multilateral instrument 45-105 trades to ......2010/07/05 · multilateral instrument 45-105 trades...

811SECURITIES COMMISSION

(ADOPTION OF NATIONAL INSTRUMENTS) S-42.2 REG 3

Part XXX[clause 2 (dd)]

MULTILATERAL INSTRUMENT 45-105TRADES TO EMPLOYEES, SENIOR OFFICERS,

DIRECTORS AND CONSULTANTS

Repealed. 23 Sep 2005 SR 100/2005 s9.

PART XXXI[clause 2(ee)]

NATIONAL INSTRUMENT 51-101STANDARDS OF DISCLOSURE FOR OIL AND GAS ACTIVITIES

PART 1 APPLICATION AND TERMINOLOGY

1.1 Definitions - In this Instrument:

(a) “analogous information” means information about an area outsidethe area in which the reporting issuer has an interest or intends to acquirean interest, which is referenced by the reporting issuer for the purpose ofdrawing a comparison or conclusion to an area in which the reporting issuerhas an interest or intends to acquire an interest, which comparison orconclusion is reasonable, and includes:

(i) historical information concerning reserves;

(ii) estimates of the volume or value of reserves;

(iii) historical information concerning resources;

(iv) estimates of the volume or value of resources;

(v) historical production amounts;

(vi) production estimates; or

(vii) information concerning a field, well, basin or reservoir;

(b) “annual information form” has the same meaning as “AIF” NI 51-102;

(c) “anticipated results” means information that may, in the opinion of areasonable person, indicate the potential value or quantities of resources inrespect of the reporting issuer’s resources or a portion of its resources andincludes:

(i) estimates of volume;

(ii) estimates of value;

(iii) areal extent;

(iv) pay thickness;

(v) flow rates; or

(vi) hydrocarbon content;

(d) “BOEs” means barrels of oil equivalent;

(e) “CICA” means The Canadian Institute of Chartered Accountants;

(f) “CICA Accounting Guideline 16” means Accounting GuidelineAcG 16 “Oil and gas accounting – full cost” included in the CICA Handbook,as amended from time to time;

Consolidated to July 5, 2010


(ADOPTION OF NATIONAL INSTRUMENTS)S-42.2 REG 3

(g) “CICA Handbook” means the Handbook of the CICA, as amendedfrom time to time;

(h) “COGE Handbook” means the “Canadian Oil and Gas EvaluationHandbook” prepared jointly by The Society of Petroleum Evaluation Engineers(Calgary Chapter) and the Canadian Institute of Mining, Metallurgy &Petroleum (Petroleum Society), as amended from time to time;

(i) “effective date”, in respect of information, means the date as at which,or for the period ended on which, the information is provided;

(j) “FAS 19” means United States Financial Accounting Standards BoardStatement of Financial Accounting Standards No. 19 “Financial Accountingand Reporting by Oil and Gas Producing Companies”, as amended from timeto time;

(k) “forecast prices and costs” means future prices and costs that are:

(i) generally accepted as being a reasonable outlook of the future;

(ii) if, and only to the extent that, there are fixed or presentlydeterminable future prices or costs to which the reporting issuer islegally bound by a contractual or other obligation to supply a physicalproduct, including those for an extension period of a contract that islikely to be extended, those prices or costs rather than the prices andcosts referred to in subparagraph (i);

(l) “foreign geographic area” means a geographic area outside NorthAmerica within one country or including all or portions of a number ofcountries;

(m) “Form 51-101F1” means Form 51-101F1 Statement of Reserves Dataand Other Oil and Gas Information;

(n) “Form 51-101F2” means Form 51-101F2 Report on Reserves Data byIndependent Qualified Reserves Evaluator or Auditor;

(o) “Form 51-101F3” means Form 51-101F3 Report of Management andDirectors on Oil and Gas Disclosure;

(p) “independent”, in respect of the relationship between a reportingissuer and a person or company, means a relationship between the reportingissuer and the person or company in which there is no circumstance thatcould, in the opinion of a reasonable person aware of all relevant facts,interfere with the person’s or company’s exercise of judgement regarding thepreparation of information which is used by the reporting issuer;

(q) “McfGEs” means thousand cubic feet of gas equivalent;

(r) “NI 14-101” means National Instrument 14-101 Definitions;

(s) “NI 51-102” means National Instrument 51-102 Continuous DisclosureObligations;




(t) “oil and gas activities”:

(i) include:

(A) the search for crude oil or natural gas in their natural statesand original locations;

(B) the acquisition of property rights or properties for thepurpose of further exploring for or removing oil or gas fromreservoirs on those properties;

(C) the construction, drilling and production activities necessaryto retrieve oil and gas from their natural reservoirs, and theacquisition, construction, installation and maintenance of fieldgathering and storage systems including lifting the oil and gas tothe surface and gathering, treating, field processing and fieldstorage; and

(D) the extraction of hydrocarbons from oil sands, shale, coal orother non-conventional sources and activities similar to thosereferred to in clauses (A), (B) and (C) undertaken with a view tosuch extraction; but

(ii) do not include:

(A) transporting, refining or marketing oil or gas;

(B) activities relating to the extraction of natural resourcesother than oil and gas and their by-products; or

(C) the extraction of geothermal steam or of hydrocarbons as aby-product of the extraction of geothermal steam or associatedgeothermal resources;

(u) “preparation date”, in respect of written disclosure, means the mostrecent date to which information relating to the period ending on theeffective date was considered in the preparation of the disclosure;

(v) “product type” means one of the following:

(i) in respect of conventional oil and gas activities:

(A) light and medium crude oil (combined);

(B) heavy oil;

(C) natural gas excluding natural gas liquids; or

(D) natural gas liquids; and

(ii) in respect of non-conventional oil and gas activities:

(A) synthetic oil;

(B) bitumen;




(C) coal bed methane;

(D) hydrates;

(E) shale oil; or

(F) shale gas;

(w) “production group” means one of the following together, in eachcase, with associated by-products:

(i) light and medium crude oil (combined);

(ii) heavy oil;

(iii) associated gas and non-associated gas (combined); and

(iv) bitumen, synthetic oil or other products from non-conventional oiland gas activities;

(x) “professional organization” means a self-regulatory organization ofengineers, geologists, other geoscientists or other professionals whoseprofessional practice includes reserves evaluations or reserves audits, that:

(i) admits members primarily on the basis of their educationalqualifications;

(ii) requires its members to comply with the professional standards ofcompetence and ethics prescribed by the organization that are relevantto the estimation, evaluation, review or audit of reserves data;

(iii) has disciplinary powers, including the power to suspend or expela member; and

(iv) is either:

(A) given authority or recognition by statute in a Canadianjurisdiction; or

(B) accepted for this purpose by the securities regulatory authorityor the regulator;

(y) “qualified reserves auditor” means an individual who:

(i) in respect of particular reserves data, resources or relatedinformation, possesses professional qualifications and experienceappropriate for the estimation, evaluation, review and audit of thereserves data, resources and related information; and

(ii) is a member in good standing of a professional organization;

(z) “qualified reserves evaluator” means an individual who:

(i) in respect of particular reserves data, resources or relatedinformation, possesses professional qualifications and experienceappropriate for the estimation, evaluation and review of the reservesdata, resources and related information; and

(ii) is a member in good standing of a professional organization;




(aa) “qualified reserves evaluator or auditor” means a qualifiedreserves auditor or a qualified reserves evaluator;

(bb) “reserves” means proved, probable or possible reserves;

(cc) “reserves data” means an estimate of proved reserves and probablereserves and related future net revenue, estimated using forecast prices andcosts;

(dd) “supporting filing” means a document filed by a reporting issuerwith a securities regulatory authority.

1.2 COGE Handbook Definitions

(1) Terms used in this Instrument but not defined in this Instrument, NI 14-101or the securities statute in the jurisdiction, and defined or interpreted in theCOGE Handbook, have the meaning or interpretation ascribed to those terms inthe COGE Handbook.

(2) In the event of a conflict or inconsistency between the definition of a term inthis Instrument, NI 14-101 or the securities statute in the jurisdiction and themeaning ascribed to the term in the COGE Handbook, the definition in thisInstrument, NI 14-101 or the securities statute in the jurisdiction, as the case maybe, applies.

1.3 Applies to Reporting Issuers Only - This Instrument applies only to reportingissuers engaged, directly or indirectly, in oil and gas activities.

1.4 Materiality Standard

(1) This Instrument applies only in respect of information that is material inrespect of a reporting issuer.

(2) For the purpose of subsection (1), information is material in respect of areporting issuer if it would be likely to influence a decision by a reasonableinvestor to buy, hold or sell a security of the reporting issuer.

PART 2 ANNUAL FILING REQUIREMENTS

2.1 Reserves Data and Other Oil and Gas Information - A reporting issuermust, not later than the date on which it is required by securities legislation to fileaudited financial statements for its most recent financial year, file with thesecurities regulatory authority the following:

1. Statement of Reserves Data and Other Information - a statement of thereserves data and other information specified in Form 51-101F1, as at the last dayof the reporting issuer’s most recent financial year and for the financial year thenended;

2. Report of Independent Qualified Reserves Evaluator or Auditor – areport in accordance with Form 51-101F2 that is:

(a) included in, or filed concurrently with, the document filed under item 1;and




(b) executed by one or more qualified reserves evaluators or auditors eachof whom is independent of the reporting issuer, who must in the aggregatehave:

(i) evaluated or audited at least 75 percent of the future net revenue(calculated using a discount rate of 10 percent) attributable to provedplus probable reserves, as reported in the statement filed or to be filedunder item 1; and

(ii) reviewed the balance of such future net revenue; and

3. Report of Management and Directors – a report in accordance withForm 51-101F3 that:

(a) refers to the information filed or to be filed under items 1 and 2;

(b) confirms the responsibility of management of the reporting issuer forthe content and filing of the statement referred to in item 1 and for the filingof the report referred to in item 2;

(c) confirms the role of the board of directors in connection with theinformation referred to in paragraph (b);

(d) is contained in, or filed concurrently with, the statement filed underitem 1; and

(e) is executed by two senior officers and two directors of the reportingissuer.

2.2 News Release to Announce Filing – A reporting issuer must, concurrentlywith filing a statement and reports under section 2.1, disseminate a news releaseannouncing that filing and indicating where a copy of the filed information can befound for viewing by electronic means.

2.3 Inclusion in Annual Information Form - The requirements of section 2.1 maybe satisfied by including the information specified in section 2.1 in an annualinformation form filed within the time specified in section 2.1.

2.4 Reservation in Report of Qualified Reserves Evaluator or Auditor

(1) If a qualified reserves evaluator or auditor cannot report on reserves datawithout reservation, the reporting issuer must ensure that the report of thequalified reserves evaluator or auditor prepared for the purpose of item 2 ofsection 2.1 sets out the cause of the reservation and the effect, if known to thequalified reserves evaluator or auditor, on the reserves data.

(2) A report containing a reservation, the cause of which can be removed by thereporting issuer, does not satisfy the requirements of item 2 of section 2.1.

PART 3 RESPONSIBILITIES OF REPORTING ISSUERS AND DIRECTORS

3.1 Interpretation - A reference to a board of directors in this Part means, for areporting issuer that does not have a board of directors, those individuals whoseauthority and duties in respect of that reporting issuer are similar to those of aboard of directors.




3.2 Reporting Issuer to Appoint Independent Qualified Reserves Evaluatoror Auditor - A reporting issuer must appoint one or more qualified reservesevaluators or auditors, each of whom is independent of the reporting issuer, toreport to the board of directors of the reporting issuer on its reserves data.

3.3 Reporting Issuer to Make Information Available to Qualified ReservesEvaluator or Auditor - A reporting issuer must make available to the qualifiedreserves evaluators or auditors that it appoints under section 3.2 all informationreasonably necessary to enable the qualified reserves evaluators or auditors toprovide a report that will satisfy the applicable requirements of this Instrument.

3.4 Certain Responsibilities of Board of Directors - The board of directors of areporting issuer must:

(a) review, with reasonable frequency, the reporting issuer’s proceduresrelating to the disclosure of information with respect to oil and gas activities,including its procedures for complying with the disclosure requirements andrestrictions of this Instrument;

(b) review each appointment under section 3.2 and, in the case of anyproposed change in such appointment, determine the reasons for theproposal and whether there have been disputes between the appointedqualified reserves evaluator or auditor and management of the reportingissuer;

(c) review, with reasonable frequency, the reporting issuer’s procedures forproviding information to the qualified reserves evaluators or auditors whoreport on reserves data for the purposes of this Instrument;

(d) before approving the filing of reserves data and the report of thequalified reserves evaluators or auditors thereon referred to in section 2.1,meet with management and each qualified reserves evaluator or auditorappointed under section 3.2, to:

(i) determine whether any restrictions affect the ability of the qualifiedreserves evaluator or auditor to report on reserves data withoutreservation; and

(ii) review the reserves data and the report of the qualified reservesevaluator or auditor thereon; and

(e) review and approve:

(i) the content and filing, under section 2.1, of the statement referredto in item 1 of section 2.1;

(ii) the filing, under section 2.1, of the report referred to in item 2 ofsection 2.1; and

(iii) the content and filing, under section 2.1, of the report referred toin item 3 of section 2.1.




3.5 Reserves Committee

(1) The board of directors of a reporting issuer may, subject to subsection (2),delegate the responsibilities set out in section 3.4 to a committee of the board ofdirectors, provided that a majority of the members of the committee:

(a) are individuals who are not and have not been, during the preceding 12months:

(i) an officer or employee of the reporting issuer or of an affiliate of thereporting issuer;

(ii) a person who beneficially owns 10 percent or more of theoutstanding voting securities of the reporting issuer; or

(iii) a relative of a person referred to in subparagraph (a)(i) or (ii),residing in the same home as that person; and

(b) are free from any business or other relationship which could reasonablybe seen to interfere with the exercise of their independent judgement.

(2) Despite subsection (1), a board of directors of a reporting issuer must notdelegate its responsibility under paragraph 3.4(e) to approve the content or thefiling of information.

(3) A board of directors that has delegated responsibility to a committeepursuant to subsection (1) must solicit the recommendation of that committee asto whether to approve the content and filing of information for the purpose ofparagraph 3.4(e).

PART 4 MEASUREMENT

4.1 Accounting Methods - A reporting issuer engaged in oil and gas activities thatdiscloses financial statements prepared in accordance with Canadian GAAP mustuse:

(a) the full cost method of accounting, applying CICA AccountingGuideline 16; or

(b) the successful efforts method of accounting, applying FAS 19.

4.2 Consistency in Dates - The date or period with respect to which the effects of anevent or transaction are recorded in a reporting issuer’s annual financialstatements must be the same as the date or period with respect to which they arefirst reflected in the reporting issuer’s annual reserves data disclosure underPart 2.

PART 5 REQUIREMENTS APPLICABLE TO ALL DISCLOSURE

5.1 Application of Part 5 - This Part applies to disclosure made by or on behalf of areporting issuer:

(a) to the public;

(b) in any document filed with a securities regulatory authority; or

(c) in other circumstances in which, at the time of making the disclosure,the reporting issuer knows, or ought reasonably to know, that the disclosureis or will become available to the public.




5.2 Disclosure of Reserves and Other Information - If a reporting issuer makesdisclosure of reserves or other information of a type that is specified inForm 51-101F1, the reporting issuer must ensure that the disclosure satisfies thefollowing requirements:

(a) estimates of reserves or future net revenue must:

(i) disclose the effective date of the estimate;

(ii) have been prepared or audited by a qualified reserves evaluator orauditor;

(iii) have been prepared or audited in accordance with the COGEHandbook;

(iv) have been made assuming that development of each property inrespect of which the estimate is made will occur, without regard to thelikely availability to the reporting issuer of funding required for thatdevelopment; and

(v) in the case of estimates of possible reserves or related future netrevenue disclosed in writing, also include a cautionary statement thatis proximate to the estimate to the following effect:

“Possible reserves are those additional reserves that are lesscertain to be recovered than probable reserves. There is a 10%probability that the quantities actually recovered will equal orexceed the sum of proved plus probable plus possible reserves.”;

(b) for the purpose of determining whether reserves should be attributed toa particular undrilled property, reasonably estimated future abandonmentand reclamation costs related to the property must have been taken intoaccount;

(c) in disclosing aggregate future net revenue the disclosure must complywith the requirements for the determination of future net revenue specifiedin Form 51-101F1; and

(d) the disclosure must be consistent with the corresponding information, ifany, contained in the statement most recently filed by the reporting issuerwith the securities regulatory authority under item 1 of section 2.1, except tothe extent that the statement has been supplemented or superseded by areport of a material change filed by the reporting issuer with the securitiesregulatory authority.

5.3 Reserves and Resources Classification – Disclosure of reserves or resourcesshall apply with the reserves and resources terminology and categories set out inthe COGE Handbook and must relate to the most specific category of reserves orresources in which the reserves or resources can be classified.

5.4 Oil and Gas Reserves and Sales – Disclosure of reserves or of sales of oil, gas orassociated by-products must be made only in respect of marketable quantities,reflecting the quantities and prices for the product in the condition (upgraded ornot upgraded, processed or unprocessed) in which it is to be, or was, sold.




5.5 Natural Gas By-Products – Disclosure concerning natural gas by-products(including natural gas liquids and sulphur) must be made in respect only ofvolumes that have been or are to be recovered prior to the point at whichmarketable gas is measured.

5.6 Future Net Revenue Not Fair Market Value – Disclosure of an estimate offuture net revenue, whether calculated without discount or using a discount rate,must include a statement to the effect that the estimated values disclosed do notrepresent fair market value.

5.7 Consent of Qualified Reserves Evaluator or Auditor

(1) A reporting issuer must not disclose a report referred to in item 2 ofsection 2.1 that has been delivered to the board of directors of the reporting issuerby a qualified reserves evaluator or auditor pursuant to an appointment undersection 3.2, or disclose information derived from the report or the identity of thequalified reserves evaluator or auditor, without the written consent of thatqualified reserves evaluator or auditor.

(2) Subsection (1) does not apply to:

(a) the filing of that report by a reporting issuer under section 2.1;

(b) the use of or reference to that report in another document filed by thereporting issuer under section 2.1; or

(c) the identification of the report or of the qualified reserves evaluator orauditor in a news release referred to in section 2.2.

5.8 Disclosure of Less Than All Reserves – If a reporting issuer that has morethan one property makes written disclosure of any reserves attributable to aparticular property:

(a) the disclosure must include a cautionary statement to the effect that:

“The estimates of reserves and future net revenue for individualproperties may not reflect the same confidence level as estimates ofreserves and future net revenue for all properties, due to the effects ofaggregation”; and

(b) the document containing the disclosure of any reserves attributable toone property must also disclose total reserves of the same classification forall properties of the reporting issuer in the same country (or, if appropriateand not misleading, in the same foreign geographic area).

5.9 Disclosure of Resources

(1) If a reporting issuer discloses anticipated results from resources which arenot currently classified as reserves, the reporting issuer must also disclose inwriting, in the same document or in a supporting filing:

(a) the reporting issuer’s interest in the resources;

(b) the location of the resources;

(c) the product types reasonably expected;




(d) the risks and level of uncertainty associated with the recovery ofresources;

(e) in the case of unproved property, if its value is disclosed:

(i) the basis of the calculation of its value; and

(ii) whether the value was prepared by an independent party.

(2) If disclosure referred to in subsection (1) includes an estimate of a quantity ofresources in which the reporting issuer has an interest or intends to acquire aninterest, or an estimated value attributable to an estimated quantity, theestimate must:

(a) have been prepared or audited by a qualified reserves evaluator orauditor;

(b) relate to the most specific category of resources in which the resourcescan be classified, as set out in the COGE Handbook, and must identify whatportion of the estimate is attributable to each category; and

(c) be accompanied by the following information:

(i) a definition of the resources category used for the estimate;

(ii) the effective date of the estimate;

(iii) the significant positive and negative factors relevant to theestimate;

(iv) in respect of contingent resources, the specific contingencieswhich prevent the classification of the resources as reserves; and

(v) a cautionary statement that is proximate to the estimate to theeffect that:

(A) in the case of discovered resources or a subcategory ofdiscovered resources other than reserves:

“There is no certainty that it will be commercially viable toproduce any portion of the resources.”; or

(B) in the case of undiscovered resources or a subcategory ofundiscovered resources:

“There is no certainty that any portion of the resources willbe discovered. If discovered, there is no certainty that it willbe commercially viable to produce any portion of theresources.”

(3) Paragraphs (1)(d) and (e) and subparagraphs (2)(c)(iii) and (iv) do not applyif:

(a) the reporting issuer includes in the written disclosure a reference to thetitle and date of a previously filed document that complies with thoserequirements; and

(b) the resources in the written disclosure, taking into account the specificproperties and interests reflected in the resources estimate or otheranticipated result, are materially the same resources addressed in thepreviously filed document.




5.10 Analogous Information

(1) Sections 5.2, 5.3 and 5.9 do not apply to the disclosure of analogousinformation provided that the reporting issuer discloses the following:

(a) the source and date of the analogous information;

(b) whether the source of the analogous information was independent;

(c) if the reporting issuer is unable to confirm that the analogous informationwas prepared by a qualified reserves evaluator or auditor or in accordancewith the COGE Handbook, a cautionary statement to that effect proximateto the disclosure of the analogous information; and

(d) the relevance of the analogous information to the reporting issuer’s oiland gas activities.

(2) For greater certainty, if a reporting issuer discloses information that is ananticipated result, an estimate of a quantity of reserves or resources, or anestimate of value attributable to an estimated quantity of reserves or resources foran area in which it has an interest or intends to acquire an interest, that is basedon an extrapolation from analogous information, sections 5.2, 5.3 and 5.9 apply tothe disclosure of the information.

5.11 Net Asset Value and Net Asset Value per Share - Written disclosure of netasset value or net asset value per share must include a description of the methodsused to value assets and liabilities and the number of shares used in thecalculation.

5.12 Reserve Replacement - Written disclosure concerning reserve replacementmust include an explanation of the method of calculation applied.

5.13 Netbacks - Written disclosure of a netback must:

(a) reflect netbacks calculated by subtracting royalties and operating costsfrom revenues; and

(b) state the method of calculation.

5.14 BOEs and McfGEs - If written disclosure includes information expressed inBOEs, McfGEs or other units of equivalency between oil and gas:

(a) the information must be presented:

(i) in the case of BOEs, using BOEs derived by converting gas to oil inthe ratio of six thousand cubic feet of gas to one barrel of oil (6 Mcf:1 bbl);

(ii) in the case of McfGEs, using McfGEs derived by converting oil togas in the ratio of one barrel of oil to six thousand cubic feet ofgas (1 bbl:6 Mcf); and

(iii) with the conversion ratio stated;

(b) if the information is also presented using BOEs or McfGEs derivedusing a conversion ratio other than a ratio specified in paragraph (a), thedisclosure must state that other conversion ratio and explain why it has beenchosen;




(c) if the information is presented using a unit of equivalency other thanBOEs or McfGEs, the disclosure must identify the unit, state the conversionratio used and explain why it has been chosen; and

(d) the disclosure must include a cautionary statement to the effect that:

“BOEs [or “McfGEs” or other applicable units of equivalency] may bemisleading, particularly if used in isolation. A BOE conversion ratioof 6 Mcf: 1 bbl [or “An McfGE conversion ratio of 1 bbl: 6 Mcf ”] is basedon an energy equivalency conversion method primarily applicable atthe burner tip and does not represent a value equivalency at thewellhead”.

5.15 Finding and Development Costs – If written disclosure is made of finding anddevelopment costs:

(a) those costs must be calculated using the following two methods, in eachcase after eliminating the effects of acquisitions and dispositions:

where:

a = exploration costs incurred in the most recent financial year;

b = development costs incurred in the most recent financial year;

c = the change during the most recent financial year in estimatedfuture development costs relating to proved reserves;

d = the change during the most recent financial year in estimatedfuture development costs relating to proved reserves and probablereserves;

x = additions to proved reserves during the most recent financial year,expressed in BOEs or other unit of equivalency; and

y = additions to proved reserves and probable reserves during themost recent financial year, expressed in BOEs or other unit ofequivalency;

(b) the disclosure must include:

(i) the results of both methods of calculation under paragraph (a) anda description of those methods;

(ii) if the disclosure also includes a result derived using any othermethod of calculation, a description of that method and the reason forits use;

a+b+cx

Method 1:

a+b+dy

Method 2:




(iii) for each result, comparative information for the most recentfinancial year, the second most recent financial year and the averagesfor the three most recent financial years;

(iv) a cautionary statement to the effect that:

“The aggregate of the exploration and development costs incurredin the most recent financial year and the change during that yearin estimated future development costs generally will not reflecttotal finding and development costs related to reserves additionsfor that year.”; and

(v) the cautionary statement required under paragraph 5.14(d).

PART 6 MATERIAL CHANGE DISCLOSURE

6.1 Material Change from Information Filed under Part 2

(1) This Part applies in respect of a material change that, had it occurred on orbefore the effective date of information included in the statement most recentlyfiled by a reporting issuer under item 1 of section 2.1, would have resulted in asignificant change in the information contained in the statement.

(2) In addition to any other requirement of securities legislation governingdisclosure of a material change, disclosure of a material change referred to insubsection (1) must discuss the reporting issuer’s reasonable expectation of howthe material change has affected its reserves data or other information.

PART 7 OTHER INFORMATION

7.1 Information to be Furnished on Request – A reporting issuer must, on therequest of the regulator, deliver additional information with respect to thecontent of a document filed under this Instrument.

PART 8 EXEMPTIONS

8.1 Authority to Grant Exemption

(1) The regulator or the securities regulatory authority may grant an exemptionfrom this Instrument, in whole or in part, subject to such conditions or restrictionsas may be imposed in the exemption.

(2) Despite subsection (1), in Ontario only the regulator may grant an exemption.

8.2 Exemption for Certain Exchangeable Security Issuers

(1) An exchangeable security issuer, as defined in subsection 13.3(1) of NI 51-102,is exempt from this Instrument if all of the requirements of subsection 13.3(2)of NI 51-102 are satisfied.

(2) For the purposes of subsection (1), the reference to ‘continuous disclosuredocuments’ in clause 13.3(2)(d)(ii)(A) of NI 51-102 includes documents filed inaccordance with this Instrument.




FORM 51-101F1STATEMENT OF RESERVES DATA ANDOTHER OIL AND GAS INFORMATION

This is the form referred to in item 1 of section 2.1 of National Instrument 51-101Standards of Disclosure for Oil and Gas Activities (‘NI 51-101’).

GENERAL INSTRUCTIONS

(1) Terms for which a meaning is given in NI 51-101 have the same meaning inthis Form 51-101F1.

(2) Unless otherwise specified in this Form 51-101F1, information under item 1of section 2.1 of NI 51-101 must be provided as at the last day of the reportingissuer’s most recent financial year or for its financial year then ended.

(3) It is not necessary to include the headings or numbering, or to follow theordering of Items, in this Form 51-101F1. Information may be provided in tables.

(4) To the extent that any Item or any component of an Item specified in thisForm 51-101F1 does not apply to a reporting issuer and its activities andoperations, or is not material, no reference need be made to that Item or component.It is not necessary to state that such an Item or component is “not applicable” or“not material”. Materiality is discussed in NI 51-101 and CompanionPolicy 51-101CP.

(5) This Form 51-101F1 sets out minimum requirements. A reporting issuer mayprovide additional information not required in this Form 51-101F1 provided thatit is not misleading and not inconsistent with the requirements of NI 51-101, andprovided that material information required to be disclosed is not omitted.

(6) A reporting issuer may satisfy the requirement of this Form 51-101F1 fordisclosure of information “by country” by instead providing information by foreigngeographic area in respect of countries outside North America as may beappropriate for meaningful disclosure in the circumstances.

PART 1 DATE OF STATEMENT

Item 1.1 Relevant Dates

1. Date the statement.

2. Disclose the effective date of the information being provided.

3. Disclose the preparation date of the information being provided.

INSTRUCTIONS

(1) For the purpose of Part 2 of NI 51-101, and consistent with the definition ofreserves data and General Instruction (2) of this Form 51-101F1, the effective dateto be disclosed under section 2 of Item 1.1 is the last day of the reporting issuer’smost recent financial year. It is the date of the balance sheet for the reportingissuer’s most recent financial year (for example, “as at December 31, 20xx”) and theending date of the reporting issuer’s most recent annual statement of income (forexample, “for the year ended December 31, 20xx”).

(2) The same effective date applies to reserves of each category reported and torelated future net revenue. References to a change in an item of information, suchas changes in production or a change in reserves, means a change in respect of thatitem during the year ended on the effective date.




(3) The preparation date, in respect of written disclosure, means the most recentdate to which information relating to the period ending on the effective date wasconsidered in the preparation of the disclosure. The preparation date is a datesubsequent to the effective date because it takes time after the end of the financialyear to assemble the information for that completed year that is needed to preparethe required disclosure as at the end of the financial year.

(4) Because of the interrelationship between certain of the reporting issuer’sreserves data and other information referred to in this Form 51-101F1 and certainof the information included in its financial statements, the reporting issuer shouldensure that its financial auditor and its qualified reserves evaluators or auditorsare kept apprised of relevant events and transactions, and should facilitatecommunication between them.

(5) If the reporting issuer provides information as at a date more recent than theeffective date, in addition to the information required as at the effective date, alsodisclose the date as at which that additional information is provided. Theprovision of such additional information does not relieve the reporting issuer of theobligation to provide information as at the effective date.

PART 2 DISCLOSURE OF RESERVES DATA

Item 2.1 Reserves Data (Forecast Prices and Costs)

1. Breakdown of Reserves (Forecast Case) – Disclose, by country and in theaggregate, reserves, gross and net, estimated using forecast prices and costs, foreach product type, in the following categories:

(a) proved developed producing reserves;

(b) proved developed non-producing reserves;

(c) proved undeveloped reserves;

(d) proved reserves (in total);

(e) probable reserves (in total);

(f) proved plus probable reserves (in total); and

(g) if the reporting issuer discloses an estimate of possible reserves in thestatement:

(i) possible reserves (in total); and

(ii) proved plus probable plus possible reserves (in total).




2. Net Present Value of Future Net Revenue (Forecast Case) – Disclose,by country and in the aggregate, the net present value of future net revenueattributable to the reserves categories referred to in section 1 of this Item,estimated using forecast prices and costs, before and after deducting futureincome tax expenses, calculated without discount and using discount rates of 5percent, 10 percent, 15 percent and 20 percent. Also disclose the same informationon a unit value basis (e.g., $/Mcf or $/bbl using net reserves) using a discount rateof 10 percent and calculated before deducting future income tax expenses. Thisunit value disclosure requirement may be satisfied by including the unit valuedisclosure for each category of proved reserves and for probable reserves in thedisclosure referred to in paragraph 3(c) of Item 2.1.

3. Additional Information Concerning Future Net Revenue (ForecastCase)

(a) This section 3 applies to future net revenue attributable to each of thefollowing reserves categories estimated using forecast prices and costs:

(i) proved reserves (in total);

(ii) proved plus probable reserves (in total); and

(iii) if paragraph 1(g) of this Item applies, proved plus probable pluspossible reserves (in total).

(b) Disclose, by country and in the aggregate, the following elements offuture net revenue estimated using forecast prices and costs and calculatedwithout discount:

(i) revenue;

(ii) royalties;

(iii) operating costs;

(iv) development costs;

(v) abandonment and reclamation costs;

(vi) future net revenue before deducting future income tax expenses;

(vii) future income tax expenses; and

(viii) future net revenue after deducting future income tax expenses.

(c) Disclose, by production group and on a unit value basis for eachproduction group (e.g., $/Mcf or $/bbl using net reserves), the net presentvalue of future net revenue (before deducting future income tax expenses)estimated using forecast prices and costs and calculated using a discountrate of 10 percent.

Item 2.2 Supplemental Disclosure of Reserves Data (Constant Prices andCosts)

The reporting issuer may supplement its disclosure of reserves data underItem 2.1 by also disclosing the components of Item 2.1 in respect of its provedreserves or its proved and probable reserves, using constant prices and costs as atthe last day of the reporting issuer’s most recent financial year.




Item 2.3 Reserves Disclosure Varies with Accounting

In determining reserves to be disclosed:

(a) Consolidated Financial Disclosure – if the reporting issuer filesconsolidated financial statements:

(i) include 100 percent of reserves attributable to the parent companyand 100 percent of the reserves attributable to its consolidatedsubsidiaries (whether or not wholly-owned); and

(ii) if a significant portion of reserves referred to in clause (i) isattributable to a consolidated subsidiary in which there is a significantminority interest, disclose that fact and the approximate portion ofsuch reserves attributable to the minority interest;

(b) Proportionate Consolidation – if the reporting issuer files financialstatements in which investments are proportionately consolidated, thereporting issuer’s disclosed reserves must include the reporting issuer’sproportionate share of investees’ oil and gas reserves; and

(c) Equity Accounting – if the reporting issuer files financial statementsin which investments are accounted for by the equity method, do not includeinvestees’ oil and gas reserves in disclosed reserves of the reporting issuer,but disclose the reporting issuer’s share of investees’ oil and gas reservesseparately.

Item 2.4 Future Net Revenue Disclosure Varies with Accounting

1. Consolidated Financial Disclosure – If the reporting issuer filesconsolidated financial statements, and if a significant portion of the reportingissuer’s economic interest in future net revenue is attributable to a consolidatedsubsidiary in which there is a significant minority interest, disclose that fact andthe approximate portion of the economic interest in future net revenue attributableto the minority interest.

2. Equity Accounting – If the reporting issuer files financial statements inwhich investments are accounted for by the equity method, do not includeinvestees’ future net revenue in disclosed future net revenue of the reportingissuer, but disclose the reporting issuer’s share of investees’ future net revenueseparately, by country and in the aggregate.




INSTRUCTIONS

(1) Do not include, in reserves, oil or gas that is subject to purchase under along-term supply, purchase or similar agreement. However, if the reporting issueris a party to such an agreement with a government or governmental authority, andparticipates in the operation of the properties in which the oil or gas is situated orotherwise serves as “producer” of the reserves (in contrast to being an independentpurchaser, broker, dealer or importer), disclose separately the reporting issuer’sinterest in the reserves that are subject to such agreements at the effective date andthe net quantity of oil or gas received by the reporting issuer under the agreementduring the year ended on the effective date.

(2) Future net revenue includes the portion attributable to the reporting issuer’sinterest under an agreement referred to in Instruction (1).

(3) Constant prices and costs are prices and costs used in an estimate that are:

(a) the reporting issuer’s prices and costs as at the effective date of theestimation, held constant throughout the estimated lives of the properties towhich the estimate applies;

(b) if, and only to the extent that, there are fixed or presently determinablefuture prices or costs to which the reporting issuer is legally bound by acontractual or other obligation to supply a physical product, including thosefor an extension period of a contract that is likely to be extended, those pricesor costs rather than the prices and costs referred to in paragraph (a).

For the purpose of paragraph (a), the reporting issuer’s prices will be the postedprice for oil and the spot price for gas, after historical adjustments for transportation,gravity and other factors.

PART 3 PRICING ASSUMPTIONS

Item 3.1 Constant Prices Used in Supplemental Estimates

If supplemental disclosure under Item 2.2 is made, then disclose, for each producttype, the benchmark reference prices for the countries or regions in which thereporting issuer operates, as at the last day of the reporting issuer’s most recentfinancial year, reflected in the reserves data disclosed in response to Item 2.2.

Item 3.2 Forecast Prices Used in Estimates

1. For each product type, disclose:

(a) the pricing assumptions used in estimating reserves data disclosed inresponse to Item 2.1:

(i) for each of at least the following five financial years; and

(ii) generally, for subsequent periods; and

(b) the reporting issuer’s weighted average historical prices for the mostrecent financial year.

2. The disclosure in response to section 1 must include the benchmark referencepricing schedules for the countries or regions in which the reporting issueroperates, and inflation and other forecast factors used.

3. If the pricing assumptions specified in response to section 1 were provided bya qualified reserves evaluator or auditor who is independent of the reportingissuer, disclose that fact and identify the qualified reserves evaluator or auditor.




INSTRUCTIONS

(1) Benchmark reference prices may be obtained from sources such as publicproduct trading exchanges or prices posted by purchasers.

(2) The term “constant prices and costs’”and the defined term “forecast prices andcosts” include any fixed or presently determinable future prices or costs to whichthe reporting issuer is legally bound by a contractual or other obligation to supplya physical product, including those for an extension period of a contract that islikely to be extended. In effect, such contractually committed prices overridebenchmark reference prices for the purpose of estimating reserves data. To ensurethat disclosure under this Part is not misleading, the disclosure should reflect suchcontractually committed prices.

(3) Under subsection 5.7(1) of NI 51-101, the reporting issuer must obtain thewritten consent of the qualified reserves evaluator or auditor to disclose his or heridentity in response to section 3 of this Item.

PART 4 RECONCILIATION OF CHANGES IN RESERVES

Item 4.1 Reserves Reconciliation

1. Provide the information specified in section 2 of this Item in respect of thefollowing reserves categories:

(a) gross proved reserves (in total);

(b) gross probable reserves (in total); and

(c) gross proved plus probable reserves (in total).

2. Disclose changes between the reserves estimates made as at the effective dateand the corresponding estimates (‘prior-year estimates’) made as at the last day ofthe preceding financial year of the reporting issuer:

(a) by country;

(b) for each of the following:

(i) light and medium crude oil (combined);

(ii) heavy oil;

(iii) associated gas and non-associated gas (combined);

(iv) synthetic oil;

(v) bitumen;

(vi) coal bed methane;

(vii) hydrates;

(viii) shale oil; and

(ix) shale gas;




(c) separately identifying and explaining:

(i) extensions and improved recovery;

(ii) technical revisions;

(iii) discoveries;

(iv) acquisitions;

(v) dispositions;

(vi) economic factors; and

(vii) production.

INSTRUCTIONS

(1) The reconciliation required under this Item 4.1 must be provided in respect ofreserves estimated using forecast prices and costs, with the price and cost caseindicated in the disclosure.

(2) For the purpose of this Item 4.1, it is sufficient to provide the information inrespect of the products specified in paragraph 2(b), excluding solution gas, naturalgas liquids and other associated by-products.

(3) The COGE Handbook provides guidance on the preparation of the reconciliationrequired under this Item 4.1.

(4) Reporting issuers must not include infill drilling reserves in the category oftechnical revisions specified in subparagraph 2(c)(ii). Reserves additions frominfill drilling must be included in the category of extensions and improved recoveryin subparagraph 2(c)(i) (or, alternatively, in an additional separate category underparagraph 2(c) labelled “infill drilling”).

PART 5 ADDITIONAL INFORMATION RELATING TO RESERVES DATA

Item 5.1 Undeveloped Reserves

1. For proved undeveloped reserves:

(a) disclose for each product type the volumes of proved undevelopedreserves that were first attributed in each of the most recent three financialyears and, in the aggregate, before that time; and

(b) discuss generally the basis on which the reporting issuer attributesproved undeveloped reserves, its plans (including timing) for developing theproved undeveloped reserves and, if applicable, its reasons for not planningto develop particular proved undeveloped reserves during the following twoyears.

2. For probable undeveloped reserves:

(a) disclose for each product type the volumes of probable undevelopedreserves that were first attributed in each of the most recent three financialyears and, in the aggregate, before that time; and




(b) discuss generally the basis on which the reporting issuer attributesprobable undeveloped reserves, its plans (including timing) for developingthe probable undeveloped reserves and, if applicable, its reasons for notplanning to develop particular probable undeveloped reserves during thefollowing two years.

Item 5.2 Significant Factors or Uncertainties

1. Identify and discuss important economic factors or significant uncertaintiesthat affect particular components of the reserves data.

2. Section 1 does not apply if the information is disclosed in the reportingissuer’s financial statements for the financial year ended on the effective date.

INSTRUCTION

Examples of information that could warrant disclosure under this Item 5.2include unusually high expected development costs or operating costs, the need tobuild a major pipeline or other major facility before production of reserves canbegin, or contractual obligations to produce and sell a significant portion ofproduction at prices substantially below those which could be realized but for thosecontractual obligations.

Item 5.3 Future Development Costs

1.(a) Provide the information specified in paragraph 1(b) in respect of developmentcosts deducted in the estimation of future net revenue attributable to each of thefollowing reserves categories:

(i) proved reserves (in total) estimated using forecast prices and costs;and

(ii) proved plus probable reserves (in total) estimated using forecastprices and costs.

(b) Disclose, by country, the amount of development costs estimated:

(i) in total, calculated using no discount and using a discount rateof 10%; and

(ii) by year for each of the first five years estimated.

2. Discuss the reporting issuer’s expectations as to:

(a) the sources (including internally-generated cash flow, debt or equityfinancing, farm-outs or similar arrangements) and costs of funding forestimated future development costs; and

(b) the effect of those costs of funding on disclosed reserves or future netrevenue.

3. If the reporting issuer expects that the costs of funding referred to insection 2, could make development of a property uneconomic for that reportingissuer, disclose that expectation and its plans for the property.




PART 6 OTHER OIL AND GAS INFORMATION

Item 6.1 Oil and Gas Properties and Wells

1. Identify and describe generally the reporting issuer’s important properties,plants, facilities and installations:

(a) identifying their locations (province, territory or state if in Canada orthe United States, and country otherwise);

(b) indicating whether they are located onshore or offshore;

(c) in respect of properties to which reserves have been attributed andwhich are capable of producing but which are not producing, disclosing howlong they have been in that condition and discussing the general proximity ofpipelines or other means of transportation; and

(d) describing any statutory or other mandatory relinquishments,surrenders, back-ins or changes in ownership.

2. State, separately for oil wells and gas wells, the number of the reportingissuer’s producing wells and non-producing wells, expressed in terms of both grosswells and net wells, by location (province, territory or state if in Canada or theUnited States, and country otherwise).

Item 6.2 Properties With No Attributed Reserves

1. For unproved properties disclose:

(a) the gross area (acres or hectares) in which the reporting issuer has aninterest;

(b) the interest of the reporting issuer therein expressed in terms of netarea (acres or hectares);

(c) the location, by country; and

(d) the existence, nature (including any bonding requirements), timing andcost (specified or estimated) of any work commitments.

2. Disclose, by country, the net area (acres or hectares) of unproved property forwhich the reporting issuer expects its rights to explore, develop and exploit toexpire within one year.

Item 6.3 Forward Contracts

1. If the reporting issuer is bound by an agreement (including a transportationagreement), directly or through an aggregator, under which it may be precludedfrom fully realizing, or may be protected from the full effect of, future marketprices for oil or gas, describe generally the agreement, discussing dates or timeperiods and summaries or ranges of volumes and contracted or reasonablyestimated values.

2. Section 1 does not apply to agreements disclosed by the reporting issuer:

(a) as financial instruments, in accordance with Section 3861 of the CICAHandbook; or

(b) as contractual obligations or commitments, in accordance withSection 3280 of the CICA Handbook.




3. If the reporting issuer’s transportation obligations or commitments for futurephysical deliveries of oil or gas exceed the reporting issuer’s expected relatedfuture production from its proved reserves, estimated using forecast prices andcosts and disclosed under Part 2, discuss such excess, giving information aboutthe amount of the excess, dates or time periods, volumes and reasonablyestimated value.

Item 6.4 Additional Information Concerning Abandonment and ReclamationCosts

In respect of abandonment and reclamation costs for surface leases, wells,facilities and pipelines, disclose:

(a) how the reporting issuer estimates such costs;

(b) the number of net wells for which the reporting issuer expects to incursuch costs;

(c) the total amount of such costs, net of estimated salvage value, expectedto be incurred, calculated without discount and using a discount rate of 10percent;

(d) the portion, if any, of the amounts disclosed under paragraph (c) of thisItem 6.4 that was not deducted as abandonment and reclamation costs inestimating the future net revenue disclosed under Part 2; and

(e) the portion, if any, of the amounts disclosed under paragraph (c) of thisItem 6.4 that the reporting issuer expects to pay in the next three financialyears, in total.

INSTRUCTION

Item 6.4 supplements the information disclosed in response to subparagraph 3(b)(v)of Item 2.1. The response to paragraph (d) of Item 6.4 should enable a reader of thisstatement and of the reporting issuer’s financial statements for the financial yearending on the effective date to understand both the reporting issuer’s estimatedtotal abandonment and reclamation costs, and what portions of that total are, andare not, reflected in the disclosed reserves data.

Item 6.5 Tax Horizon

If the reporting issuer is not required to pay income taxes for its most recentlycompleted financial year, discuss its estimate of when income taxes may becomepayable.

Item 6.6 Costs Incurred

1. Disclose each of the following, by country, for the most recent financial year(irrespective of whether such costs were capitalized or charged to expense whenincurred):

(a) property acquisition costs, separately for proved properties and unprovedproperties;

(b) exploration costs; and

(c) development costs.




2. For the purpose of this Item 6.6, if the reporting issuer files financialstatements in which investments are accounted for by the equity method, discloseby country the reporting issuer’s share of investees’ (i) property acquisitioncosts, (ii) exploration costs and (iii) development costs incurred in the most recentfinancial year.

Item 6.7 Exploration and Development Activities

1. Disclose, by country and separately for exploratory wells and developmentwells:

(a) the number of gross wells and net wells completed in the reportingissuer’s most recent financial year; and

(b) for each category of wells for which information is disclosed underparagraph (a), the number completed as oil wells, gas wells and service wellsand the number that were dry holes.

2. Describe generally the reporting issuer’s most important current and likelyexploration and development activities, by country.

Item 6.8 Production Estimates

1. Disclose, by country, for each product type, the volume of productionestimated for the first year reflected in the estimates of gross proved reserves andgross probable reserves disclosed under Item 2.1.

2. If one field accounts for 20 percent or more of the estimated productiondisclosed under section 1, identify that field and disclose the volume of productionestimated for the field for that year.

Item 6.9 Production History

1. To the extent not previously disclosed in financial statements filed by thereporting issuer, disclose, for each quarter of its most recent financial year, bycountry for each product type:

(a) the reporting issuer’s share of average daily production volume, beforededuction of royalties; and

(b) as an average per unit of volume (for example, $/bbl or $/Mcf):

(i) the prices received;

(ii) royalties paid;

(iii) production costs; and

(iv) the resulting netback.

2. For each important field, and in total, disclose the reporting issuer’sproduction volumes for the most recent financial year, for each product type.




INSTRUCTION

In providing information for each product type for the purpose of Item 6.9, it is notnecessary to allocate among multiple product types attributable to a single well,reservoir or other reserves entity. It is sufficient to provide the information inrespect of the principal product type attributable to the well, reservoir or otherreserves entity. Resulting netbacks may be disclosed on the basis of units ofequivalency between oil and gas (e.g. BOE) but if so that must be made clear anddisclosure must comply with section 5.14 of NI 51-101.

FORM 51-101F2REPORT ON RESERVES DATA BY INDEPENDENTQUALIFIED RESERVES EVALUATOR OR AUDITOR

This is the form referred to in item 2 of section 2.1 of National Instrument 51-101Standards of Disclosure for Oil and Gas Activities (“NI 51-101”).

1. Terms to which a meaning is ascribed in NI 51-101 have the same meaning in thisform.

2. The report on reserves data referred to in item 2 of section 2.1 of NI 51-101, to beexecuted by one or more qualified reserves evaluators or auditors independent of thereporting issuer, must in all material respects be as follows:

Report on Reserves Data

To the board of directors of [name of reporting issuer] (the “Company”):

1. We have [audited] [evaluated] [and reviewed] the Company’s reserves data as at[last day of the reporting issuer’s most recently completed financial year]. The reservesdata are estimates of proved reserves and probable reserves and related future netrevenue as at [last day of the reporting issuer’s most recently completed financial year],estimated using forecast prices and costs.

2. The reserves data are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on the reserves data based on our [audit][evaluation] [and review].

We carried out our [audit] [evaluation] [and review] in accordance with standards setout in the Canadian Oil and Gas Evaluation Handbook (the “COGE Handbook”)prepared jointly by the Society of Petroleum Evaluation Engineers (Calgary Chapter)and the Canadian Institute of Mining, Metallurgy & Petroleum (Petroleum Society).

3. Those standards require that we plan and perform an [audit] [evaluation] [andreview] to obtain reasonable assurance as to whether the reserves data are free ofmaterial misstatement. An [audit] [evaluation] [and review] also includes assessingwhether the reserves data are in accordance with principles and definitions presentedin the COGE Handbook.




4. The following table sets forth the estimated future net revenue (before deduction ofincome taxes) attributed to proved plus probable reserves, estimated using forecastprices and costs and calculated using a discount rate of 10 percent, included in thereserves data of the Company [audited] [evaluated] [and reviewed] by us for the yearended xxx xx, 20xx, and identifies the respective portions thereof that wehave [audited] [evaluated] [and reviewed] and reported on to the Company’s[management/board of directors]:

Location ofIndependent Description and Reserves Net Present Value of Future

Qualified Preparation (Country or Net Revenue (before incomeReserves Date of [Audit/ Foreign taxes, 10% discount rate)

Evaluator or Evaluation/ GeographicAuditor Review] Report Area) Audited Evaulated Reviewed Total

Evaluator A xxx xx, 20xx xxxx $xxx $xxx $xxx $xxx

Evaluator B xxx xx, 20xx xxxx xxx xxx xxx xxx

Totals $xxx $xxx $xxx $xxx

5. In our opinion, the reserves data respectively [audited] [evaluated] by us have, inall material respects, been determined and are in accordance with the COGEHandbook. We express no opinion on the reserves data that we reviewed but did notaudit or evaluate.

6. We have no responsibility to update our reports referred to in paragraph 4 forevents and circumstances occurring after their respective preparation dates.

7. Because the reserves data are based on judgements regarding future events, actualresults will vary and the variations may be material. However, any variations shouldbe consistent with the fact that reserves are categorized according to the probability oftheir recovery.

Executed as to our report referred to above:

Evaluator A, City, Province or State / Country,Execution Date ____________________________Execution Date[signed]

Evaluator B, City, Province or State / Country,Execution Date ____________________________Execution Date[signed]




FORM 51-101F3REPORT OF MANAGEMENT AND DIRECTORS

ON OIL AND GAS DISCLOSURE

This is the form referred to in item 3 of section 2.1 of National Instrument 51-101Standards of Disclosure for Oil and Gas Activities (“NI 51-101”).

1. Terms to which a meaning is ascribed in NI 51-101 have the same meaning in thisform.

2. The report referred to in item 3 of section 2.1 of NI 51-101 must in all materialrespects be as follows:

Report of Management and Directors onReserves Data and Other Information

Management of [name of reporting issuer] (the “Company”) are responsible for thepreparation and disclosure of information with respect to the Company’s oil and gasactivities in accordance with securities regulatory requirements. This informationincludes reserves data which are estimates of proved reserves and probable reservesand related future net revenue as at [last day of the reporting issuer’s most recentlycompleted financial year], estimated using forecast prices and costs.

[An] independent [qualified reserves evaluator[s] or qualified reserves auditor[s]][has / have] [audited] [evaluated] [and reviewed] the Company’s reserves data. Thereport of the independent [qualified reserves evaluator[s] or qualified reservesauditor[s] ] [is presented below/will be filed with securities regulatory authoritiesconcurrently with this report].

The [Reserves Committee of the] board of directors of the Company has:

(a) reviewed the Company’s procedures for providing information to theindependent [qualified reserves evaluator[s] or qualified reserves auditor[s]];

(b) met with the independent [qualified reserves evaluator[s] or qualifiedreserves auditor[s]] to determine whether any restrictions affected the ability ofthe independent [qualified reserves evaluator[s] or qualified reserves auditor[s]]to report without reservation [and, in the event of a proposal to change theindependent [qualified reserves evaluator[s] or qualified reserves auditor[s]], toinquire whether there had been disputes between the previous independent[qualified reserves evaluator[s] or qualified reserves auditor[s] and management];and

(c) reviewed the reserves data with management and the independent [qualifiedreserves evaluator[s] or qualified reserves auditor[s]].




The [Reserves Committee of the] board of directors has reviewed the Company’sprocedures for assembling and reporting other information associated with oil and gasactivities and has reviewed that information with management. The board of directorshas [, on the recommendation of the Reserves Committee,] approved:

(a) the content and filing with securities regulatory authorities of Form 51-101F1containing reserves data and other oil and gas information;

(b) the filing of Form 51-101F2 which is the report of the independent [qualifiedreserves evaluator[s] or qualified reserves auditor[s]] on the reserves data; and

(c) the content and filing of this report.

Because the reserves data are based on judgements regarding future events, actualresults will vary and the variations may be material. However, any variations shouldbe consistent with the fact that reserves are categorized according to the probability oftheir recovery.

________________________________________________________[signature, name and title of chief executive officer]

________________________________________________________[signature, name and title of a senior officer other than the chief executive officer]

________________________________________________________[signature, name of a director]

________________________________________________________[signature, name of a director]

11 Jan 2008 SR 127/2008 s5.




PART XXXII[clause 2(ff)]

NATIONAL INSTRUMENT 55-103INSIDER REPORTING FOR CERTAIN DERIVATIVE TRANSACTIONS

(EQUITY MONETIZATION)

Repealed. 19 Mar 2010 SR 11/2010 s6.




PART XXXIII[clause 2(gg)]

NATIONAL INSTRUMENT 52-108AUDITOR OVERSIGHT

PART 1 DEFINITIONS AND APPLICATION

1.1 Definitions – In this Instrument:

“CPAB” means the Canadian Public Accountability Board/Conseil canadien surla reddition de comptes, incorporated as a corporation without share capital underthe Canada Corporations Act by Letters Patent dated April 15, 2003, and any ofits successors;

“participation agreement” means a written agreement between the CPAB anda public accounting firm in connection with the CPAB’s program of practiceinspections and the establishment of practice requirements;

“participating audit firm” means a public accounting firm that has enteredinto a participation agreement and that has not had its participant statusterminated, or, if its participant status was terminated, has been reinstated inaccordance with CPAB by-laws; and

“public accounting firm” means a sole proprietorship, partnership, corporationor other legal entity engaged in the business of providing services as publicaccountants.

1.2 Application and Transition

(1) This Instrument applies to reporting issuers and public accounting firms.

(2) Repealed. 25 Jly 2008 SR 59/2008 s2.

(3) Part 2 does not apply unless:

(a) the CPAB’s prescribed time period for the public accounting firm tosubmit a participation agreement has expired; and

(b) the auditor’s report prepared by the public accounting firm is dated onor after March 30, 2004.

PART 2 AUDITOR OVERSIGHT

2.1 Public accounting firms – A public accounting firm that prepares an auditor’sreport with respect to the financial statements of a reporting issuer must be, as ofthe date of its auditor’s report:

(a) a participating audit firm; and

(b) in compliance with any restrictions or sanctions imposed by the CPAB.

2.2 Reporting Issuers – A reporting issuer that files its financial statementsaccompanied by an auditor’s report must have the auditor’s report prepared by apublic accounting firm that is, as of the date of the auditor’s report:

(a) a participating audit firm; and

(b) in compliance with any restrictions or sanctions imposed by the CPAB.




PART 3 NOTICE

3.1 Notice of Restrictions

(1) A participating audit firm that is appointed to prepare an auditor’s reportwith respect to the financial statements of a reporting issuer must, if the CPABimposes restrictions on the participating audit firm intended to address defects inits quality control systems, provide notice to the regulator.

(2) The notice required under subsection (1) must be in writing and include acomplete description of:

(a) the defects in the quality control systems identified by the CPAB; and

(b) the restrictions imposed by the CPAB, including the date the restrictionswere imposed and the time period within which the participating audit firmagreed to address the defects.

(3) The notice required under subsection (1) must be delivered within 2 businessdays of the restrictions being imposed.

3.2 Idem

(1) A participating audit firm that is subject to CPAB restrictions intended toaddress defects in its quality control systems and that is informed by the CPABthat it failed to address defects in its quality control systems, to the satisfaction ofthe CPAB, within the agreed upon time period, must provide notice to:

(a) the audit committee of each reporting issuer for which it is appointed toprepare an auditor’s report, or, if a reporting issuer does not have an auditcommittee, the board of directors or the person or persons responsible forreviewing and approving the reporting issuer’s financial statements beforethey are filed; and

(b) the regulator, if the participating audit firm is appointed to prepare anauditor’s report with respect to the financial statements of a reporting issuer.

(2) The notice required under subsection (1) must be in writing and include acomplete description of:

(a) the defects in the quality control systems identified by the CPAB;

(b) the restrictions imposed by the CPAB that were intended to addressdefects in its quality control systems, including the date the restrictions wereimposed and the time period within which the participating audit firmagreed to address the defects; and

(c) the reasons it was unable to address the defects to the satisfaction ofthe CPAB.

(3) The notice required under subsection (1) must be delivered within 10business days of the participating audit firm being informed by the CPAB that ithas failed to address the defects in its quality control systems.




3.3 Notice of Sanctions

(1) A participating audit firm that is subject to sanctions imposed by the CPABmust provide notice to:

(a) the audit committee of each reporting issuer for which it is appointed toprepare an auditor’s report, or, if a reporting issuer does not have an auditcommittee, the board of directors or the person or persons responsible forreviewing and approving the reporting issuer’s financial statements beforethey are filed; and

(b) the regulator, if the participating audit firm is appointed to prepare anauditor’s report with respect to the financial statements of a reportingissuer.

(2) The notice required under subsection (1) must be in writing and include acomplete description of the sanctions imposed by the CPAB, including the date thesanctions were imposed.

(3) The notice required under subsection (1) must be delivered within 10business days of the sanctions being imposed.

3.4 Notice of Restrictions and Sanctions Prior to Appointment

(1) Prior to accepting an appointment to prepare an auditor’s report with respectto the financial statements of a reporting issuer, a participating audit firm mustprovide notice in accordance with:

(a) subsections 3.2(1) and 3.2(2), if the CPAB informed the participatingaudit firm within the 12-month period immediately preceding the expecteddate of appointment that it failed to address defects in its quality controlsystems to the satisfaction of the CPAB; and

(b) subsections 3.3(1) and 3.3(2), if the CPAB imposed sanctions on theparticipating audit firm within the 12-month period immediately precedingthe expected date of appointment.

(2) For the purposes of subsection (1), the references to ‘is appointed’ containedin subsections 3.2(1) and 3.3(1) shall mean ‘is expected to be appointed’.

(3) A participating audit firm is not required to provide notice under subsection (1)if, pursuant to a notice provided under sections 3.2 or 3.3, the reporting issuer andregulator have been provided notice of the participating audit firm’s failure toaddress the defects in its quality control systems to the satisfaction of the CPABand of the sanctions imposed by the CPAB.

PART 4 EXEMPTION

4.1 Exemption

(1) The regulator or the securities regulatory authority may grant an exemptionfrom this Instrument, in whole or in part, subject to such conditions or restrictionsas may be imposed in the exemption.

(2) Despite subsection (1), in Ontario, only the regulator may grant such anexemption.

PART 5 EFFECTIVE DATE

5.1 Effective Date – This Instrument comes into force on March 30, 2004.

25 Jly 2008 SR 59/2008 s2.




PART XXXIV[clause 2(hh)]

NATIONAL INSTRUMENT 52-109CERTIFICATION OF DISCLOSURE IN ISSUERS’

ANNUAL AND INTERIM FILINGS



(a) “AIF” has the meaning ascribed to it in NI 51-102;

(b) “accounting principles” has the meaning ascribed to it in NI 52-107;

(c) “annual certificate” means the certificate required to be filed underPart 4 or section 6.1;

(d) “annual filings” means an issuer’s AIF, if any, its annual financialstatements and its annual MD&A filed under securities legislation for afinancial year, including, for greater certainty, all documents and informationthat are incorporated by reference in the AIF;

(e) “annual financial statements” means the annual financial statementsrequired to be filed under NI 51-102;

(f) “certifying officer” means each chief executive officer and each chieffinancial officer of an issuer, or in the case of an issuer that does not have achief executive officer or a chief financial officer, each individual performingsimilar functions to those of a chief executive officer or chief financial officer;

(g) “DC&P” means disclosure controls and procedures;

(h) “disclosure controls and procedures” means controls and otherprocedures of an issuer that are designed to provide reasonable assurancethat information required to be disclosed by the issuer in its annual filings,interim filings or other reports filed or submitted by it under securitieslegislation is recorded, processed, summarized and reported within the timeperiods specified in the securities legislation and include controls andprocedures designed to ensure that information required to be disclosed byan issuer in its annual filings, interim filings or other reports filed orsubmitted under securities legislation is accumulated and communicated tothe issuer’s management, including its certifying officers, as appropriate toallow timely decisions regarding required disclosure;

(i) “financial period” means a financial year or an interim period;

(j) “ICFR” means internal control over financial reporting;

(k) “internal control over financial reporting” means a processdesigned by, or under the supervision of, an issuer’s certifying officers, andeffected by the issuer’s board of directors, management and other personnel,to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposesin accordance with the issuer’s GAAP and includes those policies andprocedures that:

(i) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of theassets of the issuer;




(ii) are designed to provide reasonable assurance that transactionsare recorded as necessary to permit preparation of financial statementsin accordance with the issuer’s GAAP, and that receipts and expendituresof the issuer are being made only in accordance with authorizations ofmanagement and directors of the issuer; and

(iii) are designed to provide reasonable assurance regarding preventionor timely detection of unauthorized acquisition, use or disposition of theissuer’s assets that could have a material effect on the annual financialstatements or interim financial statements;

(l) “interim certificate” means the certificate required to be filed underPart 5 or section 6.2;

(m) “interim filings” means an issuer’s interim financial statements andits interim MD&A filed under securities legislation for an interim period;

(n) “interim financial statements” means the interim financialstatements required to be filed under NI 51-102;

(o) “interim period” has the meaning ascribed to it in NI 51-102;

(p) “issuer’s GAAP” has the meaning ascribed to it in NI 52-107;

(q) “marketplace” has the meaning ascribed to it in NationalInstrument 21-101 Marketplace Operation;

(r) “material weakness” means a deficiency, or a combination ofdeficiencies, in ICFR such that there is a reasonable possibility that amaterial misstatement of the reporting issuer’s annual or interim financialstatements will not be prevented or detected on a timely basis;

(s) “MD&A” has the meaning ascribed to it in NI 51-102;

(t) “NI 51-102” means National Instrument 51-102 Continuous DisclosureObligations;

(u) “NI 52-107” means National Instrument 52-107 Acceptable AccountingPrinciples, Auditing Standards and Reporting Currency;

(v) “non-venture issuer” means a reporting issuer that is not a ventureissuer;

(w) “proportionately consolidated entity” means an entity in which anissuer has an interest that is accounted for by combining, on a line-by-linebasis, the issuer’s pro rata share of each of the assets, liabilities, revenuesand expenses of the entity with similar items in the issuer’s financialstatements;

(x) “reverse takeover” has the meaning ascribed to it in NI 51-102;

(y) “reverse takeover acquiree” has the meaning ascribed to it inNI 51-102;

(z) “reverse takeover acquirer” has the meaning ascribed to it inNI 51-102;

(aa) “Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002 of theUnited States of America, Pub.L. 107-204, 116 Stat. 745 (2002), as amendedfrom time to time;

(bb) “SOX 302 Rules” means U.S. federal securities laws implementingthe annual report certification requirements in section 302(a) of theSarbanes-Oxley Act;




(cc) “SOX 404 Rules” means U.S. federal securities laws implementingthe internal control report requirements in sections 404(a) and (b) of theSarbanes-Oxley Act;

(dd) “U.S. marketplace” has the meaning ascribed to it in NI 51-102;

(ee) “variable interest entity” has the meaning ascribed to it in theissuer’s GAAP; and

(ff) “venture issuer” means a reporting issuer that, as at the end of theperiod covered by the annual or interim filings, as the case may be, did nothave any of its securities listed or quoted on any of the Toronto StockExchange, a U.S. marketplace, or a marketplace outside of Canada and theUnited States of America other than the Alternative Investment Market ofthe London Stock Exchange or the PLUS markets operated by PLUSMarkets Group plc.

1.2 Application

(1) This Instrument applies to a reporting issuer other than an investment fund.

(2) This Instrument applies in respect of annual filings and interim filings forfinancial periods ending on or after December 15, 2008.

PART 2 CERTIFICATION OBLIGATION

2.1 Certifying officers’ certification obligation – Each certifying officer mustcertify the matters prescribed by the required form that must be filed underPart 4 or Part 5.

PART 3 DC&P AND ICFR

3.1 Establishment and maintenance of DC&P and ICFR – A non-venture issuermust establish and maintain DC&P and ICFR.

3.2 MD&A disclosure of material weakness – Despite section 3.1, if a non-ventureissuer determines that it has a material weakness which exists as at the end of theperiod covered by its annual or interim filings, as the case may be, it must disclosein its annual or interim MD&A for each material weakness:

(a) a description of the material weakness;

(b) the impact of the material weakness on the issuer’s financial reportingand its ICFR; and

(c) the issuer’s current plans, if any, or any actions already undertaken, forremediating the material weakness.

3.3 Limitations on scope of design

(1) Despite section 3.1, a non-venture issuer may limit its design of DC&Por ICFR to exclude controls, policies and procedures of:

(a) subject to subsection (3), a proportionately consolidated entity or avariable interest entity in which the issuer has an interest; or

(b) subject to subsection (4), a business that the issuer acquired not morethan 365 days before the end of the financial period to which the certificaterelates.




(2) An issuer that limits its design of DC&P or ICFR under subsection (1) mustdisclose in its MD&A:

(a) the limitation; and

(b) summary financial information about the proportionately consolidatedentity, variable interest entity or business that the issuer acquired that hasbeen proportionately consolidated or consolidated in the issuer’s financialstatements.

(3) An issuer must not limit its design of DC&P or ICFR under paragraph (1)(a)except where the certifying officers would not have a reasonable basis for makingthe representations in the annual or interim certificates because they do not havesufficient access to a proportionately consolidated entity or variable interestentity, as applicable, to design and evaluate controls, policies and procedurescarried out by that entity.

(4) An issuer must not limit its design of DC&P or ICFR under paragraph (1)(b)except in the case of:

(a) an annual certificate relating to the financial year in which the issueracquired the business; and

(b) an interim certificate relating to the first, second or third interim periodending on or after the date the issuer acquired the business.

3.4 Use of a control framework for the design of ICFR

(1) A non-venture issuer must use a control framework to design the issuer’sICFR.

(2) If a venture issuer files a Form 52-109F1 or Form 52-109F2 for a financialperiod, the venture issuer must use a control framework to design the issuer’sICFR.

PART 4 CERTIFICATION OF ANNUAL FILINGS

4.1 Requirement to file

(1) A reporting issuer must file a separate annual certificate in the wordingprescribed by the required form:

(a) for each individual who, at the time of filing the annual certificate, is acertifying officer; and

(b) signed by the certifying officer.

(2) A reporting issuer must file a certificate required under subsection (1) on thelater of the dates on which it files the following:

(a) its AIF if it is required to file an AIF under NI 51-102; or

(b) its annual financial statements and annual MD&A.




(3) If a venture issuer voluntarily files an AIF for a financial year after it hasfiled its annual financial statements, annual MD&A and annual certificates forthe financial year, the venture issuer must file on the same date that it files itsAIF a separate annual certificate in the wording prescribed by the required form:

(a) for each individual who, at the time of filing the annual certificate, is acertifying officer; and


(4) A reporting issuer must file a certificate required under subsection (1) or (3)separately from the documents to which the certificate relates.

4.2 Required form of annual certificate

(1) The required form of annual certificate under subsection 4.1(1) is:

(a) Form 52-109F1, in the case of an issuer that is a non-venture issuer;and

(b) Form 52-109FV1, in the case of an issuer that is a venture issuer.

(2) Despite subsection (1)(b), a venture issuer may file Form 52-109F1 in thewording prescribed by that Form instead of Form 52-109FV1 for a financial year.

(3) The required form of annual certificate under subsection 4.1(3) isForm 52-109F1 – AIF.

4.3 Alternative form of annual certificate for first financial period afterinitial public offering – Despite subsection 4.2(1), an issuer may file an annualcertificate in Form 52-109F1 – IPO/RTO for the first financial year that ends afterthe issuer becomes a reporting issuer if:

(a) the issuer becomes a reporting issuer by filing a prospectus; and

(b) the first financial period that ends after the issuer becomes a reportingissuer is a financial year.

4.4 Alternative form of annual certificate for first financial period aftercertain reverse takeovers – Despite subsection 4.2(1), an issuer may file anannual certificate in Form 52-109F1 – IPO/RTO for the first financial year thatends after the completion of a reverse takeover if:

(a) the issuer is the reverse takeover acquiree in the reverse takeover;

(b) the reverse takeover acquirer was not a reporting issuer immediatelybefore the reverse takeover; and

(c) the first financial period that ends after the completion of the reversetakeover is a financial year.

4.5 Alternative form of annual certificate for first financial period afterbecoming a non-venture issuer – Despite subsection 4.2(1), an issuer may filean annual certificate in Form 52-109F1 – IPO/RTO for the first financial year thatends after the issuer becomes a non-venture issuer if the first financial period thatends after the issuer becomes a non-venture issuer is a financial year.

4.6 Exception for new reporting issuers – Despite section 4.1, a reporting issuerdoes not have to file an annual certificate relating to:

(a) the annual financial statements required under section 4.7 of NI 51-102for financial years that ended before the issuer became a reporting issuer; or




(b) the annual financial statements for a reverse takeover acquirerrequired under section 4.10 of NI 51-102 for financial years that endedbefore the completion of the reverse takeover.

PART 5 CERTIFICATION OF INTERIM FILINGS

5.1 Requirement to file

(1) A reporting issuer must file a separate interim certificate in the wordingprescribed by the required form:

(a) for each individual who, at the time of filing the interim certificate, is acertifying officer; and


(2) A reporting issuer must file a certificate required under subsection (1) on thesame date that the issuer files its interim filings.

(3) A reporting issuer must file a certificate required under subsection (1)separately from the documents to which the certificate relates.

5.2 Required form of interim certificate

(1) The required form of interim certificate under subsection 5.1(1) is:

(a) Form 52-109F2, in the case of an issuer that is a non-venture issuer;and

(b) Form 52-109FV2, in the case of an issuer that is a venture issuer.

(2) Despite subsection (1)(b), a venture issuer may file Form 52-109F2 in thewording prescribed by that Form instead of Form 52-109FV2 for an interimperiod.

5.3 Alternative form of interim certificate for first financial period afterinitial public offering – Despite subsection 5.2(1), an issuer may file an interimcertificate in Form 52-109F2 – IPO/RTO for the first interim period that endsafter the issuer becomes a reporting issuer if:

(a) the issuer becomes a reporting issuer by filing a prospectus; and

(b) the first financial period that ends after the issuer becomes a reportingissuer is an interim period.

5.4 Alternative form of interim certificate for first financial period aftercertain reverse takeovers – Despite subsection 5.2(1), an issuer may file aninterim certificate in Form 52-109F2 – IPO/RTO for the first interim period thatends after the completion of a reverse takeover if:

(a) the issuer is the reverse takeover acquiree in the reverse takeover;

(b) the reverse takeover acquirer was not a reporting issuer immediatelybefore the reverse takeover; and

(c) the first financial period that ends after the completion of the reversetakeover is an interim period.




5.5 Alternative form of interim certificate for first financial period afterbecoming a non-venture issuer – Despite subsection 5.2(1), an issuer may filean interim certificate in Form 52-109F2 – IPO/RTO for the first interim periodthat ends after the issuer becomes a non-venture issuer if the first financial periodthat ends after the issuer becomes a non-venture issuer is an interim period.

5.6 Exception for new reporting issuers – Despite section 5.1, a reporting issuerdoes not have to file an interim certificate relating to:

(a) the interim financial statements required under section 4.7 ofNI 51-102 for interim periods that ended before the issuer became areporting issuer; or

(b) the interim financial statements for a reverse takeover acquirerrequired under section 4.10 of NI 51-102 for interim periods that endedbefore the completion of the reverse takeover.

PART 60 REFILED FINANCIAL STATEMENTS, MD&A OR AIF

6.1 Refiled annual financial statements, annual MD&A or AIF – If an issuerrefiles its annual financial statements, annual MD&A or AIF for a financial year,it must file separate annual certificates for that financial year in Form 52-109F1Ron the date that it refiles the annual financial statements, annual MD&A or AIF,as the case may be.

6.2 Refiled interim financial statements or interim MD&A – If an issuer refilesits interim financial statements or interim MD&A for an interim period, it mustfile separate interim certificates for that interim period in Form 52-109F2R on thedate that it refiles the interim financial statements or interim MD&A, as the casemay be.

PART 7 GENERAL REQUIREMENTS FOR CERTIFICATES

7.1 Dating of certificates – A certifying officer must date a certificate filed underthis Instrument the same date the certificate is filed.

7.2 French or English

(1) A certificate filed by an issuer under this Instrument must be in French or inEnglish.

(2) In Québec, an issuer must comply with linguistic obligations and rightsprescribed by Québec law.

PART 8 EXEMPTIONS

8.1 Exemption from annual requirements for issuers that comply with U.S.laws

(1) Subject to subsection (2), Parts 2, 3, 4, 6 and 7 do not apply to an issuer for afinancial year if:

(a) the issuer is in compliance with the SOX 302 Rules and the issuer filessigned certificates relating to its annual report under the 1934 Actseparately, but concurrently, and as soon as practicable after they are filedwith or furnished to the SEC; and




(b) the issuer is in compliance with the SOX 404 Rules, and the issuer filesmanagement’s annual report on internal control over financial reporting andthe attestation report on management’s assessment of internal control overfinancial reporting included in the issuer’s annual report under the 1934 Actfor the financial year, if applicable, as soon as practicable after they are filedwith or furnished to the SEC.

(2) Despite subsection (1), Parts 2, 3, 4, 6 and 7 apply to an issuer for a financialyear if the issuer’s annual financial statements, annual MD&A or AIF, thattogether comprise the issuer’s annual filings, differ from the annual financialstatements, annual MD&A or AIF filed with or furnished to the SEC, or includedas exhibits to other documents filed with or furnished to the SEC, and certified incompliance with the SOX 302 Rules.

8.2 Exemption from interim requirements for issuers that comply with U.S.laws

(1) Subject to subsection (3), Parts 2, 3, 5, 6 and 7 do not apply to an issuer for aninterim period if the issuer is in compliance with the SOX 302 Rules and the issuerfiles signed certificates relating to its quarterly report under the 1934 Act for thequarter separately, but concurrently, and as soon as practicable after they arefiled with or furnished to the SEC.

(2) Subject to subsection (3), Parts 2, 3, 5, 6 and 7 do not apply to an issuer for aninterim period if:

(a) the issuer files with or furnishes to the SEC a report on Form 6-Kcontaining the issuer’s quarterly financial statements and MD&A;

(b) the Form 6-K is accompanied by signed certificates that are filed with orfurnished to the SEC in the same form required by the SOX 302 Rules; and

(c) the issuer files signed certificates relating to the quarterly report filed orfurnished under cover of the Form 6-K as soon as practicable after they arefiled with or furnished to the SEC.

(3) Despite subsections (1) and (2), Parts 2, 3, 5, 6 and 7 apply to an issuer for aninterim period if the issuer’s interim financial statements or interim MD&A, thattogether comprise the issuer’s interim filings, differ from the interim financialstatements or interim MD&A filed with or furnished to the SEC, or included asexhibits to other documents filed with or furnished to the SEC, and certified incompliance with the SOX 302 Rules.

8.3 Exemption for certain foreign issuers – This Instrument does not apply to anissuer if it qualifies under, and is in compliance with, sections 5.4 and 5.5 ofNational Instrument 71-102 Continuous Disclosure and Other Exemptions Relatingto Foreign Issuers.

8.4 Exemption for certain exchangeable security issuers – This Instrumentdoes not apply to an issuer if it qualifies under, and is in compliance with,subsection 13.3(2) of NI 51-102.

8.5 Exemption for certain credit support issuers – This Instrument does notapply to an issuer if it qualifies under, and is in compliance with, subsection 13.4(2)of NI 51-102.




8.6 General exemption

(1) The regulator or securities regulatory authority may grant an exemptionfrom this Instrument, in whole or in part, subject to such conditions or restrictionsas may be imposed in the exemption.

(2) Despite subsection (1), in Ontario only the regulator may grant such anexemption.

(3) Except in Ontario, an exemption referred to in subsection (1) is grantedunder the statute referred to in Appendix B of National Instrument 14-101Definitions opposite the name of the local jurisdiction.

PART 9 EFFECTIVE DATE AND REPEAL

9.1 Effective date – This Instrument comes into force on December 15, 2008.

9.2 Repeal – Multilateral Instrument 52-109 Certification of Disclosure in Issuers’Annual and Interim Filings, which came into force on:

(a) March 30, 2004, in all jurisdictions other than British Columbia, NewBrunswick and Québec;

(b) June 30, 2005, in Québec;

(c) July 28, 2005, in New Brunswick; and

(d) September 19, 2005 in British Columbia;

is repealed.

FORM 52-109F1CERTIFICATION OF ANNUAL FILINGS FULL CERTIFICATE

I, <identify (i) the certifying officer, (ii) his or her position at the issuer,(iii) the name of the issuer and (iv) if the certifying officer’s title is not“chief executive officer” or “chief financial officer”, indicate in which ofthese capacities the certifying officer is providing the certificate>, certifythe following:

1. Review: I have reviewed the AIF, if any, annual financial statements andannual MD&A, including, for greater certainty, all documents and informationthat are incorporated by reference in the AIF (together, the “annual filings”) of<identify issuer> (the “issuer”) for the financial year ended <state therelevant date>.

2. No misrepresentations: Based on my knowledge, having exercised reasonablediligence, the annual filings do not contain any untrue statement of a materialfact or omit to state a material fact required to be stated or that is necessary tomake a statement not misleading in light of the circumstances under which itwas made, for the period covered by the annual filings.

3. Fair presentation: Based on my knowledge, having exercised reasonablediligence, the annual financial statements together with the other financialinformation included in the annual filings fairly present in all materialrespects the financial condition, results of operations and cash flows of theissuer, as of the date of and for the periods presented in the annual filings.




4. Responsibility: The issuer’s other certifying officer(s) and I are responsiblefor establishing and maintaining disclosure controls and procedures (DC&P)and internal control over financial reporting (ICFR), as those terms aredefined in National Instrument 52-109 Certification of Disclosure in Issuers’Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2and 5.3, the issuer’s other certifying officer(s) and I have, as at the financialyear end:

(a) designed DC&P, or caused it to be designed under our supervision, toprovide reasonable assurance that:

(i) material information relating to the issuer is made known to us byothers, particularly during the period in which the annual filings arebeing prepared; and

(ii) information required to be disclosed by the issuer in its annualfilings, interim filings or other reports filed or submitted by it undersecurities legislation is recorded, processed, summarized and reportedwithin the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes inaccordance with the issuer’s GAAP.

5.1 Control framework: The control framework the issuer’s other certifyingofficer(s) and I used to design the issuer’s ICFR is <insert the name of thecontrol framework used>.

<insert paragraph 5.2 or 5.3 if applicable. If paragraph 5.2 or 5.3 is notapplicable, insert “5.2 N/A” or “5.3 N/A” as applicable. For paragraph 5.3,include (a)(i), (a)(ii) or (a)(iii) as applicable, and subparagraph (b).>

5.2 ICFR – material weakness relating to design: The issuer has disclosed inits annual MD&A for each material weakness relating to design existing atthe financial year end:




5.3 Limitation on scope of design: The issuer has disclosed in its annualMD&A:

(a) the fact that the issuer’s other certifying officer(s) and I have limited thescope of our design of DC&P and ICFR to exclude controls, policies andprocedures of:

(i) a proportionately consolidated entity in which the issuer has aninterest;

(ii) a variable interest entity in which the issuer has an interest; or

(iii) a business that the issuer acquired not more than 365 days beforethe issuer’s financial year end; and





<insert subparagraph 6(b)(ii) if applicable. If subparagraph 6(b)(ii) isnot applicable, insert “(ii) N/A”.>

6. Evaluation: The issuer’s other certifying officer(s) and I have:

(a) evaluated, or caused to be evaluated under our supervision, theeffectiveness of the issuer’s DC&P at the financial year end and the issuerhas disclosed in its annual MD&A our conclusions about the effectiveness ofDC&P at the financial year end based on that evaluation; and

(b) evaluated, or caused to be evaluated under our supervision, theeffectiveness of the issuer’s ICFR at the financial year end and the issuer hasdisclosed in its annual MD&A:

(i) our conclusions about the effectiveness of ICFR at the financialyear end based on that evaluation; and

(ii) for each material weakness relating to operation existing at thefinancial year end:

(A) a description of the material weakness;

(B) the impact of the material weakness on the issuer’s financialreporting and its ICFR; and

(C) the issuer’s current plans, if any, or any actions alreadyundertaken, for remediating the material weakness.

7. Reporting changes in ICFR: The issuer has disclosed in its annual MD&Aany change in the issuer’s ICFR that occurred during the period beginning on<insert the date immediately following the end of the period in respectof which the issuer made its most recent interim or annual filing, asapplicable> and ended on <insert the last day of the financial year> thathas materially affected, or is reasonably likely to materially affect, the issuer’sICFR.

8. Reporting to the issuer’s auditors and board of directors or auditcommittee: The issuer’s other certifying officer(s) and I have disclosed, basedon our most recent evaluation of ICFR, to the issuer’s auditors, and the boardof directors or the audit committee of the board of directors any fraud thatinvolves management or other employees who have a significant role in theissuer’s ICFR.

Date: <insert date of filing>

___________________________[Signature]

[Title]

<If the certifying officer’s title is not “chief executive officer” or “chief financialofficer”, indicate in which of these capacities the certifying officer is providingthe certificate.>




FORM 52-109FV1CERTIFICATION OF ANNUAL FILINGS VENTURE

ISSUER BASIC CERTIFICATE

I, <identify (i) the certifying officer, (ii) his or her position at the issuer, (iii) thename of the issuer and (iv) if the certifying officer’s title is not “chief executiveofficer” or “chief financial officer”, indicate in which of these capacities thecertifying officer is providing the certificate>, certify the following:





___________________________[Signature]

[Title]





NOTE TO READER

In contrast to the certificate required for non-venture issuers under NationalInstrument 52-109 Certification of Disclosure in Issuers’ Annual and InterimFilings (NI 52-109), this Venture Issuer Basic Certificate does not includerepresentations relating to the establishment and maintenance of disclosurecontrols and procedures (DC&P) and internal control over financial reporting(ICFR), as defined in NI 52-109. In particular, the certifying officers filing thiscertificate are not making any representations relating to the establishment andmaintenance of:

i) controls and other procedures designed to provide reasonable assurance thatinformation required to be disclosed by the issuer in its annual filings, interimfilings or other reports filed or submitted under securities legislation isrecorded, processed, summarized and reported within the time periodsspecified in securities legislation; and

ii) a process to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes inaccordance with the issuer’s GAAP.

The issuer’s certifying officers are responsible for ensuring that processes are inplace to provide them with sufficient knowledge to support the representationsthey are making in this certificate. Investors should be aware that inherentlimitations on the ability of certifying officers of a venture issuer to design andimplement on a cost effective basis DC&P and ICFR as defined in NI 52-109 mayresult in additional risks to the quality, reliability, transparency and timeliness ofinterim and annual filings and other reports provided under securities legislation.

FORM 52-109F1 – IPO/RTOCERTIFICATION OF ANNUAL FILINGS FOLLOWING

AN INITIAL PUBLIC OFFERING, REVERSE TAKEOVEROR BECOMING A NON-VENTURE ISSUER









___________________________[Signature]

[Title]


NOTE TO READER

In contrast to the usual certificate required for non-venture issuers underNational Instrument 52-109 Certification of Disclosure in Issuers’ Annual andInterim Filings (NI 52-109), namely, Form 52-109F1, this Form 52-109F1 – IPO/RTO does not include representations relating to the establishment andmaintenance of disclosure controls and procedures (DC&P) and internal controlover financial reporting (ICFR), as defined in NI 52-109. In particular, thecertifying officers filing this certificate are not making any representationsrelating to the establishment and maintenance of:



The issuer’s certifying officers are responsible for ensuring that processes are inplace to provide them with sufficient knowledge to support the representationsthey are making in this certificate.

Investors should be aware that inherent limitations on the ability of certifyingofficers of an issuer to design and implement on a cost effective basis DC&P andICFR as defined in NI 52-109 in the first financial period following:

i) completion of the issuer’s initial public offering in the circumstances describedin s. 4.3 of NI 52-109;

ii) completion of a reverse takeover in the circumstances described in s. 4.4 ofNI 52-109; or

iii) the issuer becoming a non-venture issuer in the circumstances describedin s. 4.5 of NI 52-109;

may result in additional risks to the quality, reliability, transparency andtimeliness of interim and annual filings and other reports provided undersecurities legislation.




FORM 52-109F1RCERTIFICATION OF REFILED ANNUAL FILINGS

This certificate is being filed on the same date that <identify the issuer> (the “issuer”)has refiled <identify the filing(s) that have been refiled>.


1. Review: I have reviewed the AIF, if any, annual financial statements andannual MD&A, including, for greater certainty, all documents and informationthat are incorporated by reference in the AIF (together, the “annual filings”) of theissuer for the financial year ended <state the relevant date>.

<Insert all paragraphs included in the annual certificates originally filedwith the annual filings, other than paragraph 1. If the originally filed annualcertificates were in Form 52-109FV1 or Form 52-109F1 – IPO/RTO, include the“note to reader” contained in Form 52-109FV1 or Form 52-109F1 – IPO/RTO, asthe case may be, in this certificate.>


___________________________[Signature]

[Title]





FORM 52-109F1 – AIFCERTIFICATION OF ANNUAL FILINGS IN CONNECTION WITH

VOLUNTARILY FILED AIF

This certificate is being filed on the same date that <identify the issuer> (the “issuer”)has voluntarily filed an AIF.


1. Review: I have reviewed the AIF, annual financial statements and annualMD&A, including for greater certainty all documents and information that areincorporated by reference in the AIF (together, the “annual filings”) of the issuerfor the financial year ended <state the relevant date>.

<Insert all paragraphs included in the annual certificates originally filedwith the annual filings, other than paragraph 1. If the originally filed annualcertificates were in Form 52-109FV1 or Form 52-109F1 – IPO/RTO, include the“note to reader” contained in Form 52-109FV1 or Form 52-109F1 – IPO/RTO, asthe case may be, in this certificate.>


___________________________[Signature]

[Title]





FORM 52-109F2CERTIFICATION OF INTERIM FILINGS FULL CERTIFICATE


1. Review: I have reviewed the interim financial statements and interim MD&A(together, the “interim filings”) of <identify the issuer> (the “issuer”) for theinterim period ended <state the relevant date>.

2. No misrepresentations: Based on my knowledge, having exercised reasonablediligence, the interim filings do not contain any untrue statement of a materialfact or omit to state a material fact required to be stated or that is necessary tomake a statement not misleading in light of the circumstances under which it wasmade, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonablediligence, the interim financial statements together with the other financialinformation included in the interim filings fairly present in all material respectsthe financial condition, results of operations and cash flows of the issuer, as of thedate of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsiblefor establishing and maintaining disclosure controls and procedures (DC&P) andinternal control over financial reporting (ICFR), as those terms are defined inNational Instrument 52-109 Certification of Disclosure in Issuers’ Annual andInterim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of theperiod covered by the interim filings:

(a) designed DC&P, or caused it to be designed under our supervision, toprovide reasonable assurance that:

(i) material information relating to the issuer is made known to us byothers, particularly during the period in which the interim filings arebeing prepared; and

(ii) information required to be disclosed by the issuer in its annualfilings, interim filings or other reports filed or submitted by it undersecurities legislation is recorded, processed, summarized and reportedwithin the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes inaccordance with the issuer’s GAAP.




5.1 Control framework: The control framework the issuer’s other certifyingofficer(s) and I used to design the issuer’s ICFR is <insert the name of thecontrol framework used>.

<insert paragraph 5.2 or 5.3 if applicable. If paragraph 5.2 or 5.3 is notapplicable, insert “5.2 N/A” or “5.3 N/A” as applicable. For paragraph 5.3,include (a)(i), (a)(ii) or (a)(iii) as applicable, and subparagraph (b).>

5.2 ICFR – material weakness relating to design: The issuer has disclosedin its interim MD&A for each material weakness relating to design existing at theend of the interim period:




5.3 Limitation on scope of design: The issuer has disclosed in its interimMD&A:

(a) the fact that the issuer’s other certifying officer(s) and I have limited thescope of our design of DC&P and ICFR to exclude controls, policies andprocedures of:

(i) a proportionately consolidated entity in which the issuer has aninterest;

(ii) a variable interest entity in which the issuer has an interest; or

(iii) a business that the issuer acquired not more than 365 days beforethe last day of the period covered by the interim filings; and


6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&Aany change in the issuer’s ICFR that occurred during the period beginning on<insert the date immediately following the end of the period in respect ofwhich the issuer made its most recent interim or annual filing, asapplicable> and ended on <insert the last day of the period covered by theinterim filings > that has materially affected, or is reasonably likely tomaterially affect, the issuer’s ICFR.


___________________________[Signature]

[Title]





FORM 52-109FV2CERTIFICATION OF INTERIM FILINGS VENTURE

ISSUER BASIC CERTIFICATE






___________________________[Signature]

[Title]





NOTE TO READERIn contrast to the certificate required for non-venture issuers under NationalInstrument 52-109 Certification of Disclosure in Issuers’ Annual and InterimFilings (NI 52-109), this Venture Issuer Basic Certificate does not includerepresentations relating to the establishment and maintenance of disclosurecontrols and procedures (DC&P) and internal control over financial reporting(ICFR), as defined in NI 52-109. In particular, the certifying officers filing thiscertificate are not making any representations relating to the establishment andmaintenance of:



The issuer’s certifying officers are responsible for ensuring that processes are inplace to provide them with sufficient knowledge to support the representationsthey are making in this certificate. Investors should be aware that inherentlimitations on the ability of certifying officers of a venture issuer to design andimplement on a cost effective basis DC&P and ICFR as defined in NI 52-109 mayresult in additional risks to the quality, reliability, transparency and timeliness ofinterim and annual filings and other reports provided under securities legislation.

FORM 52-109F2 – IPO/RTOCERTIFICATION OF INTERIM FILINGS FOLLOWING AN INITIAL PUBLIC

OFFERING, REVERSE TAKEOVER OR BECOMINGA NON-VENTURE ISSUER









___________________________[Signature]

[Title]


NOTE TO READERIn contrast to the usual certificate required for non-venture issuers underNational Instrument 52-109 Certification of Disclosure in Issuers’ Annual andInterim Filings (NI 52-109), namely, Form 52-109F2, this Form 52-109F2 – IPO/RTO does not include representations relating to the establishment andmaintenance of disclosure controls and procedures (DC&P) and internal controlover financial reporting (ICFR), as defined in NI 52-109. In particular, thecertifying officers filing this certificate are not making any representationsrelating to the establishment and maintenance of:



The issuer’s certifying officers are responsible for ensuring that processes are inplace to provide them with sufficient knowledge to support the representationsthey are making in this certificate.

Investors should be aware that inherent limitations on the ability of certifyingofficers of an issuer to design and implement on a cost effective basis DC&P andICFR as defined in NI 52-109 in the first financial period following:

i) completion of the issuer’s initial public offering in the circumstances describedin s. 5.3 of NI 52-109;

ii) completion of a reverse takeover in the circumstances described in s. 5.4 ofNI 52-109; or

iii) the issuer becoming a non-venture issuer in the circumstances described ins. 5.5 of NI 52-109;

may result in additional risks to the quality, reliability, transparency andtimeliness of interim and annual filings and other reports provided undersecurities legislation.




FORM 52-109F2RCERTIFICATION OF REFILED INTERIM FILINGS

This certificate is being filed on the same date that <identify the issuer> (the “issuer”)has refiled <identify the filing(s) that have been refiled>.

I, <identify (i) the certifying officer, (ii) his or her position at the issuer, (iii)the name of the issuer and (iv) if the certifying officer’s title is not ‘chiefexecutive officer’ or ‘chief financial officer’, indicate in which of thesecapacities the certifying officer is providing the certificate>, certify thefollowing:

1. Review: I have reviewed the interim financial statements and interim MD&A(together, the ‘interim filings’) of the issuer for the interim period ended <statethe relevant date>.

<Insert all paragraphs included in the interim certificates originally filedwith the interim filings, other than paragraph 1. If the originally filed interimcertificates were in Form 52-109FV2 or Form 52-109F2 – IPO/RTO, include the‘note to reader’ contained in Form 52-109FV2 or Form 52-109F2 – IPO/RTO, asthe case may be, in this certificate .>


___________________________[Signature]

[Title]

<If the certifying officer’s title is not “chief executive officer” or “chieffinancial officer”, indicate in which of these capacities the certifying officer isproviding the certificate>.

24 Oct 2008 SR 91/2008.




PART XXXV[clause 2(ii)]

NATIONAL INSTRUMENT 52-110AUDIT COMMITTEES



“accounting principles” has the meaning ascribed to it in NationalInstrument 52-107 Acceptable Accounting Principles, Auditing Standards andReporting Currency;

“AIF” has the meaning ascribed to it in NI 51-102;

“asset-backed security” has the meaning ascribed to it in NI 51-102;

“audit committee” means a committee (or an equivalent body) established byand among the board of directors of an issuer for the purpose of overseeing theaccounting and financial reporting processes of the issuer and audits of thefinancial statements of the issuer, and, if no such committee exists, the entireboard of directors of the issuer;

“audit services” means the professional services rendered by the issuer’sexternal auditor for the audit and review of the issuer’s financial statements orservices that are normally provided by the external auditor in connection withstatutory and regulatory filings or engagements;

“credit support issuer” has the meaning ascribed to it in section 13.4of NI 51-102;

“designated foreign issuer” has the meaning ascribed to it in NationalInstrument 71-102 Continuous Disclosure and Other Exemptions Relating toForeign Issuers;

“exchangeable security issuer” has the meaning ascribed to it in section 13.3of NI 51-102;

“executive officer” of an entity means an individual who is:

(a) a chair of the entity;

(b) a vice-chair of the entity;

(c) the president of the entity;

(d) a vice-president of the entity in charge of a principal business unit,division or function including sales, finance or production;

(e) an officer of the entity or any of its subsidiary entities who performs apolicy-making function in respect of the entity; or

(f) any other individual who performs a policy-making function in respectof the entity;

“foreign private issuer” means an issuer that is a foreign private issuer withinthe meaning of Rule 405 under the 1934 Act;

“immediate family member” means an individual’s spouse, parent, child,sibling, mother or father-in-law, son or daughter-in-law, brother or sister-in-law,and anyone (other than an employee of either the individual or the individual’simmediate family member) who shares the individual’s home;




“marketplace” has the meaning ascribed to it in National Instrument 21-101Marketplace Operation;

“MD&A” has the meaning ascribed to it in NI 51-102;

“NI 51-102” means National Instrument 51-102 Continuous Disclosure Obligations;

“non-audit services” means services other than audit services;

“SEC foreign issuer” has the meaning ascribed to it in NationalInstrument 71-102 Continuous Disclosure and Other Exemptions Relating toForeign Issuers;

“U.S. marketplace” means an exchange registered as a ‘national securitiesexchange’ under section 6 of the 1934 Act, or the Nasdaq Stock Market;

“venture issuer” means an issuer that, at the end of its most recently completedfinancial year, did not have any of its securities listed or quoted on any of theToronto Stock Exchange, a U.S. marketplace, or a marketplace outside of Canadaand the United States of America other than the Alternative Investment Marketof the London Stock Exchange or the PLUS markets operated by PLUS MarketsGroup plc.

1.2 Application – This Instrument applies to all reporting issuers other than:

(a) investment funds;

(b) issuers of asset-backed securities;

(c) designated foreign issuers;

(d) SEC foreign issuers;

(e) issuers that are subsidiary entities, if:

(i) the subsidiary entity does not have equity securities (other thannon-convertible, non-participating preferred securities) trading on amarketplace; and

(ii) the parent of the subsidiary entity is:

(A) subject to the requirements of this Instrument; or

(B) an issuer that:

(1) has securities listed or quoted on a U.S. marketplace;and

(2) is in compliance with the requirements of that U.S.marketplace applicable to issuers, other than foreign privateissuers, regarding the role and composition of auditcommittees;




(f) exchangeable security issuers, if the exchangeable security issuerqualifies for the relief contemplated by, and is in compliance with therequirements and conditions set out in, section 13.3 of NI 51-102; and

(g) credit support issuers, if the credit support issuer qualifies for the reliefcontemplated by, and is in compliance with the requirements and conditionsset out in, section 13.4 of NI 51-102.

1.3 Meaning of Affiliated Entity, Subsidiary Entity and Control

(1) For the purposes of this Instrument, a person or company is considered to bean affiliated entity of another person or company if:

(a) one of them controls or is controlled by the other or if both persons orcompanies are controlled by the same person or company; or

(b) the person is an individual who is:

(i) both a director and an employee of an affiliated entity; or

(ii) an executive officer, general partner or managing member of anaffiliated entity.

(2) For the purposes of this Instrument, a person or company is considered to bea subsidiary entity of another person or company if:

(a) it is controlled by:

(i) that other; or

(ii) that other and one or more persons or companies each of which iscontrolled by that other; or

(iii) two or more persons or companies, each of which is controlled bythat other; or

(b) it is a subsidiary entity of a person or company that is the other’ssubsidiary entity.

(3) For the purpose of this Instrument, “control” means the direct or indirectpower to direct or cause the direction of the management and policies of a personor company, whether through ownership of voting securities or otherwise.

(4) Despite subsection (1), an individual will not be considered to control anissuer for the purposes of this Instrument if the individual:

(a) owns, directly or indirectly, 10% or less of any class of voting securitiesof the issuer; and

(b) is not an executive officer of the issuer.

1.4 Meaning of Independence

(1) An audit committee member is independent if he or she has no direct orindirect material relationship with the issuer.

(2) For the purposes of subsection (1), a “material relationship” is a relationshipwhich could, in the view of the issuer’s board of directors, be reasonably expectedto interfere with the exercise of a member’s independent judgement.




(3) Despite subsection (2), the following individuals are considered to have amaterial relationship with an issuer:

(a) an individual who is, or has been within the last three years, anemployee or executive officer of the issuer;

(b) an individual whose immediate family member is, or has been withinthe last three years, an executive officer of the issuer;

(c) an individual who:

(i) is a partner of a firm that is the issuer’s internal or externalauditor;

(ii) is an employee of that firm; or

(iii) was within the last three years a partner or employee of that firmand personally worked on the issuer’s audit within that time;

(d) an individual whose spouse, minor child or stepchild, or child orstepchild who shares a home with the individual:

(i) is a partner of a firm that is the issuer’s internal or externalauditor;

(ii) is an employee of that firm and participates in its audit, assuranceor tax compliance (but not tax planning) practice; or

(iii) was within the last three years a partner or employee of that firmand personally worked on the issuer’s audit within that time;

(e) an individual who, or whose immediate family member, is or has beenwithin the last three years, an executive officer of an entity if any of theissuer’s current executive officers serves or served at that same time on theentity’s compensation committee; and

(f) an individual who received, or whose immediate family member who isemployed as an executive officer of the issuer received, more than $75,000 indirect compensation from the issuer during any 12 month period within thelast three years.

(4) Despite subsection (3), an individual will not be considered to have amaterial relationship with the issuer solely because:

(a) he or she had a relationship identified in subsection (3) if thatrelationship ended before March 30, 2004; or

(b) he or she had a relationship identified in subsection (3) by virtue ofsubsection (8) if that relationship ended before June 30, 2005.

(5) For the purposes of clauses (3)(c) and (3)(d), a partner does not include a fixedincome partner whose interest in the firm that is the internal or external auditoris limited to the receipt of fixed amounts of compensation (including deferredcompensation) for prior service with that firm if the compensation is notcontingent in any way on continued service.




(6) For the purposes of clause (3)(f), direct compensation does not include:

(a) remuneration for acting as a member of the board of directors or of anyboard committee of the issuer; and

(b) the receipt of fixed amounts of compensation under a retirement plan(including deferred compensation) for prior service with the issuer if thecompensation is not contingent in any way on continued service.

(7) Despite subsection (3), an individual will not be considered to have amaterial relationship with the issuer solely because the individual or his or herimmediate family member:

(a) has previously acted as an interim chief executive officer of the issuer;or

(b) acts, or has previously acted, as a chair or vice-chair of the board ofdirectors or of any board committee of the issuer on a part-time basis.

(8) For the purpose of section 1.4, an issuer includes a subsidiary entity of theissuer and a parent of the issuer.

1.5 Additional Independence Requirements

(1) Despite any determination made under section 1.4, an individual who:

(a) accepts, directly or indirectly, any consulting, advisory or othercompensatory fee from the issuer or any subsidiary entity of the issuer, otherthan as remuneration for acting in his or her capacity as a member of theboard of directors or any board committee, or as a part-time chair orvice-chair of the board or any board committee; or

(b) is an affiliated entity of the issuer or any of its subsidiary entities;

is considered to have a material relationship with the issuer.

(2) For the purposes of subsection (1), the indirect acceptance by an individual ofany consulting, advisory or other compensatory fee includes acceptance of a feeby:

(a) an individual’s spouse, minor child or stepchild, or a child or stepchildwho shares the individual’s home; or

(b) an entity in which such individual is a partner, member, an officer suchas a managing director occupying a comparable position or executive officer,or occupies a similar position (except limited partners, non-managingmembers and those occupying similar positions who, in each case, have noactive role in providing services to the entity) and which provides accounting,consulting, legal, investment banking or financial advisory services to theissuer or any subsidiary entity of the issuer.

(3) For the purposes of subsection (1), compensatory fees do not include thereceipt of fixed amounts of compensation under a retirement plan (includingdeferred compensation) for prior service with the issuer if the compensation is notcontingent in any way on continued service.




1.6 Meaning of Financial Literacy - For the purposes of this Instrument, anindividual is financially literate if he or she has the ability to read and understanda set of financial statements that present a breadth and level of complexity ofaccounting issues that are generally comparable to the breadth and complexity ofthe issues that can reasonably be expected to be raised by the issuer’s financialstatements.

PART 2 AUDIT COMMITTEE RESPONSIBILITIES

2.1 Audit Committee – Every issuer must have an audit committee that complieswith the requirements of the Instrument.

2.2 Relationship with External Auditors – Every issuer must require its externalauditor to report directly to the audit committee.

2.3 Audit Committee Responsibilities

(1) An audit committee must have a written charter that sets out its mandateand responsibilities.

(2) An audit committee must recommend to the board of directors:

(a) the external auditor to be nominated for the purpose of preparing orissuing an auditor’s report or performing other audit, review or attestservices for the issuer; and

(b) the compensation of the external auditor.

(3) An audit committee must be directly responsible for overseeing the work ofthe external auditor engaged for the purpose of preparing or issuing an auditor’sreport or performing other audit, review or attest services for the issuer, includingthe resolution of disagreements between management and the external auditorregarding financial reporting.

(4) An audit committee must pre-approve all non-audit services to be provided tothe issuer or its subsidiary entities by the issuer’s external auditor.

(5) An audit committee must review the issuer’s financial statements, MD&Aand annual and interim earnings press releases before the issuer publiclydiscloses this information.

(6) An audit committee must be satisfied that adequate procedures are in placefor the review of the issuer’s public disclosure of financial information extracted orderived from the issuer’s financial statements, other than the public disclosurereferred to in subsection (5), and must periodically assess the adequacy of thoseprocedures.

(7) An audit committee must establish procedures for:

(a) the receipt, retention and treatment of complaints received by theissuer regarding accounting, internal accounting controls, or auditingmatters; and

(b) the confidential, anonymous submission by employees of the issuer ofconcerns regarding questionable accounting or auditing matters.

(8) An audit committee must review and approve the issuer’s hiring policiesregarding partners, employees and former partners and employees of the presentand former external auditor of the issuer.




2.4 De Minimis Non-Audit Services – An audit committee satisfies the pre-approvalrequirement in subsection 2.3(4) if:

(a) the aggregate amount of all the non-audit services that were notpre-approved is reasonably expected to constitute no more than 5 % of thetotal amount of fees paid by the issuer and its subsidiary entities to theissuer’s external auditor during the fiscal year in which the services areprovided;

(b) the issuer or the subsidiary entity of the issuer, as the case may be, didnot recognize the services as non-audit services at the time of the engagement;and

(c) the services are promptly brought to the attention of the auditcommittee of the issuer and approved, prior to the completion of the audit, bythe audit committee or by one or more of its members to whom authority togrant such approvals has been delegated by the audit committee.

2.5 Delegation of Pre-Approval Function

(1) An audit committee may delegate to one or more independent members theauthority to pre-approve non-audit services in satisfaction of the requirement insubsection 2.3(4).

(2) The pre-approval of non-audit services by any member to whom authorityhas been delegated pursuant to subsection (1) must be presented to the auditcommittee at its first scheduled meeting following such pre-approval.

2.6 Pre-Approval Policies and Procedures – An audit committee satisfies thepre-approval requirement in subsection 2.3(4) if it adopts specific policies andprocedures for the engagement of the non-audit services, if:

(a) the pre-approval policies and procedures are detailed as to the particularservice;

(b) the audit committee is informed of each non-audit service; and

(c) the procedures do not include delegation of the audit committee’sresponsibilities to management.

PART 3 COMPOSITION OF THE AUDIT COMMITTEE

3.1 Composition

(1) An audit committee must be composed of a minimum of three members.

(2) Every audit committee member must be a director of the issuer.

(3) Subject to sections 3.2, 3.3, 3.4, 3.5 and 3.6, every audit committee membermust be independent.

(4) Subject to sections 3.5 and 3.8, every audit committee member must befinancially literate.

3.2 Initial Public Offerings

(1) Subject to section 3.9, if an issuer has filed a prospectus to qualify thedistribution of securities that constitutes its initial public offering, subsection 3.1(3)does not apply for a period of up to 90 days commencing on the date of the receiptfor the prospectus, provided that one member of the audit committee isindependent.




(2) Subject to section 3.9, if an issuer has filed a prospectus to qualify thedistribution of securities that constitutes its initial public offering, subsection 3.1(3)does not apply for a period of up to one year commencing on the date of the receiptfor the prospectus, provided that a majority of the audit committee members areindependent.

3.3 Controlled Companies

(1) An audit committee member that sits on the board of directors of an affiliatedentity is exempt from the requirement in subsection 3.1(3) if the member, exceptfor being a director (or member of a board committee) of the issuer and theaffiliated entity, is otherwise independent of the issuer and the affiliated entity.

(2) Subject to section 3.7, an audit committee member is exempt from therequirement in subsection 3.1(3) if:

(a) tthe member would be independent of the issuer but for the relationshipdescribed in paragraph 1.5(1)(b) or as a result of subsection 1.4(8);

(b) the member is not an executive officer, general partner or managingmember of a person or company that:

(i) is an affiliated entity of the issuer; and

(ii) has its securities trading on a marketplace;

(c) the member is not an immediate family member of an executive officer,general partner or managing member referred to in paragraph (b), above;

(d) the member does not act as the chair of the audit committee; and

(e) the board determines in its reasonable judgement that:

(i) the member is able to exercise the impartial judgement necessaryfor the member to fulfill his or her responsibilities as an auditcommittee member; and

(ii) the appointment of the member is required by the best interests ofthe issuer and its shareholders.

3.4 Events Outside Control of Member – Subject to section 3.9, if an auditcommittee member ceases to be independent for reasons outside the member’sreasonable control, the member is exempt from the requirement in subsection 3.1(3)for a period ending on the later of:

(a) the next annual meeting of the issuer; and

(b) the date that is six months from the occurrence of the event whichcaused the member to not be independent.

3.5 Death, Disability or Resignation of Member – Subject to section 3.9, if thedeath, disability or resignation of an audit committee member has resulted in avacancy on the audit committee that the board of directors is required to fill, anaudit committee member appointed to fill such vacancy is exempt from therequirements in subsections 3.1(3) and (4) for a period ending on the later of:

(a) the next annual meeting of the issuer; and

(b) the date that is six months from the day the vacancy was created.




3.6 Temporary Exemption for Limited and Exceptional Circumstances –Subject to section 3.7, an audit committee member is exempt from the requirementin subsection 3.1(3) if:

(a) the member is not an individual described in subsection 1.5(1);

(b) the member is not an employee or officer of the issuer, or an immediatefamily member of an employee or officer of the issuer;

(c) the board, under exceptional and limited circumstances, determines inits reasonable judgement that:

(i) the member is able to exercise the impartial judgement necessaryfor the member to fulfill his or her responsibilities as an auditcommittee member; and

(ii) the appointment of the member is required by the best interests ofthe issuer and its shareholders;

(d) the member does not act as chair of the audit committee; and

(e) the member does not rely upon this exemption for a period of more thantwo years.

3.7 Majority Independent – The exemptions in subsection 3.3(2) and section 3.6are not available to a member unless a majority of the audit committee memberswould be independent.

3.8 Acquisition of Financial Literacy – Subject to section 3.9, an audit committeemember who is not financially literate may be appointed to the audit committeeprovided that the member becomes financially literate within a reasonable periodof time following his or her appointment.

3.9 Restriction on Use of Certain Exemptions – The exemptions in sections 3.2,3.4, 3.5 and 3.8 are not available to a member unless the issuer’s board of directorshas determined that the reliance on the exemption will not materially adverselyaffect the ability of the audit committee to act independently and to satisfy theother requirements of this Instrument.

PART 4 AUTHORITY OF THE AUDIT COMMITTEE

4.1 Authority – An audit committee must have the authority:

(a) to engage independent counsel and other advisors as it determinesnecessary to carry out its duties;

(b) to set and pay the compensation for any advisors employed by the auditcommittee; and

(c) to communicate directly with the internal and external auditors.




PART 5 REPORTING OBLIGATIONS

5.1 Required Disclosure – Every issuer must include in its AIF the disclosurerequired by Form 52-110F1.

5.2 Management Information Circular – If management of an issuer solicitsproxies from the security holders of the issuer for the purpose of electing directorsto the issuer’s board of directors, the issuer must include in its managementinformation circular a cross-reference to the sections in the issuer’s AIF thatcontain the information required by section 5.1.

PART 6 VENTURE ISSUERS

6.1 Venture Issuers – Venture issuers are exempt from the requirements of Parts 3(Composition of the Audit Committee) and 5 (Reporting Obligations).

6.2 Required Disclosure

(1) Subject to subsection (2), if management of a venture issuer solicits proxiesfrom the security holders of the venture issuer for the purpose of electing directorsto its board of directors, the venture issuer must include in its managementinformation circular the disclosure required by Form 52-110F2.

(2) A venture issuer that is not required to send a management informationcircular to its security holders must provide the disclosure required byForm 52-110F2 in its AIF or annual MD&A.

PART 7 U.S. LISTED ISSUERS

7.1 U.S. Listed Issuers – An issuer that has securities listed or quoted on a U.S.marketplace is exempt from the requirements of Parts 2 (Audit CommitteeResponsibilities), 3 (Composition of the Audit Committee), 4 (Authority of theAudit Committee), and 5 (Reporting Obligations), if:

(a) the issuer is in compliance with the requirements of that U.S.marketplace applicable to issuers, other than foreign private issuers,regarding the role and composition of audit committees; and

(b) if the issuer is incorporated, continued or otherwise organized in ajurisdiction in Canada, the issuer includes in its AIF the disclosure (if any)required by paragraph 7 of Form 52-110F1.

PART 8 EXEMPTIONS

8.1 Exemptions

(1) The securities regulatory authority or regulator may grant an exemptionfrom this rule, in whole or in part, subject to such conditions or restrictions as maybe imposed in the exemption.

(2) Despite subsection (1), in Ontario, only the regulator may grant such anexemption.





9.1 Effective Date

(1) This Instrument comes into force on March 30, 2004.

(2) Despite subsection (1), this Instrument applies to an issuer commencing onthe earlier of:

(a) the first annual meeting of the issuer after July 1, 2004; and

(b) July 1, 2005.

MULTILATERAL INSTRUMENT 52-110

FORM 52-110F1AUDIT COMMITTEE INFORMATION REQUIRED IN AN AIF

1. The Audit Committee’s Charter

Disclose the text of the audit committee’s charter.

2. Composition of the Audit Committee

Disclose the name of each audit committee member and state whether or not themember is (i) independent and (ii) financially literate.

3. Relevant Education and Experience

Describe the education and experience of each audit committee member that isrelevant to the performance of his or her responsibilities as an audit committeemember and, in particular, disclose any education or experience that wouldprovide the member with:

(a) an understanding of the accounting principles used by the issuer toprepare its financial statements;

(b) the ability to assess the general application of such accounting principlesin connection with the accounting for estimates, accruals and reserves;

(c) experience preparing, auditing, analyzing or evaluating financialstatements that present a breadth and level of complexity of accountingissues that are generally comparable to the breadth and complexity of issuesthat can reasonably be expected to be raised by the issuer’s financialstatements, or experience actively supervising one or more individualsengaged in such activities; and

(d) an understanding of internal controls and procedures for financialreporting.

4. Audit Committee Oversight

If, at any time since the commencement of the issuer’s most recently completedfinancial year, a recommendation of the audit committee to nominate orcompensate an external auditor was not adopted by the board of directors, statethat fact and explain why.




5. Reliance on Certain Exemptions

If, at any time since the commencement of the issuer’s most recently completedfinancial year, the issuer has relied on:

(a) the exemption in section 2.4 (DeMinimis Non-audit Services); or

(b) an exemption from this Instrument, in whole or in part, granted underPart 8 (Exemptions);

state that fact.

6. Pre-Approval Policies and Procedures

If the audit committee has adopted specific policies and procedures for theengagement of non-audit services, describe those policies and procedures.

7. External Auditor Service Fees (By Category)

(a) Disclose, under the caption “Audit Fees”, the aggregate fees billed bythe issuer’s external auditor in each of the last two fiscal years for audit fees.

(b) Disclose, under the caption “Audit-Related Fees”, the aggregate feesbilled in each of the last two fiscal years for assurance and related services bythe issuer’s external auditor that are reasonably related to the performanceof the audit or review of the issuer’s financial statement and are not reportedunder clause (a) above. Include a description of the nature of the servicescomprising the fees disclosed under this category.

(c) Disclose, under the caption “Tax Fees”, the aggregate fees billed in eachof the last two fiscal years for professional services rendered by the issuer’sexternal auditor for tax compliance, tax advice, and tax planning. Include adescription of the nature of the services comprising the fees disclosed underthis category.

(d) Disclose, under the caption “All Other Fees”, the aggregate fees billed ineach of the last two fiscal years for products and services provided by theissuer’s external auditor, other than the services reported under clauses (a),(b) and (c), above. Include a description of the nature of the servicescomprising the fees disclosed under this category.

INSTRUCTION:The fees required to be disclosed by paragraph 7 relate only to services provided to theissuer or its subsidiary entities by the issuer’s external auditor.

8. Exemption

Disclose that the issuer is relying upon the exemption in section 6.1 of theInstrument.


(a) Disclose, under the caption ‘Audit Fees’, the aggregate fees billed by theissuer’s external auditor in each of the last two fiscal years for audit services.

(b) Disclose, under the caption ‘Audit-Related Fees’, the aggregate feesbilled in each of the last two fiscal years for assurance and related services bythe issuer’s external auditor that are reasonably related to the performanceof the audit or review of the issuer’s financial statements and are notreported under clause (a) above. Include a description of the nature of theservices comprising the fees disclosed under this category.




(c) Disclose, under the caption ‘Tax Fees’, the aggregate fees billed in eachof the last two fiscal years for professional services rendered by the issuer’sexternal auditor for tax compliance, tax advice, and tax planning. Include adescription of the nature of the services comprising the fees disclosed underthis category.

(d) Disclose, under the caption ‘All Other Fees’, the aggregate fees billed ineach of the last two fiscal years for products and services provided by theissuer’s external auditor, other than the services reported under clauses (a), (b)and (c), above. Include a description of the nature of the services comprisingthe fees disclosed under this category.

INSTRUCTIONSThe fees required to be disclosed by this paragraph 9 relate only to servicesprovided to the issuer or its subsidiary entities by the issuer’s external auditor.

MULTILATERAL INSTRUMENT 52-110

FORM 52-110F2DISCLOSURE BY VENTURE ISSUERS

1. The Audit Committee’s Charter

Disclose the text of the audit committee’s charter.

2. Composition of the Audit Committee

Disclose the name of each audit committee member and state whether or not themember is (i) independent and (ii) financially literate.

3. Relevant Education and Experience

Describe the education and experience of each audit committee member that isrelevant to the performance of his or her responsibilities as an audit committeemember and, in particular, disclose any education or experience that wouldprovide the member with:

(a) an understanding of the accounting principles used by the issuer toprepare its financial statements;

(b) the ability to assess the general application of such accounting principlesin connection with the accounting for estimates, accruals and reserves;

(c) experience preparing, auditing, analyzing or evaluating financialstatements that present a breadth and level of complexity of accountingissues that are generally comparable to the breadth and complexity of issuesthat can reasonably be expected to be raised by the issuer’s financialstatements, or experience actively supervising one or more individualsengaged in such activities; and

(d) an understanding of internal controls and procedures for financialreporting.




4. Audit Committee Oversight

If, at any time since the commencement of the issuer’s most recently completedfinancial year, a recommendation of the audit committee to nominate orcompensate an external auditor was not adopted by the board of directors, statethat fact and explain why.

5. Reliance on Certain Exemptions

If, at any time since the commencement of the issuer’s most recently completedfinancial year, the issuer has relied on:

(a) the exemption in section 2.4 (DeMinimis Non-audit Services); or

(b) an exemption from this Instrument, in whole or in part, granted underPart 8 (Exemptions);

state that fact.

6. Pre-Approval Policies and Procedures

If the audit committee has adopted specific policies and procedures for theengagement of non-audit services, describe those policies and procedures.


(a) Disclose, under the caption “Audit Fees”, the aggregate fees billed bythe issuer’s external auditor in each of the last two fiscal years for audit fees.

(b) Disclose, under the caption “Audit-Related Fees”, the aggregate feesbilled in each of the last two fiscal years for assurance and related services bythe issuer’s external auditor that are reasonably related to the performanceof the audit or review of the issuer’s financial statement and are not reportedunder clause (a) above. Include a description of the nature of the servicescomprising the fees disclosed under this category.

(c) Disclose, under the caption “Tax Fees”, the aggregate fees billed in eachof the last two fiscal years for professional services rendered by the issuer’sexternal auditor for tax compliance, tax advice, and tax planning. Include adescription of the nature of the services comprising the fees disclosed underthis category.

(d) Disclose, under the caption “All Other Fees”, the aggregate fees billed ineach of the last two fiscal years for products and services provided by theissuer’s external auditor, other than the services reported under clauses (a),(b) and (c), above. Include a description of the nature of the servicescomprising the fees disclosed under this category.

INSTRUCTION:

The fees required to be disclosed by paragraph 7 relate only to services provided to theissuer or its subsidiary entities by the issuer’s external auditor.

8. Exemption

Disclose that the issuer is relying upon the exemption in section 6.1 of theInstrument.

8 Apr 2004 SR 13/2004 s4; 30 Jne 2005 SR 61/2005 s4; 11 Jan 2008 SR 128/2007 s4; 4 Apr2008 SR 18/2008 s6.




PART XXXVI[clause 2(jj)]

NATIONAL INSTRUMENT 51-102CONTINUOUS DISCLOSURE OBLIGATIONS

PART 1 DEFINITIONS AND INTERPRETATION

1.1(1) Definitions and Interpretation – In this Instrument:

“AIF” means a completed Form 51-102F2 Annual Information Form or, in thecase of an SEC issuer, a completed Form 51-102F2 or an annual report ortransition report under the 1934 Act on Form 10-K, Form 10-KSB or Form 20-F;

“approved rating organization” means each of DBRS Limited, Fitch RatingsLtd., Moody’s Investors Service, Standard & Poor’s and any of their successors;

“asset-backed security” means a security that is primarily serviced by the cashflows of a discrete pool of mortgages, receivables or other financial assets, fixed orrevolving, that by their terms convert into cash within a finite period and anyrights or other assets designed to assure the servicing or the timely distribution ofproceeds to securityholders;

“board of directors” means, for a person or company that does not have a boardof directors, an individual or group that acts in a capacity similar to a board ofdirectors;

“business acquisition report” means a completed Form 51-102F4 BusinessAcquisition Report;

“class” includes a series of a class;

“common share” means an equity security to which are attached voting rightsexercisable in all circumstances, irrespective of the number or percentage ofsecurities owned, that are not less, per security, than the voting rights attached toany other outstanding securities of the reporting issuer;

“date of acquisition” means the date of acquisition required for accountingpurposes;

“electronic format” has the same meaning as in National Instrument 13-101System for Electronic Document Analysis and Retrieval (SEDAR);

“equity investee” means a business that the issuer has invested in andaccounted for using the equity method




“exchange-traded security” means a security that is listed on a recognizedexchange or is quoted on a recognized quotation and trade reporting system or islisted on an exchange or quoted on a quotation and trade reporting system that isrecognized for the purposes of National Instrument 21-101 Marketplace Operationand National Instrument 23-101 Trading Rules;

“executive officer” means, for a reporting issuer, an individual who is:

(a) a chair, vice-chair or president;

(b) a vice-president in charge of a principal business unit, division orfunction including sales, finance or production; or

(c) performing a policy-making function in respect of the issuer;

“financial outlook” means forward-looking information about prospectiveresults of operations, financial position or cash flows that is based on assumptionsabout future economic conditions and courses of action and that is not presentedin the format of a historical balance sheet, income statement or cash flowstatement;

“FOFI” or “future-oriented financial information” means forward-lookinginformation about prospective results of operations, financial position or cashflows, based on assumptions about future economic conditions and courses ofaction, and presented in the format of a historical balance sheet, incomestatement or cash flow statement;

“form of proxy” means a document containing the information required undersection 9.4 that, on completion and execution by or on behalf of a securityholder,becomes a proxy;

“income from continuing operations” means income or loss, adjusted toexclude discontinued operations, extraordinary items and income taxes;

“information circular” means a completed Form 51-102F5 Information Circular;

“informed person” means:

(a) a director or executive officer of a reporting issuer;

(b) a director or executive officer of a person or company that is itself aninformed person or subsidiary of a reporting issuer;

(c) any person or company who beneficially owns, or controls or directs,directly or indirectly, voting securities of a reporting issuer or a combinationof both carrying more than 10 percent of the voting rights attached to alloutstanding voting securities of the reporting issuer other than votingsecurities held by the person or company as underwriter in the course of adistribution; and

(d) a reporting issuer that has purchased, redeemed or otherwise acquiredany of its securities, for so long as it holds any of its securities;

“inter-dealer bond broker” means a person or company that is approved by theInvestment Dealers Association under its By-Law No. 36 Inter-Dealer BondBrokerage Systems, as amended, and is subject to its By-law No. 36 and itsRegulation 2100 Inter-Dealer Bond Brokerage Systems, as amended;




“interim period” means:

(a) in the case of a year other than a non-standard year or a transition year,a period commencing on the first day of the financial year and ending nine,six or three months before the end of the financial year;

(a.1) in the case of a non-standard year, a period commencing on the firstday of the financial year and ending within 22 days of the date that is nine,six or three months before the end of the financial year; or

(b) in the case of a transition year, a period commencing on the first day ofthe transition year and ending:

(i) three, six, nine or twelve months, if applicable, after the end of theold financial year; or

(ii) twelve, nine, six or three months, if applicable, before the end ofthe transition year;

“investment fund” means a mutual fund or a non-redeemable investment fund,and, for greater certainty in British Columbia, includes an EVCC and a VCC asthose terms are defined in National Instrument 81-106 Investment FundContinuous Disclosure;

“issuer’s GAAP” has the same meaning as in National Instrument 52-107Acceptable Accounting Principles, Auditing Standards and Reporting Currency;

“MD&A” means a completed Form 51-102F1 Management’s Discussion &Analysis or, in the case of an SEC issuer, a completed Form 51-102F1 ormanagement’s discussion and analysis prepared in accordance with Item 303 ofRegulation S-K or item 303 of Regulation S-B under the 1934 Act;

“marketplace” means:

(a) an exchange;

(b) a quotation and trade reporting system;

(c) a person or company not included in paragraph (a) or (b) that:

(i) constitutes, maintains or provides a market or facility for bringingtogether buyers and sellers of securities;

(ii) brings together the orders for securities of multiple buyers andsellers; and

(iii) uses established, non-discretionary methods under which theorders interact with each other, and the buyers and sellers entering theorders agree to the terms of a trade; or

(d) a dealer that executes a trade of an exchange-traded security outside ofa marketplace;

but does not include an inter-dealer bond broker;

“material change” means:

(a) a change in the business, operations or capital of the reporting issuerthat would reasonably be expected to have a significant effect on the marketprice or value of any of the securities of the reporting issuer; or




(b) a decision to implement a change referred to in paragraph (a) made bythe board of directors or other persons acting in a similar capacity or bysenior management of the reporting issuer who believe that confirmation ofthe decision by the board of directors or any other persons acting in a similarcapacity is probable;

“material contract” means any contract that an issuer or any of its subsidiariesis a party to, that is material to the issuer;

“mineral project” has the same meaning as in National Instrument 43-101Standards of Disclosure for Mineral Projects;

“new financial year” means the financial year of a reporting issuer thatimmediately follows a transition year;

“NI 54-101” means National Instrument 54-101 Communication with BeneficialOwners of Securities of a Reporting Issuer;

“non-standard year” means a financial year, other than a transition year, thatdoes not have 365 days, or 366 days if it includes February 29;

“non-voting security” means a restricted security that does not carry the rightto vote generally, except for a right to vote that is mandated, in specialcircumstances, by law;

“old financial year” means the financial year of a reporting issuer thatimmediately precedes a transition year;

“preference share” means a security to which is attached a preference or rightover the securities of any class of equity securities of the reporting issuer, but doesnot include an equity security;

“principal obligor” means, for an asset-backed security, a person or companythat is obligated to make payments, has guaranteed payments, or has providedalternative credit support for payments, on financial assets that representone-third or more of the aggregate amount owing on all of the financial assetsservicing the asset-backed security;

“proxy” means a completed and executed form of proxy by which a securityholderhas appointed a person or company as the securityholder’s nominee to attend andact for the securityholder and on the securityholder’s behalf at a meeting ofsecurityholders;

“recognized exchange” means:

(a) in Ontario, an exchange recognized by the securities regulatory authorityto carry on business as a stock exchange;

(a.1) in Québec, a person or company authorized by the securities regulatoryauthority to carry on business as an exchange; and

(b) in every other jurisdiction, an exchange recognized by the securitiesregulatory authority as an exchange, self-regulatory organization orself-regulatory body;




“recognized quotation and trade reporting system” means:

(a) in every jurisdiction other than British Columbia, a quotation and tradereporting system recognized by the securities regulatory authority undersecurities legislation to carry on business as a quotation and trade reportingsystem; and

(b) in British Columbia, a quotation and trade reporting system recognizedby the securities regulatory authority under securities legislation as aquotation and trade reporting system or as an exchange;

“restricted security” means an equity security of a reporting issuer if any ofthe following apply:

(a) there is another class of securities of the reporting issuer that, to areasonable person, appears to carry a greater number of votes per securityrelative to the equity security;

(b) the conditions attached to the class of equity securities, the conditionsattached to another class of securities of the reporting issuer, or thereporting issuer’s constating documents have provisions that nullify or, to areasonable person, appear to significantly restrict the voting rights of theequity securities; or

(c) the reporting issuer has issued another class of equity securities that, toa reasonable person, appears to entitle the owners of securities of that otherclass to participate in the earnings or assets of the reporting issuer to agreater extent, on a per security basis, than the owners of the first class ofequity securities;

“restricted security term” means each of the terms “non-voting security”,“subordinate voting security” and “restricted voting security”;

“restricted voting security” means a restricted security that carries a right tovote subject to a restriction on the number or percentage of securities that may bevoted by one or more persons or companies, unless the restriction is:

(a) permitted or prescribed by statute; and

(b) is applicable only to persons or companies that are not citizens orresidents of Canada or that are otherwise considered as a result of any lawapplicable to the reporting issuer to be non-Canadians;

“restructuring transaction” means:

(a) a reverse takeover;

(b) an amalgamation, merger, arrangement or reorganization;

(c) a transaction or series of transactions involving a reporting issueracquiring assets and issuing securities that results in:

(i) new securityholders owning or controlling more than 50% of thereporting issuer’s outstanding voting securities; and




(ii) a new person or company, a new combination of persons orcompanies acting together, the vendors of the assets, or newmanagement:

(A) being able to materially affect the control of the reportingissuer; or

(B) holding more than 20% of the outstanding voting securitiesof the reporting issuer, unless there is evidence showing that theholding of those securities does not materially affect the control ofthe reporting issuer; and

(d) any other transaction similar to the transactions listed in paragraphs (a)to (c);

but does not include a subdivision, consolidation, or other transaction that doesnot alter a securityholder’s proportionate interest in the issuer and the issuer’sproportionate interest in its assets;

“reverse takeover” means a transaction that the issuer is required under theissuer’s GAAP to account for as a reverse takeover;

“reverse takeover acquiree” means the legal parent in a reverse takeover;

“reverse takeover acquirer” means the legal subsidiary in a reverse takeover;

“SEC issuer” means an issuer that:

(a) has a class of securities registered under section 12 of the 1934 Act or isrequired to file reports under section 15(d) of the 1934 Act; and

(b) is not registered or required to be registered as an investment companyunder the Investment Company Act of 1940 of the United States of America,as amended;

“solicit”, in connection with a proxy, includes:

(a) requesting a proxy whether or not the request is accompanied by orincluded in a form of proxy;

(b) requesting a securityholder to execute or not to execute a form of proxyor to revoke a proxy;

(c) sending a form of proxy or other communication to a securityholderunder circumstances that to a reasonable person will likely result in thegiving, withholding or revocation of a proxy; or

(d) sending a form of proxy to a securityholder by management of areporting issuer;

but does not include:

(e) sending a form of proxy to a securityholder in response to a unsolicitedrequest made by or on behalf of the securityholder;

(f) performing ministerial acts or professional services on behalf of a personor company soliciting a proxy;




(g) sending, by an intermediary as defined in NI 54-101, of the documentsreferred to in NI 54-101;

(h) soliciting by a person or company in respect of securities of which theperson or company is the beneficial owner;

(i) publicly announcing, by a securityholder, how the securityholder intendsto vote and the reasons for that decision, if that public announcement ismade by:

(i) a speech in a public forum; or

(ii) a press release, an opinion, a statement or an advertisementprovided through a broadcast medium or by a telephonic, electronic orother communication facility, or appearing in a newspaper, a magazineor other publication generally available to the public;

(j) communicating for the purposes of obtaining the number of securitiesrequired for a securityholder proposal under the laws under which thereporting issuer is incorporated, organized or continued or under thereporting issuer’s constating or establishing documents; or

(k) communicating, other than a solicitation by or on behalf of themanagement of the reporting issuer, to securityholders in the followingcircumstances:

(i) by one or more securityholders concerning the business and affairsof the reporting issuer, including its management or proposals containedin a management information circular, and no form of proxy is sent tothose securityholders by the securityholder or securityholders makingthe communication or by a person or company acting on their behalf,unless the communication is made by:

(A) a securityholder who is an officer or director of the reportingissuer if the communication is financed directly or indirectly bythe reporting issuer;

(B) a securityholder who is a nominee or who proposes anominee for election as a director, if the communication relates tothe election of directors;

(C) a securityholder whose communication is in opposition to anamalgamation, arrangement, consolidation or other transactionrecommended or approved by the board of directors of thereporting issuer and who is proposing or intends to propose analternative transaction to which the securityholder or an affiliateor associate of the securityholder is a party;




(D) a securityholder who, because of a material interest in thesubject-matter to be voted on at a securityholder’s meeting, islikely to receive a benefit from its approval or non-approval, whichbenefit would not be shared pro rata by all other holders of thesame class of securities, unless the benefit arises from thesecurityholder’s employment with the reporting issuer; or

(E) any person or company acting on behalf of a securityholderdescribed in any of clauses (A) to (D);

(ii) by one or more securityholders and concerns the organization of adissident’s proxy solicitation, and no form of proxy is sent to thosesecurityholders by the securityholder or securityholders making thecommunication or by a person or company acting on their behalf;

(iii) as clients, by a person or company who gives financial, corporategovernance or proxy voting advice in the ordinary course of businessand concerns proxy voting advice if:

(A) the person or company discloses to the securityholder anysignificant relationship with the reporting issuer and any of itsaffiliates or with a securityholder who has submitted a matter tothe reporting issuer that the securityholder intends to raise at themeeting of securityholders and any material interests the personor company has in relation to a matter on which advice is given;

(B) the person or company receives any special commission orremuneration for giving the proxy voting advice only from thesecurityholder or securityholders receiving the advice; and

(C) the proxy voting advice is not given on behalf of any personor company soliciting proxies or on behalf of a nominee for electionas a director; or

(iv) by a person or company who does not seek directly or indirectlythe power to act as a proxyholder for a securityholder

“subordinate voting security” means a restricted security that carries a rightto vote, if there are securities of another class outstanding that carry a greaterright to vote on a per security basis;

“transition year” means the financial year of a reporting issuer or business inwhich the issuer or business changes its financial year-end;

“U.S. GAAP” means generally accepted accounting principles in the UnitedStates of America that the SEC has identified as having substantial authoritativesupport and as supplemented by Regulation S-X and Regulation S-B underthe 1934 Act;

“U.S. laws” means the 1933 Act, the 1934 Act, all enactments made under thoseActs and all SEC releases adopting the enactments, as amended;




“U.S. marketplace” means an exchange registered as a “national securitiesexchange” under section 6 of the 1934 Act, or the Nasdaq Stock Market; and

“venture issuer” means a reporting issuer that, as at the applicable time, didnot have any of its securities listed or quoted on any of the Toronto StockExchange, a U.S. marketplace or a marketplace outside of Canada and the UnitedStates of America other than the Alternative Investment Market of the LondonStock Exchange or the PLUS markets operated by PLUS Markets Group plc;where the “applicable time” in respect of:

(a) Parts 4 and 5 of this Instrument and Form 51-102F1, is the end of theapplicable financial period;

(b) Parts 6 and 9 of this Instrument and Form 51-102F6, is the end of themost recently completed financial year;

(c) Part 8 of this Instrument and Form 51-102F4, is the date of acquisition;and

(d) section 11.3 of this Instrument, is the date of the meeting of thesecurityholders.

(2) Affiliate – In this Instrument, an issuer is an affiliate of another issuer if:

(a) one of them is the subsidiary of the other; or

(b) each of them is controlled by the same person.

(3) Control – For the purposes of subsection (2), a person (first person) isconsidered to control another person (second person) if:

(a) the first person, beneficially owns, or controls or directs, directly orindirectly, securities of the second person carrying votes which, if exercised,would entitle the first person to elect a majority of the directors of the secondperson, unless that first person holds the voting securities only to secure anobligation;

(b) the second person is a partnership, other than a limited partnership,and the first person holds more than 50% of the interests of the partnership;or

(c) the second person is a limited partnership and the general partner ofthe limited partnership is the first person.

PART 2 APPLICATION

2.1 Application

This Instrument does not apply to an investment fund.




PART 3 LANGUAGE OF DOCUMENTS


(1) A person or company must file a document required to be filed under thisInstrument in French or in English.

(2) Despite subsection (1), if a person or company files a document only inFrench or only in English but delivers to securityholders a version of thedocument in the other language, the person or company must file that otherversion not later than when it is first delivered to securityholders.

(3) In Québec, a reporting issuer must comply with linguistic obligations andrights prescribed by Québec law.

3.2 Filings Translated into French or English

If a person or company files a document under this Instrument that is atranslation of a document prepared in a language other than French or English,the person or company must:

(a) attach a certificate as to the accuracy of the translation to the fileddocument; and

(b) make a copy of the document in the original language available to aregistered holder or beneficial owner of its securities, on request.

PART 4 FINANCIAL STATEMENTS

4.1 Comparative Annual Financial Statements and Audit

(1) Subject to subsection 4.8(6), a reporting issuer must file annual financialstatements that include:

(a) an income statement, a statement of retained earnings, and a cash flowstatement for:

(i) the most recently completed financial year; and

(ii) the financial year immediately preceding the most recentlycompleted financial year, if any;

(b) a balance sheet as at the end of each of the periods referred to inparagraph (a); and

(c) notes to the financial statements.

(2) Annual financial statements filed under subsection (1) must be audited.

4.2 Filing Deadline for Audit

The annual financial statements required to be filed under section 4.1 must befiled:

(a) in the case of a reporting issuer other than a venture issuer, on or beforethe earlier of:

(i) the 90th day after the end of its most recently completed financialyear; and




(ii) the date of filing, in a foreign jurisdiction, annual financialstatements for its most recently completed financial year; or

(b) in the case of a venture issuer, on or before the earlier of:

(i) the 120th day after the end of its most recently completed financialyear; and

(ii) the date of filing, in a foreign jurisdiction, annual financialstatements for its most recently completed financial year.

4.3 Interim Financial Statements

(1) Subject to sections 4.7 and 4.10, a reporting issuer must file interim financialstatements for interim periods ended after it became a reporting issuer.

(2) Subject to subsections 4.7(4), 4.8(7), 4.8(8) and 4.10(3), the interim financialstatements required to be filed under subsection (1) must include:

(a) a balance sheet as at the end of the interim period and a balance sheetas at the end of the immediately preceding financial year, if any;

(b) an income statement, a statement of retained earnings and a cash flowstatement, all for the year-to-date interim period, and comparative financialinformation for the corresponding interim period in the immediately precedingfinancial year, if any;

(c) for interim periods other than the first interim period in a reportingissuer’s financial year, an income statement and cash flow statement for thethree month period ending on the last day of the interim period andcomparative financial information for the corresponding period in thepreceding financial year, if any; and

(d) notes to the financial statements.

(3) Disclosure of Auditor Review of Interim Financial Statements

(a) If an auditor has not performed a review of the interim financialstatements required to be filed under subsection (1), the interim financialstatements must be accompanied by a notice indicating that the financialstatements have not been reviewed by an auditor.

(b) If a reporting issuer engaged an auditor to perform a review of theinterim financial statements required to be filed under subsection (1) and theauditor was unable to complete the review, the interim financial statementsmust be accompanied by a notice indicating that the auditor was unable tocomplete a review of the interim financial statements and the reasons whythe auditor was unable to complete the review.

(c) If an auditor has performed a review of the interim financial statementsrequired to be filed under subsection (1) and the auditor has expressed areservation in the auditor’s interim review report, the interim financialstatements must be accompanied by a written review report from theauditor.




(4) SEC Issuer – Restatement of Interim Financial Statements

If an SEC issuer that is a reporting issuer:

(a) has filed interim financial statements prepared in accordance withCanadian GAAP for one or more interim periods since its most recentlycompleted financial year for which financial statements have been filed; and

(b) prepares its annual or interim financial statements for the periodimmediately following the periods referred to in paragraph (a) in accordancewith U.S. GAAP;

the SEC issuer must:

(c) restate the interim financial statements for the periods referred to inparagraph (a) in accordance with U.S. GAAP and comply with thereconciliation requirements set out in Part 4 of National Instrument 52-107Acceptable Accounting Principles, Auditing Standards and ReportingCurrency; and

(d) file the restated financial statements referred to in paragraph (c) by thefiling deadline for the financial statements referred to in paragraph (b).

4.4 Filing Deadline for Interim Financial Statements

The interim financial statements required to be filed under subsection 4.3(1) mustbe filed:

(a) in the case of a reporting issuer other than a venture issuer, on or beforethe earlier of:

(i) the 45th day after the end of the interim period; and

(ii) the date of filing, in a foreign jurisdiction, interim financialstatements for a period ending on the last day of the interim period; or

(b) in the case of a venture issuer, on or before the earlier of:

(i) the 60th day after the end of the interim period; and

(ii) the date of filing, in a foreign jurisdiction, interim financialstatements for a period ending on the last day of the interim period.

4.5 Approval of Financial Statements

(1) The financial statements a reporting issuer is required to file undersection 4.1 must be approved by the board of directors before the statements arefiled.

(2) The financial statements a reporting issuer is required to file undersection 4.3 must be approved by the board of directors before the statements arefiled.

(3) In fulfilling the requirement in subsection (2), the board of directors maydelegate the approval of the financial statements to the audit committee of theboard of directors.




4.6 Delivery of Financial Statements

(1) Subject to subsection (2), a reporting issuer must send annually a requestform to the registered holders and beneficial owners of its securities, other thandebt instruments, that the registered holders and beneficial owners may use torequest a copy of the reporting issuer’s annual financial statements and MD&Afor the annual financial statements, the interim financial statements and MD&Afor the interim financial statements, or both.

(2) For the purposes of subsection (1), the reporting issuer must, applying theprocedures set out in NI 54-101, send the request form to the beneficial owners ofits securities who are identified under that Instrument as having chosen toreceive all securityholder materials sent to beneficial owners of securities.

(3) If a registered holder or beneficial owner of securities, other than debtinstruments, of a reporting issuer requests the issuer’s annual or interimfinancial statements, the reporting issuer must send a copy of the requestedfinancial statements to the person or company that made the request, withoutcharge, by the later of:

(a) in the case of a reporting issuer other than a venture issuer, 10 calendardays after the filing deadline in subparagraph 4.2(a)(i) or 4.4(a)(i), section 4.7,or subsection 4.10(2), as applicable, for the financial statements requested;

(b) in the case of a venture issuer, 10 calendar days after the filing deadlinein subparagraph 4.2(b)(i) or 4.4(b)(i), section 4.7, or subsection 4.10(2), asapplicable, for the financial statements requested; and

(c) 10 calendar days after the issuer receives the request.

(4) A reporting issuer is not required to send copies of annual or interimfinancial statements under subsection (3) that were filed more than two yearsbefore the issuer receives the request.

(5) Subsection (1) and the requirement to send annual financial statementsunder subsection (3) do not apply to a reporting issuer that sends its annualfinancial statements to its securityholders, other than holders of debt instruments,within 140 days of the issuer’s financial year-end and in accordancewith NI 54-101.

(6) If a reporting issuer sends financial statements under this section, thereporting issuer must also send, at the same time, the annual or interim MD&Arelating to the financial statements.

4.7 Filing of Financial Statements After Becoming a Reporting Issuer

(1) Despite any provisions of this Part other than subsections (2), (3) and (4) ofthis section, the first annual and interim financial statements that a reportingissuer must file under sections 4.1 and 4.3 are the financial statements for thefinancial year and interim periods immediately following the periods for whichfinancial statements of the issuer were included in a document filed:

(a) that resulted in the issuer becoming a reporting issuer; or

(b) in respect of a transaction that resulted in the issuer becoming areporting issuer.




(2) If, under subsection (1), a reporting issuer is required to file annual financialstatements for a financial year that ended before the issuer became a reportingissuer, those financial statements must be filed on or before the later of:

(a) the 20th day after the issuer became a reporting issuer; and

(b) the filing deadline in section 4.2.

(3) If, under subsection (1), a reporting issuer is required to file interim financialstatements for an interim period that ended before the issuer became a reportingissuer, those financial statements must be filed on or before the later of:

(a) the 10th day after the issuer became a reporting issuer; and

(b) the filing deadline in section 4.4.

(4) A reporting issuer is not required to provide comparative interim financialinformation for periods that ended before the issuer became a reporting issuer if:

(a) to a reasonable person it is impracticable to present prior-periodinformation on a basis consistent with subsection 4.3(2);

(b) the prior-period information that is available is presented; and

(c) the notes to the interim financial statements disclose the fact that theprior-period information has not been prepared on a basis consistent withthe most recent interim financial information.

4.8 Change in Year-End

(1) Exemption from Change in Year-End Requirements – An SEC issuersatisfies this section if:

(a) it complies with the requirements of U.S. laws relating to a change offiscal year; and

(b) it files a copy of all materials required by U.S. laws relating to a changeof fiscal year at the same time as, or as soon as practicable after, they arefiled with or furnished to the SEC and, in the case of financial statements, nolater than the filing deadlines prescribed under sections 4.2 and 4.4.

(2) Notice of Change – If a reporting issuer decides to change its financialyear-end by more than 14 days, it must file a notice containing the information setout in subsection (3) as soon as practicable, and, in any event, not later than theearlier of:

(a) the filing deadline, based on the reporting issuer’s old financialyear-end, for the next financial statements required to be filed, eitherannual or interim, whichever comes first; and

(b) the filing deadline, based on the reporting issuer’s new financialyear-end, for the next financial statements required to be filed, eitherannual or interim, whichever comes first.




(3) The notice referred to in subsection (2) must state:

(a) that the reporting issuer has decided to change its year-end;

(b) the reason for the change;

(c) the reporting issuer’s old financial year-end;

(d) the reporting issuer’s new financial year-end;

(e) the length and ending date of the periods, including the comparativeperiods, of the interim and annual financial statements to be filed for thereporting issuer’s transition year and its new financial year; and

(f) the filing deadlines, prescribed under sections 4.2 and 4.4, for theinterim and annual financial statements for the reporting issuer’s transitionyear.

(4) Maximum Length of Transition Year – For the purposes of this section:

(a) a transition year must not exceed 15 months; and

(b) the first interim period after an old financial year must not exceed fourmonths.

(5) Interim Period Ends Within One Month of Year-End – Despitesubsection 4.3(1), a reporting issuer is not required to file interim financialstatements for any period in its transition year that ends not more than onemonth:

(a) after the last day of its old financial year; or

(b) before the first day of its new financial year.

(6) Comparative Financial Information in Annual Financial Statementsfor New Financial Year – If a transition year is less than nine months in length,the reporting issuer must include as comparative financial information to itsfinancial statements for its new financial year:

(a) a balance sheet and income statement, a statement of retained earningsand a cash flow statement for its transition year; and

(b) a balance sheet and income statement, a statement of retained earningsand a cash flow statement for its old financial year.

(7) Comparative Financial Information in Interim Financial Statementsif Interim Periods Not Changed in Transition Year – If interim periods forthe reporting issuer’s transition year end three, six, nine or twelve months afterthe end of its old financial year, the reporting issuer must include:

(a) as comparative financial information in its interim financial statementsduring its transition year, the comparative financial information required bysubsection 4.3(2), except if an interim period during the transition year is 12months in length and the reporting issuer’s transition year is longer than 13months, the comparative financial information must be the balance sheetand income statement, statement of retained earnings and cash flowstatement for the 12 month period that constitutes its old financial year; and




(b) as comparative financial information in its interim financial statementsduring its new financial year:

(i) a balance sheet as at the end of its transition year; and

(ii) the income statement, statement of retained earnings and cashflow statement for the periods in its transition year or old financialyear, for the same calendar months as, or as close as possible to, thecalendar months in the interim period in the new financial year.

(8) Comparative Financial Information in Interim Financial Statementsif Interim Periods Changed in Transition Year – If interim periods for areporting issuer’s transition year end twelve, nine, six or three months before theend of the transition year, the reporting issuer must include:

(a) as comparative financial information in its interim financial statementsduring its transition year:

(i) a balance sheet as at the end of its old financial year; and

(ii) the income statement, statement of retained earnings and cashflow statement for periods in its old financial year, for the samecalendar months as, or as close as possible to, the calendar months inthe interim period in the transition year; and

(b) as comparative financial information in its interim financial statementsduring its new financial year:

(i) a balance sheet as at the end of its transition year; and

(ii) the income statement, statement of retained earnings and cashflow statement in its transition year or old financial year, or both, asappropriate, for the same calendar months as, or as close as possible to,the calendar months in the interim period in the new financial year.

4.9 Change in Corporate Structure

If an issuer is party to a transaction that resulted in:

(a) the issuer becoming a reporting issuer other than by filing a prospectus;or

(b) if the issuer was already a reporting issuer:

(i) the issuer ceasing to be a reporting issuer;

(ii) a change in the reporting issuer’s financial year end; or

(iii) a change in the name of the reporting issuer;

the issuer must, as soon as practicable, and in any event not later than thedeadline for the first filing required under this Instrument following thetransaction, file a notice stating:

(c) the names of the parties to the transaction;

(d) a description of the transaction;

(e) the effective date of the transaction;




(f) the name of each party, if any, that ceased to be a reporting issuer afterthe transaction and of each continuing entity;

(g) the date of the reporting issuer’s first financial year-end after thetransaction if paragraph (a) or subparagraph (b)(ii) applies;

(h) the periods, including the comparative periods, if any, of the interimand annual financial statements required to be filed for the reportingissuer’s first financial year after the transaction, if paragraph (a) orsubparagraph (b)(ii) applies; and

(i) what documents were filed under this Instrument that described thetransaction and where those documents can be found in electronic format, ifparagraph (a) or subparagraph (b)(ii) applies.

4.10 Reverse Takeovers

(1) Change in Year End – If a reporting issuer must comply with section 4.9because it was a party to a reverse takeover, the reporting issuer must complywith section 4.8 unless:

(a) the reporting issuer had the same year-end as the reverse takeoveracquirer before the transaction; or

(b) the reporting issuer changes its year-end to be the same as that of thereverse takeover acquirer.

(2) Financial Statements of the Reverse Takeover Acquirer for PeriodsEnding Before a Reverse Takeover – If a reporting issuer completes a reversetakeover, it must:

(a) file the following financial statements for the reverse takeover acquirer,unless the financial statements have already been filed:

(i) financial statements for all annual and interim periods endingbefore the date of the reverse takeover and after the date of thefinancial statements included in an information circular or similardocument, or under Item 5.2 of the Form 51-102F3 Material ChangeReport, prepared in connection with the transaction; or

(ii) if the reporting issuer did not file a document referred to insubparagraph (i), or the document does not include the financialstatements for the reverse takeover acquirer that would be required tobe included in a prospectus, the financial statements prescribed undersecurities legislation and described in the form of prospectus that thereverse takeover acquirer was eligible to use prior to the reversetakeover for a distribution of securities in the jurisdiction;




(b) file the annual financial statements required by paragraph (a) on orbefore the later of:

(i) the 20th day after the date of the reverse takeover;

(ii) the 90th date after the end of the financial year; and

(iii) the 120th day after the end of the financial year if the reportingissuer is a venture issuer; and

(c) file the interim financial statements required by paragraph (a) on orbefore the later of:

(i) the 10th day after the date of the reverse takeover;

(ii) the 45th day after the end of the interim period;

(iii) the 60th day after the end of the interim period if the reportingissuer is a venture issuer; and

(iv) the filing deadline in paragraph (b).

(3) Comparative Financial Information in Interim Financial Statementsafter a Reverse Takeover – A reporting issuer is not required to providecomparative interim financial information for the reverse takeover acquirer forperiods that ended before the date of a reverse takeover if:

(a) to a reasonable person it is impracticable to present prior-periodinformation on a basis consistent with subsection 4.3(2);



4.11 Change of Auditor

(1) Definitions – In this section:

“appointment” means, in relation to a reporting issuer, the earlier of:

(a) the appointment as its auditor of a different person or company than itsformer auditor; and

(b) the decision by the board of directors of the reporting issuer to proposeto holders of qualified securities to appoint as its auditor a different personor company than its former auditor;

“consultation” means advice provided by a successor auditor, whether or not inwriting, to a reporting issuer during the relevant period, which the successorauditor concluded was an important factor considered by the reporting issuer inreaching a decision concerning:

(a) the application of accounting principles or policies to a transaction,whether or not the transaction is completed;

(b) a report provided by an auditor on the reporting issuer’s financialstatements;

(c) scope or procedure of an audit or review engagement; or

(d) financial statement disclosure;




“disagreement” means a difference of opinion between personnel of a reportingissuer responsible for finalizing the reporting issuer’s financial statements andthe personnel of a former auditor responsible for authorizing the issuance of auditreports on the reporting issuer’s financial statements or authorizing thecommunication of the results of the auditor’s review of the reporting issuer’sinterim financial statements, if the difference of opinion:

(a) resulted in a reservation in the former auditor’s audit report on thereporting issuer’s financial statements for any period during the relevantperiod;

(b) would have resulted in a reservation in the former auditor’s auditreport on the reporting issuer’s financial statements for any period duringthe relevant period if the difference of opinion had not been resolved to theformer auditor’s satisfaction, not including a difference of opinion based onincomplete or preliminary information that was resolved to the satisfactionof the former auditor upon the receipt of further information;

(c) resulted in a qualified or adverse communication or denial of assurancein respect of the former auditor’s review of the reporting issuer’s interimfinancial statements for any interim period during the relevant period; or

(d) would have resulted in a qualified or adverse communication or denialof assurance in respect of the former auditor’s review of the reportingissuer’s interim financial statements for any interim period during therelevant period if the difference of opinion had not been resolved to theformer auditor’s satisfaction, not including a difference of opinion based onincomplete or preliminary information that was resolved to the satisfactionof the former auditor upon the receipt of further information;

“former auditor” means the auditor of a reporting issuer that is the subject ofthe most recent termination or resignation;

“qualified securities” means securities of a reporting issuer that carry the rightto participate in voting on the appointment or removal of the reporting issuer’sauditor;

“relevant information circular” means:

(a) if a reporting issuer’s constating documents or applicable law requireholders of qualified securities to take action to remove the reporting issuer’sauditor or to appoint a successor auditor:

(i) the information circular required to accompany or form part ofevery notice of meeting at which that action is proposed to be taken; or

(ii) the disclosure document accompanying the text of the writtenresolution provided to holders of qualified securities; or

(b) if paragraph (a) does not apply, the information circular required toaccompany or form part of the first notice of meeting to be sent to holders ofqualified securities following the preparation of a reporting packageconcerning a termination or resignation;




“relevant period” means the period:

(a) commencing at the beginning of the reporting issuer’s two most recentlycompleted financial years and ending on the date of termination orresignation; or

(b) during which the former auditor was the reporting issuer’s auditor, ifthe former auditor was not the reporting issuer’s auditor throughout theperiod described in paragraph (a);

“reportable event” means a disagreement, a consultation, or an unresolvedissue;

“reporting package” means:

(a) the documents referred to in subparagraphs (5)(a)(i) and (6)(a)(i);

(b) the letter referred to in clause (5)(a)(ii)(B), if received by the reportingissuer, unless an updated letter referred to in clause (6)(a)(iii)(B) has beenreceived by the reporting issuer;

(c) the letter referred to in clause (6)(a)(ii)(B), if received by the reportingissuer; and

(d) any updated letter referred to in clause (6)(a)(iii)(B) received by thereporting issuer;

“resignation” means notification from an auditor to a reporting issuer of theauditor’s decision to resign or decline to stand for reappointment;

“successor auditor” means the person or company:

(a) appointed;

(b) that the board of directors have proposed to holders of qualifiedsecurities be appointed; or

(c) that the board of directors have decided to propose to holders ofqualified securities be appointed;

as the reporting issuer’s auditor after the termination or resignation of thereporting issuer’s former auditor;

“termination” means, in relation to a reporting issuer, the earlier of:

(a) the removal of its auditor before the expiry of the auditor’s term ofappointment, the expiry of its auditor’s term of appointment withoutreappointment, or the appointment of a different person or company as itsauditor upon expiry of its auditor’s term of appointment; and

(b) the decision by the board of directors of the reporting issuer to proposeto holders of its qualified securities that its auditor be removed before, orthat a different person or company be appointed as its auditor upon, theexpiry of its auditor’s term of appointment;




“unresolved issue” means any matter that, in the former auditor’s opinion, has,or could have, a material impact on the financial statements, or reports providedby the auditor relating to the financial statements, for any financial period duringthe relevant period, and about which the former auditor has advised the reportingissuer if:

(a) the former auditor was unable to reach a conclusion as to the matter’simplications before the date of termination or resignation;

(b) the matter was not resolved to the former auditor’s satisfaction beforethe date of termination or resignation; or

(c) the former auditor is no longer willing to be associated with any of thefinancial statements.

(2) Meaning of “Material” – For the purposes of this section, the term“material” has a meaning consistent with the discussion of the term “materiality”in the Handbook.

(3) Exemption from Change of Auditor Requirements – This section doesnot apply if:

(a) the following three conditions are met:

(i) a termination, or resignation, and appointment occur in connectionwith an amalgamation, arrangement, takeover or similar transactioninvolving the reporting issuer or a reorganization of the reportingissuer;

(ii) the termination, or resignation, and appointment have beendisclosed in a news release that has been filed or in a disclosuredocument that has been delivered to holders of qualified securities andfiled; and

(iii) no reportable event has occurred;

(b) the change of auditor is required by the legislation under which thereporting issuer exists or carries on its activities; or

(c) the change of auditor arises from an amalgamation, merger or otherreorganization of the auditor.

(4) Exemption From Change of Auditor Requirements – SEC Issuers –An SEC issuer satisfies this section:

(a) complies with the requirements of U.S. laws relating to a change ofauditor;

(b) files a copy of all materials required by U.S. laws relating to a change ofauditor at the same time as, or as soon as practicable after, they are filedwith or furnished to the SEC;

(c) issues and files a news release describing the information disclosed in thematerials referred to in paragraph (b), if there are any reportable events; and

(d) includes the materials referred to in paragraph (b) with each relevantinformation circular.




(5) Requirements Upon Auditor Termination or Resignation – Upon atermination or resignation of its auditor, a reporting issuer must:

(a) within 10 days after the date of termination or resignation:

(i) prepare a change of auditor notice in accordance with subsection (7)and deliver a copy of it to the former auditor; and

(ii) request the former auditor to:

(A) review the reporting issuer’s change of auditor notice;

(B) prepare a letter, addressed to the regulator or securitiesregulatory authority, stating, for each statement in the change ofauditor notice, whether the auditor:

(I) agrees;

(II) disagrees, and the reasons why; or

(III) has no basis to agree or disagree; and

(C) deliver the letter to the reporting issuer within 20 days afterthe date of termination or resignation;

(b) within 30 days after the date of termination or resignation:

(i) have the audit committee of its board of directors or its board ofdirectors review the letter referred to in clause (5)(a)(ii)(B) if receivedby the reporting issuer, and approve the change of auditor notice;

(ii) file a copy of the reporting package with the regulator or securitiesregulatory authority;

(iii) deliver a copy of the reporting package to the former auditor;

(iv) if there are any reportable events, issue and file a news releasedescribing the information in the reporting package; and

(c) include with each relevant information circular:

(i) a copy of the reporting package as an appendix; and

(ii) a summary of the contents of the reporting package with across-reference to the appendix.

(6) Requirements upon Auditor Appointment – Upon an appointment of asuccessor auditor, a reporting issuer must:

(a) within 10 days after the date of appointment:

(i) prepare a change of auditor notice in accordance with subsection (7)and deliver it to the successor auditor and to the former auditor;

(ii) request the successor auditor to:

(A) review the reporting issuer’s change of auditor notice;




(B) prepare a letter addressed to the regulator or securitiesregulatory authority, stating, for each statement in the change ofauditor notice, whether the auditor:

(I) agrees;

(II) disagrees, and the reasons why; or

(III) has no basis to agree or disagree; and

(C) deliver that letter to the reporting issuer within 20 daysafter the date of appointment; and

(iii) request the former auditor to, within 20 days after the date ofappointment:

(A) confirm that the letter referred to in clause (5)(a)(ii)(B) doesnot have to be updated; or

(B) prepare and deliver to the reporting issuer an updated letterto replace the letter referred to in clause (5)(a)(ii)(B);

(b) within 30 days after the date of appointment:

(i) have the audit committee of its board of directors or its board ofdirectors review the letters referred to in clauses (6)(a)(ii)(B)and (6)(a)(iii)(B) if received by the reporting issuer, and approve thechange of auditor notice;

(ii) file a copy of the reporting package with the regulator or securitiesregulatory authority;

(iii) deliver a copy of the reporting package to the successor auditorand to the former auditor; and

(iv) if there are any reportable events, issue and file a news releasedisclosing the appointment of the successor auditor and either describingthe information in the reporting package or referring to the newsrelease required under subparagraph (5)(b)(iv).

(7) Change of Auditor Notice Content – A change of auditor notice muststate:

(a) the date of termination or resignation;

(b) whether the former auditor:

(i) resigned on the former auditor’s own initiative or at the reportingissuer’s request;

(ii) was removed or is proposed to holders of qualified securities to beremoved during the former auditor’s term of appointment; or

(iii) was not reappointed or has not been proposed for reappointment;

(c) whether the termination or resignation of the former auditor and anyappointment of the successor auditor were considered or approved by theaudit committee of the reporting issuer’s board of directors or the reportingissuer’s board of directors;




(d) whether the former auditor’s report on any of the reporting issuer’sfinancial statements relating to the relevant period contained any reservationand, if so, a description of each reservation;

(e) if there is a reportable event, the following information:

(i) for a disagreement:

(A) a description of the disagreement;

(B) whether the audit committee of the reporting issuer’s boardof directors or the reporting issuer’s board of directors discussedthe disagreement with the former auditor; and

(C) whether the reporting issuer authorized the former auditorto respond fully to inquiries by any successor auditor concerningthe disagreement and, if not, a description of and reasons for anylimitation;

(ii) for a consultation:

(A) a description of the issue that was the subject of theconsultation;

(B) a summary of the successor auditor’s oral advice, if any,provided to the reporting issuer concerning the issue;

(C) a copy of the successor auditor’s written advice, if any,received by the reporting issuer concerning the issue; and

(D) whether the reporting issuer consulted with the formerauditor concerning the issue and, if so, a summary of the formerauditor’s advice concerning the issue; and

(iii) for an unresolved issue:

(A) a description of the issue;

(B) whether the audit committee of the reporting issuer’s boardof directors or the reporting issuer’s board of directors discussedthe issue with the former auditor; and

(C) whether the reporting issuer authorized the former auditorto respond fully to inquiries by any successor auditor concerningthe issue and, if not, a description of and reasons for anylimitation; and

(f) if there are no reportable events, a statement to that effect.

(8) Auditor’s Obligations to Report Non-Compliance – If the successorauditor becomes aware that the change of auditor notice required by this sectionhas not been prepared and filed by the reporting issuer, the auditor must,within 7 days, advise the reporting issuer in writing and deliver a copy of theletter to the regulator or securities regulatory authority.




PART 4A – FORWARD-LOOKING INFORMATION

4A.1 Application

This Part applies to forward-looking information that is disclosed by a reportingissuer other than forward-looking information contained in oral statements.

4A.2 Reasonable Basis

A reporting issuer must not disclose forward-looking information unless theissuer has a reasonable basis for the forward-looking information.

4A.3 Disclosure

A reporting issuer that discloses material forward-looking information mustinclude disclosure that:

(a) identifies forward-looking information as such;

(b) cautions users of forward-looking information that actual results mayvary from the forward-looking information and identifies material riskfactors that could cause actual results to differ materially from theforward-looking information;

(c) states the material factors or assumptions used to develop forward-lookinginformation; and

(d) describes the reporting issuer’s policy for updating forward-lookinginformation if it includes procedures in addition to those described insubsection 5.8(2).

PART 4B – FOFI AND FINANCIAL OUTLOOKS

4B.1 Application

(1) Subject to subsection (2), this Part applies to FOFI or a financial outlook thatis disclosed by a reporting issuer.

(2) This Part does not apply to disclosure that is:

(a) subject to requirements in National Instrument 51-101 Standards ofDisclosure for Oil and Gas Activities or National Instrument 43-101Standards of Disclosure for Mineral Projects;

(b) made to comply with the conditions of any exemption from therequirements referred to in paragraph (a) that a reporting issuer receivedfrom a regulator or securities regulatory authority unless the regulator orsecurities regulatory authority orders that this Part applies to disclosuremade under the exemption; or

(c) contained in an oral statement.




4B.2 Assumptions

(1) A reporting issuer must not disclose FOFI or a financial outlook unless theFOFI or financial outlook is based on assumptions that are reasonable in thecircumstances.

(2) FOFI or a financial outlook that is based on assumptions that are reasonablein the circumstances must, without limitation:

(a) be limited to a period for which the information in the FOFI or financialoutlook can be reasonably estimated; and

(b) use the accounting policies the reporting issuer expects to use toprepare its historical financial statements for the period covered by the FOFIor the financial outlook.

4B.3 Disclosure

In addition to the disclosure required by section 4A.3, if a reporting issuerdiscloses FOFI or a financial outlook, the issuer must include disclosure that:

(a) states the date management approved the FOFI or financial outlook, ifthe document containing the FOFI or financial outlook is undated; and

(b) explains the purpose of the FOFI or financial outlook and cautionsreaders that the information may not be appropriate for other purposes.

PART 5 MANAGEMENT’S DISCUSSION & ANALYSIS

5.1 Filing of MD&A

(1) A reporting issuer must file MD&A relating to its annual and interimfinancial statements required under Part 4.

(1.1) Despite subsection (1), a reporting issuer does not have to file MD&Arelating to the annual and interim financial statements required under sections 4.7and 4.10 for financial years and interim periods that ended before the issuerbecame a reporting issuer.

(2) Subject to section 5.2, the MD&A required to be filed under subsection (1)must be filed by the earlier of:

(a) the filing deadlines for the annual and interim financial statements setout in sections 4.2 and 4.4, as applicable; and

(b) the date the reporting issuer files the financial statements undersubsections 4.1(1) or 4.3(1), as applicable.

5.2 Filing of MD&A and Supplement for SEC Issuers

(1) If an SEC issuer that is a reporting issuer is filing its annual or interim MD&Aprepared in accordance with Item 303 of Regulation S-K or Item 303 ofRegulation S-B under the 1934 Act, the SEC issuer must file that document on orbefore the earlier of:

(a) the date the SEC issuer would be required to file that document undersection 5.1; and

(b) the date the SEC issuer files that document with the SEC.




(1.1) An SEC issuer that is a reporting issuer must file a supplement prepared inaccordance with subsection (2) at the same time it files its annual or interim MD&A,if the SEC issuer:

(a) has based the discussion in the MD&A on financial statementsprepared in accordance with U.S. GAAP; and

(b) is required by subsection 4.1(1) of National Instrument 52-107 AcceptableAccounting Principles, Auditing Standards and Reporting Currency toprovide a reconciliation to Canadian GAAP.

(2) A supplement required under subsection (1.1) must restate, based onfinancial information of the reporting issuer prepared in accordance with orreconciled to Canadian GAAP, those parts of the MD&A that:

(a) are based on financial statements of the reporting issuer prepared inaccordance with U.S. GAAP; and

(b) would contain material differences if they were based on financialstatements of the reporting issuer prepared in accordance with CanadianGAAP.

5.3 Additional Disclosure for Venture Issuers Without Significant Revenue

(1) A venture issuer that has not had significant revenue from operations ineither of its last two financial years, must disclose in its MD&A or in its MD&Asupplement if one is required under section 5.2, for each period referred to insubsection (2), a breakdown of material components of:

(a) capitalized or expensed exploration and development costs;

(b) expensed research and development costs;

(c) deferred development costs;

(d) general and administration expenses; and

(e) any material costs, whether capitalized, deferred or expensed, notreferred to in paragraphs (a) through (d);

and if the venture issuer’s business primarily involves mining exploration anddevelopment, the analysis of capitalized or expensed exploration and developmentcosts must be presented on a property-by-property basis.

(2) The disclosure in subsection (1) must be provided for the following periods:

(a) in the case of annual MD&A, for the two most recently completedfinancial years; and

(b) in the case of interim MD&A, for the most recent year-to-date interimperiod and the comparative year-to-date period presented in the interimfinancial statements.

(3) Subsection (1) does not apply if the information required under thatsubsection has been disclosed in the financial statements to which the MD&A orMD&A supplement relates.




5.4 Disclosure of Outstanding Share Data

(1) A reporting issuer must disclose in its MD&A, or in its MD&A supplement ifone is required under section 5.2, the designation and number or principal amountof:

(a) each class and series of voting or equity securities of the reporting issuerfor which there are securities outstanding;

(b) each class and series of securities of the reporting issuer for which thereare securities outstanding if the securities are convertible into, or exercisableor exchangeable for, voting or equity securities of the reporting issuer; and

(c) subject to subsection (2), each class and series of voting or equitysecurities of the reporting issuer that are issuable on the conversion, exerciseor exchange of outstanding securities of the reporting issuer.

(2) If the exact number or principal amount of voting or equity securities of thereporting issuer that are issuable on the conversion, exercise or exchange ofoutstanding securities of the reporting issuer is not determinable, the reportingissuer must disclose the maximum number or principal amount of each class andseries of voting or equity securities that are issuable on the conversion, exercise orexchange of outstanding securities of the reporting issuer and, if that maximumnumber or principal amount is not determinable, the reporting issuer mustdescribe the exchange or conversion features and the manner in which thenumber or principal amount of voting or equity securities will be determined.

(3) The disclosure under subsections (1) and (2) must be prepared as of the latestpracticable date.

5.5 Approval of MD&A

(1) The annual MD&A and any annual MD&A supplement that a reportingissuer is required to file under this Part must be approved by the board of directorsbefore being filed.

(2) The interim MD&A and any interim MD&A supplement that a reportingissuer is required to file under this Part must be approved by the board of directorsbefore being filed.

(3) In fulfilling the requirement in subsection (2), the board of directors maydelegate the approval of the interim MD&A and any MD&A supplement requiredto be filed under this Part to the audit committee of the board of directors.

5.6 Delivery of MD&A

(1) If a registered holder or beneficial owner of securities, other than debtinstruments, of a reporting issuer requests the reporting issuer’s annual orinterim MD&A, the reporting issuer must send a copy of the requested MD&A andany MD&A supplement required under section 5.2 to the person or company thatmade the request, without charge, by the delivery deadline set out insubsection 4.6(3) for the annual or interim financial statements to which the MD&Arelates.

(2) A reporting issuer is not required to send copies of any MD&A or MD&Asupplement under subsection (1) that was filed more than two years before theissuer receives the request.




(3) The requirement to send annual MD&A and any related MD&A supplementunder subsection (1) does not apply to a reporting issuer that sends its annualMD&A and any related MD&A supplement to its securityholders, other thanholders of debt instruments, within 140 days of the issuer’s financial year-end andin accordance with NI 54-101.

(4) If a reporting issuer sends MD&A under this section, the reporting issuermust also send, at the same time, the annual or interim financial statements towhich the MD&A relates.

5.7 Additional Disclosure for Reporting Issuers with Significant EquityInvestees

(1) A reporting issuer that has a significant equity investee must disclose in itsMD&A, or in its MD&A supplement if one is required under section 5.2, for eachperiod referred to in subsection (2):

(a) summarized information as to the assets, liabilities and results ofoperations of the equity investee; and

(b) the reporting issuer’s proportionate interest in the equity investee andany contingent issuance of securities by the equity investee that mightsignificantly affect the reporting issuer’s share of earnings.

(2) The disclosure in subsection (1) must be provided for the following periods:

(a) in the case of annual MD&A, for the two most recently completedfinancial years; and

(b) in the case of interim MD&A, for the most recent year-to-date interimperiod and the comparative year-to-date period presented in the interimfinancial statements.

(3) Subsection (1) does not apply if:

(a) the information required under that subsection has been disclosed inthe financial statements to which the MD&A or MD&A supplement relates;or

(b) the issuer files separate financial statements of the equity investee forthe periods referred to in subsection (2).

5.8 Disclosure Relating to Previously Disclosed Material Forward-LookingInformation

(1) Application - This section applies to material forward-looking informationthat is disclosed by a reporting issuer other than:

(a) forward-looking information contained in an oral statement; or

(b) disclosure that is:

(i) subject to the requirements in National Instrument 51-101Standards of Disclosure for Oil and Gas Activities or NationalInstrument 43-101 Standards of Disclosure for Mineral Projects; or

(ii) made to comply with the conditions of any exemption from therequirements referred to in subparagraph (i) that a reporting issuerreceived from a regulator or securities regulatory authority unless theregulator or securities regulatory authority orders that this Partapplies to disclosure made under the exemption.




(2) Update - A reporting issuer must discuss in its MD&A, or MD&Asupplement if one is required under section 5.2:

(a) events and circumstances that occurred during the period to which theMD&A relates that are reasonably likely to cause actual results to differmaterially from material forward-looking information for a period that is notyet complete that the reporting issuer previously disclosed to the public; and

(b) the expected differences referred to in paragraph (a).

(3) Exemption - Subsection (2) does not apply if the reporting issuer:

(a) includes the information required by subsection (2) in a news releaseissued and filed by the reporting issuer before the filing of the MD&A orMD&A supplement referred to in subsection (2); and

(b) includes disclosure in the MD&A or MD&A supplement referred to insubsection (2) that:

(i) identifies the news release referred to in paragraph (a);

(ii) states the date of the news release; and

(iii) states that the news release is available on www.sedar.com.

(4) Comparison to Actual - A reporting issuer must disclose and discuss in itsMD&A, or MD&A supplement if one is required under section 5.2, materialdifferences between:

(a) actual results for the annual or interim period to which the MD&Arelates; and

(b) any FOFI or financial outlook for the period referred to in paragraph (a)that the reporting issuer previously disclosed.

(5) Withdrawal - If during the period to which its MD&A relates, a reportingissuer decides to withdraw previously disclosed material forward-lookinginformation:

(a) the reporting issuer must, in its MD&A or MD&A supplement if one isrequired under section 5.2, disclose the decision and discuss the events andcircumstances that led the reporting issuer to that decision, including adiscussion of the assumptions underlying the forward-looking informationthat are no longer valid; and

(b) subsection (4) does not apply to the reporting issuer with respect to theMD&A or MD&A supplement:

(i) if the reporting issuer complies with paragraph (a); and

(ii) the MD&A or MD&A supplement is filed before the end of theperiod covered by the forward-looking information.

(6) Exemption - Paragraph (5)(a) does not apply if the reporting issuer:

(a) includes the information required by paragraph (5)(a) in a news releaseissued and filed by the reporting issuer before the filing of the MD&A orMD&A supplement referred to in subsection (5); and




(b) includes disclosure in the MD&A or MD&A supplement referred to insubsection (5) that:

(i) identifies the news release referred to in paragraph (a);

(ii) states the date of the news release; and

(iii) states that the news release is available on www.sedar.com.

PART 6 ANNUAL INFORMATION FORM

6.1 Requirement to File an AIF

A reporting issuer that is not a venture issuer must file an AIF.

6.2 Filing Deadline for an AIF

An AIF required to be filed under section 6.1 must be filed:

(a) subject to paragraph (b), on or before the 90th day after the end of thereporting issuer’s most recently completed financial year; or

(b) in the case of a reporting issuer that is an SEC issuer filing its AIF inForm 10-K, Form 10-KSB or Form 20-F, on or before the earlier of:

(i) the 90th day after the end of the reporting issuer’s most recentlycompleted financial year; and

(ii) the date the reporting issuer files its Form 10-K, Form 10-KSB orForm 20-F with the SEC.

6.3 Repealed. 5 Jan 2007 SR 115/2006 s4.

PART 7 MATERIAL CHANGE REPORTS

7.1 Publication of Material Change

(1) Subject to subsection (2), if a material change occurs in the affairs of areporting issuer, the reporting issuer must:

(a) immediately issue and file a news release authorized by an executiveofficer disclosing the nature and substance of the change; and

(b) as soon as practicable, and in any event within 10 days of the date onwhich the change occurs, file a Form 51-102F3 Material Change Report withrespect to the material change.

(2) Subsection (1) does not apply if:

(a) in the opinion of the reporting issuer, and if that opinion is arrived at ina reasonable manner, the disclosure required by subsection (1) would beunduly detrimental to the interests of the reporting issuer; or

(b) the material change consists of a decision to implement a change madeby senior management of the reporting issuer who believe that confirmationof the decision by the board of directors is probable, and senior managementof the reporting issuer has no reason to believe that persons with knowledgeof the material change have made use of that knowledge in purchasing orselling securities of the reporting issuer;

and the reporting issuer immediately files the report required underparagraph (1)(b) marked so as to indicate that it is confidential, together withwritten reasons for non-disclosure.




(3) Repealed. 25 Jly 2008 SR 59/2008 s4.

(4) Repealed. 25 Jly 2008 SR 59/2008 s4.

(5) If a report has been filed under subsection (2), the reporting issuer mustadvise the regulator or securities regulatory authority in writing if it believes thereport should continue to remain confidential, within 10 days of the date of filingof the initial report and every 10 days thereafter until the material change isgenerally disclosed in the manner referred to in paragraph (1)(a), or, if thematerial change consists of a decision of the type referred to in paragraph (2)(b),until that decision has been rejected by the board of directors of the reportingissuer.

(6) Despite subsection (5), in Ontario, the reporting issuer must advise thesecurities regulatory authority.

(7) If a report has been filed under subsection (2), the reporting issuer mustpromptly generally disclose the material change in the manner referred to insubsection (1) upon the reporting issuer becoming aware, or having reasonablegrounds to believe, that persons or companies are purchasing or selling securitiesof the reporting issuer with knowledge of the material change that has not beengenerally disclosed.

PART 8 BUSINESS ACQUISITION REPORT

8.1 Interpretation and Application

(1) In this Part:

“acquisition” includes an acquisition of an interest in a business that isconsolidated for accounting purposes or accounted for by another method,such as the equity method;

“acquisition of related businesses” means the acquisition of two or morebusinesses if:

(a) the businesses were under common control or management beforethe acquisitions were completed;

(b) each acquisition was conditional upon the completion of each otheracquisition; or

(c) the acquisitions were contingent upon a single common event; and

“business” includes an interest in an oil and gas property to which reserves,as defined in National Instrument 51-101 Standards of Disclosure for Oiland Gas Activities, have been specifically attributed.

(2) This Part does not apply to a transaction that is a reverse takeover.

8.2 Obligation to File a Business Acquisition Report and Filing Deadline

(1) If a reporting issuer completes a significant acquisition, as determined undersection 8.3, it must file a business acquisition report within 75 days after the dateof acquisition.




(2) Despite subsection (1), if the most recently completed financial year of theacquired business ended 45 days or less before the date of acquisition, a reportingissuer must file a business acquisition report:

(a) within 90 days after the date of acquisition, in the case of an issuerother than a venture issuer; or

(b) within 120 days after the date of acquisition, in the case of a ventureissuer.

8.3 Determination of Significance

(1) Significant Acquisitions – Subject to subsection (3) and subsections 8.10(1)and 8.10(2), an acquisition of a business or related businesses is a significantacquisition:

(a) for a reporting issuer that is not a venture issuer, if the acquisitionsatisfies any of the three significance tests set out in subsection (2); and

(b) for a venture issuer, if the acquisition satisfies either of the significancetests set out in paragraphs (2)(a) or (b) if “20 percent” is read as “40 percent”.

(2) Required Significance Tests – For the purposes of subsection (1), thesignificance tests are:

(a) The Asset Test – The reporting issuer’s proportionate share of theconsolidated assets of the business or related businesses exceeds 20 percentof the consolidated assets of the reporting issuer calculated using theaudited financial statements of each of the reporting issuer and the businessor the related businesses for the most recently completed financial year ofeach that ended before the date of the acquisition.

(b) The Investment Test – The reporting issuer’s consolidated investmentsin and advances to the business or related businesses as at the date of theacquisition exceeds 20 percent of the consolidated assets of the reporting issueras at the last day of the most recently completed financial year of the reportingissuer ended before the date of the acquisition, excluding any investments in oradvances to the business or related businesses as at that date.

(c) The Income Test – The reporting issuer’s proportionate share of theconsolidated income from continuing operations of the business or relatedbusinesses exceeds 20 percent of the consolidated income from continuingoperations of the reporting issuer calculated using the audited financialstatements of each of the reporting issuer and the business or relatedbusinesses for the most recently completed financial year of each endedbefore the date of acquisition.

(3) Optional Significance Tests – Despite subsection (1) and subject tosubsections 8.10(1) and 8.10(2), if an acquisition of a business or relatedbusinesses is significant based on the significance tests in subsection (2):

(a) a reporting issuer that is not a venture issuer may re-calculate thesignificance using the optional significance tests in subsection (4); and

(b) a venture issuer may re-calculate the significance using the optionalsignificance tests in paragraphs (4)(a) or (b) if “20 percent” is read as “40percent”.




(4) For the purposes of subsection (3), the optional significance tests are:

(a) The Asset Test – The reporting issuer’s proportionate share of theconsolidated assets of the business or related businesses, calculated usingthe financial statements of each of the reporting issuer and the business orthe related businesses for the most recently completed interim period orfinancial year of each, exceeds 20 percent of the consolidated assets of thereporting issuer without giving effect to the acquisition.

(b) The Investment Test – The reporting issuer’s consolidated investmentsin and advances to the business or related businesses as at the date of theacquisition exceeds 20 percent of the consolidated assets of the reportingissuer as at the last day of the most recently completed interim period orfinancial year of the reporting issuer, excluding any investments in oradvances to the business or related businesses as at that date.

(c) The Income Test - The income from continuing operations calculatedunder the following subclause (i) exceeds 20 percent of the income fromcontinuing operations calculated under the following subclause (ii):

(i) the reporting issuer’s proportionate share of the consolidatedincome from continuing operations of the business or related businessesfor the later of:

(A) the most recently completed financial year of the business orrelated businesses; or

(B) the 12 months ended on the last day of the most recentlycompleted interim period of the business or related businesses;

(ii) the reporting issuer’s consolidated income from continuingoperations for the later of:

(A) the most recently completed financial year, without givingeffect to the acquisition; or

(B) the 12 months ended on the last day of the most recentlycompleted interim period of the reporting issuer, without givingeffect to the acquisition.

(5) If an acquisition does not meet any of the significance tests undersubsection (4), the acquisition is not a significant acquisition.

(6) Despite subsection (3), the significance of an acquisition of a business orrelated businesses may be re-calculated using financial statements for periodsthat ended after the date of acquisition only if, after the date of acquisition, thebusiness or related businesses remained substantially intact and were notsignificantly reorganized, and no significant assets or liabilities were transferredto other entities.

(7) Application of the Income Test if a Loss Occurred – For the purposes ofparagraphs (2)(c) and (4)(c), if any of the reporting issuer, the business or therelated businesses has incurred a loss, the significance test must be applied usingthe absolute value of the loss.




(8) Application of the Income Test if Lower Than Average Income forthe Most Recent Year - For the purposes of paragraph (2)(c) andclause (4)(c)(ii)(A), if the reporting issuer’s consolidated income from continuingoperations for the most recently completed financial year was lower by 20 percentor more than its average consolidated income from continuing operations for thethree most recently completed financial years, the issuer may, subject tosubsection (10), substitute the average consolidated income from continuingoperations for the three most recently completed financial years in determiningwhether the significance test set out in paragraph (2)(c) or (4)(c) is satisfied.

(9) Application of the Optional Income Test if Lower Than AverageIncome for the Most Recent Year - For the purpose of clause (4)(c)(ii)(B) if thereporting issuer’s consolidated income from continuing operations for the mostrecently completed 12-month period was lower by 20 percent or more than itsaverage consolidated income from continuing operations for the three mostrecently completed 12-month periods, the issuer may, subject to subsection (10),substitute the average consolidated income for the three most recentlycompleted 12-month periods in determining whether the significance test set outin paragraph (4)(c) is satisfied.

(10) Lower than Average Income of the Issuer if a Loss Occurred – If thereporting issuer’s consolidated income from continuing operations for either of thetwo earlier financial periods referred to in subsections (8) and (9) is a loss, thereporting issuer’s income from continuing operations for that period is consideredto be zero for the purposes of calculating the average consolidated income for thethree financial periods.

(11) Application of Significance Tests – Step-By-Step Acquisitions – If areporting issuer has made a “step-by-step” purchase as described in the Handbook,then for the purposes of applying subsections (2) and (4):

(a) if the initial investment and one or more incremental investments weremade during the same financial year, the investments must be aggregatedand tested on a combined basis;

(b) if one or more incremental investments were made in a financial yearsubsequent to the financial year in which an initial or incrementalinvestment was made and the initial or previous incremental investmentsare reflected in audited annual financial statements of the reporting issuerpreviously filed, the reporting issuer must apply the significance tests setout in subsections (2) and (4) on a combined basis to the incrementalinvestments not reflected in audited financial statements of the reportingissuer previously filed; and

(c) if one or more incremental investments were made in a financial yearsubsequent to the financial year in which the initial investment was madeand the initial investment is not reflected in audited annual financialstatements of the reporting issuer previously filed, the reporting issuer mustapply the significance tests set out in subsections (2) and (4) to the initial andincremental investments on a combined basis.




(11.1) Application of the Optional Income Test based on Pro FormaFinancial Information - For the purposes of calculating the optional incometest under clause (4)(c)(ii)(A), a reporting issuer may use pro forma consolidatedincome from continuing operations for its most recently completed financial yearthat was included in a previously filed document if:

(a) the reporting issuer has made a significant acquisition of a businessafter its most recently completed financial year; and

(b) the previously filed document included:

(i) audited annual financial statements of that acquired business forthe periods required by this Part; and

(ii) the pro forma financial information required by subsection 8.4(5)or (6).

(12) Application of Significance Tests – Related Businesses – Indetermining whether an acquisition of related businesses is a significantacquisition, related businesses acquired after the ending date of the most recentlyfiled annual audited financial statements of the reporting issuer must beconsidered on a combined basis.

(13) Application of Significance Tests – Accounting Principles andCurrency – For the purposes of the significance tests in subsections (2) and (4),financial statements of the business or related businesses must be reconciled tothe accounting principles used to prepare the reporting issuer’s financialstatements and translated into the same reporting currency as that used in thereporting issuer’s financial statements.

(14) Application of Significance Tests – Use of Unaudited FinancialStatements – Despite subsections (2) and (4), the significance of an acquisition ofa business or related businesses may be calculated using unaudited financialstatements of the business or related businesses that comply with subsection 6.1(1)of National Instrument 52-107 Acceptable Accounting Principles, AuditingStandards and Reporting Currency if the financial statements of the business orrelated businesses for the most recently completed financial year have not beenaudited.

(15) Application of Significance Tests – Use of Previous Audited FinancialStatements – Despite subsections (2) and (4), the significance of an acquisition ofa business or related businesses may be calculated using the audited financialstatements for the financial year immediately preceding the reporting issuer’smost recently completed financial year if the reporting issuer has not beenrequired to file, and has not filed, audited financial statements for its mostrecently completed financial year.




8.4 Financial Statement Disclosure for Significant Acquisitions

(1) Comparative Annual Financial Statements - If a reporting issuer isrequired to file a business acquisition report under section 8.2, subject tosections 8.6 through 8.11, the business acquisition report must include thefollowing for each business or related businesses:

(a) an income statement, a statement of retained earnings and a cash flowstatement for the following periods:

(i) if the business has completed one financial year;

(A) the most recently completed financial year ended on orbefore the date of acquisition; and

(B) the financial year immediately preceding the most recentlycompleted financial year, if any; or

(ii) if the business has not completed one financial year, the financialperiod commencing on the date of formation and ending on a date notmore than 45 days before the date of acquisition;

(b) a balance sheet as at the end of each of the periods specified inparagraph (a) and notes to the financial statements.

(2) Audit – The most recently completed financial period referred to insubsection (1) must be audited.

(3) Interim Financial Statements - Subject to subsection (4) and sections 8.6through 8.11, if a reporting issuer is required to include financial statements in abusiness acquisition report under subsection (1), the business acquisition reportmust include financial statements for:

(a) the most recently completed interim period or other period that startedthe day after the date of the balance sheet specified in paragraph (1)(b) andended:

(i) in the case of an interim period, before the date of acquisition; or

(ii) in the case of a period other than an interim period, after theinterim period referred to in subparagraph (i) and on or before the dateof acquisition; and

(b) a comparable period in the preceding financial year of the business.

(4) Earlier Interim Financial Statements Permitted – Despite subsection (3),the business acquisition report may include financial statements for a periodending not more than one interim period before the period referred to insubparagraph (3)(a)(i) if:

(a) the business does not, or related businesses do not, constitute amaterial departure from the business or operations of the reporting issuerimmediately before the acquisition;




(b) the reporting issuer will not account for the acquisition as a continuityof interests; and

(c) either:

(i) the date of acquisition is, and the reporting issuer files thebusiness acquisition report, within the following time after the business’sor related businesses’ most recently completed interim period:

(A) 45 days, if the reporting issuer is not a venture issuer; or

(B) 60 days, if the reporting issuer is a venture issuer; or

(ii) the reporting issuer filed a document before the date of acquisitionthat included financial statements for the business or related businessesthat would have been required if the document were a prospectus,and those financial statements are for a period ending not morethan one interim period before the interim period referred to insubparagraph (3)(a)(i).

(5) Pro Forma Financial Statements Required in a Business AcquisitionReport - If a reporting issuer is required to include financial statements in abusiness acquisition report under subsection (1) or (3), the business acquisitionreport must include:

(a) a pro forma balance sheet of the reporting issuer,

(i) as at the date of the reporting issuer’s most recent balance sheetfiled, that gives effect, as if they had taken place as at the date of thepro forma balance sheet, to significant acquisitions that have beencompleted, but are not reflected in the reporting issuer’s most recentbalance sheet for an annual or interim period; or

(ii) if the reporting issuer has not filed a balance sheet for any annualor interim period, as at the date of the acquired business’s most recentbalance sheet, that gives effect, as if they had taken place as at the dateof the pro forma balance sheet, to significant acquisitions that havebeen completed;

(b) a pro forma income statement of the reporting issuer that gives effect tosignificant acquisitions completed since the beginning of the financial yearreferred to in clause (i)(A) or (ii)(A), as applicable, as if they had taken placeat the beginning of that financial year, for each of the following financialperiods:

(i) the reporting issuer’s:

(A) most recently completed financial year for which it has filedfinancial statements; and

(B) interim period for which it has filed financial statementsthat started after the period in clause (A) and ended immediatelybefore the date of acquisition or, in the reporting issuer’s discretion,after the date of acquisition; or




(ii) if the reporting issuer has not filed an income statement for anyannual or interim period, for the business’s or related businesses’:

(A) most recently completed financial year that ended before thedate of acquisition; and

(B) period for which financial statements are included in thebusiness acquisition report under paragraph (3)(a); and

(c) pro forma earnings per share based on the pro forma financialstatements referred to in paragraph (b).

(6) Pro Forma Financial Statements based on Earlier Interim FinancialStatements Permitted – Despite paragraph (5)(a) and clauses (5)(b)(i)(B)and (5)(b)(ii)(B), if the reporting issuer relies on subsection (4), the businessacquisition report may include:

(a) a pro forma balance sheet as at the date of the balance sheet filedimmediately before the reporting issuer’s most recent balance sheet filed;and

(b) a pro forma income statement for the period ending not more than oneinterim period before the interim period referred to in clause (5)(b)(i)(B)or (5)(b)(ii)(B), as applicable.

(7) Preparation of Pro Forma Financial Statements - If a reporting issueris required to include pro forma financial statements in a business acquisitionreport under subsection (5):

(a) the reporting issuer must identify in the pro forma financial statementseach significant acquisition, if the pro forma financial statements give effectto more than one significant acquisition;

(b) the reporting issuer must include in the pro forma financial statementsa description of the underlying assumptions on which the pro formafinancial statements are prepared, cross-referenced to each related proforma adjustment;

(c) if the financial year-end of the business differs from the reportingissuer’s year-end by more than 93 days, for the purpose of preparing the proforma income statement for the reporting issuer’s most recently completedfinancial year, the reporting issuer must construct an income statement ofthe business for a period of 12 consecutive months ending no more than 93days before or after the reporting issuer’s year-end, by adding the results fora subsequent interim period to a completed financial year of the businessand deducting the comparable interim results for the immediately precedingyear;

(d) if a constructed income statement is required under paragraph (c), thepro forma financial statements must disclose the period covered by theconstructed income statement on the face of the pro forma financialstatements and must include a note stating that the financial statements ofthe business used to prepare the pro forma financial statements wereprepared for the purpose of the pro forma financial statements and do notconform with the financial statements for the business included elsewherein the business acquisition report;




(e) if a reporting issuer is required to prepare a pro forma incomestatement for an interim period required by paragraph (5)(b), and the proforma income statement for the most recently completed financial yearincludes results of the business which are also included in the pro formaincome statement for the interim period, the reporting issuer must disclosein a note to the pro forma financial statements the revenue, expenses, grossprofit and income from continuing operations included in each pro formaincome statement for the overlapping period; and

(f) a constructed period referred to in paragraph (c) does not have to beaudited.

(8) Financial Statements of Related Businesses - If a reporting issuer isrequired under subsection (1) to include financial statements for more than onebusiness because the significant acquisition involves an acquisition of relatedbusinesses, the financial statements required under subsection (1) must bepresented separately for each business, except for the periods during which thebusinesses have been under common control or management, in which case thereporting issuer may present the financial statements of the businesses on acombined basis.

8.5 Repealed. 5 Jan 2007 SR 115/2006 s4.

8.6 Exemption for Significant Acquisitions Accounted for Using the EquityMethod

A reporting issuer is exempt from the requirements in section 8.4 if:

(a) the acquisition is, or will be, of an equity investee;

(b) the business acquisition report includes disclosure for the periods forwhich financial statements are otherwise required under subsection 8.4(1)that:

(i) summarizes information as to the assets, liabilities and results ofoperations of the equity investee; and

(ii) describes the reporting issuer’s proportionate interest in thebusiness and any contingent issuance of securities by the equityinvestee that might significantly affect the reporting issuer’s share ofearnings;

(c) the financial information provided under paragraph (b) for the mostrecently completed financial year:

(i) has been derived from audited financial statements of the equityinvestee; or

(ii) has been audited; and

(d) the business acquisition report:

(i) identifies the financial statements referred to in subparagraph (c)(i)from which the disclosure provided under paragraph (b) has beenderived; or




(ii) discloses that the financial information provided underparagraph (b), if not derived from audited financial statements, hasbeen audited; and

(iii) discloses that the audit opinion with respect to the financialstatements referred to in subparagraph (i), or the financial informationreferred to in subparagraph (ii), was issued without a reservation.

8.7 Repealed. 5 Jan 2007 SR 115/2006 s4.

8.8 Exemption for Significant Acquisitions if Financial Year End Changed

If under section 8.4 a reporting issuer is required to provide financial statementsfor a business acquired and the business changed its financial year end duringeither of the financial years required to be included, the reporting issuer mayinclude financial statements for the transition year in satisfaction of the financialstatements for one of the years, provided that the transition year is at least ninemonths.

8.9 Exemption from Comparatives if Financial Statements Not PreviouslyPrepared

A reporting issuer is not required to provide comparative information for interimfinancial statements required under subsection 8.4(3) for a business acquired if:

(a) to a reasonable person it is impracticable to present prior-periodinformation on a basis consistent with the most recently completed interimperiod of the acquired business;



8.10 Acquisition of an Interest in an Oil and Gas Property

(1) Asset Test - Despite subsections 8.3(2) and 8.3(4), the asset tests inparagraphs 8.3(2)(a) and 8.3(4)(a) do not apply to an acquisition:

(a) of a business that is an interest in an oil and gas property or relatedbusinesses that are interests in oil and gas properties; and

(b) that is not of securities of another issuer.

(2) Income Test - Despite subsections 8.3(2), 8.3(4), 8.3(8), 8.3(9), 8.3(10)and 8.3(11.1), a reporting issuer must substitute ‘operating income’ for ‘consolidatedincome from continuing operations’ for the purposes of the income test inparagraphs 8.3(2)(c) and 8.3(4)(c) if the acquisition is one described in subsection (1).

(3) Exemption from Financial Statement Disclosure - A reporting issuer isexempt from the requirements in section 8.4 if:

(a) the significant acquisition is an acquisition described in subsection (1);

(b) the reporting issuer is unable to provide the financial statements inrespect of the significant acquisition otherwise required under this Partbecause those financial statements do not exist or because the reportingissuer does not have access to those financial statements;




(c) the acquisition does not constitute a reverse takeover;

(d) the business or related businesses did not, immediately before the timeof completion of the acquisition, constitute a ‘reportable segment’ of thevendor, as defined in the Handbook;

(e) subject to subsection (4), in respect of the business or related businesses,for each of the financial periods for which financial statements would, but forthis section, be required under section 8.4, the business acquisition reportincludes:

(i) an operating statement presenting for the business or relatedbusinesses at least the following:

(A) gross revenue;

(B) royalty expenses;

(C) production costs; and

(D) operating income;

(ii) a pro forma operating statement of the reporting issuer that giveseffect to significant acquisitions completed since the beginning of thereporting issuer’s most recently completed financial year for whichfinancial statements are required to have been filed, as if they hadtaken place at the beginning of that financial year, for each of thefinancial periods referred to in paragraph 8.4(5)(b);

(iii) a description of the property or properties and the interestacquired by the reporting issuer; and

(iv) disclosure of the annual oil and gas production volumes from thebusiness or related businesses;

(f) the operating statement for the most recently completed financial periodreferred to in subsection 8.4(1) is audited; and

(g) the business acquisition report discloses

(i) the estimated reserves and related future net revenue attributableto the business or related businesses, the material assumptions used inpreparing the estimates and the identity and relationship to thereporting issuer or to the vendor of the person who prepared theestimates; and

(ii) the estimated oil and gas production volumes from the business orrelated businesses for the first year reflected in the estimates disclosedunder subparagraph (i).

(4) Exemption from Alternative Disclosure – A reporting issuer is exemptfrom the requirements of subparagraphs (3)(e)(i), (ii) and (iv), if:

(a) production, gross revenue, royalty expenses, production costs andoperating income were nil for the business or related businesses for eachfinancial period; and

(b) the business acquisition report discloses this fact




8.11 Exemption for Step-By-Step Acquisitions

Despite section 8.4, a reporting issuer is exempt from the requirements to filefinancial statements for an acquired business, other than the pro forma financialstatements required by subsection 8.4(5), in a business acquisition report if thereporting issuer has made a “step-by-step” purchase as described in the Handbookand the acquired business has been consolidated in the reporting issuer’s mostrecent annual financial statements that have been filed.

PART 9 PROXY SOLICITATION AND INFORMATION CIRCULARS

9.1 Sending of Proxies and Information Circulars

(1) If management of a reporting issuer gives notice of a meeting to its registeredholders of voting securities, management must, at the same time as or beforegiving that notice, send to each registered holder of voting securities who isentitled to notice of the meeting a form of proxy for use at the meeting.

(2) Subject to section 9.2, a person or company that solicits proxies fromregistered holders of voting securities of a reporting issuer must:

(a) in the case of a solicitation by or on behalf of management of a reportingissuer, send an information circular with the notice of meeting to eachregistered securityholder whose proxy is solicited; or

(b) in the case of any other solicitation, concurrently with or before thesolicitation, send an information circular to each registered securityholderwhose proxy is solicited.

(3) Repealed. 25 Jly 2008 SR 59/2008 s4.

9.2 Exemptions from Sending Information Circular

(1) Subsection 9.1(2) does not apply to a solicitation by a person or company inrespect of securities of which the person or company is the beneficial owner.

(2) Paragraph 9.1(2)(b) does not apply to a solicitation if the total number ofsecurityholders whose proxies are solicited is not more than 15.

(3) For the purposes of subsection (2), two or more persons or companies who arejoint registered owners of one or more securities are considered to be onesecurityholder.

(4) Despite paragraph 9.1(2)(b), a person or company, other than managementof a reporting issuer or a person or company acting on behalf of management, maysolicit proxies from registered securityholders of a reporting issuer withoutsending an information circular, if:

(a) the solicitation is made to the public by broadcast, speech or publication;

(b) soliciting proxies by broadcast, speech or publication is permitted by thelaws under which the reporting issuer is incorporated, organized or continuedand the person or company making the solicitation complies with therequirements, if any, of those laws relating to the broadcast, speech orpublication;




(c) the person or company has filed the following information:

(i) the name and address of the reporting issuer to which thesolicitation relates;

(ii) the information required under Item 2, sections 3.2, 3.3 and 3.4and paragraphs (b) and (d) of Item 5 of Form 51-102F5 InformationCircular;

(iii) any information required to be disclosed in respect of thebroadcast, speech or publication by the laws under which the reportingissuer is incorporated, organized or continued; and

(iv) a copy of any communication intended to be published; and

(d) the broadcast, speech or publication contains the information referredto in paragraphs (c)(i) to (iii).

(5) Subsection (4) does not apply to a person or company that is proposing, at thetime of the solicitation, a significant acquisition or restructuring transactioninvolving the reporting issuer and the person or company, under securities of theperson or company, or securities of an affiliate of the person or company, are to bechanged, exchanged, issued or distributed, unless:

(a) the person or company has filed an information circular or otherdocument containing the information required by section 14.4 ofForm 51-102F5 Information Circular; and

(b) the solicitation refers to that information circular or other documentand discloses that the circular or other document is on SEDAR.

(6) Subsection (4) does not apply to a person or company that is nominating orproposing to nominate, at the time of the solicitation, an individual, includinghimself or herself, for election as a director of the reporting issuer, unless:

(a) the person or company has filed an information circular or otherdocument containing the information required by Form 51-102F5 InformationCircular in respect of the proposed nominee; and

(b) the solicitation refers to that information circular or other documentand discloses that the circular or other document is on SEDAR.

9.3 Filing of Information Circulars and Proxy-Related Material

A person or company that is required under this Instrument to send aninformation circular or form of proxy to registered securityholders of a reportingissuer must promptly file a copy of the information circular, form of proxy and allother material required to be sent by the person or company in connection withthe meeting to which the information circular or form of proxy relates.




9.3.1Content of Information Circular

(1) Subject to Item 8 of Form 51-102F5, if a reporting issuer sends aninformation circular to a securityholder under paragraph 9.1(2)(a), the issuermust:

(a) disclose all compensation paid, payable, awarded, granted, given, orotherwise provided, directly or indirectly, by the issuer, or a subsidiary of theissuer, to each NEO and director, in any capacity, including, for greatercertainty, all plan and non-plan compensation, direct and indirect pay,remuneration, economic or financial award, reward, benefit, gift or perquisitepaid, payable, awarded, granted, given, or otherwise provided to the NEO ordirector for services provided, directly or indirectly, to the issuer or asubsidiary of the issuer; and

(b) include detail and discussion of the compensation, and thedecision-making process relating to compensation, presented in such a waythat it provides a reasonable person, applying reasonable effort, anunderstanding of:

(i) how decisions about NEO and director compensation are made;

(ii) the compensation the board of directors intended the issuer to pay,make payable, award, grant, give or otherwise provide to each NEOand director; and

(iii) how specific NEO and director compensation relates to the overallstewardship and governance of the reporting issuer.

(2) The disclosure required under subsection (1) must be provided for the periodsset out in, in accordance with, and subject to any exemptions set out in,Form 51-102F6 Statement of Executive Compensation, which came into force onDecember 31, 2008.

(3) For the purposes of this section, ‘NEO’ and ‘plan’ have the meaning ascribedto those terms in Form 51-102F6 Statement of Executive Compensation, whichcame into force on December 31, 2008.

(4) This section does not apply to an issuer in respect of a financial year endingbefore December 31, 2008.

9.4 Content of Form of Proxy

(1) A form of proxy sent to securityholders of a reporting issuer by a person orcompany soliciting proxies must indicate in bold-face type whether or not theproxy is solicited by or on behalf of the management of the reporting issuer,provide a specifically designated blank space for dating the form of proxy andspecify the meeting in respect of which the proxy is solicited.

(2) An information circular sent to securityholders of a reporting issuer or theform of proxy to which the information circular relates must:

(a) indicate in bold-face type that the securityholder has the right toappoint a person or company to represent the securityholder at the meetingother than the person or company if any, designated in the form of proxy;and

(b) contain instructions as to the manner in which the securityholder mayexercise the right referred to in paragraph (a).




(3) If a form of proxy sent to securityholders of a reporting issuer contains adesignation of a named person or company as nominee, it must provide an optionfor the securityholder to designate in the form of proxy some other person orcompany as the securityholder’s nominee.

(4) A form of proxy sent to securityholders of a reporting issuer must provide anoption for the securityholder to specify that the securities registered in thesecurityholder’s name will be voted for or against each matter or group of relatedmatters identified in the form of proxy, in the notice of meeting or in aninformation circular, other than the appointment of an auditor and the election ofdirectors.

(5) A form of proxy sent to securityholders of a reporting issuer may conferdiscretionary authority with respect to each matter referred to in subsection (4) asto which a choice is not specified if the form of proxy or the information circularstates in bold-face type how the securities represented by the proxy will be votedin respect of each matter or group of related matters.

(6) A form of proxy sent to securityholders of a reporting issuer must provide anoption for the securityholder to specify that the securities registered in the nameof the securityholder must be voted or withheld from voting in respect of theappointment of an auditor or the election of directors.

(7) An information circular sent to securityholders of a reporting issuer or theform of proxy to which the information circular relates must state that:

(a) the securities represented by the proxy will be voted or withheld fromvoting in accordance with the instructions of the securityholder on any ballotthat may be called for; and

(b) if the securityholder specifies a choice under subsection (4) or (6) withrespect to any matter to be acted upon, the securities will be votedaccordingly.

(8) A form of proxy sent to securityholders of a reporting issuer may conferdiscretionary authority with respect to:

(a) amendments or variations to matters identified in the notice ofmeeting; and

(b) other matters which may properly come before the meeting;

if:

(c) the person or company by whom or on whose behalf the solicitation ismade is not aware within a reasonable time before the time the solicitation ismade that any of those amendments, variations or other matters are to bepresented for action at the meeting; and

(d) a specific statement is made in the information circular or in the form ofproxy that the proxy is conferring such discretionary authority.




(9) A form of proxy sent to securityholders of a reporting issuer must not conferauthority to vote:

(a) for the election of any person as a director of a reporting issuer unless abona fide proposed nominee for that election is named in the informationcircular; or

(b) at any meeting other than the meeting specified in the notice of meetingor any adjournment of that meeting.

9.5 Exemption

Sections 9.1 to 9.4 do not apply to a reporting issuer, or a person or company thatsolicits proxies from registered holders of voting securities of a reporting issuer, if:

(a) the reporting issuer or other person or company complies with therequirements of the laws relating to the solicitation of proxies under whichthe reporting issuer is incorporated, organized or continued;

(b) the requirements referred to in subsection (a) are substantially similarto the requirements of this Part; and

(c) the reporting issuer or other person or company files a copy of anyinformation circular and form of proxy, or other documents that containsubstantially similar information, promptly after the reporting issuer orother person or company sends the circular, form or other document inconnection with the meeting.

PART 10 RESTRICTED SECURITY DISCLOSURE

10.1 Restricted Security Disclosure

(1) Except as otherwise provided in section 10.3, if a reporting issuer hasoutstanding restricted securities, or securities that are directly or indirectlyconvertible into or exercisable or exchangeable for restricted securities orsecurities that will, when issued, result in an existing class of outstandingsecurities being considered restricted securities, each document referred to insubsection (2) must:

(a) refer to restricted securities using a term that includes the appropriaterestricted security term;

(b) not refer to securities by a term that includes “common”, or “preference”or “preferred”, unless the securities are common shares or preference shares,respectively;

(c) describe any restrictions on the voting rights of restricted securities;

(d) describe the rights to participate, if any, of holders of restrictedsecurities if a takeover bid is made for securities of the reporting issuer withvoting rights superior to those attached to the restricted securities;

(e) state the percentage of the aggregate voting rights attached to thereporting issuer’s securities that are represented by the class of restrictedsecurities; and




(f) if holders of restricted securities have no right to participate if atakeover bid is made for securities of the reporting issuer with voting rightssuperior to those attached to the restricted securities, contain a statement tothat effect in bold-face type.

(2) Subsection (1) applies to the following documents except as provided insubsections (3) and (6):

(a) an information circular;

(b) a document required by this Instrument to be delivered upon request bya reporting issuer to any of its securityholders; and

(c) an AIF prepared by a reporting issuer.

(3) Despite subsection (2), annual financial statements, interim financialstatements and MD&A or other accompanying discussion by management ofthose financial statements are not required to include the details referred to inparagraphs (1)(c), (d), (e) and (f).

(4) Each reference to restricted securities in any document not referred to insubsection (2) that a reporting issuer sends to its securityholders must include theappropriate restricted security term.

(5) A reporting issuer must not refer, in any of the documents described insubsection (4), to securities by a term that includes “common” or “preference” or“preferred”, unless the securities are common shares or preference shares,respectively.

(6) Despite paragraph (1)(b) and subsection (5), a reporting issuer may, in oneplace only in a document referred to in subsection (2) or (4), describe the restrictedsecurities by the term used in the constating documents of the reporting issuer, tothe extent that term differs from the appropriate restricted security term, if thedescription is not on the front page of the document and is in the same type faceand type size as that used generally in the document.

10.2 Dissemination of Disclosure Documents to Holder of RestrictedSecurities

(1) If a reporting issuer sends a document to all holders of any class of its equitysecurities the document must also be sent by the reporting issuer at the same timeto the holders of its restricted securities.

(2) A reporting issuer that is required by this Instrument to arrange for, orvoluntarily makes arrangements for, delivery of the documents referred to insubsection (1) to the beneficial owners of any securities of a class of equitysecurities registered in the name of a registrant, must make similar arrangementsfor delivery of the documents to the beneficial owners of securities of a class ofrestricted securities registered in the name of the registrant.




10.3 Exemptions for Certain Reporting Issuers

The provisions of sections 10.1 and 10.2 do not apply to:

(a) securities that carry a right to vote subject to a restriction on thenumber or percentage of securities that may be voted or owned by persons orcompanies that are not citizens or residents of Canada or that are otherwiseconsidered as a result of any law applicable to the reporting issuer to benon-Canadians, but only to the extent of the restriction; and

(b) securities that are subject to a restriction, imposed by any lawgoverning the reporting issuer, on the level of ownership of the securities byany person, company or combination of persons or companies, but only to theextent of the restriction.

PART 11 ADDITIONAL FILING REQUIREMENTS

11.1 Additional Requirements

(1) A reporting issuer must file a copy of any disclosure material:

(a) that it sends to its securityholders;

(b) in the case of an SEC issuer, that it files with or furnishes to the SEC,including material filed as exhibits to other documents, if the materialcontains information that has not been included in disclosure already filed ina jurisdiction by the SEC issuer under the 1934 Act; or

(c) that it files with another provincial or territorial securities regulatoryauthority or regulator other than in connection with a distribution;

(2) A reporting issuer must file the material referred to in subsection (1) on thesame date as, or as soon as practicable after, the earlier of:

(a) the date on which the reporting issuer sends the material to itssecurityholders;

(b) the date on which the reporting issuer files or furnishes the material tothe SEC; and

(c) the date on which the reporting issuer files that material with the otherprovincial or territorial securities regulatory authority or regulator.

11.2 Change of Status Report

A reporting issuer must file a notice promptly after the occurrence of either of thefollowing:

(a) the reporting issuer becomes a venture issuer; or

(b) the reporting issuer ceases to be a venture issuer.




11.3 Voting Results

A reporting issuer that is not a venture issuer must, promptly following a meetingof securityholders at which a matter was submitted to a vote, file a report thatdiscloses, for each matter voted upon:

(a) a brief description of the matter voted upon and the outcome of the vote;and

(b) if the vote was conducted by ballot, including a vote on a matter inwhich votes are cast both in person and by proxy, the number or percentageof votes cast for, against or withheld from the vote.

11.4 Financial Information

A reporting issuer must file a copy of any news release issued by it that disclosesinformation regarding its historical or prospective results of operations orfinancial condition for a financial year or interim period.

11.5 Re-filing Documents

If a reporting issuer decides it will:

(a) re-file a document filed under this Instrument; or

(b) re-state financial information for comparative periods in financialstatements for reasons other than retroactive application of a change in anaccounting standard or policy or a new accounting standard;

and the information in the re-filed document, or re-stated financial information,will differ materially from the information originally filed, the issuer mustimmediately issue and file a news release authorized by an executive officerdisclosing the nature and substance of the change or proposed changes.

11.6 Executive Compensation Disclosure for Certain Reporting Issuers

(1) A reporting issuer that does not send to its securityholders an informationcircular that includes the disclosure required by Item 8 of Form 51-102F5 andthat does not file an AIF that includes the executive compensation disclosurerequired by Item 18 of Form 51-102F2 must:

(a) disclose all compensation paid, payable, awarded, granted, given, orotherwise provided, directly or indirectly, by the issuer, or a subsidiary of theissuer, to each NEO and director, in any capacity, including, for greatercertainty, all plan and non-plan compensation, direct and indirect pay,remuneration, economic or financial award, reward, benefit, gift or perquisitepaid, payable, awarded, granted, given, or otherwise provided to the NEO ordirector for services provided, directly or indirectly, to the issuer or asubsidiary of the issuer; and

(b) include detail and discussion of the compensation, and thedecision-making process relating to compensation, presented in such a waythat it provides a reasonable person, applying reasonable effort, anunderstanding of:

(i) how decisions about NEO and director compensation are made;




(ii) the compensation the board of directors intended the issuer to pay,make payable, award, grant, give or otherwise provide to each NEOand director; and

(iii) how specific NEO and director compensation relates to the overallstewardship and governance of the reporting issuer.

(2) The disclosure required under subsection (1) must be provided for the periodsset out in, and in accordance with, Form 51-102F6 Statement of ExecutiveCompensation, which came into force on December 31, 2008.

(3) The disclosure required under subsection (1) must be filed not later than 140days after the end of the reporting issuer’s most recently completed financial year.

(4) For the purposes of this section, “NEO” and ‘plan’ have the meaning ascribedto those terms in Form 51-102F6 Statement of Executive Compensation, whichcame into force on December 31, 2008.

(5) This section does not apply to an issuer that satisfies securities legislationrequirements relating to information circulars, proxies and proxy solicitationunder section 4.6 or 5.7 of National Instrument 71-102 Continuous Disclosure andOther Exemptions Relating to Foreign Issuers.

(6) This section does not apply to an issuer in respect of a financial year endingbefore December 31, 2008.

PART 12 FILING OF CERTAIN DOCUMENTS

12.1 Filing of Documents Affecting the Rights of Securityholders

(1) A reporting issuer must file copies of the following documents, and anymaterial amendments to the following documents, unless previously filed:

(a) articles of incorporation, amalgamation, continuation or any otherconstating or establishing documents of the issuer, unless the constating orestablishing document is a statutory or regulatory instrument;

(b) by-laws or other corresponding instruments currently in effect;

(c) any securityholder or voting trust agreement that the reporting issuerhas access to and that can reasonably be regarded as material to an investorin securities of the reporting issuer;

(d) any securityholders’ rights plans or other similar plans; and

(e) any other contract of the issuer or a subsidiary of the issuer that createsor can reasonably be regarded as materially affecting the rights or obligationsof its securityholders generally.

(2) A document required to be filed under subsection (1) may be filed in paperformat if:

(a) it is dated before March 30, 2004; and

(b) it does not exist in an acceptable electronic format.




12.2 Filing of Material Contracts

(1) Unless previously filed, a reporting issuer must file a material contractentered into:

(a) within the last financial year; or

(b) before the last financial year if that material contract is still in effect.

(2) Despite subsection (1), a reporting issuer is not required to file a materialcontract entered into in the ordinary course of business unless the materialcontract is:

(a) a contract to which directors, officers, or promoters are parties otherthan a contract of employment;

(b) a continuing contract to sell the majority of the reporting issuer’sproducts or services or to purchase the majority of the reporting issuer’srequirements of goods, services, or raw materials;

(c) a franchise or licence or other agreement to use a patent, formula,trade secret, process or trade name;

(d) a financing or credit agreement with terms that have a directcorrelation with anticipated cash distributions;

(e) an external management or external administration agreement; or

(f) a contract on which the reporting issuer’s business is substantiallydependent.

(3) A provision in a material contract filed pursuant to subsections (1) or (2)may be omitted or marked to be unreadable if an executive officer of the reportingissuer reasonably believes that disclosure of that provision would be seriouslyprejudicial to the interests of the reporting issuer or would violate confidentialityprovisions.

(4) Subsection (3) does not apply if the provision relates to:

(a) debt covenants and ratios in financing or credit agreements;

(b) events of default or other terms relating to the termination of thematerial contract; or

(c) other terms necessary for understanding the impact of the materialcontract on the business of the reporting issuer.

(5) If a provision is omitted or marked to be unreadable under subsection (3),the reporting issuer must include a description of the type of information thathas been omitted or marked to be unreadable immediately after the provision inthe copy of the material contract filed by the reporting issuer.

(6) Despite subsections (1) and (2), a reporting issuer is not required to file amaterial contract entered into before January 1, 2002.




12.3 Time for Filing of Documents

The documents required to be filed under sections 12.1 and 12.2 must be filed nolater than the time the reporting issuer files a material change report inForm 51-102F3, if the making of the document constitutes a material change forthe issuer; and:

(a) no later than the time the reporting issuer’s AIF is filed undersection 6.1, if the document was made or adopted before the date of theissuer’s AIF; or

(b) if the reporting issuer is not required to file an AIF under section 6.1,within 120 days after the end of the issuer’s most recently completedfinancial year, if the document was made or adopted before the end of theissuer’s most recently completed financial year.

PART 13 EXEMPTIONS

13.1 Exemptions from this Instrument




13.2 Existing Exemptions

(1) A reporting issuer that was entitled to rely on an exemption, waiver orapproval granted to it by a regulator or securities regulatory authority relating tocontinuous disclosure requirements of securities legislation or securities directionsexisting immediately before this Instrument came into force is exempt from anysubstantially similar provision of this Instrument to the same extent and on thesame conditions, if any, as contained in the exemption, waiver or approval.

(2) A reporting issuer must, at the time that it first intends to rely onsubsection (1) in connection with a filing requirement under this Instrument,inform the securities regulatory authority in writing of:

(a) the general nature of the prior exemption, waiver or approval and thedate on which it was granted; and

(b) the requirement under prior securities legislation or securities directionsin respect of which the prior exemption, waiver or approval applied and thesubstantially similar provision of this Instrument.




13.3 Exemption for Certain Exchangeable Security Issuers

(1) In this section:

“designated Canadian jurisdiction” means Alberta, British Columbia,Manitoba, New Brunswick, Nova Scotia, Ontario, Québec, or Saskatchewan;

“designated exchangeable security” means an exchangeable security whichprovides the holder of the security with economic and voting rights which are, asnearly as possible except for tax implications, equivalent to the underlyingsecurities;

“exchangeable security” means a security of an issuer that is exchangeable for,or carries the right of the holder to purchase, or of the parent issuer to cause thepurchase of, an underlying security;

“exchangeable security issuer” means a person or company that has issued anexchangeable security;

“parent issuer”, when used in relation to an exchangeable security issuer,means the person or company that issues the underlying security; and

“underlying security” means a security of a parent issuer issued or transferred,or to be issued or transferred, on the exchange of an exchangeable security.

(2) Except as provided in this subsection, an exchangeable security issuersatisfies the requirements in this Instrument if:

(a) the parent issuer is the beneficial owner of all the issued andoutstanding voting securities of the exchangeable security issuer;

(b) the parent issuer is either:

(i) an SEC issuer with a class of securities listed or quoted on a U.S.marketplace that has filed all documents it is required to file withthe SEC; or

(ii) a reporting issuer in a designated Canadian jurisdiction that hasfiled all documents it is required to file under this Instrument;

(c) the exchangeable security issuer does not issue any securities, and doesnot have any securities outstanding, other than:

(i) designated exchangeable securities;

(ii) securities issued to and held by the parent issuer or an affiliate ofthe parent issuer;

(iii) debt securities issued to and held by banks, loan corporations,loan and investment corporations, savings companies, trust corporations,treasury branches, savings or credit unions, financial servicescooperatives, insurance companies or other financial institutions; or

(iv) securities issued under exemptions from the prospectusrequirement in section 2.35 and registration requirement in section 3.35of National Instrument 45-106 Prospectus and Registration Exemptions;




(d) the exchangeable security issuer files in electronic format:

(i) if the parent issuer is not a reporting issuer in a designatedCanadian jurisdiction, copies of all documents the parent issuer isrequired to file with the SEC under the 1934 Act, at the same time as,or as soon as practicable after, the filing by the parent issuer of thosedocuments with the SEC; or

(ii) if the parent issuer is a reporting issuer in a designated Canadianjurisdiction:

(A) a notice indicating that the exchangeable security issuer isrelying on the continuous disclosure documents filed by its parentissuer and setting out where those documents can be found inelectronic format, if the parent issuer is a reporting issuer in thelocal jurisdiction; or

(B) copies of all documents the parent issuer is required to fileunder securities legislation, other than in connection with adistribution, at the same time as the filing by the parent issuer ofthose documents with a securities regulatory authority or regulator;

(e) the exchangeable security issuer concurrently sends to all holders ofdesignated exchangeable securities all disclosure materials that are sent toholders of the underlying securities in the manner and at the time requiredby:

(i) U.S. laws and any U.S. marketplace on which securities of theparent issuer are listed or quoted, if the parent issuer is not a reportingissuer in a designated Canadian jurisdiction; or

(ii) securities legislation, if the parent issuer is a reporting issuer in adesignated Canadian jurisdiction;

(f) the parent issuer:

(i) complies with U.S. laws and the requirements of any U.S.marketplace on which the securities of the parent issuer are listed orquoted if the parent issuer is not a reporting issuer in a designatedCanadian jurisdiction, or securities legislation if the parent issuer is areporting issuer in a designated Canadian jurisdiction, in respect ofmaking public disclosure of material information on a timely basis; and

(ii) immediately issues in Canada and files any news release thatdiscloses a material change in its affairs;

(g) the exchangeable security issuer issues in Canada a news release andfiles a material change report in accordance with Part 7 of this Instrumentfor all material changes in respect of the affairs of the exchangeable securityissuer that are not also material changes in the affairs of its parent issuer;and




(h) the parent issuer includes in all mailings of proxy solicitation materialsto holders of designated exchangeable securities a clear and concise statementthat:

(i) explains the reason the mailed material relates solely to the parentissuer;

(ii) indicates that the designated exchangeable securities are theeconomic equivalent to the underlying securities; and

(iii) describes the voting rights associated with the designatedexchangeable securities.

(3) The insider reporting requirement and the requirement to file an insiderprofile under National Instrument 55-102 System for Electronic Disclosure byInsiders does not apply to any insider of an exchangeable security issuer in respectof securities of the exchangeable security issuer so long as:

(a) if the insider is not the parent issuer:

(i) the insider does not receive, in the ordinary course, information asto material facts or material changes concerning the parent issuerbefore the material facts or material changes are generally disclosed;and

(ii) the insider is not an insider of the parent issuer in any capacityother than by virtue of being an insider of the exchangeable securityissuer;

(b) the parent issuer is the beneficial owner of all of the issued andoutstanding voting securities of the exchangeable security issuer;

(c) if the insider is the parent issuer, the insider does not beneficially ownany designated exchangeable securities other than securities acquiredthrough the exercise of the exchange right and not subsequently traded bythe insider;

(d) the parent issuer is an SEC issuer or a reporting issuer in a designatedCanadian jurisdiction; and

(e) the exchangeable security issuer has not issued any securities and doesnot have any securities outstanding, other than:

(i) designated exchangeable securities;

(ii) securities issued to and held by the parent issuer or an affiliate ofthe parent issuer;

(iii) debt securities issued to and held by banks, loan corporations,loan and investment corporations, savings companies, trust corporations,treasury branches, savings or credit unions, financial servicescooperatives, insurance companies or other financial institutions;

(iv) securities issued under exemptions from the prospectusrequirement in section 2.35 and registration requirement in section 3.35of National Instrument 45-106 Prospectus and Registration Exemptions.




13.4 Exemption for Certain Credit Support Issuers


“alternative credit support” means support, other than a guarantee, for thepayments to be made by the issuer, as stipulated in the terms of the securities orin an agreement governing rights of, or granting rights to, holders of the securitiesthat:

(a) obliges the person or company providing the support to provide theissuer with funds sufficient to enable the issuer to make the stipulatedpayments, or

(b) entitles the holder of the securities to receive, from the person orcompany providing the support, payment if the issuer fails to make astipulated payment;

“credit support issuer” means an issuer of securities for which a creditsupporter has provided a guarantee or alternative credit support;

“credit supporter” means a person or company that provides a guarantee oralternative credit support for any of the payments to be made by an issuer ofsecurities as stipulated in the terms of the securities or in an agreement governingrights of, or granting rights to, holders of the securities;

“designated Canadian jurisdiction” means Alberta, British Columbia,Manitoba, New Brunswick, Nova Scotia, Ontario, Québec or Saskatchewan;

“designated credit support securities” means:

(a) non-convertible debt or convertible debt that is convertible intonon-convertible securities of the credit supporter; or

(b) non-convertible preferred shares or convertible preferred shares thatare convertible into securities of the credit supporter;

in respect of which a parent credit supporter has provided:

(c) alternative credit support that:

(i) entitles the holder of the securities to receive payment from thecredit supporter, or enables the holder to receive payment from thecredit support issuer, within 15 days of any failure by the credit supportissuer to make a payment; and

(ii) results in the securities receiving the same credit rating as, or ahigher credit rating than, the credit rating they would have received ifpayment had been fully and unconditionally guaranteed by the creditsupporter, or would result in the securities receiving such a rating ifthey were rated; or

(d) a full and unconditional guarantee of the payments to be made by thecredit support issuer, as stipulated in the terms of the securities or in anagreement governing the rights of holders of the securities, that results inthe holder of such securities being entitled to receive payment from thecredit supporter within 15 days of any failure by the credit support issuer tomake a payment;




“parent credit supporter” means a credit supporter of which the reportingissuer is a subsidiary;

“subsidiary credit supporter” means a credit supporter that is a subsidiary ofthe parent credit supporter;

“summary financial information” includes the following line items:

(a) sales or revenues;

(b) income from continuing operations;

(c) net earnings or loss; and

(d) unless the accounting principles used to prepare the financial statementsof the person or company permits the preparation of the person or company’sbalance sheet without classifying assets and liabilities between current andnon-current and the person or company provides alternative meaningfulfinancial information which is more appropriate to the industry:

(i) current assets;

(ii) non-current assets;

(iii) current liabilities; and

(iv) non-current liabilities.

(1.1) For the purposes of subparagraph (2)(g)(ii), consolidating summary financialinformation must be prepared on the following basis:

(a) an entity’s annual or interim summary financial information must bederived from the entity’s financial information underlying the correspondingconsolidated financial statements of the parent credit supporter for thecorresponding period;

(b) the parent credit supporter column must account for investments in allsubsidiaries under the equity method; and

(c) all subsidiary entity columns must account for investments innon-credit supporter subsidiaries under the equity method.

(2) Except as provided in this section, a credit support issuer satisfies therequirements in this Instrument if:

(a) the parent credit supporter is the beneficial owner of all the outstandingvoting securities of the credit support issuer;

(b) the parent credit supporter is either:

(i) an SEC issuer that is incorporated or organized under the laws ofthe United States of America or any state or territory of the UnitedStates of America or the District of Columbia and that has filed alldocuments it is required to file with the SEC; or

(ii) subject to subsection (4), a reporting issuer in a designatedCanadian jurisdiction that has filed all documents it is required to fileunder this Instrument;




(c) the credit support issuer does not issue any securities, and does nothave any securities outstanding, other than:

(i) designated credit support securities;

(ii) securities issued to and held by the parent credit supporter or anaffiliate of the parent credit supporter;

(iii) debt securities issued to and held by banks, loan corporations,loan and investment corporations, savings companies, trust corporations,treasury branches, savings or credit unions, financial servicescooperatives, insurance companies or other financial institutions; or

(iv) securities issued under exemptions from the prospectusrequirement in section 2.35 and registration requirement in section 3.35of National Instrument 45-106 Prospectus and Registration Exemptions;

(d) the credit support issuer files in electronic format:

(i) if the parent credit supporter is not a reporting issuer in adesignated Canadian jurisdiction, copies of all documents the parentcredit supporter is required to file with the SEC under the 1934 Act, atthe same time or as soon as practicable after the filing by the parentcredit supporter of those documents with the SEC; or

(ii) if the parent credit supporter is a reporting issuer in a designatedCanadian jurisdiction:

(A) a notice indicating that the credit support issuer is relying onthe continuous disclosure documents filed by the parent creditsupporter and setting out where those documents can be found forviewing in electronic format, if the credit support issuer is areporting issuer in the local jurisdiction; or

(B) copies of all documents the parent credit supporter isrequired to file under securities legislation, other than in connectionwith a distribution, at the same time as the filing by the parentcredit supporter of those documents with a securities regulatoryauthority or regulator;

(e) if the parent credit supporter is not a reporting issuer in a designatedCanadian jurisdiction, the parent credit supporter:

(i) complies with U.S. laws and the requirements of any U.S.marketplace on which securities of the parent credit supporter arelisted or quoted in respect of making public disclosure of materialinformation on a timely basis; and

(ii) immediately issues in Canada and files any news release thatdiscloses a material change in its affairs;

(f) the credit support issuer issues in Canada a news release and files amaterial change report in accordance with Part 7 for all material changes inrespect of the affairs of the credit support issuer that are not also materialchanges in the affairs of the parent credit supporter;




(g) the credit support issuer files, in electronic format, in the noticereferred to in clause (d)(ii)(A) or in or with the copy of the interim and annualconsolidated financial statements filed under subparagraph (d)(i) orclause (d)(ii)(B), either:

(i) a statement that the financial results of the credit support issuerare included in the consolidated financial results of the parent creditsupporter, if at that time:

(A) the credit support issuer has minimal assets, operations,revenues or cash flows other than those related to the issuance,administration and repayment of the securities described inparagraph (c); and

(B) each item of the summary financial information of thesubsidiaries of the parent credit supporter on a combined basis,other than the credit support issuer, represents less than 3% ofthe corresponding items on the consolidated financial statementsof the parent credit supporter being filed or referred to underparagraph (d); or

(ii) for the periods covered by the interim or annual consolidatedfinancial statements of the parent credit supporter filed, consolidatingsummary financial information for the parent credit supporter presentedwith a separate column for each of the following:

(A) the parent credit supporter;

(B) the credit support issuer;

(C) any other subsidiaries of the parent credit supporter on acombined basis;

(D) consolidating adjustments; and

(E) the total consolidated amounts;

(h) the credit support issuer files a corrected notice under clause (d)(ii)(A) ifthe credit support issuer filed the notice with the statement contemplated insubparagraph (g)(i) and the credit support issuer can no longer rely onsubparagraph (g)(i);

(i) in the case of designated credit support securities that include debt, thecredit support issuer concurrently sends to all holders of such securities alldisclosure materials that are sent to holders of similar debt of the parentcredit supporter in the manner and at the time required by:

(i) U.S. laws and any U.S. marketplace on which securities of theparent credit supporter are listed or quoted, if the parent creditsupporter is not a reporting issuer in a designated Canadian jurisdiction;or

(ii) securities legislation, if the parent credit supporter is a reportingissuer in a designated Canadian jurisdiction;




(j) in the case of designated credit support securities that include preferredshares, the credit support issuer concurrently sends to all holders of suchsecurities all disclosure materials that are sent to holders of similarpreferred shares of the parent credit supporter in the manner and at thetime required by:

(i) U.S. laws and any U.S. marketplace on which securities of theparent credit supporter are listed or quoted, if the parent creditsupporter is not a reporting issuer in a designated Canadian jurisdiction;or

(ii) securities legislation, if the parent credit supporter is a reportingissuer in a designated Canadian jurisdiction; and

(k) no person or company other than the parent credit supporter hasprovided a guarantee or alternative credit support for the payments to bemade under any issued and outstanding securities of the credit supportissuer.

(2.1) A credit support issuer satisfies the requirements of this Instrumentwhere there is a parent credit supporter and one or more subsidiary creditsupporters if:

(a) the conditions in paragraphs (2)(a) to (f), (i), and (j) are complied with;

(b) the parent credit supporter controls each subsidiary credit supporterand the parent credit supporter has consolidated the financial statements ofeach subsidiary credit supporter into the parent credit supporter’s financialstatements that are filed or referred to under paragraph (2)(d);

(c) the credit support issuer files, in electronic format, in the noticereferred to in clause (2)(d)(ii)(A) or in or with the copy of the interim andannual consolidated financial statements filed under subparagraph (2)(d)(i)or clause (2)(d)(ii)(B), for a period covered by any interim or annualconsolidated financial statements of the parent credit supporter filed by theparent credit supporter, consolidating summary financial information forthe parent credit supporter presented with a separate column for each ofthe following:

(i) the parent credit supporter;

(ii) the credit support issuer;

(iii) each subsidiary credit supporter on a combined basis;

(iv) any other subsidiaries of the parent credit supporter on acombined basis;

(v) consolidating adjustments; and

(vi) the total consolidated amounts;

(d) no person or company, other than the parent credit supporter or asubsidiary credit supporter has provided a guarantee or alternative creditsupport for the payments to be made under the issued and outstandingdesignated credit support securities; and

(e) the guarantees or alternative credit supports are joint and several.




(2.2) Despite paragraph (2.1)(c), the information set out in a column inaccordance with:

(a) subparagraph (2.1)(c)(iv), may be combined with the information setout in accordance with any of the other columns in paragraph (2.1)(c) if eachitem of the summary financial information set out in a column inaccordance with subparagraph (2.1)(c)(iv) represents less than 3% of thecorresponding items on the consolidated financial statements of the parentcredit supporter being filed or referred to under paragraph (2)(d);

(b) subparagraph (2.1)(c)(ii) may be combined with the information set outin accordance with any of the other columns in paragraph (2.1)(c) if thecredit support issuer has minimal assets, operations, revenues or cash flowsother than those related to the issuance, administration and repayment ofthe securities described in paragraph (2)(c).

(3) The insider reporting requirement and the requirement to file an insiderprofile under National Instrument 55-102 System for Electronic Disclosure byInsiders do not apply to an insider of a credit support issuer in respect of securitiesof the credit support issuer so long as:

(a) the conditions in paragraphs (2)(a) to (c) are complied with;

(b) if the insider is not a credit supporter:

(i) the insider does not receive, in the ordinary course, information asto material facts or material changes concerning a credit supporterbefore the material facts or material changes are generally disclosed;and

(ii) the insider is not an insider of a credit supporter in any capacityother than by virtue of being an insider of the credit support issuer;and

(c) if the insider is a credit supporter, the insider does not beneficially ownany designated credit support securities;

(d) Repealed. 4 Apr 2008 SR 17/2008 s12.

(e) Repealed. 4 Apr 2008 SR 17/2008 s12.

(4) A parent credit supporter is not a reporting issuer in a designated Canadianjurisdiction for the purposes of subparagraph (2)(b)(ii) if the parent creditsupporter complies with a requirement of this Instrument by relying on aprovision of National Instrument 71-102 Continuous Disclosure and OtherExemptions Relating to Foreign Issuers.

PART 14 EFFECTIVE DATE AND TRANSITION

14.1 Effective Date

This Instrument comes into force on March 30, 2004.

14.2 Transition

Despite section 14.1, section 5.7 applies for financial years of the reporting issuerbeginning on or after January 1, 2007.




NATIONAL INSTRUMENT 51-102

FORM 51-102F1MANAGEMENT’S DISCUSSION AND ANALYSIS

PART 1 GENERAL PROVISIONS

(a) What is MD&A?

MD&A is a narrative explanation, through the eyes of management, of howyour company performed during the period covered by the financialstatements, and of your company’s financial condition and future prospects.MD&A complements and supplements your financial statements, but doesnot form part of your financial statements.

Your objective when preparing the MD&A should be to improve yourcompany’s overall financial disclosure by giving a balanced discussion ofyour company’s results of operations and financial condition including,without limitation, such considerations as liquidity and capital resources –openly reporting bad news as well as good news. Your MD&A should:

• help current and prospective investors understand what thefinancial statements show and do not show;

• discuss material information that may not be fully reflected in thefinancial statements, such as contingent liabilities, defaults underdebt, off-balance sheet financing arrangements, or other contractualobligations;

• discuss important trends and risks that have affected the financialstatements, and trends and risks that are reasonably likely toaffect them in the future; and

• provide information about the quality, and potential variability, ofyour company’s earnings and cash flow, to assist investors indetermining if past performance is indicative of future performance.

(b) Date of Information

In preparing the MD&A, you must take into account information availableup to the date of the MD&A. If the date of the MD&A is not the date it isfiled, you must ensure the disclosure in the MD&A is current so that it willnot be misleading when it is filed.

(c) Use of “Company”

Wherever this Form uses the word ‘company’, the term includes other typesof business organizations such as partnerships, trusts and otherunincorporated business entities.




(d) Explain Your Analysis

Explain the nature of, and reasons for, changes in your company’sperformance. Do not simply disclose the amount of change in a financialstatement item from period to period. Avoid using boilerplate language.Your discussion should assist the reader to understand trends, events,transactions and expenditures.

(e) Focus on Material Information

Focus your MD&A on material information. You do not need to discloseinformation that is not material. Exercise your judgment when determiningwhether information is material.

(f) What is Material?

Would a reasonable investor’s decision whether or not to buy, sell or holdsecurities in your company likely be influenced or changed if the informationin question was omitted or misstated? If so, the information is likelymaterial. This concept of materiality is consistent with the financialreporting notion of materiality contained in the Handbook.

(g) Venture Issuers Without Significant Revenues

If your company is a venture issuer without significant revenues fromoperations, focus your discussion and analysis of results of operations onexpenditures and progress towards achieving your business objectives andmilestones.

(h) Reverse Takeover Transactions

When an acquisition is accounted for as a reverse takeover, the MD&Ashould be based on the reverse takeover acquirer’s financial statements.

(i) Foreign Accounting Principles

If your company’s primary financial statements have been prepared usingaccounting principles other than Canadian GAAP and a reconciliation isprovided, your MD&A must focus on the primary financial statements.

(j) Resource Issuers

If your company has mineral projects, your disclosure must comply withNational Instrument 43-101 Standards of Disclosure for Mineral Projects,including the requirement that all scientific and technical disclosure bebased on a technical report or other information prepared by or under thesupervision of a qualified person.

If your company has oil and gas activities, your disclosure must comply withNational Instrument 51-101 Standards of Disclosure for Oil and GasActivities.




(k) Numbering and Headings

The numbering, headings and ordering of items included in this Form areguidelines only. You do not need to include the headings or numbering orfollow the order of items in this Form. Disclosure provided in response to anyitem need not be repeated elsewhere.

(l) Omitting Information

You do not need to respond to any item in this Form that is inapplicable.

(m) Defined Terms

If a term is used but not defined in this Form, refer to Part 1 of NationalInstrument 51-102 and to National Instrument 14-101 Definitions. If a termis used in this Form and is defined in both the securities statute of the localjurisdiction and in National Instrument 51-102, refer to section 1.4 ofCompanion Policy 51-102CP.

(n) Plain Language

Write the MD&A so that readers are able to understand it. Refer to the plainlanguage principles listed in section 1.5 of Companion Policy 51-102CP. Ifyou use technical terms, explain them in a clear and concise manner.

(o) Available Prior Period Information

If you have not presented comparative financial information in yourfinancial statements, in your MD&A you must provide prior period informationrelating to results of operations that is available.

PART 2 CONTENT OF MD&A

Item 1 Annual MD&A

1.1 Date

Specify the date of your MD&A. The date of the MD&A must be no earlier thanthe date of the auditor’s report on the financial statements for your company’smost recently completed financial year.

1.2 Overall Performance

Provide an analysis of your company’s financial condition, results of operationsand cash flows. Discuss known trends, demands, commitments, events oruncertainties that are reasonably likely to have an effect on your company’sbusiness. Compare your company’s performance in the most recently completedfinancial year to the prior year’s performance. Your analysis should address atleast the following:

(a) operating segments that are reportable segments as those terms areused in the Handbook;

(b) other parts of your business if:

(i) they have a disproportionate effect on revenues, income or cashneeds; or

(ii) there are any legal or other restrictions on the flow of funds fromone part of your company’s business to another;




(c) industry and economic factors affecting your company’s performance;

(d) why changes have occurred or expected changes have not occurred inyour company’s financial condition and results of operations; and

(e) the effect of discontinued operations on current operations.

INSTRUCTIONS

(i) When explaining changes in your company’s financial condition and results,include an analysis of the effect on your continuing operations of any acquisition,disposition, write-off, abandonment or other similar transaction.

(ii) Financial condition reflects the overall health of the company and includesyour company’s financial position (as shown on the balance sheet) and otherfactors that may affect your company’s liquidity, capital resources and solvency. Adiscussion of financial condition should include important trends and risks thathave affected the financial statements, and trends and risks that are reasonablylikely to affect them in the future.

(iii) Include information for a period longer than two financial years if it willhelp the reader to better understand a trend.

1.3 Selected Annual Information

(1) Provide the following financial data derived from your company’s financialstatements for each of the three most recently completed financial years:

(a) net sales or total revenues;

(b) income or loss before discontinued operations and extraordinary items,in total and on a per-share and diluted per-share basis;

(c) net income or loss, in total and on a per-share and diluted per-sharebasis;

(d) total assets;

(e) total long-term financial liabilities; and

(f) cash dividends declared per-share for each class of share.

(2) Discuss the factors that have caused period to period variations includingdiscontinued operations, changes in accounting policies, significant acquisitionsor dispositions and changes in the direction of your business, and any otherinformation your company believes would enhance an understanding of, andwould highlight trends in, financial condition and results of operations.

INSTRUCTIONS

Indicate the accounting principles that the financial data has been prepared inaccordance with, the reporting currency, the measurement currency if differentfrom the reporting currency and, if the underlying financial statements have beenreconciled to Canadian GAAP, provide a cross-reference to the reconciliation thatis found in the notes to the financial statements.




1.4 Results of Operations

Discuss your analysis of your company’s operations for the most recentlycompleted financial year, including:

(a) net sales or total revenues by operating business segment, includingany changes in such amounts caused by selling prices, volume or quantity ofgoods or services being sold, or the introduction of new products or services;

(b) any other significant factors that caused changes in net sales or totalrevenues;

(c) cost of sales or gross profit;

(d) for issuers that have significant projects that have not yet generatedoperating revenue, describe each project, including your company’s plan forthe project and the status of the project relative to that plan, andexpenditures made and how these relate to anticipated timing and costs totake the project to the next stage of the project plan;

(e) for resource issuers with producing mines, identify milestones such asmine expansion plans, productivity improvements, or plans to develop a newdeposit;

(f) factors that caused a change in the relationship between costs andrevenues, including changes in costs of labour or materials, price changes orinventory adjustments;

(g) commitments, events, risks or uncertainties that you reasonablybelieve will materially affect your company’s future performance includingnet sales, total revenue and income or loss before discontinued operationsand extraordinary items;

(h) effect of inflation and specific price changes on your company’s net salesand total revenues and on income or loss before discontinued operations andextraordinary items;

(i) a comparison in tabular form of disclosure you previously made abouthow your company was going to use proceeds (other than working capital)from any financing, an explanation of variances and the impact of thevariances, if any, on your company’s ability to achieve its business objectivesand milestones; and

(j) unusual or infrequent events or transactions.

INSTRUCTIONS

Your discussion under paragraph 1.4(d) should include:

(i) whether or not you plan to expend additional funds on the project; and

(ii) any factors that have affected the value of the project(s) such as changein commodity prices, land use or political or environmental issues.




1.5 Summary of Quarterly Results

Provide the following information in summary form, derived from your company’sfinancial statements, for each of the eight most recently completed quarters:

(a) net sales or total revenues;

(b) income or loss before discontinued operations and extraordinary items,in total and on a per-share and diluted per-share basis; and

(c) net income or loss, in total and on a per-share and diluted per-sharebasis.

Discuss the factors that have caused variations over the quarters necessary tounderstand general trends that have developed and the seasonality of thebusiness.

INSTRUCTIONS

(i) In the case of the annual MD&A, your most recently completed quarter is thequarter that ended on the last day of your most recently completed financial year.

(ii) You do not have to provide information for a quarter prior to your companybecoming a reporting issuer if your company has not prepared financial statementsfor those quarters.

(iii) For sections 1.2, 1.3, 1.4 and 1.5 consider identifying, discussing andanalyzing the following factors:

(A) changes in customer buying patterns, including changes due to newtechnologies and changes in demographics;

(B) changes in selling practices, including changes due to new distributionarrangements or a reorganization of a direct sales force;

(C) changes in competition, including an assessment of the issuer’s resources,strengths and weaknesses relative to those of its competitors;

(D) the effect of exchange rates;

(E) changes in pricing of inputs, constraints on supply, order backlog, orother input-related matters;

(F) changes in production capacity, including changes due to plant closuresand work stoppages;

(G) changes in volume of discounts granted to customers, volumes of returnsand allowances, excise and other taxes or other amounts reflected on a netbasis against revenues;

(H) changes in the terms and conditions of service contracts;

(I) the progress in achieving previously announced milestones;

(J) for resource issuers with producing mines, identify changes to cash flowcaused by changes in production throughput, head-grade, cut-off grade,metallurgical recovery and any expectation of future changes; and

(K) if you have an equity investee that is significant to your company, thenature of the investment and significance to your company.




(iv) Indicate the accounting principles that the financial data has been preparedin accordance with, the reporting currency, the measurement currency if differentfrom the reporting currency and, if the underlying financial statements have beenreconciled to Canadian GAAP, provide a cross-reference to the reconciliation thatis found in the notes to the financial statements.

1.6 Liquidity

Provide an analysis of your company’s liquidity, including:

(a) its ability to generate sufficient amounts of cash and cash equivalents,in the short term and the long term, to maintain your company’s capacity, tomeet your company’s planned growth or to fund development activities;

(b) trends or expected fluctuations in your company’s liquidity, taking intoaccount demands, commitments, events or uncertainties;

(c) its working capital requirements;

(d) liquidity risks associated with financial instruments;

(e) if your company has or expects to have a working capital deficiency,discuss its ability to meet obligations as they become due and how you expectit to remedy the deficiency;

(f) balance sheet conditions or income or cash flow items that may affectyour company’s liquidity;

(g) legal or practical restrictions on the ability of subsidiaries to transferfunds to your company and the effect these restrictions have had or mayhave on the ability of your company to meet its obligations; and

(h) defaults or arrears or significant risk of defaults or arrears on:

(i) dividend payments, lease payments, interest or principal paymenton debt;

(ii) debt covenants; and

(iii) redemption or retraction or sinking fund payments;

and how your company intends to cure the default or arrears or address therisk.

INSTRUCTIONS

(i) In discussing your company’s ability to generate sufficient amounts of cashand cash equivalents you should describe sources of funding and the circumstancesthat could affect those sources that are reasonably likely to occur. Examples ofcircumstances that could affect liquidity are market or commodity price changes,economic downturns, defaults on guarantees and contractions of operations.

(ii) In discussing trends or expected fluctuations in your company’s liquidity andliquidity risks associated with financial instruments you should discuss:

(A) provisions in debt, lease or other arrangements that could trigger anadditional funding requirement or early payment. Examples of such situationsare provisions linked to credit rating, earnings, cash flows or share price; and




(B) circumstances that could impair your company’s ability to undertaketransaction considered essential to operations. Examples of such circumstancesare the inability to maintain investment grade credit rating, earningsper-share, cash flow or share price.

(iii) In discussing your company’s working capital requirements you shoulddiscuss situations where your company must maintain significant inventory tomeet customers’ delivery requirements or any situations involving extendedpayment terms.

(iv) In discussing your company’s balance sheet conditions or income or cashflow items you should present a summary, in tabular form, of contractualobligations including payments due for each of the next five years and thereafter.The summary and table do not have to be provided if your company is a ventureissuer. An example of a table that can be adapted to your company’s particularcircumstances follows:

Payments Due by Period

Contractual Less than 1 – 3 4 – 5 AfterObligations Total 1 year years years 5 years

Long Term Debt

Capital Lease Obligations

Operating Leases

Purchase Obligations1

Other Long Term Obligations2

Total Contractual Obligations

The tabular presentation may be accompanied by footnotes to describe provisions thatcreate, increase or accelerate obligations, or other details to the extent necessary for anunderstanding of the timing and amount of your company’s specified contractualobligations.

1.7 Capital Resources

Provide an analysis of your company’s capital resources, including:

(a) commitments for capital expenditures as of the date of your company’sfinancial statements including:

(i) the amount, nature and purpose of these commitments;

(ii) the expected source of funds to meet these commitments; and

(iii) expenditures not yet committed but required to maintain yourcompany’s capacity, to meet your company’s planned growth or to funddevelopment activities;

(b) known trends or expected fluctuations in your company’s capitalresources, including expected changes in the mix and relative cost of theseresources; and

(c) sources of financing that your company has arranged but not yet used.




INSTRUCTIONS

(i) Capital resources are financing resources available to your company andinclude debt, equity and any other financing arrangements that you reasonablyconsider will provide financial resources to your company.

(ii) In discussing your company’s commitments you should discuss any explorationand development, or research and development expenditures required to maintainproperties or agreements in good standing.

1.8 Off-Balance Sheet Arrangements

Discuss any off-balance sheet arrangements that have, or are reasonably likely tohave, a current or future effect on the results of operations or financial conditionof your company including, without limitation, such considerations as liquidityand capital resources.

In your discussion of off-balance sheet arrangements you should discuss theirbusiness purpose and activities, their economic substance, risks associated withthe arrangements, and the key terms and conditions associated with anycommitments. Your discussion should include:

(a) a description of the other contracting party(ies);

(b) the effects of terminating the arrangement;

(c) the amounts receivable or payable, revenues, expenses and cash flowsresulting from the arrangement;

(d) the nature and amounts of any other obligations or liabilities arisingfrom the arrangement that could require your company to provide fundingunder the arrangement and the triggering events or circumstances thatcould cause them to arise; and

(e) any known event, commitment, trend or uncertainty that may affect theavailability or benefits of the arrangement (including any termination) andthe course of action that management has taken, or proposes to take, inresponse to any such circumstances.

INSTRUCTIONS

(i) Off-balance sheet arrangements include any contractual arrangement with anentity not reported on a consolidated basis with your company, under which yourcompany has:

(A) any obligation under certain guarantee contracts;

(B) a retained or contingent interest in assets transferred to an unconsolidatedentity or similar arrangement that serves as credit, liquidity or market risksupport to that entity for the assets;

(C) any obligation under certain derivative instruments; or

(D) any obligation under a material variable interest held by your companyin an unconsolidated entity that provides financing, liquidity, market risk orcredit risk support to your company, or engages in leasing, hedging or,research and development services with your company.

(ii) Contingent liabilities arising out of litigation, arbitration or regulatoryactions are not considered to be off-balance sheet arrangements.




(iii) Disclosure of off-balance sheet arrangements should cover the most recentlycompleted financial year. However, the discussion should address changes fromthe previous year where such discussion is necessary to understand the disclosure.

(iv) The discussion need not repeat information provided in the notes to thefinancial statements if the discussion clearly cross-references to specific informationin the relevant notes and integrates the substance of the notes into the discussion ina manner that explains the significance of the information not included in theMD&A.

1.9 Transactions with Related Parties

Discuss all transactions involving related parties as defined by the Handbook.

INSTRUCTIONS

In discussing your company’s transactions with related parties, your discussionshould include both qualitative and quantitative characteristics that are necessaryfor an understanding of the transactions’ business purpose and economic substance.You should discuss:

(A) the relationship and identify the related person or entities;

(B) the business purpose of the transaction;

(C) the recorded amount of the transaction and the measurement basisused; and

(D) any ongoing contractual or other commitments resulting from thetransaction.

1.10 Fourth Quarter

Discuss and analyze fourth quarter events or items that affected your company’sfinancial condition, cash flows or results of operations, including extraordinaryitems, year-end and other adjustments, seasonal aspects of your company’sbusiness and dispositions of business segments. If your company has filedseparate MD&A for its fourth quarter, you may satisfy this requirement byincorporating that MD&A by reference.

1.11 Proposed Transactions

Discuss the expected effect on financial condition, results of operations and cashflows of any proposed asset or business acquisition or disposition if yourcompany’s board of directors, or senior management who believe that confirmationof the decision by the board is probable, have decided to proceed with thetransaction. Include the status of any required shareholder or regulatoryapprovals.

INSTRUCTIONS

You do not have to disclose this information if, under section 7.1 of NationalInstrument 51-102, your company has filed a Form 51-102F3 Material ChangeReport regarding the transaction on a confidential basis and the report remainsconfidential.




1.12 Critical Accounting Estimates

If your company is not a venture issuer, provide an analysis of your company’scritical accounting estimates. Your analysis should:

(a) identify and describe each critical accounting estimate used by yourcompany including:

(i) a description of the accounting estimate;

(ii) the methodology used in determining the critical accountingestimate;

(iii) the assumptions underlying the accounting estimate that relateto matters highly uncertain at the time the estimate was made;

(iv) any known trends, commitments, events or uncertainties that youreasonably believe will materially affect the methodology or theassumptions described; and

(v) if applicable, why the accounting estimate is reasonably likely tochange from period to period and have a material impact on thefinancial presentation;

(b) explain the significance of the accounting estimate to your company’sfinancial condition, changes in financial condition and results of operationsand identify the financial statement line items affected by the accountingestimate;

(c) Repealed. 5 Jan 2007 SR 115/2006 s4.

(d) discuss changes made to critical accounting estimates during the pasttwo financial years including the reasons for the change and the quantitativeeffect on your company’s overall financial performance and financialstatement line items; and

(e) identify the segments of your company’s business that the accountingestimate affects and discuss the accounting estimate on a segment basis, ifyour company operates in more than one segment.

INSTRUCTIONS

(i) An accounting estimate is a critical accounting estimate only if:

(A) it requires your company to make assumptions about matters that arehighly uncertain at the time the accounting estimate is made; and

(B) different estimates that your company could have used in the currentperiod, or changes in the accounting estimate that are reasonably likely tooccur from period to period, would have a material impact on your company’sfinancial condition, changes in financial condition or results of operations.

(ii) As part of your description of each critical accounting estimate, in addition toqualitative disclosure, you should provide quantitative disclosure when quantitativeinformation is reasonably available and would provide material information forinvestors. Similarly, in your discussion of assumptions underlying an accountingestimate that relates to matters highly uncertain at the time the estimate wasmade, you should provide quantitative disclosure when it is reasonably availableand it would provide material information for investors. For example, quantitativeinformation may include a sensitivity analysis or disclosure of the upper and lowerends of the range of estimates from which the recorded estimate was selected.




1.13 Changes in Accounting Policies including Initial Adoption

Discuss and analyze any changes in your company’s accounting policies, including:

(a) for any accounting policies that you have adopted or expect to adoptsubsequent to the end of your most recently completed financial year,including changes you have made or expect to make voluntarily and thosedue to a change in an accounting standard or a new accounting standardthat you do not have to adopt until a future date, you should:

(i) describe the new standard, the date you are required to adopt itand, if determined, the date you plan to adopt it;

(ii) disclose the methods of adoption permitted by the accountingstandard and the method you expect to use;

(iii) discuss the expected effect on your company’s financial statements,or if applicable, state that you cannot reasonably estimate the effect;and

(iv) discuss the potential effect on your business, for example technicalviolations or default of debt covenants or changes in business practices;and

(b) for any accounting policies that you have initially adopted during themost recently completed financial year, you should:

(i) describe the events or transactions that gave rise to the initialadoption of an accounting policy;

(ii) describe the accounting principle that has been adopted and themethod of applying that principle;

(iii) discuss the effect resulting from the initial adoption of theaccounting policy on your company’s financial condition, changes infinancial condition and results of operations;

(iv) if your company is permitted a choice among acceptable accountingprinciples:

(A) state that you made a choice among acceptable alternatives;

(B) identify the alternatives;

(C) describe why you made the choice that you did; and

(D) discuss the effect, where material, on your company’s financialcondition, changes in financial condition and results of operationsunder the alternatives not chosen; and

(v) if no accounting literature exists that covers the accounting for theevents or transactions giving rise to your initial adoption of theaccounting policy, explain your decision regarding which accountingprinciple to use and the method of applying that principle.




INSTRUCTIONS

You do not have to present the discussion under paragraph 1.13(b) for the initialadoption of accounting policies resulting from the adoption of new accountingstandards.

1.14 Financial Instruments and Other Instruments

For financial instruments and other instruments:

(a) discuss the nature and extent of your company’s use of, includingrelationships among, the instruments and the business purposes that theyserve;

(b) describe and analyze the risks associated with the instruments;

(c) describe how you manage the risks in paragraph (b), including adiscussion of the objectives, general strategies and instruments used tomanage the risks, including any hedging activities;

(d) disclose the financial statement classification and amounts of income,expenses, gains and losses associated with the instrument; and

(e) discuss the significant assumptions made in determining the fair valueof financial instruments, the total amount and financial statementclassification of the change in fair value of financial instruments recognizedin income for the period, and the total amount and financial statementclassification of deferred or unrecognized gains and losses on financialinstruments.

INSTRUCTIONS

(i) “Other instruments’ are instruments that may be settled by the delivery ofnon-financial assets. A commodity futures contract is an example of an instrumentthat may be settled by delivery of non-financial assets.

(ii) Your discussion under paragraph 1.14(a) should enhance a reader’sunderstanding of the significance of recognized and unrecognized instruments onyour company’s financial position, results of operations and cash flows. Theinformation should also assist a reader in assessing the amounts, timing, andcertainty of future cash flows associated with those instruments. Also discuss therelationship between liability and equity components of convertible debt instruments.

(iii) For purposes of paragraph 1.14(c), if your company is exposed to significantprice, credit or liquidity risks, consider providing a sensitivity analysis or tabularinformation to help readers assess the degree of exposure. For example, an analysisof the effect of a hypothetical change in the prevailing level of interest or currencyrates on the fair value of financial instruments and future earnings and cash flowsmay be useful in describing your company’s exposure to price risk.

(iv) For purposes of paragraph 1.14(d), disclose and explain the income,expenses, gains and losses from hedging activities separately from other activities.




1.15 Other MD&A Requirements

(a) Your MD&A must disclose that additional information relating to yourcompany, including your company’s AIF if your company files an AIF, is onSEDAR at www.sedar.com.

(b) Your MD&A must also provide the information required in thefollowing sections of National Instrument 51-102, if applicable:

(i) section 5.3 – Additional Disclosure for Venture Issuers withoutSignificant Revenue;

(ii) section 5.4 – Disclosure of Outstanding Share Data; and

(iii) section 5.7 – Additional Disclosure for Reporting Issuers withSignificant Equity Investees.

(c) Your MD&A must include the MD&A disclosure required by NationalInstrument 52-109 Certification of Disclosure in Issuers’ Annual and InterimFilings and, as applicable, Form 52-109F1 Certification of Annual Filings –Full Certificate, Form 52-109F1R Certification of Refiled Annual Filings, orForm 52-109F1 AIF Certification of Annual Filings in Connection withVoluntarily Filed AIF.

INSTRUCTIONS

Your company may also be required to provide additional disclosure in its MD&Aas set out in Form 52-109F1 Certification of Annual Filings and Form 52-109F2Certification of Interim Filings.

Item 2 Interim MD&A

2.1 Date

Specify the date of your interim MD&A.

2.2 Interim MD&A

Interim MD&A must update your company’s annual MD&A for all disclosurerequired by Item 1 except section 1.3. This disclosure must include:

(a) a discussion of your analysis of:

(i) current quarter and year-to-date results including a comparison ofresults of operations and cash flows to the corresponding periods in theprevious year;

(ii) changes in results of operations and elements of income or lossthat are not related to ongoing business operations;

(iii) any seasonal aspects of your company’s business that affect itsfinancial condition, results of operations or cash flows; and

(b) a comparison of your company’s interim financial condition to yourcompany’s financial condition as at the most recently completed financialyear-end.




2.3 Other Interim MD&A Requirements

Your interim MD&A must include the interim MD&A disclosure required byNational Instrument 52-109 Certification of Disclosure in Issuers’ Annual andInterim Filings and, as applicable, Form 52-109F2 Certification of Interim Filings– Full Certificate or Form 52-109F2R Certification of Refiled Interim Filings.

INSTRUCTIONS

(i) If the first MD&A you file in this Form (your first MD&A) is an interimMD&A, you must provide all the disclosure called for in Item 1 in your firstMD&A. Base the disclosure, except the disclosure for section 1.3, on your interimfinancial statements. Since you do not have to update the disclosure required insection 1.3 in your interim MD&A, your first MD&A will provide disclosure undersection 1.3 based on your annual financial statements. Your subsequent interimMD&A for that year will update your first interim MD&A.

(ii) For the purposes of paragraph 2.2(b), you may assume the reader has accessto your annual MD&A or your first MD&A. You do not have to duplicate thediscussion and analysis of financial condition in your annual MD&A or your firstMD&A. For example, if economic and industry factors are substantially unchangedyou may make a statement to this effect.

(iii) For the purposes of subparagraph 2.2(a)(i), you should generally giveprominence to the current quarter.

(iv) In discussing your company’s balance sheet conditions or income or cash flowitems for an interim period, you do not have to present a summary, in tabular form,of all known contractual obligations contemplated under section 1.6. Instead, youshould disclose material changes in the specified contractual obligations duringthe interim period that are outside the ordinary course of your company’s business.

(v) Interim MD&A prepared in accordance with Item 2 is not required for yourcompany’s fourth quarter as relevant fourth quarter content will be contained inyour company’s annual MD&A prepared in accordance with Item 1 (see section 1.10).

(vi) In your interim MD&A, update the summary of quarterly results insection 1.5 by providing summary information for the eight most recently completedquarters.

(vii) Your annual MD&A may not include all the information in Item 1 if youwere a venture issuer as at the end of your last financial year. If you ceased to be aventure issuer during your interim period, you do not have to restate the MD&Ayou previously filed. Instead, provide the disclosure for the additional sections inItem 1 that you were exempt from as a venture issuer in the next interim MD&A youfile. Base your disclosure for those sections on your interim financial statements.




NATIONAL INSTRUMENT

FORM 51-102F2ANNUAL INFORMATION FORM


(a) What is an AIF?

An AIF (annual information form) is required to be filed annually by certain companiesunder Part 6 of National Instrument 51-102. An AIF is a disclosure document intendedto provide material information about your company and its business at a point in timein the context of its historical and possible future development. Your AIF describes yourcompany, its operations and prospects, risks and other external factors that impactyour company specifically.

This disclosure is supplemented throughout the year by subsequent continuousdisclosure filings including news releases, material change reports, business acquisitionreports, financial statements and management discussion and analysis.

(b) Date of Information

Unless otherwise specified in this Form, the information in your AIF must be presentedas at the last day of your company’s most recently completed financial year. Ifnecessary, you must update the information in the AIF so it is not misleading when it isfiled. For information presented as at any date other than the last day of yourcompany’s most recently completed financial year, specify the relevant date in thedisclosure.

(c) Use of “Company”

Wherever this Form uses the word “company”, the term includes other types of businessorganizations such as partnerships, trusts and other unincorporated business entities.

All references to “your company” in Items 4, 5, 6, 12, 13, 15 and 16 of this Form applycollectively to your company, your company’s subsidiaries, joint ventures to which yourcompany is a party and entities in which your company has an investment accountedfor by the equity method.

(d) Focus on Material Information

Focus your AIF on material information. You do not need to disclose information that isnot material. Exercise your judgment when determining whether information ismaterial. However, you must disclose all corporate and individual cease trade orders,bankruptcies, penalties and sanctions in accordance with Item 10 and section 12.2 ofthis Form.

(e) What is Material?

Would a reasonable investor’s decision whether or not to buy, sell or hold securities inyour company likely be influenced or changed if the information in question wasomitted or misstated? If so, the information is likely material. This concept ofmateriality is consistent with the financial reporting notion of materiality contained inthe Handbook.




(f) Incorporating Information by Reference

You may incorporate information required to be included in your AIF by reference toanother document, other than a previous AIF. Clearly identify the referenceddocument or any excerpt of it that you incorporate into your AIF. Unless you havealready filed the referenced document or excerpt, including any documents incorporatedby reference into the document or excerpt, under your SEDAR profile, you must file itwith your AIF. You must also disclose that the document is on SEDAR at www.sedar.com.

(g) Defined Terms

If a term is used but not defined in this Form, refer to Part 1 of NationalInstrument 51-102 and to National Instrument 14-101 Definitions. If a term is used inthis Form and is defined in both the securities statute of a local jurisdiction and inNational Instrument 51-102, refer to section 1.4 of Companion Policy 51-102CP.

(h) Plain Language

Write the AIF so that readers are able to understand it. Refer to the plain languageprinciples listed in section 1.5 of Companion Policy 51-102CP. If you use technicalterms, explain them in a clear and concise manner.

(i) Special Purpose Vehicles

If your company is a special purpose vehicle, you may have to modify the disclosureitems in this Form to reflect the special purpose nature of your company’s business.

(j) Numbering and Headings

The numbering, headings and ordering of items included in this Form are guidelinesonly. You do not need to include the headings or numbering or follow the order of itemsin this Form. Disclosure provided in response to any item need not be repeatedelsewhere.

(k) Omitting Information

You do not need to respond to any item in this Form that is inapplicable and you mayomit negative answers.

PART 2 CONTENT OF AIF

Item 1 Cover Page

1.1 Date

Specify the date of your AIF. The date must be no earlier than the date of theauditor’s report on the financial statements for your company’s most recentlycompleted financial year.

You must file your AIF within 10 days of the date of the AIF.

1.2 Revisions

If you revise your company’s AIF after you have filed it, identify the revisedversion as a “revised AIF”.




Item 2 Table of Contents

2.1 Table of Contents

Include a table of contents.

Item 3 Corporate Structure

3.1 Name, Address and Incorporation

(1) State your company’s full corporate name or, if your company is anunincorporated entity, the full name under which it exists and carries onbusiness, and the address(es) of your company’s head and registered office.

(2) State the statute under which your company is incorporated, continued ororganized or, if your company is an unincorporated entity, the laws of thejurisdiction or foreign jurisdiction under which it is established and exists.Describe the substance of any material amendments to the articles or otherconstating or establishing documents of your company.

3.2 Intercorporate Relationships

Describe, by way of a diagram or otherwise, the intercorporate relationshipsamong your company and its subsidiaries. For each subsidiary state:

(a) the percentage of votes attaching to all voting securities of thesubsidiary beneficially owned, or controlled or directed, directly or indirectly,by your company;

(b) the percentage of each class of restricted securities of the subsidiarybeneficially owned, or controlled or directed, directly or indirectly, by yourcompany; and

(c) where it was incorporated, continued, formed or organized.

INSTRUCTIONS

You may omit a particular subsidiary if, at the most recent financial year-end ofyour company:

(i) the total assets of the subsidiary do not exceed 10 per cent of theconsolidated assets of your company;

(ii) the sales and operating revenues of the subsidiary do not exceed 10 percent of the consolidated sales and operating revenues of your company; and

(iii) the conditions in paragraphs (i) and (ii) would be satisfied if you:

(A) aggregated the subsidiaries that may be omitted under paragraphs(i) and (ii); and

(B) changed the reference in those paragraphs from 10 per cent to 20per cent.




Item 4 General Development of the Business

4.1 Three Year History

Describe how your company’s business has developed over the last threecompleted financial years. Include only events, such as acquisitions or dispositions,or conditions that have influenced the general development of the business. Ifyour company produces or distributes more than one product or provides morethan one kind of service, describe the products or services. Also discuss changes inyour company’s business that you expect will occur during the current financialyear.

4.2 Significant Acquisitions

Disclose any significant acquisition completed by your company during its mostrecently completed financial year for which disclosure is required under Part 8 ofNational Instrument 51-102, by providing a brief summary of the significantacquisition and stating whether your company has filed a Form 51-102F4 inrespect of the acquisition.

Item 5 Describe the Business

5.1 General

(1) Describe the business of your company and its operating segments that arereportable segments as those terms are used in the Handbook. For eachreportable segment include:

(a) Summary – For products or services:

(i) their principal markets;

(ii) distribution methods;

(iii) for each of the two most recently completed financial years, asdollar amounts or as percentages, the revenues for each category ofproducts or services that accounted for 15 per cent or more of totalconsolidated revenues for the applicable financial year derived from:

(A) sales or transfers to joint ventures in which your company isa participant or to entities in which your company has aninvestment accounted for by the equity method;

(B) sales to customers, other than those referred to in clause A,outside the consolidated entity; and

(C) sales or transfers to controlling shareholders;

(iv) if not fully developed, the stage of development of the products orservices and, if the products are not at the commercial productionstage:

(A) the timing and stage of research and development programs;

(B) whether your company is conducting its own research anddevelopment, is subcontracting out the research and developmentor is using a combination of those methods; and

(C) the additional steps required to reach commercial productionand an estimate of costs and timing.




(b) Production and Services – The actual or proposed method ofproduction and, if your company provides services, the actual or proposedmethod of providing services.

(c) Specialized Skill and Knowledge – A description of any specializedskill and knowledge requirements and the extent to which the skill andknowledge are available to your company.

(d) Competitive Conditions – The competitive conditions in yourcompany’s principal markets and geographic areas, including, if reasonablypossible, an assessment of your company’s competitive position.

(e) New Products – If you have publicly announced the introduction of anew product, the status of the product.

(f) Components – The sources, pricing and availability of raw materials,component parts or finished products.

(g) Intangible Properties – The importance, duration and effect ofidentifiable intangible properties, such as brand names, circulation lists,copyrights, franchises, licences, patents, software, subscription lists andtrademarks, on the segment.

(h) Cycles – The extent to which the business of the segment is cyclical orseasonal.

(i) Economic Dependence – A description of any contract upon whichyour company’s business is substantially dependent, such as a contract tosell the major part of your company’s products or services or to purchase themajor part of your company’s requirements for goods, services or rawmaterials, or any franchise or licence or other agreement to use a patent,formula, trade secret, process or trade name upon which your company’sbusiness depends.

(j) Changes to Contracts – A description of any aspect of your company’sbusiness that you reasonably expect to be affected in the current financialyear by renegotiation or termination of contracts or sub-contracts, and thelikely effect.

(k) Environmental Protection – The financial and operational effects ofenvironmental protection requirements on the capital expenditures, earningsand competitive position of your company in the current financial year andthe expected effect in future years.

(l) Employees – The number of employees as at the most recent financialyear-end or the average number of employees over the year, whichever ismore meaningful to understand the business.

(m) Foreign Operations – Describe the dependence of your company andany segment upon foreign operations.

(n) Lending – With respect to your company’s lending operations, disclosethe investment policies and lending and investment restrictions.

(2) Bankruptcy and Similar Matters – Disclose the nature and results of anybankruptcy, receivership or similar proceedings against your company or any ofits subsidiaries, or any voluntary bankruptcy, receivership or similar proceedingsby your company or any of its subsidiaries, within the three most recentlycompleted financial years or during or proposed for the current financial year.




(3) Reorganizations – Disclose the nature and results of any materialreorganization of your company or any of its subsidiaries within the three mostrecently completed financial years or completed during or proposed for the currentfinancial year.

(4) Social or Environmental Policies – If your company has implementedsocial or environmental policies that are fundamental to your operations, such aspolicies regarding your company’s relationship with the environment or with thecommunities in which it does business, or human rights policies, describe themand the steps your company has taken to implement them.

5.2 Risk Factors

Disclose risk factors relating to your company and its business, such as cash flowand liquidity problems, if any, experience of management, the general risksinherent in the business carried on by your company, environmental and healthrisks, reliance on key personnel, regulatory constraints, economic or politicalconditions and financial history and any other matter that would be most likely toinfluence an investor’s decision to purchase securities of your company. If there isa risk that securityholders of your company may become liable to make anadditional contribution beyond the price of the security, disclose that risk.

INSTRUCTIONS

(i) Disclose the risks in order of seriousness from the most serious to the leastserious.

(ii) A risk factor must not be de-emphasized by including excessive caveats orconditions.

5.3 Companies with Asset-backed Securities Outstanding

If your company had asset-backed securities outstanding that were distributedunder a prospectus, disclose the following information:

(1) Payment Factors – A description of any events, covenants, standardsor preconditions that may reasonably be expected to affect the timing oramount of any payments or distributions to be made under the asset-backedsecurities.

(2) Underlying Pool of Assets – For the three most recently completedfinancial years of your company or the lesser period commencing on the firstdate on which your company had asset-backed securities outstanding,financial disclosure that described the underlying pool of financial assetsservicing the asset-backed securities relating to:

(a) the composition of the pool as of the end of each financial year orpartial period;

(b) income and losses from the pool on at least an annual basis or suchshorter period as is reasonable given the nature of the underlying poolof assets;




(c) the payment, prepayment and collection experience of the pool onat least an annual basis or such shorter period as is reasonable giventhe nature of the underlying pool of assets;

(d) servicing and other administrative fees; and

(e) any significant variances experienced in the matters referred to inparagraphs (a) through (d).

(2.1) If any of the financial disclosure disclosed in accordance withsubsection (2) has been audited, disclose the existence and results of theaudit.

(3) Investment Parameters – The investment parameters applicable toinvestments of any cash flow surpluses.

(4) Payment History – The amount of payments made during the threemost recently completed financial years or the lesser period commencing onthe first date on which your company had asset-backed securities outstanding,in respect of principal and interest or capital and yield, each statedseparately, on asset-backed securities of your company outstanding.

(5) Acceleration Event – The occurrence of any event that has led to, orwith the passage of time could lead to, the accelerated payment of principal,interest or capital of asset-backed securities.

(6) Principal Obligors – The identity of any principal obligors for theoutstanding asset-backed securities of your company, the percentage of thepool of financial assets servicing the asset-backed securities represented byobligations of each principal obligor and whether the principal obligor hasfiled an AIF in any jurisdiction or a Form 10-K, Form 10-KSB or Form 20-Fin the United States.

INSTRUCTIONS

(i) Present the information requested under subsection (2) in a manner thatenables a reader to easily determine the status of the events, covenants, standardsand preconditions referred to in subsection (1).

(ii) If the information required under subsection (2):

(A) is not compiled specifically on the pool of financial assets servicing theasset-backed securities, but is compiled on a larger pool of the same assetsfrom which the securitized assets are randomly selected so that the performanceof the larger pool is representative of the performance of the pool of securitizedassets; or

(B) in the case of a new company, where the pool of financial assets servicingthe asset-backed securities will be randomly selected from a larger pool of thesame assets so that the performance of the larger pool will be representative ofthe performance of the pool of securitized assets to be created;

a company may comply with subsection (2) by providing the information requiredbased on the larger pool and disclosing that it has done so.




5.4 Companies With Mineral Projects

If your company had a mineral project, disclose the following information for eachproject material to your company:

(1) Project Description and Location

(a) the area (in hectares or other appropriate units) and the location ofthe project;

(b) the nature and extent of your company’s title to or interest in theproject, including surface rights, obligations that must be met to retainthe project and the expiration date of claims, licences and otherproperty tenure rights;

(c) the terms of any royalties, overrides, back-in rights, payments orother agreements and encumbrances to which the project is subject;

(d) all environmental liabilities to which the project is subject;

(e) the location of all known mineralized zones, mineral resources,mineral reserves and mine workings, existing tailing ponds, wastedeposits and important natural features and improvements;

(f) to the extent known, the permits that must be acquired to conductthe work proposed for the project and if the permits have beenobtained.

(2) Accessibility, Climate, Local Resources, Infrastructure andPhysiography

(a) the means of access to the property;

(b) the proximity of the property to a population centre and the natureof transport;

(c) to the extent relevant to the mining project, the climate and lengthof the operating season;

(d) the sufficiency of surface rights for mining operations, theavailability and sources of power, water, mining personnel, potentialtailings storage areas, potential waste disposal areas, heap leach padsareas and potential processing plant sites;

(e) the topography, elevation and vegetation.

(3) History

(a) the prior ownership and development of the property and ownershipchanges and the type, amount, quantity and results of the explorationwork undertaken by previous owners, and any previous production onthe property, to the extent known;

(b) if your company acquired a project within the three most recentlycompleted financial years or during the current financial year from, orintends to acquire a project from, an informed person or promoter ofyour company or an associate or affiliate of an informed person orpromoter, the name of the vendor, the relationship of the vendor to yourcompany, and the consideration paid or intended to be paid to thevendor;




(c) to the extent known, the name of every person or company that hasreceived or is expected to receive a greater than five per cent interest inthe consideration received or to be received by the vendor referred to inparagraph (b).

(4) Geological Setting – The regional, local and property geology.

(5) Exploration – The nature and extent of all exploration work conductedby, or on behalf of, your company on the property, including:

(a) the results of all surveys and investigations and the proceduresand parameters relating to surveys and investigations;

(b) an interpretation of the exploration information;

(c) whether the surveys and investigations have been carried out byyour company or a contractor and if by a contractor, the name of thecontractor; and

(d) a discussion of the reliability or uncertainty of the data obtained inthe program.

(6) Mineralization – The mineralization encountered on the property, thesurrounding rock types and relevant geological controls, detailing length,width, depth and continuity together with a description of the type,character and distribution of the mineralization.

(7) Drilling – The type and extent of drilling, including the proceduresfollowed and an interpretation of all results.

(8) Sampling and Analysis – The sampling and assaying including:

(a) description of sampling methods and the location, number, type,nature, spacing or density of samples collected;

(b) identification of any drilling, sampling or recovery factors thatcould materially impact the accuracy or reliability of the results;

(c) a discussion of the sample quality and whether the samples arerepresentative and of any factors that may have resulted in samplebiases;

(d) rock types, geological controls, widths of mineralized zones, cut-offgrades and other parameters used to establish the sampling interval;and

(e) quality control measures and data verification procedures.

(9) Security of Samples – The measures taken to ensure the validity andintegrity of samples taken.




(10) Mineral Resource and Mineral Reserve Estimates – The mineralresources and mineral reserves, if any; including:

(a) the quantity and grade or quality of each category of mineralresources and mineral reserves;

(b) the key assumptions, parameters and methods used to estimatethe mineral resources and mineral reserves; and

(c) the extent to which the estimate of mineral resources and mineralreserves may be materially affected by metallurgical, environmental,permitting, legal, title, taxation, socio-economic, marketing, politicaland other relevant issues.

(11) Mining Operations – For development properties and productionproperties, the mining method, metallurgical process, production forecast,markets, contracts for sale of products, environmental conditions, taxes,mine life and expected payback period of capital.

(12) Exploration and Development – A description of your company’scurrent and contemplated exploration or development activities.

INSTRUCTIONS

(i) Disclosure regarding mineral exploration development or production activitieson material projects must comply with, and is subject to the limitations set out in,National Instrument 43-101 Standards of Disclosure for Mineral Projects. Youmust use the appropriate terminology to describe mineral reserves and mineralresources. You must base your disclosure on a technical report, or other information,prepared by or under the supervision of a qualified person.

(ii) You may satisfy the disclosure requirements in section 5.4 by reproducing thesummary from the technical report on the material property, and incorporating thedetailed disclosure in the technical report into the AIF by reference.

(iii) In giving the information required under section 5.4 include the nature ofownership interests, such as fee interests, leasehold interests, royalty interests andany other types and variations of ownership interests.

5.5 Companies with Oil and Gas Activities

If your company is engaged in oil and gas activities as defined in NationalInstrument 51-101 Standards of Disclosure for Oil and Gas Activities, disclose thefollowing information:

(1) Reserves Data and Other Information

(a) In the case of information that, for purposes of Form 51-101F1Statement of Reserves Data and Other Oil and Gas Information, is to beprepared as at the end of a financial year, disclose that information as atyour company’s most recently completed financial year-end.

(b) In the case of information that, for purposes of Form 51-101F1, is to beprepared for a financial year, disclose that information for your company’smost recently completed financial year.

(c) Repealed. 5 Jan 2007 SR 115/2006 s4.




(2) Report of Independent Qualified Reserves Evaluator or Auditor –Include with the disclosure under subsection (1) a report in the form ofForm 51-101F2 Report on Reserves Data by Independent Qualified ReservesEvaluator or Auditor, on the reserves data included in the disclosure requiredunder subsection (1) above.

(3) Report of Management – Include with the disclosure under subsection (1)a report in the form of Form 51-101F3 Report of Management and Directors on Oiland Gas Disclosure that refers to the information disclosed under subsection (1).

(4) Material Changes – To the extent not reflected in the information disclosedin response to subsection (1), disclose the information contemplated by Part 6 ofNational Instrument 51-101 Standards of Disclosure for Oil and Gas Activities inrespect of material changes that occurred after your company’s most recentlycompleted financial year-end.

INSTRUCTIONS

The information presented in response to section 5.5 must be in accordance withNational Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.

Item 6 Dividends

6.1 Dividends

(1) Disclose the amount of cash dividends or distributions declared per securityfor each class of your company’s securities for each of the three most recentlycompleted financial years.

(2) Describe any restriction that could prevent your company from payingdividends or distributions.

(3) Disclose your company’s current dividend or distribution policy and anyintended change in dividend or distribution policy.

Item 7 Description of Capital Structure

7.1 General Description of Capital Structure

Describe your company’s capital structure. State the description or the designationof each class of authorized security, and describe the material characteristics ofeach class of authorized security, including voting rights, provisions for exchange,conversion, exercise, redemption and retraction, dividend rights and rights upondissolution or winding-up.

INSTRUCTIONS

This section requires only a brief summary of the provisions that are material froma securityholder’s standpoint. The provisions attaching to different classes ofsecurities do not need to be set out in full. This summary should include thedisclosure required in subsection 10.1(1) of National Instrument 51-102.

7.2 Constraints

If there are constraints imposed on the ownership of securities of your company toensure that your company has a required level of Canadian ownership, describethe mechanism, if any, by which the level of Canadian ownership of the securitiesis or will be monitored and maintained.




7.3 Ratings

If you have asked for and received a stability rating, or if you are aware that youhave received any other kind of rating, including a provisional rating, from one ormore approved rating organizations for securities of your company that areoutstanding and the rating or ratings continue in effect, disclose:

(a) each security rating, including a provisional rating or stability rating,received from an approved rating organization;

(b) for each rating disclosed under paragraph (a), the name of the approvedrating organization that has assigned the rating;

(c) a definition or description of the category in which each approved ratingorganization rated the securities and the relative rank of each rating withinthe organization’s overall classification system;

(d) an explanation of what the rating addresses and what attributes, if any,of the securities are not addressed by the rating;

(e) any factors or considerations identified by the approved ratingorganization as giving rise to unusual risks associated with the securities;

(f) a statement that a security rating or stability rating is not arecommendation to buy, sell or hold securities and may be subject to revisionor withdrawal at any time by the rating organization; and

(g) any announcement made by, or any proposed announcement known tothe issuer that is to be made by, an approved rating organization to theeffect that the organization is reviewing or intends to revise or withdraw arating previously assigned and required to be disclosed under this section.

INSTRUCTIONS

There may be factors relating to a security that are not addressed by a ratingsagency when they give a rating. For example, in the case of cash settled derivatives,factors in addition to the creditworthiness of the issuer, such as the continuedsubsistence of the underlying interest or the volatility of the price, value or level ofthe underlying interest may be reflected in the rating analysis. Rather than beingaddressed in the rating itself, these factors may be described by an approved ratingorganization by way of a superscript or other notation to a rating. Any suchattributes must be discussed in the disclosure under section 7.3.

Item 8 Market for Securities

8.1 Trading Price and Volume

(1) For each class of securities of your company that is traded or quoted on aCanadian marketplace, identify the marketplace and the price ranges and volumetraded or quoted on the Canadian marketplace on which the greatest volume oftrading or quotation generally occurs.

(2) If a class of securities of your company is not traded or quoted on a Canadianmarketplace, but is traded or quoted on a foreign marketplace, identify theforeign marketplace and the price ranges and volume traded or quoted on theforeign marketplace on which the greatest volume of trading or quotationgenerally occurs.




(3) Provide the information required under subsections (1) and (2) on a monthlybasis for each month or, if applicable, partial months of the most recentlycompleted financial year.

8.2 Prior Sales

For each class of securities of your company that is outstanding but not listed orquoted on a marketplace, state the price at which securities of the class havebeen issued during the most recently completed financial year by your company,the number of securities of the class issued at that price, and the date on whichthe securities were issued.

Item 9 Escrowed Securities and Securities Subject to ContractualItem 9 Restriction on Transfer

9.1 Escrowed Securities and Securities Subject to Contractual Restrictionon Transfer

(1) State, in substantially the following tabular form, the number of securitiesof each class of your company held, to your company’s knowledge, in escrow orthat are subject to a contractual restriction on transfer and the percentage thatnumber represents of the outstanding securities of that class for your company’smost recently completed financial year.

ESCROWED SECURITIES AND SECURITIES SUBJECTTO CONTRACTUAL RESTRICTION ON TRANSFER

Designation of Number of securities held in Percentage ofclass escrow or that are subject to a class

contractual restriction on transfer

(2) In a note to the table disclose the name of the depository, if any, and the dateof and conditions governing the release of the securities from escrow or the datethe contractual restriction on transfer ends, as applicable.

INSTRUCTIONS

(i) For the purposes of this section, escrow includes securities subject to a poolingagreement.

(ii) For the purposes of this section, securities subject to contractual restrictionson transfer as a result of pledges made to lenders are not required to be disclosed.

Item 10 Directors and Officers

10.1 Name, Occupation and Security Holding

(1) List the name, province or state, and country of residence of each directorand executive officer of your company and indicate their respective positions andoffices held with your company and their respective principal occupations duringthe five preceding years.




(2) State the period or periods during which each director has served as adirector and when his or her term of office will expire.

(3) State the number and percentage of securities of each class of votingsecurities of your company or any of its subsidiaries beneficially owned, orcontrolled or directed, directly or indirectly, by all directors and executive officersof your company as a group.

(4) Identify the members of each committee of the board.

(5) If the principal occupation of a director or executive officer of your company isacting as an officer of a person or company other than your company, disclose thatfact and state the principal business of the person or company.

INSTRUCTIONS

For the purposes of subsection (3), securities of subsidiaries of your company thatare beneficially owned, or controlled or directed, directly or indirectly, by directorsor executive officers through ownership, or control or direction, directly orindirectly, over securities of your company, do not need to be included.

10.2 Cease Trade Orders, Bankruptcies, Penalties or Sanctions

(1) If a director or executive officer of your company is, as at the date of the AIF,or was within 10 years before the date of the AIF, a director, chief executive officeror chief financial officer of any company (including your company) that:

(a) was subject to an order that was issued while the director or executiveofficer was acting in the capacity as director, chief executive officer or chieffinancial officer; or

(b) was subject to an order that was issued after the director or executiveofficer ceased to be a director, chief executive officer or chief financial officerand which resulted from an event that occurred while that person was actingin the capacity as director, chief executive officer or chief financial officer;

state the fact and describe the basis on which the order was made and whether theorder is still in effect.

(1.1) For the purposes of subsection (1), “order” means:

(a) a cease trade order;

(b) an order similar to a cease trade order; or

(c) an order that denied the relevant company access to any exemptionunder securities legislation;

that was in effect for a period of more than 30 consecutive days.

(1.2) If a director or executive officer of your company, or a shareholder holding asufficient number of securities of your company to affect materially the control ofyour company:

(a) is, as at the date of the AIF, or has been within the 10 years before thedate of the AIF, a director or executive officer of any company (includingyour company) that, while that person was acting in that capacity, or withina year of that person ceasing to act in that capacity, became bankrupt, madea proposal under any legislation relating to bankruptcy or insolvency or wassubject to or instituted any proceedings, arrangement or compromise withcreditors or had a receiver, receiver manager or trustee appointed to hold itsassets, state the fact; or




(b) has, within the 10 years before the date of the AIF, become bankrupt,made a proposal under any legislation relating to bankruptcy or insolvency,or become subject to or instituted any proceedings, arrangement orcompromise with creditors, or had a receiver, receiver manager or trusteeappointed to hold the assets of the director, executive officer or shareholder,state the fact.

(2) Describe the penalties or sanctions imposed and the grounds on which theywere imposed, or the terms of the settlement agreement and the circumstancesthat gave rise to the settlement agreement, if a director or executive officer of yourcompany, or a shareholder holding a sufficient number of securities of yourcompany to affect materially the control of your company, has been subject to:

(a) any penalties or sanctions imposed by a court relating to securitieslegislation or by a securities regulatory authority or has entered into asettlement agreement with a securities regulatory authority; or

(b) any other penalties or sanctions imposed by a court or regulatory bodythat would likely be considered important to a reasonable investor in makingan investment decision.

(3) Despite subsection (2), no disclosure is required of a settlement agreemententered into before December 31, 2000 unless the disclosure would likely beimportant to a reasonable investor in making an investment decision.

INSTRUCTIONS

(i) The disclosure required by subsections (1), (1.2) and (2) also applies to anypersonal holding companies of any of the persons referred to in subsections (1),(1.2) and (2) .

(ii) A management cease trade order which applies to directors or executiveofficers of a company is an ‘order’ for the purposes of paragraph 10.2(1)(a) andmust be disclosed, whether or not the director, chief executive officer or chieffinancial officer was named in the order.

(iii) A late filing fee, such as a filing fee that applies to the late filing of an insiderreport, is not a ‘penalty or sanction’ for the purposes of section 10.2.

(iv) The disclosure in paragraph 10.2(1)(a) only applies if the director orexecutive officer was a director, chief executive officer or chief financial officer whenthe order was issued against the company. You do not have to provide disclosure ifthe director or executive officer became a director, chief executive officer or chieffinancial officer after the order was issued .

10.3 Conflicts of Interest

Disclose particulars of existing or potential material conflicts of interest betweenyour company or of a subsidiary of your company and any director or officer ofyour company or a subsidiary of your company.

Item 11 Promoters

11.1 Promoters

For a person or company that has been, within the two most recently completedfinancial years or during the current financial year, a promoter of your companyor of a subsidiary of your company, state:

(a) the person or company’s name;




(b) the number and percentage of each class of voting securities and equitysecurities of your company or any of its subsidiaries beneficially owned, orcontrolled or directed, directly or indirectly;

(c) the nature and amount of anything of value, including money, property,contracts, options or rights of any kind received or to be received by thepromoter directly or indirectly from your company or from a subsidiary ofyour company, and the nature and amount of any assets, services or otherconsideration received or to be received by your company or a subsidiary ofyour company in return; and

(d) for an asset acquired within the two most recently completed financialyears or during the current financial year, or an asset to be acquired, by yourcompany or by a subsidiary of your company from a promoter:

(i) the consideration paid or to be paid for the asset and the method bywhich the consideration has been or will be determined;

(ii) the person or company making the determination referred to insubparagraph (i) and the person or company’s relationship with yourcompany, the promoter, or an associate or affiliate of your company orof the promoter; and

(iii) the date that the asset was acquired by the promoter and the costof the asset to the promoter.

Item 12 Legal Proceedings and Regulatory Activities

12.1 Legal Proceedings

(1) Describe any legal proceedings your company is or was a party to, or thatany of its property is or was the subject of, during your company’s financial year.

(2) Describe any such legal proceedings your company knows to be contemplated.

(3) For each proceeding described in subsections (1) and (2), include the name ofthe court or agency, the date instituted, the principal parties to the proceeding,the nature of the claim, the amount claimed, if any, whether the proceeding isbeing contested, and the present status of the proceeding.

INSTRUCTION

You do not need to give information with respect to any proceeding that involves aclaim for damages if the amount involved, exclusive of interest and costs, does notexceed ten per cent of the current assets of your company. However, if anyproceeding presents in large degree the same legal and factual issues as otherproceedings pending or known to be contemplated, you must include the amountinvolved in the other proceedings in computing the percentage.

12.2 Regulatory Actions

Describe any:

(a) penalties or sanctions imposed against your company by a court relatingto securities legislation or by a securities regulatory authority during yourfinancial year;

(b) any other penalties or sanctions imposed by a court or regulatory bodyagainst your company that would likely be considered important to areasonable investor in making an investment decision; and




(c) settlement agreements your company entered into before a courtrelating to securities legislation or with a securities regulatory authorityduring your financial year.

Item 13 Interest of Management and Others in Material Transactions

13.1 Interest of Management and Others in Material Transactions

Describe, and state the approximate amount of, any material interest, direct orindirect, of any of the following persons or companies in any transaction withinthe three most recently completed financial years or during the current financialyear that has materially affected or is reasonably expected to materially affectyour company:

(a) a director or executive officer of your company;

(b) a person or company that beneficially owns, or controls or directs,directly or indirectly, more than 10 percent of any class or series of youroutstanding voting securities; and

(c) an associate or affiliate of any of the persons or companies referred to inparagraphs (a) or (b).

INSTRUCTIONS

(i) The materiality of the interest is to be determined on the basis of thesignificance of the information to investors in light of all the circumstances of theparticular case. The importance of the interest to the person having the interest, therelationship of the parties to the transaction with each other and the amountinvolved are among the factors to be considered in determining the significance ofthe information to securityholders.

(ii) This Item does not apply to any interest arising from the ownership ofsecurities of your company if the securityholder receives no extra or special benefitor advantage not shared on an equal basis by all other holders of the same class ofsecurities or all other holders of the same class of securities who are resident inCanada.

(iii) Give a brief description of the material transactions. Include the name ofeach person or company whose interest in any transaction is described and thenature of the relationship to your company.

(iv) For any transaction involving the purchase of assets by or sale of assets toyour company or a subsidiary of your company, state the cost of the assets to thepurchaser, and the cost of the assets to the seller if acquired by the seller withinthree years before the transaction.

(v) You do not need to give information under this Item for a transaction if:

(A) the rates or charges involved in the transaction are fixed by law ordetermined by competitive bids;

(B) the interest of a specified person or company in the transaction is solelythat of a director of another company that is a party to the transaction;

(C) the transaction involves services as a bank or other depository of funds, atransfer agent, registrar, trustee under a trust indenture or other similarservices; or




(D) the transaction does not involve remuneration for services and theinterest of the specified person or company arose from the beneficialownership, direct or indirect, of less than ten per cent of any class of equitysecurities of another company that is party to the transaction and thetransaction is in the ordinary course of business of your company or yourcompany’s subsidiaries.

(vi) Describe all transactions not excluded above that involve remuneration(including an issuance of securities), directly or indirectly, to any of the specifiedpersons or companies for services in any capacity unless the interest of the person orcompany arises solely from the beneficial ownership, direct or indirect, of less thanten per cent of any class of equity securities of another company furnishing theservices to your company or your company’s subsidiaries.

Item 14 Transfer Agents and Registrars

14.1 Transfer Agents and Registrars

State the name of your company’s transfer agent(s) and registrar(s) and thelocation (by municipalities) of the register(s) of transfers of each class ofsecurities.

Item 15 Material Contracts

15.1 Material Contracts

Give particulars of any material contract:

(a) required to be filed under section 12.2 of the Instrument at the timethis AIF is filed, as required under section 12.3 of the Instrument; or

(b) that would be required to be filed under section 12.2 of the Instrumentat the time this AIF is filed, as required under section 12.3 of theInstrument, but for the fact that it was previously filed.

INSTRUCTIONS

(i) You must give particulars of any material contract that was entered intowithin the last financial year or before the last financial year but is still in effect,and that is required to be filed under section 12.2 of the Instrument or would berequired to be filed under section 12.2 of the Instrument but for the fact that it waspreviously filed. You do not need to give particulars of a material contract thatwas entered into before January 1, 2002 because these material contracts are notrequired to be filed under section 12.2 of the Instrument.

(ii) Set out a complete list of all contracts for which particulars must be givenunder this section, indicating those that are disclosed elsewhere in the AIF.Particulars need only be provided for those contracts that do not have theparticulars given elsewhere in the AIF.

(iii) Particulars of contracts must include the dates of, parties to, considerationprovided for in, and general nature and key terms of, the contracts.




Item 16 Interests of Experts

16.1 Names of Experts

Name each person or company:

(a) who is named as having prepared or certified a report, valuation,statement or opinion described or included in a filing, or referred to in afiling, made under National Instrument 51-102 by your company during, orrelating to, your company’s most recently completed financial year; and

(b) whose profession or business gives authority to the report, valuation,statement or opinion made by the person or company.

16.2 Interests of Experts

(1) Disclose all registered or beneficial interests, direct or indirect, in anysecurities or other property of your company or of one of your associates oraffiliates:

(a) held by an expert named in section 16.1 and, if the expert is not anindividual, by the designated professionals of that expert, when that expertprepared the report, valuation, statement or opinion referred to inparagraph 16.1(a);

(b) received by an expert named in section 16.1 and, if the expert is not anindividual, by the designated professionals of that expert, after the timespecified in paragraph 16.2(1)(a); or

(c) to be received by an expert named in section 16.1 and, if the expert isnot an individual, by the designated professionals of that expert.

(1.1) For the purposes of subsection (1), a “designated professional” means,in relation to an expert named in section 16.1:

(a) each partner, employee or consultant of the expert who participated inand who was in a position to directly influence the preparation of the report,valuation, statement or opinion referred to in paragraph 16.1(a); and

(b) each partner, employee or consultant of the expert who was, at any timeduring the preparation of the report, valuation, statement or opinionreferred to in paragraph 16.1(a), in a position to directly influence theoutcome of the preparation of the statement, report or valuation, including,without limitation:

(i) any person who recommends the compensation of, or who providesdirect supervisory, management or other oversight of, the partner,employee or consultant in the performance of the preparation of thereport, valuation, statement or opinion referred to in paragraph 16.1(a),including those at all successively senior levels through to the expert’schief executive officer;

(ii) any person who provides consultation regarding technical orindustry-specific issues, transactions or events for the preparation ofthe report, valuation, statement or opinion referred to inparagraph 16.1(a); and

(iii) any person who provides quality control for the preparation of thereport, valuation, statement or opinion referred to in paragraph 16.1(a).




(2) For the purposes of subsection (1), if the person’s or company’s interest in thesecurities represents less than one per cent of your outstanding securities of thesame class, a general statement to that effect is sufficient.

(2.1) Despite subsection (1), an auditor who is independent in accordance withthe auditor’s rules of professional conduct in a jurisdiction of Canada or who hasperformed an audit in accordance with US GAAS is not required to provide thedisclosure in subsection (1) if there is disclosure that the auditor is independent inaccordance with the auditor’s rules of professional conduct in a jurisdiction ofCanada or that the auditor has complied with the SEC’s rules on auditorindependence.

(3) If a person or a director, officer or employee of a person or company referredto in subsection (1) is or is expected to be elected, appointed or employed as adirector, officer or employee of your company or of any associate or affiliate of yourcompany, disclose the fact or expectation.

INSTRUCTIONS

(i) If you have included a report, valuation, statement or opinion of an expert inthe AIF, your company may be required by other securities legislation to obtain theconsent of an expert before referring to the expert’s opinion, for example underNational Instrument 43-101 Standards of Disclosure for Mineral Projects andNational Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.

(ii) Section 16.2 does not apply to:

(A) auditors of a business acquired by your company provided they have notbeen or will not be appointed as your company’s auditor subsequent to theacquisition; and

(B) your company’s predecessor auditors, if any, for periods when they werenot your company’s auditor.

(iii) Section 16.2 does not apply to registered or beneficial interests, direct orindirect, held through mutual funds.

Item 17 Additional Information

17.1 Additional Information

(1) Disclose that additional information relating to your company may be foundon SEDAR at www.sedar.com.

(2) If your company is required to distribute a Form 51-102F5 to any of itssecurityholders, include a statement that additional information, includingdirectors’ and officers’ remuneration and indebtedness, principal holders of yourcompany’s securities and securities authorized for issuance under equitycompensation plans, if applicable, is contained in your company’s informationcircular for its most recent annual meeting of securityholders that involved theelection of directors.

(3) Include a statement that additional financial information is provided in yourcompany’s financial statements and MD&A for its most recently completedfinancial year.




INSTRUCTIONS

Your company may also be required to provide additional information in its AIF asset out in Form 52-110F1 Audit Committee Information Required in an AIF.

Item 18 Additional Disclosure for Companies Not Sending InformationItem 18 Circulars

18.1 Additional Disclosure

For companies that are not required to send a Form 51-102F5 to any of theirsecurityholders, disclose the information required under Items 6 to 10, 12 and 13of Form 51-102F5, as modified below, if applicable:

Form 51-102F5 Reference Modification

Item 6 - Voting Securities and Principal Include the disclosure specified inHolders of Voting Securities section 6.1 without regard to the

phrase “entitled to be voted at themeeting”. Do not include thedisclosure specified in sections 6.2, 6.3and 6.4. Include the disclosurespecified in section 6.5.

Item 7 – Election of Directors Disregard the preamble of section 7.1.Include the disclosure specified insection 7.1 without regard to the word“proposed” throughout. Do not includethe disclosure specified in section 7.3.

Item 8 – Executive Compensation Disregard the preamble andparagraphs (a), (b) and (c) of Item 8. Acompany that does not send amanagement information circular toits securityholders must provide thedisclosure required by Form 51-102F6.

Item 9 – Securities Authorized for Issuance Disregard subsection 9.1(1).under Equity Compensation Plans

Item 10 – Indebtedness of Directors and Include the disclosure specifiedExecutive Officers throughout; however, replace the

phrase “date of the informationcircular” with “date of the AIF”throughout. Disregardparagraph 10.3(a).

Item 12 – Appointment of Auditor Name the auditor. If the auditor wasfirst appointed within the last fiveyears, state the date when the auditorwas first appointed.





FORM 51-102F3MATERIAL CHANGE REPORT


(a) Confidentiality

If this Report is filed on a confidential basis, state in block capitals “CONFIDENTIAL”at the beginning of the Report.

(b) Use of “Company”

Wherever this Form uses the word “company” the term includes other types of businessorganizations such as partnerships, trusts and other unincorporated business entities.

(c) Numbering and Headings

The numbering, headings and ordering of the items included in this Form areguidelines only. You do not need to include the headings or numbering or follow theorder of items in this Form. Disclosure provided in response to any item need not berepeated elsewhere.

(d) Defined Terms


(e) Plain Language

Write the Report so that readers are able to understand it. Consider both the level ofdetail provided and the language used in the document. Refer to the plain languageprinciples listed in section 1.5 of Companion Policy 51-102CP. If you use technicalterms, explain them in a clear and concise manner.

PART 2 CONTENT OF MATERIAL CHANGE REPORT

Item 1 Name and Address of Company

State the full name of your company and the address of its principal office inCanada.

Item 2 Date of Material Change

State the date of the material change.

Item 3 News Release

State the date and method(s) of dissemination of the news release issued undersection 7.1 of National Instrument 51–102.




Item 4 Summary of Material Change

Provide a brief but accurate summary of the nature and substance of the materialchange.

Item 5

5.1 Full Description of Material Change

Supplement the summary required under Item 4 with sufficient disclosure toenable a reader to appreciate the significance and impact of the material changewithout having to refer to other material. Management is in the best position todetermine what facts are significant and must disclose those facts in a meaningfulmanner. See also Item 7.

Some examples of significant facts relating to the material change include: dates,parties, terms and conditions, description of any assets, liabilities or capitalaffected, purpose, financial or dollar values, reasons for the change, and a generalcomment on the probable impact on the issuer or its subsidiaries. Specificfinancial forecasts would not normally be required.

Other additional disclosure may be appropriate depending on the particularsituation.

5.2 Disclosure for Restructuring Transactions

This item applies to a material change report filed in respect of the closing of arestructuring transaction under which securities are to be changed, exchanged,issued or distributed. This item does not apply if, in respect of the transaction,your company sent an information circular to its securityholders or filed aprospectus or a securities exchange takeover bid circular.

Include the disclosure for each entity that resulted from the restructuringtransaction, if your company has an interest in that entity, required bysection 14.2 of Form 51-102F5. You may satisfy the requirement to include thisdisclosure by incorporating the information by reference to another document.

INSTRUCTIONS

(i) If your company is engaged in oil and gas activities, the disclosure underItem 5 must also satisfy the requirements of Part 6 of National Instrument 51-101Standards of Disclosure for Oil and Gas Activities.

(ii) If you incorporate information by reference to another document, clearlyidentify the referenced document or any excerpt from it. Unless you have alreadyfiled the referenced document or excerpt, you must file it with the material changereport. You must also disclose that the document is on SEDAR at www.sedar.com.

Item 6 Reliance on subsection 7.1(2) or (3) of National Instrument 51-102

If this Report is being filed on a confidential basis in reliance on subsection 7.1(2)of National Instrument 51-102, state the reasons for such reliance.

INSTRUCTIONS

Refer to subsections 7.1(5), (6) and (7) of National Instrument 51-102 concerningcontinuing obligations in respect of reports filed under subsection 7.1(2) ofNational Instrument 51-102.




Item 7 Omitted Information

State whether any information has been omitted on the basis that it isconfidential information. In a separate letter to the applicable regulator orsecurities regulatory authority marked “Confidential” provide the reasons foryour company’s omission of confidential significant facts in the Report insufficient detail to permit the applicable regulator or securities regulatoryauthority to determine whether to exercise its discretion to allow the omission ofthese significant facts.

INSTRUCTIONS

In certain circumstances where a material change has occurred and a Report hasbeen or is about to be filed but subsection 7.1(2) or (5) of National Instrument51-102 is not or will no longer be relied upon, your company may neverthelessbelieve one or more significant facts otherwise required to be disclosed in the Reportshould remain confidential and not be disclosed or not be disclosed in full detail inthe Report.

Item 8 Executive Officer

Give the name and business telephone number of an executive officer of yourcompany who is knowledgeable about the material change and the Report, or thename of an officer through whom such executive officer may be contacted.

Item 9 Date of Report

Date the Report.


FORM 51-102F4BUSINESS ACQUISITION REPORT


(a) What is a Business Acquisition Report?

Your company must file a Business Acquisition Report after completing a significantacquisition. See Part 8 of National Instrument 51-102. The Business AcquisitionReport describes the significant businesses acquired by your company and the effect ofthe acquisition on your company.


Wherever this Form uses the word “company”, the term includes other types ofbusiness organizations such as partnerships, trusts and other unincorporated businessentities.

(c) Focus on Relevant Information

When providing the disclosure required by this Form, focus your discussion oninformation that is relevant to an investor, analyst or other reader.

(d) Incorporating Material By Reference

You may incorporate information required by this Form, by reference to anotherdocument. Clearly identify the referenced document, or any excerpt of it, that youincorporate into this Report. Unless you have already filed the referenced document orexcerpt, including any documents incorporated by reference into the document orexcerpt, you must file it with this Report. You must also disclose that the document ison SEDAR at www.sedar.com.




(e) Defined Terms


(f) Plain Language

Write this Report so that readers are able to understand it. Consider both the level ofdetail provided and the language used in the document. Refer to the plain languageprinciples listed in section 1.5 of Companion Policy 51-102CP. If you use technicalterms, explain them in a clear and concise manner.

(g) Numbering and Headings

The numbering, headings and ordering of items included in this Form are guidelinesonly. You do not need to include the headings or numbering or follow the order of itemsin this Form. Disclosure provided in response to any item need not be repeatedelsewhere in the Report.

PART 2 CONTENT OF BUSINESS ACQUISITION REPORT

Item 1 Identity of Company

1.1 Name and Address of Company

State the full name of your company and the address of its principal office inCanada.

1.2 Executive Officer

Give the name and business telephone number of an executive officer of yourcompany who is knowledgeable about the significant acquisition and the Report,or the name of an officer through whom such executive officer may be contacted.

Item 2 Details of Acquisition

2.1 Nature of Business Acquired

Describe the nature of the business acquired.

2.2 Date of Acquisition

State the date of acquisition used for accounting purposes.

INSTRUCTIONS

If your company is using Canadian GAAP, the date of acquisition for accountingpurposes is one of the following two dates, whichever is applicable:

(a) the date the net assets or equity interests are received, and theconsideration is given; or

(b) the date of the written agreement that provides that control of theacquired enterprise transferred to the acquirer, subject only to those conditionsrequired to protect the interests of the parties involved, or the later date, ifany, specified in the written agreement that such control is to be transferred.




2.3 Consideration

Disclose the type and amount of consideration, both monetary and non-monetary,paid or payable by your company in connection with the significant acquisition,including contingent consideration. Identify the source of funds used by yourcompany for the acquisition, including a description of any financing associatedwith the acquisition.

2.4 Effect on Financial Position

Describe any plans or proposals for material changes in your business affairs orthe affairs of the acquired business which may have a significant effect on theresults of operations and financial position of your company. Examples includeany proposal to liquidate the business, to sell, lease or exchange all or asubstantial part of its assets, to amalgamate the business with any other businessorganization or to make any material changes to your business or the businessacquired such as changes in corporate structure, management or personnel.

2.5 Prior Valuations

Describe in sufficient detail any valuation opinion obtained within the last 12months by the acquired business or your company required by securitieslegislation or a Canadian exchange or market to support the consideration paid byyour company or any of its subsidiaries for the business, including the name of theauthor, the date of the opinion, the business to which the opinion relates, thevalue attributed to the business and the valuation methodologies used.

2.6 Parties to Transaction

State whether the transaction is with an informed person, associate or affiliate ofyour company and, if so, the identity and the relationship of the other parties toyour company.

2.7 Date of Report

Date the Report.

Item 3 Financial Statements

Include the financial statements or other information required by Part 8 ofNational Instrument 51-102. If applicable, disclose that the auditors have notgiven their consent to include their audit report in this Report.




NATIONAL INSTRUMENT

FORM 51-102F5INFORMATION CIRCULAR


(a) Timing of Information

The information required by this Form 51-102F5 must be given as of a specified datenot more than thirty days prior to the date you first send the information circular to anysecurityholder of the company.


Wherever this Form uses the word “company”, the term includes other types ofbusiness organizations such as partnerships, trusts and other unincorporated businessentities.

(c) Incorporating Information by Reference

You may incorporate information required to be included in your information circularby reference to another document. Clearly identify the referenced document or anyexcerpt of it that you incorporate into your information circular. Unless you havealready filed the referenced document or excerpt, including any documents incorporatedby reference into the document or excerpt, you must file it with your informationcircular. You must also disclose that the document is on SEDAR at www.sedar.com andthat, upon request, you will promptly provide a copy of any such document free ofcharge to a securityholder of the company. However, you may not incorporateinformation required to be included in Form 51-102F6 Statement of ExecutiveCompensation by reference into your information circular.

(d) Defined Terms

If a term is used but not defined in this Form, refer to Part 1 of NationalInstrument 51-102 and to National Instrument 14-101 Definitions. If a term is used inthis Form and is defined in both the securities statute of the local jurisdiction and inNational Instrument 51-102, refer to section 1.4 of Companion Policy 51-102CP.

(e) Plain Language

Write this document so that readers are able to understand it. Refer to the plainlanguage principles listed in section 1.5 of Companion Policy 51-102CP. If you usetechnical terms, explain them in a clear and concise manner.

(f) Numbering and Headings

The numbering, headings and ordering of items included in this Form are guidelinesonly. You do not need to include the headings or numbering or follow the order of itemsin this Form. Disclosure provided in response to any item need not be repeatedelsewhere.

(g) Tables and Figures

Where it is practicable and appropriate, present information in tabular form. State allamounts in figures.




(h) Omitting Information

You do not need to respond to any item in this Form that is inapplicable. You mayalso omit information that is not known to the person or company on whose behalf thesolicitation is made and that is not reasonably within the power of the person orcompany to obtain, if you briefly state the circumstances that render the informationunavailable.

You may omit information that was contained in another information circular, noticeof meeting or form of proxy sent to the same persons or companies whose proxies weresolicited in connection with the same meeting, as long as you clearly identify theparticular document containing the information.

PART 2 CONTENT

Item 1 Date

Specify the date of the information circular.

Item 2 Revocability of Proxy

State whether the person or company giving the proxy has the power to revokeit. If any right of revocation is limited or is subject to compliance with any formalprocedure, briefly describe the limitation or procedure.

Item 3 Persons Making the Solicitation

3.1 If a solicitation is made by or on behalf of management of the company, statethis. Name any director of the company who has informed management inwriting that he or she intends to oppose any action intended to be taken bymanagement at the meeting and indicate the action that he or she intends tooppose.

3.2 If a solicitation is made other than by or on behalf of management of thecompany, state this and give the name of the person or company by whom, or onwhose behalf, it is made.

3.3 If the solicitation is to be made other than by mail, describe the method to beemployed. If the solicitation is to be made by specially engaged employees orsoliciting agents, state:

(a) the parties to and material features of any contract or arrangementfor the solicitation; and

(b) the cost or anticipated cost thereof.

3.4 State who has borne or will bear, directly or indirectly, the cost of soliciting.




Item 4 Proxy Instructions

4.1 The information circular or the form of proxy to which the information circularrelates must indicate in bold-face type that the securityholder has the right toappoint a person or company to represent the securityholder at the meeting otherthan the person or company, if any, designated in the form of proxy and mustcontain instructions as to the manner in which the securityholder may exercisethe right.

4.2 The information circular or the form of proxy to which the information circularrelates must state that the securities represented by the proxy will be voted orwithheld from voting in accordance with the instructions of the securityholder onany ballot that may be called for and that, if the securityholder specifies a choicewith respect to any matter to be acted upon, the securities will be votedaccordingly.

Item 5 Interest of Certain Persons or Companies in MattersItem 5 to be Acted Upon

Briefly describe any material interest, direct or indirect, by way of beneficialownership of securities or otherwise, of each of the following persons or companiesin any matter to be acted upon other than the election of directors or theappointment of auditors:

(a) if the solicitation is made by or on behalf of management of thecompany, each person who has been a director or executive officer of thecompany at any time since the beginning of the company’s last financialyear;

(b) if the solicitation is made other than by or on behalf of management ofthe company, each person or company by whom, or on whose behalf, directlyor indirectly, the solicitation is made;

(c) each proposed nominee for election as a director of the company; and

(d) each associate or affiliate of any of the persons or companies listed inparagraphs (a) to (c).

INSTRUCTIONS

(i) The following persons and companies are deemed to be persons or companiesby whom or on whose behalf the solicitation is made (collectively, “solicitors” orindividually a “solicitor”):

(A) any member of a committee or group that solicits proxies, and anyperson or company whether or not named as a member who, acting alone orwith one or more other persons or companies, directly or indirectly takes theinitiative or engages in organizing, directing or financing any such committeeor group;

(B) any person or company who contributes, or joins with another tocontribute, more than $250 to finance the solicitation of proxies; or

(C) any person or company who lends money, provides credit, or enters intoany other arrangements, under any contract or understanding with asolicitor, for the purpose of financing or otherwise inducing the purchase,sale, holding or voting of securities of the company but not including a bankor other lending institution or a dealer that, in the ordinary course ofbusiness, lends money or executes orders for the purchase or sale of securities.




(ii) Subject to paragraph (i), the following persons and companies are deemed notto be solicitors:

(A) any person or company retained or employed by a solicitor to solicitproxies or any person or company who merely transmits proxy-solicitingmaterial or performs ministerial or clerical duties;

(B) any person or company employed or retained by a solicitor in thecapacity of lawyer, accountant, or advertising, public relations, investorrelations or financial advisor and whose activities are limited to theperformance of their duties in the course of the employment or retainer;

(C) any person regularly employed as an officer or employee of the companyor any of its affiliates; or

(D) any officer or director of, or any person regularly employed by, anysolicitor.

Item 6 Voting Securities and Principal Holders of Voting Securities

6.1 For each class of voting securities of the company entitled to be voted at themeeting, state the number of securities outstanding and the particulars of votingrights for each class.

6.2 For each class of restricted securities, provide the information required insubsection 10.1(1) of National Instrument 51-102.

6.3 Give the record date as of which the securityholders entitled to vote at the meetingwill be determined or particulars as to the closing of the security transfer register,as the case may be, and, if the right to vote is not limited to securityholders ofrecord as of the specified record date, indicate the conditions under whichsecurityholders are entitled to vote.

6.4 If action is to be taken with respect to the election of directors and if thesecurityholders or any class of securityholders have the right to elect a specifiednumber of directors or have cumulative or similar voting rights, include astatement of such rights and state briefly the conditions precedent, if any, to theexercise thereof.

6.5 If, to the knowledge of the company’s directors or executive officers, any person orcompany beneficially owns, or controls or directs, directly or indirectly, votingsecurities carrying 10 per cent or more of the voting rights attached to any class ofvoting securities of the company, name each person or company and state:

(a) the approximate number of securities beneficially owned, or controlledor directed, directly or indirectly, by each such person or company; and

(b) the percentage of the class of outstanding voting securities of thecompany represented by the number of voting securities so owned, controlledor directed, directly or indirectly.




Item 7 Election of Directors

7.1 If directors are to be elected, provide the following information, in tabular form tothe extent practicable, for each person proposed to be nominated for election as adirector (a “proposed director”) and each other person whose term of office as adirector will continue after the meeting:

(a) state the name, province or state, and country of residence, of eachdirector and proposed director;

(b) state the period or periods during which each director has served as adirector and when the term of office for each director and proposed directorwill expire;

(c) identify the members of each committee of the board;

(d) state the present principal occupation, business or employment of eachdirector and proposed director. Give the name and principal business of anycompany in which any such employment is carried on. Furnish similarinformation as to all of the principal occupations, businesses or employmentsof each proposed director within the five preceding years, unless theproposed director is now a director and was elected to the present term ofoffice by a vote of securityholders at a meeting, the notice of which wasaccompanied by an information circular;

(e) if a director or proposed director has held more than one position in thecompany, or a parent or subsidiary, state only the first and last position held;

(f) state the number of securities of each class of voting securities of thecompany or any of its subsidiaries beneficially owned, or controlled ordirected, directly or indirectly, by each proposed director;

(g) if securities carrying 10 per cent or more of the voting rights attached toall voting securities of the company or of any of its subsidiaries arebeneficially owned, or controlled or directed, directly or indirectly, by anyproposed director and the proposed director’s associates or affiliates:

(i) state the number of securities of each class of voting securitiesbeneficially owned, directly or indirectly, or controlled or directed bythe associates or affiliates; and

(ii) name each associate or affiliate whose security holdings are 10 percent or more.




7.2 If a proposed director:

(a) is, as at the date of the information circular, or has been, within 10 yearsbefore the date of the information circular, a director, chief executive officeror chief financial officer of any company (including the company in respect ofwhich the information circular is being prepared) that:

(i) was subject to an order that was issued while the proposed directorwas acting in the capacity as director, chief executive officer or chieffinancial officer; or

(ii) was subject to an order that was issued after the proposed directorceased to be a director, chief executive officer or chief financial officerand which resulted from an event that occurred while that person wasacting in the capacity as director, chief executive officer or chieffinancial officer;

state the fact and describe the basis on which the order was made andwhether the order is still in effect; or

(b) is, as at the date of the information circular, or has been within 10 yearsbefore the date of the information circular, a director or executive officer ofany company (including the company in respect of which the informationcircular is being prepared) that, while that person was acting in thatcapacity, or within a year of that person ceasing to act in that capacity,became bankrupt, made a proposal under any legislation relating tobankruptcy or insolvency or was subject to or instituted any proceedings,arrangement or compromise with creditors or had a receiver, receivermanager or trustee appointed to hold its assets, state the fact; or

(c) has, within the 10 years before the date of the information circular,become bankrupt, made a proposal under any legislation relating tobankruptcy or insolvency, or become subject to or instituted any proceedings,arrangement or compromise with creditors, or had a receiver, receivermanager or trustee appointed to hold the assets of the proposed director,state the fact

7.2.1 Describe the penalties or sanctions imposed and the grounds on which they wereimposed, or the terms of the settlement agreement and the circumstances thatgave rise to the settlement agreement, if a proposed director has been subject to:

(a) any penalties or sanctions imposed by a court relating to securitieslegislation or by a securities regulatory authority or has entered into asettlement agreement with a securities regulatory authority; or

(b) any other penalties or sanctions imposed by a court or regulatory bodythat would likely be considered important to a reasonable securityholder indeciding whether to vote for a proposed director.

7.2.2 Despite section 7.2.1, no disclosure is required of a settlement agreemententered into before December 31, 2000 unless the disclosure would likely beimportant to a reasonable securityholder in deciding whether to vote for aproposed director.




INSTRUCTIONS

(i) The disclosure required by sections 7.2 and 7.2.1 also applies to any personalholding companies of the proposed director.

(ii) A management cease trade order which applies to directors or executiveofficers of a company is an “order” for the purposes of paragraph 7.2(a)(i) and mustbe disclosed, whether or not the proposed director was named in the order .

(iii) A late filing fee, such as a filing fee that applies to the late filing of an insiderreport, is not a “penalty or sanction” for the purposes of section 7.2.1.

(iv) The disclosure in paragraph 7.2(a)(i) only applies if the proposed directorwas a director, chief executive officer or chief financial officer when the order wasissued against the company. You do not have to provide disclosure if the proposeddirector became a director, chief executive officer or chief financial officer after theorder was issued.

7.2.3 For the purposes of subsection 7.2(a), ‘order’ means:

(a) a cease trade order;

(b) an order similar to a cease trade order; or

(c) an order that denied the relevant company access to any exemptionunder securities legislation;

that was in effect for a period of more than 30 consecutive days

7.3 If any proposed director is to be elected under any arrangement or understandingbetween the proposed director and any other person or company, except thedirectors and executive officers of the company acting solely in such capacity,name the other person or company and describe briefly the arrangement orunderstanding.

Item 8 Executive Compensation

If you are sending this information circular in connection with a meeting:

(a) that is an annual general meeting;

(b) at which the company’s directors are to be elected; or

(c) at which the company’s securityholders will be asked to vote on a matterrelating to executive compensation;

include a completed Form 51-102F6 Statement of Executive Compensation.

Item 9 Securities Authorized for Issuance Under Equity CompensationItem 9 Plans

9.1(1) Provide the information in subsection (2) if you are sending this informationcircular in connection with a meeting:

(a) that is an annual general meeting;

(b) at which the company’s directors are to be elected; or

(c) at which the company’s securityholders will be asked to vote on a matterrelating to executive compensation or a transaction that involves thecompany issuing securities.




(2) In the tabular form under the caption set out, provide the informationspecified in section 9.2 as of the end of the company’s most recently completedfinancial year with respect to compensation plans under which equity securities ofthe company are authorized for issuance, aggregated as follows:

(a) all compensation plans previously approved by securityholders; and

(b) all compensation plans not previously approved by securityholders.

Equity Compensation Plan Information

Number of securitiesremaining available for

Number of Weighted- future issuance undersecurities to be average equity compensation

issued upon exercise exercise price of plans (excludingof outstanding options, outstanding options, securities reflected in

warrants and rights warrants and rights column (a))

Plan Category (a) (b) (c)

Equitycompensation

plans approved bysecurityholders

Equitycompensation

plans notapproved by

securityholders

Total

9.2 Include in the table the following information as of the end of the company’s mostrecently completed financial year for each category of compensation plandescribed in section 9.1:

(a) the number of securities to be issued upon the exercise of outstandingoptions, warrants and rights (column (a));

(b) the weighted-average exercise price of the outstanding options, warrantsand rights disclosed under subsection 9.2(a) (column (b)); and

(c) other than securities to be issued upon the exercise of the outstandingoptions, warrants and rights disclosed in subsection 9.2(a), the number ofsecurities remaining available for future issuance under the plan (column (c)).

9.3 For each compensation plan under which equity securities of the company areauthorized for issuance and that was adopted without the approval ofsecurityholders, describe briefly, in narrative form, the material features of theplan.




INSTRUCTIONS

(i) The disclosure under Item 9 relating to compensation plans must includeindividual compensation arrangements.

(ii) Provide disclosure with respect to any compensation plan of the company (orparent, subsidiary or affiliate of the company) under which equity securities of thecompany are authorized for issuance to employees or non-employees (such asdirectors, consultants, advisors, vendors, customers, suppliers or lenders) inexchange for consideration in the form of goods or services as described insection 3870 “Stock-based Compensation and Other Stock-based Payments” of theHandbook. You do not have to provide disclosure regarding any plan, contract orarrangement for the issuance of warrants or rights to all securityholders of thecompany on a pro rata basis (such as a rights offering).

(iii) If more than one class of equity security is issued under the company’scompensation plans, disclose aggregate plan information for each class of securityseparately.

(iv) You may aggregate information regarding individual compensationarrangements with the plan information required under subsections 9.1(a) and (b),as applicable.

(v) You may aggregate information regarding a compensation plan assumed inconnection with a merger, consolidation or other acquisition transaction pursuantto which the company may make subsequent grants or awards of its equitysecurities with the plan information required under subsections 9.1(a) and (b), asapplicable. Disclose on an aggregated basis in a footnote to the table theinformation required under subsections 9.2(a) and (b) with respect to anyindividual options, warrants or rights outstanding under the compensation planassumed in connection with a merger, consolidation or other acquisition transaction.

(vi) To the extent that the number of securities remaining available for futureissuance disclosed in column (c) includes securities available for future issuanceunder any compensation plan other than upon the exercise of an option, warrant orright, disclose the number of securities and type of plan separately for each suchplan in a footnote to the table.

(vii) If the description of a compensation plan set forth in the company’s financialstatements contains the disclosure required by section 9.3, a cross-reference to thedescription satisfies the requirements of section 9.3.

(viii) If an equity compensation plan contains a formula for calculating thenumber of securities available for issuance under the plan, including, withoutlimitation, a formula that automatically increases the number of securitiesavailable for issuance by a percentage of the number of outstanding securities ofthe company, describe this formula in a footnote to the table.




Item 10 Indebtedness of Directors and Executive Officers

10.1 Aggregate Indebtedness

AGGREGATE INDEBTEDNESS ($)

Purpose To the Company or its To Another EntitySubsidiaries

(a) (b) (c)

Share purchases

Other

(1) Complete the above table for the aggregate indebtedness outstanding as at adate within thirty days before the date of the information circular entered into inconnection with:

(a) a purchase of securities; and

(b) all other indebtedness.

(2) Report separately the indebtedness to:

(a) the company or any of its subsidiaries (column (b)); and

(b) another entity if the indebtedness is the subject of a guarantee, supportagreement, letter of credit or other similar arrangement or understandingprovided by the company or any of its subsidiaries (column (c));

of all executive officers, directors, employees and former executive officers,directors and employees of the company or any of its subsidiaries.

(3) “Support agreement” includes, but is not limited to, an agreement to provideassistance in the maintenance or servicing of any indebtedness and an agreementto provide compensation for the purpose of maintaining or servicing anyindebtedness of the borrower.




10.2 Indebtedness of Directors and Executive Officers under (1) Securities10.2 Purchase and (2) Other Programs

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS UNDER (1) SECURITIESPURCHASE AND (2) OTHER PROGRAMS

Name Involvement Largest Amount Financially Security for Amountand of Company Amount Oustanding Assisted Indebtedness Forgiven

Principal or Subsidiary Outstanding as at [Date Securities DuringPosition During within 30 Purchases [Most

[Most days] ($) During [Most RecentlyRecently Recently Completed

Completed Completed Financialfinancial Financial Year] ($)Year] ($) Year] (#)

(a) (b) (c) (d) (e) (f) (g)

Securities Purchase Programs

Other Programs

(1) Complete the above table for each individual who is, or at any time duringthe most recently completed financial year was, a director or executive officer ofthe company, each proposed nominee for election as a director of the company, andeach associate of any such director, executive officer or proposed nominee:

(a) who is, or at any time since the beginning of the most recentlycompleted financial year of the company has been, indebted to the companyor any of its subsidiaries; or

(b) whose indebtedness to another entity is, or at any time since thebeginning of the most recently completed financial year has been, the subjectof a guarantee, support agreement, letter of credit or other similararrangement or understanding provided by the company or any of itssubsidiaries;

and separately disclose the indebtedness for security purchase programs and allother programs.

(2) Note the following:

Column (a) – disclose the name and principal position of the borrower. If theborrower was, during the most recently completed financial year, but nolonger is a director or executive officer, state that fact. If the borrower is aproposed nominee for election as a director, state that fact. If the borrower isincluded as an associate, describe briefly the relationship of the borrower toan individual who is or, during the financial year, was a director or executiveofficer or who is a proposed nominee for election as a director, name thatindividual and provide the information required by this subparagraph forthat individual.




Column (b) – disclose whether the company or a subsidiary of the company isthe lender or the provider of a guarantee, support agreement, letter of creditor similar arrangement or understanding.

Column (c) – disclose the largest aggregate amount of the indebtednessoutstanding at any time during the most recently completed financial year.

Column (d) – disclose the aggregate amount of indebtedness outstanding asat a date within thirty days before the date of the information circular.

Column (e) – disclose separately for each class or series of securities, the sumof the number of securities purchased during the most recently completedfinancial year with the financial assistance (security purchase programsonly).

Column (f) – disclose the security for the indebtedness, if any, provided to thecompany, any of its subsidiaries or the other entity (security purchaseprograms only).

Column (g) – disclose the total amount of indebtedness that was forgiven atany time during the most recently completed financial year.

(3) Supplement the above table with a summary discussion of:

(a) the material terms of each incidence of indebtedness and, if applicable,of each guarantee, support agreement, letter of credit or other similararrangement or understanding, including:

(i) the nature of the transaction in which the indebtedness wasincurred;

(ii) the rate of interest;

(iii) the term to maturity;

(iv) any understanding, agreement or intention to limit recourse; and

(v) any security for the indebtedness;

(b) any material adjustment or amendment made during the most recentlycompleted financial year to the terms of the indebtedness and, if applicable,the guarantee, support agreement, letter of credit or similar arrangement orunderstanding. Forgiveness of indebtedness reported in column (g) of theabove table should be explained; and

(c) the class or series of the securities purchased with financial assistanceor held as security for the indebtedness and, if the class or series of securitiesis not publicly traded, all material terms of the securities, including theprovisions for exchange, conversion, exercise, redemption, retraction anddividends.




10.3 You do not need to disclose information required by this Item:

(a) if you are not sending this information circular in connection with ameeting:

(i) that is an annual general meeting;

(ii) at which the company’s directors are to be elected; or

(iii) at which the company’s securityholders will be asked to voteon a matter relating to executive compensation;

(b) for any indebtedness that has been entirely repaid on or before thedate of the information circular; or

(c) for routine indebtedness.

“Routine indebtedness” means indebtedness described in any of the followingclauses:

(i) if the company or its subsidiary makes loans to employeesgenerally:

(A) the loans are made on terms no more favourable than theterms on which loans are made by the company or its subsidiary toemployees generally; and

(B) the amount, at any time during the last completed financialyear, remaining unpaid under the loans to the director, executiveofficer or proposed nominee, together with his or her associates,does not exceed $50,000;

(ii) a loan to a person or company who is a full-time employee of thecompany:

(A) that is fully secured against the residence of the borrower;and

(B) the amount of which in total does not exceed the annualsalary of the borrower;

(iii) if the company or its subsidiary makes loans in the ordinarycourse of business, a loan made to a person or company other than afull-time employee of the company:

(A) on substantially the same terms, including those as tointerest rate and security, as are available when a loan is made toother customers of the company or its subsidiary with comparablecredit; and

(B) with no more than the usual risks of collectibility;

(iv) a loan arising by reason of purchases made on usual trade termsor of ordinary travel or expense advances, or for similar reasons, if therepayment arrangements are in accord with usual commercial practice.




Item 11 Interest of Informed Persons in Material Transactions

Describe briefly and, where practicable, state the approximate amount of anymaterial interest, direct or indirect, of any informed person of the company, anyproposed director of the company, or any associate or affiliate of any informedperson or proposed director, in any transaction since the commencement of thecompany’s most recently completed financial year or in any proposed transactionwhich has materially affected or would materially affect the company or any of itssubsidiaries.

INSTRUCTIONS

(i) Briefly describe the material transaction. State the name and address of eachperson or company whose interest in any transaction is described and the nature ofthe relationship giving rise to the interest.

(ii) For any transaction involving the purchase or sale of assets by or to thecompany or any subsidiary, other than in the ordinary course of business, state thecost of the assets to the purchaser and the cost of the assets to the seller, if acquiredby the seller within two years prior to the transaction.

(iii) This Item does not apply to any interest arising from the ownership ofsecurities of the company where the securityholder receives no extra or specialbenefit or advantage not shared on a proportionate basis by all holders of the sameclass of securities or by all holders of the same class of securities who are resident inCanada.

(iv) Include information as to any material underwriting discounts or commissionsupon the sale of securities by the company where any of the specified persons orcompanies was or is to be an underwriter in a contractual relationship with thecompany with respect to securities or is an associate or affiliate of a person orcompany that was or is to be such an underwriter.

(v) You do not need to disclose the information required by this Item for anytransaction or any interest in that transaction if:

(A) the rates or charges involved in the transaction are fixed by law ordetermined by competitive bids;

(B) the interest of the specified person in the transaction is solely that ofdirector of another company that is a party to the transaction;

(C) the transaction involves services as a bank or other depositary of funds,transfer agent, registrar, trustee under a trust indenture or other similarservices; or




(D) the transaction does not directly or indirectly, involve remuneration forservices; and:

(I) the interest of the specified person or company arose from thebeneficial ownership, direct or indirect, of less than 10 per cent of anyclass of voting securities of another company that is a party to thetransaction;

(II) the transaction is in the ordinary course of business of thecompany or its subsidiaries; and

(III) the amount of the transaction or series of transactions is lessthan 10 per cent of the total sales or purchases, as the case may be, of thecompany and its subsidiaries for the most recently completed financialyear.

(vi) Provide information for transactions not excluded above which involveremuneration, directly or indirectly, to any of the specified persons or companiesfor services in any capacity unless the interest of the person arises solely from thebeneficial ownership, direct or indirect, of less than 10 per cent of any class ofvoting securities of another company furnishing the services to the company or itssubsidiaries.

Item 12 Appointment of Auditor

Name the auditor of the company. If the auditor was first appointed within thelast five years, state the date when the auditor was first appointed.

If action is to be taken to replace an auditor, provide the information requiredunder section 4.11 of National Instrument 51-102.

Item 13 Management Contracts

If management functions of the company or any of its subsidiaries are to anysubstantial degree performed other than by the directors or executive officers ofthe company or subsidiary:

(a) give details of the agreement or arrangement under which themanagement functions are performed, including the name and address ofany person or company who is a party to the agreement or arrangement orwho is responsible for performing the management functions;

(b) give the names and provinces of residence of any person that was,during the most recently completed financial year, an informed person ofany person or company with which the company or subsidiary has any suchagreement or arrangement and, if the following information is known to thedirectors or executive officers of the company, give the names and provincesof residence of any person or company that would be an informed person ofany person or company with which the company or subsidiary has any suchagreement or arrangement if the person were an issuer;

(c) for any person or company named under paragraph (a) state theamounts paid or payable by the company and its subsidiaries to the personor company since the commencement of the most recently completedfinancial year and give particulars; and




(d) for any person or company named under paragraph (a) or (b) and theirassociates or affiliates, give particulars of:

(i) any indebtedness of the person, company, associate or affiliate tothe company or its subsidiaries that was outstanding; and

(ii) any transaction or arrangement of the person, company, associateor affiliate with the company or subsidiary;

at any time since the start of the company’s most recently completedfinancial year.

INSTRUCTIONS

(i) Do not refer to any matter that is relatively insignificant.

(ii) In giving particulars of indebtedness, state the largest aggregate amount ofindebtedness outstanding at any time during the period, the nature of theindebtedness and of the transaction in which it was incurred, the amount of theindebtedness presently outstanding and the rate of interest paid or charged on theindebtedness.

(iii) Do not include as indebtedness amounts due from the particular person forpurchases subject to usual trade terms, for ordinary travel and expense advancesand for other similar transactions.

Item 14 Particulars of Matters to be Acted Upon

14.1 If action is to be taken on any matter to be submitted to the meeting ofsecurityholders other than the approval of financial statements, briefly describethe substance of the matter, or related groups of matters, except to the extentdescribed under the foregoing items, in sufficient detail to enable reasonablesecurityholders to form a reasoned judgment concerning the matter. Withoutlimiting the generality of the foregoing, such matters include alterations of sharecapital, charter amendments, property acquisitions or dispositions, reversetakeovers, amalgamations, mergers, arrangements or reorganizations and othersimilar transactions.

14.2 If the action to be taken is in respect of a significant acquisition as determinedunder Part 8 of National Instrument 51-102 under which securities of theacquired business are being exchanged for the company’s securities, or in respectof a restructuring transaction under which securities are to be changed,exchanged, issued or distributed, include disclosure for:

(a) the company, if the company has not filed all documents required underNational Instrument 51-102;

(b) the business being acquired, if the matter is a significant acquisition;

(c) each entity, other than the company, whose securities are beingchanged, exchanged, issued or distributed, if:

(i) the matter is a restructuring transaction; and

(ii) the company’s current securityholders will have an interest inthat entity after the restructuring transaction is completed; and




(d) each entity that would result from the significant acquisition orrestructuring transaction, if the company’s securityholders will have aninterest in that entity after the significant acquisition or restructuringtransaction is completed.

The disclosure must be the disclosure (including financial statements) prescribedunder securities legislation and described in the form of prospectus that the entitywould be eligible to use immediately prior to the sending and filing of theinformation circular in respect of the significant acquisition or restructuringtransaction, for a distribution of securities in the jurisdiction.

14.3 If the matter is one that is not required to be submitted to a vote ofsecurityholders, state the reasons for submitting it to securityholders and statewhat action management intends to take in the event of a negative vote by thesecurityholders.

14.4 Section 14.2 does not apply to an information circular that is sent to holders ofvoting securities of a reporting issuer soliciting proxies otherwise than on behalfof management of the reporting issuer (a “dissident circular”), unless the senderof the dissident circular is proposing a significant acquisition or restructuringtransaction involving the reporting issuer and the sender, under which securitiesof the sender, or an affiliate of the sender, are to be distributed or transferred tosecurityholders of the reporting issuer. However, a sender of a dissident circularshall include in the dissident circular the disclosure required by section 14.2 if thesender of the dissident circular is proposing a significant acquisition or restructuringtransaction under which securities of the sender or securities of an affiliate of thesender are to be changed, exchanged, issued or distributed.

14.5 A company satisfies section 14.2 if it prepares an information circular inconnection with a Qualifying Transaction, for a company that is a CPC, or inconnection with a Reverse Take-Over (as Qualifying Transaction, CPC andReverse Take-Over are defined in the TSX Venture Exchange policies) providedthat the company complies with the policies and requirements of the TSX VentureExchange in respect of that Qualifying Transaction or Reverse Take-Over.

INSTRUCTION

For the purposes of section 14.2, a securityholder will not be considered to have aninterest in an entity after an acquisition or restructuring transaction is completed if thesecurityholder will only hold a redeemable security that is immediately redeemed forcash

Item 15 Restricted Securities

15.1 If the action to be taken involves a transaction that would have the effect ofconverting or subdividing, in whole or in part, existing securities into restrictedsecurities, or creating new restricted securities, the information circular mustalso include, as part of the minimum disclosure required, a detailed description of:

(a) the voting rights attached to the restricted securities that are thesubject of the transaction or that will result from the transaction eitherdirectly or following a conversion, exchange or exercise, and the votingrights, if any, attached to the securities of any other class of securities of thecompany that are the same or greater on a per security basis than thoseattached to the restricted securities that are the subject of the transaction orthat will result from the transaction either directly or following a conversion,exchange or exercise;




(b) the percentage of the aggregate voting rights attached to the company’ssecurities that are represented by the class of restricted securities;

(c) any significant provisions under applicable corporate and securitieslaw, in particular whether the restricted securities may or may not betendered in any takeover bid for securities of the reporting issuer havingvoting rights superior to those attached to the restricted securities, that donot apply to the holders of the restricted securities that are the subject of thetransaction or that will result from the transaction either directly orfollowing a conversion, exchange or exercise, but do apply to the holders ofanother class of equity securities, and the extent of any rights provided inthe constating documents or otherwise for the protection of holders of therestricted securities; and

(d) any rights under applicable corporate law, in the constating documentsor otherwise, of holders of restricted securities that are the subject of thetransaction either directly or following a conversion, exchange or exercise, toattend, in person or by proxy, meetings of holders of equity securities of thecompany and to speak at the meetings to the same extent that holders ofequity securities are entitled.

15.2 If holders of restricted securities do not have all of the rights referred to insection 15.1, the detailed description referred to in section 15.1 must include, inbold-face type, a statement of the rights the holders do not have.

Item 16 Additional Information

16.1 Disclose that additional information relating to the company is on SEDAR atwww.sedar.com. Disclose how securityholders may contact the company torequest copies of the company’s financial statements and MD&A.

16.2 Include a statement that financial information is provided in the company’scomparative financial statements and MD&A for its most recently completedfinancial year.





FORM 51-102F6STATEMENT OF EXECUTIVE COMPENSATION

(in respect of financial years ending before December 31, 2008)

Item 1 General Instructions and Interpretation

1.1 The purpose of this Form is to provide disclosure of all compensation, whateverthe source, earned by certain executive officers and directors in connection withoffice or employment by your company or a subsidiary of your company. Whereverthis Form uses the word “company”, the term includes other types of businessorganizations such as partnerships, trusts and other unincorporated businessentities. The particular requirements in this Form should be interpreted withregard to this purpose, the definition of “executive officer” in the Instrument, andin a manner that gives priority to substance over form.

1.2 You should prepare the Form in the prescribed format. You may omit a table orcolumn of a table if it is not applicable.

1.3 Definitions – For the purposes of this Form:

“Chief Executive Officer” or “CEO” means each individual who served as chiefexecutive officer of your company or acted in a similar capacity during the mostrecently completed financial year;

“Chief Financial Officer” or “CFO” means each individual who served as chieffinancial officer of your company or acted in a similar capacity during the mostrecently completed financial year;

“long-term incentive plan” or “LTIP” means a plan providing compensationintended to motivate performance over a period greater than one financial year.LTIPs do not include option or SAR plans or plans for compensation throughshares or units that are subject to restrictions on resale;

“measurement period” means the period beginning at the “measurementpoint” which is established by the market close on the last trading day before thebeginning of your company’s fifth preceding financial year, through and includingthe end of your company’s most recently completed financial year. If the class orseries of securities has been publicly traded for a shorter period of time, the periodcovered by the comparison may correspond to that time period;

“Named Executive Officers” or “NEOs” means the following individuals:

(a) each CEO;

(b) each CFO;

(c) each of your company’s three most highly compensated executiveofficers, other than the CEO and CFO, who were serving as executive officersat the end of the most recently completed financial year and whose totalsalary and bonus exceeds $150,000; and

(d) any additional individuals for whom disclosure would have beenprovided under (c) except that the individual was not serving as an officer ofyour company at the end of the most recently completed financial year-end;




“normal retirement age” means normal retirement age as defined in a pensionplan or, if not defined, the earliest time at which a plan participant may retirewithout any benefit reduction due to age;

“options” includes all options, share purchase warrants and rights granted by acompany or its subsidiaries as compensation for employment services or office. Anextension of an option or replacement grant is a grant of a new option. Also,options includes any grants made to a NEO by a third party or a non-subsidiaryaffiliate of your company in respect of services to your company or a subsidiary ofyour company;

“plan” includes, but is not limited to, any arrangement, whether or not set forthin any formal document and whether or not applicable to only one individual,under which cash, securities, options, SARs, phantom stock, warrants, convertiblesecurities, shares or units that are subject to restrictions on resale, performanceunits and performance shares, or similar instruments may be received orpurchased. It excludes the Canada Pension Plan, similar government plans andgroup life, health, hospitalization, medical reimbursement and relocation plansthat are available generally to all salaried employees (for example, does notdiscriminate in scope, terms or operation in favour of executive officers ordirectors;

“replacement grant” means the grant of an option or SAR reasonably related toany prior or potential cancellation of an option or SAR;

“repricing” of an option or SAR means the adjustment or amendment of theexercise or base price of a previously awarded option or SAR. Any repricingoccurring through the operation of a formula or mechanism in, or applicable to,the previously awarded option or SAR equally affecting all holders of the class ofsecurities underlying the option or SAR is excluded; and

“stock appreciation right” or “SAR” means a right, granted by a company orany of its subsidiaries as compensation for employment services or office to receivecash or an issue or transfer of securities based wholly or in part on changes in thetrading price of publicly traded securities.

If a term is used but not defined in this Form, refer to Part 1 of NationalInstrument 51-102 and to National Instrument 14-101 Definitions. If a term isused in this Form and is defined in both the securities statute of a localjurisdiction and in National Instrument 51-102, refer to section 1.4 of CompanionPolicy 51-102CP.

1.4 In preparing this Form:

(a) Determination of Most Highly Compensated Executive Officers.The determination of your company’s most highly compensated executiveofficers is based on the total annual salary and bonus of each executiveofficer during your company’s most recently completed financial year.

(b) Change in Status of a NEO During the Financial Year. If the NEOserved in that capacity during any part of a financial year for whichdisclosure is required, disclose all of his or her compensation for the fullfinancial year.




(c) Exclusion Due to Unusual Compensation or Compensation forForeign Assignment. In limited circumstances, you can exclude disclosureof an individual, other than a CEO or CFO, who is one of the three mosthighly compensated executive officers. Factors to consider in determining toexclude an individual are:

(i) a payment or accrual of an unusually large amount of cashcompensation (such as bonus or commission) that is not part of arecurring arrangement and is unlikely to continue; or

(ii) the payment of additional amounts of cash compensation forincreased living expenses due to an assignment outside of Canada.

(d) All Compensation Covered. This Form requires disclosure of all planand non-plan compensation for each NEO, and each director in accordancewith Item 11. Except as expressly provided, no amount, benefit or rightreported as compensation for a financial year need be reported ascompensation for any subsequent fiscal year.

(e) Sources of Compensation. Compensation to officers and directorsmust include compensation from the company and its subsidiaries. Also, thecompany must include in the appropriate compensation category anycompensation paid under an understanding, arrangement or agreementexisting among:

(i) any of:

(A) the company;

(B) its subsidiaries; or

(C) an officer or director of the company or its subsidiary; and

(ii) another entity;

for the purpose of the entity compensating the officer or director foremployment services or office.

If the company’s executive management is employed or retained by anexternal management company (including a subsidiary, affiliate or associate)and the company has entered into an understanding, arrangement oragreement of any kind for the provision of executive management services bythe external management company to the company directly or indirectly, thecompany must disclose any compensation payable:

(iii) directly by the company to any persons employed or retained bythe external management company who are acting as executive officersand directors of the company; and

(iv) by the external management company to such persons that isattributable to services rendered to the company directly or indirectly.

(f) Compensation Furnished to Associates. Any compensation to anassociate, under an understanding or agreement among any of the company,its subsidiaries or another entity and an officer or director of the company orits subsidiary for the purpose of the company, its subsidiary or the otherentity compensating the officer or director for employment services or office,must be included in the appropriate compensation category.




(g) Allocation of Compensation – If the company’s executive managementis provided through an external management company, and the externalmanagement company has other clients in addition to the company, thecompany must disclose either:

(i) the portion of the compensation paid to the officer or director by theexternal management company that can be attributed to servicesrendered to the company; or

(ii) the entire compensation paid by the external management companyto the officer or director.

If the company does allocate the compensation paid to the officer or director,it should disclose the basis for the allocation.

Item 2 Summary Compensation Table

Annual Compensation Long-Term Compensation

Awards Payouts

Securities Shares orOther Under Units

NEO annual Options/ Subject to All OtherName and Compen- SARs Resale LTIP CompenPrincipal Salary Bonus sation Granted Restrictions Payouts sationPosition Year ($) ($) ($) (#) ($) ($) ($)

(a) (b) (c) (d) (e) (f) (g) (h) (i)

CEO XXX3XXX2XXX1

CFO XXX3XXX2XXX1

A XXX3XXX2XXX1

B XXX3XXX2XXX1

C XXX3XXX2XXX1




1. Complete this table for each of the NEOs for your company’s three most recentlycompleted financial years. Note the following:

Columns (c) and (d) – include any cash or non-cash base salary and bonus earnedby the NEO. For non-cash compensation, disclose the fair market value of thecompensation at the time the compensation is earned. Amounts deferred at theelection of a NEO must be included in the financial year in which earned. If theamount of salary and/or bonus earned in a given financial year is not calculable,that fact must be disclosed in a footnote and the amount must be disclosed in thesubsequent financial year in the column for the financial year in which earned.

Any salary or bonus earned in a covered year that was foregone, at the election ofa NEO, under a program of your company under which non-cash compensationmay be received in lieu of a portion of annual compensation, need not be includedin the salary or bonus columns. Instead, you may disclose the non-cashcompensation in the appropriate column for that year (i.e. columns (f), (g) and (i)).If the election was made under a LTIP and therefore is not reportable at the timeof grant in this table, a footnote must be added to the salary or bonus columndisclosing this fact and referring to the table in section 3.1.

Commissions can be treated as salary or bonus. You can add a footnote to the tableto indicate that such amounts are paid under a commission arrangement anddisclose details of the arrangement in the compensation committee report(Item 9).

Column (e) – disclose all other compensation of the NEO that is not properlycategorized as salary or bonus, including:

(a) Perquisites and other personal benefits, securities or property, unlessthe aggregate amount of such compensation is less than $50,000 and 10 percent of the total of the annual salary and bonus of the NEO for the financialyear. Generally, a perquisite is the cost or value of a personal benefitprovided to the NEO that is not available to all employees. Examples ofthings that could be perquisites are:

(i) car allowance;

(ii) car lease;

(iii) cars;

(iv) corporate aircraft;

(v) club membership;

(vi) financial assistance to provide education to children of theexecutives;

(vii) financial counselling;

(viii) parking;

(ix) tax return preparation.




The following are not considered perquisites and thus need not be reported:

(i) contributions to professional dues;

(ii) CPP or Québec Pension Plan;

(iii) dental;

(iv) employee relocation plans available to all employees;

(v) group life benefits available to all employees;

(vi) long-term benefits available to all employees;

(vii) medical.

Each perquisite or other personal benefit exceeding 25 per cent of the totalperquisites and other personal benefits reported for a NEO must beidentified by type and amount in a footnote to column (e). Perquisites andother personal benefits must be valued on the basis of the aggregateincremental cost to your company and its subsidiaries;

(b) The above-market portion of all interest, dividends or other amountspaid concerning securities, options, stock appreciation rights (SARs), loans,deferred compensation or other obligations issued to a NEO during thefinancial year or payable during that period but deferred at the election ofthe NEO. Above-market or preferential means a rate greater than the rateordinarily paid by the company or its subsidiary on securities or otherobligations having the same or similar features issued to third parties. Anyabove-market portion not reported in column (e) should be reported incolumn (i);

(c) Earnings on LTIP compensation or dividend equivalents paid duringthe financial year or payable during that period but deferred at the electionof the NEO;

(d) Amounts reimbursed during the financial year for the payment oftaxes;

(e) The difference between the price paid by a NEO for a security of yourcompany or its subsidiaries that was purchased from your company or itssubsidiaries and the fair market value of the security at the time ofpurchase, unless the discount was available generally, either to allsecurityholders or to all salaried employees of your company;

(f) The imputed interest benefits from loans provided to, or debts incurredon behalf of, the NEO by your company and its subsidiaries as computed inaccordance with the Income Tax Act (Canada); and

(g) The amounts of loan or interest obligations of the NEO to yourcompany, its subsidiaries or third parties that were serviced or settled by thecompany or its subsidiaries without the substitution of an obligation to repaythe amount to the company or subsidiaries in its place.




Column (f) – includes the number of securities under option (with or without SARsawarded with the options) and, separately, the number of securities subject tofreestanding SARs. The figures in this column for the most recent fiscal yearshould equal those reported in the table in section 4.1, column (b). These figuresare not cumulative.

If at any time during the most recently completed financial year your companyrepriced options or freestanding SARs previously awarded to a NEO, disclose therepriced options or SARs as new options or SARs grants in column (f).

Column (g) – includes the dollar value (net of consideration paid by the NEO) ofany shares or units that are subject to restrictions on resale (calculated bymultiplying the closing market price of your company’s freely trading shares onthe date of grant by the number of stock or stock units awarded).

In a footnote to column (g) disclose:

(i) the number and value of the aggregate holdings of shares andunits that are subject to restrictions on resale at the end of the mostrecently completed financial year;

(ii) for any shares or units that are subject to restrictions on resalethat will vest, in whole or in part, in less than three years from the dateof grant, the total number of securities awarded and the vestingschedule; and

(iii) whether dividends or dividend equivalents will be paid on theshares and units that are subject to restrictions on resale disclosed inthe column.

Column (h) – includes the dollar value of all payouts under LTIPs.

Awards of shares or units that are subject to restrictions on resale that are subjectto performance-based conditions prior to vesting may be disclosed as LTIP awardsunder the table in section 3.1 instead of under column (g). If this approach isselected, once the share or unit vests, it must be reported as an LTIP payout incolumn (h).

If any specified performance target, goal or condition to payout was waivedregarding any amount included in LTIP payouts, disclose this fact in a footnote tocolumn (h).

Column (i) – must include, but is not limited to:

(a) The amount paid, payable or accrued to a NEO for:

(i) the resignation, retirement or other termination of the NEO’semployment with your company or one of its subsidiaries; or

(ii) a change in control of your company or one of its subsidiaries or achange in the NEO’s responsibilities following such a change in control.

(b) The dollar value of the above-market portion of all interest, dividends orother amounts earned during the financial year, or calculated with respect tothat period, excluding amounts that are paid during that period, or payableduring that period at the election of the NEO that were reported as otherannual compensation in column (e). See the description for column (e),point (b) for an explanation of the above market portion.




(c) The dollar value of amounts earned on LTIP compensation during thefinancial year, or calculated with respect to that period, and dividendequivalents earned during that period except that amounts paid during thatperiod, or payable during that period at the election of the NEO must bereported as other annual compensation in column (e).

(d) Annual contributions or other allocations by the company or itssubsidiaries to vested and unvested defined contribution plans or employeesavings plans. These benefits are not considered to be perquisites due totheir all-inclusive nature.

(e) The dollar value of any insurance premium paid by, or on behalf of, yourcompany or its subsidiaries during the financial year with respect to termlife insurance for the benefit of a NEO. If there is an arrangement orunderstanding, whether formal or informal, that the NEO has received orwill receive or be allocated an interest in any cash surrender value under theinsurance policy, either:

(i) the full dollar value of the remainder of the premiums paid by, oron behalf of, the company or its subsidiaries; or

(ii) if the premiums will be refunded to the company or its subsidiarieson termination of the policy, the dollar value of the benefit to the NEOof the remainder of the premium paid by, or on behalf of, the companyor its subsidiaries during the financial year. This benefit must bedetermined for the period, projected on an actuarial basis, betweenpayment of premium and the refund.

(f) If the NEO’s compensation takes the form of a contribution to assist inthe NEO’s purchase of shares, the amount of the contribution, unless thecontribution was available generally, either to all securityholders or to allsalaried employees of the company.

The same method of reporting under this paragraph must be used for each NEO.If your company changes methods of reporting from one year to the next, that factand the reason for the change must be disclosed in a footnote to column (i).

The following need not be reported in column (i):

(i) LTIP awards and amounts received on exercise of options andSARs; and

(ii) information on defined benefit and actuarial plans.




2. The $150,000 threshold only applies to the most recent fiscal year in determiningthe NEOs.

3. If, during any of the financial years covered by the table, your company or itssubsidiaries did not employ a NEO for the entire financial year, disclose this factand the number of months the NEO was so employed during the year in a footnoteto the table.

4. If during any of the financial years covered by the table, a NEO was compensatedby a non-subsidiary affiliate of your company, disclose in a note to the table:

(a) the amount and nature of such compensation; and

(b) whether the compensation is included in the compensation reported inthe table.

5. Information with respect to a financial year-end prior to the most recentlycompleted financial year-end need not be provided if your company was not areporting issuer at any time during such prior financial year.

Item 3 LTIP Awards Table

3.1 LTIP – Awards In Most Recently Completed Financial Year

Estimated Future Payouts UnderPerformance Non-Securities-Price-Based Plans

Securities, or OtherUnits or Period Until

NEO Other Rights Maturation or Threshold Target MaximumName (#) Payout ($ or #) ($ or #) ($ or #)

(a) (b) (c) (d) (e) (f)

CEO

CFO

A

B

C

1. Complete this table for each LTIP award made to the NEOs during the mostrecently completed financial year. Note the following:

Column (b) – Include the number of securities, units or other rights awardedunder any LTIP and, if applicable, the number of securities underlying anysuch unit or right.

Columns (d) to (f) – For plans not based on stock price, the dollar value of theestimated payout or range estimated payouts under the award (threshold,target and maximum amount), whether such award is denominated in stock orcash.

Threshold is the minimum amount payable for a certain level of performanceunder the plan.




Target is the amount payable if the specified performance target(s) is reached.You should provide a representative amount based on the previous financialyear’s performance if the target award is not determinable.

Maximum is the maximum payout possible under the plan.

2. Describe in a footnote to the table, the material terms of any award, including ageneral description of the formula or criteria applied in determining the amountspayable. You are not required to disclose confidential information that wouldadversely affect your company’s competitive position.

3. A grant of two instruments in conjunction with each other, only one of which isunder an LTIP, need be reported only in the table applicable to the otherinstrument.

Item 4 Options and SARs

4.1 Option/SAR Grants During the Most Recently Completed Financial Year

Market ValueSecurities, Per cent of of Securities

Under Total Options/ UnderlyingOptions/ SARs Granted Options/SARs

SARs to Employees Exercise or on the DateNEO Granted in Financial Base Price of Grant ExpirationName (#) Year ($/Security) ($/Security) Date

(a) (b) (c) (d) (e) (f)

CEO

CFO

A

B

C

1. Complete this table for individual grants of options to purchase or acquiresecurities of your company or any of its subsidiaries (whether or not in conjunctionwith SARs) and freestanding SARs made during the most recently completedfinancial year to each of NEO. Note the following:

The information must be presented for each NEO in groups according to eachissuer and class or series of security underlying the options or SARs grantedand within these groups in reverse chronological order. For each grant, disclosein a footnote the issuer and the class or series of securities underlying theoptions or freestanding SARs granted.

If more than one grant of options or freestanding SARs was made to a NEOduring the most recently completed financial year, a separate row must be usedto provide the particulars of each grant. However, multiple grants during asingle financial year to a NEO can be aggregated if each grant was made on thesame terms (eg. exercise price, expiration date and vesting thresholds, if any).




A single grant of options or freestanding SARs must be reported as separategrants for each tranche with a different exercise or base price, expiration dateor performance-vesting threshold.

Each material term of the grant, including but not limited to the date ofexercisability, the number of SARs, dividend equivalents, performance units orother instruments granted in conjunction with options, a performance-basedcondition to exercisability, a re-load feature or a tax-reimbursement featuremust be disclosed in a footnote to the table.

Options or freestanding SARs granted in an option repricing transaction mustbe disclosed.

If the exercise or base price is adjustable over the term of an option orfreestanding SAR in accordance with a prescribed standard or formula, includein a footnote to the table, a description of the standard or formula.

If any provision of an option or SAR (other than an anti-dilution provision) couldcause the exercise or base price to be lowered, a description of the provision and itspotential consequences must be included in a footnote to the table.

In determining the grant date market value of the securities underlying optionsor freestanding SARs, use either the closing market price or any other formulaprescribed under the option or SAR plan. For options or SARs granted prior tothe establishment of a trading market in the underlying securities, the initialoffering price may be used.

4.2 Aggregated Option/SAR Exercises During The Most Recently CompletedFinancial Year And Financial Year-End Option/SAR Values

Value ofUnexercised

Unexercised in-the-MoneyOptions/SARs Options/SARS

Securities, at FY-End at FY-EndAcquired on Aggregate Value (#) ($)

NEO Exercise Realized Exercisable/ Exercisable/Name (#) ($) Unexercisable Unexercisable

(a) (b) (c) (d) (e)

CEO

CFO

A

B

C

1. Complete this table for each exercise of options (or SARS awarded with theoptions) and freestanding SARs during the most recently completed financial yearby each NEO and the financial year-end value of unexercised options and SARs,on an aggregated basis. Note the following:




(i) Column (c) – the aggregate dollar value realized upon exercise. Thedollar value is equal to column (b) times the difference between themarket value of the securities underlying the options or SARs atexercise or financial year-end, respectively, and the exercise or baseprice of the options or SARs.

(ii) Column (d) – the total number of securities underlying unexercisedoptions and SARs held at the end of the most recently completedfinancial year, separately identifying the xercisable and unexercisableoptions and SARs.

(iii) Column (e) – the aggregate dollar value of in-the-money,unexercised options and SARs held at the end of the financial year,separately identifying the exercisable and unexercisable options andSARs. The dollar value is calculated the same way as in column (c).Options or freestanding SARs are in-the-money at financial year-end ifthe market value of the underlying securities on that date exceeds theexercise or base price of the option or SAR.

Item 5 Option and SAR Repricings

5.1 Table of Option and SAR Repricings

Length ofSecurities Original

Under Market Price Exercise OptionOptions/ of Securities Price at Time Term

SARs at Time of of Repricing New RemainingRepriced or Repricing or or Exercise at Date of

NEO Date of Amended Amendment Amendment Price Repricing orName Repricing (#) ($/Security) ($/Security) ($/Security) Amendment

(a) (b) (c) (d) (e) (f) (g)

CEO

CFO

A

B

C

1. Complete this table if at any time during the most recently completed financialyear, your company has repriced downward any options or freestanding SARsheld by any NEO.

2. State the following information for all downward repricings of options or SARsheld by any NEO during the shorter of:

(a) the 10 year period ending on the date of this Form; and

(b) the period during which your company has been a reporting issuer.




3. Information about a replacement grant made during the financial year must bedisclosed even if the corresponding original grant was cancelled in a prior year. Ifthe replacement grant is not made at the current market value, describe this factand the terms of the grant in a footnote to the table.

4. The information must be presented in groups according to issuer and class orseries of security underlying options or SARs and within these groups in reversechronological order.

5. In a narrative immediately before or after this table, explain in reasonable detailthe basis for all downward repricings during the most recently completedfinancial year of options and SARs held by any of the NEOs.

“Item 6 Defined Benefit or Actuarial Plan Disclosure

“6.1 Pension Plan Table

Years of Service

Remuneration($) 15 20 25 30 35

125,000

150,000

175,000

200,000

225,000

250,000

300,000

400,000

[insert additonalrows as appropriate

for additionalincrements]

1. Complete this table for defined benefit or actuarial plans under which benefits aredetermined primarily by final compensation (or average final compensation) andyears of service. The estimated annual benefits payable upon retirement (includingamounts attributable to any defined benefit supplementary or excess pensionawards plan) for the specified compensation and years of service should bedisclosed.

2. Immediately following the table disclose:

(a) the compensation covered by the plan(s), including the relationship ofthe covered compensation to the compensation reported in the table insection 2.1;

(b) the current compensation covered by the plan for any NEO whose totalcompensation differs substantially (by more than 10 per cent) from that setout in the table in section 2.1;




(c) a statement as to the basis upon which benefits are computed (forexample; straight-life annuity amounts), and whether or not the benefitslisted in the table are subject to any deduction for social security or otheroffset amounts such as Canada Pension Plan or Québec Pension Planamounts; and

(d) the estimated credited years of service for each NEO.

3. Compensation disclosed in the table must allow for reasonable increases inexisting compensation levels or, alternately, you may present, as the highestcompensation level in the table, an amount equal to 120 per cent of the amount ofcovered compensation of the most highly compensated of the NEOs.

4. For defined benefit or actuarial plans which are not reported in the table in section6.1 because the benefits are not determined primarily by final compensation (oraverage final compensation) or years of service, state in narrative form:

(a) the formula by which benefits are determined; and

(b) the estimated annual benefits payable upon retirement at normalretirement age for each of the NEOs.

Item 7 Termination of Employment, Change in Responsibilities andEmployment Contracts

7.1 Describe the terms and conditions, including dollar amounts, of each of thefollowing contracts or arrangements which are in existence at the end of the mostrecently completed financial year:

(a) any employment contract between your company or its subsidiaries anda NEO; and

(b) any compensatory plan, contract or arrangement, where a NEO isentitled to receive more than $100,000 from the issuer or its subsidiaries,including periodic payments or instalments, in the event of:

(i) the resignation, retirement or any other termination of the NEO’semployment with your company and its subsidiaries;

(ii) a change of control of your company or any of its subsidiaries; or

(iii) a change in the NEO’s responsibilities following a change incontrol.

7.2 A cross reference to disclosure already made of any payments, instalments orcontributions to defined benefit pension plans under Items 2 or 6 is permitted.

Item 8 Composition of the Compensation Committee

8.1 If any compensation is reported in Items 2 to 6 for the most recently completedfinancial year, under the caption “Composition of the Compensation Committee”,identify each member of your company’s compensation committee (or other boardcommittee performing equivalent functions or in the absence of any suchcommittee, the entire board of directors) during the most recently completedfinancial year. Also, indicate each committee member who:

(a) was, during the most recently completed financial year, an officer oremployee of your company or any of its subsidiaries;

(b) was formerly an officer of your company or any of its subsidiaries;




(c) had or has any relationship that requires disclosure by your companyunder Form 51-102F5 Information Circular, Item 10 “Indebtedness ofDirectors and Executive Officers” and Item 11 “Interest of Informed Personsin Material Transactions”;

(d) was an executive officer of your company and also served as a directoror member of the compensation committee (or other board committeeperforming equivalent functions or, in the absence of any such committee,the entire board of directors) of another issuer, one of whose executiveofficers served either:

(i) on the compensation committee (or other board committeeperforming equivalent functions or, in the absence of any suchcommittee, the entire board of directors) of the issuer; or

(ii) as a director of the issuer.

8.2 If the composition of the compensation committee changed during the year orbefore the report in Item 9 “Report on Executive Compensation” is prepared, thendisclose the change in membership as well as any of the relationships described insection 8.1, if any.

Item 9 Report on Executive Compensation

9.1 If any compensation is reported in Items 2 to 6 for the most recently completedfinancial year, describe under the caption “Report on Executive Compensation”the policies of the compensation committee or other board committee performingequivalent functions, or in the absence of any such committee then of the entireboard of directors of your company, during the most recently completed financialyear, for determining compensation of executive officers. Boilerplate languageshould be avoided.

9.2 This report should include a discussion of:

(a) the relative emphasis of your company on cash compensation, options,SARs, securities purchase programs, shares or units that are subject torestrictions on resale and other incentive plans, and annual versus long-termcompensation;

(b) whether the amount and terms of outstanding options, SARs, sharesand units subject to restrictions on resale were taken into account whendetermining whether and how many new option grants would be made;

(c) the specific relationship of your company’s performance to executivecompensation, and, in particular, describing each measure of your company’sperformance, whether quantitative or qualitative, on which executivecompensation was based and the weight assigned to each measure, e.g.percentage ranges; and

(d) the waiver or adjustment of the relevant performance criteria and thebases for the decision if an award was made to a NEO under aperformance-based plan despite failure to meet the relevant performancecriteria. For example, you should explain how bonuses are earned and whythey were awarded this period, if applicable.




9.3 The report should state the following information about each CEO’s compensation:

(a) the bases for the CEO’s compensation for the most recently completedfinancial year, including the factors and criteria upon which the CEO’scompensation was based and the relative weight assigned to each factor;

(b) the competitive rates, if compensation of the CEO was based onassessments of competitive rates, with whom the comparison was made, thenature of, and the basis for, selecting the group with which the comparisonwas made and at what level in the group the compensation was placed.Disclose if different competitive standards were used for different componentsof the CEO’s compensation; and

(c) the relationship of your company’s performance to the CEO’scompensation for the most recently completed financial year, describingeach measure of your company’s performance, whether quantitative orqualitative, on which the CEO’s compensation was based and the weightassigned to each measure, for example, percentage ranges.

9.4 Name each member of your company’s compensation committee (or other boardcommittee performing equivalent functions or, in the absence of any suchcommittee, the entire board of directors). If the board of directors modified orrejected in any material way any action or recommendation by the committee withrespect to decisions in the most recently completed financial year, the reportshould indicate this fact, explain the reasons for the board’s action and include thenames of all of the members of the board.

9.5 If a compensation committee member dissents concerning the content of thereport, the report must identify the dissenting member and the reasons providedto the committee for the dissent.

9.6 Disclosure of target levels with respect to specific quantitative or qualitativeperformance-related factors considered by the committee (or board), or any factorsor criteria involving confidential information is not required.

9.7 If compensation of executive officers is determined by different board committees,a joint report may be presented indicating the separate committee’s responsibilitiesand members of each committee or alternatively separate reports may beprepared for each committee.

Item 10 Performance Graph

10.1 If any compensation is reported in response to Items 2 to 6 for the most recentlycompleted financial year, immediately after Item 9, provide a line graph called“Performance Graph” comparing:

(a) the yearly percentage change in your company’s cumulative totalshareholder return on each class or series of equity securities that arepublicly traded, as measured in accordance with section 10.2; with:

(b) the cumulative total return of a broad equity market index assumingreinvestment of dividends, that includes issuers whose securities are tradedon the same exchange or are of comparable market capitalization, providedthat, if your company is within the S&P/TSX Composite Index, you must usethe total return index value of the S&P/TSX Composite Index.




10.2 The yearly percentage change in your company’s cumulative total shareholderreturn on a class or series of securities must be measured by dividing:

(a) the sum of:

(i) the cumulative amount of dividends for the measurement period,assuming dividend reinvestment; and

(ii) the difference between the price for the securities of the class orseries at the end and the beginning of the measurement period; by

(b) the price for the securities of the class or series at the beginning of themeasurement period.

At the measurement point, which is the beginning of the measurement period, theclosing price must be converted into a fixed investment of $100 in your company’ssecurities (or in the securities represented by a given index), with cumulativereturns for each subsequent financial year measured as a change from thatinvestment.

10.3 In preparing the required graphic comparisons:

(a) use, to the extent feasible, comparable methods of presentation andassumptions for the total return calculations, provided that, if your companyconstructs its own peer group index under section 10.5(b), the samemethodology must be used in calculating both your company’s total returnand that of the peer group index;

(b) assume the reinvestment of dividends into additional securities of thesame class or series at the frequency with which dividends are paid on thesecurities during the applicable financial year; and

(c) each financial year should be plotted with points showing the cumulativetotal return as of that point. The value of the investment as of each pointplotted on a given return line is the number of securities held at that pointmultiplied by the then-prevailing security price.

10.4 You must present information for your company’s last five most recentlycompleted financial years, and may choose to graph a longer period but the $100measurement point remains the same. A period shorter than five years may beused if the class or series of securities forming the basis for the comparison hasbeen publicly traded for a shorter time period.

10.5 You also may elect to include in the graph a line charting the cumulative totalreturn, assuming reinvestment of dividends; of:

(a) a published industry or line-of-business index which is any index that isprepared by a party other than your company or its affiliate and is accessibleto your company’s securityholders, provided that, you may use an indexprepared by your company or its affiliate if such index is widely recognizedand used;

(b) peer issuer(s) selected in good faith. If you do not select your company’speer issuers on an industry or line-of-business basis, you must disclose thebasis for your selection; or




(c) issuer(s) with similar market capitalization(s), but only if you do not usea published industry or line-of-business index and do not believe you canreasonably identify a peer group. If you use this alternative, the graph mustbe accompanied by a statement of the reasons for this selection.

10.6 If you use peer issuer comparisons or comparisons with issuers with similarmarket capitalizations, the identity of those issuers must be disclosed and thereturns of each component issuer of the group must be weighted according to therespective issuer’s market capitalization at the beginning of each period for whicha return is indicated.

10.7 Any election to use an additional index under section 10.5 is considered to apply inrespect of all subsequent financial years unless abandoned by your company inaccordance with this section. To abandon the index, your company must have, inthe information circular or AIF for the financial year immediately preceding themost recently completed financial year:

(a) stated its intention to abandon the index;

(b) explained the reason(s) for this change; and

(c) compared your company’s total return with that of the elected additionalindex.

10.8 You may include comparisons using performance measures in addition to totalreturn, such as return on average common shareholders’ equity, so long as yourcompany’s compensation committee (or other board committee performingequivalent functions or in the absence of any such committee the entire board ofdirectors) describes the link between that measure and the level of executivecompensation in the report required by Item 9.

Item 11 Compensation of Directors

11.1 Disclose the following under the “Compensation of Directors” heading:

(a) any standard compensation arrangements, stating amounts, earned bydirectors of your company for their services as directors from your companyand its subsidiaries during the most recently completed financial year,including any additional amounts payable for committee participation orspecial assignments;

(b) any other arrangements, stating the amounts paid and the name of thedirector, under which directors were compensated for their services asdirectors from your company and its subsidiaries during the most recentlycompleted financial year; and

(c) any other arrangements, stating the amounts paid and the name of thedirector, under which directors of your company were compensated forservices as consultants or experts, by your company and its subsidiariesduring the most recently completed financial year.




11.2 If information required by section 11.1 is provided in response to another item ofthis Form, a cross-reference to where the information is provided satisfiessection 11.1.

Item 12 Unincorporated Issuers

12.1 Unincorporated issuers must report

(a) a description of and amount of fees or other compensation paid by theissuer to individuals acting as directors or trustees of the issuer for the mostrecently completed financial year; and

(b) a description of and amount of expenses reimbursed by the issuer tosuch individuals as directors or trustees during the most recently completedfinancial year.

12.2 The information required by this Item may be disclosed in the issuer’s annualfinancial statements instead.

Item 13 Venture Issuers

13.1 A venture issuer may omit the disclosure required by Items 5, 6, 8, 9 and 10. Aventure issuer must, in a narrative that accompanies the table required insection 4.1, disclose which grants of options or SARs result from repricing andexplain in reasonable detail the basis for the repricing.

Item 14 Issuers Reporting in the United States

14.1 Except as provided in section 14.2, SEC issuers may satisfy the requirements ofthis Form by providing the information required by Item 402 “ExecutiveCompensation” of Regulation S-K under the 1934 Act.

14.2 Section 14.1 is not available to an issuer that, as a foreign private issuer, satisfiesItem 402 of Regulation S-K by providing the information required by Items 6.B“Compensation” and 6.E.2 “Share Ownership” of Form 20-F under the 1934 Act.

Item 15 Repeal

15.1 This form is repealed on March 31, 2010.




FORM 51-102F6STATEMENT OF EXECUTIVE COMPENSATION

(in respect of financial years ending on or after December 31, 2008)

ITEM 1 – GENERAL PROVISIONS

1.1 Objective

All direct and indirect compensation provided to certain executive officers anddirectors for, or in connection with, services they have provided to the company ora subsidiary of the company must be disclosed in this form.

The objective of this disclosure is to communicate the compensation the board ofdirectors intended the company to pay, make payable, award, grant, give orotherwise provide to each NEO and director for the financial year. This disclosurewill provide insight into executive compensation as a key aspect of the overallstewardship and governance of the company and will help investors understandhow decisions about executive compensation are made.

A company’s executive compensation disclosure under this form must satisfy thisobjective.

1.2 Definitions

If a term is used in this form but is not defined in this section, refer tosubsection 1.1(1) of the Instrument or to National Instrument 14-101 Definitions.

In this form:

“CEO” means an individual who acted as chief executive officer of thecompany, or acted in a similar capacity, for any part of the most recentlycompleted financial year;

“CFO” means an individual who acted as chief financial officer of thecompany, or acted in a similar capacity, for any part of the most recentlycompleted financial year;

“closing market price” means the price at which the company’s securitywas last sold, on the applicable date:

(a) in the security’s principal marketplace in Canada; or

(b) if the security is not listed or quoted on a marketplace in Canada,in the security’s principal marketplace;

“company” includes other types of business organizations such aspartnerships, trusts and other unincorporated business entities;

“equity incentive plan” means an incentive plan, or portion of anincentive plan, under which awards are granted and that falls within thescope of Section 3870 of the Handbook;

“external management company” includes a subsidiary, affiliate orassociate of the external management company;

“grant date” means a date determined for financial statement reportingpurposes under Section 3870 of the Handbook;

“incentive plan” means any plan providing compensation that depends onachieving certain performance goals or similar conditions within a specifiedperiod;




“incentive plan award” means compensation awarded, earned, paid, orpayable under an incentive plan;

“NEO” or “named executive officer” means each of the followingindividuals:

(a) a CEO;

(b) a CFO;

(c) each of the three most highly compensated executive officers, orthe three most highly compensated individuals acting in a similarcapacity, other than the CEO and CFO, at the end of the most recentlycompleted financial year whose total compensation was, individually,more than $150,000, as determined in accordance with subsection 1.3(6),for that financial year; and

(d) each individual who would be an NEO under paragraph (c) but forthe fact that the individual was neither an executive officer of thecompany, nor acting in a similar capacity, at the end of that financialyear;

“NI 52-107” means National Instrument 52-107 Acceptable AccountingPrinciples, Auditing Standards and Reporting Currency;

“non-equity incentive plan” means an incentive plan or portion of anincentive plan that is not an equity incentive plan;

“option-based award” means an award under an equity incentive plan ofoptions, including, for greater certainty, share options, share appreciationrights, and similar instruments that have option-like features;

“plan” includes any plan, contract, authorization, or arrangement, whetheror not set out in any formal document, where cash, securities, similarinstruments or any other property may be received, whether for one or morepersons;

“replacement grant” means an option that a reasonable person wouldconsider to be granted in relation to a prior or potential cancellation of anoption;

“repricing” means, in relation to an option, adjusting or amending theexercise or base price of the option, but excludes any adjustment oramendment that equally affects all holders of the class of securitiesunderlying the option and occurs through the operation of a formula ormechanism in, or applicable to, the option;

“share-based award” means an award under an equity incentive plan ofequity-based instruments that do not have option-like features, including,for greater certainty, common shares, restricted shares, restricted shareunits, deferred share units, phantom shares, phantom share units, commonshare equivalent units, and stock.




1.3 Preparing the form

(1) All compensation to be included:

(a) When completing this form, the company must disclose all compensationpaid, payable, awarded, granted, given, or otherwise provided, directly orindirectly, by the company, or a subsidiary of the company, to each NEO anddirector, in any capacity, including, for greater certainty, all plan andnon-plan compensation, direct and indirect pay, remuneration, economic orfinancial award, reward, benefit, gift or perquisite paid, payable, awarded,granted, given, or otherwise provided to the NEO or director for servicesprovided, directly or indirectly, to the company or a subsidiary of thecompany.

(b) Despite paragraph (a), in respect of the Canada Pension Plan, similargovernment plans, and group life, health, hospitalization, medicalreimbursement and relocation plans that do not discriminate in scope, termsor operation and are generally available to all salaried employees, thecompany is not required to disclose as compensation:

(i) any contributions or premiums paid or payable by the company onbehalf of an NEO, or of a director, under these plans; and

(ii) any cash, securities, similar instruments or any other propertyreceived by an NEO, or by a director, under these plans.

(c) For greater certainty, the plans described in paragraph (b) includeplans that provide for such benefits after retirement.

(d) If an item of compensation is not specifically mentioned or described inthis form, it is to be disclosed in column (h) (“All other compensation”) of thesummary compensation table in section 3.1.

(2) Departures from format

Although the required disclosure must be made in accordance with this form, thedisclosure may:

(a) omit a table, column of a table, or other prescribed information, if it doesnot apply; and

(b) add tables, columns, and other information, if necessary to satisfy theobjective in section 1.1.

(3) Information for full financial year

If an NEO acted in that capacity for the company during part of the financial yearfor which disclosure is required in the summary compensation table, providedetails of all of the compensation that the NEO received from the company forthat financial year. This includes compensation the NEO earned in any otherposition with the company during the financial year.

Do not annualize compensation in a table for any part of a year when an NEO wasnot in the service of the company. Annualized compensation may be disclosed in afootnote.




(4) External management companies

(a) If one or more individuals acting as an NEO of the company are notemployees of the company, disclose the names of those individuals.

(b) If an external management company employs or retains one or moreindividuals acting as NEOs or directors of the company and the company hasentered into an understanding, arrangement or agreement with the externalmanagement company to provide executive management services to thecompany directly or indirectly, disclose any compensation that:

(i) the company paid directly to an individual employed, or retainedby the external management company, who is acting as an NEO ordirector of the company; and

(ii) the external management company paid to the individual that isattributable to the services they provided to the company directly orindirectly.

(c) If an external management company provides the company’s executivemanagement services and provides executive management services toanother company, disclose:

(i) the portion of the compensation paid to the individual acting as anNEO or director that the external management company attributes toservices the external management company provided to the company;or

(ii) the entire compensation the external management company paidto the individual acting as an NEO or director. If the managementcompany allocates the compensation paid to an NEO or director,disclose the basis or methodology used to allocate this compensation.

Commentary

An NEO may be employed by an external management company andprovide services to the company under an understanding, arrangementor agreement. In this case, references in this form to the CEO or CFO arereferences to the individuals who performed similar functions to that ofthe CEO or CFO. They are generally the same individuals who signedand filed annual and interim certificates to comply with MultilateralInstrument 52-109 Certification of Disclosure in Issuers’ Annual andInterim Filings.

(5) Director and NEO compensation

Disclose any compensation awarded to, earned by, paid to, or payable to eachdirector and NEO, in any capacity with respect to the company. Compensation todirectors and NEOs must include all compensation from the company and itssubsidiaries.

Disclose any compensation awarded to, earned by, paid to, or payable to, an NEO,or director, in any capacity with respect to the company, by another person orcompany.




(6) Determining if an individual is an NEO

For the purpose of calculating total compensation awarded to, earned by, paid to,or payable to an individual under paragraph (c) of the definition of NEO:

(a) use the total compensation that would be reported under column (i) ofthe summary compensation table required by section 3.1 for each executiveofficer, as if that executive officer were an NEO for the company’s mostrecently completed financial year; and

(b) exclude from the calculation:

(i) any compensation that would be reported under column (g) of thesummary compensation table required by section 3.1;

(ii) any incremental payments, payables, and benefits to an executiveofficer that are triggered by, or result from, a scenario listed insection 6.1 that occurred during the most recently completed financialyear; and

(iii) any cash compensation that relates to foreign assignments that isspecifically intended to offset the impact of a higher cost of living in theforeign location, and is not otherwise related to the duties the executiveofficer performs for the company.

Commentary

The $150,000 threshold in paragraph (c) of the definition of NEO only applieswhen determining who is an NEO in a company’s most recently completedfinancial year. If an individual is an NEO in the most recently completedfinancial year, disclosure of compensation in prior years must be provided ifotherwise required by this form even if total compensation in a prior year isless than $150,000 in that year.

(7) Compensation to associates

Disclose any awards, earnings, payments, or payables to an associate of an NEO,or of a director, as a result of compensation awarded to, earned by, paid to, orpayable to the NEO or the director, in any capacity with respect to the company.

(8) New reporting issuers

(a) Subject to paragraph (b) and subsection 3.1(1), disclose information inthe summary compensation table for the three most recently completedfinancial years since the company became a reporting issuer.

(b) Do not provide information for a completed financial year if thecompany was not a reporting issuer for any part of that financial year, unlessthe company became a reporting issuer as a result of a restructuringtransaction.

(c) If the company was not a reporting issuer at any time during the mostrecently completed financial year and the company is completing the formbecause it is preparing a prospectus, discuss all significant elements of thecompensation to be awarded to, earned by, paid to, or payable to NEOs of thecompany once it becomes a reporting issuer, to the extent this compensationhas been determined.




Commentary

1. Unless otherwise specified, information required to be disclosed underthis form may be prepared in accordance with the accounting principles thecompany uses to prepare its financial statements, as permitted by NI 52-107,or the Handbook.

2. The definition of “director” under securities legislation includes anindividual who acts in a capacity similar to that of a director.

ITEM 2 – COMPENSATION DISCUSSION AND ANALYSIS

2.1 Compensation discussion and analysis

(1) Describe and explain all significant elements of compensation awarded to,earned by, paid to, or payable to NEOs for the most recently completed financialyear. Include the following:

(a) the objectives of any compensation program or strategy;

(b) what the compensation program is designed to reward;

(c) each element of compensation;

(d) why the company chooses to pay each element;

(e) how the company determines the amount (and, where applicable, theformula) for each element; and

(f) how each element of compensation and the company’s decisions aboutthat element fit into the company’s overall compensation objectives andaffect decisions about other elements.

(2) If applicable, describe any new actions, decisions or policies that were madeafter the end of the most recently completed financial year that could affect areasonable person’s understanding of an NEO’s compensation for the mostrecently completed financial year.

(3) If applicable, clearly state the benchmark and explain its components,including the companies included in the benchmark group and the selectioncriteria.

(4) If applicable, disclose performance goals or similar conditions that are basedon objective, identifiable measures, such as the company’s share price or earningsper share. If performance goals or similar conditions are subjective, the companymay describe the performance goal or similar condition without providing specificmeasures.

The company is not required to disclose performance goals or similar conditions inrespect of specific quantitative or qualitative performance-related factors if areasonable person would consider that disclosing them would seriously prejudicethe company’s interests. Companies do not qualify for this exemption if they havepublicly disclosed the performance goals or similar conditions.

If the company does not disclose specific performance goals or similar conditions,state what percentage of the NEO’s total compensation relates to this undisclosedinformation and how difficult it could be for the NEO, or how likely it will be forthe company, to achieve the undisclosed performance goal or similar condition.

If the company discloses performance goals or similar conditions that arenon-GAAP financial measures, explain how the company calculates theseperformance goals or similar conditions from its financial statements.




Commentary

1. The information disclosed under section 2.1 will depend on the facts.Provide enough analysis to allow a reasonable person, applying reasonableeffort, to understand the disclosure elsewhere in this form. Describe thesignificant principles underlying policies and explain the decisions relatingto compensation provided to an NEO. Disclosure that merely describes theprocess for determining compensation or compensation already awarded,earned, paid, or payable is not adequate. The information contained in thissection should give readers a sense of how compensation is tied to the NEO’sperformance. Avoid boilerplate language.

2. If the company’s process for determining executive compensation is verysimple, for example, the company relies solely on board discussion withoutany formal objectives, criteria and analysis, then make this clear in thediscussion.

3. The following are examples of items that will usually be significantelements of disclosure concerning compensation:

• contractual or non-contractual arrangements, plans, process changes orany other matters that might cause the amounts disclosed for the mostrecently completed financial year to be misleading if used as an indicatorof expected compensation levels in future periods;

• the process for determining perquisites and personal benefits;

• policies and decisions about the adjustment or recovery of awards,earnings, payments, or payables if the performance goal or similarcondition on which they are based are restated or adjusted to reduce theaward, earning, payment, or payable;

• the basis for selecting events that trigger payment for any arrangementthat provides for payment at, following or in connection with anytermination or change of control;

• whether the company used any benchmarking in determiningcompensation or any element of compensation;

• any waiver or change to any specified performance goal or similarcondition to payout for any amount, including whether the waiver orchange applied to one or more specified NEOs or to all compensationsubject to the performance goal or similar condition;

• the role of executive officers in determining executive compensation; and

• performance goals or similar conditions in respect of specific quantitativeor qualitative performance-related factors for NEOs.




2.2 Performance graph

(a) This section does not apply to:

(i) venture issuers;

(ii) companies that have distributed only debt securities ornon-convertible, non-participating preferred securities to the public;and

(iii) companies that were not reporting issuers in any jurisdiction inCanada for at least 12 calendar months before the end of their mostrecently completed financial year, other than companies that becamenew reporting issuers as a result of a restructuring transaction.

(b) Provide a line graph showing the company’s cumulative total shareholderreturn over the five most recently completed financial years. Assumethat $100 was invested on the first day of the five-year period. If thecompany has been a reporting issuer for less than five years, use the periodthat the company has been a reporting issuer.

Compare this to the cumulative total return of at least one broad equity marketindex that, to a reasonable person, would be an appropriate reference point for thecompany’s return. If the company is included in the S&P/TSX Composite TotalReturn Index, use that index. In all cases, assume that dividends are reinvested.

Discuss how the trend shown by this graph compares to the trend in thecompany’s compensation to executive officers reported under this form over thesame period.

Commentary

For section 2.2, companies may also include other relevant performance goals orsimilar conditions.

2.3 Option-based awards

Describe the process the company uses to grant option-based awards to executiveofficers. Include the role of the compensation committee and executive officers insetting or amending any equity incentive plan under which an option-basedaward is granted. State whether previous grants of option-based awards aretaken into account when considering new grants.




ITEM 3 – SUMMARY COMPENSATION TABLE

3.1 Summary compensation table

(1) For each NEO in the most recently completed financial year, complete thistable for each of the company’s three most recently completed financial years thatend on or after December 31, 2008.

Commentary

Under subsection (1), a company is not required to disclose comparative perioddisclosure in accordance with the requirements of either Form 51-102F6 Statementof Executive Compensation, which came into force on March 30, 2004, as amended,or this form, in respect of a financial year ending before December 31, 2008.

(2) In column (c), include the dollar value of cash and non-cash base salary anNEO earned during a financial year covered in the table (a covered financialyear). If the company cannot calculate the amount of salary earned in a financialyear, disclose this in a footnote, along with the reason why it cannot bedetermined. Restate the salary figure the next time the company prepares thisform, and explain what portion of the restated figure represents an amount thatthe company could not previously calculate.

(3) In column (d), disclose the dollar amount based on the grant date fair value ofthe award for a covered financial year.

A B

A

Non-equity incentive

plan compensation

($)

(f)

Name and

principal

position

(a)

Year

(b)

Salary

($)

(c)

Share-

based

awards

(d)

Option-

based

awards

($)

(e)

Annual

incentive

plans

(f1)

Long-

term

incentive

plans

(f2)

Pension

value

($)

(g)

All other

compensation

($)

(h)

Total

compensation

($)

(i)

CEO

____

____

CFO

____

____

A

____

____

B

____

____

C

____

____




(4) In column (e), disclose the dollar amount based on the grant date fair value ofthe award for a covered financial year. Include option-based awards both with orwithout tandem share appreciation rights.

(5) For an award disclosed in column (d) or (e), in a footnote to the table or in anarrative after the table:

(a) if the grant date fair value is different from the fair value determined inaccordance with Section 3870 of the Handbook (accounting fair value), statethe amount of the difference and explain the difference; and

(b) describe the methodology used to calculate the grant date fair value,disclose the key assumptions and estimates used for each calculation, andexplain why the company chose that methodology.

Commentary

1. This commentary applies to subsections (3), (4) and (5).

2. The value disclosed in columns (d) and (e) of the summary compensationtable should reflect what the board of directors intended to award or pay ascompensation (grant date fair value) as set out in comment 3, below.

3. While compensation practices vary, there are generally two approachesthat boards of directors use when setting compensation. A board of directorsmay decide the value in securities of the company it intends to award or payas compensation. Alternatively, a board of directors may decide the portion ofthe potential ownership of the company it intends to transfer as compensation.A fair value ascribed to the award will normally result from these approaches.

A company may calculate this value either in accordance with a valuationmethodology identified in Section 3870 of the Handbook or in accordancewith another methodology set out in comment 5 below.

4. In some cases, the grant date fair value disclosed in columns (d) and (e)may differ from the accounting fair value. For financial statement purposes,the accounting fair value amount is amortized over the service period toobtain an accounting cost (accounting compensation expense), adjusted atyear end as required.

5. While the most commonly used methodologies for calculating the value ofmost types of awards are the Black-Scholes-Merton model and the binomiallattice model, companies may choose to use another valuation methodology ifit produces a more meaningful and reasonable estimate of fair value.

6. The summary compensation table requires disclosure of an amount evenif the accounting compensation expense is zero. The amount disclosed in thetable should reflect the grant date fair value following the principlesdescribed under comments 2 and 3, above.

7. Column (d) includes common shares, restricted shares, restricted shareunits, deferred share units, phantom shares, phantom share units, commonshare equivalent units, stock, and similar instruments that do not haveoption-like features.




(6) In column (e), include the incremental fair value if, at any time during thecovered financial year, the company has adjusted, amended, cancelled, replacedor significantly modified the exercise price of options previously awarded to,earned by, paid to, or payable to, an NEO. The repricing or modification date mustbe determined in accordance with section 3870 of the Handbook. The methodologyused to calculate the incremental fair value must be the same methodology usedto calculate the initial grant.

This requirement does not apply to any repricing that equally affects all holders ofthe class of securities underlying the options and that occurs through a pre-existing formula or mechanism in the plan or award that results in the periodicadjustment of the option exercise or base price, an antidilution provision in a planor award, or a recapitalization or similar transaction.

(7) Include a footnote to the table quantifying the incremental fair value of anyadjusted, amended, cancelled, replaced or significantly modified options that areincluded in the table.

(8) In column (f), include the dollar value of all amounts earned for servicesperformed during the covered financial year that are related to awards undernon-equity incentive plans and all earnings on any such outstanding awards.

(a) If the relevant performance goal or similar condition was satisfiedduring a covered financial year (including for a single year in a plan with amulti-year performance goal or similar condition), report the amountsearned for that financial year, even if they are payable at a later date. Thecompany is not required to report these amounts again in the summarycompensation table when they are actually paid to an NEO.

(b) Include a footnote describing and quantifying all amounts earned onnon-equity incentive plan compensation, whether they were paid during thefinancial year, were payable but deferred at the election of an NEO, or arepayable by their terms at a later date.

(c) Include any discretionary cash awards, earnings, payments, or payablesthat were not based on pre-determined performance goals or similarconditions that were communicated to an NEO. Report any performance-basedplan awards that include pre-determined performance goals or similarconditions in column (f).

(d) In column (f1), include annual non-equity incentive plan compensation,such as bonuses and discretionary amounts. For column (f1), annualnon-equity incentive plan compensation relates only to a single financialyear. In column (f 2), include all non-equity incentive plan compensationrelated to a period longer than one year.

(9) In column (g), include all compensation relating to defined benefit or definedcontribution plans. These include service costs and other compensatory itemssuch as plan changes and earnings that are different from the estimated earningsfor defined benefit plans and above-market earnings for defined contributionplans.

This disclosure relates to all plans that provide for the payment of pension planbenefits. Use the same amounts included in column (e) of the defined benefit plantable required by Item 5 for the covered financial year and the amounts includedin column (c) of the defined contribution plan table as required by Item 5 for thecovered financial year.




(10) In column (h), include all other compensation not reported in any othercolumn of this table. Column (h) must include, but is not limited to:

(a) perquisites, including property or other personal benefits provided toan NEO that are not generally available to all employees, and that inaggregate are worth $50,000 or more, or are worth 10% or more of an NEO’stotal salary for the financial year. Value these items on the basis of theaggregate incremental cost to the company and its subsidiaries. Describe ina footnote the methodology used for computing the aggregate incrementalcost to the company.

State the type and amount of each perquisite the value of which exceeds 25%of the total value of perquisites reported for an NEO in a footnote to thetable. Provide the footnote information for the most recently completedfinancial year only;

(b) other post-retirement benefits such as health insurance or life insuranceafter retirement;

(c) all ‘gross-ups’ or other amounts reimbursed during the covered financialyear for the payment of taxes;

(d) the incremental payments, payables, and benefits to an NEO that aretriggered by, or result from, a scenario listed in section 6.1 that occurredbefore the end of the covered financial year;

(e) the dollar value of any insurance premiums paid or payable by, or onbehalf of, the company during the covered financial year for personalinsurance for an NEO if the estate of the NEO is the beneficiary;

(f) the dollar value of any dividends or other earnings paid or payable onshare-based or option-based awards that were not factored into the grantdate fair value required to be reported in columns (d) and (e);

(g) any compensation cost for any security that the NEO bought from thecompany or its subsidiaries at a discount from the market price of thesecurity (through deferral of salary, bonus or otherwise). Calculate this costat the date of purchase and in accordance with Section 3870 of theHandbook; and

(h) above-market or preferential earnings on compensation that is deferredon a basis that is not tax exempt other than for defined contribution planscovered in the defined contribution plan table in Item 5. Above-market orpreferential applies to non-registered plans and means a rate greater thanthe rate ordinarily paid by the company or its subsidiary on securities orother obligations having the same or similar features issued to third parties.

Commentary

1. Generally, there will be no incremental payments, payables, and benefitsthat are triggered by, or result from, a scenario described in section 6.1 thatoccurred before the end of a covered financial year for compensation that hasbeen reported in the summary compensation table for the most recentlycompleted financial year or for a financial year before the most recentlycompleted financial year.




If the vesting or payout of the previously reported compensation is accelerated,or a performance goal or similar condition in respect of the previouslyreported compensation is waived, as a result of a scenario described insection 6.1, the incremental payments, payables, and benefits should includethe value of the accelerated benefit or of the waiver of the performance goal orsimilar condition.

2. Generally, an item is not a perquisite if it is integrally and directly relatedto the performance of an executive officer’s duties. If something is necessaryfor a person to do his or her job, it is integrally and directly related to the joband is not a perquisite, even if it also provides some amount of personalbenefit.

If the company concludes that an item is not integrally and directly related toperforming the job, it may still be a perquisite if the item provides an NEOwith any direct or indirect personal benefit. If it does provide a personalbenefit, the item is a perquisite, whether or not it is provided for a businessreason or for the company’s convenience, unless it is generally available on anon-discriminatory basis to all employees.

Companies must conduct their own analysis of whether a particular item is aperquisite. The following are examples of things that are often consideredperquisites or personal benefits. This list is not exhaustive:• Cars, car lease and car allowance;• Corporate aircraft or personal travel financed by the company;• Jewellery;• Clothing;• Artwork;• Housekeeping services;• Club membership;• Theatre tickets;• Financial assistance to provide education to children of executive officers;• Parking;• Personal financial or tax advice;• Security at personal residence or during personal travel; and• Reimbursements of taxes owed with respect to perquisites or other

personal benefit.

(11) In column (i), include the dollar value of total compensation for the coveredfinancial year. For each NEO, this is the sum of the amounts reported incolumns (c) through (h).

(12) Any deferred amounts must be included in the appropriate column for thecovered financial year in which they are earned.

(13) If an NEO elected to exchange any compensation awarded to, earned by,paid to, or payable to the NEO in a covered financial year under a program thatallows the NEO to receive awards, earnings, payments, or payables in anotherform, the compensation the NEO elected to exchange must be reported ascompensation in the column appropriate for the form of compensation exchanged:Do not report it in the form in which it was or will be received by the NEO. State ina footnote the form of awards, earnings, payments, or payables substituted for thecompensation the NEO elected to exchange.




3.2 Narrative discussion

Describe and explain any significant factors necessary to understand theinformation disclosed in the summary compensation table required by section 3.1.

Commentary

The significant factors described in section 3.2 will vary depending on thecircumstances of each award but may include:

• the significant terms of each NEO’s employment agreement or arrangement;

• any repricing or other significant changes to the terms of any share-basedor option-based award program during the most recently completedfinancial year; and

• the significant terms of any award reported in the summary compensationtable, including a general description of the formula or criterion to beapplied in determining the amounts payable and the vesting schedule.For example, if dividends will be paid on shares, state this, the applicabledividend rate and whether that rate is preferential.

3.3 Currencies

Report amounts in this form using the same currency that the company uses in itsfinancial statements. If compensation awarded to, earned by, paid to, or payableto an NEO was in a currency other than the reporting currency, state in a footnotethe currency in which compensation was awarded, earned, paid, or payable,disclose the translation rate and describe the methodology used to translate thecompensation into the reporting currency.

3.4 Officers who also act as directors

If an NEO is also a director who receives compensation for services as a director,include that compensation in the summary compensation table and include afootnote explaining which amounts relate to the director role. Do not providedisclosure for that NEO under Item 7.




ITEM 4 – INCENTIVE PLAN AWARDS

4.1 Outstanding share-based awards and option-based awards

(1) Complete this table for each NEO for all awards outstanding at the end of themost recently completed financial year. This includes awards granted before themost recently completed financial year. For all awards in this table, disclose theawards that have been transferred at other than fair market value.

Option-based Awards Share-based Awards Name

(a)

Number of

securities

underlying

unexercised

options

(#)

(b)

Option

exercise

price

($)

(c)

Option

expiration

date

(d)

Value of

unexercised

in-the-money

options

($)

(e)

Number of

shares or

units of

shares that

have not

vested

(#)

(f)

Market or

payout value

of share-

based awards

that have not

vested

($)

(g) CEO

CFO

A

B

C

A B

(2) In column (b), for each award, disclose the number of securities underlyingunexercised options.

(3) In column (c), disclose the exercise or base price for each option under eachaward reported in column (b).

(4) In column (d), disclose the expiration date for each option under each awardreported in column (b).

(5) In column (e), disclose the aggregate dollar amount of in-the-moneyunexercised options held at the end of the year. Calculate this amount based onthe difference between the market value of the securities underlying theinstruments at the end of the year, and the exercise or base price of the option.

(6) In column (f), disclose the total number of shares or units that have notvested.

(7) In column (g), disclose the aggregate market value or payout value ofshare-based awards that have not vested.

If the share-based award provides only for a single payout on vesting, calculatethis value based on that payout.




If the share-based award provides for different payouts depending on theachievement of different performance goals or similar conditions, calculate thisvalue based on the minimum payout. However, if the NEO achieved a performancegoal or similar condition in a financial year covered by the share-based award thaton vesting could provide for a payout greater than the minimum payout, calculatethis value based on the payout expected as a result of the NEO achieving thisperformance goal or similar condition.

4.2 Incentive plan awards – value vested or earned during the year

(1) Complete this table for each NEO for the most recently completed financialyear.

Name

(a)

Option-based awards -

Value vested during the

year

($)

(b)

Share-based awards - Value

vested during the year

($)

(c)

Non-equity incentive plan

compensation - Value

earned during the year

($)

(d) CEO

CFO

A

B

C

A

(2) In column (b), disclose the aggregate dollar value that would have beenrealized if the options under the option-based award had been exercised on thevesting date. Compute the dollar value that would have been realized bydetermining the difference between the market price of the underlying securitiesat exercise and the exercise or base price of the options under the option-basedaward on the vesting date. Do not include the value of any related payment orother consideration provided (or to be provided) by the company to or on behalf ofan NEO.

(3) In column (c), disclose the aggregate dollar value realized upon vesting ofshare-based awards. Compute the dollar value realized by multiplying thenumber of shares or units by the market value of the underlying shares on thevesting date. For any amount realized upon vesting for which receipt has beendeferred, include a footnote that states the amount and the terms of the deferral.





Describe and explain the significant terms of all plan-based awards, includingnon-equity incentive plan awards, issued or vested, or under which options havebeen exercised, during the year, or outstanding at the year end, to the extent notalready discussed under sections 2.1, 2.3 and 3.2. The company may aggregateinformation for different awards, if separate disclosure of each award is notnecessary to communicate their significant terms.

CommentaryThe items included in the narrative required by section 4.3 will varydepending on the terms of each plan, but may include:• the number of securities underlying each award or received on vesting or

exercise;• general descriptions of formulae or criteria that are used to determine

amounts payable;• exercise prices and expiry dates;• dividend rates on share-based awards;• whether awards are vested or unvested;• performance goals or similar conditions, or other significant conditions;• information on estimated future payouts for non-equity incentive plan

awards (performance goals or similar conditions and maximum amounts);and

• the closing market price on the grant date, if the exercise or base price isless than the closing market price of the underlying security on the grantdate.




ITEM 5 – PENSION PLAN BENEFITS

5.1 Defined benefit plans table

(1) Complete this table for all pension plans that provide for payments orbenefits at, following, or in connection with retirement, excluding definedcontribution plans. For all disclosure in this table, use the same assumptions andmethods used for financial statement reporting purposes under the accountingprinciples used to prepare the company’s financial statements, as permittedby NI 52-107.

A B

A

Annual

benefits

payable

($)

(c)

Name

(a)

Number

of years

credited

service

(#)

(b)

At

year

end

(c1)

At

age

65

(c2)

Accrued

obligation

at start of

year

($)

(d)

Compensatory

change

($)

(e)

Non-

compensatory

change

($)

(f)

Accrued

obligation

at year end

($)

(g)

CEO

CFO

A

B

C

(2) In columns (b) and (c), the disclosure must be as of the end of the company’smost recently completed financial year. In columns (d) through (g), the disclosuremust be as of the plan measurement date used in the company’s audited financialstatements for the most recently completed financial year.

(3) In column (b), disclose the number of years of service credited to an NEOunder the plan. If the number of years of credited service in any plan is differentfrom the NEO’s number of actual years of service with the company, include afootnote that states the amount of the difference and any resulting benefitaugmentation, such as the number of additional years the NEO received.




(4) In column (c), disclose:

(a) the annual lifetime benefit payable at the end of the most recentlycompleted financial year in column (c1) based on years of credited servicereported in column (b) and actual pensionable earnings as at the end of themost recently completed financial year; and

(b) the annual lifetime benefit payable at age 65 in column (c2) based onyears of credited service as of age 65 and actual pensionable earningsthrough the end of the most recently completed financial year, as percolumn (c1).

(5) In column (d), disclose the accrued obligation at the start of the most recentlycompleted financial year.

(6) In column (e), disclose the compensatory change in the accrued obligation forthe most recently completed financial year. This includes service cost net ofemployee contributions plus plan changes and differences between actual andestimated earnings, and any additional changes that have retroactive impact,including, for greater certainty, a change in valuation assumptions as a consequenceof an amendment to benefit terms.

Disclose the valuation method and all significant assumptions the companyapplied in quantifying the accrued obligation at the end of the most recentlycompleted financial year. The company may satisfy all or part of this disclosure byreferring to the disclosure of assumptions in its financial statements, footnotes tothe financial statements or discussion in its management’s discussion andanalysis.

(7) In column (f), disclose the non-compensatory changes in the accruedobligation for the company’s most recently completed financial year. Include allitems that are not compensatory, such as changes in assumptions other thanthose already included in column (e) because they were made as a consequence ofan amendment to benefit terms, employee contributions and interest on theaccrued obligation at the start of the year.

(8) In column (g), disclose the accrued obligation at the end of the most recentlycompleted financial year.




5.2 Defined contribution plans table

(1) Complete this table for all pension plans that provide for payments orbenefits at, following or in connection with retirement, excluding defined benefitplans. For all disclosure in this table, use the same assumptions and methodsused for financial statement reporting purposes under the accounting principlesused to prepare the company’s financial statements, as permitted by NI 52-107.

Name

(a)

Accumulated value at

start of year

($)

(b)

Compensatory

($)

(c)

Non-compensatory

($)

(d)

Accumulated value

at year end

($)

(e) CEO

CFO

A

B

C

A

(2) In column (c), disclose the employer contribution and above-market orpreferential earnings credited on employer and employee contributions.Above-market or preferential earnings applies to non-registered plans and meansa rate greater than the rate ordinarily paid by the company or its subsidiary onsecurities or other obligations having the same or similar features issued to thirdparties.

(3) In column (d), disclose the non-compensatory amount, including employeecontributions and regular investment earnings on employer and employeecontributions. Regular investment earnings means all investment earnings inregistered defined contribution plans and earnings that are not above market orpreferential in other defined contribution plans.

(4) In column (e), disclose the accumulated value at the end of the most recentlycompleted financial year.

Commentary

For pension plans that provide the maximum of: (i) the value of a definedbenefit pension; and (ii) the accumulated value of a defined contributionpension, companies should disclose the global value of the pension plan in thedefined benefit plans table under section 5.1.

For pension plans that provide the sum of a defined benefit component and adefined contribution component, companies should disclose the respectivecomponents of the pension plan. The defined benefit component should bedisclosed in the defined benefit plans table under section 5.1 and the definedcontribution component should be disclosed in the defined contribution planstable under section 5.2.





Describe and explain for each retirement plan in which an NEO participates, anysignificant factors necessary to understand the information disclosed in thedefined benefit plan table in section 5.1 and the defined contribution plan table insection 5.2.

Commentary

Significant factors described in the narrative required by section 5.3 will vary, butmay include:

• the significant terms and conditions of payments and benefits available underthe plan, including the plan’s normal and early retirement payment, benefitformula, contribution formula, calculation of interest credited under thedefined contribution plan and eligibility standards;

• provisions for early retirement, if applicable, including the name of the NEOand the plan, the early retirement payment and benefit formula and eligibilitystandards. Early retirement means retirement before the normal retirement ageas defined in the plan or otherwise available under the plan;

• the specific elements of compensation (e.g., salary, bonus) included in applyingthe payment and benefit formula. If a company provides this information,identify each element separately; and

• company policies on topics such as granting extra years of credited service,including an explanation of who these arrangements relate to and why they areconsidered appropriate.

5.4 Deferred compensation plans

Describe the significant terms of any deferred compensation plan relating to eachNEO, including:

(a) the types of compensation that can be deferred and any limitations onthe extent to which deferral is permitted (by percentage of compensation orotherwise);

(b) significant terms of payouts, withdrawals and other distributions; and

(c) measures for calculating interest or other earnings, how and whenthese measures may be changed, and whether an NEO or the company chosethese measures. Quantify these measures wherever possible.

ITEM 6 – TERMINATION AND CHANGE OF CONTROL BENEFITS

6.1 Termination and change of control benefits

(1) For each contract, agreement, plan or arrangement that provides forpayments to an NEO at, following or in connection with any termination (whethervoluntary, involuntary or constructive), resignation, retirement, a change incontrol of the company or a change in an NEO’s responsibilities, describe, explain,and where appropriate, quantify the following items:

(a) the circumstances that trigger payments or the provision of otherbenefits, including perquisites and pension plan benefits;

(b) the estimated incremental payments, payables, and benefits that aretriggered by, or result from, each circumstance, including timing, durationand who provides the payments and benefits;




(c) how the payment and benefit levels are determined under the variouscircumstances that trigger payments or provision of benefits;

(d) any significant conditions or obligations that apply to receiving paymentsor benefits. This includes but is not limited to, non-compete, non-solicitation,non-disparagement or confidentiality agreements. Include the term of theseagreements and provisions for waiver or breach; and

(e) any other significant factors for each written contract, agreement, planor arrangement.

(2) Disclose the estimated incremental payments, payables, and benefits even ifit is uncertain what amounts might be paid in given circumstances under thevarious plans and arrangements, assuming that the triggering event took placeon the last business day of the company’s most recently completed financial year.For valuing share-based awards or option-based awards, use the closing marketprice of the company’s securities on that date.

If the company is unsure about the provision or amount of payments or benefits,make a reasonable estimate (or a reasonable estimate of the range of amounts)and disclose the significant assumptions underlying these estimates.

(3) Despite subsection (1), the company is not required to disclose the following:

(a) Perquisites and other personal benefits if the aggregate of thiscompensation is less than $50,000. State the individual perquisites andpersonal benefits as required by paragraph 3.1(10)(a).

(b) Information about possible termination scenarios for an NEO whoseemployment terminated in the past year. The company must only disclosethe consequences of the actual termination.

(c) Information in respect of a scenario described in subsection (1) if therewill be no incremental payments, payables, and benefits that are triggeredby, or result from, that scenario.

Commentary

1. Subsection (1) does not require the company to disclose notice oftermination without cause, or compensation in lieu thereof, which areimplied as a term of an employment contract under common law or civil law.

2. Item 6 applies to changes of control regardless of whether the change ofcontrol results in termination of employment.

3. Generally, there will be no incremental payments, payables, and benefitsthat are triggered by, or result from, a scenario described in subsection (1) forcompensation that has been reported in the summary compensation table forthe most recently completed financial year or for a financial year before themost recently completed financial year.

If the vesting or payout of the previously reported compensation is accelerated,or a performance goal or similar condition in respect of the previouslyreported compensation is waived, as a result of a scenario described insubsection (1), the incremental payments, payables, and benefits shouldinclude the value of the accelerated benefit or of the waiver of the performancegoal or similar condition.




ITEM 7 – DIRECTOR COMPENSATION

7.1 Director compensation table

(1) Complete this table for all amounts of compensation provided to the directorsfor the company’s most recently completed financial year.

A B

A

Name

(a)

Fees

earned

($)

(b)

Share-

based

awards

($)

(c)

Option-

based

awards

($)

(d)

Non-equity

incentive plan

compensation

($)

(e)

Pension

value

($)

(f)

All other

compensation

($)

(g)

Total

($)

(h) A

B

C

D

E

(2) All forms of compensation must be included in this table.

(3) Complete each column in the manner required for the corresponding columnin the summary compensation table in section 3.1, in accordance with therequirements of Item 3, as supplemented by the commentary to Item 3, except asfollows:

(a) In column (a), do not include a director who is also an NEO if his or hercompensation for service as a director is fully reflected in the summarycompensation table and elsewhere in this form. If an NEO is also a directorwho receives compensation for his or her services as a director, reflect thedirector compensation in the summary compensation table required bysection 3.1 and provide a footnote to this table indicating that the relevantdisclosure has been provided under section 3.4.

(b) In column (b), include all fees awarded, earned, paid, or payable in cashfor services as a director, including annual retainer fees, committee, chair,and meeting fees.

(c) In column (g), include all compensation paid, payable, awarded,granted, given, or otherwise provided, directly or indirectly, by the company,or a subsidiary of the company, to a director in any capacity, under any otherarrangement. This includes, for greater certainty, all plan and non-plancompensation, direct and indirect pay, remuneration, economic or financialaward, reward, benefit, gift or perquisite paid, payable, awarded, granted,given, or otherwise provided to the director for services provided, directly orindirectly, to the company or a subsidiary of the company. In a footnote tothe table, disclose these amounts and describe the nature of the servicesprovided by the director that are associated with these amounts.




(d) In column (g), include programs where the company agrees to makedonations to one or more charitable institutions in a director’s name, payablecurrently or upon a designated event such as the retirement or death of thedirector. Include a footnote to the table disclosing the total dollar amountpayable under the program.


Describe and explain any factors necessary to understand the director compensationdisclosed in section 7.1.

Commentary

Significant factors described in the narrative required by section 7.2 willvary, but may include:

• disclosure for each director who served in that capacity for any part of themost recently completed financial year;

• standard compensation arrangements, such as fees for retainer, committeeservice, service as chair of the board or a committee, and meetingattendance;

• any compensation arrangements for a director that are different from thestandard arrangements, including the name of the director and adescription of the terms of the arrangement; and

• any matters discussed in the compensation discussion and analysis thatdo not apply to directors in the same way that they apply to NEOs such aspractices for granting option-based awards.

7.3 Share-based awards, option-based awards and non-equity incentive plancompensation

Provide the same disclosure for directors that is required under Item 4 for NEOs.

ITEM 8 – COMPANIES REPORTING IN THE UNITED STATES

8.1 Companies reporting in the United States

(1) Except as provided in subsection (2), SEC issuers may satisfy the requirementsof this form by providing the information required by Item 402 ‘Executivecompensation’ of Regulation S-K under the 1934 Act.

(2) Subsection (1) does not apply to a company that, as a foreign private issuer,satisfies Item 402 of Regulation S-K by providing the information required byItems 6.B ‘Compensation’ and 6.E.2 ‘Share Ownership’ of Form 20-F under the1934 Act.

ITEM 9 – EFFECTIVE DATE AND TRANSITION

9.1 Effective date

(1) This form comes into force on December 31, 2008.

(2) This form applies to a company in respect of a financial year ending on orafter December 31, 2008.




9.2 Transition

(1) The form entitled Form 51-102F6 Statement of Executive Compensation,which came into force on March 30, 2004, as amended:

(a) does not apply to a company in respect of a financial year ending on orafter December 31, 2008; and

(b) for greater certainty, applies to a company that is required to prepareand file executive compensation disclosure because:

(i) the company is sending an information circular to a securityholderunder paragraph 9.1(2)(a) of National Instrument 51-102 ContinuousDisclosure Obligations, the information circular includes the disclosurerequired by Item 8 of Form 51-102F5, and the information circular is inrespect of a financial year ending before December 31, 2008; or

(ii) the company is filing an AIF that includes the disclosure requiredby Item 8 of Form 51-102F5, in accordance with Item 18 ofForm 51-102F2, and the AIF is in respect of a financial year endingbefore December 31, 2008.

(2) A company that is required to prepare and file executive compensationdisclosure for a reason set out in paragraph (1)(b) may satisfy that requirement bypreparing and filing the disclosure required by this form.

16 Apr 2004 SR 14/2004 s12; 10 Jne 2005 SR49/2005 s8; 13 Jan 2006 SR 149/2005 s8; 5 Jan2007 SR 115/2006 s4; 11 Jan 2008 SR 128/2007s5 and SR 129/2007 s5; 4 Apr 2008 SR 17/2008s12; 25 Jly 2008 SR 59/2008 s4; 24 Oct 2008 SR91/2008 s4; 2 Jan 2009 SR 125/2008 s2; 2 Oct2009 SR 81/2009 s10.




PART XXXVII[clause 2(kk)]

NATIONAL INSTRUMENT 52-107ACCEPTABLE ACCOUNTING PRINCIPLES,

AUDITING STANDARDS AND REPORTING CURRENCY



“accounting principles” mean a body of accounting principles that aregenerally accepted in a jurisdiction of Canada or a foreign jurisdiction andinclude, without limitation, Canadian GAAP, U.S. GAAP and InternationalFinancial Reporting Standards;

“acquisition statements” means the financial statements of an acquiredbusiness or a business to be acquired, or operating statements for an oil and gasproperty that is an acquired business or a business to be acquired, that arerequired to be filed under National Instrument 51-102 or that are included in aprospectus;

“auditing standards” mean a body of auditing standards that are generallyaccepted in a jurisdiction of Canada or a foreign jurisdiction and include, withoutlimitation, Canadian GAAS, U.S. GAAS and International Standards on Auditing;


“convertible security” means a security of an issuer that is convertible into, orcarries the right of the holder to acquire, or of the issuer to cause the acquisitionof, a security of the same issuer;

“credit support issuer” means an issuer of securities for which a creditsupporter has provided a guarantee;

“credit supporter” means a person or company that provides a guarantee forany of the payments to be made by an issuer of securities as stipulated in theterms of the securities or in an agreement governing rights of, or granting rightsto, holders of the securities;

“designated foreign issuer” means a foreign issuer:

(a) that does not have a class of securities registered under section 12 ofthe 1934 Act and is not required to file reports under section 15(d) ofthe 1934 Act;

(b) that is subject to foreign disclosure requirements in a designatedforeign jurisdiction; and

(c) for which the total number of equity securities owned, directly orindirectly, by residents of Canada does not exceed ten per cent, on afully-diluted basis, of the total number of equity securities of the issuer,calculated in accordance with sections 1.2 and 1.3;




“designated foreign jurisdiction” means Australia, France, Germany, HongKong, Italy, Japan, Mexico, the Netherlands, New Zealand, Singapore, SouthAfrica, Spain, Sweden, Switzerland or the United Kingdom of Great Britain andNorthern Ireland;

“exchangeable security” means a security of an issuer that is exchangeablefor, or carries the right of the holder to acquire, or of the issuer to cause theacquisition of, a security of another issuer;

“exchange-traded security” means a security that is listed on a recognizedexchange or is quoted on a recognized quotation and trade reporting system or islisted on an exchange or quoted on a quotation and trade reporting system thatis recognized for the purposes of National Instrument 21-101 MarketplaceOperation and National Instrument 23-101 Trading Rules;

“executive officer” means, for an issuer, an individual who is:




“foreign disclosure requirements” means the requirements to which aforeign issuer is subject concerning disclosure made to the public, tosecurityholders of the issuer, or to a foreign regulatory authority:

(a) relating to the foreign issuer and the trading in its securities; and

(b) that is made publicly available in the foreign jurisdiction under:

(i) the securities laws of the foreign jurisdiction in which theprincipal trading market of the foreign issuer is located; or

(ii) the rules of the marketplace that is the principal trading marketof the foreign issuer;

“foreign issuer” means an issuer, other than an investment fund, that isincorporated or organized under the laws of a foreign jurisdiction; unless:

(a) outstanding voting securities of the issuer carrying more than 50 percent of the votes for the election of directors are owned, directly orindirectly, by residents of Canada; and

(b) any of the following apply:

(i) the majority of the executive officers or directors of the issuer areresidents of Canada;

(ii) more than 50 per cent of the consolidated assets of the issuer arelocated in Canada; or

(iii) the business of the issuer is administered principally in Canada;




“foreign registrant” means a registrant that is incorporated or organized underthe laws of a foreign jurisdiction, except a registrant that satisfies the followingconditions:

(a) outstanding voting securities of the registrant carrying more than 50per cent of the votes for the election of directors are owned, directly orindirectly, by residents of Canada; and

(b) any of the following apply:

(i) the majority of the executive officers or directors of the registrantare residents of Canada;

(ii) more than 50 per cent of the consolidated assets of the registrantare located in Canada; or

(iii) the business of the registrant is administered principally inCanada;

“foreign regulatory authority” means a securities commission, exchange orother securities market regulatory authority in a designated foreign jurisdiction;

“inter-dealer bond broker” means a person or company that is approved by theInvestment Dealers Association under IDA By-Law No. 36 Inter-Dealer BondBrokerage Systems, as amended, and is subject to IDA By-Law No. 36 and IDARegulation 2100 Inter-Dealer Bond Brokerage Systems, as amended;

“issuer’s GAAP” means the accounting principles used to prepare an issuer’sfinancial statements, as permitted by this Instrument;


(a) an exchange;








“multiple convertible security” means a security of an issuer that isconvertible into; or exchangeable for, or carries the right of the holder to acquire,or of the issuer to cause the acquisition of, a convertible security, an exchangeablesecurity or another multiple convertible security;

“National Instrument 51-102” means National Instrument 51-102 ContinuousDisclosure Obligations;




“National Instrument 71-102” means National Instrument 71-102 ContinuousDisclosure and Other Exemptions Relating to Foreign Issuers;

“principal trading market” means the published market on which the largesttrading volume in the equity securities of the issuer occurred during the issuer’smost recently completed financial year that ended before the date the determinationis being made;

“public enterprise” means a public enterprise determined with reference to theHandbook;

“published market” means, for a class of securities, a marketplace on which thesecurities have traded that discloses, regularly in a publication of general andregular paid circulation or in a form that is broadly distributed by electronicmeans, the prices at which those securities have traded;




(b) in every other jurisdiction of Canada, an exchange recognized by thesecurities regulatory authority as an exchange, self-regulatory organizationor self-regulatory body;


(a) in every jurisdiction of Canada other than British Columbia, a quotationand trade reporting system recognized by the securities regulatory authorityunder securities legislation to carry on business as a quotation and tradereporting system; and


“SEC issuer” means an issuer that:



“SEC foreign issuer” means a foreign issuer that is also an SEC issuer;

“underlying security” means a security issued or transferred, or to be issued ortransferred, in accordance with the terms of a convertible security, an exchangeablesecurity or a multiple convertible security;

“U.S. GAAP” means generally accepted accounting principles in the UnitedStates of America that the SEC has identified as having substantial authoritativesupport, as supplemented by Regulation S-X and Regulation S-B under the 1934Act; and

“U.S. GAAS” means generally accepted auditing standards in the United Statesof America, as supplemented by the SEC’s rules on auditor independence.




1.2 Determination of Canadian Shareholders for Calculation of DesignatedForeign Issuer and Foreign Issuer

(1) For the purposes of paragraph (c) of the definition of “designated foreignissuer” and paragraph 5.1(c), a reference to equity securities owned, directly orindirectly, by residents of Canada; includes:

(a) the underlying securities that are equity securities of the foreign issuer;and

(b) the equity securities of the foreign issuer represented by an Americandepositary receipt or an American depositary share issued by a depositaryholding equity securities of the foreign issuer.

(2) For the purposes of paragraph (a) of the definition of “foreign issuer”,securities represented by American depositary receipts or American depositaryshares issued by a depositary holding voting securities of the foreign issuer mustbe included as outstanding in determining both the number of votes attached tosecurities owned, directly or indirectly, by residents of Canada and the number ofvotes attached to all of the issuer’s outstanding voting securities.

1.3 Timing for Calculation of Designated Foreign Issuer, Foreign Issuer andForeign Registrant – For the purposes of paragraph (c) of the definition of“designated foreign issuer”, paragraph (a) of the definition of “foreign issuer” andparagraph (a) of the definition of “foreign registrant”, the calculation is made:

(a) if the issuer has not completed one financial year, on the earlier of:

(i) the date that is 90 days before the date of its prospectus; and

(ii) the date that it became a reporting issuer; and

(b) for all other issuers and for registrants, on the first day of the mostrecent financial year or year-to-date interim period for which operatingresults are presented in the financial statements filed or included in theissuer’s prospectus.

1.4 Interpretation

(1) Interpretation of “prospectus” – For the purposes of this Instrument, areference to “prospectus” includes a preliminary prospectus, a prospectus, anamendment to a preliminary prospectus and an amendment to a prospectus.

(2) Interpretation of “included” – For the purposes of this Instrument, areference to information being “included in” another document means informationreproduced in the document or incorporated into the document by reference.




PART 2 APPLICATION

2.1 Application

(1) This Instrument does not apply to investment funds.

(2) This Instrument applies to:

(a) all annual and interim financial statements delivered by registrants tothe securities regulatory authority;

(b) all annual, interim and pro forma financial statements filed, or includedin a document that is filed, under National Instrument 51-102 or NationalInstrument 71-102;

(c) all annual, interim and pro forma financial statements included in aprospectus or a take-overbid circular filed, or included in a document that isfiled;

(d) any operating statements for an oil and gas property that is an acquiredbusiness or a business to be acquired, that are filed under NationalInstrument 51-102 or that are included in a prospectus or a take-over bidcircular filed, or included in a document that is filed;

(e) any other annual, interim or pro forma financial statement filed by areporting issuer; and

(f) financial information that is filed under National Instrument 51-102 orthat is included in a prospectus or a take-over bid circular filed, or includedin a document that is filed, that is:

(i) derived from a credit support issuer’s consolidated financialstatements; or

(ii) summarized financial information as to the assets, liabilities andresults of operations of a business relating to an acquisition that is, orwill be, an investment accounted for by the issuer using the equitymethod.

PART 3 GENERAL RULES

3.1 Acceptable Accounting Principles

(1) Financial statements, other than acquisition statements, must be preparedin accordance with Canadian GAAP as applicable to public enterprises.

(2) Financial statements must be prepared in accordance with the sameaccounting principles for all periods presented in the financial statements.

(3) The notes to the financial statements must identify the accounting principlesused to prepare the financial statements.

3.2 Acceptable Auditing Standards – Financial statements, other than acquisitionstatements, that are required by securities legislation to be audited must beaudited in accordance with Canadian GAAS and be accompanied by an auditor’sreport that:

(a) does not contain a reservation;

(b) identifies all financial periods presented for which the auditor hasissued an auditor’s report;




(c) refers to the former auditor’s reports on the comparative periods, if theissuer or registrant has changed its auditor and one or more of thecomparative periods presented in the financial statements were audited by adifferent auditor; and

(d) identifies the auditing standards used to conduct the audit and theaccounting principles used to prepare the financial statements.

3.3 Acceptable Auditors – An auditor’s report filed by an issuer or registrant mustbe prepared and signed by a person or company that is authorized to sign anauditor’s report by the laws of a jurisdiction of Canada or a foreign jurisdiction,and that meets the professional standards of that jurisdiction.

3.4 Measurement and Reporting Currencies

(1) The reporting currency must be disclosed on the face page of the financialstatements or in the notes to the financial statements unless the financialstatements are prepared in accordance with Canadian GAAP and the reportingcurrency is the Canadian dollar.

(2) The notes to the financial statements must disclose the measurementcurrency if it is different than the reporting currency.

3.5 Financial Information Derived from a Credit Support Issuer’sConsolidated Financial Statements – If a credit support issuer files, orincludes in a prospectus, financial information derived from the credit supportissuer’s consolidated financial statements:

(a) the credit support issuer’s consolidated financial statements must beprepared in accordance with Canadian GAAP as applicable to publicenterprises for all periods presented in the financial statements and in thecase of annual audited consolidated financial statements:

(i) be audited in accordance with Canadian GAAS; and

(ii) be accompanied by an auditor’s report that:

(A) does not contain a reservation; and

(B) is prepared and signed by a person or company that isauthorized to sign an auditor’s report by the laws of a jurisdictionof Canada or a foreign jurisdiction, and that meets the professionalstandards of that jurisdiction;

(b) the financial information must disclose that the credit support issuer’sconsolidated financial statements from which the financial information isderived were prepared in accordance with Canadian GAAP as applicable topublic enterprises; and

(c) the financial information must disclose the reporting currency for thefinancial information, and disclose the measurement currency if it isdifferent than the reporting currency.




PART 4 EXEMPTIONS FOR SEC ISSUERS

4.1 Acceptable Accounting Principles for SEC Issuers

(1) Despite subsections 3.1(1) and 3.1(2), financial statements of an SEC issuerthat are filed with or delivered to a securities regulatory authority or regulator,other than acquisition statements, may be prepared in accordance with U.S.GAAP provided that, if the SEC issuer previously filed or included in a prospectusfinancial statements prepared in accordance with Canadian GAAP, the SECissuer complies with the following:

(a) the notes to the first two sets of the issuer’s annual financial statementsafter the change from Canadian GAAP to U.S. GAAP and the notes to theissuer’s interim financial statements for interim periods during those twoyears:

(i) explain the material differences between Canadian GAAP asapplicable to public enterprises and U.S. GAAP that relate to recognition,measurement and presentation;

(ii) quantify the effect of material differences between CanadianGAAP as applicable to public enterprises and U.S. GAAP that relate torecognition, measurement and presentation, including a tabularreconciliation between net income reported in the financial statementsand net income computed in accordance with Canadian GAAP asapplicable to public enterprises; and

(iii) provide disclosure consistent with disclosure requirements ofCanadian GAAP as applicable to public enterprises to the extent notalready reflected in the financial statements;

(b) financial information for any comparative periods that were previouslyreported in accordance with Canadian GAAP are presented as follows:

(i) as previously reported in accordance with Canadian GAAP;

(ii) as restated and presented in accordance with U.S. GAAP; and

(iii) supported by an accompanying note that:

(A) explains the material differences between Canadian GAAPand U.S. GAAP that relate to recognition, measurement andpresentation; and

(B) quantifies the effect of material differences betweenCanadian GAAP and U.S. GAAP that relate to recognition,measurement and presentation, including a tabular reconciliationbetween net income as previously reported in the financialstatements in accordance with Canadian GAAP and net income asrestated and presented in accordance with U.S. GAAP; and

(c) if the SEC issuer has filed financial statements prepared in accordancewith Canadian GAAP for one or more interim periods of the current year,those interim financial statements are restated in accordance with U.S. GAAPand comply with paragraphs (a) and (b).




(2) The comparative information specified in subparagraph 4.1(1)(b)(i) may bepresented on the face of the balance sheet and statements of income and cashflows or in the note to the financial statements required bysubparagraph 4.1(1)(b)(iii).

4.2 Acceptable Auditing Standards for SEC Issuers – Despite section 3.2,financial statements of an SEC issuer that are filed with or delivered to asecurities regulatory authority or regulator, other than acquisition statements,that are required by securities legislation to be audited may be audited inaccordance with US GAAS if the financial statements are accompanied by anauditor’s report prepared in accordance with U.S. GAAS that:

(a) contains an unqualified opinion;

(b) identifies all financial periods presented for which the auditor hasissued an auditor’s report;

(c) refers to the former auditor’s reports on the comparative periods, if theissuer has changed its auditor and one or more of the comparative periodspresented in the financial statements were audited by a different auditor;and

(d) identifies the auditing standards used to conduct the audit and theaccounting principles used to prepare the financial statements.

PART 5 EXEMPTIONS FOR FOREIGN ISSUERS

5.1 Acceptable Accounting Principles for Foreign Issuers – Despitesubsection 3.1(1), financial statements of a foreign issuer that are filed with ordelivered to a securities regulatory authority or regulator, other than acquisitionstatements, may be prepared in accordance with:

(a) U.S. GAAP, if the issuer is an SEC foreign issuer;

(b) International Financial Reporting Standards;

(c) accounting principles that meet the disclosure requirements for foreignprivate issuers, as that term is defined for the purposes of the 1934 Act, if:

(i) the issuer is an SEC foreign issuer;

(ii) on the last day of the most recently completed financial year thetotal number of equity securities owned directly or indirectly byresidents of Canada does not exceed ten per cent, on a fully-dilutedbasis, of the total number of equity securities of the issuer; and

(ii) the financial statements include any reconciliation to U.S. GAAPrequired by the SEC;

(d) accounting principles that meet the foreign disclosure requirements ofthe designated foreign jurisdiction to which the issuer is subject, if the issueris a designated foreign issuer; or




(e) accounting principles that cover substantially the same core subjectmatter as Canadian GAAP, including recognition and measurement principlesand disclosure requirements, if the notes to the financial statements:

(i) explain the material differences between Canadian GAAP applicableto public enterprises and the accounting principles used that relate torecognition, measurement and presentation;

(ii) quantify the effect of material differences between CanadianGAAP applicable to public enterprises and the accounting principlesused that relate to recognition, measurement and presentation, includinga tabular reconciliation between net income reported in the issuer’sfinancial statements and net income computed in accordance withCanadian GAAP applicable to public enterprises; and

(iii) provide disclosure consistent with Canadian GAAP applicable topublic enterprises requirements to the extent not already reflected inthe financial statements.

5.2 Acceptable Auditing Standards for Foreign Issuers – Despite section 3.2,financial statements of a foreign issuer that are filed with or delivered to asecurities regulatory authority or regulator, other than acquisition statements,that are required by securities legislation to be audited may be audited inaccordance with:

(a) U.S. GAAS, if the auditor’s report:

(i) contains an unqualified opinion;

(ii) identifies all financial periods presented for which the auditor hasissued an auditor’s report;

(iii) refers to the former auditor’s reports on the comparative periods,if the issuer has changed its auditor and one or more of the comparativeperiods presented in the financial statements were audited by adifferent auditor; and

(iv) identifies the auditing standards used to conduct the audit andthe accounting principles used to prepare the financial statements;

(b) International Standards on Auditing, if the auditor’s report isaccompanied by a statement by the auditor that:

(i) describes any material differences in the form and content of theauditor’s report as compared to an auditor’s report prepared inaccordance with Canadian GAAS; and

(ii) indicates that an auditor’s report prepared in accordance withCanadian GAAS would not contain a reservation; or

(c) auditing standards that meet the foreign disclosure requirements of thedesignated foreign jurisdiction to which the issuer is subject, if the issuer is adesignated foreign issuer;

if the financial statements are accompanied by an auditor’s report prepared inaccordance with the same auditing standards used to audit the financialstatements and the auditor’s report identifies the auditing standards used toconduct the audit and the accounting principles used to prepare the financialstatements.




PART 6 REQUIREMENTS FOR ACQUISITION STATEMENTS

6.1 Acceptable Accounting Principles for Acquisition Statements

(1) Acquisition statements included in a business acquisition report or includedin a prospectus must be prepared in accordance with any of the followingaccounting principles:

(a) Canadian GAAP applicable to public enterprises;

(b) U.S. GAAP;

(c) International Financial Reporting Standards;

(d) accounting principles that meet the disclosure requirements for foreignprivate issuers, as that term is defined for the purposes of the 1934 Act, if:

(i) the issuer or the acquired business is an SEC foreign issuer;

(ii) on the last day of the most recently completed financial year thetotal number of equity securities owned directly or indirectly byresidents of Canada does not exceed ten per cent, on a fully-dilutedbasis, of the total number of equity securities of the SEC foreign issuer;and

(ii) the financial statements include any reconciliation to U.S. GAAPrequired by the SEC;

(e) accounting principles that meet the foreign disclosure requirements ofthe designated foreign jurisdiction to which the issuer or the acquiredbusiness is subject, if the issuer or the acquired business is a designatedforeign issuer; or

(f) accounting principles that cover substantially the same core subjectmatter as Canadian GAAP, including recognition and measurement principlesand disclosure requirements.

(2) Acquisition statements must be prepared in accordance with the sameaccounting principles for all periods presented.

(3) The notes to the acquisition statements must identify the accountingprinciples used to prepare the acquisition statements.

(4) If acquisition statements are prepared using accounting principles that aredifferent from the issuer’s GAAP, the acquisition statements for the most recentlycompleted financial year and interim period that are required to be filed must bereconciled to the issuer’s GAAP and the notes to the acquisition statements must:

(a) explain the material differences between the issuer’s GAAP and theaccounting principles used to prepare the acquisition statements that relateto recognition, measurement, and presentation;




(b) quantify the effect of material differences between the issuer’s GAAPand the accounting principles used to prepare the acquisition statementsthat relate to recognition, measurement and presentation, including atabular reconciliation between net income reported in the acquisitionstatements and net income computed in accordance with the issuer’s GAAP;and

(c) provide disclosure consistent with the issuer’s GAAP to the extent notalready reflected in the acquisition statements.

(5) Despite subsections (1) and (4), if the issuer is required to reconcile itsfinancial statements to Canadian GAAP, the acquisition statements for the mostrecently completed financial year and interim period that are required to be filedmust be:

(a) prepared in accordance with Canadian GAAP applicable to publicenterprises; or

(b) reconciled to Canadian GAAP applicable to public enterprises and thenotes to the acquisition statements must:

(i) explain the material differences between Canadian GAAP applicableto public enterprises and the accounting principles used to prepare theacquisition statements that relate to recognition, measurement, andpresentation;

(ii) quantify the effect of material differences between CanadianGAAP applicable to public enterprises and the accounting principlesused to prepare the acquisition statements that relate to recognition,measurement and presentation, including a tabular reconciliationbetween net income reported in the acquisition statements and netincome computed in accordance with Canadian GAAP applicable topublic enterprises; and

(iii) provide disclosure consistent with disclosure requirements ofCanadian GAAP applicable to public enterprises to the extent notalready reflected in the acquisition statements.

6.2 Acceptable Auditing Standards for Acquisition Statements

(1) Acquisition statements that are required by securities legislation to beaudited must be audited in accordance with:

(a) Canadian GAAS; or

(b) U.S. GAAS.




(2) Despite subsection (1), acquisition statements filed by or included in aprospectus of a foreign issuer may be audited in accordance with:

(a) International Standards on Auditing, if the auditor’s report isaccompanied by a statement by the auditor that:



(b) auditing standards that meet the foreign disclosure requirements of thedesignated foreign jurisdiction to which the issuer is subject, if the issuer is adesignated foreign issuer.

(3) Acquisition statements must be accompanied by an auditor’s report preparedin accordance with the same auditing standards used to audit the acquisitionstatements and the auditor’s report must identify the auditing standards used toconduct the audit and the accounting principles used to prepare the financialstatements.

(4) If acquisition statements are audited in accordance with paragraph (1)(a),the auditor’s report must not contain a reservation.

(5) If acquisition statements are audited in accordance with paragraph (1)(b),the auditor’s report must contain an unqualified opinion.

(6) Despite paragraph (2)(a) and subsections (4) and (5) an auditor’s report thataccompanies acquisition statements may contain a qualification of opinionrelating to inventory if:

(a) the issuer includes in the business acquisition report, prospectus orother document containing the acquisition statements, a balance sheet forthe business that is for a date that is subsequent to the date to which thequalification relates; and

(b) the balance sheet referred to in paragraph (a) is accompanied by anauditor’s report that does not contain a qualification of opinion relating toclosing inventory.

6.3 Financial Information for Acquisitions Accounted for by the IssuerUsing the Equity Method

(1) If an issuer files, or includes in a prospectus, summarized financialinformation as to the assets, liabilities and results of operations of a businessrelating to an acquisition that is, or will be, an investment accounted for by theissuer using the equity method, the financial information must:

(a) meet the requirements in section 6.1 if the term “acquisition statements”in that section is read as “summarized financial information as to the assets,liabilities and results of operations of a business relating to an acquisitionthat is, or will be, an investment accounted for by the issuer using the equitymethod”; and

(b) disclose the reporting currency for the financial information, anddisclose the measurement currency if it is different than the reportingcurrency.




(2) If the financial information referred to in subsection (1) is for any completedfinancial year, the financial information must:

(a) either:

(i) meet the requirements in section 6.2 if the term “acquisitionstatements” in that section is read as “summarized financial informationas to the assets, liabilities and results of operations of a businessrelating to an acquisition that is; or will be, an investment accountedfor by the issuer using the equity method”; or

(ii) be derived from financial statements that meet the requirementsin section 6.2 if the term “acquisition statements” in that section is readas “financial statements from which is derived summarized financialinformation as to the assets, liabilities and results of operations of abusiness relating to an acquisition that is, or will be, an investmentaccounted for by the issuer using the equity method”; and

(b) be audited, or derived from financial statements that are audited, by aperson or company that is authorized to sign an auditor’s report by the lawsof a jurisdiction of Canada or a foreign jurisdiction, and that meets theprofessional standards of that jurisdiction.

PART 7 PRO FORMA FINANCIAL STATEMENTS

7.1 Acceptable Accounting Principles for Pro Forma Financial Statements

(1) Pro forma financial statements must be prepared in accordance with theissuer’s GAAP.

(2) Despite subsection (1), if an issuer’s financial statements have been reconciledto Canadian GAAP under subsection 4.1(1) or paragraph 5.1(e), the issuer’s proforma financial statements must be prepared in accordance with, or reconciled to,Canadian GAAP applicable to public enterprises.

(3) Despite subsection (1), if an issuer’s financial statements have been preparedin accordance with the accounting principles referred to in paragraph 5.1(c) andthose financial statements are reconciled to U.S. GAAP, the pro forma financialstatements may be prepared in accordance with, or reconciled to, U.S. GAAP.

PART 8 EXEMPTIONS FOR FOREIGN REGISTRANTS

8.1 Acceptable Accounting Principles for Foreign Registrants – Despitesubsection 3.1(1), financial statements delivered by a foreign registrant may beprepared in accordance with:

(a) U.S. GAAP;

(b) International Financial Reporting Standards;

(c) accounting principles that meet the disclosure requirements of a foreignregulatory authority to which the registrant is subject, if it is a foreignregistrant incorporated or organized under the laws of that designatedforeign jurisdiction; or




(d) accounting principles that cover substantially the same core subjectmatter as Canadian GAAP, including recognition and measurement principlesand disclosure requirements, if the notes to the financial statements:

(i) explain the material differences between Canadian GAAP asapplicable to public enterprises and the accounting principles used thatrelate to recognition, measurement and presentation;

(ii) quantify the effect of material differences between CanadianGAAP as applicable to public enterprises and the accounting principlesused that relate to recognition, measurement, and presentation; and

(iii) provide disclosure consistent with disclosure requirements ofCanadian GAAP as applicable to public enterprises to the extent notalready reflected in the financial statements.

8.2 Acceptable Auditing Standards for Foreign Registrants – Despite section 3.2,financial statements delivered by a foreign registrant that are required bysecurities legislation to be audited may be audited in accordance with:

(a) U.S. GAAS if the auditor’s report contains an unqualified opinion;

(b) International Standards on Auditing, if the auditor’s report isaccompanied by a statement by the auditor that:



(c) auditing standards that meet the foreign disclosure requirements of thedesignated foreign jurisdiction to which the registrant is subject, if it is aforeign registrant incorporated or organized under the laws of that designatedforeign jurisdiction;

if the financial statements are accompanied by an auditor’s report prepared inaccordance with the same auditing standards used to audit the financialstatements and the auditor’s report identifies the auditing standards used toconduct the audit and the accounting principles used to prepare the financialstatements.

PART 9 EXEMPTIONS

9.1 Exemptions


(2) Despite subsection (1), in Ontario, only the regulator may grant anexemption.





9.2 Certain Exemptions Evidenced by Receipt

(1) Subject to subsections (2) and (3), without limiting the manner in which anexemption may be evidenced, an exemption from this Instrument as it pertains tofinancial statements or auditor’s reports included in a prospectus, may beevidenced by the issuance of a receipt for the prospectus or an amendment to theprospectus.

(2) A person or company must not rely on a receipt as evidence of an exemptionunless the person or company:

(a) sent to the regulator or securities regulatory authority, on or before thedate the preliminary prospectus or the amendment to the preliminaryprospectus or prospectus was filed, a letter or memorandum describing thematters relating to the exemption application, and indicating whyconsideration should be given to the granting of the exemption; or

(b) sent to the regulator or securities regulatory authority the letter ormemorandum referred to in paragraph (a) after the date of the preliminaryprospectus or the amendment to the preliminary prospectus or prospectushas been filed and receives a written acknowledgement from the securitiesregulatory authority or regulator that issuance of the receipt is evidence thatthe exemption is granted.

(3) A person or company must not rely on a receipt as evidence of an exemptionif the regulator or securities regulatory authority has before, or concurrently with,the issuance of the receipt for the prospectus, sent notice to the person or companythat the issuance of a receipt does not evidence the granting of the exemption.

(4) For the purpose of this section, a reference to a prospectus does not include apreliminary prospectus.


10.1 Effective Date – This Instrument comes into force on March 30, 2004.

16 Apr 2004 SR 14/2004 s12; 10 Jne 2005 SR49/2005 s9; 5 Jan 2007 SR 115/2006 s5; 11 Jan2008 SR 128/2007 s6.




PART XXXVIII[clause 2(ll)]

NATIONAL INSTRUMENT 71-102CONTINUOUS DISCLOSURE AND OTHER EXEMPTIONS

RELATING TO FOREIGN ISSUERS


1.1 Definitions and Interpretation – In this Instrument:

“AIF” means a completed Form 51-102F2 Annual Information Form or, in thecase of an SEC foreign issuer, a completed Form 51-102F2 or an annual report ortransition report under the 1934 Act on Form 10-K, Form 10-KSB, or Form 20-F;


“class” includes a series of a class;

“convertible security” means a security of an issuer that is convertible into, orcarries the right of the holder to acquire, or of the issuer to cause the acquisitionof, a security of the same issuer;

“designated foreign issuer” means a foreign reporting issuer:

(a) that does not have a class of securities registered under section 12 ofthe 1934 Act and is not required to file reports under section 15(d) ofthe 1934 Act;

(b) that is subject to foreign disclosure requirements in a designatedforeign jurisdiction; and

(c) for which the total number of equity securities owned, directly orindirectly, by residents of Canada does not exceed 10 per cent, on afully-diluted basis, of the total number of equity securities of the issuer,calculated in accordance with sections 1.2 and 1.3;

“designated foreign jurisdiction” means Australia, France, Germany, HongKong, Italy, Japan, Mexico, the Netherlands, New Zealand, Singapore, SouthAfrica, Spain, Sweden, Switzerland or the United Kingdom of Great Britain andNorthern Ireland;

“exchangeable security” means a security of an issuer that is exchangeable for,or carries the right of the holder to acquire, or of the issuer to cause the acquisitionof, a security of another issuer;

“exchange-traded security” means a security that is listed on a recognizedexchange or is quoted on a recognized quotation and trade reporting system or islisted on an exchange or quoted on a quotation and trade reporting system that isrecognized for the purposes of National Instrument 21-101 Marketplace Operationand National Instrument 23-101 Trading Rules;




“executive officer” means, for a reporting issuer, an individual who is:




“foreign disclosure requirements” means the requirements to which a foreignreporting issuer is subject concerning the disclosure made to the public, tosecurityholders of the issuer or to a foreign regulatory authority:

(a) relating to the foreign reporting issuer and the trading in its securities;and

(b) that is made publicly available in the foreign jurisdiction under:

(i) the securities laws of the foreign jurisdiction in which the principaltrading market of the foreign reporting issuer is located; or

(ii) the rules of the marketplace that is the principal trading marketof the foreign reporting issuer;

“foreign regulatory authority” means a securities commission, exchange orother securities market regulatory authority in a designated foreign jurisdiction;

“foreign reporting issuer” means a reporting issuer, other than an investmentfund, that is incorporated or organized under the laws of a foreign jurisdiction,unless:

(a) outstanding voting securities carrying more than 50 per cent of thevotes for the election of directors are owned, directly or indirectly, byresidents of Canada; and

(b) any one or more of the following is true:

(i) the majority of the executive officers or directors of the issuer areresidents of Canada;

(ii) more than 50 per cent of the consolidated assets of the issuer arelocated in Canada; or

(iii) the business of the issuer is administered principally in Canada;

“inter-dealer bond broker” means a person or company that is approved by theInvestment Dealers Association under its By-Law No. 36 Inter-Dealer BondBrokerage Systems, as amended, and is subject to its By-Law No. 36 and itsRegulation 2100 Inter-Dealer Bond Brokerage Systems, as amended;

“interim period” means:

(a) in the case of a year other than a non-standard year or a transition year,a period commencing on the first day of the financial year and ending nine,six or three months before the end of the financial year;

(a.1) in the case of a non-standard year, a period commencing on the firstday of the financial year and ending within 22 days of the date that is nine,six or three months before the end of the financial year; or




(b) in the case of a transition year, a period commencing on the first day ofthe transition year and ending:

(i) three, six, nine or twelve months, if applicable, after the end of theold financial year; or

(ii) twelve, nine, six or three months, if applicable, before the end ofthe transition year;


(a) an exchange;








“MD&A” means a completed Form 51-102F1 Management’s Discussion &Analysis or, in the case of an SEC foreign issuer, a completed Form 51-102F1 ormanagement’s discussion and analysis prepared in accordance with Item 303 ofRegulation S-K or Item 303 of Regulation S-B under the 1934 Act;

“multiple convertible security” means a security of an issuer that isconvertible into, or exchangeable for, or carries the right of the holder to acquire,or of the issuer to cause the acquisition of, a convertible security, an exchangeablesecurity or another multiple convertible security;

“Nasdaq” means Nasdaq National Market and Nasdaq SmallCap Market;

“NI 52-107” means National Instrument 52-107 Acceptable Accounting Principles,Auditing Standards and Reporting Currency;

“non-standard year” means a financial year, other than a transition year, thatdoes not have 365 days, or 366 days if it includes February 29;

“old financial year” means the financial year of a reporting issuer thatimmediately precedes its transition year;

“principal trading market” means the published market on which the largesttrading volume in the equity securities of the issuer occurred during the issuer’smost recent financial year that ended before the date the determination is beingmade;




“published market” means, for a class of securities, a marketplace on which thesecurities have traded that discloses regularly in a publication of general andregular paid circulation or in a form that is broadly distributed by electronicmeans the prices at which those securities have traded;




(b) in every other jurisdiction, an exchange recognized by the securitiesregulatory authority as an exchange, self-regulatory organization orself-regulatory body;


(a) in every jurisdiction other than British Columbia, a quotation and tradereporting system recognized by the securities regulatory authority undersecurities legislation to carry on business as a quotation and trade reportingsystem; and


“SEC foreign issuer” means a foreign reporting issuer that:



“transition year” means the financial year of reporting issuer in which theissuer changes its financial year-end;

“TSX” means the Toronto Stock Exchange;

“underlying security” means a security issued or transferred, or to be issued ortransferred, in accordance with the terms of a convertible security, an exchangeablesecurity or a multiple convertible security;

“U.S. market” means an exchange in the United States of America or Nasdaq;and

“U.S. market requirements” means the requirements of the U.S. market onwhich the reporting issuer’s securities are listed or quoted.




1.2 Determination of Canadian Shareholders

(1) For the purposes of section 4.14 and paragraph (c) of the definition of“designated foreign issuer”, a reference to equity securities owned, directly orindirectly, by residents of Canada, includes:

(a) the underlying securities that are equity securities of the foreignreporting issuer; and

(b) the equity securities of the foreign reporting issuer represented by anAmerican depositary receipt or an American depositary share issued by adepositary holding equity securities of the foreign reporting issuer.

(2) For the purposes of paragraph (a) of the definition of “foreign reportingissuer”, securities represented by American depositary receipts or Americandepositary shares issued by a depositary holding voting securities of the foreignreporting issuer must be included as outstanding in determining both the numberof votes attached to securities owned, directly or indirectly, by residents of Canadaand the number of votes attached to all of the issuer’s outstanding votingsecurities.

1.3 Timing for Calculation of Designated Foreign Issuer and ForeignReporting Issuer

For the purposes of paragraph (c) of the definition of “designated foreign issuer”,paragraph (a) of the definition of “foreign reporting issuer” and section 4.14, thecalculation is made:

(a) if the issuer has not completed a financial year since becoming areporting issuer, at the date that the issuer became a reporting issuer; and

(b) or all other issuers:

(i) for the purpose of financial statement and MD&A filings underthis Instrument, on the first day of the most recent financial year oryear-to-date interim period for which operating results are presented inthe financial statements or MD&A; and

(ii) for the purpose of other continuous disclosure filing obligationsunder this Instrument, on the first day of the issuer’s current financialyear.




PART 2 LANGUAGE OF DOCUMENTS


(1) A person or company must file a document required to be filed under thisInstrument in either French or English.

(2) Notwithstanding subsection (1), if a person or company files a document onlyin French or only in English but delivers to securityholders of an issuer a versionof the document in the other language, the person or company must file that otherversion not later than when it is first delivered to securityholders.

(3) In Québec, a reporting issuer must comply with linguistic obligations andrights prescribed by Québec law.

2.2 Filings Prepared in a Language other than French or English

(1) If a person or company files a document that is required to be filed under thisInstrument that is a translation of a document prepared in a language other thanFrench or English, the person or company must file the document upon which thetranslation was based.

(2) A foreign reporting issuer filing a document upon which the translation wasbased under subsection (1) must attach to the document a certificate as to theaccuracy of the translation.

PART 3 FILING AND SENDING OF DOCUMENTS

3.1 Timing of Filing of Documents

A person or company filing a document under this Instrument must file thedocument at the same time as, or as soon as practicable after, the filing orfurnishing of the document to the SEC or to a foreign regulatory authority.

3.2 Sending of Documents to Canadian Securityholders

If a person or company sends a document to holders of securities of any classunder U.S. federal securities law, or the laws or requirements of a designatedforeign jurisdiction, and that document is required to be filed under thisInstrument, then the document must be sent in the same manner and at the sametime, or as soon as practicable after, to holders of securities of that class in thelocal jurisdiction.




PART 4 SEC FOREIGN ISSUERS

4.1 Amendments and Supplements

Any amendments or supplements to disclosure documents filed by an SEC foreignissuer under this Instrument must also be filed.

4.2 Material Change Reporting

An SEC foreign issuer satisfies securities legislation requirements relating todisclosure of material changes if the issuer:

(a) complies with the U.S. market requirements for making public disclosureof material information on a timely basis;

(b) complies with foreign disclosure requirements for making publicdisclosure of material information on a timely basis, if securities of the issuerare not listed or quoted on a U.S. market;

(c) promptly files each news release issued by it for the purpose ofcomplying with the requirements referred to in paragraph (a) or (b);

(d) complies with the requirements of U.S. federal securities law for filingor furnishing current reports to the SEC; and

(e) files the current reports filed with or furnished to the SEC.

4.3 Financial Statements

An SEC foreign issuer satisfies securities legislation requirements relating to thepreparation, approval, filing and delivery of its interim financial statements, andannual financial statements and auditor’s reports on annual financial statementsif it:

(a) complies with the requirements of U.S. federal securities law relating tointerim financial statements, annual financial statements and auditor’sreports on annual financial statements;

(b) complies with the U.S. market requirements relating to interimfinancial statements and annual financial statements, if securities of theissuer are listed or quoted on a U.S. market;

(c) files the interim financial statements, annual financial statements andauditor’s reports on annual financial statements filed with or furnished tothe SEC or a U.S. market;

(d) complies with section 3.2 of this Instrument; and

(e) complies with NI 52-107 as it relates to financial statements of theissuer that are included in any documents specified in paragraph (c).




4.4 AIFs and MD&A

An SEC foreign issuer satisfies securities legislation requirements relating to thepreparation, approval, filing and delivery of AIFs and MD&A if it:

(a) complies with the requirements of U.S. federal securities law relating toannual reports, quarterly reports, current reports and management’sdiscussion and analysis;

(b) files each annual report, quarterly report, current report andmanagement’s discussion and analysis filed with or furnished to the SEC;

(c) complies with section 3.2 of this Instrument; and

(d) complies with NI 52-107 as it relates to financial statements of theissuer that are included in any documents specified in paragraph (b).

4.5 Business Acquisition Reports

An SEC foreign issuer satisfies securities legislation requirements relating to thepreparation and filing of business acquisition reports if it:

(a) complies with the requirements of U.S. federal securities law relating tobusiness acquisition reports;

(b) files each business acquisition report filed with or furnished to the SEC;


(d) complies with NI 52-107 as it relates to financial statements that areincluded in any documents specified in paragraph (b).

4.6 Proxies and Proxy Solicitation by the Issuer and Information Circulars

An SEC foreign issuer satisfies securities legislation requirements relating toinformation circulars, proxies and proxy solicitation if it:

(a) complies with the requirements of U.S. federal securities law relating toproxy statements, proxies and proxy solicitation;

(b) files all material relating to a meeting of securityholders that is filedwith or furnished to the SEC;

(c) sends each document filed under paragraph (b) to securityholders in thelocal jurisdiction in the manner and at the time required by U.S. federalsecurities laws and U.S. market requirements; and





4.7 Proxy Solicitation by Another Person or Company

(1) A person or company, other than the SEC foreign issuer, satisfies securitieslegislation requirements relating to information circulars, proxies and proxysolicitation with respect to an SEC foreign issuer if the person or companycomplies with the requirements of subsection 4.6.

(2) If a proxy solicitation is made with respect to an SEC foreign issuer by aperson or company other than the SEC foreign issuer and the person or companysoliciting proxies lacks access to the relevant list of securityholders of the SECforeign issuer, subsection (1) is not available, if:

(a) the aggregate published trading volume of the class on the TSX andthe TSX Venture Exchange exceeded the aggregate published tradingvolume of the class on all U.S. markets:

(i) for the 12 calendar month period before commencement of theproxy solicitation, if there is no other proxy solicitation for securities ofthe same class in progress; or

(ii) for the 12 calendar month period before commencement of the firstproxy solicitation, if another proxy solicitation for securities of the sameclass is already in progress;

(b) the information disclosed by the SEC foreign issuer in its most recentForm 10-K, Form 10-KSB or Form 20-F filed with the SEC under the 1934Act demonstrated that paragraph (a) of the definition of “foreign reportingissuer” applied to the SEC foreign issuer; or

(c) the person or company soliciting proxies reasonably believes thatparagraph (a) of the definition of “foreign reporting issuer” applies to theSEC foreign issuer.

4.8 Disclosure of Voting Results

An SEC foreign issuer satisfies securities legislation requirements relating todisclosure of securityholder voting results if the issuer:

(a) complies with the requirements of U.S. federal securities law relating todisclosure of securityholder voting results; and

(b) files a copy of all disclosure of securityholder voting results filed with orfurnished to the SEC.

4.9 Filing of Certain News Releases

An SEC foreign issuer satisfies securities legislation requirements relating to thefiling of news releases that disclose information regarding its results of operationsor financial condition if the issuer:

(a) complies with the requirements of U.S. federal securities laws relatingto the filing of news releases disclosing financial information; and

(b) files a copy of each news release disclosing financial information that isfiled with or furnished to the SEC.




4.10 Filing of Certain Documents

Securities legislation requirements relating to the filing of documents affectingthe rights of securityholders and the filing of material contracts do not apply to anSEC foreign issuer.

4.11 Early Warning

A person or company satisfies the early warning requirements and acquisitionannouncement provisions of securities legislation in respect of securities of anSEC foreign issuer that has a class of securities registered under section 12 ofthe 1934 Act if the person or company:

(a) complies with the requirements of U.S. federal securities law relating tothe reporting of beneficial ownership of equity securities of the SEC foreignissuer; and

(b) files each report of beneficial ownership that is filed with or furnished tothe SEC.

4.12 Insider Reporting

The insider reporting requirement does not apply to an insider of an SEC foreignissuer that has a class of securities registered under section 12 of the 1934 Act ifthe insider complies with the requirements of U.S. federal securities law relatingto insider reporting.

4.13 Communication with Beneficial Owners of Securities

An SEC foreign issuer that has a class of securities registered under section 12 ofthe 1934 Act satisfies securities legislation requirements relating to communicationswith, delivery of materials to and conferring voting rights upon non-registeredholders of its securities who hold their interests in the securities through one ormore intermediaries if the issuer:

(a) complies with the requirements of Rule 14a-13 under the 1934 Act forany depositary and any intermediary whose last address as shown on thebooks of the issuer is in Canada; and

(b) complies with the requirements of National Instrument 54-101Communication with Beneficial Owners of Securities of a Reporting Issuerwith respect to fees payable to intermediaries, for any depositary and anyintermediary whose last address as shown on the books of the issuer is inCanada.

4.14 Going Private Transactions and Related Party Transactions

Securities legislation requirements relating to going private transactions andrelated party transactions, as those terms are used in securities legislation of thelocal jurisdiction, do not apply to an SEC foreign issuer carrying out a goingprivate transaction or related party transaction if the total number of equitysecurities of the SEC foreign issuer owned, directly or indirectly, by residents ofCanada, does not exceed 20 per cent, on a diluted basis, of the total number ofequity securities of the SEC foreign issuer.





An SEC foreign issuer satisfies securities legislation requirements relating to achange of auditor if the issuer:

(a) complies with the requirements of U.S. federal securities laws relatingto a change of auditor; and

(b) files a copy of all materials relating to a change of auditor that are filedwith or furnished to the SEC.

4.16 Restricted Securities

(1) Securities legislation continuous disclosure requirements relating to restrictedsecurities do not apply in respect of SEC foreign issuers.

(2) Securities legislation minority approval requirements relating to restrictedsecurities do not apply in respect of SEC foreign issuers.

PART 5 DESIGNATED FOREIGN ISSUERS

5.1 Amendments and Supplements

Any amendments or supplements to disclosure documents filed by a designatedforeign issuer under this Instrument must also be filed.

5.2 Mandatory Annual Disclosure by Designated Foreign Issuer

To rely on this Part, a designated foreign issuer must, at least once a year,disclose in, or as an appendix to, a document that it is required by foreigndisclosure requirements to send to its securityholders and that it sends to itssecurityholders in Canada:

(a) that it is a designated foreign issuer as defined in this Instrument;

(b) that it is subject to the foreign regulatory requirements of a foreignregulatory authority; and

(c) the name of the foreign regulatory authority referred to in paragraph (b).

5.3 Material Change Reporting

A designated foreign issuer satisfies securities legislation requirements relatingto disclosure of material changes if the issuer:

(a) complies with foreign disclosure requirements for making publicdisclosure of material information on a timely basis;

(b) promptly files each news release issued by it for the purpose ofcomplying with the requirements referred to in paragraph (a); and

(c) files the documents disclosing the material information filed with orfurnished to the foreign regulatory authority or disseminated to the publicor securityholders of the issuer.




5.4 Financial Statements

A designated foreign issuer satisfies securities legislation requirements relatingto the preparation, approval, filing and delivery of its interim financial statements,annual financial statements and auditor’s reports on annual financial statementsif it:

(a) complies with the foreign disclosure requirements relating to interimfinancial statements, annual financial statements and auditor’s reports onannual financial statements;

(b) files the interim financial statements, annual financial statements andauditor’s reports on annual financial statements required to be filed with orfurnished to the foreign regulatory authority;



5.5 AIFs & MD&A

A designated foreign issuer satisfies securities legislation requirements relatingto the preparation, approval, filing and delivery of AIFs and MD&A if it:

(a) complies with the foreign disclosure requirements relating to annualreports, quarterly reports and management’s discussion and analysis;

(b) files each annual report, quarterly report and management’s discussionand analysis required to be filed with or furnished to the foreign regulatoryauthority;



5.6 Business Acquisition Reports

A designated foreign issuer satisfies securities legislation requirements relatingto the preparation and filing of business acquisition reports if it:

(a) complies with the foreign disclosure requirements relating to businessacquisitions;

(b) files each report in respect of a business acquisition required to be filedwith or furnished to the foreign regulatory authority;


(d) complies with NI 52-107 as it relates to financial statements that areincluded in any documents specified in paragraph (b).




5.7 Proxies and Proxy Solicitation by the Issuer and Information Circulars

A designated foreign issuer satisfies securities legislation requirements relatingto information circulars, proxies and proxy solicitation if it:

(a) complies with the foreign disclosure requirements relating to proxystatements, proxies and proxy solicitation;

(b) files all material relating to a meeting of securityholders that is filedwith or furnished to the foreign regulatory authority;



5.8 Proxy Solicitation by Another Person or Company

(1) A person or company, other than the designated foreign issuer, satisfiessecurities legislation requirements relating to information circulars, proxies andproxy solicitation with respect to a designated foreign issuer if the person orcompany satisfies the requirements of section 5.7.

(2) If a proxy solicitation is made with respect to a designated foreign issuer by aperson or company other than the designated foreign issuer and the person orcompany soliciting proxies lacks access to the relevant list of securityholders ofthe designated foreign issuer, subsection (1) is not available, if:

(a) the aggregate published trading volume of the class on the TSX andthe TSX Venture Exchange exceeded the aggregate trading volume onsecurities marketplaces outside Canada:

(i) for the 12 calendar months before commencement of the proxysolicitation, if there is no other proxy solicitation for securities of thesame class in progress; or

(ii) for the 12 calendar month period before the commencement of thefirst proxy solicitation, if another proxy solicitation for securities of thesame class is already in progress;

(b) the information disclosed by the designated foreign issuer in a documentfiled within the previous 12 months with a foreign regulatory authority,demonstrated that paragraph (a) of the definition of “foreign reportingissuer” applied to the designated foreign issuer; or

(c) the person or company soliciting proxies reasonably believes thatparagraph (a) of the definition of “foreign reporting issuer” applies to thedesignated foreign issuer.

5.9 Disclosure of Voting Results

A designated foreign issuer satisfies securities legislation requirements relatingto disclosure of securityholder voting results if the issuer:

(a) complies with the foreign disclosure requirements relating to disclosureof securityholder voting results; and

(b) files each report disclosing securityholder voting results that is filedwith or furnished to a foreign regulatory authority.




5.10 Filing of Certain News Releases

A designated foreign issuer satisfies securities legislation requirements relatingto the filing of news releases that disclose information regarding its results ofoperations or financial condition if the issuer:

(a) complies with the foreign disclosure requirements relating to the filingof news releases disclosing financial information; and

(b) files a copy of each news release disclosing financial information that isfiled with or furnished to a foreign regulatory authority.

5.11 Filing of Certain Documents

Securities legislation requirements relating to the filing of documents affectingthe rights of securityholders and the filing of material contracts do not apply to adesignated foreign issuer.

5.12 Early Warning

A person or company satisfies the early warning requirements and acquisitionannouncement provisions of securities legislation in respect of securities of adesignated foreign issuer if the person or company:

(a) complies with the foreign disclosure requirements relating to reportingof beneficial ownership of equity securities of the designated foreign issuer;and

(b) files each report of beneficial ownership that is filed with or furnished tothe foreign regulatory authority.

5.13 Insider Reporting

The insider reporting requirement does not apply to an insider of a designatedforeign issuer if the insider complies with foreign disclosure requirementsrelating to insider reporting.

5.14 Communication with Beneficial Owners of Securities

A designated foreign issuer satisfies securities legislation requirements relatingto communications with, delivery of materials to and conferring voting rightsupon non-registered holders of its securities who hold their interests in thesecurities through one or more intermediaries if the issuer:

(a) complies with foreign disclosure requirements relating to communicationwith beneficial owners of securities; and

(b) complies with the requirements of National Instrument 54-101Communication with Beneficial Owners of Securities of a Reporting Issuerwith respect to fees payable to intermediaries, for any depositary and anyintermediary whose last address as shown on the books of the issuer is inCanada.

5.15 Going Private Transactions and Related Party Transactions

Securities legislation requirements relating to going private transactions andrelated party transactions, as those terms are used in securities legislation of thelocal jurisdiction, do not apply to a designated foreign issuer carrying out a goingprivate transaction or related party transaction.




5.16 Change in Year-End

A designated foreign issuer satisfies securities legislation requirements relatingto a change in year-end if the issuer:

(a) complies with foreign disclosure requirements relating to a change inyear-end; and

(b) files a copy of all filings made under foreign disclosure requirementsrelating to the change in year-end.


A designated foreign issuer satisfies securities legislation requirements relatingto a change of auditor if the issuer:

(a) complies with foreign disclosure requirements relating to a change ofauditor; and

(b) files a copy of all filings made under foreign disclosure requirementsrelating to the change of auditor.

5.18 Restricted Securities

(1) Securities legislation continuous disclosure requirements relating to restrictedsecurities do not apply in respect of designated foreign issuers.

(2) Securities legislation minority approval requirements relating to restrictedsecurities do not apply in respect of designated foreign issuers.

PART 6 FOREIGN TRANSITION ISSUERS

6.1 Application

This Part only applies in Ontario.

6.2 Definition

In this section, “foreign transition issuer” means an issuer:

(a) that is not incorporated or organized under the laws of Canada or ajurisdiction of Canada;

(b) that is not an SEC foreign issuer or a designated foreign issuer;

(c) that became a reporting issuer solely by listing securities on the TSXbefore March 30, 2004;

(d) of which the total number of securities of the class listed on the TSXregistered in the names of residents of Canada does not exceed 5 per cent ofthe total number of issued and outstanding securities of the class; and

(e) of which the total number of holders of securities of the class listed onthe TSX registered in the names of residents of Canada does not exceed 300.




6.3 Transitional Exemptions

Until January 1, 2005, a foreign transition issuer is exempt from:

(a) securities legislation requirements to file business acquisition reports,AIFs and MD&A;

(b) securities legislation requirements relating to the preparation, approvaland filing of annual financial statements and auditor’s reports thereon if theannual financial statements are:

(i) prepared in compliance with the laws of the foreign jurisdiction ofincorporation or organization of the issuer; and

(ii) filed not later than the earlier of:

(A) promptly after they are filed with any other governmentalagency or securities market regulatory authority; and

(B) 140 days after the end of the financial year; and

(c) securities legislation requirements relating to the preparation, approvaland filing of interim financial statements, if the interim financial statementsare:

(i) prepared in compliance with the laws of the foreign jurisdiction ofincorporation or organization of the issuer; and

(ii) filed not later than the earlier of:

(A) promptly after they are filed with any other governmentalagency or securities market regulatory authority; and

(B) 60 days after the end of the interim period.


7.1 Effective Date

This Instrument comes into force on March 30, 2004.

16 Apr 2004 SR 14/2004 s12; 10 Jne 2005 SR49/2005 s10; 5 Jan 2007 SR 115/2006 s6; 11 Jan2008 SR 128/2007 s7.

PART XXXIX[clause 2(mm)]

NATIONAL INSTRUMENT 31-101NATIONAL REGISTRATION SYSTEM

Repealed. 2 Oct 2009 SR 81/2009 s11.




PART XL[clause 2(nn)]

NATIONAL INSTRUMENT 81-106INVESTMENT FUND CONTINUOUS DISCLOSURE

PART I DEFINITIONS AND APPLICATIONS


“annual management report of fund performance” means a documentprepared in accordance with Part B of Form 81-106F1;

“current value” means, for an asset held by, or a liability of, an investment fund,the value calculated in accordance with Canadian GAAP;

“education savings plan” means an agreement between one or more personsand another person or organization, in which the other person or organizationagrees to pay or cause to be paid, to or for one or more beneficiaries designated inconnection with the agreement, scholarship awards;

“EVCC” means an employee venture capital corporation that does not have arestricted constitution, and is registered under Part 2 of the Employee InvestmentAct (British Columbia), R.S.B.C. 1996 c. 112, and whose business objective ismaking multiple investments;

“independent review committee” means the independent review committee ofthe investment fund established under National Instrument 81-107 IndependentReview Committee for Investment Funds;

“independent valuation” means a valuation of the assets and liabilities, or ofthe venture investments, of a labour sponsored or venture capital fund thatcontains the opinion of an independent valuator as to the current value of theassets and liabilities, or of the venture investments, and that is prepared inaccordance with Part 8;

“independent valuator” means a valuator that is independent of the laboursponsored or venture capital fund and that has appropriate qualifications;

“interim management report of fund performance” means a documentprepared in accordance with Part C of Form 81-106F1;

“interim period” means, in relation to an investment fund:

(a) a period of at least three months that ends six months before the end ofa financial year of the investment fund; or

(b) in the case of a transition year of the investment fund, a periodcommencing on the first day of the transition year and ending six monthsafter the end of its old financial year;

“investment fund” means a mutual fund or a non-redeemable investment fund,and, for greater certainty in British Columbia, includes an EVCC and a VCC;




“labour sponsored or venture capital fund” means an investment fund thatis:

(a) a labour sponsored investment fund corporation or a labour sponsoredventure capital corporation under provincial legislation;

(b) a registered or prescribed labour sponsored venture capital corporationas defined in the ITA;

(c) an EVCC; or

(d) a VCC;

“management expense ratio” means the ratio, expressed as a percentage, ofthe expenses of an investment fund to its average net asset value, calculated inaccordance with Part 15;

“management fees” means the total fees paid or payable by an investment fundto its manager or one or more portfolio advisers or sub-advisers, includingincentive or performance fees, but excluding operating expenses of the investmentfund;

“management report of fund performance” means an annual managementreport of fund performance or an interim management report of fund performance;

“material change” means, in relation to an investment fund:

(a) a change in the business, operations or affairs of the investment fundthat would be considered important by a reasonable investor in determiningwhether to purchase or continue to hold securities of the investment fund; or

(b) a decision to implement a change referred to in paragraph (a) made:

(i) by the board of directors of the investment fund or the board ofdirectors of the manager of the investment fund or other persons actingin a similar capacity;

(ii) by senior management of the investment fund who believe thatconfirmation of the decision by the board of directors or such otherpersons acting in a similar capacity is probable; or

(iii) by senior management of the manager of the investment fundwho believe that confirmation of the decision by the board of directorsof the manager or such other persons acting in a similar capacity isprobable;

“material contract” means, for an investment fund, a document that theinvestment fund would be required to list in an annual information form underItem 16 of Form 81-101F2 if the investment fund filed a simplified prospectusunder National Instrument 81-101 Mutual Fund Prospectus Disclosure;

“mutual fund in the jurisdiction” means an incorporated or unincorporatedmutual fund that is a reporting issuer in, or that is organized under the laws of,the local jurisdiction, but does not include a private mutual fund;

“National Instrument 51-102” means National Instrument 51-102 ContinuousDisclosure Obligations;

“National Instrument 81-107” means National Instrument 81-107 IndependentReview Committee for Investment Funds;




“net asset value” means the value of the total assets of the investment fund lessthe value of the total liabilities of the investment fund, as at a specific date,determined in accordance with Part 14;

“non-redeemable investment fund” means an issuer:

(a) whose primary purpose is to invest money provided by its securityholders;

(b) that does not invest:

(i) for the purpose of exercising or seeking to exercise control of anissuer, other than an issuer that is a mutual fund or a non-redeemableinvestment fund; or

(ii) for the purpose of being actively involved in the management ofany issuer in which it invests, other than an issuer that is a mutualfund or a non-redeemable investment fund; and

(c) that is not a mutual fund;

“quarterly portfolio disclosure” means the disclosure prepared in accordancewith Part 6;

“scholarship award” means any amount, other than a refund of contributions,that is paid or payable directly or indirectly to further the education of abeneficiary designated under an education savings plan;

“scholarship plan” means an arrangement under which contributions toeducation savings plans are pooled to provide scholarship awards to designatedbeneficiaries;

“transition year” means the financial year of an investment fund in which achange of year end occurs;

“VCC” means a venture capital corporation registered under Part 1 of the SmallBusiness Venture Capital Act (British Columbia), R.S.B.C. 1996 c. 429 whosebusiness objective is making multiple investments; and

“venture investment” means an investment in a private company or aninvestment made in accordance with the requirements of provincial laboursponsored or venture capital fund legislation or the ITA.

1.2 Application

(1) Except as otherwise provided in this Instrument, this Instrument applies to:

(a) an investment fund that is a reporting issuer; and

(b) subject to subsection (2), a mutual fund in the jurisdiction.

(2) Despite paragraph (1)(b), in Alberta, British Columbia, Manitoba andNewfoundland and Labrador, this Instrument does not apply to a mutual fundthat is not a reporting issuer.

(3) In Saskatchewan, this Instrument does not apply to a Type B corporationwithin the meaning of The Labour-sponsored Venture Capital Corporations Act(Saskatchewan).




(4) In Québec, this Instrument does not apply to a reporting issuer organizedunder:

(a) an Act to establish the Fonds de solidarité des travailleurs du Québec(F.T.Q.) R.S.Q., chapter F-3.2.1;

(b) an Act to establish Fondaction, le Fonds de développement de laConfédération des syndicats nationaux pour la coopération et l’emploi(R.S.Q., chapter F-3.1.2); or

(c) an Act constituting Capital régional et coopératif Desjardins, Loiconstituant Capital régional et coopératif Desjardins (R.S.Q., chapter C-6.1).

1.3 Interpretation

(1) Each section, part, class or series of a class of securities of an investmentfund that is referable to a separate portfolio of assets is considered to be a separateinvestment fund for the purposes of this Instrument.

(2) Terms defined in National Instrument 81-102 Mutual Funds, NationalInstrument 81-104 Commodity Pools and National Instrument 81-105 MutualFund Sales Practices and used in this Instrument have the respective meaningsascribed to them in those Instruments except that references in those definitionsto “mutual fund” must be read as references to “investment fund”.

1.4 Language of Documents

(1) A document that is required to be filed under this Instrument must beprepared in French or English.

(2) If an investment fund files a document in French or in English, and atranslation of the document into the other language is sent to a securityholder, theinvestment fund must file the translated document not later than when it is sentto the securityholder.

(3) In Québec, the linguistic obligations and rights prescribed by Québec lawmust be complied with.

PART 2 FINANCIAL STATEMENTS

2.1 Comparative Annual Financial Statements and Auditor’s Report

(1) An investment fund must file annual financial statements for the investmentfund’s most recently completed financial year that include:

(a) a statement of net assets as at the end of that financial year and astatement of net assets as at the end of the immediately preceding financialyear;

(b) a statement of operations for that financial year and a statement ofoperations for the immediately preceding financial year;

(c) statement of changes in net assets for that financial year and astatement of changes in net assets for the immediately preceding financialyear;

(d) a statement of cashflows for that financial year and a statement ofcashflows for the immediately preceding financial year, unless it is notrequired by Canadian GAAP;




(e) a statement of investment portfolio as at the end of that financial year;and

(f) notes to the annual financial statements.

(2) Annual financial statements filed under subsection (1) must be accompaniedby an auditor’s report.

2.2 Filing Deadline for Annual Financial Statements - The annual financialstatements and auditor’s report required to be filed under section 2.1 must be filedon or before the 90th day after the investment fund’s most recently completedfinancial year.

2.3 Interim Financial Statements - An investment fund must file interim financialstatements for the investment fund’s most recently completed interim period thatinclude:

(a) a statement of net assets as at the end of that interim period and astatement of net assets as at the end of the immediately preceding financialyear;

(b) a statement of operations for that interim period and a statement ofoperations for the corresponding period in the immediately precedingfinancial year;

(c) a statement of changes in net assets for that interim period and astatement of changes in net assets for the corresponding period in theimmediately preceding financial year;

(d) a statement of cashflows for and as at the end of that interim period anda statement of cashflows for the corresponding period in the immediatelypreceding financial year, unless it is not required by Canadian GAAP;

(e) a statement of investment portfolio as at the end of that interim period;and

(f) notes to the interim financial statements.

2.4 Filing Deadline for Interim Financial Statements - The interim financialstatements required to be filed under section 2.3 must be filed on or before the 60th

day after the end of the most recent interim period of the investment fund.

2.5 Approval of Financial Statements

(1) The board of directors of an investment fund that is a corporation mustapprove the financial statements of the investment fund before those financialstatements are filed or made available to securityholders or potential purchasersof securities of the investment fund.

(2) The trustee or trustees of an investment fund that is a trust, or anotherperson or company authorized to do so by the constating documents of theinvestment fund, must approve the financial statements of the investment fund,before those financial statements are filed or made available to securityholders orpotential purchasers of securities of the investment fund.

2.6 Acceptable Accounting Principles - The financial statements of an investmentfund must be prepared in accordance with Canadian GAAP as applicable to publicenterprises.




2.7 Acceptable Auditing Standards

(1) Financial statements that are required to be audited must be audited inaccordance with Canadian GAAS.

(2) Audited financial statements must be accompanied by an auditor’s reportprepared in accordance with Canadian GAAS and the following requirements:

1. The auditor’s report must not contain a reservation.

2. The auditor’s report must identify all financial periods presented forwhich the auditor has issued an auditor’s report.

3. If the investment fund has changed its auditor and a comparative periodpresented in the financial statements was audited by a different auditor, theauditor’s report must refer to the former auditor’s report on the comparativeperiod.

4. The auditor’s report must identify the auditing standards used toconduct the audit and the accounting principles used to prepare the financialstatements.

2.8 Acceptable Auditors - An auditor’s report must be prepared and signed by aperson or company that is authorized to sign an auditor’s report by the laws of ajurisdiction of Canada, and that meets the professional standards of thatjurisdiction.

2.9 Change in Year End

(1) This section applies to an investment fund that is a reporting issuer.

(2) Section 4.8 of National Instrument 51-102 applies to an investment fund thatchanges its financial year end, except that:

(a) a reference to “interim period” must be read as “interim period” asdefined in this Instrument;

(b) a requirement under National Instrument 51-102 to include specifiedfinancial statements must be read as a requirement to include the financialstatements required under this Part; and

(c) a reference to “filing deadline” in subsection 4.8(2) of NationalInstrument 51-102 must be read as a reference to the filing deadlinesprovided for under section 2.2 and 2.4 of this Instrument.

(3) Despite section 2.4, an investment fund is not required to file interimfinancial statements for any period in a transition year if the transition year isless than nine months in length.

(4) Despite subsections 4.8(7) and (8) of National Instrument 51-102:

(a) for interim financial statements for an interim period in the transitionyear, the investment fund must include as comparative information:

(i) a statement of net assets as at the end of its old financial year; and

(ii) a statement of operations, a statement of changes in net assets,and, if applicable, a statement of cashflows, for the interim period of theold financial year;




(b) for interim financial statements for an interim period in a new financialyear, the investment fund must include as comparative information:

(i) a statement of net assets as at the end of the transition year; and

(ii) a statement of operations, a statement of changes in net assets,and, if applicable, a statement of cashflows, for the period that is oneyear earlier than the interim period in the new financial year.

2.10 Change in Legal Structure - If an investment fund that is a reporting issuer isparty to an amalgamation, arrangement, merger, winding-up, reorganization orother transaction that will result in:

(a) the investment fund terminating or ceasing to be a reporting issuer,

(b) another entity becoming an investment fund,

(c) a change in the investment fund’s financial year end, or

(d) a change in the name of the investment fund,

the investment fund must, as soon as practicable, and in any event not later thanthe deadline for the first filing required by this Instrument following thetransaction, file a notice stating:

(e) the names of the parties to the transaction;

(f) a description of the transaction;

(g) the effective date of the transaction;

(h) if applicable, the names of each party that terminated or ceased to be areporting issuer following the transaction and of each continuing entity;

(i) if applicable, the date of the investment fund’s first financial year endfollowing the transaction; and

(j) if applicable, the periods, including the comparative periods, if any, ofthe interim and annual financial statements required to be filed for theinvestment fund’s first financial year following the transaction.

2.11 Filing Exemption for Mutual Funds that are Non-Reporting Issuers - Amutual fund that is not a reporting issuer is exempt from the filing requirementsof section 2.1 for a financial year or section 2.3 for an interim period if:

(a) the mutual fund prepares the applicable financial statements inaccordance with this Instrument;

(b) the mutual fund delivers the financial statements to its securityholdersin accordance with Part 5 within the same time periods as if the financialstatements were required to be filed;

(c) the mutual fund has advised the regulator or securities regulatoryauthority that it is relying on this exemption not to file its financialstatements; and

(d) the mutual fund has included in a note to the financial statements thatit is relying on this exemption not to file its financial statements.




2.12 Disclosure of Auditor Review of Interim Financial Statements

(1) This section applies to an investment fund that is a reporting issuer.

(2) If an auditor has not performed a review of the interim financial statementsrequired to be filed, the interim financial statements must be accompanied by anotice indicating that the interim financial statements have not been reviewed byan auditor.

(3) If an investment fund engaged an auditor to perform a review of the interimfinancial statements required to be filed and the auditor was unable to completethe review, the interim financial statements must be accompanied by a noticeindicating that the auditor was unable to complete a review of the interimfinancial statements and the reasons why.

(4) If an auditor has performed a review of the interim financial statementsrequired to be filed and the auditor has expressed a reservation in the auditor’sinterim review report, the interim financial statements must be accompanied by awritten review report from the auditor.

PART 3 FINANCIAL DISCLOSURE REQUIREMENTS

3.1 Statement of Net Assets - The statement of net assets of an investment fundmust disclose the following as separate line items, each shown at current value:

1. cash, term deposits and, if not included in the statement of investmentportfolio, short term debt instruments

2. investments

3. accounts receivable relating to securities issued

4. accounts receivable relating to portfolio assets sold

5. accounts receivable relating to margin paid or deposited on futures orforward contracts.

6. amounts receivable or payable in respect of derivatives transactions,including premiums or discounts received or paid

7. deposits with brokers for portfolio securities sold short

8. accrued expenses

9. accrued incentive arrangements or performance compensation

10. portfolio securities sold short

11. liabilities for securities redeemed

12. liabilities for portfolio assets purchased

13. income tax payable

14. total net assets and securityholder’s equity and, if applicable, for each classor series

15. net assets per security, or if applicable, per security of each class or series.




3.2 Statement of Operations - The statement of operations of an investment fundmust disclose the following information as separate line items:

1. dividend revenue

2. interest revenue

3. income from derivatives

4. revenue from securities lending

5. management fees, excluding incentive or performance fee

6. incentive or performance fees

7. audit fees

8. directors’ or trustees’ fees

8.1 independent review committee fees

9. custodial fees

10. legal fees

10.1 commissions and other portfolio transaction costs

11. securityholder reporting costs

12. capital tax

13. amounts that would otherwise have been payable by the investment fundthat were waived or paid by the manager or a portfolio adviser of the investmentfund.

14. provision for income tax

15. net investment income or loss for the period

16. realized gains or losses

17. unrealized gains or losses

18. increase or decrease in net assets from operations and, if applicable, for eachclass or series

19. increase or decrease in net assets from operations per security or, ifapplicable, per security of each class or series.

3.3 Statement of Changes in Net Assets - The statement of changes in net assetsof an investment fund must disclose, for each class or series, the following asseparate line items:

1. net assets at the beginning of the period to which the statement applies

2. increase or decrease in net assets from operations

3. proceeds from the issuance of securities of the investment fund

4. aggregate amounts paid on redemption of securities of the investment fund

5. securities issued on reinvestment of distributions

6. distributions, showing separately the amount distributed out of net investmentincome and out of realized gains on portfolio assets sold, and return of capital

7. net assets at the end of the period reported upon




3.4 Statement of Cashflows - The statement of cashflows of an investment fundmust disclose the following as separate line items:

1. net investment income or loss

2. proceeds of disposition of portfolio assets

3. purchase of portfolio assets

4. proceeds from the issuance of securities of the investment fund

5. aggregate amounts paid on redemption of securities of the investment fund

6. compensation paid in respect of the sale of securities of the investment fund

3.5 Statement of Investment Portfolio

(1) The statement of investment portfolio of an investment fund must disclosethe following for each portfolio asset held or sold short:

1. the name of the issuer of the portfolio asset

2. a description of the portfolio asset, including:

(a) for an equity security, the name of the class of the security;

(b) for a debt instrument not included in paragraph (c), allcharacteristics commonly used commercially to identify the instrument,including the name of the instrument, the interest rate of theinstrument, the maturity date of the instrument, whether the instrumentis convertible or exchangeable and, if used to identify the instrument,the priority of the instrument;

(c) for a debt instrument referred to in the definition of “moneymarket fund” in National Instrument 81-102 Mutual Funds, the name,interest rate and maturity date of the instrument;

(d) for a portfolio asset not referred to in paragraph (a), (b) or (c), thename of the portfolio asset and the material terms and conditions of theportfolio asset commonly used commercially in describing the portfolioasset.

3. the number or aggregate face value of the portfolio asset.

4. the cost of the portfolio asset

5. the current value of the portfolio asset

(2) For the purposes of subsection (1), disclosure for a long portfolio must besegregated from the disclosure for a short portfolio.

(3) For the purposes of subsection (1) and subject to subsection (2), disclosuremust be aggregated for portfolio assets having the same description and issuer.

(4) Despite subsection (1) and (3) and subject to subsection (2), the informationreferred to in subsection (1) may be provided in the aggregate for those short termdebt instruments that:

(a) are issued by a bank listed in Schedule I, II or III to the Bank Act(Canada) or a loan corporation or trust corporation registered under the lawsof a jurisdiction; or




(b) have achieved an investment rating within the highest or next highestcategories of ratings of each approved credit rating organization.

(5) If an investment fund discloses short term debt instruments as permitted bysubsection (4), the investment fund must disclose separately the aggregate shortterm debt instruments denominated in any currency if the aggregate exceeds 5%of the total short term debt.

(6) If an investment fund holds positions in derivatives, the investment fundmust disclose in the statement of investment portfolio or the notes to thatstatement:

(a) for long and short positions in options:

(i) the quantity of the underlying interest, the number of options, theunderlying interest, the strike price, the expiration month and year,the cost and the current value; and

(ii) if the underlying interest is a future, information about the futurein accordance with subparagraph (i);

(b) for positions in futures and forwards, the number of futures andforwards, the underlying interest, the price at which the contract wasentered into, the delivery month and year and the current value;

(c) for positions in swaps, the number of swap contracts, the underlyinginterest, the principal or notional amount, the payment dates, and thecurrent value; and

(d) if a rating of a counterparty has fallen below the approved credit ratinglevel.

(7) If applicable, the statement of investment portfolio included in the financialstatements of the investment fund, or the notes to the statement of investmentportfolio, must identify the underlying interest that is being hedged by eachposition taken by the investment fund in a derivative.

(8) An investment fund may omit the information required by subsection (1)about mortgages from a statement of investment portfolio if the statement ofinvestment portfolio discloses:

(a) the total number of mortgages held;

(b) the aggregate current value of mortgages held;

(c) a breakdown of mortgages, by reference to number and current valueamong mortgages insured under the National Housing Act (Canada),insured conventional mortgages and uninsured conventional mortgages;

(d) a breakdown of mortgages, by reference to number and current value,among mortgages that are pre-payable and those that are not pre-payable;and

(e) a breakdown of mortgages, by reference to number, current value,amortized cost and outstanding principal value, among groups of mortgageshaving contractual interest rates varying by no more than one quarter of onepercent.

(9) An investment fund must maintain records of all portfolio transactionsundertaken by the investment fund.




3.6 Notes to Financial Statements

(1) The notes to the financial statements of an investment fund must disclosethe following:

1. the basis for determining current value and cost of portfolio assets and, ifa method of determining cost other than by reference to the average cost ofthe portfolio assets is used, the method used

2. if the investment fund has outstanding more than one class or series ofsecurities ranking equally against its net assets, but differing in otherrespects:

(a) the number of authorized securities of each class or series;

(b) the number of securities of each class or series that have beenissued and are outstanding;

(c) the differences between the classes or series, including differencesin sales charges, and management fees;

(d) the method used to allocate income and expenses, and realizedand unrealized capital gains and losses, to each class;

(e) the fee arrangements for any class-level expenses paid to affiliates;and

(f) transactions involving the issue or redemption of securities of theinvestment fund undertaken in the period for each class of securities towhich the financial statements pertain.

3. to the extent the amount is ascertainable, the soft dollar portion of thetotal commissions and other portfolio transaction costs paid or payable todealers by the investment fund, where the soft dollar portion is the amountpaid or payable for goods and services other than order execution.

4. the total cost of distribution of the investment fund’s securities recordedin the statement of changes in net assets.

5. the net asset value per security as at the date of the financial statementscompared to the net assets per security as shown on the statement of netassets, and an explanation of each of the differences between those amounts.

(2) If not disclosed elsewhere in the financial statements, an investment fundthat borrows money must, in a note to the financial statements, disclose theminimum and maximum amount borrowed during the period to which thefinancial statements or management report of fund performance pertain.

3.7 Inapplicable Line Items - Despite the requirements of this Part, an investmentfund may omit a line item from the financial statements for any matter that doesnot apply to the investment fund or for which the investment fund has nothing todisclose.




3.8 Disclosure of Securities Lending Transactions

(1) An investment fund must disclose, in the statement of investment portfolioincluded in the financial statements of the investment fund, or in the notes to thefinancial statements:

(a) the aggregate dollar value of portfolio securities that were lent in thesecurities lending transactions of the investment fund that are outstandingas at the date of the financial statements; and

(b) the type and aggregate amount of collateral received by the investmentfund under securities lending transactions of the investment fund that areoutstanding as at the date of the financial statements.

(2) The statement of net assets of an investment fund that has received cashcollateral from a securities lending transaction that is outstanding as of the dateof the financial statements must disclose separately:

(a) the cash collateral received by the investment fund; and

(b) the obligation to repay the cash collateral.

(3) The statement of operations of an investment fund must disclose incomefrom a securities lending transaction as revenue.

3.9 Disclosure of Repurchase Transactions

(1) An investment fund, in the statement of investment portfolio included in thefinancial statements of the investment fund, or in the notes to that statement,must, for a repurchase transaction of the investment fund that is outstanding asat the date of the statement, disclose:

(a) the date of the transaction;

(b) the expiration date of the transaction;

(c) the nature and current value of the portfolio securities sold by theinvestment fund;

(d) the amount of cash received and the repurchase price to be paid by theinvestment fund; and

(e) the current value of the sold portfolio securities as at the date of thestatement.

(2) The statement of net assets of an investment fund that has entered into arepurchase transaction that is outstanding as of the date of the statement of netassets must disclose separately the obligation of the investment fund to repay thecollateral.

(3) The statement of operations of an investment fund must disclose incomefrom the use of the cash received on a repurchase transaction as revenue.

(4) The information required by this section may be presented on an aggregatebasis.




3.10 Disclosure of Reverse Repurchase Transactions

(1) An investment fund, in the statement of investment portfolio or in the notesto that statement, must, for a reverse repurchase transaction of the investmentfund that is outstanding as at the date of the statement, disclose:

(a) the date of the transaction;

(b) the expiration date of the transaction;

(c) the total dollar amount paid by the investment fund;

(d) the nature and current value or principal amount of the portfoliosecurities received by the investment fund; and

(e) the current value of the purchased portfolio securities as at the date ofthe statement.

(2) The statement of net assets of an investment fund that has entered into areverse repurchase transaction that is outstanding as of the date of the financialstatements must disclose separately the reverse repurchase agreement relating tothe transaction at current value.

(3) The statement of operations of an investment fund must disclose incomefrom a reverse repurchase transaction as revenue.

(4) The information required by this section may be presented on an aggregatebasis.

3.11 Scholarship Plans

(1) In addition to the requirements of this Part, an investment fund that is ascholarship plan must disclose, as of the end of its most recently completedfinancial year, a separate statement or schedule to the financial statements thatprovides:

(a) a summary of education savings plans and units outstanding by year ofeligibility, including:

(i) disclosure of the number of units by year of eligibility for theopening units, units purchased, units forfeited and the ending units;

(ii) disclosure of the principal amounts and the accumulated incomeper year of eligibility, and their total balances; and

(iii) a reconciliation of the total balances of the principal amounts andthe accumulated income in the statement or schedule to the statementof net assets of the scholarship plan;

(b) the total number of units outstanding; and

(c) a statement of scholarship awards paid to beneficiaries, and areconciliation of the amount of scholarship awards paid with the statementof operations.

(2) Despite the requirements of sections 3.1 and 3.2, an investment fund that isa scholarship plan may omit the “net assets per security” and “increase ordecrease in net assets from operations per security” line items from its financialstatements.




PART 4 MANAGEMENT REPORTS OF FUND PERFORMANCE

4.1 Application - This Part applies to an investment fund that is a reporting issuer.

4.2 Filing of Management Reports of Fund Performance - An investment fund,other than an investment fund that is a scholarship plan, must file an annualmanagement report of fund performance for each financial year and an interimmanagement report of fund performance for each interim period at the same timethat it files its annual financial statements or its interim financial statements forthat financial period.

4.3 Filing of Annual Management Report of Fund Performance for anInvestment Fund that is a Scholarship Plan - An investment fund that is ascholarship plan must file an annual management report of fund performance foreach financial year at the same time that it files its annual financial statements.

4.4 Contents of Management Reports of Fund Performance - A managementreport of fund performance required by this Part must:

(a) be prepared in accordance with Form 81-106F1; and

(b) not incorporate by reference information from any other document thatis required to be included in a management report of fund performance.

4.5 Approval of Management Reports of Fund Performance

(1) The board of directors of an investment fund that is a corporation mustapprove the management report of fund performance of the investment fundbefore the report is filed or made available to a holder or potential purchaser ofsecurities of the investment fund.

(2) The trustee or trustees of an investment fund that is a trust, or anotherperson or company authorized to do so by the constating documents of theinvestment fund, must approve the management report of fund performance ofthe investment fund before the report is filed or made available to a holder orpotential purchaser of securities of the investment fund.

PART 5 DELIVERY OF FINANCIAL STATEMENTS AND MANAGEMENTPART 5 REPORTS OF FUND PERFORMANCE

5.1 Delivery of Certain Continuous Disclosure Documents

(1) In this Part, “securityholder” means a registered holder or beneficialowner of securities issued by an investment fund.

(2) Subject to section 5.2 or section 5.3, an investment fund must send to asecurityholder, by the filing deadline for the document, the following:

(a) annual financial statements;

(b) interim financial statements;

(c) if required to be prepared by the investment fund, the annualmanagement report of fund performance;

(d) if required to be prepared by the investment fund, the interimmanagement report of fund performance.




(3) An investment fund must apply the procedures set out in NationalInstrument 54-101 Communication with Beneficial Owners of Securities of aReporting Issuer when complying with this Part.

(4) Despite subsection (3), National Instrument 54-101 Communication withBeneficial Owners of Securities of a Reporting Issuer does not apply to aninvestment fund with respect to a requirement under this Part if the investmentfund has the necessary information to communicate directly with a beneficialowner of its securities.

5.2 Sending According to Standing Instructions

(1) Subsection 5.1(2) does not apply to an investment fund that requestsstanding instructions from a securityholder in accordance with this section andsends the documents listed in subsection 5.1(2) according to those instructions.

(2) An investment fund relying on subsection 5.2(1) must send, to eachsecurityholder, a document that:

(a) explains the choices a securityholder has to receive the documentslisted in subsection 5.1(2);

(b) solicits instructions from the securityholder about delivery of thosedocuments; and

(c) explains that the instructions provided by the securityholder willcontinue to be followed by the investment fund until they are changed by thesecurityholder.

(3) If a person or company becomes a securityholder of an investment fund, theinvestment fund must solicit instructions in accordance with subsection (2) fromthe securityholder as soon as reasonably practicable after the investment fundaccepts a purchase order from the securityholder.

(4) An investment fund must rely on instructions given under this section until asecurityholder changes them.

(5) At least once a year, an investment fund must send each securityholder areminder that:

(a) the securityholder is entitled to receive the documents listed insubsection 5.1(2);

(b) the investment fund is relying on delivery instructions provided by thesecurityholder;

(c) explains how a securityholder can change the instructions it has given;and

(d) the securityholder can obtain the documents on the SEDAR websiteand on the investment fund’s website, if applicable, and by contacting theinvestment fund.




5.3 Sending According to Annual Instructions

(1) Subsection 5.1(2) does not apply to an investment fund that requests annualinstructions from a securityholder in accordance with this section and sends thedocuments listed in subsection 5.1(2) according to those instructions.

(2) Subsection (1) does not apply to an investment fund that has previouslyrelied on subsection 5.2(1).

(3) An investment fund relying on subsection 5.3(1) must send annually to eachsecurityholder a request form the securityholder may use to instruct theinvestment fund as to which of the documents listed in subsection 5.1(2) thesecurityholder wishes to receive.

(4) The request form described in subsection (3) must be accompanied by a noticeexplaining that:

(a) the securityholder is providing delivery instructions for the currentyear only; and

(b) the documents are available on the SEDAR website and on theinvestment fund’s website, if applicable, and by contacting the investmentfund.

5.4 General

(1) If a securityholder requests any of the documents listed in subsection 5.1(2),an investment fund must send a copy of the requested documents by the later of:

(a) the filing deadline for the requested document; and

(b) 10 calendar days after the investment fund receives the request.

(2) An investment fund must not charge a fee for sending the documentsreferred to in this Part and must ensure that securityholders can respond withoutcost to the solicitations of instructions required by this Part.

(3) Investment funds under common management may solicit one set of deliveryinstructions from a securityholder that will apply to all of the investment fundsunder common management held by that securityholder.

(4) Despite subsection 7.1(3), for the purposes of delivery to a securityholder, aninvestment fund may bind its management report of fund performance with themanagement report of fund performance for one or more other investment funds ifthe securityholder holds each investment fund.

5.5 Websites - An investment fund that is a reporting issuer and that has a websitemust post to the website any documents listed in subsection 5.1(2) no later thanthe date that those documents are filed.




PART 6 QUARTERLY PORTFOLIO DISCLOSURE

6.1 Application - This Part applies to an investment fund that is a reporting issuer,other than a scholarship plan or a labour sponsored or venture capital fund.

6.2 Preparation and Dissemination

(1) An investment fund must prepare quarterly portfolio disclosure that includes:

(a) a summary of investment portfolio prepared in accordance with Item 5of Part B of Form 81-106F1 as at the end of:

(i) each period of at least three months that ends three or nine monthsbefore the end of a financial year of the investment fund; or

(ii) in the case of a transition year of the investment fund, each periodcommencing on the first day of the transition year and ending eitherthree, nine or twelve months, if applicable, after the end of its oldfinancial year; and

(b) the total net asset value of the investment fund as at the end of theperiods specified in (a)(i) or (ii).

(2) An investment fund that has a website must post to the website the quarterlyportfolio disclosure within 60 days of the end of the period for which the quarterlyportfolio disclosure was prepared.

(3) An investment fund must promptly send the most recent quarterly portfoliodisclosure, without charge, to any securityholder of the investment fund, upon arequest made by the securityholder 60 days after the end of the period to whichthe quarterly portfolio disclosure pertains.

PART 7 BINDING AND PRESENTATION

7.1 Binding of Financial Statements and Management Reports of FundPerformance

(1) An investment fund must not bind its financial statements with the financialstatements of another investment fund in a document unless all informationrelating to the investment fund is presented together and not intermingled withinformation relating to the other investment fund.

(2) Despite subsection (1), if a document contains the financial statements ofmore than one investment fund, the notes to the financial statements may becombined and presented in a separate part of the document.

(3) An investment fund must not bind its management report of fund performancewith the management report of fund performance for another investment fund.

7.2 Multiple Class Investment Funds

(1) An investment fund that has more than one class or series of securitiesoutstanding that are referable to a single portfolio must prepare financialstatements and management reports of fund performance that contain informationconcerning all of the classes or series.

(2) If an investment fund has more than one class or series of securitiesoutstanding, the distinctions between the classes or series must be disclosed inthe financial statements and management reports of fund performance.




PART 8 INDEPENDENT VALUATIONS FOR LABOUR SPONSORED ORPART 8 VENTURE CAPITAL FUNDS

8.1 Application - This Part applies to a labour sponsored or venture capital fundthat is a reporting issuer.

8.2 Exemption from Requirement to Disclose Individual Current Values forVenture Investments - Despite item 5 of subsection 3.5(1), a labour sponsoredor venture capital fund is exempt from the requirement to present separately in astatement of investment portfolio the current value of each venture investmentthat does not have a market value if:

(a) the labour sponsored or venture capital fund discloses in the statementof investment portfolio:

(i) the cost amounts for each venture investment;

(ii) the total cost of the venture investments;

(iii) the total adjustment from cost to current value of the ventureinvestments; and

(iv) the total current value of the venture investments;

(b) the labour sponsored or venture capital fund discloses in the statementof investment portfolio tables showing the distribution of venture investmentsby stage of development and by industry classification including:

(i) the number of venture investments in each stage of developmentand industry class;

(ii) the total cost and aggregate current value of the ventureinvestments for each stage of development and industry class; and

(iii) the total cost and aggregate current value of venture investmentsfor each stage of development and industry class as a percentage oftotal venture investments;

(c) for a statement of investment portfolio contained in annual financialstatements, the labour sponsored or venture capital fund has obtained anindependent valuation relating to the value of the venture investments or tothe net assets of the fund and has filed the independent valuationconcurrently with the filing of the annual financial statements;

(d) for a statement of investment portfolio contained in interim financialstatements, the labour sponsored or venture capital fund obtained and filedthe independent valuation referred to in paragraph (c) in connection withthe preparation of the most recent annual financial statements of the laboursponsored or venture capital fund; and

(e) the labour sponsored or venture capital fund has disclosed in theapplicable financial statements that an independent valuation has beenobtained as of the end of the applicable financial year.




8.3 Disclosure Concerning Independent Valuator - A labour sponsored orventure capital fund that obtains an independent valuation must include, in thestatement of investment portfolio contained in its annual financial statements, orin the notes to the annual financial statements,

(a) a description of the independent valuator’s qualifications; and

(b) a description of any past, present or anticipated relationship betweenthe independent valuator and the labour sponsored or venture capital fund,its manager or portfolio adviser.

8.4 Content of Independent Valuation - An independent valuation must providethe aggregate current value of the venture investments or the net assets of thelabour sponsored or venture capital fund as at the fund’s financial year end.

8.5 Independent Valuator’s Consent - A labour sponsored or venture capital fundobtaining an independent valuation must:

(a) obtain the independent valuator’s consent to its filing; and

(b) include a statement in the valuation report, signed by the independentvaluator, in substantially the following form:

“We refer to the independent valuation of the [net assets/ventureinvestments] of [name of labour sponsored or venture capital fund] as of[date of financial year end] dated. We consent to the filing of theindependent valuation with the securities regulatory authorities.”

PART 9 ANNUAL INFORMATION FORM


9.2 Requirement to File Annual Information Form- An investment fund mustfile an annual information form if the investment fund has not obtained a receiptfor a prospectus during the last 12 months preceding its financial year end.

9.3 Filing Deadline for Annual Information Form - An investment fund requiredunder section 9.2 to file an annual information form must file the annualinformation form no later than 90 days after the end of its most recently completedfinancial year.

9.4 Preparation and Content of Annual Information Form

(1) An annual information form required to be filed under section 9.2 must beprepared as of the end of the most recently completed financial year of theinvestment fund to which it pertains.

(2) An annual information form required to be filed must be prepared inaccordance with Form 81-101F2, except that:

(a) a reference to “mutual fund” must be read as a reference to “investmentfund”;

(b) General Instructions (3), (10) and (14) of Form 81-101F2 do not apply;

(c) subsections (3), (4) and (6) of Item 1.1 of Form 81-101F2 do not apply;

(d) subsections (3), (4) and (6) of Item 1.2 of Form 81-101F2 do not apply;

(e) Item 5 of Form 81-101F2 must be completed in connection with all of thesecurities of the investment fund;




(f) Item 15 of Form 81-101F2 does not apply to an investment fund that is acorporation, except for the disclosure in connection with the independentreview committee; and

(g) Items 19, 20, 21 and 22 of Form 81-101F2 do not apply.

(3) An investment fund required to file an annual information form must at thesame time file copies of all material incorporated by reference in the annualinformation form that it has not previously filed.

PART 10 PROXY VOTING DISCLOSURE FOR PORTFOLIO SECURITIESPART 10 HELD


10.2 Requirement to Establish Policies and Procedures

(1) An investment fund must establish policies and procedures that it will followto determine whether, and how, to vote on any matter for which the investmentfund receives, in its capacity as securityholder, proxy materials for a meeting ofsecurityholders of an issuer.

(2) The policies and procedures referred to in subsection (1) must include:

(a) a standing policy for dealing with routine matters on which theinvestment fund may vote;

(b) the circumstances under which the investment fund will deviate fromthe standing policy for routine matters;

(c) the policies under which, and the procedures by which, the investmentfund will determine how to vote or refrain from voting on non-routinematters; and

(d) procedures to ensure that portfolio securities held by the investmentfund are voted in accordance with the instructions of the investment fund.

(3) An investment fund that has not prepared an annual information form inaccordance with Part 9 or in accordance with National Instrument 81-101 MutualFund Prospectus Disclosure must include a summary of the policies andprocedures required by this section in its prospectus.

10.3 Proxy Voting Record - An investment fund must maintain a proxy votingrecord that includes, for each time that the investment fund receives, in itscapacity as securityholder, materials relating to a meeting of securityholders of areporting issuer or the equivalent of a reporting issuer in a foreign jurisdiction:

(a) the name of the issuer;

(b) the exchange ticker symbol of the portfolio securities, unless not readilyavailable to the investment fund;

(c) the CUSIP number for the portfolio securities;

(d) the meeting date;

(e) a brief identification of the matter or matters to be voted on at themeeting;

(f) whether the matter or matters voted on were proposed by the issuer, itsmanagement or another person or company;




(g) whether the investment fund voted on the matter or matters;

(h) if applicable, how the investment fund voted on the matter or matters;and

(i) whether votes cast by the investment fund were for or against therecommendations of management of the issuer.

10.4 Preparation and Availability of Proxy Voting Record

(1) An investment fund must prepare a proxy voting record on an annual basisfor the period ending on June 30 of each year.

(2) An investment fund that has a website must post the proxy voting record tothe website no later than August 31 of each year.

(3) An investment fund must promptly send the most recent copy of theinvestment fund’s proxy voting policies and procedures and proxy voting record,without charge, to any securityholder upon a request made by the securityholderafter August 31.

PART 11 MATERIAL CHANGE REPORTS


11.2 Publication of Material Change

(1) If a material change occurs in the affairs of an investment fund, theinvestment fund must:

(a) promptly issue and file a news release that is authorized by anexecutive officer of the manager of the investment fund and that disclosesthe nature and substance of the material change;

(b) post all disclosure made under paragraph (a) on the website of theinvestment fund or the investment fund manager;

(c) as soon as practicable, but in any event no later than 10 days after thedate on which the change occurs, file a report containing the informationrequired by Form 51-102F3, except that a reference in Form 51-102F3 to:

(i) the term “material change” must be read as “material change”under this Instrument;

(ii) “section 7.1 of National Instrument 51-102” in Item 3 of Part 2must be read as a reference to “section 11.2 of NationalInstrument 81-106”;

(iii) “subsection 7.1(2) of National Instrument 51-102” in Item 6 ofPart 2 must be read as a reference to “subsection 11.2(2) of NationalInstrument 81-106”;

(iv) “subsection 7.1(5) of National Instrument 51-102” in Items 6and 7 of Part 2 must be read as a reference to “subsection 11.2(4) ofNational Instrument 81-106”; and




(v) “executive officer of your company” in Item 8 of Part 2 must beread as a reference to “officer of the investment fund or of the managerof the investment fund”; and

(d) file an amendment to its prospectus or simplified prospectus thatdiscloses the material change in accordance with the requirements ofsecurities legislation.

(2) If:

(a) in the opinion of the board of directors or trustee of an investment fundor the manager, and if that opinion is arrived at in a reasonable manner, thedisclosure required by subsection (1) would be unduly detrimental to theinvestment fund’s interest; or

(b) the material change:

(i) consists of a decision to implement a change made by seniormanagement of the investment fund or senior management of themanager of the investment fund who believe that confirmation of thedecision by the board of directors or persons acting in a similar capacityis probable; and

(ii) senior management of the investment fund or senior managementof the manager of the investment fund has no reason to believe thatpersons with knowledge of the material change have made use of thatknowledge in purchasing or selling securities of the investment fund,

the investment fund may, instead of complying with subsection (1),immediately file the report required under paragraph (1)(c) marked toindicate that it is confidential, together with written reasons fornon-disclosure.

(3) Repealed. 25 Jly 2008 SR 59/2008 s5.

(4) If a report has been filed under subsection (2), the investment fund mustadvise the regulator or securities regulatory authority in writing within 10 days ofthe initial filing of the report if it believes the report should continue to remainconfidential and every 10 days thereafter until the material change is generallydisclosed in the manner referred to in subsection (1) or, if the material changeconsists of a decision of the type referred to in paragraph (2)(b), until that decisionhas been rejected by the board of directors of the investment fund or the board ofdirectors of the manager of the investment fund.

(5) Despite filing a report under subsection (2), an investment fund mustpromptly and generally disclose the material change in the manner referred to insubsection (1) upon the investment fund becoming aware, or having reasonablegrounds to believe, that a person or company is purchasing or selling securities ofthe investment fund with knowledge of the material change that has not beengenerally disclosed.




PART 12 PROXY SOLICITATION AND INFORMATION CIRCULARS


12.2 Sending of Proxies and Information Circulars

(1) If management of an investment fund or the manager of an investment fundgives or intends to give notice of a meeting to registered holders of the investmentfund, management or the manager must, at the same time as or before giving thatnotice, send to each registered holder who is entitled to notice of the meeting aform of proxy for use at the meeting.

(2) A person or company that solicits proxies from registered holders of aninvestment fund must:

(a) in the case of a solicitation by or on behalf of management of theinvestment fund, send with the notice of meeting to each registered holderwhose proxy is solicited a completed Form 51-102F5; or

(b) in the case of a solicitation by or on behalf of any person or companyother than management of the investment fund, at the same time as orbefore the solicitation, send a completed Form 51-102F5 and a form of proxyto each registered holder whose proxy is solicited.

(3) Repealed. 25 Jly 2008 SR 59/2008 s5.

12.3 Exemption

(1) Subsection 12.2(2) does not apply to a solicitation by a person or company inrespect of securities of which the person or company is the beneficial owner.

(2) Paragraph 12.2(2)(b) does not apply to a solicitation if the total number ofsecurityholders whose proxies are solicited is not more than 15.

(3) For the purposes of subsection (2), two or more persons or companies who arejoint registered owners of one or more securities are considered to be onesecurityholder.

12.4 Compliance with National Instrument 51-102 - A person or company thatsolicits proxies under section 12.2 must comply with sections 9.3 and 9.4 ofNational Instrument 51-102 as if those sections applied to the person or company.

PART 13 CHANGE OF AUDITOR DISCLOSURE


13.2 Change of Auditor - Section 4.11 of National Instrument 51-102 applies to aninvestment fund that changes its auditor, except that references in that section tothe “board of directors” are to be read as references to:

(a) if the investment fund is a corporation, the “board of directors of theinvestment fund”, or

(b) if the investment fund is a trust, the “trustee or trustees or anotherperson or company authorized by the constating documents of the investmentfund”.




PART 14 CALCULATION OF NET ASSET VALUE


14.2 Calculation, Frequency and Currency

(1) The net asset value of an investment fund must be calculated using the fairvalue of the investment fund’s assets and liabilities.

(1.1) The net asset value of an investment fund must include the income andexpenses of the investment fund accrued up to the date of calculation of the netasset value.

(1.2) For the purposes of subsection (1), fair value means:

(a) the market value based on reported prices and quotations in an activemarket; or

(b) if the market value is not available, or the manager of the investmentfund believes that it is unreliable, a value that is fair and reasonable in allthe relevant circumstances.

(1.3) The manager of an investment fund must:

(a) establish and maintain appropriate written policies and procedures fordetermining the fair value of the investment fund’s assets and liabilities;and

(b) consistently follow those policies and procedures.

(1.4) The manager of an investment fund must maintain a record of thedetermination of fair value and the reasons supporting that determination.

(2) For the purposes of calculating net asset value for purchases and redemptionsof its securities as required by Parts 9 and 10 of National Instrument 81-102Mutual Funds, a labour sponsored or venture capital fund that has included adeferred charge for sales commissions in the calculation may continue to do so,provided that:

(a) the calculation reflects the amortization of this deferred charge over theremaining amortization period; and

(b) the labour sponsored or venture capital fund ceased adding to thisdeferred charge by December 31, 2003.

(3) The net asset value of an investment fund must be calculated:

(a) if the investment fund does not use specified derivatives, at least oncein each week; or

(b) if the investment fund uses specified derivatives, at least once everybusiness day.

(4) A mutual fund that holds securities of other mutual funds must have datesfor the calculation of net asset value that are compatible with those of the othermutual funds.




(5) Despite paragraph 3(a), an investment fund that, at the date that thisInstrument comes into force, calculates net asset value no less frequently thanonce a month may continue to calculate net asset value at least as frequently as itdoes at that date.

(6) The net asset value of an investment fund must be calculated in the currencyof Canada or in the currency of the United States of America or both.

(7) An investment fund that arranges for the publication of its net asset value inthe financial press must ensure that its current net asset value is provided on atimely basis to the financial press.

14.3 Portfolio Transactions - The net asset value of an investment fund mustinclude each purchase or sale of a portfolio asset no later than in the nextcalculation of the net asset value after the date the purchase or sale becomesbinding.

14.4 Capital Transactions - The investment fund must include each issue orredemption of a security of the investment fund in the next calculation of net assetvalue the investment fund makes after the calculation of net asset value used toestablish the issue or redemption price.

PART 15 CALCULATION OF MANAGEMENT EXPENSE RATIO

15.1 Calculation of Management Expense Ratio

(1) An investment fund may disclose its management expense ratio only if themanagement expense ratio is calculated for the financial year or interim period ofthe investment fund and if it is calculated by:

(a) dividing:

(i) the aggregate of:

(A) total expenses of the investment fund, excluding commissionsand other portfolio transaction costs, before income taxes, for thefinancial year or interim period, as shown on its statement ofoperations; and

(B) any other fee, charge or expense of the investment fund thathas the effect of reducing the investment fund’s net asset value;

by:

(ii) the average net asset value of the investment fund for thefinancial year or interim period, obtained by:

(A) adding together the net asset values of the investment fundas at the close of business of the investment fund on each dayduring the financial year or interim period on which the net assetvalue of the investment fund has been calculated, and

(B) dividing the amount obtained under clause (A) by thenumber of days during the financial year or interim period onwhich the net asset value of the investment fund has beencalculated; and




(b) multiplying the result obtained under paragraph (a) by 100.

(2) If any fees and expenses otherwise payable by an investment fund in afinancial year or interim period were waived or otherwise absorbed by a memberof the organization of the investment fund, the investment fund must disclose, ina note to the disclosure of its management expense ratio, details of:

(a) what the management expense ratio would have been without anywaivers or absorptions;

(b) the length of time that the waiver or absorption is expected to continue;

(c) whether the waiver or absorption can be terminated at any time by themember of the organization of the investment fund; and

(d) any other arrangements concerning the waiver or absorption.

(3) Investment fund expenses rebated by a manager or an investment fund to asecurityholder must not be deducted from total expenses of the investment fund indetermining the management expense ratio of the investment fund.

(4) An investment fund that has separate classes or series of securities mustcalculate a management expense ratio for each class or series, in the mannerrequired by this section, modified as appropriate.

(5) The management expense ratio of an investment fund for a financial periodof less than or greater than twelve months must be annualized.

(6) If an investment fund provides its management expense ratio to a serviceprovider that will arrange for public dissemination of the management expenseratio:

(a) the investment fund must provide the management expense ratiocalculated in accordance with this Part; and

(b) the requirement to provide note disclosure contained in subsection (2)does not apply if the investment fund indicates, as applicable, that fees havebeen waived, expenses have been absorbed, or that fees or expenses werepaid directly by investors during the period for which the managementexpense ratio was calculated.

15.2 Fund of Funds Calculation

(1) For the purposes of subparagraph 15.1(1)(a)(i), the total expenses for afinancial year or interim period of an investment fund that invests in securities ofother investment funds is equal to the sum of:

(a) the total expenses incurred by the investment fund that are for theperiod for which the calculation of the management expense ratio is madeand that are attributable to its investment in each underlying investmentfund, as calculated by:

(i) multiplying the total expenses of each underlying investment fund,excluding commissions and other portfolio transaction costs, beforeincome taxes, for the financial year or interim period, by;

(ii) the average proportion of securities of the underlying investmentfund held by the investment fund during the financial year or interimperiod, calculated by:




(A) adding together the proportion of securities of the underlyinginvestment fund held by the investment fund on each day in theperiod; and

(B) dividing the amount obtained under clause (A) by thenumber of days in the period; and

(b) the total expenses of the investment fund, excluding commissions andother portfolio transaction costs, before income taxes, for the period.

(2) An investment fund that has exposure to one or more other investment fundsthrough the use of derivatives in a financial year or interim period must calculateits management expense ratio for the financial year or interim period in themanner described in subsection (1), treating each investment fund to which it hasexposure as an “underlying investment fund” under subsection (1).

(3) Subsection (2) does not apply if the derivatives do not expose the investmentfund to expenses that would be incurred by a direct investment in the relevantinvestment funds.

(4) Management fees rebated by an underlying fund to an investment fund thatinvests in the underlying fund must be deducted from total expenses of theunderlying fund if the rebate is made for the purpose of avoiding duplication offees between the two investment funds.

PART 16 ADDITIONAL FILING REQUIREMENTS


16.2 Additional Filing Requirements - If an investment fund sends to itssecurityholders any disclosure document other than those required by thisInstrument, the investment fund must file a copy of the document on the samedate as, or as soon as practicable after, the date on which the document is sent toits securityholders.

16.3 Voting Results - An investment fund must, promptly following a meeting ofsecurityholders at which a matter was submitted to a vote, file a report thatdiscloses, for each matter voted upon:

(a) a brief description of the matter voted upon and the outcome of the vote;and

(b) if the vote was conducted by ballot, the number and percentage of votescast, which includes votes cast in person and by proxy, for, against, orwithheld from, each vote.




16.4 Filing of Material Contracts - An investment fund that is not subject toNational Instrument 81-101 Mutual Fund Prospectus Disclosure, or securitieslegislation that imposes a similar requirement, must file a copy of any materialcontract of the investment fund not previously filed, or any amendment to anymaterial contract of the investment fund not previously filed:

(a) with the final prospectus of the investment fund; or

(b) upon the execution of the material contract or amendment.

PART 17 EXEMPTIONS

17.1 Exemption


(2) Despite subsection (1), in Ontario only the regulator may grant an exemptionfrom any part of this Instrument.

PART 18 EFFECTIVE DATE AND TRANSITION

18.1 Effective Date - This Instrument comes into force on June 1, 2005.

18.2 Repealed. 29 Aug 2008 SR 72/2008 s6.

18.3 Repealed. 29 Aug 2008 SR 72/2008 s6.

18.4 Repealed. 29 Aug 2008 SR 72/2008 s6.

18.5 Repealed. 29 Aug 2008 SR 72/2008 s6.

18.6 Existing Exemptions

(1) An investment fund that has obtained an exemption or waiver from, orapproval under, securities legislation, National Policy 39, NationalInstrument 81-101 Mutual Fund Prospectus Disclosure, NationalInstrument 81-102 Mutual Funds, National Instrument 81-104 Commodity Poolsor National Instrument 81-105 Mutual Fund Sales Practices relating to itscontinuous disclosure obligations is exempt from any substantially similarprovision of this Instrument to the same extent and on the same conditions, if any,as contained in the exemption, waiver or approval, unless the regulator orsecurities regulatory authority has revoked that exemption, waiver or approvalunder authority provided to it in securities legislation.

(2) An investment fund must, at the time that it first intends to rely onsubsection (1) in connection with a filing requirement under this Instrument,inform the securities regulatory authority in writing of:

(a) the general nature of the prior exemption, waiver or approval and thedate on which it was granted; and

(b) the provision in respect of which the prior exemption, waiver orapproval applied and the substantially similar provision of this Instrument.




NATIONAL INSTRUMENT 81-106INVESTMENT FUND CONTINUOUS DISCLOSURE

FORM 81-106F1CONTENTS OF ANNUAL AND INTERIM MANAGEMENT REPORT

OF FUND PERFORMANCE

PART A INSTRUCTIONS AND INTERPRETATION

Item 1 General

(a) The Form

The Form describes the disclosure required in an annual or interim managementreport of fund performance (MRFP) of an investment fund. Each item of the Formoutlines disclosure or format requirements. Instructions to help you comply withthese requirements are printed in italic type.

(b) Plain Language

An MRFP must state the required information concisely and in plain language (asdefined in National Instrument 81-101 Mutual Fund Prospectus Disclosure).Refer to Part 1 of Companion Policy 81-106CP for a discussion concerning plainlanguage and presentation.

When preparing an MRFP, respond as simply and directly as is reasonablypossible and include only as much information as is necessary for readers tounderstand the matters for which you are providing disclosure.

(c) Format

Present the MRFP in a format that assists readability and comprehension. TheForm generally does not mandate the use of a specific format to achieve thesegoals, except in the case of disclosure of financial highlights and past performanceas required by Items 3 and 4 of each of Parts B and C of the Form; that disclosuremust be presented in the format specified in the Form.

An MRFP must use the headings and sub-headings shown in the Form. Withinthis framework, investment funds are encouraged to use, as appropriate, tables,captions, bullet points or other organizational techniques that assist in presentingthe required disclosure clearly and concisely. Disclosure provided in response toany item does not need to be repeated elsewhere. The interim MRFP must use thesame headings as used in the annual MRFP.

The Form does not prohibit including information beyond what the Formrequires. An investment fund may include artwork and educational material (asdefined in National Instrument 81-101 Mutual Fund Prospectus Disclosure) in itsannual and interim MRFP. However, an investment fund must take reasonablecare to ensure that including such material does not obscure the requiredinformation and does not lengthen the MRFP excessively.




(d) Focus on Material Information

You do not need to disclose information that is not material. You do not need torespond to any item in this Form that is inapplicable and you may omit negativeanswers.

(e) What is Material?

Would a reasonable investor’s decision to buy, sell or hold securities of aninvestment fund likely be influenced or changed if the information in questionwas omitted or misstated? If so, the information is material. This concept ofmateriality is consistent with the financial reporting notion of materialitycontained in the Handbook. In determining whether information is material, takeinto account both quantitative and qualitative factors.

(f) Terminology

All references to “net assets” or “net assets per security” in this Form arereferences to net assets determined in accordance with Canadian GAAP aspresented in the financial statements of the investment fund. All references to“net asset value” or “net asset value per security” in this Form are references tonet asset value determined in accordance with Part 14 of the Instrument.

Investment funds must use net assets as shown on the financial statements in the“The Fund’s Net Assets per [Unit/Share]” table. All other calculations for thepurposes of the MRFP must be made using net asset value.

Item 2 Management Discussion of Fund Performance

The management discussion of fund performance is an analysis and explanationthat is designed to complement and supplement an investment fund’s financialstatements. The discussion is the equivalent to the corporate managementdiscussion and analysis (MD&A) with specific modifications for investment funds.It provides the manager of an investment fund with the opportunity to discuss theinvestment fund’s position and financial results for the relevant period. Thediscussion is intended to give a reader the ability to look at the investment fundthrough the eyes of management by providing both a historical and prospectiveanalysis of the investment activities and operations of the investment fund.Coupled with the financial highlights, this information should enable readers tobetter assess the investment fund’s performance and future prospects.

Focus the management discussion on material information about the performanceof the investment fund, with particular emphasis on known material trends,commitments, events, risks or uncertainties that the manager reasonably expectsto have a material effect on the investment fund’s future performance orinvestment activities.

The description of the disclosure requirements is intentionally general. This Formcontains a minimum number of specific instructions in order to allow, as well asencourage, investment funds to discuss their activities in the most appropriatemanner and to tailor their comments to their individual circumstances.




PART B CONTENT REQUIREMENTS FOR ANNUAL MANAGEMENTPART B REPORT OF FUND PERFORMANCE

Item 1 First Page Disclosure

The first page of an annual MRFP must contain disclosure in substantially thefollowing words:

“This annual management report of fund performance contains financialhighlights but does not contain the complete annual financial statements ofthe investment fund. You can get a copy of the annual financial statementsat your request, and at no cost, by calling [toll-free/collect call telephonenumber], by writing to us at [insert address] or by visiting our website at[insert address] or SEDAR at www.sedar.com.

Securityholders may also contact us using one of these methods to request acopy of the investment fund’s proxy voting policies and procedures, proxyvoting disclosure record, or quarterly portfolio disclosure.”

INSTRUCTION:

If the MRFP is bound with the financial statements of the investment fund,modify the first page wording appropriately.


2.1 Investment Objective and Strategies

Disclose under the heading “Investment Objective and Strategies” a briefsummary of the fundamental investment objective and strategies of the investmentfund.

INSTRUCTION:

Disclosing the fundamental investment objective provides investors with a referencepoint for assessing the information contained in the MRFP. It must be a concisesummary of the fundamental investment objective and strategies of the investmentfund, and not merely copied from the prospectus.

2.2 Risk

Disclose under the heading “Risk” a discussion of how changes to the investmentfund over the financial year affected the overall level of risk associated with aninvestment in the investment fund.




INSTRUCTION:

Ensure that the discussion is not merely a repeat of information contained in theprospectus of the investment fund, but rather a discussion that reflects any changesin risk level of the investment fund over the financial year.

Consider how the changes in the risks associated with an investment in theinvestment fund affect the suitability or investor risk tolerance stated in theprospectus or offering document. All investment funds should refer to Items 9 and10 of Part B of Form 81-101F1 as if those sections applied to them.


(1) Under the heading “Results of Operations” provide a summary of the resultsof operations of the investment fund for the financial year to which the MDFPpertains, including a discussion of:

(a) any material changes in investments in specific portfolio assets andoverall asset mix from the previous period;

(b) how the composition and changes to the composition of the investmentportfolio relate to the investment fund’s fundamental investment objectiveand strategies or to changes in the economy, markets or unusual events;

(c) unusual trends in redemptions or sales and the effect of these on theinvestment fund;

(d) significant components and changes to the components of revenue andexpenses;

(e) risks, events, trends and commitments that had a material effect onpast performance; and

(f) unusual or infrequent events or transactions, economic changes andmarket conditions that affected performance.

(2) An investment fund that borrows money, other than immaterial operatingoverdrafts, must disclose:

(a) the minimum and maximum amount borrowed during the period;

(b) the percentage of net assets of the investment fund that the borrowingrepresented as of the end of the period;

(c) how the borrowed money was used; and

(d) the terms of the borrowing arrangements.




INSTRUCTION:

Explain the nature of and reasons for changes in your investment fund’sperformance. Do not simply disclose the amount of change in a financial statementitem from period to period. Avoid the use of boilerplate language. Your discussionshould assist the reader to understand the significant factors that have affected theperformance of the investment fund.

2.4 Recent Developments

Under the heading “Recent Developments” discuss the developments affecting theinvestment fund, including:

(a) known changes to the strategic position of the investment fund;

(b) known material trends, commitments, events or uncertainties thatmight reasonably be expected to affect the investment fund;

(c) changes to the manager or portfolio adviser, or change of control of themanager, of the investment fund;

(d) the effects of any actual or planned reorganizations, mergers or similartransactions;

(e) the estimated effects of changes in accounting policies adopted subsequentto year end; and

(f) changes to the composition or members of the independent reviewcommittee of the investment fund.

INSTRUCTIONS:

(1) Preparing the management discussion necessarily involves some degree of predictionor projection. The discussion must describe anticipated events, decisions, circumstances,opportunities and risks that management considers reasonably likely to materiallyimpact performance. It must also describe management’s vision, strategy and targets.

(2) There is no requirement to provide forward-looking information. If anyforward-looking information is provided, it must contain a statement that theinformation is forward-looking, a description of the factors that may cause actualresults to differ materially from the forward-looking information, your materialassumptions and appropriate risk disclosure and cautionary language. You must alsodiscuss any forward-looking information disclosed for a prior period which, in light ofintervening events and absent further explanations, may be misleading.

2.5 Related Party Transactions

Under the heading “Related Party Transactions” discuss any transactionsinvolving related parties to the investment fund.




INSTRUCTIONS:

(1) In determining who is a related party, investment funds should look to theHandbook. In addition, related parties include the manager and portfolio adviser(or their affiliates) and a broker or dealer related to any of the investment fund, itsmanager or portfolio adviser.

(2) When discussing related party transactions, include the identity of the relatedparty, the relationship to the investment fund, the purpose of the transaction, themeasurement basis used to determine the recorded amount and any ongoingcommitments to the related party.

(3) Related party transactions include portfolio transactions with related partiesof the investment fund. When discussing these transactions, include the dollaramount of commission, spread or any other fee that the investment fund paid toany related party in connection with a portfolio transaction.

(4) If the investment fund has an independent review committee, state whetherthe investment fund has relied on the positive recommendation or approval of theindependent review committee to proceed with the transaction, and provide detailsof any conditions or parameters surrounding the transaction imposed by theindependent review committee in its positive recommendation or approval.




Item 3 Financial Highlights

3.1 Financial Highlights

(1) Provide selected financial highlights for the investment fund under theheading “Financial Highlights” in the form of the following tables, appropriatelycompleted, and introduced using the following words:

“The following tables show selected key financial information about theFund and are intended to help you understand the Fund’s financialperformance for the past [insert number] years.

The Fund’s Net Assets per [Unit/Share](1)

[insert year] [insert year] [insert year] [insert year] [insert year]

Net Asset Value, beginning of year $ $ $ $ $

Increase (decrease) from operations:

total revenue $ $ $ $ $

total expenses $ $ $ $ $

realized gains (losses) for the period $ $ $ $ $

unrealized gains (losses) for the period $ $ $ $ $

Total increase (decrease)from operations (2) $ $ $ $ $

Distributions:

From income (excluding dividends) $ $ $ $ $

From dividends $ $ $ $ $

From capital gains $ $ $ $ $

Return of capital $ $ $ $ $

Total Annual Distributions(3) $ $ $ $ $

Net asset value at [insert last dayof financial year] of year shown $ $ $ $ $

(1) This information is derived from the Fund’s audited annual financial statements. The net assets persecurity presented in the financial statements differs from the net asset value calculated for fund pricingpurposes. [An explanation of these differences can be found in the notes to the financial statements./Thisdifference is due to [explain].]

(2) Net assets and distributions are based on the actual number of [units/shares] outstanding at the relevanttime. The increase/decrease from operations is based on the weighted average number of [units/shares]outstanding over the financial period.

(3) Distributions were [paid in cash/reinvested in additional [units/shares] of the Fund, or both].




Ratios and Supplemental Data


Total net assets (000’s)(1) $ $ $ $ $

Number of [units/shares] outstanding(1)

Management expense ratio(2) % % % % %

Management expense ratio beforewaivers or absorptions % % % % %

Trading expense ratio(3) % % % % %

Portfolio turnover rate(4) % % % % %

Net asset value per [unit/share] % % % % %

Closing market price [if applicable] $ $ $ $ $

(1) This information is provided as at [insert date of end of financial year] of the year shown.

(2) Management expense ratio is based on total expenses (excluding commissions and other portfoliotransaction costs) for the stated period and is expressed as an annualized percentage of daily average net assetvalue during the period.

(3) The trading expense ratio represents total commissions and other portfolio transaction costs expressed asan annualized percentage of daily average net asset value during the period.

(4) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio adviser manages itsportfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of thesecurities in its portfolio once in the course of the year. The higher a fund’s portfolio turnover rate in a year, thegreater the trading costs payable by the fund in the year, and the greater the chance of an investor receivingtaxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and theperformance of a fund.

(2) Repealed. 29 Aug 2008 SR 72/2008 s6.

(3) Modify the table appropriately for corporate investment funds.

(4) Show the financial highlights individually for each class or series, if amulti-class fund.

(5) Provide per unit or per share amounts to the nearest cent, and providepercentage amounts to two decimal places.

(6) Except for net assets, net value and distributions, calculate per unit/sharevalues on the basis of the weighted average number of unit/shares outstandingover the financial period.

(7) Provide the selected financial information required by this Item inchronological order for each of the five most recently completed financial years ofthe investment fund for which audited financial statements have been filed, withthe information for the most recent financial year in the first column on the left ofthe table.

(8) If the investment fund has merged with another investment fund, include inthe table only the financial information of the continuing investment fund.

(9) Calculate the management expense ratio of the investment fund as requiredby Part 15 of the Instrument. Include a brief description of the method ofcalculating the management expense ratio in a note to the table.




(10) If the investment fund:

(a) changed, or proposes to change, the basis of the calculation of themanagement fees or of the other fees, charges or expenses that are chargedto the investment fund; or

(b) introduces or proposes to introduce a new fee,

and if the change would have had an effect on the management expense ratio forthe last completed financial year of the investment fund if the change had been ineffect throughout that financial year, disclose the effect of the change on themanagement expense ratio in a note to the “Ratios and Supplemental Data” table.

(11) Do not include disclosure concerning portfolio turnover rate for a moneymarket fund.

(12)(a) Calculate the trading expense ratio by dividing:

(i) the total commissions and other portfolio transaction costs disclosedin the statement of operations, by;

(ii) the same denominator used to calculate the management expenseratio.

(b) If an investment fund invests in securities of other investment funds,calculate the trading expense ratio using the methodology required for thecalculation of the management expense ratio in section 15.2 of the Instrument,making reasonable assumptions or estimates when necessary.

(13) Provide the closing market price only if the investment fund is traded on anexchange.

INSTRUCTIONS:

(1) Calculate the investment fund’s portfolio turnover rate by dividing the lesserof the amounts of the cost of purchases and proceeds of sales of portfolio securitiesfor the financial year by the average of the value of the portfolio securities owned bythe investment fund in the financial year. Calculate the monthly average bytotalling the values of portfolio securities as at the beginning and end of the firstmonth of the financial year and as at the end of each of the succeeding 11 monthsand dividing the sum by 13. Exclude from both numerator and denominatoramounts relating to all portfolio securities having a remaining term to maturity onthe date of acquisition by the investment fund of one year or less.

(2) Further to instruction (1), include:

(a) proceeds from a short sale in the value of the portfolio securities soldduring the period;

(b) the cost of covering a short sale in the value of portfolio securitiespurchased during the period;

(c) premiums paid to purchase options in the value of portfolio securitiespurchased during the period; and

(d) premiums received from the sale of options in the value of the portfoliosecurities sold during the period.

(3) If the investment fund acquired the assets of another investment fund inexchange for its own shares during the financial year in a purchase-of-assetstransaction, exclude from the calculation of portfolio turnover rate the value ofsecurities acquired and sold to realign the fund’s portfolio. Adjust the denominatorof the portfolio turnover computation to reflect these excluded purchases and salesand disclose them in a footnote





An investment fund that is a scholarship plan must comply with Item 3.1, exceptthat the following table must replace “The Fund’s Net Assets per [Unit/Share]”table and the “Ratios and Supplemental Data” table.

Financial & Operating Highlights (with comparative figures)


Balance Sheet

Total Assets $ $ $ $ $

Net Assets $ $ $ $ $

% change of Net Assets % % % % %

Statement of Operations

Scholarship Awards $ $ $ $ $

Canadian EducationSavings Grant $ $ $ $ $

Net investment income $ $ $ $ $

Other

Total number of[agreements/units] in plans

% change in the totalnumber of agreements % % % % %

3.3 Management Fees

Disclose the basis for calculating the management fees paid by the investmentfund and a breakdown of the services received in consideration of the managementfees, as a percentage of management fees.

INSTRUCTION:

The disclosure must list the major services paid for out of the management fees,including portfolio adviser compensation, waived or absorbed expenses, trailingcommissions and sales commissions, if applicable. Services may be groupedtogether so that commercially sensitive information, such as the specific compensationpaid to a portfolio adviser or the manager’s profit, is not determinable.

Item 4 Past Performance

4.1 General

(1) In responding to the requirements of this Item, an investment fund mustcomply with sections 15.2, 15.3, 15.9, 15.10, 15.11 and 15.14 of NationalInstrument 81-102 Mutual Funds as if those sections applied to the annualMRFP.

(2) Despite the specific requirements of this Item, do not provide performancedata for any period if the investment fund was not a reporting issuer at all timesduring the period.




(3) Set out in the footnotes to the chart or table required by this Item theassumptions relevant to the calculation of the performance information, includingany assumptions or estimates made in order to calculate the return on the shortportfolio, if applicable. Include a statement of the significance of the assumptionthat distributions are reinvested for taxable investments.

(4) In a general introduction to the “Past Performance” section, indicate, asapplicable, that:

(a) the performance information shown assumes that all distributionsmade by the investment fund in the periods shown were reinvested inadditional securities of the investment fund;

(b) the performance information does not take into account sales,redemption, distribution or other optional charges that would have reducedreturns or performance; and

(c) how the investment fund has performed in the past does not necessarilyindicate how it will perform in the future.

(5) Use a linear scale for each axis of the bar chart required by this Item.

(6) The x-axis must intersect the y-axis at 0 for the “Year-by-Year Returns” barchart.

4.2 Year-by-Year Returns

(1) Provide a bar chart, under the heading “Past Performance” and under thesub-heading “Year-by-Year Returns”, that shows, in chronological order with themost recent year on the right of the bar chart, the annual total return of theinvestment fund for the lesser of:

(a) each of the 10 most recently completed financial years; and

(b) each of the completed financial years in which the investment fund hasbeen in existence and which the investment fund was a reporting issuer.

(2) Provide an introduction to the bar chart that:

(a) indicates that the bar chart shows the investment fund’s annualperformance for each of the years shown, and illustrates how the investmentfund’s performance has changed from year to year; and

(b) indicates that the bar chart shows, in percentage terms, how much aninvestment made on the first day of each financial year would have grown ordecreased by the last day of each financial year.

(3) If the investment fund holds short portfolio positions, show separately theannual total return for both the long portfolio positions and the short portfoliopositions in addition to the overall total return.

4.3 Annual Compound Returns

(1) If the investment fund is not a money market fund, disclose, in the form of atable, under the sub-heading “Annual Compound Returns”:

(a) the investment fund’s past performance for the ten, five, three and oneyear periods ended on the last day of the investment fund’s financial year;and

(b) if the investment fund was a reporting issuer for more than one andless than 10 years, the investment fund’s past performance since theinception of the investment fund.




(2) Include in the table, for the same periods for which the annual compoundreturns of the investment fund are provided, the historical annual compoundtotal returns or changes of:

(a) one or more appropriate broad-based securities market indices; and

(b) at the option of the investment fund, one or more non-securities indicesor narrowly-based market indices that reflect the market sectors in whichthe investment fund invests.

(3) Include a brief description of the broad-based securities market index (orindices) and provide a discussion of the relative performance of the investmentfund as compared to that index.

(4) If the investment fund includes in the table an index that is different fromthe one included in the most recently filed MRFP, explain the reasons for thechange and include the disclosure required by this Item for both the new andformer indices.

(5) Calculate the annual compound return in accordance with the requirementsof Part 15 of National Instrument 81-102.

(6) If the investment fund holds short portfolio positions, show separately theannual compound returns for both the long and the short portfolio positions inaddition to the overall annual compound returns.

INSTRUCTIONS:

(1) An “appropriate broad-based securities market index” is one that:

(a) is administered by an organization that is not affiliated with any of themutual fund, its manager, portfolio adviser or principal distributor, unlessthe index is widely recognized and used; and

(b) has been adjusted by its administrator to reflect the reinvestment ofdividends on securities in the index or interest on debt.

(2) It may be appropriate for an investment fund that invests in more than onetype of security to compare its performance to more than one relevant index. Forexample, a balanced fund may wish to compare its performance to both a bondindex and an equity index.

(3) In addition to the appropriate broad-based securities market index, theinvestment fund may compare its performance to other financial or narrowly-basedsecurities indices (or a blend of indices) that reflect the market sectors in which theinvestment fund invests or that provide useful comparatives to the performance ofthe investment fund. For example, an investment fund could compare itsperformance to an index that measured the performance of certain sectors of thestock market (e.g. communications companies, financial sector companies, etc.) orto a non-securities index, such as the Consumer Price Index, so long as thecomparison is not misleading.





An investment fund that is a scholarship plan must comply with this Item, exceptthat year-by-year returns and annual compound returns must be calculated basedon the scholarship plan’s total portfolio adjusted for cash flows.

Item 5 Summary of Investment Portfolio

(1) Include, under the heading “Summary of Investment Portfolio”, a summaryof the investment fund’s portfolio as at the end of the financial year of theinvestment fund to which the annual MRFP pertains.

(2) The summary of investment portfolio:

(a) must break down the entire portfolio of the investment fund intoappropriate subgroups, and must show the percentage of the aggregate netasset value of the investment fund constituted by each subgroup;

(b) must disclose the top 25 positions held by the investment fund, eachexpressed as a percentage of net asset value of the investment fund;

(c) must disclose long positions separately from short positions; and

(d) must disclose separately the total percentage of net asset valuerepresented by the long positions and by the short positions.

(3) Indicate that the summary of investment portfolio may change due toongoing portfolio transactions of the investment fund and a quarterly update isavailable.

INSTRUCTIONS:

(1) The summary of investment portfolio is designed to give the reader an easilyaccessible snapshot of the portfolio of the investment fund as at the end of thefinancial year for which the annual MRFP pertains. As with the other componentsof the annual MRFP, care should be taken to ensure that the information in thesummary of investment portfolio is presented in an easily accessible andunderstandable way.

(2) The Canadian securities regulatory authorities have not prescribed the namesof the categories into which the portfolio should be broken down. An investmentfund should use the most appropriate categories given the nature of the fund. Ifappropriate, an investment fund may use more than one breakdown, for instanceshowing the portfolio of the investment fund broken down according to securitytype, industry, geographical locations, etc.

(3) Instead of a table, the disclosure required by (2)(a) of this Item may bepresented in the form of a pie chart.

(4) If the investment fund owns more than one class of securities of an issuer,those classes should be aggregated for the purposes of this Item, however, debt andequity securities of an issuer must not be aggregated.

(5) Portfolio assets other than securities should be aggregated if they havesubstantially similar investment risks and profiles. For instance, gold certificatesshould be aggregated, even if they are issued by different financial institutions.

(6) Treat cash and cash equivalents as one separate discrete category.




(7) In determining its holdings for purposes of the disclosure required by thisItem, an investment fund should, for each long position in a derivative that is heldby the investment fund for purposes other than hedging and for each indexparticipation unit held by the investment fund, consider that it holds directly theunderlying interest of that derivative or its proportionate share of the securitiesheld by the issuer of the index participation unit.

(8) If an investment fund invests substantially all of its assets directly orindirectly (through the use of derivatives) in securities of one other fund, list onlythe 25 largest holdings of the other investment fund by percentage of net asset valueof the other investment fund, as disclosed by the other investment fund as at themost recent quarter end.

(9) If the investment fund invests in other investment funds, include a statementto the effect that the prospectus and other information about the underlyinginvestment funds are available on the internet at www.sedar.com.

(10) A labour sponsored or venture capital fund must disclose its top 25 positions,but is not required to express any of its venture investments as a percentage of thefund’s net asset value if it complies with the conditions in Part 8 of the Instrumentto be exempt from disclosing the individual current values of venture investmentsin its statement of investment portfolio.

Item 6 Other Material Information

Provide any other material information relating to the investment fund nototherwise required to be disclosed by this Part, including information required tobe disclosed pursuant to an order or exemption received by the investment fund.

PART C CONTENT REQUIREMENTS FOR INTERIM MANAGEMENTPART C REPORT OF FUND PERFORMANCE

Item 1 First Page Disclosure

The first page of an interim MRFP must contain disclosure in substantially thefollowing words:

“This interim management report of fund performance contains financialhighlights, but does not contain either interim or annual financial statementsof the investment fund. You can get a copy of the interim or annual financialstatements at your request, and at no cost, by calling [toll-free/collect calltelephone number], by writing to us at [insert address] or by visiting ourwebsite at [insert address] or SEDAR at www.sedar.com.

Securityholders may also contact us using one of these methods to request acopy of the investment fund’s proxy voting policies and procedures, proxyvoting disclosure record, or quarterly portfolio disclosure.”

INSTRUCTION:

If the MRFP is bound with the financial statements of the investment fund, modifythe first page wording appropriately.






Update the analysis of the investment fund’s results of operations provided in themost recent annual MRFP. Discuss any material changes to any of the componentslisted in Item 2.3 of Part B.

2.2 Recent Developments

If there have been any significant developments affecting the investment fundsince the most recent annual MRFP, discuss those developments and their impacton the investment fund, in accordance with the requirements of Item 2.4 of Part B.

2.3 Related Party Transactions

Provide the disclosure required by Item 2.5 of Part B.

INSTRUCTIONS:

(1) If the first MRFP you file in this Form is not an annual MRFP, you mustprovide all the disclosure required by Part B, except for Items 3 and 4, in the firstMRFP.

(2) The discussion in an interim MRFP is intended to update the reader onmaterial developments since the date of the most recent annual MRFP. You mayassume the reader has access to your annual MRFP, so it is not necessary to restateall of the information contained in the most recent annual discussion.

(3) The discussion in an interim MRFP should deal with the financial period towhich the interim MRFP pertains.

Item 3 Financial Highlights

(1) Provide the disclosure required by Item 3.1 of Part B, with an additionalcolumn on the left of the table representing the interim period.

(2) Provide the disclosure required by Item 3.3 of Part B of the form.

INSTRUCTION:

If the distributions cannot be allocated by type at the end of the interim period,provide only total distributions by unit/share.

Item 4 Past Performance

Provide a bar chart prepared in accordance with Item 4.2 of Part B, and includethe total return calculated for the interim period.

Item 5 Summary of Investment Portfolio

(1) Include a summary of investment portfolio as at the end of the financialperiod to which the interim MRFP pertains.

(2) The summary of investment portfolio must be prepared in accordance withItem 5 of Part B.

Item 6 Other Material Information

Provide any other material information relating to the investment fund nototherwise required to be disclosed by this Part including information required tobe disclosed pursuant to an order or exemption received by the investment fund.

10 Jne 2005 SR 49/2005 s11; 10 Nov 2006 SR104/2006 s8; 25 Jly 2008 SR 59/2008 s5; 29 Aug2008 SR 72/2008 s6.




PART XLI[clause 2(oo)]

NATIONAL INSTRUMENT 58-101DISCLOSURE OF CORPORATE GOVERNANCE PRACTICES

PART I DEFINITIONS AND APPLICATIONS


“AIF” has the same meaning as in NI 51-102;

“asset-backed security” has the same meaning as in NI 51-102;

“CEO” means a chief executive officer;

“code” means a code of business conduct and ethics;

“executive officer” has the same meaning as in NI 51-102;

“marketplace” has the same meaning as in National Instrument 21-101Marketplace Operation;

“MD&A” has the same meaning as in NI 51-102;

“NI 51-102” means National Instrument 51-102 Continuous DisclosureObligations;

“NI 52-110” means National Instrument 52-110 Audit Committees;

“SEDAR” has the same meaning as in National Instrument 13-101 System forElectronic Document Analysis and Retrieval (SEDAR);

“significant security holder means, in relation to an issuer, a security holderthat:

(a) owns or controls 10% or more of any class of the issuer’s votingsecurities; or

(b) is able to affect materially the control of the issuer, whether alone or byacting in concert with others;

“subsidiary entity” has the meaning set out in NI 52-110;

“U.S. marketplace” means an exchange registered as of the effective date of thisInstrument as a ‘national securities exchange’ under section 6 of the 1934 Act, orthe Nasdaq Stock Market; and

“venture issuer” means a reporting issuer that, at the end of its most recentlycompleted financial year, did not have any of its securities listed or quoted on anyof the Toronto Stock Exchange, a U.S. marketplace, or a marketplace outside ofCanada and the United States of America other than the Alternative InvestmentMarket of the London Stock Exchange or the PLUS markets operated by PLUSMarkets Group plc.




1.2 Meaning of Independence

(1) For the purposes of this instrument, a director is independent if he or shewould be independent within the meaning of section 1.4 of NI 52-110.

(2) Repealed. 4 Apr 2008 SR 18/2008 s7.

1.3 Application - This Instrument applies to a reporting issuer other than:

(a) an investment fund or issuer of asset-backed securities, as definedin NI 51-102;

(b) a designated foreign issuer or SEC foreign issuer, as defined in NationalInstrument 71-102 Continuous Disclosure and Other Exemptions Relating toForeign Issuers;

(c) a credit support issuer or exchangeable security issuer that is exempt undersections 13.2 and 13.3 of NI 51-102, as applicable; and

(d) an issuer that is a subsidiary entity, if:

(i) the issuer does not have equity securities, other than non-convertible,non-participating preferred securities, trading on a marketplace; and

(ii) the person or company that owns the issuer is:

(A) subject to the requirements of this Instrument; or

(B) an issuer that has securities listed or quoted on a U.S. marketplace,and is in compliance with the corporate governance disclosurerequirements of that U.S. marketplace.

PART 2 DISCLOSURE AND FILING REQUIREMENTS

2.1 Required Disclosure

(1) If management of an issuer, other than a venture issuer, solicits a proxy froma security holder of the issuer for the purpose of electing directors to the issuer’sboard of directors, the issuer must include in its management information circularthe disclosure required by Form 58-101F1.

(2) An issuer, other than a venture issuer, that does not send a managementinformation circular to its security holders must provide the disclosure requiredby Form 58-101F1 in its AIF.

2.2 Venture Issuers

(1) If management of a venture issuer solicits a proxy from a security holder ofthe venture issuer for the purpose of electing directors to the issuer’s board ofdirectors, the venture issuer must include in its management information circularthe disclosure required by Form 58-101F2.

(2) A venture issuer that does not send a management information circular to itssecurity holders must provide the disclosure required by Form 58-101F2 in its AIFor annual MD&A.

2.3 Filing of Code - If an issuer has adopted or amended a written code, the issuermust file a copy of the code or amendment on SEDAR no later than the date on whichthe issuer’s next financial statements must be filed, unless a copy of the code oramendment has been previously filed.




PART 3 EXEMPTIONS AND EFFECTIVE DATE

3.1 Exemptions

(1) The securities regulatory authority or regulator may grant an exemptionfrom this rule, in whole or in part, subject to any conditions or restrictionsimposed in the exemption.

(2) Despite subsection (1), in Ontario, only the regulator may grant anexemption.

3.2 Effective Date

(1) This Instrument comes into force on June 30, 2005.

(2) Despite subsection (1), sections 2.1 and 2.2 only apply to managementinformation circulars, AIFs and annual MD&A, as the case may be, which arefiled following an issuer’s financial year ending on or after June 30, 2005.

FORM 58-101F1CORPORATE GOVERNANCE DISCLOSURE

1. Board of Directors

(a) Disclose the identity of directors who are independent.

(b) Disclose the identity of directors who are not independent, and describethe basis for that determination.

(c) Disclose whether or not a majority of directors are independent. If amajority of directors are not independent, describe what the board ofdirectors (the board) does to facilitate its exercise of independent judgementin carrying out its responsibilities.

(d) If a director is presently a director of any other issuer that is areporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction,identify both the director and the other issuer.

(e) Disclose whether or not the independent directors hold regularlyscheduled meetings at which non-independent directors and members ofmanagement are not in attendance. If the independent directors hold suchmeetings, disclose the number of meetings held since the beginning of theissuer’s most recently completed financial year. If the independent directorsdo not hold such meetings, describe what the board does to facilitate openand candid discussion among its independent directors.

(f) Disclose whether or not the chair of the board is an independentdirector. If the board has a chair or lead director who is an independentdirector, disclose the identity of the independent chair or lead director, anddescribe his or her role and responsibilities. If the board has neither a chairthat is independent nor a lead director that is independent, describe whatthe board does to provide leadership for its independent directors.

(g) Disclose the attendance record of each director for all board meetingsheld since the beginning of the issuer’s most recently completed financialyear.




2. Board Mandate - Disclose the text of the board’s written mandate. If the boarddoes not have a written mandate, describe how the board delineates its role andresponsibilities.

3. Position Descriptions

(a) Disclose whether or not the board has developed written positiondescriptions for the chair and the chair of each board committee. If the boardhas not developed written position descriptions for the chair and/or the chairof each board committee, briefly describe how the board delineates the roleand responsibilities of each such position.

(b) Disclose whether or not the board and CEO have developed a writtenposition description for the CEO. If the board and CEO have not developedsuch a position description, briefly describe how the board delineates the roleand responsibilities of the CEO.

4. Orientation and Continuing Education

(a) Briefly describe what measures the board takes to orient new directorsregarding:

(i) the role of the board, its committees and its directors; and

(ii) the nature and operation of the issuer’s business.

(b) Briefly describe what measures, if any, the board takes to providecontinuing education for its directors. If the board does not providecontinuing education, describe how the board ensures that its directorsmaintain the skill and knowledge necessary to meet their obligations asdirectors.

5. Ethical Business Conduct

(a) Disclose whether or not the board has adopted a written code for thedirectors, officers and employees. If the board has adopted a written code:

(i) disclose how a person or company may obtain a copy of the code;

(ii) describe how the board monitors compliance with its code, or if theboard does not monitor compliance, explain whether and how the boardsatisfies itself regarding compliance with its code; and

(iii) provide a cross-reference to any material change report filed sincethe beginning of the issuer’s most recently completed financial yearthat pertains to any conduct of a director or executive officer thatconstitutes a departure from the code.

(b) Describe any steps the board takes to ensure directors exerciseindependent judgement in considering transactions and agreements inrespect of which a director or executive officer has a material interest.

(c) Describe any other steps the board takes to encourage and promote aculture of ethical business conduct.

6. Nomination of Directors

(a) Describe the process by which the board identifies new candidates forboard nomination.




(b) Disclose whether or not the board has a nominating committeecomposed entirely of independent directors. If the board does not have anominating committee composed entirely of independent directors, describewhat steps the board takes to encourage an objective nomination process.

(c) If the board has a nominating committee, describe the responsibilities,powers and operation of the nominating committee.

7. Compensation

(a) Describe the process by which the board determines the compensationfor the issuer’s directors and officers.

(b) Disclose whether or not the board has a compensation committeecomposed entirely of independent directors. If the board does not have acompensation committee composed entirely of independent directors, describewhat steps the board takes to ensure an objective process for determiningsuch compensation.

(c) If the board has a compensation committee, describe the responsibilities,powers and operation of the compensation committee.

(d) If a compensation consultant or advisor has, at any time since thebeginning of the issuer’s most recently completed financial year, beenretained to assist in determining compensation for any of the issuer’sdirectors and officers, disclose the identity of the consultant or advisor andbriefly summarize the mandate for which they have been retained. If theconsultant or advisor has been retained to perform any other work for theissuer, state that fact and briefly describe the nature of the work.

8. Other Board Committees - If the board has standing committees other than theaudit, compensation and nominating committees, identify the committees anddescribe their function.

9. Assessments - Disclose whether or not the board, its committees and individualdirectors are regularly assessed with respect to their effectiveness and contribution.If assessments are regularly conducted, describe the process used for theassessments. If assessments are not regularly conducted, describe how the boardsatisfies itself that the board, its committees, and its individual directors areperforming effectively.

INSTRUCTIONS:

(1) This Form applies to both corporate and non-corporate entities. Reference to aparticular corporate characteristic, such as a board, includes any equivalentcharacteristic of a non-corporate entity.




Income trust issuers must provide disclosure in a manner which recognizes thatcertain functions of a corporate issuer, its board and its management may beperformed by any or all of the trustees, the board or management of a subsidiary ofthe trust, or the board, management or employees of a management company. Inthe case of an income trust, references to the issuer refer to both the trust and anyunderlying entities, including the operating entity.

(2) If the disclosure required by Item 1 is included in a management informationcircular distributed to security holders of the issuer for the purpose of electingdirectors to the issuer’s board of directors, provide disclosure regarding the existingdirectors and any proposed directors.

(3) Disclosure regarding board committees made under Item 8 of this Form mayinclude the existence and summary content of any committee charter.

FORM 58-101F2CORPORATE GOVERNANCE DISCLOSURE

(Venture Issuers)

1. Board of Directors - Disclose how the board of directors (the board) facilitatesits exercise of independent supervision over management, including:

(i) the identity of directors that are independent; and

(ii) the identity of directors who are not independent, and the basis forthat determination.

2. Directorships - If a director is presently a director of any other issuer that is areporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction,identify both the director and the other issuer.

3. Orientation and Continuing Education - Describe what steps, if any, theboard takes to orient new board members, and describe any measures the boardtakes to provide continuing education for directors.

4. Ethical Business Conduct - Describe what steps, if any, the board takes toencourage and promote a culture of ethical business conduct.

5. Nomination of Directors - Disclose what steps, if any, are taken to identify newcandidates for board nomination, including:

(i) who identifies new candidates; and

(ii) the process of identifying new candidates.

6. Compensation - Disclose what steps, if any, are taken to determine compensationfor the directors and CEO, including:

(i) who determines compensation; and

(ii) the process of determining compensation.

7. Other Board Committees - If the board has standing committees other than theaudit, compensation and nominating committees, identify the committees anddescribe their function.




8. Assessments - Disclose what steps, if any, that the board takes to satisfy itselfthat the board, its committees, and its individual directors are performingeffectively.

INSTRUCTIONS:

(1) This form applies to both corporate and non-corporate entities. Reference to aparticular corporate characteristic, such as a board, includes any equivalentcharacteristic of a non-corporate entity.

Income trust issuers must provide disclosure in a manner which recognizes thatcertain functions of a corporate issuer, its board and its management may beperformed by any or all of the trustees, the board or management of a subsidiary ofthe trust, or the board, management or employees of a management company. Inthe case of an income trust, references to ‘the issuer’ refer to both the trust and anyunderlying entities, including the operating entity.

(2) If the disclosure required by Items 1 and 2 is included in a managementinformation circular distributed to security holders of the issuer for the purpose ofelecting directors to the issuer’s board of directors, provide disclosure regarding theexisting directors and any proposed directors.

(3) Disclosure regarding board committees made under Item 7 of this Form mayinclude the existence and summary content of any committee charter.

30 Jne 2005 SR 61/2005 s5; 11 Jan 2008 SR128/2007 s8; 4 Apr 2008 SR 18/2008 s7.

PART XLII[clause 2(pp)]

MULTILATERAL INSTRUMENT 11-101PRINCIPAL REGULATOR SYSTEM

Repealed. 2 Oct 2009 SR 81/2009 s12.




PART XLIII[Clause 2(qq)]

NATIONAL INSTRUMENT 45-106PROSPECTUS AND REGISTRATION EXEMPTIONS

Text boxes in this Instrument located above sections 2.1 to 2.5, 2.7 to 2.21, 2.24, 2.26,2.27, and 2.30 to 2.43 refer to National Instrument 45-102 Resale of Securities. Thesetext boxes do not form part of this Instrument.

Text boxes in this Instrument located below sections 2.34, 3.34, 2.36, 3.36, 2.37, 3.37,2.41 and 3.41 refer to the Securities Act (Ontario). These text boxes do not form part ofthis Instrument.

PART 1: DEFINITIONS AND INTERPRETATION

1.1 Definitions

In this Instrument:

“accredited investor” means:

(a) a Canadian financial institution, or a Schedule III bank;

(b) the Business Development Bank of Canada incorporated under the BusinessDevelopment Bank of Canada Act (Canada);

(c) a subsidiary of any person referred to in paragraphs (a) or (b), if the personowns all of the voting securities of the subsidiary, except the voting securitiesrequired by law to be owned by directors of that subsidiary;

(d) a person registered under the securities legislation of a jurisdiction ofCanada as an adviser or dealer, other than a person registered solely as a limitedmarket dealer under one or both of the Securities Act (Ontario) or the SecuritiesAct (Newfoundland and Labrador);

(e) an individual registered or formerly registered under the securities legislationof a jurisdiction of Canada as a representative of a person referred to inparagraph (d);

(f) the Government of Canada or a jurisdiction of Canada, or any crowncorporation, agency or wholly owned entity of the Government of Canada or ajurisdiction of Canada;

(g) a municipality, public board or commission in Canada and a metropolitancommunity, school board, the Comité de gestion de la taxe scolaire de l’île deMontréal or an intermunicipal management board in Québec;

(h) any national, federal, state, provincial, territorial or municipal governmentof or in any foreign jurisdiction, or any agency of that government;

(i) a pension fund that is regulated by the Office of the Superintendent ofFinancial Institutions (Canada), a pension commission or similar regulatoryauthority of a jurisdiction of Canada;




(j) an individual who, either alone or with a spouse, beneficially owns financialassets having an aggregate realizable value that before taxes, but net of anyrelated liabilities, exceeds $1 000 000;

(k) an individual whose net income before taxes exceeded $200 000 in each ofthe 2 most recent calendar years or whose net income before taxes combined withthat of a spouse exceeded $300 000 in each of the 2 most recent calendar years andwho, in either case, reasonably expects to exceed that net income level in thecurrent calendar year;

(l) an individual who, either alone or with a spouse, has net assets of atleast $5 000 000;

(m) a person, other than an individual or investment fund, that has net assets ofat least $5 000 000 as shown on its most recently prepared financial statements;

(n) an investment fund that distributes or has distributed its securities only to:

(i) a person that is or was an accredited investor at the time of thedistribution;

(ii) a person that acquires or acquired securities in the circumstancesreferred to in sections 2.10 [Minimum amount investment], or 2.19 [Additionalinvestment in investment funds]; or

(iii) a person described in paragraph (i) or (ii) that acquires or acquiredsecurities under section 2.18 [Investment fund reinvestment];

(o) an investment fund that distributes or has distributed securities under aprospectus in a jurisdiction of Canada for which the regulator or, in Québec, thesecurities regulatory authority, has issued a receipt;

(p) a trust company or trust corporation registered or authorized to carry onbusiness under the Trust and Loan Companies Act (Canada) or under comparablelegislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf ofa fully managed account managed by the trust company or trust corporation, asthe case may be;

(q) a person acting on behalf of a fully managed account managed by thatperson, if that person:

(i) is registered or authorized to carry on business as an adviser or theequivalent under the securities legislation of a jurisdiction of Canada or aforeign jurisdiction; and

(ii) in Ontario, is purchasing a security that is not a security of aninvestment fund;

(r) a registered charity under the Income Tax Act (Canada) that, in regard to thetrade, has obtained advice from an eligibility adviser or an adviser registeredunder the securities legislation of the jurisdiction of the registered charity to giveadvice on the securities being traded;

(s) an entity organized in a foreign jurisdiction that is analogous to any of theentities referred to in paragraphs (a) to (d) or paragraph (i) in form and function;

(t) a person in respect of which all of the owners of interests, direct, indirect orbeneficial, except the voting securities required by law to be owned by directors,are persons that are accredited investors;




(u) an investment fund that is advised by a person registered as an adviser or aperson that is exempt from registration as an adviser; or

(v) a person that is recognized or designated by the securities regulatoryauthority or, except in Ontario and Québec, the regulator as an accreditedinvestor;

“AIF” means:

(a) an AIF as defined in National Instrument 51-102 Continuous DisclosureObligations;

(b) a prospectus filed in a jurisdiction, other than a prospectus filed under a CPCinstrument, if the issuer has not filed or been required to file an AIF or annualfinancial statements under National Instrument 51-102 Continuous DisclosureObligations; or

(c) a QT circular if the issuer has not filed or been required to file annualfinancial statements under National Instrument 51-102 Continuous DisclosureObligations subsequent to filing a QT circular;

“approved credit rating” has the same meaning as in National Instrument 81-102Mutual Funds;

“approved credit rating organization” has the same meaning as in NationalInstrument 81-102 Mutual Funds;

“bank” means a bank named in Schedule I or II of the Bank Act (Canada);

“Canadian financial institution” means:

(a) an association governed by the Cooperative Credit Associations Act (Canada)or a central cooperative credit society for which an order has been made undersection 473(1) of that Act; or

(b) a bank, loan corporation, trust company, trust corporation, insurancecompany, treasury branch, credit union, caisse populaire, financial servicescooperative, or league that, in each case, is authorized by an enactment of Canadaor a jurisdiction of Canada to carry on business in Canada or a jurisdiction ofCanada;

“CPC instrument” means a rule, regulation or policy of the TSX Venture ExchangeInc. that applies only to capital pool companies, and, in Quebec, includes PolicyStatement 41-601Q, Capital Pool Companies;

“debt security” means any bond, debenture, note or similar instrument representingindebtedness, whether secured or unsecured;

“director” means:

(a) a member of the board of directors of a company or an individual whoperforms similar functions for a company; and

(b) with respect to a person that is not a company, an individual who performsfunctions similar to those of a director of a company;




“eligibility adviser” means:

(a) a person that is registered as an investment dealer and authorized to giveadvice with respect to the type of security being distributed; and

(b) in Saskatchewan or Manitoba, also means a lawyer who is a practicingmember in good standing with a law society of a jurisdiction of Canada or a publicaccountant who is a member in good standing of an institute or association ofchartered accountants, certified general accountants or certified managementaccountants in a jurisdiction of Canada provided that the lawyer or publicaccountant must not:

(i) have a professional, business or personal relationship with the issuer, orany of its directors, executive officers, founders, or control persons; and

(ii) have acted for or been retained personally or otherwise as an employee,executive officer, director, associate or partner of a person that has acted foror been retained by the issuer or any of its directors, executive officers,founders or control persons within the previous 12 months;

“eligible investor” means:

(a) a person whose:

(i) net assets, alone or with a spouse, in the case of an individual,exceed $400 000;

(ii) net income before taxes exceeded $75 000 in each of the 2 most recentcalendar years and who reasonably expects to exceed that income level in thecurrent calendar year; or

(iii) net income before taxes, alone or with a spouse, in the case of anindividual, exceeded $125 000 in each of the 2 most recent calendar yearsand who reasonably expects to exceed that income level in the currentcalendar year;

(b) a person of which a majority of the voting securities are beneficially owned byeligible investors or a majority of the directors are eligible investors;

(c) a general partnership of which all of the partners are eligible investors;

(d) a limited partnership of which the majority of the general partners areeligible investors;

(e) a trust or estate in which all of the beneficiaries or a majority of the trusteesor executors are eligible investors;

(f) an accredited investor;

(g) a person described in section 2.5 [Family, friends and business associates]; or

(h) a person that has obtained advice regarding the suitability of the investmentand, if the person is resident in a jurisdiction of Canada, that advice has beenobtained from an eligibility adviser;

“executive officer” means, for an issuer, an individual who is:


(b) a vice-president in charge of a principal business unit, division or functionincluding sales, finance or production; or





“financial assets” means:

(a) cash;

(b) securities; or

(c) a contract of insurance, a deposit or an evidence of a deposit that is not asecurity for the purposes of securities legislation;

“founder” means, in respect of an issuer, a person who:

(a) acting alone, in conjunction, or in concert with one or more persons, directlyor indirectly, takes the initiative in founding, organizing or substantiallyreorganizing the business of the issuer; and

(b) at the time of the distribution or trade is actively involved in the business ofthe issuer;

“fully managed account” means an account of a client for which a person makes theinvestment decisions if that person has full discretion to trade in securities for theaccount without requiring the client’s express consent to a transaction;

“investment fund” has the same meaning as in National Instrument 81-106Investment Fund Continuous Disclosure;

“marketplace” has the same meaning as in National Instrument 21-101 MarketplaceOperation;

“MD&A” has the same meaning as in National Instrument 51-102 ContinuousDisclosure Obligations;

“non-redeemable investment fund” has the same meaning as in NationalInstrument 81-106 Investment Fund Continuous Disclosure;

“person” includes:

(a) an individual;

(b) a corporation;

(c) a partnership, trust, fund and an association, syndicate, organization orother organized group of persons, whether incorporated or not; and

(d) an individual or other person in that person’s capacity as a trustee, executor,administrator or personal or other legal representative;

“QT circular” means an information circular or filing statement in respect of aqualifying transaction for a capital pool company filed under a CPC instrument;

“qualifying issuer” means a reporting issuer in a jurisdiction of Canada that:

(a) is a SEDAR filer;

(b) has filed all documents required to be filed under the securities legislation ofthat jurisdiction; and

(c) if not required to file an AIF, has filed in the jurisdiction:

(i) an AIF for its most recently completed financial year for which annualstatements are required to be filed; and

(ii) copies of all material incorporated by reference in the AIF notpreviously filed;




“related liabilities” means:

(a) liabilities incurred or assumed for the purpose of financing the acquisition orownership of financial assets; or

(b) liabilities that are secured by financial assets;

“RRIF” means a registered retirement income fund as defined in the Income Tax Act(Canada);

“RRSP” means a registered retirement savings plan as defined in the Income Tax Act(Canada);

“Schedule III bank” means an authorized foreign bank named in Schedule III of theBank Act (Canada);

“SEDAR filer” means an issuer that is an electronic filer under NationalInstrument 13-101 System for Electronic Document Analysis and Retrieval(SEDAR);

“self-directed RESP” means an educational savings plan registered under theIncome Tax Act (Canada):

(a) that is structured so that a contribution by a subscriber to the plan isdeposited directly into an account in the name of the subscriber; and

(b) under which the subscriber maintains control and direction over the plan todirect how the assets of the plan are to be held, invested or reinvested subject tocompliance with the Income Tax Act (Canada);

“spouse” means, an individual who:

(a) is married to another individual and is not living separate and apart withinthe meaning of the Divorce Act (Canada), from the other individual;

(b) is living with another individual in a marriage-like relationship, including amarriage-like relationship between individuals of the same gender; or

(c) in Alberta, is an individual referred to in paragraph (a) or (b), or is an adultinterdependent partner within the meaning of the Adult InterdependentRelationships Act (Alberta);

“subsidiary” means an issuer that is controlled directly or indirectly by another issuerand includes a subsidiary of that subsidiary;

“TFSA” means a tax-free savings account as described in the Income Tax Act (Canada).

1.2 Interpretation of indirect interest

For the purposes of paragraph 1.1(t), in British Columbia, an indirect interest meansan economic interest in the person referred to in that paragraph.

1.3 Affiliate

For the purpose of this Instrument, an issuer is an affiliate of another issuer if:

(a) one of them is the subsidiary of the other; or

(b) each of them is controlled by the same person.




1.4 Control

Except in Part 2, Division 4, for the purpose of this Instrument, a person (first person)is considered to control another person (second person) if:

(a) the first person beneficially owns or directly or indirectly exercises control ordirection over securities of the second person carrying votes which, if exercised,would entitle the first person to elect a majority of the directors of the secondperson, unless that first person holds the voting securities only to securean obligation;

(b) the second person is a partnership, other than a limited partnership, and thefirst person holds more than 50% of the interests of the partnership; or

(c) the second person is a limited partnership and the general partner of thelimited partnership is the first person.

1.5 Registration requirement

(1) An exemption in this Instrument from the dealer registration requirement, orfrom the prospectus requirement, that refers to a registered dealer is onlyavailable for a trade in a security if the dealer is registered in a category thatpermits the trade described in the exemption.

(2) In this Instrument, an exemption from the dealer registration requirement is anexemption from the underwriter registration requirement.

1.6 Definition of distribution - Manitoba

For the purpose of this Instrument, in Manitoba, “distribution” means a primarydistribution to the public.

1.7 Definition of trade – Québec

For the purpose of this Instrument, in Québec, “trade” refers to any of the followingactivities:

(a) the activities described in the definition of “dealer” in section 5 of theSecurities Act (R.S.Q., c. V-1.1), including the following activities:

(i) the sale or disposition of a security by onerous title, whether the terms ofpayment be on margin, installment or otherwise, but does not include atransfer or the giving in guarantee of securities in connection with a debt orthe purchase of a security, except as provided in paragraph (b);

(ii) participation as a trader in any transaction in a security through thefacilities of an exchange or a quotation and trade reporting system;

(iii) the receipt by a registrant of an order to buy or sell a security;

(b) a transfer or the giving in guarantee of securities of an issuer from theholdings of a control person in connection with a debt.




PART 2: PROSPECTUS EXEMPTIONS

Division 1: Capital Raising Exemptions

2.1 Rights offering

Refer to Appendix E of National Instrument 45-102 Resale of Securities.First trades are subject to a seasoning period on resale.

The prospectus requirement does not apply to a distribution by an issuer of a rightgranted by the issuer to purchase a security of its own issue to a security holder of theissuer if:

(a) the issuer has given the regulator or, in Québec, the securities regulatoryauthority, prior written notice stating the date, amount, nature and conditions ofthe distribution, including the approximate net proceeds to be derived by theissuer on the basis of the additional securities being fully taken up;

(b) the regulator or, in Québec, the securities regulatory authority, has notobjected in writing to the distribution within 10 days of receipt of the noticereferred to in paragraph (a) or, if the regulator or securities regulatory authorityobjects to the distribution, the issuer has delivered to the regulator or securitiesregulatory authority information relating to the securities that is satisfactory toand accepted by the regulator or securities regulatory authority; and

(c) the issuer has complied with the applicable requirements of NationalInstrument 45-101 Rights Offerings.

2.2 Reinvestment plan


(1) Subject to subsections (3), (4) and (5), the prospectus requirement does not applyto the following distributions by an issuer, or by a trustee, custodian oradministrator acting for or on behalf of the issuer, to a security holder of the issuerif the distributions are permitted by a plan of the issuer:

(a) a distribution of a security of the issuer’s own issue if a dividend ordistribution out of earnings, surplus, capital or other sources payable inrespect of the issuer’s securities is applied to the purchase of the security;and

(b) subject to subsection (2), a distribution of a security of the issuer’s ownissue if the security holder makes an optional cash payment to purchase thesecurity of the issuer that trades on a marketplace.

(2) Subsection (1) does not apply unless the aggregate number of securities issuedunder the optional cash payment referred to in subsection (1)(b) does not exceed,in the financial year of the issuer during which the distribution takes place, 2% ofthe issued and outstanding securities of the class to which the plan relates as atthe beginning of the financial year.

(3) A plan that permits a distribution described in subsection (1)(a) or (b) must beavailable to every security holder in Canada to which the dividend or distributionout of earnings, surplus, capital or other sources is available.




(4) Subsection (1) does not apply to a distribution of a security of an investment fund.

(5) Subject to section 8.3.1, if the security distributed under a plan described insubsection (1) is of a different class or series than the class or series of the securityto which the dividend or distribution is attributable, the issuer or the trustee,custodian or administrator must have provided to each participant that is eligibleto receive a security under the plan either a description of the material attributesand characteristics of the security distributed under the plan or notice of a sourcefrom which the participant can obtain the information without charge.

2.3 Accredited investor

Refer to Appendix D of National Instrument 45-102 Resale of Securities.First trades are subject to a restricted period on resale.

(1) The prospectus requirement does not apply to a distribution of a security if thepurchaser purchases the security as principal and is an accredited investor.

(2) Subject to subsection (3), for the purpose of this section, a trust company or trustcorporation described in paragraph (p) of the definition of “accredited investor” insection 1.1 [Definitions] is deemed to be purchasing as principal.

(3) Subsection (2) does not apply to a trust company or trust corporation registeredunder the laws of Prince Edward Island that is not registered or authorized underthe Trust and Loan Companies Act (Canada) or under comparable legislation inanother jurisdiction of Canada.

(4) For the purpose of this section, a person described in paragraph (q) of thedefinition of “accredited investor” in section 1.1 [Definitions] is deemed to bepurchasing as principal.

(5) This section does not apply to a distribution of a security to a person if the personwas created, or is used, solely to purchase or hold securities as an accreditedinvestor described in paragraph (m) of the definition of “accredited investor” insection 1.1 [Definitions].

2.4 Private issuer



“private issuer” means an issuer:

(a) that is not a reporting issuer or an investment fund;

(b) the securities of which, other than non-convertible debt securities:

(i) are subject to restrictions on transfer that are contained in theissuer’s constating documents or security holders” agreements; and

(ii) are beneficially owned by not more than 50 persons, not includingemployees and former employees of the issuer or its affiliates, providedthat each person is counted as one beneficial owner unless the person iscreated or used solely to purchase or hold securities of the issuer inwhich case each beneficial owner or each beneficiary of the person, asthe case may be, must be counted as a separate beneficial owner; and




(c) that:

(i) has distributed its securities only to persons described insubsection (2); or

(ii) has completed a transaction and immediately following thecompletion of the transaction, its securities were beneficially ownedonly by persons described in subsection (2) and since the completion ofthe transaction has distributed its securities only to persons describedin subsection (2).

(2) The prospectus requirement does not apply to a distribution of a security of aprivate issuer to a person who purchases the security as principal and is:

(a) a director, officer, employee, founder or control person of the issuer;

(b) a director, officer or employee of an affiliate of the issuer;

(c) a spouse, parent, grandparent, brother, sister, child or grandchild of adirector, executive officer, founder or control person of the issuer;

(d) a parent, grandparent, brother, sister, child or grandchild of the spouse of adirector, executive officer, founder or control person of the issuer;

(e) a close personal friend of a director, executive officer, founder or controlperson of the issuer;

(f) a close business associate of a director, executive officer, founder or controlperson of the issuer;

(g) a spouse, parent, grandparent, brother, sister, child or grandchild of theselling security holder or of the selling security holder’s spouse;

(h) a security holder of the issuer;

(i) an accredited investor;

(j) a person of which a majority of the voting securities are beneficially owned by,or a majority of the directors are, persons described in paragraphs (a) to (i);

(k) a trust or estate of which all of the beneficiaries or a majority of the trusteesor executors are persons described in paragraphs (a) to (i); or

(l) a person that is not the public.

(3) Except for a distribution to an accredited investor, no commission or finder’s feemay be paid to any director, officer, founder or control person of an issuer inconnection with a distribution under subsection (2).

2.5 Family, friends and business associates


(1) Except in Ontario and subject to section 2.6 [Family, friends and businessassociates — Saskatchewan], the prospectus requirement does not apply to adistribution of a security to a person who purchases the security as principal andis:

(a) a director, executive officer or control person of the issuer, or of an affiliate ofthe issuer;




(b) a spouse, parent, grandparent, brother, sister, child or grandchild of adirector, executive officer or control person of the issuer, or of an affiliate of theissuer;

(c) a parent, grandparent, brother, sister, child or grandchild of the spouse of adirector, executive officer or control person of the issuer or of an affiliate of theissuer;

(d) a close personal friend of a director, executive officer or control person of theissuer, or of an affiliate of the issuer;

(e) a close business associate of a director, executive officer or control person ofthe issuer, or of an affiliate of the issuer;

(f) a founder of the issuer or a spouse, parent, grandparent, brother, sister, child,grandchild, close personal friend or close business associate of a founder of theissuer;

(g) a parent, grandparent, brother, sister, child or grandchild of a spouse of afounder of the issuer;

(h) a person of which a majority of the voting securities are beneficially ownedby, or a majority of the directors are, persons described in paragraphs (a) to (g); or

(i) a trust or estate of which all of the beneficiaries or a majority of the trusteesor executors are persons described in paragraphs (a) to (g).

(2) No commission or finder’s fee may be paid to any director, officer, founder, orcontrol person of an issuer or an affiliate of the issuer in connection with adistribution under subsection (1).

2.6 Family, friends and business associates - Saskatchewan

(1) In Saskatchewan, section 2.5 [Family, friends and business associates] does notapply unless the person making the distribution obtains a signed riskacknowledgement from the purchaser in the required form for a distribution to:

(a) a person described in section 2.5(1)(d) or (e) [Family, friends and businessassociates];

(b) a close personal friend or close business associate of a founder of the issuer;or

(c) a person described in section 2.5(1)(h) or (i) [Family, friends and businessassociates] if the distribution is based in whole or in part on a close personalfriendship or close business association.

(2) The person making the distribution must retain the required form referred to insubsection (1) for 8 years after the distribution.

2.7 Founder, control person and family - Ontario





In Ontario, the prospectus requirement does not apply to a distribution to a person whopurchases the security as principal and is:

(a) a founder of the issuer;

(b) an affiliate of a founder of the issuer;

(c) a spouse, parent, brother, sister, grandparent, grandchild or child of anexecutive officer, director or founder of the issuer; or

(d) a person that is a control person of the issuer.

2.8 Affiliates


The prospectus requirement does not apply to a distribution by an issuer of a security ofits own issue to an affiliate of the issuer that is purchasing as principal.

2.9 Offering memorandum


(1) In British Columbia, New Brunswick, Nova Scotia and Newfoundland andLabrador, the prospectus requirement does not apply to a distribution by anissuer of a security of its own issue to a purchaser if:

(a) the purchaser purchases the security as principal; and

(b) at the same time or before the purchaser signs the agreement to purchase thesecurity, the issuer:

(i) delivers an offering memorandum to the purchaser in compliance withsubsections (5) to (13); and

(ii) obtains a signed risk acknowledgement from the purchaser in compliancewith subsection (15).

(2) In Alberta, Manitoba, Northwest Territories, Nunavut, Prince Edward Island,Québec, Saskatchewan and Yukon, the prospectus requirement does not apply toa distribution by an issuer of a security of its own issue to a purchaser if:

(a) the purchaser purchases the security as principal;

(b) the purchaser is an eligible investor or the acquisition cost to the purchaserdoes not exceed $10 000;

(c) at the same time or before the purchaser signs the agreement to purchase thesecurity, the issuer:


(ii) obtains a signed risk acknowledgement from the purchaser in compliancewith subsection (15); and




(d) if the issuer is an investment fund, the investment fund is:

(i) a non-redeemable investment fund; or

(ii) a mutual fund that is a reporting issuer.

(3) In Alberta, Manitoba, Northwest Territories, Nunavut, Prince Edward Island,Québec, Saskatchewan and Yukon, this section does not apply to a distribution ofa security to a person described in paragraph (a) of the definition of “eligibleinvestor” in section 1.1 [Definitions] if that person was created, or is used, solely topurchase or hold securities in reliance on the exemption from the prospectusrequirement set out in subsection (2).

(4) No commission or finder’s fee may be paid to any person, other than a registereddealer, in connection with a distribution to a purchaser in the NorthwestTerritories, Nunavut, Saskatchewan and Yukon under subsection (2).

(5) An offering memorandum delivered under this section must be in the requiredform.

(6) If the securities legislation where the purchaser is resident does not provide acomparable right, an offering memorandum delivered under this section mustprovide the purchaser with a contractual right to cancel the agreement topurchase the security by delivering a notice to the issuer not later than midnighton the 2nd business day after the purchaser signs the agreement to purchase thesecurity.

(7) If the securities legislation where the purchaser is resident does not providestatutory rights of action in the event of a misrepresentation in an offeringmemorandum delivered under this section, the offering memorandum mustcontain a contractual right of action against the issuer for rescission or damagesthat:

(a) is available to the purchaser if the offering memorandum, or any informationor documents incorporated or deemed to be incorporated by reference into theoffering memorandum, contains a misrepresentation, without regard to whetherthe purchaser relied on the misrepresentation;

(b) is enforceable by the purchaser delivering a notice to the issuer:

(i) in the case of an action for rescission, within 180 days after thepurchaser signs the agreement to purchase the security; or

(ii) in the case of an action for damages, before the earlier of:

(A) 180 days after the purchaser first has knowledge of the factsgiving rise to the cause of action; or

(B) 3 years after the date the purchaser signs the agreement topurchase the security;

(c) is subject to the defence that the purchaser had knowledge of themisrepresentation;




(d) in the case of an action for damages, provides that the amount recoverable:

(i) must not exceed the price at which the security was offered; and

(ii) does not include all or any part of the damages that the issuer provesdoes not represent the depreciation in value of the security resulting fromthe misrepresentation; and

(e) is in addition to, and does not detract from, any other right of the purchaser.

(8) An offering memorandum delivered under this section must contain a certificatethat states the following:

“This offering memorandum does not contain a misrepresentation.”

(9) If the issuer is a company, a certificate under subsection (8) must be signed:

(a) by the issuer’s chief executive officer and chief financial officer or, if theissuer does not have a chief executive officer or chief financial officer, anindividual acting in that capacity;

(b) on behalf of the directors of the issuer, by:

(i) any 2 directors who are authorized to sign, other than the personsreferred to in paragraph (a); or

(ii) all the directors of the issuer; and

(c) by each promoter of the issuer.

(10) If the issuer is a trust, a certificate under subsection (8) must be signed by:

(a) the individuals who perform functions for the issuer similar to thoseperformed by the chief executive officer and the chief financial officer of acompany; and

(b) each trustee and the manager of the issuer.

(10.1) If a trustee or the manager that is signing the certificate of the issuer is:

(a) an individual, the individual must sign the certificate;

(b) a company, the certificate must be signed:

(i) by the chief executive officer and the chief financial officer of the trusteeor the manager; and

(ii) on behalf of the board of directors of the trustee or the manager, by:

(A) any two directors of the trustee or the manager, other than thepersons referred to in subparagraph (i); or

(B) all of the directors of the trustee or the manager;

(c) a limited partnership, the certificate must be signed by each general partnerof the limited partnership as described in subsection (11.1) in relation to an issuerthat is a limited partnership; or

(d) not referred to in paragraphs (a), (b) or (c), the certificate may be signed byany person or company with authority to act on behalf of the trustee or themanager.




(10.2) Despite subsections (10) and (10.1), if the issuer is an investment fund and thedeclaration of trust, trust indenture or trust agreement establishing the investmentfund delegates the authority to do so, or otherwise authorizes an individual orcompany to do so, the certificate may be signed by the individual or company towhom the authority is delegated or that is authorized to sign the certificate.

(10.3) Despite subsections (10) and (10.1), if the trustees of an issuer, other than aninvestment fund, do not perform functions for the issuer similar to thoseperformed by the directors of a company, the trustees are not required to sign thecertificate of the issuer if at least two individuals who perform functions for theissuer similar to those performed by the directors of a company sign thecertificate.

(11) If the issuer is a limited partnership, a certificate under subsection (8) must besigned by:

(a) each individual who performs a function for the issuer similar to any of thoseperformed by the chief executive officer or the chief financial officer of a company;and

(b) each general partner of the issuer.

(11.1) If a general partner of the issuer is:



(i) by the chief executive officer and the chief financial officer of the generalpartner; and

(ii) on behalf of the board of directors of the general partner, by:

(A) any two directors of the general partner, other than the personsreferred to in subparagraph (i); or

(B) all of the directors of the general partner;

(c) a limited partnership, the certificate must be signed by each general partnerof the limited partnership and, for greater certainty, this subsection applies toeach general partner required to sign;

(d) a trust, the certificate must be signed by the trustees of the general partneras described in subsection (10) in relation to an issuer that is a trust; or

(e) not referred to in paragraphs (a) to (d), the certificate may be signed by anyperson or company with authority to act on behalf of the general partner.

(12) If an issuer is not a company, trust or limited partnership, a certificate undersubsection (8) must be signed by the persons that, in relation to the issuer, are ina similar position or perform a similar function to any of the persons referred to insubsections (9), (10), (10.1), (10.2), (10.3), (11) and (11.1).

(13) A certificate under subsection (8) must be true:

(a) at the date the certificate is signed; and

(b) at the date the offering memorandum is delivered to the purchaser.




(14) If a certificate under subsection (8) ceases to be true after it is delivered to thepurchaser, the issuer cannot accept an agreement to purchase the security fromthe purchaser unless:

(a) the purchaser receives an update of the offering memorandum;

(b) the update of the offering memorandum contains a newly dated certificatesigned in compliance with subsection (9), (10), (10.1), (10.2), (10.3), (11) or (11.1);and

(c) the purchaser re-signs the agreement to purchase the security.

(15) A risk acknowledgement under subsection (1) or (2) must be in the required formand an issuer relying on subsection (1) or (2) must retain the signed riskacknowledgment for 8 years after the distribution.

(16) The issuer must:

(a) hold in trust all consideration received from the purchaser in connection witha distribution of a security under subsection (1) or (2) until midnight on the 2nd

business day after the purchaser signs the agreement to purchase the security;and

(b) return all consideration to the purchaser promptly if the purchaser exercisesthe right to cancel the agreement to purchase the security described undersubsection (6).

(17) The issuer must file a copy of an offering memorandum delivered under thissection and any update of a previously filed offering memorandum with thesecurities regulatory authority on or before the 10th day after the distributionunder the offering memorandum or update of the offering memorandum.

(18) If a qualifying issuer uses a form of offering memorandum that allows thequalifying issuer to incorporate previously filed information into the offeringmemorandum by reference, the qualifying issuer is exempt from the requirementunder National Instrument 43-101 Standards of Disclosure for Mineral Projectsto file a technical report to support scientific or technical information about thequalifying issuer’s mineral project in the offering memorandum or incorporatedby reference into the offering memorandum if the information about the mineralproject is contained in a previously filed technical report under NationalInstrument 43-101 Standards of Disclosure for Mineral Projects.

2.10 Minimum amount investment


(1) The prospectus requirement does not apply to a distribution of a security to aperson if:

(a) that person purchases as principal;

(b) the security has an acquisition cost to the purchaser of not less than $150 000paid in cash at the time of the distribution; and

(c) the distribution is of a security of a single issuer.




(2) Subsection (1) does not apply to a distribution of a security to a person if theperson was created, or is used, solely to purchase or hold securities in reliance onthis exemption from the prospectus requirement set out in subsection (1).

Division 2: Transaction Exemptions

2.11 Business combination and reorganization


The prospectus requirement does not apply to a distribution of a security in connectionwith:

(a) an amalgamation, merger, reorganization or arrangement that is under astatutory procedure;

(b) an amalgamation, merger, reorganization or arrangement that:

(i) is described in an information circular made pursuant to NationalInstrument 51-102 Continuous Disclosure Obligations or in a similardisclosure record and the information circular or similar disclosure record isdelivered to each security holder whose approval of the amalgamation,merger, reorganization or arrangement is required before it can proceed; and

(ii) is approved by the security holders referred to in subparagraph (i); or

(c) a dissolution or winding-up of the issuer.

2.12 Asset acquisition


The prospectus requirement does not apply to a distribution by an issuer of a security ofits own issue to a person as consideration for the acquisition, directly or indirectly, ofthe assets of the person, if those assets have a fair value of not less than $150 000.

2.13 Petroleum, natural gas and mining properties


The prospectus requirement does not apply to a distribution by an issuer of a security ofits own issue as consideration for the acquisition, directly or indirectly, of petroleum,natural gas or mining properties or any interest in them.

2.14 Securities for debt





The prospectus requirement does not apply to a distribution by a reporting issuer of asecurity of its own issue to a creditor to settle a bona fide debt of that reporting issuer.

2.15 Issuer acquisition or redemption

This provision is not cited in any Appendix of National Instrument 45-102Resale of Securities.

The prospectus requirement does not apply to a distribution of a security to the issuerof the security.

2.16 Take-over bid and issuer bid

Refer to section 2.11 or Appendix E of National Instrument 45-102 Resale ofSecurities. First trades are subject to a seasoning period on resale unlessthe requirements of section 2.11 of National Instrument 45-102 are met.

The prospectus requirement does not apply to a distribution of a security in connectionwith a take-over bid in a jurisdiction of Canada or an issuer bid in a jurisdiction ofCanada.

2.17 Offer to acquire to security holder outside local jurisdiction


The prospectus requirement does not apply to a distribution by a security holderoutside the local jurisdiction to a person in the local jurisdiction if the distributionwould have been in connection with a take-over bid or issuer bid made by that personwere it not for the fact that the security holder is outside of the local jurisdiction.

Division 3: Investment Fund Exemptions

2.18 Investment fund reinvestment


(1) Subject to subsections (3), (4), (5) and (6), the prospectus requirement does notapply to the following distributions by an investment fund, and the investmentfund manager of the fund, to a security holder of the investment fund if thedistributions are permitted by a plan of the investment fund:

(a) a distribution of a security of the investment fund’s own issue if a dividend ordistribution out of earnings, surplus, capital or other sources payable in respect ofthe investment fund’s securities is applied to the purchase of the security that is ofthe same class or series as the securities to which the dividend or distribution outof earnings, surplus, capital or other sources is attributable; and




(b) subject to subsection (2), a distribution of a security of the investment fund’sown issue if the security holder makes an optional cash payment to purchase thesecurity of the investment fund that is of the same class or series of securitiesdescribed in paragraph (a) that trade on a marketplace.

(2) The aggregate number of securities issued under the optional cash paymentreferred to in subsection (1)(b) must not exceed, in any financial year of theinvestment fund during which the distribution takes place, 2% of the issued andoutstanding securities of the class to which the plan relates as at the beginning ofthe financial year.

(3) A plan that permits the distributions described in subsection (1) must be availableto every security holder in Canada to which the dividend or distribution out ofearnings, surplus, capital or other sources is available.

(4) A person must not charge a fee for a distribution described in subsection (1).

(5) An investment fund that is a reporting issuer and in continuous distribution mustset out in its current prospectus:

(a) details of any deferred or contingent sales charge or redemption fee that ispayable at the time of the redemption of the security;

(b) any right that the security holder has to make an election to receive cashinstead of securities on the payment of a dividend or making of a distribution bythe investment fund; and

(c) instructions on how the right referred to in paragraph (b) can be exercised.

(6) An investment fund that is a reporting issuer and is not in continuous distributionmust provide the information required by subsection (5) in its prospectus, annualinformation form or a material change report.

2.19 Additional investment in investment funds


The prospectus requirement does not apply to a distribution by an investment fund, orthe investment fund manager of the fund, of a security of the investment fund’s ownissue to a security holder of the investment fund if:

(a) the security holder initially acquired securities of the investment fund asprincipal for an acquisition cost of not less than $150 000 paid in cash at the timeof the distribution;

(b) the distribution is of a security of the same class or series as the securitiesinitially acquired, as described in paragraph (a); and

(c) the security holder, as at the date of the distribution, holds securities of theinvestment fund that have:

(i) an acquisition cost of not less than $150 000; or

(ii) a net asset value of not less than $150 000.




2.20 Private investment club


The prospectus requirement does not apply to a distribution of a security of aninvestment fund if the investment fund:

(a) has no more than 50 beneficial security holders;

(b) does not seek and has never sought to borrow money from the public;

(c) does not and has never distributed its securities to the public;

(d) does not pay or give any remuneration for investment management oradministration advice in respect of trades in securities, except normal brokeragefees; and

(e) for the purpose of financing the operations of the investment fund, requiressecurity holders to make contributions in proportion to the value of the securitiesheld by them.

2.21 Private investment fund - loan and trust pools


(1) Subject to subsection (2), the prospectus requirement does not apply to adistribution of a security of an investment fund if the investment fund:

(a) is administered by a trust company or trust corporation that is registered orauthorized by an enactment of Canada or a jurisdiction of Canada to carry onbusiness in Canada or a jurisdiction of Canada;

(b) has no promoter or investment fund manager other than the trust companyor trust corporation referred to in paragraph (a); and

(c) co-mingles the money of different estates and trusts for the purpose offacilitating investment.

(2) A trust company or trust corporation registered under the laws of Prince EdwardIsland that is not registered under the Trust and Loan Companies Act (Canada) orunder comparable legislation in another jurisdiction of Canada is not a trustcompany or trust corporation for the purpose of subparagraph (1)(a).

Division 4: Employee, Executive Officer, Director and Consultant Exemptions

2.22 Definitions

In this Division and in Division 4 of Part 3 of this Instrument:

“associate”, when used to indicate a relationship with a person, means:

(a) an issuer of which the person beneficially owns or controls, directly orindirectly, voting securities entitling the person to more than 10% of thevoting rights attached to outstanding voting securities of the issuer;




(b) any partner of the person:

(c) any trust or estate in which the person has a substantial beneficialinterest or in respect of which the person serves as trustee or executor or in asimilar capacity; or

(d) in the case of an individual, a relative of that individual, including:

(i) a spouse of that individual; or

(ii) a relative of that individual’s spouse;

if the relative has the same home as that individual;

“associated consultant” means, for an issuer, a consultant of the issuer or of arelated entity of the issuer if:

(a) the consultant is an associate of the issuer or of a related entity of theissuer; or

(b) the issuer or a related entity of the issuer is an associate of theconsultant;

“compensation” means an issuance of securities in exchange for servicesprovided or to be provided and includes an issuance of securities for the purpose ofproviding an incentive;

“consultant” means, for an issuer, a person, other than an employee, executiveofficer, or director of the issuer or of a related entity of the issuer, that:

(a) is engaged to provide services to the issuer or a related entity of theissuer, other than services provided in relation to a distribution;

(b) provides the services under a written contract with the issuer or arelated entity of the issuer; and

(c) spends or will spend a significant amount of time and attention on theaffairs and business of the issuer or a related entity of the issuer;

and includes:

(d) for an individual consultant, a corporation of which the individualconsultant is an employee or shareholder, and a partnership of which theindividual consultant is an employee or partner; and

(e) for a consultant that is not an individual, an employee, executive officer,or director of the consultant, provided that the individual employee,executive officer, or director spends or will spend a significant amount oftime and attention on the affairs and business of the issuer or a relatedentity of the issuer;




“holding entity” means a person that is controlled by an individual;

“investor relations activities” means activities or communications, by or onbehalf of an issuer or a security holder of the issuer, that promote or couldreasonably be expected to promote the purchase or sale of securities of the issuer,but does not include:

(a) the dissemination of information or preparation of records in theordinary course of the business of the issuer:

(i) to promote the sale of products or services of the issuer; or

(ii) to raise public awareness of the issuer;

that cannot reasonably be considered to promote the purchase or sale ofsecurities of the issuer;

(b) activities or communications necessary to comply with the requirementsof:

(i) securities legislation of any jurisdiction of Canada;

(ii) the securities laws of any foreign jurisdiction governing the issuer;or

(iii) any exchange or market on which the issuer’s securities trade; or

(c) activities or communications necessary to follow securities directions ofany jurisdiction of Canada;

“investor relations person” means a person that is a registrant or thatprovides services that include investor relations activities;

“issuer bid requirements” means the requirements under securities legislationthat apply to an issuer bid;

“listed issuer” means an issuer, any of the securities of which:

(a) are listed and not suspended, or the equivalent, from trading on:

(i) TSX Inc.;

(ii) TSX Venture Exchange Inc.;

(iii) NYSE Amex Equities;

(iv) The New York Stock Exchange;

(v) the London Stock Exchange; or

(b) are quoted on the Nasdaq Stock Market;

“permitted assign” means, for a person that is an employee, executive officer,director or consultant of an issuer or of a related entity of the issuer:

(a) a trustee, custodian, or administrator acting on behalf of, or for thebenefit of the person;

(b) a holding entity of the person;

(c) a RRSP, RRIF, or TFSA of the person;

(d) a spouse of the person;




(e) a trustee, custodian, or administrator acting on behalf of, or for thebenefit of the spouse of the person;

(f) a holding entity of the spouse of the person; or

(g) a RRSP, RRIF, or TFSA of the spouse of the person;

“plan” means a plan or program established or maintained by an issuerproviding for the acquisition of securities of the issuer by persons described insection 2.24(1) [Employee, executive officer, director and consultant] ascompensation;

“related entity” means, for an issuer, a person that controls or is controlled bythe issuer or that is controlled by the same person that controls the issuer;

“related person” means, for an issuer:

(a) a director or executive officer of the issuer or of a related entity of theissuer;

(b) an associate of a director or executive officer of the issuer or of a relatedentity of the issuer; or

(c) a permitted assign of a director or executive officer of the issuer or of arelated entity of the issuer;

“security holder approval” means an approval for the issuance of securities ofan issuer as compensation or under a plan:

(a) given by a majority of the votes cast at a meeting of security holders ofthe issuer other than votes attaching to securities beneficially owned byrelated persons to whom securities may be issued as compensation or underthat plan; or

(b) evidenced by a resolution signed by all the security holders entitled tovote at a meeting, if the issuer is not required to hold a meeting; and

“support agreement” includes an agreement to provide assistance in themaintenance or servicing of indebtedness of the borrower and an agreement toprovide consideration for the purpose of maintaining or servicing indebtedness ofthe borrower.

2.23 Interpretation

(1) In this Division, a person (first person) is considered to control another person(second person) if the first person, directly or indirectly, has the power to directthe management and policies of the second person by virtue of:

(a) ownership of or direction over voting securities in the second person;

(b) a written agreement or indenture;




(c) being the general partner or controlling the general partner of the secondperson; or

(d) being a trustee of the second person.

(2) In this Division, participation in a distribution is considered voluntary if:

(a) in the case of an employee or the employee’s permitted assign, the employeeor the employee’s permitted assign is not induced to participate in the distributionby expectation of employment or continued employment of the employee with theissuer or a related entity of the issuer;

(b) in the case of an executive officer or the executive officer’s permitted assign,the executive officer or the executive officer’s permitted assign is not induced toparticipate in the distribution by expectation of appointment, employment,continued appointment or continued employment of the executive officer with theissuer or a related entity of the issuer;

(c) in the case of a consultant or the consultant’s permitted assign, theconsultant or the consultant’s permitted assign is not induced to participate in thedistribution by expectation of engagement of the consultant to provide services orcontinued engagement of the consultant to provide services to the issuer or arelated entity of the issuer; and

(d) in the case of an employee of a consultant, the individual is not induced bythe issuer, a related entity of the issuer, or the consultant to participate in thedistribution by expectation of employment or continued employment with theconsultant.

2.24 Employee, executive officer, director and consultant


(1) Subject to section 2.25 [Unlisted reporting issuer exception], the prospectusrequirement does not apply to a distribution:

(a) by an issuer in a security of its own issue; or

(b) by a control person of an issuer of a security of the issuer or of an option toacquire a security of the issuer;

with:

(c) an employee, executive officer, director or consultant of the issuer;

(d) an employee, executive officer, director or consultant of a related entity of theissuer; or

(e) a permitted assign of a person referred to in paragraphs (c) or (d);

if participation in the distribution is voluntary.




(2) For the purposes of subsection (1), a person referred to in paragraph (c), (d) or (e)includes a trustee, custodian or administrator acting as agent for that person forthe purpose of facilitating a trade.

2.25 Unlisted reporting issuer exception

(1) For the purpose of this section, “unlisted reporting issuer” means a reportingissuer in a jurisdiction of Canada that is not a listed issuer.

(2) Subject to subsection (3), section 2.24 [Employee, executive officer, director andconsultant] does not apply to a distribution to an employee or consultant of theunlisted reporting issuer who is an investor relations person of the issuer, anassociated consultant of the issuer, an executive officer of the issuer, a director ofthe issuer, or a permitted assign of those persons if, after the distribution:

(a) the number of securities, calculated on a fully diluted basis, reserved forissuance under options granted to:

(i) related persons, exceeds 10% of the outstanding securities of the issuer;or

(ii) a related person, exceeds 5% of the outstanding securities of the issuer;or

(b) the number of securities, calculated on a fully diluted basis, issued within 12months to:


(ii) a related person and the associates of the related person, exceeds 5% ofthe outstanding securities of the issuer.

(3) Subsection (2) does not apply to a distribution if the unlisted reporting issuer:

(a) obtains security holder approval; and

(b) before obtaining security holder approval, provides security holders with thefollowing information in sufficient detail to permit security holders to form areasoned judgment concerning the matter:

(i) the eligibility of employees, executive officers, directors, and consultantsto be issued or granted securities as compensation or under a plan;

(ii) the maximum number of securities that may be issued, or in the case ofoptions, the number of securities that may be issued on exercise of theoptions, as compensation or under a plan;

(iii) particulars relating to any financial assistance or support agreementto be provided to participants by the issuer or any related entity of the issuerto facilitate the purchase of securities as compensation or under a plan,including whether the assistance or support is to be provided on a full-, part-,or non-recourse basis;

(iv) in the case of options, the maximum term and the basis for thedetermination of the exercise price;




(v) particulars relating to the options or other entitlements to be granted ascompensation or under a plan, including transferability; and

(vi) the number of votes attaching to securities that, to the issuer’sknowledge at the time the information is provided, will not be included forthe purpose of determining whether security holder approval has beenobtained.

2.26 Distributions among current or former employees, executive officers,directors, or consultants of non-reporting issuer


(1) Subject to subsection (2), the prospectus requirement does not apply to adistribution of a security of an issuer by:

(a) a current or former employee, executive officer, director, or consultant of theissuer or related entity of the issuer; or

(b) a permitted assign of a person referred to in paragraph (a);

to:

(c) an employee, executive officer, director, or consultant of the issuer or arelated entity of the issuer; or

(d) a permitted assign of the employee, executive officer, director, or consultant.

(2) The exemption in subsection (1) is only available if:

(a) participation in the distribution is voluntary;

(b) the issuer of the security is not a reporting issuer in any jurisdiction ofCanada; and

(c) the price of the security being distributed is established by a generallyapplicable formula contained in a written agreement among some or all of thesecurity holders of the issuer to which the transferee is or will become a party.

2.27 Permitted transferees


(1) Subject to section 2.28, the prospectus requirement does not apply to a distributionof a security of an issuer acquired by a person described in section 2.24(1)[Employee,executive officer, director and consultant] under a plan of the issuer if thedistribution:

(a) is between:

(i) a person who is an employee, executive officer, director or consultant ofthe issuer or a related entity of the issuer; and

(ii) the permitted assign of that person;

or

(b) is between permitted assigns of that person.




(2) Subject to section 2.28, the prospectus requirement does not apply to a distributionof a security of an issuer by a trustee, custodian or administrator acting on behalf,or for the benefit, of employees, executive officers, directors or consultants of theissuer or a related entity of the issuer, to:

(a) an employee, executive officer, director or consultant of the issuer or arelated entity of the issuer; or


if the security was acquired from:

(c) an employee, executive officer, director or consultant of the issuer or a relatedentity of the issuer; or

(d) the permitted assign of a person referred to in paragraph (c).

(3) For the purposes of the exemptions in subsection (1) and paragraphs (2) (c)and (d), all references to employee, executive officer, director, or consultantinclude a former employee, executive officer, director, or consultant.

2.28 Limitation re: permitted transferees

The exemption from the prospectus requirement under subsection 2.27(1) or (2) is onlyavailable if the security was acquired:

(a) by a person described in section 2.24(1) [Employee, executive officer, director,and consultant] under any exemption that makes the resale of the security subjectto section 2.6 of National Instrument 45-102 Resale of Securities; or

(b) in Manitoba, by a person described in section 2.24(1) [Employee, executiveofficer, director, and consultant].

2.29 Issuer bid

The issuer bid requirements do not apply to the acquisition by an issuer of a security ofits own issue that was acquired by a person described in section 2.24(1) [Employee,executive officer, director, and consultant] if:

(a) the purpose of the acquisition by the issuer is to:

(i) fulfill withholding tax obligations; or

(ii) provide payment of the exercise price of a stock option;

(b) the acquisition by the issuer is made in accordance with the terms of a planthat specifies how the value of the securities acquired by the issuer is determined;

(c) in the case of securities acquired as payment of the exercise price of a stockoption, the date of exercise of the option is chosen by the option holder; and

(d) the aggregate number of securities acquired by the issuer within a 12 monthperiod under this section does not exceed 5% of the outstanding securities of theclass or series at the beginning of the period.




Division 5: Miscellaneous Exemptions

2.30 Isolated distribution by issuer

Refer to Appendix D of National Instrument 45-102 Resale of Securities.First trades are subject to a restricted period.

The prospectus requirement does not apply to a distribution by an issuer of a security ofits own issue if the distribution is an isolated distribution and is not made:

(a) in the course of continued and successive transactions of a like nature; and

(b) by a person whose usual business is trading in securities.

2.31 Dividends and distributions

Subsection (1) is cited in Appendix E of National Instrument 45-102 Resaleof Securities. First trades are subject to a seasoning period on resale.

Subsection (2) is cited in Appendix D and Appendix E of NationalInstrument 45-102. Resale restriction is determined by the exemptionunder which the previously issued security was first acquired.

(1) The prospectus requirement does not apply to a distribution by an issuer of asecurity of its own issue to a security holder of the issuer as a dividend ordistribution out of earnings, surplus, capital or other sources.

(2) The prospectus requirement does not apply to a distribution by an issuer to asecurity holder of the issuer of a security of a reporting issuer as an in speciedividend or distribution out of earnings or surplus.

2.32 Distribution to lender by control person for collateral

This provision is not cited in any Appendix of National Instrument 45-102Resale of Securities. Trades by a lender, pledgee, mortgagee or otherencumbrancer to realize on a debt are regulated by section 2.8 of NationalInstrument 45-102.

The prospectus requirement does not apply to a distribution of a security of an issuer toa lender, pledgee, mortgagee or other encumbrancer from the holdings of a controlperson of the issuer for the purpose of giving collateral for a bona fide debt of the controlperson.

2.33 Acting as underwriter

Refer to Appendix F of National Instrument 45-102 Resale of Securities.First trades are a distribution.

The prospectus requirement does not apply to a distribution of a security between aperson and a purchaser acting as an underwriter or between or among persons actingas underwriters.




2.34 Specified debt

This provision is not cited in any Appendix of National Instrument 45-102Resale of Securities. These securities are free trading.

(1) In this section, “permitted supranational agency” means:

(a) the African Development Bank, established by the Agreement Establishingthe African Development Bank which came into force on September 10, 1964, thatCanada became a member of on December 30, 1982;

(b) the Asian Development Bank, established under a resolution adopted by theUnited Nations Economic and Social Commission for Asia and the Pacific in 1965;

(c) the Caribbean Development Bank, established by the Agreement Establishingthe Caribbean Development Bank which came into force on January 26, 1970, asamended, that Canada is a founding member of;

(d) the European Bank for Reconstruction and Development, established by theAgreement Establishing the European Bank for Reconstruction and Developmentand approved by the European Bank for Reconstruction and DevelopmentAgreement Act (Canada), that Canada is a founding member of;

(e) the Inter-American Development Bank, established by the Agreementestablishing the Inter-American Development Bank which became effectiveDecember 30, 1959, as amended from time to time, that Canada is a member of;

(f) the International Bank for Reconstruction and Development, established bythe Agreement for an International Bank for Reconstruction and Developmentapproved by the Bretton Woods and Related Agreements Act (Canada); and

(g) the International Finance Corporation, established by Articles of Agreementapproved by the Bretton Woods and Related Agreements Act (Canada).

(2) The prospectus requirement does not apply to a distribution of:

(a) a debt security issued by or guaranteed by the Government of Canada or thegovernment of a jurisdiction of Canada;

(b) a debt security issued by or guaranteed by a government of a foreignjurisdiction if the debt security has an approved credit rating from an approvedcredit rating organization;

(c) a debt security issued by or guaranteed by a municipal corporation inCanada, or secured by or payable out of rates or taxes levied under the law of ajurisdiction of Canada on property in the jurisdiction and collectable by or throughthe municipality in which the property is situated;

(d) a debt security issued by or guaranteed by a Canadian financial institutionor a Schedule III bank, other than debt securities that are subordinate in right ofpayment to deposits held by the issuer or guarantor of those debt securities;




(d.1) in Ontario, a debt security issued by or guaranteed by a loan corporation,trust company, trust corporation, insurance company, treasury branch, creditunion, caisse populaire, financial services cooperative, or league that, in eachcase, is authorized by an enactment of a jurisdiction of Canada other than Ontarioto carry on business in a jurisdiction of Canada, other than debt securities that aresubordinate in right of payment to deposits held by the issuer or guarantor ofthose debt securities;

(e) a debt security issued by the Comité de gestion de la taxe scolaire de l’île deMontréal; or

(f) a debt security issued by or guaranteed by a permitted supranational agencyif the debt securities are payable in the currency of Canada or the United States ofAmerica.

(3) Paragraphs (2)(a), (c) and (d) do not apply in Ontario.

In Ontario, paragraphs 73(1)(a) and (b) of the Securities Act (Ontario)provide similar exemptions to the exemptions in paragraphs (2)(a), (c)and (d).

2.35 Short-term debt


The prospectus requirement does not apply to a distribution of a negotiable promissorynote or commercial paper maturing not more than one year from the date of issue, if thenote or commercial paper distributed:

(a) is not convertible or exchangeable into or accompanied by a right to purchaseanother security other than a security described in this section; and

(b) has an approved credit rating from an approved credit rating organization.

2.36 Mortgages


(1) In this section, “syndicated mortgage” means a mortgage in which 2 or morepersons participate, directly or indirectly, as a lender in a debt obligation that issecured by the mortgage.

(2) Except in Ontario, and subject to subsection (3), the prospectus requirement doesnot apply to a distribution of a mortgage on real property in a jurisdiction ofCanada by a person who is registered or licensed, or exempted from registration orlicensing, under mortgage brokerage or mortgage dealer legislation of thatjurisdiction.




(3) In Alberta, British Columbia, Manitoba, Québec and Saskatchewan, subsection (2)does not apply to a distribution of a syndicated mortgage.

In Ontario, paragraph 73(1)(a) of the Securities Act (Ontario) provides asimilar exemption.

2.37 Personal property security legislation


Except in Ontario, the prospectus requirement does not apply to a distribution to aperson, other than an individual, in a security evidencing indebtedness secured by orunder a security agreement, secured in accordance with personal property securitylegislation of a jurisdiction of Canada that provides for the granting of security inpersonal property.

In Ontario, paragraph 73(1)(a) of the Securities Act (Ontario) provides asimilar exemption.

2.38 Not for profit issuer


The prospectus requirement does not apply to a distribution by an issuer that isorganized exclusively for educational, benevolent, fraternal, charitable, religious orrecreational purposes and not for profit in a security of its own issue if:

(a) no part of the net earnings benefit any security holder of the issuer; and

(b) no commission or other remuneration is paid in connection with the sale ofthe security.

2.39 Variable insurance contract



(a) “contract’, “group insurance”, “insurance company”, “life insurance”and “policy” have the respective meanings assigned to them in the legislation fora jurisdiction referenced in Appendix A.

(b) “variable insurance contract” means a contract of life insurance underwhich the interest of the purchaser is valued for purposes of conversion orsurrender by reference to the value of a proportionate interest in a specifiedportfolio of assets.




(2) The prospectus requirement does not apply to a distribution of a variableinsurance contract by an insurance company if the variable insurance contract is:

(a) a contract of group insurance;

(b) a whole life insurance contract providing for the payment at maturity of anamount not less than 75% of the premium paid up to age 75 years for a benefitpayable at maturity;

(c) an arrangement for the investment of policy dividends and policy proceeds ina separate and distinct fund to which contributions are made only from policydividends and policy proceeds; or

(d) a variable life annuity.

2.40 RRSP/RRIF/TFSA

Refer to Appendix D and Appendix E of National Instrument 45-102 Resaleof Securities. The resale restriction is determined by the exemption underwhich the security was first acquired.

The prospectus requirement does not apply to a distribution of a security between:

(a) an individual or an associate of the individual; and

(b) a RRSP, RRIF, or TFSA:

(i) established for or by the individual; or

(ii) under which the individual is a beneficiary.

2.41 Schedule III banks and cooperative associations - evidence of deposit


Except in Ontario, the prospectus requirement does not apply to a distribution of anevidence of deposit issued by a Schedule III bank or an association governed by theCooperative Credit Associations Act (Canada).

In Ontario, clause (e) of the definition of “security” in subsection 1(1) of theSecurities Act (Ontario) excludes these evidences of deposit from thedefinition of “security’.

2.42 Conversion, exchange, or exercise

Subsection (1)(a) is cited in Appendix D and Appendix E of NationalInstrument 45-102 Resale of Securities. Resale restriction is determined bythe exemption under which the previously issued security was firstacquired.

Subsection (1)(b) is cited in Appendix E of National Instrument 45-102Resale of Securities. First trades are subject to a seasoning period onresale, unless the requirements of section 2.10 of NI 45-102 are met.




(1) The prospectus requirement does not apply to a distribution by an issuer if:

(a) the issuer distributes a security of its own issue to a security holder of theissuer in accordance with the terms and conditions of a security previously issuedby that issuer; or

(b) subject to subsection (2), the issuer distributes a security of a reportingissuer held by it to a security holder of the issuer in accordance with the terms andconditions of a security previously issued by that issuer.

(2) Subsection (1)(b) does not apply unless:

(a) the issuer has given the regulator or, in Québec, the securities regulatoryauthority, prior written notice stating the date, amount, nature and conditions ofthe distribution; and

(b) the regulator or, in Québec, the securities regulatory authority, has notobjected in writing to the distribution within 10 days of receipt of the noticereferred to in paragraph (a) or, if the regulator or securities regulatory authorityobjects to the distribution, the issuer must deliver to the regulator or securitiesregulatory authority information relating to the securities that is satisfactory toand accepted by the regulator or securities regulatory authority.

2.43 Self-directed registered educational savings plans


The prospectus requirement does not apply to a distribution of a self-directed RESP toa subscriber if:

(a) the distribution is conducted by:

(i) a dealing representative of a mutual fund dealer who is acting on behalfof the mutual fund dealer;

(ii) a Canadian financial institution; or

(iii) in Ontario, a financial intermediary; and

(b) the self-directed RESP restricts its investments in securities to securities inwhich the person who distributes the self-directed RESP is permitted todistribute.

PART 3: REGISTRATION EXEMPTIONS

3.0 Removal of exemptions – market intermediaries

(1) Subject to subsection (2), in Ontario and Newfoundland and Labrador, theexemptions from the dealer registration requirement under the followingsections are not available for a market intermediary except for a trade in asecurity with a registered dealer that is an affiliate of the market intermediary:

(a) section 3.1 [Rights offering];

(b) section 3.3 [Accredited investor];

(c) section 3.4 [Private issuer];

(d) section 3.7 [Founder, control person and family - Ontario];




(e) section 3.10 [Minimum amount investment];

(f) section 3.11 [Business combination and reorganization];

(g) section 3.12 [Asset acquisition];

(h) section 3.14 [Securities for debt];

(i) section 3.15 [Issuer acquisition or redemption];

(j) section 3.16 [Take-over bid and issuer bid];

(k) section 3.17 [Offer to acquire to security holder outside local jurisdiction];

(l) section 3.19 [Additional investment in investment funds];

(m) section 3.21 [Private investment fund - loan and trust pools];

(n) section 3.29 [Isolated trade];

(o) section 3.30 [Isolated trade by issuer];

(p) section 3.31 [Dividends and distributions];

(q) section 3.33 [Acting as underwriter];

(r) section 3.34 [Specified debt];

(s) section 3.35 [Short-term debt];

(t) section 3.39 [Variable insurance contract];

(u) section 3.42 [Conversion, exchange, or exercise];

(v) section 3.44 [Registered dealer].

(2) Subsection (1) does not apply in respect of a trade in a security by a lawyer oraccountant if the trade is incidental to the principal business of that lawyer oraccountant.

Division 1: Capital Raising Exemptions

3.1 Rights offering

The dealer registration requirement does not apply in respect of a trade by an issuer ina right granted by the issuer to purchase a security of its own issue to a security holderof the issuer if:

(a) the issuer has given the regulator or, in Québec, the securities regulatoryauthority, prior written notice stating the date, amount, nature and conditions ofthe trade, including the approximate net proceeds to be derived by the issuer onthe basis of the additional securities being fully taken up;

(b) the regulator or, in Québec, the securities regulatory authority, has notobjected in writing to the trade within 10 days of receipt of the notice referred to inparagraph (a) or, if the regulator or securities regulatory authority objects to thetrade, the issuer has delivered to the regulator or securities regulatory authorityinformation relating to the securities that is satisfactory to and accepted by theregulator or securities regulatory authority; and

(c) the issuer has complied with the applicable requirements of NationalInstrument 45-101 Rights Offerings.




3.2 Reinvestment plan

(1) Subject to subsections (3), (4) and (5), the dealer registration requirement does notapply in respect of the following trades by an issuer, or by a trustee, custodian oradministrator acting for or on behalf of the issuer, to a security holder of the issuerif the trades are permitted by a plan of the issuer:

(a) a trade in a security of the issuer’s own issue if a dividend or distribution outof earnings, surplus, capital or other sources payable in respect of the issuer’ssecurities is applied to the purchase of the security; and

(b) subject to subsection (2), a trade in a security of the issuer’s own issue if thesecurity holder makes an optional cash payment to purchase the security of theissuer that trades on a marketplace.

(2) Subsection (1) does not apply unless the aggregate number of securities issuedunder the optional cash payment referred to in subsection (1)(b) does not exceed,in the financial year of the issuer during which the trade takes place, 2% of theissued and outstanding securities of the class to which the plan relates as at thebeginning of the financial year.

(3) A plan that permits the trades described in subsection (1)(a) or (b) must beavailable to every security holder in Canada to which the dividend or distributionout of earnings, surplus, capital or other sources is available.

(4) Subsection (1) does not apply to a trade in a security of an investment fund.

(5) Subject to section 8.3.1, if the security traded under a plan described insubsection (1) is of a different class or series than the class or series of the securityto which the dividend or distribution is attributable, the issuer or the trustee,custodian or administrator must have provided to each participant that is eligibleto receive a security under the plan either a description of the material attributesand characteristics of the security traded under the plan or notice of a source fromwhich the participant can obtain the information without charge.

3.3 Accredited investor

(1) The dealer registration requirement does not apply in respect of a trade in asecurity if the purchaser purchases the security as principal and is an accreditedinvestor.

(2) Subject to subsection (3), for the purpose of this section, a trust company or trustcorporation described in paragraph (p) of the definition of “accredited investor” insection 1.1 [Definitions] is deemed to be purchasing as principal.

(3) Subsection (2) does not apply to a trust company or trust corporation registeredunder the laws of Prince Edward Island that is not registered or authorized underthe Trust and Loan Companies Act (Canada) or under comparable legislation inanother jurisdiction of Canada.

(4) For the purpose of this section, a person described in paragraph (q) of thedefinition of “accredited investor” in section 1.1 [Definitions] is deemed to bepurchasing as principal.

(5) This section does not apply to a trade in a security to a person if the person wascreated, or is used, solely to purchase or hold securities as an accredited investoras described in paragraph (m) of the definition of “accredited investor” insection 1.1 [Definitions].




3.4 Private issuer


“private issuer” means an issuer:

(a) that is not a reporting issuer or an investment fund;

(b) the securities of which, other than non-convertible debt securities:

(i) are subject to restrictions on transfer that are contained in theissuer’s constating documents or security holders’ agreements; and

(ii) are beneficially owned by not more than 50 persons, not includingemployees and former employees of the issuer or its affiliates, providedthat each person is counted as one beneficial owner unless the person iscreated or used solely to purchase or hold securities of the issuer inwhich case each beneficial owner or each beneficiary of the person, asthe case may be, must be counted as a separate beneficial owner; and

(c) that:

(i) has distributed its securities only to persons described insubsection (2); or

(ii) has completed a transaction and immediately following thecompletion of the transaction, its securities were beneficially ownedonly by persons described in subsection (2) and since the completion ofthe transaction has distributed its securities only to persons describedin subsection (2).

(2) The dealer registration requirement does not apply in respect of a trade in asecurity of a private issuer to a person who purchases the security as principaland is:


(b) a director, officer or employee of an affiliate of the issuer;

(c) a spouse, parent, grandparent, brother, sister, child or grandchild of adirector, executive officer, founder or control person of the issuer;

(d) a parent, grandparent, brother, sister, child or grandchild of the spouse of adirector, executive officer, founder or control person of the issuer;

(e) a close personal friend of a director, executive officer, founder or controlperson of the issuer;

(f) a close business associate of a director, executive officer, founder or controlperson of the issuer;

(g) a spouse, parent, grandparent, brother, sister, child or grandchild of theselling security holder or of the selling security holder’s spouse;

(h) a security holder of the issuer;

(i) an accredited investor;




(j) a person of which a majority of the voting securities are beneficially owned by,or a majority of the directors are, persons described in paragraphs (a) to (i);

(k) a trust or estate of which all of the beneficiaries or a majority of the trusteesor executors are persons described in paragraphs (a) to (i); or

(l) a person that is not the public.

(3) Except for a trade to an accredited investor, no commission or finder’s fee may bepaid to any director, officer, founder or control person of an issuer in connectionwith a trade under subsection (2).

3.5 Family, friends and business associates

(1) Except in Ontario and subject to section 3.6 [Family, friends and businessassociates - Saskatchewan], the dealer registration requirement does not apply inrespect of a trade in a security to a person who purchases the security as principaland is:

(a) a director, executive officer or control person of the issuer, or of an affiliate ofthe issuer;

(b) a spouse, parent, grandparent, brother, sister, child or grandchild of adirector, executive officer or control person of the issuer, or of an affiliate of theissuer;

(c) a parent, grandparent, brother, sister, child or grandchild of the spouse of adirector, executive officer or control person of the issuer or of an affiliate of theissuer;

(d) a close personal friend of a director, executive officer or control person of theissuer, or of an affiliate of the issuer;

(e) a close business associate of a director, executive officer or control person ofthe issuer, or of an affiliate of the issuer;

(f) a founder of the issuer or a spouse, parent, grandparent, brother, sister, child,grandchild, close personal friend or close business associate of a founder of theissuer;

(g) a parent, grandparent, brother, sister, child or grandchild of a spouse of afounder of the issuer;

(h) a person of which a majority of the voting securities are beneficially ownedby, or a majority of the directors are, persons described in paragraphs (a) to (g); or

(i) a trust or estate of which all of the beneficiaries or a majority of the trusteesor executors are persons described in paragraphs (a) to (g).

(2) No commission or finder’s fee may be paid to any director, officer, founder, orcontrol person of an issuer or an affiliate of the issuer in connection with a tradeunder subsection (1).




3.6 Family, friends and business associates - Saskatchewan

(1) In Saskatchewan, section 3.5 [Family, friends and business associates] does notapply unless the person making the trade obtains a signed risk acknowledgementfrom the purchaser in the required form for a trade to:

(a) a person described in section 3.5(1)(d) or (e) [Family, friends and businessassociates];

(b) a close personal friend or close business associate of a founder of the issuer;or

(c) a person described in section 3.5(1)(h) or (i) [Family, friends and businessassociates] if the trade is based in whole or in part on a close personal friendship orclose business association.

(2) The person making the trade must retain the required form referred to insubsection (1) for 8 years after the trade.

3.7 Founder, control person and family - Ontario

In Ontario, the dealer registration requirement does not apply in respect of a trade in asecurity to a person who purchases the security as principal and is:

(a) a founder of the issuer;

(b) an affiliate of a founder of the issuer;

(c) a spouse, parent, brother, sister, grandparent, grandchild or child of anexecutive officer, director or founder of the issuer; or

(d) a person that is a control person of the issuer.

3.8 Affiliates

The dealer registration requirement does not apply in respect of a trade by an issuer ina security of its own issue to an affiliate of the issuer that is purchasing as principal.

3.9 Offering memorandum

(1) In British Columbia, New Brunswick, Nova Scotia and Newfoundland andLabrador, the dealer registration requirement does not apply in respect of a tradeby an issuer in a security of its own issue to a purchaser if:

(a) the purchaser purchases the security as principal; and

(b) at the same time or before the purchaser signs the agreement to purchase thesecurity, the issuer:


(ii) obtains a signed risk acknowledgement from the purchaser in compliancewith subsection (15).




(2) In Alberta, Manitoba, Northwest Territories, Nunavut, Prince Edward Island,Québec, Saskatchewan and Yukon, the dealer registration requirement does notapply in respect of a trade by an issuer in a security of its own issue to a purchaserif:

(a) the purchaser purchases the security as principal;

(b) the purchaser is an eligible investor or the acquisition cost to the purchaserdoes not exceed $10 000;

(c) at the same time or before the purchaser signs the agreement to purchase thesecurity, the issuer:


(ii) obtains a signed risk acknowledgement from the purchaser in compliancewith subsection (15); and

(d) if the issuer is an investment fund, the investment fund is:

(i) a non-redeemable investment fund; or

(ii) a mutual fund that is a reporting issuer.

(3) In Alberta, Manitoba, Northwest Territories, Nunavut, Prince Edward Island,Québec, Saskatchewan and Yukon, this section does not apply to a trade in asecurity to a person described in paragraph (a) of the definition of “eligibleinvestor” in section 1.1 [Definitions] if that person was created, or is used, solely topurchase or hold securities in reliance on an exemption from the dealerregistration requirement set out in subsection (2).

(4) No commission or finder’s fee may be paid to any person, other than a registereddealer, in connection with a trade to a purchaser in Northwest Territories,Nunavut, Saskatchewan and Yukon under subsection (2).

(5) An offering memorandum delivered under this section must be in the requiredform.

(6) If the securities legislation where the purchaser is resident does not provide acomparable right, an offering memorandum delivered under this section mustprovide the purchaser with a contractual right to cancel the agreement topurchase the security by delivering a notice to the issuer not later than midnighton the 2nd business day after the purchaser signs the agreement to purchase thesecurity.

(7) If the securities legislation where the purchaser is resident does not providestatutory rights of action in the event of a misrepresentation in an offeringmemorandum delivered under this section, the offering memorandum mustcontain a contractual right of action against the issuer for rescission or damagesthat:

(a) is available to the purchaser if the offering memorandum, or any informationor documents incorporated or deemed to be incorporated by reference into theoffering memorandum, contains a misrepresentation, without regard to whetherthe purchaser relied on the misrepresentation;




(b) is enforceable by the purchaser delivering a notice to the issuer:

(i) in the case of an action for rescission, within 180 days after thepurchaser signs the agreement to purchase the security; or

(ii) in the case of an action for damages, before the earlier of:

(A) 180 days after the purchaser first has knowledge of the factsgiving rise to the cause of action; or

(B) 3 years after the date the purchaser signs the agreement topurchase the security;

(c) is subject to the defence that the purchaser had knowledge of themisrepresentation;

(d) in the case of an action for damages, provides that the amount recoverable:

(i) must not exceed the price at which the security was offered; and

(ii) does not include all or any part of the damages that the issuer provesdoes not represent the depreciation in value of the security resulting fromthe misrepresentation; and

(e) is in addition to, and does not detract from, any other right of the purchaser.

(8) An offering memorandum delivered under this section must contain a certificatethat states the following:

“This offering memorandum does not contain a misrepresentation.”

(9) If the issuer is a company, a certificate under subsection (8) must be signed:

(a) by the issuer’s chief executive officer and chief financial officer or, if theissuer does not have a chief executive officer or chief financial officer, anindividual acting in that capacity;

(b) on behalf of the directors of the issuer by:

(i) any 2 directors who are authorized to sign, other than the personsreferred to in paragraph (a); or

(ii) all the directors of the issuer; and

(c) by each promoter of the issuer.

(10) If the issuer is a trust, a certificate under subsection (8) must be signed by:

(a) the individuals who perform functions for the issuer similar to thoseperformed by the chief executive officer and the chief financial officer of acompany; and

(b) each trustee and the manager of the issuer.




(10.1) If a trustee or the manager that is signing the certificate of the issuer is:



(i) by the chief executive officer and the chief financial officer of the trusteeor the manager; and

(ii) on behalf of the board of directors of the trustee or the manager, by:

(A) any two directors of the trustee or the manager, other than thepersons referred to in subparagraph (i); or

(B) all of the directors of the trustee or the manager;

(c) a limited partnership, the certificate must be signed by each general partnerof the limited partnership as described in subsection (11.1) in relation to an issuerthat is a limited partnership; or

(d) not referred to in paragraphs (a), (b) or (c), the certificate may be signed byany person or company with authority to act on behalf of the trustee or themanager.

(10.2) Despite subsections (10) and (10.1), if the issuer is an investment fund and thedeclaration of trust, trust indenture or trust agreement establishing the investmentfund delegates the authority to do so, or otherwise authorizes an individual orcompany to do so, the certificate may be signed by the individual or company towhom the authority is delegated or that is authorized to sign the certificate.

(10.3) Despite subsections (10) and (10.1), if the trustees of an issuer, other than aninvestment fund, do not perform functions for the issuer similar to thoseperformed by the directors of a company, the trustees are not required to sign thecertificate of the issuer provided that at least two individuals who do performfunctions for the issuer similar to those performed by the directors of a companysign the certificate.

(11) If the issuer is a limited partnership, a certificate under subsection (8) must besigned by:

(a) each individual who performs a function for the issuer similar to any of thoseperformed by the chief executive officer or the chief financial officer of a company;and

(b) each general partner of the issuer.

(11.1) If a general partner of the issuer is:



(i) by the chief executive officer and the chief financial officer of the generalpartner; and

(ii) on behalf of the board of directors of the general partner, by:

(A) any two directors of the general partner, other than the personsreferred to in subparagraph (i); or

(B) all of the directors of the general partner;




(c) a limited partnership, the certificate must be signed by each general partnerof the limited partnership and, for greater certainty, this subsection applies toeach general partner required to sign;

(d) a trust, the certificate must be signed by the trustees of the general partneras described in subsection 10 in relation to an issuer that is a trust; or

(e) not referred to in paragraphs (a) to (d), the certificate may be signed by anyperson or company with authority to act on behalf of the general partner.

(12) If an issuer is not a company, trust or limited partnership, a certificate undersubsection (8) must be signed by the persons that, in relation to the issuer, are ina similar position or perform a similar function to any of the persons referred to insubsections (9), (10), (10.1), (10.2), (10.3), (11) and (11.1).

(13) A certificate under subsection (8) must be true:

(a) at the date the certificate is signed; and

(b) at the date the offering memorandum is delivered to the purchaser.

(14) If a certificate under subsection (8) ceases to be true after it is delivered to thepurchaser, the issuer cannot accept an agreement to purchase the security fromthe purchaser unless:

(a) the purchaser receives an update of the offering memorandum;

(b) the update of the offering memorandum contains a newly dated certificatesigned in compliance with subsection (9), (10), (10.1), (10.2), (10.3), (11) or (11.1);and

(c) the purchaser re-signs the agreement to purchase the security.

(15) A risk acknowledgement under subsection (1) or (2) must be in the required formand an issuer relying on subsection (1) or (2) must retain the signed riskacknowledgment for 8 years after the trade.

(16) The issuer must:

(a) hold in trust all consideration received from the purchaser in connection witha trade in a security under subsection (1) or (2) until midnight on the 2nd businessday after the purchaser signs the agreement to purchase the security; and

(b) return all consideration to the purchaser promptly if the purchaser exercisesthe right to cancel the agreement to purchase the security described undersubsection (6).

(17) The issuer must file a copy of an offering memorandum delivered under thissection and any update of a previously filed offering memorandum with thesecurities regulatory authority on or before the 10th day after the distributionunder the offering memorandum or update of the offering memorandum.

(18) If a qualifying issuer uses a form of offering memorandum that allows thequalifying issuer to incorporate previously filed information into the offeringmemorandum by reference, the qualifying issuer is exempt from the requirementunder National Instrument 43-101 Standards of Disclosure for Mineral Projectsto file a technical report to support scientific or technical information about thequalifying issuer’s mineral project in the offering memorandum or incorporatedby reference into the offering memorandum if the information about the mineralproject is contained in a previously filed technical report under NationalInstrument 43-101 Standards of Disclosure for Mineral Projects.




3.10 Minimum amount investment

(1) The dealer registration requirement does not apply in respect of a trade in asecurity to a person if:

(a) that person purchases as principal;

(b) the security has an acquisition cost to the purchaser of not less than $150 000paid in cash at the time of the trade; and

(c) the trade is in a security of a single issuer.

(2) Subsection (1) does not apply to a trade in a security to a person if the person wascreated, or is used, solely to purchase or hold securities in reliance on thisexemption from the dealer registration requirement set out in subsection (1).

Division 2: Transaction Exemptions

3.11 Business combination and reorganization

The dealer registration requirement does not apply in respect of a trade in a security inconnection with:

(a) an amalgamation, merger, reorganization or arrangement that is under astatutory procedure;

(b) an amalgamation, merger, reorganization or arrangement that:

(i) is described in an information circular made pursuant to NationalInstrument 51-102 Continuous Disclosure Obligations or in a similardisclosure record and the information circular or similar disclosure record isdelivered to each security holder whose approval of the amalgamation,merger, reorganization or arrangement is required before it can proceed; and

(ii) is approved by the security holders referred to in subparagraph (i); or

(c) a dissolution or winding-up of the issuer.

3.12 Asset acquisition

The dealer registration requirement does not apply in respect of a trade by an issuer ina security of its own issue to a person as consideration for the acquisition, directly orindirectly, of the assets of the person, if those assets have a fair value of not lessthan $150 000.

3.13 Petroleum, natural gas and mining properties

The dealer registration requirement does not apply in respect of a trade by an issuer ina security of its own issue as consideration for the acquisition, directly or indirectly, ofpetroleum, natural gas or mining properties or any interest in them.

3.14 Securities for debt

The dealer registration requirement does not apply in respect of a trade by a reportingissuer in a security of its own issue to a creditor to settle a bona fide debt of thatreporting issuer.




3.15 Issuer acquisition or redemption

The dealer registration requirement does not apply in respect of a trade in a security tothe issuer of the security.

3.16 Take-over bid and issuer bid

The dealer registration requirement does not apply in respect of a trade in a security inconnection with a take-over bid in a jurisdiction of Canada or an issuer bid in ajurisdiction of Canada.

3.17 Offer to acquire to security holder outside local jurisdiction

The dealer registration requirement does not apply in respect of a trade by a securityholder outside the local jurisdiction to a person in the local jurisdiction if the tradewould have been in connection with a take-over bid or issuer bid made by that personwere it not for the fact that the security holder is outside of the local jurisdiction.

Division 3: Investment Fund Exemptions

3.18 Investment fund reinvestment

(1) Subject to subsections (3), (4), (5) and (6), the dealer registration requirement doesnot apply in respect of the following trades by an investment fund, and theinvestment fund manager of the fund, to a security holder of the investment fundif the trades are permitted by a plan of the investment fund:

(a) a trade in a security of the investment fund’s own issue if a dividend ordistribution out of earnings, surplus, capital or other sources payable in respect ofthe investment fund’s securities is applied to the purchase of the security that is ofthe same class or series as the securities to which the dividend or distribution outof earnings, surplus, capital or other sources is attributable; and

(b) subject to subsection (2), a trade in a security of the investment fund’s ownissue if the security holder makes an optional cash payment to purchase thesecurity of the investment fund that is of the same class or series of securitiesdescribed in paragraph (a) that trade on a marketplace.

(2) The aggregate number of securities issued under the optional cash paymentreferred to in subsection (1)(b) must not exceed, in any financial year of theinvestment fund during which the trade takes place, 2% of the issued andoutstanding securities of the class to which the plan relates as at the beginning ofthe financial year.

(3) A plan that permits the trades described in subsection (1) must be available toevery security holder in Canada to which the dividend or distribution out ofearnings, surplus, capital or other sources is available.

(4) A person must not charge a fee for a trade described in subsection (1).




(5) An investment fund that is a reporting issuer and in continuous distribution mustset out in its current prospectus:

(a) details of any deferred or contingent sales charge or redemption fee that ispayable at the time of the redemption of the security;

(b) any right that the security holder has to make an election to receive cashinstead of securities on the payment of a dividend or making of a distribution bythe investment fund; and

(c) instructions on how the right referred to in paragraph (b) can be exercised.

(6) An investment fund that is a reporting issuer and is not in continuous distributionmust provide the information required by subsection (5) in its prospectus, annualinformation form or a material change report.

3.19 Additional investment in investment funds

The dealer registration requirement does not apply in respect of a trade by aninvestment fund, or the investment fund manager of the fund, in a security of theinvestment fund’s own issue with a security holder of the investment fund if:

(a) the security holder initially acquired securities of the investment fund asprincipal for an acquisition cost of not less than $150 000 paid in cash at the timeof the trade;

(b) the trade is in respect of a security of the same class or series as the securitiesinitially acquired, as described in paragraph (a); and

(c) the security holder, as at the date of the trade, holds securities of theinvestment fund that have:

(i) an acquisition cost of not less than $150 000; or

(ii) a net asset value of not less than $150 000.

3.20 Private investment club

The dealer registration requirement does not apply in respect of a trade in a security ofan investment fund if the investment fund:

(a) has no more than 50 beneficial security holders;

(b) does not seek and has never sought to borrow money from the public;

(c) does not and has never distributed its securities to the public;

(d) does not pay or give any remuneration for investment management oradministration advice in respect of trades in securities, except normal brokeragefees; and

(e) for the purpose of financing the operations of the investment fund, requiressecurity holders to make contributions in proportion to the value of the securitiesheld by them.




3.21 Private investment fund - loan and trust pools

(1) Subject to subsection (2), the dealer registration requirement does not apply inrespect of a trade in a security of an investment fund if the investment fund:

(a) is administered by a trust company or trust corporation that is registered orauthorized by an enactment of Canada or a jurisdiction of Canada to carry onbusiness in Canada or a jurisdiction of Canada;

(b) has no promoter or investment fund manager other than the trust companyor trust corporation referred to in paragraph (a); and

(c) co-mingles the money of different estates and trusts for the purpose offacilitating investment.

(2) A trust company or trust corporation registered under the laws of Prince EdwardIsland that is not registered under the Trust and Loan Companies Act (Canada) orunder comparable legislation in another jurisdiction of Canada is not a trustcompany or trust corporation for the purpose of subparagraph (1)(a).

(3) The investment fund manager registration requirement does not apply to a trustcompany or trust corporation that administers an investment fund referred to insubsection (1).

Division 4: Employee, Executive Officer, Director and ConsultantDivision 4: Exemptions

3.22 Definitions

The definitions in Division 4 of Part 2 of this Instrument have the same meaning in thisDivision.

3.23 Interpretation

(1) In this Division, a person (first person) is considered to control another person(second person) if the first person, directly or indirectly, has the power to directthe management and policies of the second person by virtue of:

(a) ownership of or direction over voting securities in the second person;

(b) a written agreement or indenture;

(c) being the general partner or controlling the general partner of the secondperson; or

(d) being a trustee of the second person.

(2) In this Division, participation in a trade is considered voluntary if:

(a) in the case of an employee or the employee’s permitted assign, the employeeor the employee’s permitted assign is not induced to participate in the trade byexpectation of employment or continued employment of the employee with theissuer or a related entity of the issuer;

(b) in the case of an executive officer or the executive officer’s permitted assign,the executive officer or the executive officer’s permitted assign is not induced toparticipate in the trade by expectation of appointment, employment, continuedappointment or continued employment of the executive officer with the issuer or arelated entity of the issuer;




(c) in the case of a consultant or the consultant’s permitted assign, theconsultant or the consultant’s permitted assign is not induced to participate in thetrade by expectation of engagement of the consultant to provide services orcontinued engagement of the consultant to provide services to the issuer or arelated entity of the issuer; and

(d) in the case of an employee of a consultant, the individual is not induced bythe issuer, a related entity of the issuer, or the consultant to participate in thetrade by expectation of employment or continued employment with the consultant.

3.24 Employee, executive officer, director and consultant

(1) Subject to section 3.25 [Unlisted reporting issuer exception], the dealer registrationrequirement does not apply in respect of:

(a) a trade by an issuer in a security of its own issue; or

(b) a trade by a control person of an issuer in a security of the issuer or in anoption to acquire a security of the issuer;

with:

(c) an employee, executive officer, director or consultant of the issuer;

(d) an employee, executive officer, director or consultant of a related entity of theissuer; or

(e) a permitted assign of a person referred to in paragraphs (c) or (d);

if participation in the trade is voluntary.

(2) For the purposes of subsection (1), a person referred to in paragraph (c), (d) or (e)includes a trustee, custodian or administrator acting as agent for that person forthe purpose of facilitating a trade.

(3) The dealer registration requirement does not apply in respect of an act by a relatedentity of an issuer in furtherance of a trade referred to in subsection (1).

3.25 Unlisted reporting issuer exception

(1) For the purpose of this section, “unlisted reporting issuer” means a reportingissuer in a jurisdiction of Canada that is not a listed issuer.

(2) Subject to subsection (3), section 3.24 [Employee, executive officer, director andconsultant] does not apply to a trade to an employee or consultant of the unlistedreporting issuer who is an investor relations person of the issuer, an associatedconsultant of the issuer, an executive officer of the issuer, a director of the issuer,or a permitted assign of those persons if, after the trade:

(a) the number of securities, calculated on a fully diluted basis, reserved forissuance under options granted to:


(ii) a related person, exceeds 5% of the outstanding securities of the issuer;or




(b) the number of securities, calculated on a fully diluted basis, issued within 12months to:


(ii) a related person and the associates of the related person, exceeds 5% ofthe outstanding securities of the issuer.

(3) Subsection (2) does not apply to a trade if the unlisted reporting issuer:

(a) obtains security holder approval; and

(b) before obtaining security holder approval, provides security holders with thefollowing information in sufficient detail to permit security holders to form areasoned judgment concerning the matter:

(i) the eligibility of employees, executive officers, directors, and consultantsto be issued or granted securities as compensation or under a plan;

(ii) the maximum number of securities that may be issued, or in the case ofoptions, the number of securities that may be issued on exercise of theoptions, as compensation or under a plan;

(iii) particulars relating to any financial assistance or support agreementto be provided to participants by the issuer or any related entity of the issuerto facilitate the purchase of securities as compensation or under a plan,including whether the assistance or support is to be provided on a full-, part-,or non-recourse basis;

(iv) in the case of options, the maximum term and the basis for thedetermination of the exercise price;

(v) particulars relating to the options or other entitlements to be granted ascompensation or under a plan, including transferability; and

(vi) the number of votes attaching to securities that, to the issuer’sknowledge at the time the information is provided, will not be included forthe purpose of determining whether security holder approval has beenobtained.

3.26 Trades among current or former employees, executive officers, directors,or consultants of non-reporting issuer

(1) Subject to subsection (2), the dealer registration requirement does not apply inrespect of a trade in a security of an issuer by:

(a) a current or former employee, executive officer, director, or consultant of theissuer or related entity of the issuer; or


to:

(c) an employee, executive officer, director, or consultant of the issuer or arelated entity of the issuer; or

(d) a permitted assign of the employee, executive officer, director, or consultant.




(2) The exemption in subsection (1) is only available if:

(a) participation in the trade is voluntary;

(b) the issuer of the security is not a reporting issuer in any jurisdiction ofCanada; and

(c) the price of the security being traded is established by a generally applicableformula contained in a written agreement among some or all of the securityholders of the issuer to which the transferee is or will become a party.

3.27 Permitted transferees

(1) The dealer registration requirement does not apply in respect of a trade in asecurity of an issuer acquired by a person described in section 3.24(1) [Employee,executive officer, director and consultant] under a plan of the issuer if the trade:

(a) is between:

(i) a person who is an employee, executive officer, director or consultant ofthe issuer or a related entity of the issuer; and

(ii) the permitted assign of that person; or

(b) is between permitted assigns of that person.

(2) The dealer registration requirement does not apply in respect of a trade in asecurity of an issuer by a trustee, custodian or administrator acting on behalf, orfor the benefit, of employees, executive officers, directors or consultants of theissuer or a related entity of the issuer, to:

(a) an employee, executive officer, director or consultant of the issuer or arelated entity of the issuer; or


if the security was acquired from:

(c) an employee, executive officer, director or consultant of the issuer or a relatedentity of the issuer; or

(d) the permitted assign of a person referred to in paragraph (c).

(3) For the purposes of the exemptions in subsection (1) and paragraphs (2)(c) and (d),all references to employee, executive officer, director, or consultant include aformer employee, executive officer, director, or consultant.

3.28 Resale - non-reporting issuer

The dealer registration requirement does not apply in respect of the resale of a securitythat was acquired under this Division or by a person described in section 3.24(1)[Employee, executive officer, director, and consultant] if the conditions in section 2.14 ofNational Instrument 45-102 Resale of Securities are satisfied.




Division 5: Miscellaneous Exemptions

3.29 Isolated trade

The dealer registration requirement does not apply in respect of a trade in a security bya person if the trade is an isolated trade and is not made:

(a) by the issuer of the security;

(b) in the course of continued and successive transactions of a like nature; and

(c) by a person whose usual business is trading in securities.

3.30 Isolated trade by issuer

The dealer registration requirement does not apply in respect of a trade by an issuer ina security of its own issue if the trade is an isolated trade and is not made:

(a) in the course of continued and successive transactions of a like nature; and

(b) by a person whose usual business is trading in securities.

3.31 Dividends and distributions

(1) The dealer registration requirement does not apply in respect of a trade by anissuer in a security of its own issue to a security holder of the issuer as a dividendor distribution out of earnings, surplus, capital or other sources.

(2) The dealer registration requirement does not apply in respect of a trade by anissuer to a security holder of the issuer in a security of a reporting issuer as an inspecie dividend or distribution out of earnings or surplus.

3.32 Trade to lender by control person for collateral

The dealer registration requirement does not apply in respect of a trade in a security ofan issuer to a lender, pledgee, mortgagee or other encumbrancer from the holdings of acontrol person of the issuer for the purpose of giving collateral for a bona fide debt of thecontrol person.

3.33 Acting as underwriter

The dealer registration requirement does not apply in respect of a trade in a securitybetween a person and a purchaser acting as an underwriter or between or amongpersons acting as underwriters.

3.34 Specified debt

(1) In this section, “permitted supranational agency” means:

(a) the African Development Bank, established by the Agreement Establishingthe African Development Bank which came into force on September 10, 1964, thatCanada became a member of on December 30, 1982;

(b) the Asian Development Bank, established under a resolution adopted by theUnited Nations Economic and Social Commission for Asia and the Pacific in 1965;

(c) the Caribbean Development Bank, established by the Agreement Establishingthe Caribbean Development Bank which came into force on January 26, 1970, asamended, that Canada is a founding member of;




(d) the European Bank for Reconstruction and Development, established by theAgreement Establishing the European Bank for Reconstruction and Developmentand approved by the European Bank for Reconstruction and DevelopmentAgreement Act (Canada), that Canada is a founding member of;

(e) the Inter-American Development Bank, established by the Agreementestablishing the Inter-American Development Bank which became effectiveDecember 30, 1959, as amended from time to time, that Canada is a member of;

(f) the International Bank for Reconstruction and Development, established bythe Agreement for an International Bank for Reconstruction and Developmentapproved by the Bretton Woods and Related Agreements Act (Canada); and

(g) the International Finance Corporation, established by Articles of Agreementapproved by the Bretton Woods and Related Agreements Act (Canada).

(2) The dealer registration requirement does not apply in respect of a trade in:

(a) a debt security issued by or guaranteed by the Government of Canada or thegovernment of a jurisdiction of Canada;

(b) a debt security issued by or guaranteed by a government of a foreignjurisdiction if the debt security has an approved credit rating from an approvedcredit rating organization;

(c) a debt security issued by or guaranteed by a municipal corporation inCanada, or secured by or payable out of rates or taxes levied under the law of ajurisdiction of Canada on property in the jurisdiction and collectable by or throughthe municipality in which the property is situated;

(d) a debt security issued by or guaranteed by a Canadian financial institutionor a Schedule III bank, other than debt securities that are subordinate in right ofpayment to deposits held by the issuer or guarantor of those debt securities;

(e) a debt security issued by the Comité de gestion de la taxe scolaire de l’île deMontréal; or

(f) a debt security issued by or guaranteed by a permitted supranational agencyif the debt securities are payable in the currency of Canada or the United States ofAmerica.

(3) Paragraphs (2)(a) and (c) do not apply in Ontario.

In Ontario, paragraphs 35(1)1 and 35(1)2 of the Securities Act (Ontario)provide similar exemptions as the exemptions in paragraphs (2)(a) and (c).

3.35 Short-term debt

The dealer registration requirement does not apply in respect of a trade in a negotiablepromissory note or commercial paper maturing not more than one year from the date ofissue, if the note or commercial paper traded:

(a) is not convertible or exchangeable into or accompanied by a right to purchaseanother security other than a security described in this section; and

(b) has an approved credit rating from an approved credit rating organization.




3.36 Mortgages

(1) In this section, “syndicated mortgage” means a mortgage in which 2 or morepersons participate, directly or indirectly, as a lender in a debt obligation that issecured by the mortgage.

(2) Except in Ontario, and subject to subsection (3), the dealer registration requirementdoes not apply in respect of a trade in a mortgage on real property in a jurisdictionof Canada by a person who is registered or licensed, or exempted from registrationor licensing, under mortgage brokerage or mortgage dealer legislation of thatjurisdiction.

(3) In Alberta, British Columbia, Manitoba, Québec and Saskatchewan, subsection (2)does not apply in respect of a trade in a syndicated mortgage.

In Ontario, subsection 35(4) of the Securities Act (Ontario) provides asimilar exemption.

3.37 Personal property security legislation

Except in Ontario, the dealer registration requirement does not apply in respect of atrade to a person, other than an individual, in a security evidencing indebtednesssecured by or under a security agreement, secured in accordance with personalproperty security legislation of a jurisdiction of Canada that provides for the grantingof security in personal property.

In Ontario, subsection 35(2) of the Securities Act (Ontario) provides asimilar exemption.

3.38 Not for profit issuer

The dealer registration requirement does not apply in respect of a trade by an issuerthat is organized exclusively for educational, benevolent, fraternal, charitable, religiousor recreational purposes and not for profit in a security of its own issue if:

(a) no part of the net earnings benefit any security holder of the issuer; and

(b) no commission or other remuneration is paid in connection with the sale ofthe security.

3.39 Variable insurance contract


(a) “contract”, “group insurance”, “insurance company”, “life insurance”and “policy” have the respective meanings assigned to them in the legislation fora jurisdiction referenced in Appendix A.

(b) “variable insurance contract” means a contract of life insurance underwhich the interest of the purchaser is valued for purposes of conversion orsurrender by reference to the value of a proportionate interest in a specifiedportfolio of assets.




(2) The dealer registration requirement does not apply in respect of a trade in avariable insurance contract by an insurance company if the variable insurancecontract is:

(a) a contract of group insurance;

(b) a whole life insurance contract providing for the payment at maturity of anamount not less than 75% of the premium paid up to age 75 years for a benefitpayable at maturity;

(c) an arrangement for the investment of policy dividends and policy proceeds ina separate and distinct fund to which contributions are made only from policydividends and policy proceeds; or

(d) a variable life annuity.

3.40 RRSP/RRIF/TFSA

The dealer registration requirement does not apply in respect of a trade in a securitybetween:

(a) an individual or an associate of the individual; and

(b) a RRSP, RRIF, or TFSA:

(i) established for or by the individual; or

(ii) under which the individual is a beneficiary.

3.41 Schedule III banks and cooperative associations - evidence of deposit

Except in Ontario, the dealer registration requirement does not apply in respect of atrade in an evidence of deposit issued by a Schedule III bank or an association governedby the Cooperative Credit Associations Act (Canada).

In Ontario, clause (e) of the definition of “security” in subsection 1(1) of theSecurities Act (Ontario) excludes these evidences of deposit from thedefinition of “security’.

3.42 Conversion, exchange, or exercise

(1) The dealer registration requirement does not apply in respect of a trade by anissuer if:

(a) the issuer trades a security of its own issue to a security holder of the issuerin accordance with the terms and conditions of a security previously issued by thatissuer; or

(b) subject to subsection (2), the issuer trades a security of a reporting issuerheld by it to a security holder of the issuer in accordance with the terms andconditions of a security previously issued by that issuer.

(2) Subsection (1)(b) does not apply unless:

(a) the issuer has given the regulator or, in Québec, the securities regulatoryauthority, prior written notice stating the date, amount, nature and conditions ofthe trade; and




(b) the regulator or, in Québec, the securities regulatory authority, has notobjected in writing to the trade within 10 days of receipt of the notice referred to inparagraph (a) or, if the regulator or securities regulatory authority objects to thetrade, the issuer must deliver to the regulator or securities regulatory authorityinformation relating to the securities that is satisfactory to and accepted by theregulator or securities regulatory authority.

3.43 Self-directed registered educational savings plans

The dealer registration requirement does not apply to a trade in a self-directed RESP toa subscriber if:

(a) the trade is made by:

(i) a dealing representative of a mutual fund dealer who is acting on behalfof the mutual fund dealer;

(ii) a Canadian financial institution; or

(iii) in Ontario, a financial intermediary; and

(b) the self-directed RESP restricts its investments in securities to securities inwhich the person who trades the self-directed RESP is permitted to trade.

3.44 Registered dealer

The dealer registration requirement does not apply in respect of a trade by a personacting solely through an agent who is a registered dealer.

3.45 Exchange contract

(1) In Alberta, British Columbia, Québec and Saskatchewan, the dealer registrationrequirement does not apply in respect of the following trades in exchangecontracts:

(a) a trade by a person acting solely through a registered dealer;

(b) subject to subsection (2) and (3), a trade resulting from an unsolicited orderplaced with an individual who is not a resident of and does not carry on businessin the jurisdiction;

(c) a trade that may occasionally be transacted by employees of a registereddealer if the employees:

(i) do not usually trade in exchange contracts; and

(ii) have been designated by the regulator or, in Québec, the securitiesregulatory authority, as “non-trading” employees, either individually or as aclass.

(2) An individual referred to in subsection (1)(b) must not:

(a) advertise or engage in promotional activity that is directed to persons in thejurisdiction during the 6 months preceding the trade; and

(b) pay any commission or finder’s fee to any person in the jurisdiction inconnection with the trade.

(3) Subsection (1)(b) does not apply in Saskatchewan.




3.46 Estates, bankruptcies, and liquidations

The dealer registration requirement does not apply in respect of a trade by a personacting under the authority of:

(a) a direction, order or judgment of a court;

(b) a will; or

(c) any law of a jurisdiction;

in the course of enforcing legal obligations or administering the affairs of anotherperson.

3.47 Employees of registered dealer

The dealer registration requirement does not apply in respect of a trade by an employeeof a registered dealer in a security if the employee does not usually trade in securitiesand has been designated or accepted by the regulator or, in Québec, the securitiesregulatory authority, as a “non-trading” employee, either individually or as a class.

3.48 Small security holder selling and purchase arrangements

(1) For the purposes of this section:

“exchange” means:

(a) TSX Inc.;

(b) the TSX Venture Exchange Inc.; or

(c) an exchange that:

(i) has a policy that is substantially similar to the policy of the TSXInc.; and

(ii) is designated by the securities regulatory authority for thepurpose of this section;

“policy” means:

(a) in the case of the TSX Inc., sections 638 and 639 [Odd lot selling andpurchase arrangements] of the TSX Company Manual as amended from timeto time;

(b) in the case of the TSX Venture Exchange Inc., Policy 5.7 SmallShareholder Selling and Purchase Arrangements as amended from time totime; or

(c) in the case of an exchange referred to in paragraph (c) of the definitionof “exchange”, the rule, policy or other similar instrument of the exchange onsmall shareholder selling and purchase arrangements.

(2) The dealer registration requirement does not apply in respect of a trade by anissuer or its agent, in securities of the issuer that are listed on an exchange if:

(a) the trade is an act in furtherance of participation by the holders of thesecurities in an arrangement that is in accordance with the policy of thatexchange;




(b) the issuer and its agent do not provide advice to a security holder about thesecurity holder’s participation in the arrangement referred to in paragraph (a),other than a description of the arrangement’s operation, procedures for participationin the arrangement, or both;

(c) the trade is made in accordance with the policy of that exchange, withoutresort to an exemption from, or variation of, the significant subject matter of thepolicy; and

(d) at the time of the trade after giving effect to a purchase under thearrangement, the market value of the maximum number of securities that asecurity holder is permitted to hold in order to be eligible to participate in thearrangement is not more than $25 000.

(3) For the purposes of subsection (2)(c), an exemption from, or variation of, themaximum number of securities that a security holder is permitted to hold under apolicy in order to be eligible to participate in the arrangement provided for in thepolicy is not an exemption from, or variation of, the significant subject matter ofthe policy.

3.49 Adviser

The adviser registration requirement does not apply to:

(a) the following persons if performance of services as an adviser are incidentalto their principal business or occupation:

(i) a Canadian financial institution and a Schedule III bank;

(ii) the Business Development Bank of Canada continued under theBusiness Development Bank of Canada Act (Canada);

(iii) a société d’entraide économique or the Fédération des sociétés d’entraideéconomique du Québec governed by the Act respecting the sociétés d’entraideéconomique (Québec);

(iv) a lawyer, accountant, engineer or teacher, or, in Québec, a notary, ifthat individual:

(A) does not recommend securities of an issuer in which that individualhas an interest; and

(B) does not receive remuneration for the performance of services asan adviser separate from remuneration received by that individual forpracticing in their professions;

(v) a registered dealer or any partner, officer or employee of a registereddealer; or

(b) a publisher or a writer for a newspaper, news magazine or business orfinancial journal or periodical, however delivered, that is of general and regularpaid circulation, and only available to subscribers for value, or purchasers of it, ifthe publisher or writer:

(i) gives advice only through the written publication;

(ii) has no interest either directly or indirectly in any of the securities onwhich that individual gives advice; and

(iii) receives no commission or other consideration for giving the adviceother than for acting in that person’s capacity as a publisher or writer.




3.50 Investment dealer acting as portfolio manager

(1) Subject to subsection (2), the adviser registration requirement does not apply to aregistered investment dealer who manages the investment portfolios of its clientsthrough discretionary authority granted by the clients if the investment dealer isa member of the Investment Industry Regulatory Organization of Canada and theadvising activities are conducted in accordance with the rules of the InvestmentIndustry Regulatory Organization of Canada.

(2) Any partner, director, officer or employee of a registered investment dealerreferred to in subsection (1) who manages an investment portfolio for theregistered investment dealer must be registered under the securities legislation ofthe jurisdiction to trade in securities.

PART 4: CONTROL BLOCK DISTRIBUTIONS

4.1 Control block distributions

(1) In this Part:

“control block distribution” means a trade to which the provisions ofsecurities legislation listed in Appendix B apply.

(2) Terms defined or interpreted in National Instrument 62-103 The Early WarningSystem and Related Take-over Bid and Insider Reporting Issues and used in thisPart have the same meaning as is assigned to them in that Instrument.

(3) The prospectus requirement does not apply to a control block distribution by aneligible institutional investor of a reporting issuer’s securities if:

(a) the eligible institutional investor:

(i) has filed the reports required under the early warning requirements orfiles the reports required under Part 4 of National Instrument 62-103 TheEarly Warning System and Related Take-over Bid and Insider ReportingIssues;

(ii) does not have knowledge of any material fact or material change withrespect to the reporting issuer that has not been generally disclosed;

(iii) does not receive in the ordinary course of its business and investmentactivities knowledge of any material fact or material change with respect tothe reporting issuer that has not been generally disclosed; and

(iv) either alone or together with any joint actors, does not possess effectivecontrol of the reporting issuer;

(b) there are no directors or officers of the reporting issuer who were, or couldreasonably be seen to have been, selected, nominated or designated by the eligibleinstitutional investor or any joint actor;

(c) the control block distribution is made in the ordinary course of business orinvestment activity of the eligible institutional investor;




(d) securities legislation would not require the securities to be held for aspecified period of time if the trade was not a control block distribution;

(e) no unusual effort is made to prepare the market or to create a demand for thesecurities; and

(f) no extraordinary commission or consideration is paid in respect of the controlblock distribution.

(4) An eligible institutional investor that makes a distribution in reliance onsubsection (3) must file a letter within 10 days after the distribution thatdescribes the date and size of the distribution, the market on which it was madeand the price at which the securities being distributed were sold.

4.2 Distributions by a control person after a take-over bid

(1) Subject to subsection (2), the prospectus requirement does not apply to adistribution in a security from the holdings of a control person acquired under atake-over bid for which a take-over bid circular was issued and filed if:

(a) the issuer whose securities are being acquired under the take-over bid hasbeen a reporting issuer for at least 4 months at the date of the take-over bid;

(b) the intention to make the distribution is disclosed in the take-over bidcircular issued in respect of the take-over bid;

(c) the distribution is made within the period beginning on the date of the expiryof the bid and ending 20 days after that date;

(d) a notice of intention to distribute securities in Form 45-102F1 Notice ofIntention to Distribute Securities under Section 2.8 of NI 45-102 Resale ofSecurities under National Instrument 45-102 Resale of Securities is filed beforethe distribution;

(e) an insider report of the distribution in Form 55-102F2 Insider Report orForm 55-102F6 Insider Report, as applicable, under National Instrument 55-102System for Electronic Disclosure by Insiders (SEDI) is filed within 3 days after thecompletion of the distribution;

(f) no unusual effort is made to prepare the market or to create a demand for thesecurity; and

(g) no extraordinary commission or consideration is paid in respect of thedistribution.

(2) A control person referred to in subsection (1) is not required to comply withsubsection (1)(b) if:

(a) another person makes a competing take-over bid for securities of the issuerfor which the take-over bid circular is issued; and

(b) the control person sells those securities to that other person for a considerationthat is not greater than the consideration offered by that other person under itstake-over bid.




PART 5: OFFERINGS BY TSX VENTURE EXCHANGE OFFERINGPART 5: DOCUMENT

5.1 Application and interpretation

(1) This Part does not apply in Ontario.

(2) In this Part:

“exchange policy” means Exchange Policy 4.6 - Public Offering by Short FormOffering Document and Exchange Form 4H - Short Form Offering Document, ofthe TSX Venture Exchange as amended from time to time;

“gross proceeds” means the gross proceeds that are required to be paid to theissuer for listed securities distributed under a TSX Venture exchange offeringdocument;

“listed security” means a security of a class listed on the TSX VentureExchange;

“prior exchange offering” means a distribution of securities by an issuer undera TSX Venture exchange offering document that was completed duringthe 12-month period immediately preceding the date of the TSX Ventureexchange offering document;

“subsequently triggered report” means a material change report that must befiled no later than 10 days after a material change under securities legislation asa result of a material change that occurs after the date the TSX Venture exchangeoffering document is certified but before a purchaser enters into an agreement ofpurchase and sale;

“TSX Venture Exchange” means the TSX Venture Exchange Inc.;

“TSX Venture exchange offering document” means an offering documentthat complies with the exchange policy;

“warrant” means a warrant of an issuer distributed under a TSX Ventureexchange offering document that entitles the holder to acquire a listed security ora portion of a listed security of the same issuer.

5.2 TSX Venture Exchange offering

Refer to Appendix D of National Instrument 45-102 Resale of Securities.These securities are free trading unless the security is acquired by:

(i) a purchaser that, at the time the security was acquired, was aninsider or promoter of the issuer of the security, an underwriter of theissuer, or a member of the underwriter’s professional group; or

(ii) any other purchaser in excess of $40 000 for the portion of thesecurities in excess of $40 000.

The first trade by purchasers under (i) and (ii) are subject to a restrictedperiod.




The prospectus requirement does not apply to a distribution by an issuer in a securityof its own issue if:

(a) the issuer has filed an AIF in a jurisdiction of Canada;

(b) the issuer is a SEDAR filer;

(c) the issuer is a reporting issuer in a jurisdiction of Canada and has filed in ajurisdiction of Canada:

(i) a TSX Venture exchange offering document;

(ii) all documents required to be filed under the securities legislation ofthat jurisdiction; and

(iii) any subsequently triggered report;

(d) the distribution is of listed securities or units consisting of listed securitiesand warrants;

(e) the issuer has filed with the TSX Venture Exchange a TSX Venture exchangeoffering document in respect of the distribution, that:

(i) incorporates by reference the following documents of the issuer filedwith the securities regulatory authority in any jurisdiction of Canada:

(A) the AIF;

(B) the most recent annual financial statements and the MD&Arelating to those financial statements;

(C) all unaudited interim financial statements and the MD&A relatingto those financial statements, filed after the date of the AIF but beforeor on the date of the TSX Venture exchange offering document;

(D) all material change reports filed after the date of the AIF butbefore or on the date of the TSX Venture exchange offering document;and

(E) all documents required under National Instrument 43-101Standards of Disclosure for Mineral Projects and NationalInstrument 51-101 Standards of Disclosure for Oil and Gas Activitiesfiled on or after the date of the AIF but before or on the date of the TSXVenture exchange offering document;

(ii) deems any subsequently triggered report required to be delivered to apurchaser under this Part to be incorporated by reference;

(iii) grants to purchasers contractual rights of action in the event of amisrepresentation, as required by the exchange policy;

(iv) grants to purchasers contractual rights of withdrawal, as required bythe exchange policy; and

(v) contains all the certificates required by the exchange policy;

(f) the distribution is conducted in accordance with the exchange policy;




(g) the issuer or the underwriter delivers the TSX Venture exchange offeringdocument and any subsequently triggered report to each purchaser:

(i) before the issuer or the underwriter enters into the written confirmationof purchase and sale resulting from an order or subscription for securitiesbeing distributed under the TSX Venture exchange offering document; or

(ii) not later than midnight on the 2nd business day after the agreement ofpurchase and sale is entered into;

(h) the listed securities issued under the TSX Venture exchange offeringdocument, when added to the listed securities of the same class issued under priorexchange offerings, do not exceed:

(i) the number of securities of the same class outstanding immediatelybefore the issuer distributes securities of the same class under the TSXVenture exchange offering document; or

(ii) the number of securities of the same class outstanding immediatelybefore a prior exchange offering;

(i) the gross proceeds under the TSX Venture exchange offering document, whenadded to the gross proceeds from prior exchange offerings do not exceed $2million;

(j) no purchaser acquires more than 20% of the securities distributed under theTSX Venture exchange offering document; and

(k) no more than 50% of the securities distributed under the TSX Ventureexchange offering document are subject to section 2.5 of National Instrument 45-102Resale of Securities.

5.3 Underwriter obligations

An underwriter that qualifies as a “sponsor” under TSX Venture Exchange Policy 2.2 -Sponsorship and Sponsorship Requirements as amended from time to time must signthe TSX Venture exchange offering document and comply with TSX Venture ExchangeAppendix 4A - Due Diligence Report in connection with the distribution.

PART 6: REPORTING REQUIREMENTS

6.1 Report of exempt distribution

(1) Subject to subsection (2) and section 6.2 [When report not required], issuers thatdistribute their own securities and underwriters that distribute securities theyacquired under section 2.33 must file a report if they make the distribution underone or more of the following exemptions:

(a) section 2.3 [Accredited investor];

(b) section 2.5 [Family, friends and business associates];

(c) subsection 2.9 (1) or (2) [Offering memorandum for Alberta, B.C., Manitoba,New Brunswick, Nova Scotia, Newfoundland and Labrador, Northwest Territories,Nunavut, Prince Edward Island, Québec, Saskatchewan and Yukon];

(d) section 2.10 [Minimum amount investment];

(e) section 2.12 [Asset acquisition];




(f) section 2.13 [Petroleum, natural gas and mining properties];

(g) section 2.14 [Securities for debt];

(h) section 2.19 [Additional investment in investment funds];

(i) section 2.30 [Isolated distribution by issuer];

(j) section 5.2 [TSX Venture Exchange offering].

(2) The issuer or underwriter must file the report in the jurisdiction where thedistribution takes place no later than 10 days after the distribution.

6.2 When report not required

(1) An issuer is not required to file a report under section 6.1(a) [Report of exemptdistribution] for a distribution of a debt security of its own issue or, concurrentlywith the distribution of the debt security, an equity security of its own issue, to aCanadian financial institution or a Schedule III bank.

(2) An investment fund is not required to file a report under section 6.1 [Report ofexempt distribution] for a distribution under section 2.3 [Accredited investor],section 2.10 [Minimum amount] or section 2.19 [Additional investment ininvestment funds] if the investment fund files the report not later than 30 daysafter the financial year-end of the investment fund.

6.3 Required form of report of exempt distribution

(1) The required form of report under section 6.1 [Report of exempt distribution] isForm 45-106F1.

(2) Except in Manitoba, an issuer that makes a distribution under an exemption froma prospectus requirement not provided for in this Instrument is exempt from therequirements in securities legislation to file a report of exempt trade or exemptdistribution in the required form if the issuer files a report of exempt distributionin accordance with Form 45-106F1.

6.4 Required form of offering memorandum

(1) The required form of offering memorandum under section 2.9 or section 3.9[Offering memorandum] is Form 45-106F2.

(2) Despite subsection (1), a qualifying issuer may prepare an offering memorandumin accordance with Form 45-106F3.

6.5 Required form of risk acknowledgement

(1) The required form of risk acknowledgement under subsection 2.9(12) orsubsection 3.9(12) [Offering memorandum] is Form 45-106F4.

(2) In Saskatchewan, the required form of risk acknowledgement under section 2.6 orsection 3.6 [Family, friends and business associates] is Form 45-106F5.




PART 7: EXEMPTION

7.1 Exemption

(1) Subject to subsection (2), the regulator or the securities regulatory authority maygrant an exemption to this Instrument, in whole or in part, subject to suchconditions or restrictions as may be imposed in the exemption.

(2) In Ontario, only the regulator may grant an exemption and only from Part 6, inwhole or in part, subject to such conditions or restrictions as may be imposed inthe exemption.

(3) Except in Ontario, an exemption referred to in subsection (1) is granted under thestatute referred to in Appendix B of National Instrument 14-101 Definitionsopposite the name of the local jurisdiction.

PART 8: TRANSITIONAL, COMING INTO FORCE

8.1 Additional investment - investment funds – exemption from prospectusrequirement

The prospectus requirement does not apply to a distribution by an investment fund in asecurity of its own issue to a purchaser that initially acquired the security as principalbefore this Instrument came into force if:

(a) the security was initially acquired under any of the following provisions:

(i) in Alberta, sections 86(e) and 131(1)(d) of the Securities Act (Alberta) asthey existed prior to their repeal by sections 9(a) and 13 of the SecuritiesAmendment Act (Alberta), 2003 SA c.32 and sections 66.2 and 122.2 of theAlberta Securities Commission Rules (General);

(ii) in British Columbia, sections 45(2) (5) and (22), and 74(2) (4) and (19) ofthe Securities Act (British Columbia);

(iii) in Manitoba, sections 19(3) and 58(1)(a) of the Securities Act (Manitoba)and section 90 of the Securities Regulation MR 491/88R;

(iv) in New Brunswick, section 2.8 of Local Rule 45-501 Prospectus andRegistration Exemptions;

(v) in Newfoundland and Labrador, sections 36(1)(e) and 73(1)(d) of theSecurities Act (Newfoundland and Labrador);

(vi) in Nova Scotia, sections 41(1)(e) and 77(1)(d) of the Securities Act(Nova Scotia);

(vii) in Northwest Territories, section 3(c) and (z) of Blanket Order No. 1;

(viii) in Nunavut, section 3(c) and (z) of Blanket Order No. 1;

(ix) in Ontario, sections 35(1)5 and 72(1)(d) of the Securities Act (Ontario)and section 2.12 of Ontario Securities Commission Rule 45-501 ExemptDistributions that came into force on January 12, 2004;

(x) in Prince Edward Island, section 2(3)(d) of the Securities Act (PrinceEdward Island) and Prince Edward Island Local Rule 45-512 -ExemptDistributions - Exemption for Purchase of Mutual Fund Securities;

(xi) in Québec, section 51 and 155.1(2) of the Securities Act (Québec);

(xii) in Saskatchewan, sections 39(1)(e) and 81(1)(d) of the The SecuritiesAct, 1988 (Saskatchewan);




(b) the distribution is of a security of the same class or series as the initialdistribution; and

(c) the security holder, as at the date of the distribution, holds securities of theinvestment fund that have:

(i) an acquisition cost of not less than the minimum amount prescribed bysecurities legislation referred to in paragraph (a) under which the initialdistribution was conducted; or

(ii) a net asset value of not less than the minimum amount prescribed bysecurities legislation referred to in paragraph (a) under which the initialdistribution was conducted.

8.1.1 Additional investment - investment funds – exemption from registrationrequirement

(1) After March 27, 2010, this section 8.1.1 does not apply in any jurisdiction.

(2) The dealer registration requirement does not apply in respect of a trade by aninvestment fund in a security of its own issue to a purchaser that initiallyacquired the security as principal before this Instrument came into force if:

(a) the security was initially acquired under any of the following provisions:

(i) in Alberta, sections 86(e) and 131(1)(d) of the Securities Act (Alberta) asthey existed prior to their repeal by sections 9(a) and 13 of the SecuritiesAmendment Act (Alberta), 2003 SA c.32 and sections 66.2 and 122.2 of theAlberta Securities Commission Rules (General);

(ii) in British Columbia, sections 45(2) (5) and (22), and 74(2) (4) and (19) ofthe Securities Act (British Columbia);

(iii) in Manitoba, sections 19(3) and 58(1)(a) of the Securities Act (Manitoba)and section 90 of the Securities Regulation MR 491/88R;

(iv) in New Brunswick, section 2.8 of Local Rule 45-501 Prospectus andRegistration Exemptions;

(v) in Newfoundland and Labrador, sections 36(1)(e) and 73(1)(d) of theSecurities Act (Newfoundland and Labrador);

(vi) in Nova Scotia, sections 41(1)(e) and 77(1)(d) of the Securities Act(Nova Scotia);

(vii) in Northwest Territories, section 3(c) and (z) of Blanket Order No. 1;

(viii) in Nunavut, section 3(c) and (z) of Blanket Order No. 1;

(ix) in Ontario, sections 35(1)5 and 72(1)(d) of the Securities Act (Ontario)and section 2.12 of Ontario Securities Commission Rule 45-501 ExemptDistributions that came into force on January 12, 2004;

(x) in Prince Edward Island, section 2(3)(d) of the Securities Act (PrinceEdward Island) and Prince Edward Island Local Rule 45-512 -ExemptDistributions - Exemption for Purchase of Mutual Fund Securities;

(xi) in Québec, section 51 and 155.1(2) of the Securities Act (Québec);

(xii) in Saskatchewan, sections 39(1)(e) and 81(1)(d) of the The SecuritiesAct, 1988 (Saskatchewan);




(b) the trade is for a security of the same class or series as the initial trade; and

(c) the security holder, as at the date of the trade, holds securities of theinvestment fund that have:

(i) an acquisition cost of not less than the minimum amount prescribed bysecurities legislation referred to in paragraph (a) under which the initialtrade was conducted; or

(ii) a net asset value of not less than the minimum amount prescribed bysecurities legislation referred to in paragraph (a) under which the initialtrade was conducted.

8.2 Definition of “accredited investor” - investment fund

An investment fund that distributed its securities to persons pursuant to any of thefollowing provisions is an investment fund under paragraph (n)(ii) of the definition of“accredited investor”:

(a) in Alberta, sections 86(e) and 131(1)(d) of the Securities Act (Alberta) as theyexisted prior to their repeal by sections 9(a) and 13 of the Securities AmendmentAct (Alberta), 2003 SA c.32 and sections 66.2 and 122.2 of the Alberta SecuritiesCommission Rules (General);

(b) in British Columbia, sections 45(2) (5) and (22), and 74(2) (4) and (19) of theSecurities Act (British Columbia);

(c) in Manitoba, sections 19(3) and 58(1)(a) of the Securities Act (Manitoba) andsection 90 of the Securities Regulation MR 491/88R;

(d) in New Brunswick, section 2.8 of Local Rule 45-501 Prospectus andRegistration Exemptions;

(e) in Newfoundland and Labrador, sections 36(1)(e) and 73(1)(d) of the SecuritiesAct (Newfoundland and Labrador);

(f) in Nova Scotia, sections 41(1)(e) and 77(1)(d) of the Securities Act (Nova Scotia);

(g) in Northwest Territories, section 3(c) and (z) of Blanket Order No. 2;

(h) in Nunavut, section 3(c) and (z) of Blanket Order No. 3;

(i) in Ontario, sections 35(1)5 and 72(1)(d) of the Securities Act (Ontario) andsection 2.12 of Ontario Securities Commission Rule 45-501 Exempt Distributionsthat came into force on January 12, 2004;

(j) in Prince Edward Island, section 2(3)(d) of the Securities Act (Prince EdwardIsland) and Prince Edward Island Local Rule 45-512 -Exempt Distributions -Exemption for Purchase of Mutual Fund Securities;

(k) in Québec, section 51 and 155.1(2) of the Securities Act (Québec);

(l) in Saskatchewan, sections 39(1)(e) and 81(1)(d) of the The Securities Act, 1988(Saskatchewan).




8.3 Transition - Closely-held issuer – exemption from prospectus requirement


“2001 OSC Rule 45-501” means the Ontario Securities Commission Rule 45-501Exempt Distributions that came into force on November 30, 2001;

“2004 OSC Rule 45-501” means the Ontario Securities Commission Rule 45-501Exempt Distributions that came into force on January 12, 2004;

“closely-held issuer” has the same meaning as in 2004 OSC Rule 45-501;

(2) The prospectus requirement does not apply to a distribution of a security that waspreviously distributed by a closely-held issuer under section 2.1 of 2001 OSCRule 45-501, or under section 2.1 of 2004 OSC Rule 45-501, to a person whopurchases the security as principal and is:


(b) a spouse, parent, grandparent, brother, sister or child of a director, executiveofficer, founder or control person of the issuer;

(c) a parent, grandparent, brother, sister or child of the spouse of a director,executive officer, founder or control person of the issuer;

(d) a close personal friend of a director, executive officer, founder or controlperson of the issuer;

(e) a close business associate of a director, executive officer, founder or controlperson of the issuer;

(f) a spouse, parent, grandparent, brother, sister or child of the selling securityholder or of the selling security holder’s spouse;

(g) a security holder of the issuer;

(h) an accredited investor;

(i) a person of which a majority of the voting securities are beneficially owned by,or a majority of the directors are, persons described in paragraphs (a) to (h);

(j) a trust or estate of which all of the beneficiaries or a majority of the trusteesor executors are persons described in paragraphs (a) to (h); or

(k) a person that is not the public.

8.3.1 Transition - Closely-held issuer – exemption from registrationrequirement

(1) After March 27, 2010, this section 8.3.1 does not apply in any jurisdiction.


“2001 OSC Rule 45-501” means the Ontario Securities Commission Rule 45-501Exempt Distributions that came into force on November 30, 2001;

“2004 OSC Rule 45-501” means the Ontario Securities Commission Rule 45-501Exempt Distributions that came into force on January 12, 2004;

“closely-held issuer” has the same meaning as in 2004 OSC Rule 45-501;




(3) The dealer registration requirement does not apply in respect of a trade in asecurity that was previously distributed by a closely-held issuer under section 2.1of 2001 OSC Rule 45-501 or under section 2.1 of 2004 OSC Rule 45-501 to aperson who purchases the security as principal and is:


(b) a spouse, parent, grandparent, brother, sister or child of a director, executiveofficer, founder or control person of the issuer;

(c) a parent, grandparent, brother, sister or child of the spouse of a director,executive officer, founder or control person of the issuer;

(d) a close personal friend of a director, executive officer, founder or controlperson of the issuer;

(e) a close business associate of a director, executive officer, founder or controlperson of the issuer;

(f) a spouse, parent, grandparent, brother, sister or child of the selling securityholder or of the selling security holder’s spouse;

(g) a security holder of the issuer;

(h) an accredited investor;

(i) a person of which a majority of the voting securities are beneficially owned by,or a majority of the directors are, persons described in paragraphs (a) to (h);

(j) a trust or estate of which all of the beneficiaries or a majority of the trusteesor executors are persons described in paragraphs (a) to (h); or

(k) a person that is not the public.

8.4 Transition – reinvestment plan

Despite subsection 2.2(5) or 3.2(5), if an issuer’s reinvestment plan was establishedbefore September 28, 2009, and provides for the distribution of a security that is of adifferent class or series than the class or series of the security to which the dividend ordistribution is attributable, the issuer or the trustee, custodian or administrator of theplan must provide to each person who is already a participant the description of thematerial attributes and characteristics of the securities traded under the plan or noticeof a source from which the participant can obtain the information not later than 140days after the next financial year end of the issuer ending on or after September 28, 2009.

8.5 Application of Part 3 of this instrument

On March 27, 2010, Part 3 does not apply in any jurisdiction.

8.6 Repeal of former instrument

National Instrument 45-106 Prospectus and Registration Exemptions which came intoforce on September 14, 2005 is repealed on September 28, 2009.




8.7 Effective date

(1) Except in Ontario, this Instrument comes into force on September 28, 2009.

(2) In Ontario, this Instrument comes into force on the later of the following:

(a) September 28, 2009;

(b) the day on which sections 5 and 11, subsection 12(1) and section 13 ofSchedule 26 of the Budget Measures Act, 2009 are proclaimed in force.




Appendix Ato

National Instrument 45-106 Prospectus and Registration ExemptionsVariable insurance contract exemption

(section 2.39)

JURISDICTION LEGISLATION REFERENCE

ALBERTA “contract of insurance”, “group insurance”, “lifeinsurance”, and “policy” have the respectivemeanings assigned to them under the InsuranceAct (Alberta) and the regulations under that Act.“insurance company” means an insurer as definedin the Insurance Act (Alberta) that is licensedunder that Act.

BRITISH COLUMBIA “contract”, “group insurance”, and “policy” havethe respective meanings assigned to them underthe Insurance Act (British Columbia) and theregulations under that Act. “life insurance” hasthe respective meaning assigned to it under theFinancial Institutions Act (British Columbia)and the regulations under that Act.“insurancecompany” means an insurance company, or anextra provincial insurance corporation, authorizedto carry on insurance business under the FinancialInstitutions Act (British Columbia).

MANITOBA “contract of insurance”, “group insurance”, “lifeinsurance”, and “policy” have the respectivemeanings assigned to them under the InsuranceAct (Manitoba) and the regulations under thatAct. “insurance company” means an insurer asdefined in the Insurance Act (Manitoba) that islicensed under that Act.

NEW BRUNSWICK “contract of insurance”, “group insurance”, “lifeinsurance”, and “policy” have the respectivemeanings assigned to them under the InsuranceAct (New Brunswick) and the regulations underthat Act. “insurance company” means an insureras defined in the Insurance Act (New Brunswick)that is licensed under that Act.

NORTHWEST TERRITORIES “contract”, “group insurance”, “life insurance”,and “policy” have the respective meaningsassigned to them under the Insurance Act(Northwest Territories). “insurance company”means an insurer as defined in the Insurance Act(Northwest Territories) that is licensed underthat Act.




NOVA SCOTIA “contract”, “group insurance”, “life insurance”,and “policy” have the respective meanings assignedto them under the Insurance Act (Nova Scotia)and the regulations under that Act. “insurancecompany” has the same meaning as insection 3(1)(a) of the General Securities Rules(Nova Scotia).

ONTARIO “contract”, “group insurance”, and “policy” havethe respective meanings assigned to them insection 1 and 171 of the Insurance Act(Ontario).“life insurance” has the respectivemeaning assigned to it in Schedule 1 by Order ofthe Superintendent of Financial Services.“insurance company” has the same meaning as insection 1(2) of the General Regulation (Ont.Reg. 1015).

QUÉBEC “contract of insurance”, “group insurance”, “lifeinsurance”, and “policy” have the respectivemeanings assigned to them under the Civil Codeof Québec. “insurance company” means an insurerholding a license under the Act respectinginsurance (R.S.Q., c. A-32).

PRINCE EDWARD ISLAND “contract”, “group insurance”, “insurer”, “lifeinsurance” and “policy” have the respectivemeanings assigned to them in sections 1 and 174of the Insurance Act (Prince Edward Island).“insurance company” means an insurance companylicensed under the Insurance Act (R.S.P.E.I. 1988,Cap. I-4).

SASKATCHEWAN “contract”, “life insurance” and “policy” have therespective meanings assigned to them in section 2of The Saskatchewan Insurance Act(Saskatchewan).“group insurance” has therespective meaning assigned to it in section 133 ofThe Saskatchewan Insurance Act (Saskatchewan).“insurance company” means an issuer licensedunder The Saskatchewan Insurance Act(Saskatchewan).

YUKON “contract”, “group”, “life insurance” and “policy”have the respective meanings assigned to themunder the Insurance Act (Yukon) and theregulations made under that Act. “insurancecompany” means an insurer as defined in theInsurance Act (Yukon) that is licensed under thatAct.




Appendix Bto

National Instrument 45-106 Prospectus and Registration Exemptions

Control Block Distributions(PART 4)

JURISDICTION SECURITIES LEGISLATION REFERENCE

ALBERTA Section 1(p)(iii) of the Securities Act (Alberta)

BRITISH COLUMBIA Paragraph (c) of the definition of “distribution”contained in section 1 of the Securities Act(British Columbia)

MANITOBA Section 1(b) of the definition of “primarydistribution to the public” contained insubsection 1(1) of the Securities Act (Manitoba)

NEW BRUNSWICK Paragraph (c) of the definition of “distribution”contained in section 1(1) of the Securities Act(New Brunswick)

NEWFOUNDLAND AND Section 2(1)(1)(iii) of the Securities ActLABRADOR (Newfoundland and Labrador)

NORTHWEST TERRITORIES Paragraph (c) of the definition of “distribution”in subsection 1(1) of the Securities Act(Northwest Territories)

NOVA SCOTIA Section 2(1)(1)(iii) of the Securities Act (NovaScotia)

ONTARIO Paragraph (c) of the definition of “distribution”contained in subsection 1(1) of the SecuritiesAct (Ontario)

PRINCE EDWARD ISLAND Section 1(f)(iii) of the Securities Act (PrinceEdward Island)

QUÉBEC Paragraph 9 of the definition of “distribution”contained section 5 of the Securities Act(Québec)

SASKATCHEWAN Section 2(1)(r)(iii) of The Securities Act, 1988(Saskatchewan)

YUKON Paragraph (c) of the definition of “distribution”in subsection 1(1) of the Securities Act (Yukon)




FORM 45-106F1

Report of Exempt Distribution

This is the form required under section 6.1 of National Instrument 45-106 for a reportof exempt distribution.

Issuer/underwriter information

Item 1: State the full name of the issuer of the security distributed and the address andtelephone number of its head office. If the issuer of the security distributed is aninvestment fund, state the name of the fund as the issuer, and provide the full name ofthe manager of the investment fund and the address and telephone number of the headoffice of the manager. Include the former name of the issuer if its name has changedsince last report. If an underwriter is completing this form, also state the full name ofthe underwriter and the address and telephone number of the head office of theunderwriter.

Item 2: State whether the issuer is or is not a reporting issuer and, if reporting, each ofthe jurisdictions in which it is reporting.

Item 3: Indicate the industry of the issuer by checking the appropriate box next to oneof the industries listed below.

Bio-tech Mining

Financial Services exploration/development

investment companies and funds production

mortgage investment companies Oil and gas

Forestry Real estate

Hi-tech Utilities

Industrial Other (describe)

_______________________________

Details of distribution

Item 4: Complete Schedule I to this report. Schedule I is designed to assist incompleting the remainder of this report.

Item 5: State the distribution date. If the report is being filed for securities distributedon more than one distribution date, state all distribution dates.

Item 6: For each security distributed:

(a) describe the type of security;

(b) state the total number of securities distributed. If the security is convertibleor exchangeable, describe the type of underlying security, the terms of exercise orconversion and any expiry date; and

(c) state the exemption(s) relied on.




Securities

Cash(Canadian $)

Total Dollarvalue ofcompensation(Canadian $)

Number and type ofsecurities issued

Price persecurity

Exemptionrelied on anddate ofdistribution

Item 7: Complete the following table for each Canadian and foreign jurisdiction wherepurchasers of the securities reside. Do not include in this table, securities issuedas payment for commissions or finder’s fees disclosed under item 8, below.

Price per Total dollar value raisedEach jurisdiction where Number of security from purchasers in thepurchasers reside purchasers (Canadian $)1 jurisdiction (Canadian $)

Total number ofPurchasers

Total dollar value ofdistribution in alljurisdictions(Canadian $)

Note 1: If securities are issued at different prices list the highest and lowest price thesecurities were sold for.

Commissions and finder’s fees

Item 8: Complete the following table by providing information for each person who hasreceived or will receive compensation in connection with the distribution(s).Compensation includes commissions, discounts or other fees or payments of a similarnature. Do not include payments for services incidental to the distribution, such asclerical, printing, legal or accounting services.

If the securities being issued as compensation are or include convertible securities,such as warrants or options, please add a footnote describing the terms of theconvertible securities, including the term and exercise price. Do not include theexercise price of any convertible security in the total dollar value of the compensationunless the securities have been converted.

Compensation paid or to be paid (cash and/or securities)

Full name andaddress of theperson beingcompensated




Item 9: If a distribution is made in Ontario, please include the attached “Authorizationof Indirect Collection of Personal Information for Distributions in Ontario”. The“Authorization of Indirect Collection of Personal Information for Distributions inOntario” is only required to be filed with the Ontario Securities Commission.

Certificate

On behalf of the [issuer/underwriter], I certify that the statements made in this reportare true.

Date: _____________________________________

______________________________________________________________________________Name of [issuer/underwriter] (please print)

______________________________________________________________________________

Print name, title and telephone number of person signing

______________________________________________________________________________Signature

Instruction

The person filing the form must complete the bracketed information by deleting theinappropriate word.

Item 10: State the name, title and telephone number of the person who may becontacted with respect to any questions regarding the contents of this report, ifdifferent than the person signing the certificate.

IT IS AN OFFENCE TO MAKE A MISREPRESENTATION IN THIS REPORT.

Notice - Collection and use of personal information

The personal information required under this form is collected on behalf of and used bythe securities regulatory authorities or, where applicable, the regulators under theauthority granted in securities legislation for the purposes of the administration andenforcement of the securities legislation.

If you have any questions about the collection and use of this information, contact thesecurities regulatory authority or, where applicable, the regulator in the jurisdiction(s)where the form is filed, at the address(es) listed at the end of this report.




Authorization of Indirect Collection of Personal Information for Distributionsin Ontario

The attached Schedule I contains personal information of purchasers and details of thedistribution(s). The issuer/underwriter hereby confirms that each purchaser listed inSchedule I of this report who is resident in Ontario:

(a) has been notified by the issuer/underwriter:

(i) of the delivery to the Ontario Securities Commission of the informationpertaining to the person as set out in Schedule I;

(ii) that this information is being collected indirectly by the OntarioSecurities Commission under the authority granted to it in securitieslegislation;

(iii) that this information is being collected for the purposes of theadministration and enforcement of the securities legislation of Ontario; and

(iv) of the title, business address and business telephone number of thepublic official in Ontario, as set out in this report, who can answer questionsabout the Ontario Securities Commission’s indirect collection of theinformation; and

(b) has authorized the indirect collection of the information by the OntarioSecurities Commission.

Schedule I

Complete the following table.

For reports filed under sub-section 6.1(1)(j) (TSX Venture Exchange offering) ofNational Instrument 45-106 the following table only needs to list the total number ofpurchasers by jurisdiction instead of including the name, residential address andtelephone number of each purchaser.

Do not include in this table, securities issued as payment of commissions or finder’s feesdisclosed under item 8 of this report.

The information in this schedule will not be placed on the public file of anysecurities regulatory authority or, where applicable, regulator. However,freedom of information legislation in certain jurisdictions may require the securitiesregulatory authority or, where applicable, regulator to make this information availableif requested.

Full name, residential Number and type of Total purchase Exemption Date ofaddress and telephone securities purchased price (Canadian $) relied on distributionnumber of purchaser




Instructions:

1. References to a purchaser in this report are to the beneficial owner of the securities.

2. File this report and the applicable fee in each jurisdiction in which a distribution ismade at the addresses listed at the end of this report. If the distribution is made inmore than one jurisdiction, the issuer/underwriter must complete a single reportidentifying all purchasers and file that report in each of the jurisdictions in whichthe distribution is made. Filing fees associated with the filing of the report are notaffected by identifying all purchasers in a single report.

3. If the space provided for any answer is insufficient, additional sheets may be usedand must be cross-referenced to the relevant part and properly identified andsigned by the person whose signature appears on the report.

4. One report may be used for multiple distributions occurring within 10 days of eachother provided that the report is filed on or before the 10th day following the first ofsuch distributions.

5. The information in items 5, 6, and 7 must reconcile with the information inSchedule I of Form 45-106F1. All dollar amounts must be in Canadian dollars.

6. In order to determine the applicable fee, consult the securities legislation of eachjurisdiction in which a distribution is made.

7. This report must be filed in English or in French. In Québec, the issuer/underwritermust comply with linguistic obligations and rights prescribed by Québec law.

Securities Regulatory Authorities and Regulators

British Columbia Securities CommissionP.O. Box 10142, Pacific Centre701 West Georgia StreetVancouver, British Columbia V7Y 1L2Telephone: (604) 899-6500Toll free in British Columbia and Alberta 1-800-373-6393Facsimile: (604) 899-6506

Alberta Securities Commission4th Floor, 300 – 5th Avenue SWCalgary, Alberta T2P 3C4Telephone: (403) 297-6454Facsimile: (403) 297-6156

Saskatchewan Financial Services CommissionSuite 601 - 1919 Saskatchewan DriveRegina, Saskatchewan S4P 4H2Telephone: (306) 787-5879Facsimile: (306) 787-5899

The Manitoba Securities Commission500 – 400 St Mary AvenueWinnipeg, Manitoba R3C 4K5Telephone: (204) 945-2548Toll free in Manitoba 1-800-655-5244Facsimile: (204) 945-0330




Ontario Securities CommissionSuite 1903, Box 5520 Queen Street WestToronto, Ontario M5H 3S8Telephone: (416) 593- 8314Toll free in Canada: 1-877-785-1555Facsimile: (416) 593-8122Public official contact regarding indirect collection of information:Administrative Support ClerkTelephone (416) 593-3684

Autorité des marchés financiers800, Square Victoria, 22e étageC.P. 246, Tour de la BourseMontréal, Québec H4Z 1G3Telephone: (514) 395-0337Or 1-877-525-0337Facsimile: (514) 873-6155 (For filing purposes only)Facsimile: (514) 864-6381 (For privacy requests only)

New Brunswick Securities Commission85 Charlotte Street, Suite 300Saint John, New Brunswick E2L 2J2Telephone: (506) 658-3060Toll Free in New Brunswick 1-866-933-2222Facsimile: (506) 658-3059

Nova Scotia Securities Commission2nd Floor, Joseph Howe Building1690 Hollis StreetHalifax, Nova Scotia B3J 3J9Telephone: (902) 424-7768Facsimile: (902) 424-4625

Prince Edward Island Securities Office95 Rochford Street, 4th Floor Shaw BuildingP.O. Box 2000Charlottetown, Prince Edward Island C1A 7N8Telephone: (902) 368-4569Facsimile: (902) 368-5283

Government of Newfoundland and LabradorFinancial Services Regulation DivisionP.O. Box 8700Confederation Building2nd Floor, West BlockPrince Philip DriveSt. John’s, NFLD A1B 4J6Attention: Director of SecuritiesTelephone: (709) 729-4189Facsimile: (709) 729-6187




Government of YukonDepartment of Community ServicesLaw Centre, 3rd Floor2130 Second AvenueWhitehorse, YT Y1A 5H6Telephone: (867) 667-5314Facsimile: (867) 393-6251

Government of Northwest TerritoriesGovernment of the Northwest TerritoriesOffice of the Superintendent of SecuritiesP.O. Box 1320Yellowknife, NT X1A 2L9Attention: Deputy Superintendent, Legal & EnforcementTelephone: (867) 920-8984Facsimile: (867) 873-0243

Government of NunavutDepartment of JusticeLegal Registries DivisionP.O. Box 1000, Station 5701st Floor, Brown BuildingIqaluit, Nunavut X0A 0H0Telephone: (867) 975-6590Facsimile: (867) 975-6594

FORM 45-106F2Offering Memorandum for Non-Qualifying Issuers

Date: [Insert the date from the certificate page.]

The Issuer

Name:

Head office: Address:Phone #:E-mail address:Fax #:

Currently listed or quoted? [If no, state in bold type: “These securities do not tradeon any exchange or market”. If yes, state where, e.g., TSX/TSX Venture Exchange.]

Reporting issuer? [Yes/No. If yes, state where.]

SEDAR filer? [Yes/No]

The OfferingSecurities offered:Price per security:Minimum/Maximum offering: [If there is no minimum, state in bold type: “There is nominimum.” and also state in bold type: “You may be the only purchaser.’]State in bold type: Funds available under the offering may not be sufficient toaccomplish our proposed objectives.Minimum subscription amount: [State the minimum amount each investor mustinvest, or state “There is no minimum subscription amount an investor must invest.’]Payment terms:Proposed closing date(s):




Income tax consequences: There are important tax consequences to these securities.See item 6. [If income tax consequences are not material, delete this item.]Selling agent? [Yes/No. If yes, state “See item 7’. The name of the selling agent may alsobe stated.]

Resale restrictionsState: “You will be restricted from selling your securities for [4 months and a day/anindefinite period]. See item 10.”

Purchaser’s rightsState: “You have 2 business days to cancel your agreement to purchase these securities.If there is a misrepresentation in this offering memorandum, you have the right to sueeither for damages or to cancel the agreement. See item 11.”

State in bold type:

“No securities regulatory authority or regulator has assessed the meritsof these securities or reviewed this offering memorandum. Anyrepresentation to the contrary is an offence. This is a risky investment.See item 8.”

[All of the above information must appear on a single cover page.]

Item 1: Use of Available Funds

1.1 Funds - Using the following table, disclose the funds available as a result of theoffering. If the issuer plans to combine additional sources of funding with theavailable funds from the offering to achieve its principal capital-raising purpose,please provide details about each additional source of funding. If there is nominimum offering, state “$0” as the minimum.

Disclose also the amount of any working capital deficiency, if any, of the issuer asat a date not more than 30 days prior to the date of the offering memorandum. Ifthe working capital deficiency will not be eliminated by the use of available funds,state how the issuer intends to eliminate or manage the deficiency.

Assuming min. Assuming max.offering offering

A. Amount to be raised by this offering

B. Selling commissions and fees

C. Estimated offering costs(e.g., legal, accounting, audit.)

D. Available funds: D = A - (B+C)

E. Additional sources of funding required

F. Working capital deficiency

G. Total: H = (D+E) - F




1.2 Use of Available Funds - Using the following table, provide a detailedbreakdown of how the issuer will use the available funds. If any of the availablefunds will be paid to a related party, disclose in a note to the table the name of therelated party, the relationship to the issuer, and the amount. If the issuer has aworking capital deficiency, disclose the portion, if any, of the available funds to beapplied against the working capital deficiency. If more than 10% of the availablefunds will be used by the issuer to pay debt and the issuer incurred the debtwithin the two preceding financial years, describe why the debt was incurred.

Description of intended use of available Assuming min. Assuming max.funds listed in order of priority offering offering

$ $

$ $

Total: Equal to G in the Funds table above $ $

1.3 Reallocation - The available funds must be used for the purposes disclosed in theoffering memorandum. The board of directors can reallocate the proceeds to otheruses only for sound business reasons. If the available funds may be reallocated,include the following statement:

“We intend to spend the available funds as stated. We will reallocate funds only forsound business reasons.”

Item 2: Business of [name of issuer or other term used to refer to issuer]

2.1 Structure - State the business structure (e.g., partnership, corporation or trust),the statute and the province, state or other jurisdiction under which the issuer isincorporated, continued or organized, and the date of incorporation, continuanceor organization.

2.2 Our Business - Describe the issuer’s business. The disclosure must providesufficient information to enable a prospective purchaser to make an informedinvestment decision. For a non-resource issuer this disclosure may includeprincipal products or services, operations, market, marketing plans and strategiesand a discussion of the issuer’s current and prospective competitors. For aresource issuer this will require a description of principal properties (includinginterest held) and a summary of material information including, if applicable: thestage of development, reserves, geology, operations, production and mineralreserves or mineral resources being explored or developed. A resource issuerdisclosing scientific or technical information for a mineral project must followGeneral Instruction A.8 of this Form. A resource issuer disclosing informationabout its oil and gas activities must follow General Instruction A.9 of this Form.

2.3 Development of Business - Describe (generally, in one or two paragraphs) thegeneral development of the issuer’s business over at least its two most recentlycompleted financial years and any subsequent period. Include the major eventsthat have occurred or conditions that have influenced (favourably or unfavourably)the development of the issuer.




2.4 Long Term Objectives - Describe each significant event that must occur toaccomplish the issuer’s long term objectives, state the specific time period inwhich each event is expected to occur, and the costs related to each event.

2.5 Short Term Objectives and How We Intend to Achieve Them

(a) Disclose the issuer’s objectives for the next 12 months.

(b) Using the following table, disclose how the issuer intends to meet thoseobjectives for the next 12 months.

What we must do and Target completion date or, if not Our cost tohow we will do it known, number of months to complete complete

$

$

2.6 Insufficient Funds - If applicable, disclose that the funds available as a result ofthe offering either may not or will not be sufficient to accomplish all of the issuer’sproposed objectives and there is no assurance that alternative financing will beavailable. If alternative financing has been arranged, disclose the amount, sourceand all outstanding conditions that must be satisfied.

2.7 Material Agreements - Disclose the key terms of all material agreements:

(a) to which the issuer is currently a party; or

(b) with a related party;

including the following information:

(i) if the agreement is with a related party, the name of the related partyand the relationship;

(ii) a description of any asset, property or interest acquired, disposed of,leased, under option, etc.;

(iii) a description of any service provided;

(iv) purchase price and payment terms (e.g., paid in instalments, cash,securities or work commitments);

(v) the principal amount of any debenture or loan, the repayment terms,security, due date and interest rate;

(vi) the date of the agreement;

(vii) the amount of any finder’s fee or commission paid or payable to arelated party in connection with the agreement;

(viii) any material outstanding obligations under the agreement; and

(ix) for any transaction involving the purchase of assets by or sale of assetsto the issuer from a related party, state the cost of the assets to the relatedparty, and the cost of the assets to the issuer.




Item 3: Interests of Directors, Management, Promoters and Principal Holders

3.1 Compensation and Securities Held - Using the following table, provide thespecified information about each director, officer and promoter of the issuer andeach person who, directly or indirectly, beneficially owns or controls 10% or moreof any class of voting securities of the issuer (a “principal holder”). If the principalholder is not an individual, state in a note to the table the name of any person that,directly or indirectly, beneficially owns or controls more than 50% of the votingrights of the principal holder. If the issuer has not completed its first financialyear, then include compensation paid since inception. Compensation includes anyform of remuneration including cash, shares and options.

Name and Positions held (e.g., Compensation paid by Number, type and Number, type andmunicipality director, officer, issuer or related party in percentage of percentage ofof principal promoter and/or the most recently completed securities of the securities of theresidence principal holder) financial year and the issuer held after issuer held after

and the date of compensation anticipated completion of completion ofobtaining that to be paid in the current min. offering max. offeringposition financial year

3.2 Management Experience - Using the following table, disclose the principaloccupations of the directors and executive officers over the past five years. Inaddition, for each individual, describe any relevant experience in a businesssimilar to the issuer’s.

Name Principal occupation and related experience

3.3 Penalties, Sanctions and Bankruptcy

(a) Disclose any penalty or sanction (including the reason for it and whether it iscurrently in effect) that has been in effect during the last 10 years, or any ceasetrade order that has been in effect for a period of more than 30 consecutive daysduring the past 10 years against:

(i) a director, executive officer or control person of the issuer; or

(ii) an issuer of which a person referred to in (i) above was a director,executive officer or control person at the time.

(b) Disclose any declaration of bankruptcy, voluntary assignment in bankruptcy,proposal under any bankruptcy or insolvency legislation, proceedings, arrangementor compromise with creditors or appointment of a receiver, receiver manager ortrustee to hold assets, that has been in effect during the last 10 years with regardto any:

(i) director, executive officer or control person of the issuer; or

(ii) issuer of which a person referred to in (i) above was a director, executiveofficer or control person at that time.




3.4 Loans - Disclose the principal amount of any debenture or loan, the repaymentterms, security, due date and interest rate due to or from the directors,management, promoters and principal holders as at a date not more than 30 daysprior to the date of the offering memorandum.

Item 4: Capital Structure

4.1 Share Capital - Using the following table, provide the required informationabout outstanding securities of the issuer (including options, warrants and othersecurities convertible into shares). If necessary, notes to the table may be added todescribe the material terms of the securities.

Description of Number Price Number outstanding as at Number Numbersecurity authorized to per [a date not more than 30 outstanding outstanding

be issued security days prior to the offering after min. after max.memorandum date] offering offering

4.2 Long Term Debt - Using the following table, provide the required informationabout outstanding long term debt of the issuer. Disclose the current portion of thelong-term debt due within 12 months of the date of the offering memorandum. Ifthe securities being offered are debt securities, add a column to the tabledisclosing the amount of debt that will be outstanding after both the minimumand maximum offering. If the debt is owed to a related party, indicate that in anote to the table and identify the related party.

Description of long term debt Interest Repayment Amount outstanding at [a date not(including whether secured) rate terms more than 30 days prior to the offering

memorandum date]

$

$

4.3 Prior Sales - If the issuer has issued any securities of the class being offeredunder the offering memorandum (or convertible or exchangeable into the classbeing offered under the offering memorandum) within the last 12 months, use thefollowing table to provide the information specified. If securities were issued inexchange for assets or services, describe in a note to the table the assets orservices that were provided.

Date of Type of Number of Price per Total fundsissuance security issued securities issued security received




Item 5: Securities Offered

5.1 Terms of Securities - Describe the material terms of the securities being offered,including:

(a) voting rights or restrictions on voting;

(b) conversion or exercise price and date of expiry;

(c) rights of redemption or retraction; and

(d) interest rates or dividend rates.

5.2 Subscription Procedure

(a) Describe how a purchaser can subscribe for the securities and the method ofpayment.

(b) State that the consideration will be held in trust and the period that it will beheld (refer at least to the mandatory two day period).

(c) Disclose any conditions to closing, e.g., receipt of additional funds from othersources. If there is a minimum offering, disclose when consideration will bereturned to purchasers if the minimum is not met, and whether the issuer will paythe purchasers interest on consideration.

Item 6: Income Tax Consequences and RRSP Eligibility

6.1 State: “You should consult your own professional advisers to obtain advice on theincome tax consequences that apply to you.”

6.2 If income tax consequences are a material aspect of the securities being offered(e.g., flow-through shares), provide:

(a) a summary of the significant income tax consequences to Canadian residents;and

(b) the name of the person providing the income tax disclosure in (a).

6.3 Provide advice regarding the RRSP eligibility of the securities and the name of theperson providing the advice or state “Not all securities are eligible for investmentin a registered retirement savings plan (RRSP). You should consult your ownprofessional advisers to obtain advice on the RRSP eligibility of these securities.’

Item 7: Compensation Paid to Sellers and Finders

If any person has or will receive any compensation (e.g., commission, corporate financefee or finder’s fee) in connection with the offering, provide the following information tothe extent applicable:

(a) a description of each type of compensation and the estimated amount to bepaid for each type;

(b) if a commission is being paid, the percentage that the commission willrepresent of the gross proceeds of the offering (assuming both the minimum andmaximum offering);

(c) details of any broker’s warrants or agent’s option (including number ofsecurities under option, exercise price and expiry date); and

(d) if any portion of the compensation will be paid in securities, details of thesecurities (including number, type and, if options or warrants, the exercise priceand expiry date).




Item 8: Risk Factors

Describe in order of importance, starting with the most important, the risk factorsmaterial to the issuer that a reasonable investor would consider important in decidingwhether to buy the issuer’s securities.

Risk factors will generally fall into the following three categories:

(a) Investment Risk - risks that are specific to the securities being offered. Someexamples include:

• arbitrary determination of price;

• no market or an illiquid market for the securities;

• resale restrictions; and

• subordination of debt securities.

(b) Issuer Risk - risks that are specific to the issuer. Some examples include:

• insufficient funds to accomplish the issuer’s business objectives;

• no history or a limited history of sales or profits;

• lack of specific management or technical expertise;

• management’s regulatory and business track record;

• dependence on key employees, suppliers or agreements;

• dependence on financial viability of guarantor;

• pending and outstanding litigation; and

• political risk factors.

(c) Industry Risk - risks faced by the issuer because of the industry in which itoperates. Some examples include:

• environmental and industry regulation;

• product obsolescence; and

• competition.

Item 9: Reporting Obligations

9.1 Disclose the documents, including any financial information required by theissuer’s corporate legislation, constating documents, or other documents underwhich the issuer is organized, that will be sent to purchasers on an annual or on-going basis. If the issuer is not required to send any documents to the purchaserson an annual or on-going basis, state in bold type: “We are not required to sendyou any documents on an annual or ongoing basis.”

9.2 If corporate or securities information about the issuer is available from agovernment, securities regulatory authority or regulator, SRO or quotation andtrade reporting system, disclose where that information can be located (includingwebsite address).




Item 10: Resale Restrictions

10.1 General Statement - For trades in Alberta, British Columbia, New Brunswick,Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut,Prince Edward Island, Québec, Saskatchewan and Yukon, state:

“These securities will be subject to a number of resale restrictions, including arestriction on trading. Until the restriction on trading expires, you will not be ableto trade the securities unless you comply with an exemption from the prospectusand registration requirements under securities legislation.”

10.2 Restricted Period - For trades in Alberta, British Columbia, New Brunswick,Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut,Prince Edward Island, Québec, Saskatchewan and Yukon state one of thefollowing, as applicable:

(a) If the issuer is not a reporting issuer in a jurisdiction at the distribution datestate:

“Unless permitted under securities legislation, you cannot trade the securitiesbefore the date that is 4 months and a day after the date [insert name ofissuer or other term used to refer to the issuer] becomes a reporting issuer inany province or territory of Canada.”

(b) If the issuer is a reporting issuer in a jurisdiction at the distribution datestate:

“Unless permitted under securities legislation, you cannot trade the securitiesbefore the date that is 4 months and a day after the distribution date.”

10.3 Manitoba Resale Restrictions - For trades in Manitoba, if the issuer will not be areporting issuer in a jurisdiction at the time the security is acquired by thepurchaser state:

“Unless permitted under securities legislation, you must not trade the securitieswithout the prior written consent of the regulator in Manitoba unless:

(a) [name of issuer or other term used to refer to issuer] has filed aprospectus with the regulator in Manitoba with respect to the securities youhave purchased and the regulator in Manitoba has issued a receipt for thatprospectus; or

(b) you have held the securities for at least 12 months.

The regulator in Manitoba will consent to your trade if the regulator is of theopinion that to do so is not prejudicial to the public interest.”

Item 11: Purchasers’ Rights

State the following:

“If you purchase these securities you will have certain rights, some of which aredescribed below. For information about your rights you should consult a lawyer.

(1) Two Day Cancellation Right - You can cancel your agreement to purchasethese securities. To do so, you must send a notice to us by midnight on the 2ndbusiness day after you sign the agreement to buy the securities.




(2) Statutory Rights of Action in the Event of a Misrepresentation - [Insert thissection only if the securities legislation of the jurisdiction in which the tradeoccurs provides purchasers with statutory rights in the event of a misrepresentationin an offering memorandum. Modify the language, if necessary, to conform to thestatutory rights.] If there is a misrepresentation in this offering memorandum,you have a statutory right to sue:

(a) [name of issuer or other term used to refer to issuer] to cancel youragreement to buy these securities; or

(b) for damages against [state the name of issuer or other term used torefer to issuer and the title of any other person against whom the rights areavailable].

This statutory right to sue is available to you whether or not you relied on themisrepresentation. However, there are various defences available to the persons orcompanies that you have a right to sue. In particular, they have a defence if you knewof the misrepresentation when you purchased the securities.

If you intend to rely on the rights described in (a) or (b) above, you must do so withinstrict time limitations. You must commence your action to cancel the agreement within[state time period provided by the securities legislation]. You must commence youraction for damages within [state time period provided by the securities legislation.]

Contractual Rights of Action in the Event of a Misrepresentation - [Insert this sectiononly if the securities legislation of the jurisdiction in which the purchaser is residentdoes not provide purchasers with statutory rights in the event of a misrepresentation inan offering memorandum.] If there is a misrepresentation in this offering memorandum,you have a contractual right to sue [name of issuer or other term used to refer to issuer]:

(a) to cancel your agreement to buy these securities; or

(b) for damages.

This contractual right to sue is available to you whether or not you relied on themisrepresentation. However, in an action for damages, the amount you may recoverwill not exceed the price that you paid for your securities and will not include any partof the damages that [name of issuer or other term used to refer to issuer] proves doesnot represent the depreciation in value of the securities resulting from themisrepresentation. [Name of issuer or other term used to refer to issuer] has a defenceif it proves that you knew of the misrepresentation when you purchased the securities.

If you intend to rely on the rights described in (a) or (b) above, you must do so withinstrict time limitations. You must commence your action to cancel the agreementwithin 180 days after you signed the agreement to purchase the securities. You mustcommence your action for damages within the earlier of 180 days after learning of themisrepresentation and 3 years after you signed the agreement to purchase thesecurities.”




Item 12: Financial Statements

Include in the offering memorandum immediately before the certificate page of theoffering memorandum all required financial statements as set out in the Instructions.

Item 13: Date and Certificate

State the following on the certificate page of the offering memorandum:

“Dated [insert the date the certificate page of the offering memorandum issigned].

This offering memorandum does not contain a misrepresentation.”

Instructions for CompletingForm 45-106F2

Offering Memorandum for Non-Qualifying IssuersA. General Instructions

1. Draft the offering memorandum so that it is easy to read and understand. Beconcise and use clear, plain language. Avoid technical terms. If technical termsare necessary, provide definitions.

2. Address the items required by the form in the order set out in the form. However,it is not necessary to provide disclosure about an item that does not apply.

3. The issuer may include additional information in the offering memorandum otherthan that specifically required by the form. An offering memorandum is generallynot required to contain the level of detail and extent of disclosure required by aprospectus. Generally, this description should not exceed 2 pages. However, anoffering memorandum must provide a prospective purchaser with sufficientinformation to make an informed investment decision.

4. The issuer may wrap the offering memorandum around a prospectus or similardocument. However, all matters required to be disclosed by the offeringmemorandum must be addressed and the offering memorandum must provide across-reference to the page number or heading in the wrapped document wherethe relevant information is contained. The certificate to the offering memorandummust be modified to indicate that the offering memorandum, including thedocument around which it is wrapped, does not contain a misrepresentation.

5. It is an offence to make a misrepresentation in the offering memorandum. Thisapplies both to information that is required by the form and to additionalinformation that is provided. Include particulars of any material facts, which havenot been disclosed under any of the Item numbers and for which failure to disclosewould constitute a misrepresentation in the offering memorandum. Refer also tosection 3.8(3) of Companion Policy 45-106CP for additional information.




6. When the term “related party” is used in this form, it refers to:

(a) a director, officer, promoter or control person of the issuer;

(b) in regard to a person referred to in (a), a child, parent, grandparent orsibling, or other relative living in the same residence;

(c) in regard to a person referred to in (a) or (b), his or her spouse or a personwith whom he or she is living in a marriage-like relationship;

(d) an insider of the issuer;

(e) a company controlled by one or more individuals referred to in (a) to (d); and

(f) in the case of an insider, promoter or control person that is not an individual,any person that controls that insider, promoter or control person.

(If the issuer is not a reporting issuer, the reference to “insider” includes persons orcompanies who would be insiders of the issuer if that issuer were a reporting issuer.)

7. Disclosure is required in item 3.1 of compensation paid directly or indirectly bythe issuer or a related party to a director, officer, promoter and/or principal holderif the issuer receives a direct benefit from such compensation paid.

8. Refer to National Instrument 43-101 Standards of Disclosure for Mineral Projects(NI 43-101) when disclosing scientific or technical information for a mineralproject of the issuer.

9. If an oil and gas issuer is disclosing information about its oil and gas activities, itmust ensure that the information is disclosed in accordance with Part 4 andPart 5 of National Instrument 51-101 Standards of Disclosure for Oil and GasActivities (NI 51-101). Under section 5.3 of NI 51-101, disclosure of reserves orresources must be consistent with the reserves and resources terminology andcategories set out in the Canadian Oil and Gas Evaluation Handbook. For thepurposes of this instruction, references to reporting issuer in Part 4 and Part 5of NI 51-101 will be deemed to include all issuers.

10. Securities legislation restricts what can be told to investors about the issuer’sintent to list or quote securities on an exchange or market. Refer to applicablesecurities legislation before making any such statements.

11. If an issuer uses this form in connection with a distribution under an exemptionother than section 2.9 (offering memorandum) of National Instrument 45-106Prospectus and Registration Exemptions, the issuer must modify the disclosure initem 11 to correctly describe the purchaser’s rights. If a purchaser does not havestatutory or contractual rights of action in the event of a misrepresentation in theoffering memorandum, that fact must be stated in bold on the face page.

12. During the course of a distribution of securities, any material forward-lookinginformation disseminated must only be that which is set out in the offeringmemorandum. If an extract of FOFI, as defined in National Instrument 51-102Continuous Disclosure Obligations (NI 51-102), is disseminated, the extract orsummary must be reasonably balanced and have a cautionary note in boldfacestating that the information presented is not complete and that complete FOFI isincluded in the offering memorandum.




B. Financial Statements - General

1. All financial statements, operating statements for an oil and gas property that isan acquired business or a business to be acquired and summarized financialinformation as to the assets, liabilities and results of operations of a businessrelating to an acquisition that is, or will be, an investment accounted for by theissuer using the equity method included in the offering memorandum mustcomply with National Instrument 52-107 Acceptable Accounting Principles,Auditing Standards and Reporting Currency (NI 52-107), regardless of whetherthe issuer is a reporting issuer or not. Under NI 52-107, a non-qualifying issuerthat uses Canadian GAAP cannot use differential reporting as set out in theHandbook.

2. Include all financial statements required by these instructions in the offeringmemorandum immediately before the certificate page of the offering memorandum.

3. If the issuer has not completed one financial year or its first financial year end isless than 120 days from the date of the offering memorandum, include in theoffering memorandum financial statements of the issuer consisting of:

(a) an income statement, a statement of retained earnings and a cash flowstatement for the period from inception to a date not more than 90 days before thedate of the offering memorandum;

(b) a balance sheet as at the end of the period referred to in paragraph (a); and


4. If the issuer has completed one or more financial years, include in the offeringmemorandum annual financial statements of the issuer consisting of:

(a) an income statement, a statement of retained earnings and a cash flowstatement for:

(i) the most recently completed financial year that ended more than 120days before the date of the offering memorandum; and

(ii) the financial year immediately preceding the financial year in clause (i),if any;

(b) a balance sheet as at the end of each of the periods referred to inparagraph (a); and


5. If the issuer has completed one or more financial years, include in the offeringmemorandum interim financial statements of the issuer comprised of:

(a) an income statement, a statement of retained earnings and a cash flowstatement for the most recently completed interim period that ended:

(i) more than 60 days before the date of the offering memorandum; and

(ii) after the year-end date of the financial statements requiredunder B.4(a)(i);




(b) an income statement, a statement of retained earnings and a cash flowstatement for the corresponding period in the immediately preceding financialyear, if any;

(c) a balance sheet as at the end of the periods required by paragraphs (a)and (b); and

(d) notes to the financial statements.

6. An issuer is not required to include the comparative financial information for theperiod in B.4.(a)(ii) in an offering memorandum if the issuer includes financialstatements for a financial year ended less than 120 days before the date of theoffering memorandum.

7. For an issuer that is not an investment fund, the term “interim period” has themeaning set out in NI 51-102. In most cases, an interim period is a period endingnine, six, or three months before the end of a financial year. For an issuer that isan investment fund, the term “interim period” has the meaning set outin National Instrument 81-106 – Investment Fund Continuous Disclosure(NI 81-106).

8. The comparative financial information required under B.5(b) and (c) may beomitted if not previously prepared.

9. The financial statements required by B.3 and the financial statements of the mostrecently completed financial period referred to in B.4 must be audited. Thefinancial statements required under B.5, B.6 and the comparative financialinformation required by B.4 may be unaudited; however, if any of those financialstatements have been audited, the auditor’s report must be included in theoffering memorandum.

10. Refer to National Instrument 52-108 Auditor Oversight for requirements relatingto reporting issuers and public accounting firms.

11. All unaudited financial statements and unaudited comparatives must be clearlylabelled as unaudited.

12. If the offering memorandum does not contain audited financial statements for theissuer’s most recently completed financial year, and if the distribution is ongoing,update the offering memorandum to include the annual audited financialstatements and the accompanying auditor’s report as soon as the issuer hasapproved the audited financial statements, but in any event no later thanthe 120th day following the financial year end.

13. The offering memorandum does not have to be updated to include interimfinancial statements for periods completed after the date that is 60 days before thedate of the offering memorandum unless it is necessary to prevent the offeringmemorandum from containing a misrepresentation.

14. Forward looking information included in an offering memorandum must complywith section 4A.2 of NI 51-102 and must include the disclosure described insection 4A.3 of NI 51-102. In addition to the foregoing, FOFI or a financial outlook,each as defined in NI 51-102, included in an offering memorandum must complywith Part 4B of NI 51-102. For an issuer that is not a reporting issuer, referencesto “reporting issuer” in section 4A.2, section 4A.3 and Part 4B of NI 51-102 shouldbe read as references to an “issuer”. Additional guidance may be found in thecompanion policy to NI 51-102.




15. If the issuer is a limited partnership, in addition to the financial statementsrequired for the issuer, include in the offering memorandum the financialstatements in accordance with Part B for the general partner and, if the limitedpartnership has active operations, for the limited partnership.

C. Financial Statements - Business Acquisitions

1. If the issuer:

(a) has acquired a business during the past two years and the audited financialstatements of the issuer included in the offering memorandum do not include theresults of the acquired business for 9 consecutive months; or

(b) is proposing to acquire a business and the acquisition has progressed to astate where a reasonable person would believe that the likelihood of theacquisition being completed is high;

include the financial statements specified in C.4 for the business if either of the testsin C.2 is met, irrespective of how the issuer accounts, or will account, for theacquisition.

2. Include the financial statements specified in C.4 for a business referred to in C.1 ifeither:

(a) the issuer’s proportionate share of the consolidated assets of the businessexceeds 40% of the consolidated assets of the issuer calculated using the annualfinancial statements of each of the issuer and the business for the most recentlycompleted financial year of each that ended before the date of acquisition or, for aproposed acquisition, the date of the offering memorandum; or

(b) the issuer’s consolidated investments in and advances to the business as atthe date of acquisition or the proposed date of acquisition exceeds 40% of theconsolidated assets of the issuer, excluding any investments in or advances to thebusiness, as at the last day of the issuer’s most recently completed financial yearthat ended before the date of acquisition or the date of the offering memorandumfor a proposed acquisition.

2.1. In this Instruction C, the term “date of acquisition” means the date of acquisitionused for accounting purposes.

3. If an issuer or a business has not yet completed a financial year, or its firstfinancial year ended within 120 days of the offering memorandum date, use thefinancial statements referred to in B.3 to make the calculations in C.2.

4. If under C.2 you must include in an offering memorandum financial statementsfor a business, the financial statements must include:

(a) If the business has not completed one financial year or its first financial yearend is less than 120 days from the date of the offering memorandum:

(i) an income statement, a statement of retained earnings and a cash flowstatement:

(A) for the period from inception to a date not more than 90 daysbefore the date of the offering memorandum; or

(B) if the date of acquisition precedes the ending date of the periodreferred to in (A), for the period from inception to the date of acquisitionor a date not more than 45 days before the date of acquisition;




(ii) a balance sheet dated as at the end of the period referred to in clause (i);and

(iii) notes to the financial statements.

(b) If the business has completed one or more financial years include:

(i) annual financial statements comprised of:

(A) an income statement, a statement of retained earnings and a cashflow statement for the following annual periods:

(i) the most recently completed financial year that ended beforethe date of acquisition and more than 120 days before the date ofthe offering memorandum; and

(ii) the financial year immediately preceding the most recentlycompleted financial year specified in clause (i), if any;

(B) a balance sheet as at the end of each of the periods specified in (A);

(C) notes to the financial statements; and

(ii) interim financial statements comprised of:

(A) an income statement, a statement of retained earnings and a cashflow statement for either:

(i) the most recently completed year-to-date interim period andthe three month period ending on the last date of the interimperiod that ended before the date of acquisition and more than 60days before the date of the offering memorandum and ended afterthe date of the financial statements required under C.4(b)(i)(A)(i);or

(ii) the period from the first day after the financial year referredto in C.4(b)(i) to a date before the date of acquisition and after theperiod end in C.4(b)(ii)(A)(i); and

(B) an income statement, a statement of retained earnings and a cashflow statement for the corresponding period in the immediatelypreceding financial year, if any;

(C) a balance sheet as at the end of the periods required by (A)and (B); and

(D) notes to the financial statements.

Refer to Instruction B.7 for the meaning of “interim period”.

5. The information for the most recently completed financial period referred toin C.4(b)(i) must be audited and accompanied by an auditor’s report. The financialstatements required under C.4(a), C.4(b)(ii) and the comparative financialinformation required by C.4(b)(i) may be unaudited; however, if those financialstatements or comparative financial information have been audited, the auditor’sreport must be included in the offering memorandum.




6. If the offering memorandum does not contain audited financial statements for abusiness referred to in C.1 for the business’s most recently completed financialyear that ended before the date of acquisition and the distribution is ongoing,update the offering memorandum to include those financial statementsaccompanied by an auditor’s report when they are available, but in any event nolater than the date 120 days following the year-end.

7. The term “business” should be evaluated in light of the facts and circumstancesinvolved. Generally, a separate entity or a subsidiary or division of an entity is abusiness and, in certain circumstances, a lesser component of an entity may alsoconstitute a business, whether or not the subject of the acquisition previouslyprepared financial statements. The subject of an acquisition should be considereda business where there is, or the issuer expects there will be, continuity ofoperations. The issuer should consider:

(a) whether the nature of the revenue producing activity or potential revenueproducing activity will remain generally the same after the acquisition; and

(b) whether any of the physical facilities, employees, marketing systems, salesforces, customers, operating rights, production techniques or trade names areacquired by the issuer instead of remaining with the vendor after the acquisition.

8. If a transaction or a proposed transaction for which the likelihood of thetransaction being completed is high has been or will be accounted for as a reversetake-over as defined in NI 51-102, include financial statements for the legalsubsidiary in the offering memorandum in accordance with Part A. The legalparent, as that term is defined in the CICA Handbook, is considered to be thebusiness acquired. C.1 may also require financial statements of the legal parent.

9. An issuer satisfies the requirements in C.4 if the issuer includes in the offeringmemorandum the financial statements required in a business acquisition reportunder NI 51-102.

D. Financial Statement - Exemptions

1. An issuer will satisfy the financial statement requirements of this form if itincludes the financial statements required by securities legislation for a prospectus.

2. Notwithstanding the requirements in section 3.2(a) of NI 52-107, an auditor’sreport that accompanies financial statements of an issuer or a business containedin an offering memorandum of a non-reporting issuer may contain a qualificationof opinion relating to inventory if:

(a) the issuer includes in the offering memorandum a balance sheet that is for adate that is subsequent to the date to which the qualification relates; and

(b) the balance sheet referred to in paragraph (a) is accompanied by an auditor’sreport that does not contain a qualification of opinion relating to closinginventory; and

(c) the issuer has not previously filed financial statements for the same entityaccompanied by an auditor’s report for a prior year that contained a qualificationof opinion relating to inventory.




3. If an issuer has, or will account for a business referred to in C.1 using the equitymethod, then financial statements for a business required by Part C are notrequired to be included if:

(a) the offering memorandum includes disclosure for the periods for whichfinancial statements are otherwise required under Part C that:

(i) summarizes information as to the assets, liabilities and results ofoperations of the business; and

(ii) describes the issuer’s proportionate interest in the business and anycontingent issuance of securities by the business that might significantlyaffect the issuer’s share of earnings;

(b) the financial information provided under D.3(a) for the most recentlycompleted financial year has been audited, or has been derived from auditedfinancial statements of the business; and

(c) the offering memorandum discloses that:

(i) the financial information provided under D.3(a) for any completedfinancial year has been audited, or identifies the audited financial statementsfrom which the financial information provided under D.3(a) has beenderived; and

(ii) the audit opinion with respect to the financial information or financialstatements referred to in D.3(c)(i) was issued without a reservation ofopinion.

If the financial information included in an offering memorandum under D.3(a)has been derived from financial statements of a business incorporated ororganized in a foreign jurisdiction that have been prepared in accordance withforeign GAAP, the information must be accompanied by a note that explains andquantifies the effect of material differences between Canadian GAAP and theforeign GAAP.

4. Financial statements relating to the acquisition or proposed acquisition of abusiness that is an interest in an oil and gas property are not required to beincluded in an offering memorandum if the acquisition is significant based only onthe asset test or:

(a) the issuer is unable to provide the financial statements in respect of thesignificant acquisition otherwise required because those financial statements donot exist or the issuer does not have access to those financial statements;

(b) the acquisition was not or will not be accounted for as a “reverse take-over” asdefined in NI 51-102;

(c) the business did not or does not constitute a “reportable segment” of theseller, as defined in section 1701 of the CICA Handbook, at the time of acquisition;and




(d) the offering memorandum contains alternative disclosure for the businesswhich includes:

(i) an operating statement for each of the financial periods for whichfinancial statements would, but for this section, be required under C.4,presenting for the business, at a minimum, the following line items:

(A) gross revenue;

(B) royalty expenses;

(C) production costs; and

(D) operating income;

The operating statement for the most recently completed financial periodreferred to in C.4(b)(i) must be audited.

(ii) a description of the property or properties and the interest acquired bythe issuer;

(iii) information with respect to the estimated reserves and related futurenet revenue attributable to the business, the material assumptions used inpreparing the estimates and the identity and relationship to the issuer or tothe seller of the person who prepared the estimates;

(iv) actual production volumes of the property for the most recentlycompleted year; and

(v) estimated production volumes of the property for the first year reflectedin the estimate disclosed under D.4(d)(iv).

5. Financial statements for a business that is an interest in an oil and gas property,or for the acquisition or proposed acquisition by an issuer of a property, are notrequired to be audited if during the 12 months preceding the date of acquisition orthe proposed date of acquisition, the daily average production of the property on abarrel of oil equivalent basis (with gas converted to oil in the ratio of six thousandcubic feet of gas being the equivalent of one barrel of oil) is less than 20 per cent ofthe total daily average production of the seller for the same or similar periods and:

(a) despite reasonable efforts during the purchase negotiations, the issuer wasprohibited from including in the purchase agreement the rights to obtain anaudited operating statement of the property;

(b) the purchase agreement includes representations and warranties by theseller that the amounts presented in the operating statement agree to the seller’sbooks and records; and

(c) the offering memorandum discloses:

1. that the issuer was unable to obtain an audited operating statement;

2. the reasons for that inability;

3. the fact that the purchase agreement includes the representations andwarranties referred to in D.5(b)(ii); and

4. that the results presented in the operating statements may have beenmaterially different if the statements had been audited.




Form 45-106F3Offering Memorandum for Qualifying Issuers

Date: [Insert the date from the certificate page.]

The Issuer

Name:

Head office: Address:Phone #:E-mail address:Fax #:

Where currently listed or quoted? [e.g., TSX/TSX Venture Exchange]Jurisdictions in which the issuer is a reporting issuer:

The OfferingSecurities offered:Price per security:Minimum/Maximum offering: [If there is no minimum state in bold: “There is nominimum.” and also state in bold type: “You may be the only purchaser.”]State in bold type: Funds available under the offering may not be sufficient toaccomplish our proposed objectives.Minimum subscription amount: [State the minimum amount each investor mustinvest, or state “There is no minimum subscription amount an investor must invest.”]Payment terms:Proposed closing date(s):Income Tax consequences: “There are important tax consequences to these securities.See item 6.” [If income tax consequences are not material, delete this item.]Selling agent? [Yes/No. If yes, state “See item 7”. The name of the selling agent mayalso be stated.]

Resale restrictionsState: “You will be restricted from selling your securities for 4 months and a day. Seeitem 10”.

Purchaser’s rightsState: “You have 2 business days to cancel your agreement to purchase these securities.If there is a misrepresentation in this offering memorandum, you have the right to sueeither for damages or to cancel the agreement. See item 11.”

State in bold type:

“No securities regulatory authority or regulator has assessed the meritsof these securities or reviewed this offering memorandum. Anyrepresentation to the contrary is an offence. This is a risky investment.See item 8.”

[All of the above information must appear on a single cover page.]




Item 1: Use of Available Funds

1.1 Available Funds - Using the following table, disclose the funds available as aresult of the offering. If the issuer plans to combine additional sources of fundingwith the available funds from the offering to achieve its principal capital-raisingpurpose, please provide details about each additional source of funding. If there isno minimum offering, state “$0” as the minimum.

Disclose also the amount of any working capital deficiency, if any, of the issuer asat a date not more than 30 days prior to the date of the offering memorandum. Ifthe working capital deficiency will not be eliminated by the use of available funds,state how the issuer intends to eliminate or manage the deficiency.

Assuming min. Assuming max.offering offering

A. Amount to be raised by this offering

B. Selling commissions and fees

C. Estimated offering costs(e.g., legal, accounting, audit.)

D. Available funds: D = A - (B+C)

E. Additional sources of funding required

F. Working capital deficiency

G. Total: H = (D+E) - F

1.2 Use of Available Funds - Using the following table, provide a detailedbreakdown of how the issuer will use the available funds. If any of the availablefunds will be paid to an insider, associate or affiliate of the issuer, disclose in anote to the table the name of the insider, associate or affiliate, the relationship tothe issuer, and the amount. If the issuer has a working capital deficiency, disclosethe portion, if any, of the available funds to be applied against the working capitaldeficiency. If more than 10% of the available funds will be used by the issuer topay debt and the issuer incurred the debt within the two preceding financialyears, describe why the debt was incurred.

Description of intended use of available Assuming min. Assuming max.funds listed in order of priority offering offering

$ $

$ $

Total: Equal to G in the Funds table above $ $




1.3 Reallocation - The available funds must be used for the purposes disclosed inthe offering memorandum. The board of directors can reallocate the proceeds toother uses only for sound business reasons. If the available funds may bereallocated, include the following statement:

“We intend to spend the available funds as stated. We will reallocate funds onlyfor sound business reasons.”

1.4 Insufficient Funds - If applicable, disclose that the funds available as a result ofthe offering either may not or will not be sufficient to accomplish all of the issuer’sproposed objectives and that there is no assurance that alternative financing willbe available. If alternative financing has been arranged, disclose the amount,source and any outstanding conditions that must be satisfied.

Item 2: Information About [name of issuer or other term used to refer to issuer]

2.1 Business Summary - Briefly (in one or two paragraphs) describe the businessintended to be carried on by the issuer over the next 12 months. State whetherthis represents a change of business. The disclosure must provide sufficientinformation to enable a prospective purchaser to make an informed investmentdecision. If the issuer is a non-resource issuer, describe the products that theissuer is or will be developing or producing and the stage of development of each ofthe products. If the issuer is a resource issuer, state: whether the issuer’sprincipal properties are primarily in the exploration or in the development orproduction stage; what resources the issuer is engaged in exploring, developing orproducing; and the locations of the issuer’s principal properties. A resource issuerwho discloses information about its oil and gas activities must follow GeneralInstruction A-9 of this Form.

2.2 Existing Documents Incorporated by Reference - State:

“Information has been incorporated by reference into this offering memorandumfrom documents listed in the table below, which have been filed with securitiesregulatory authorities or regulators in Canada. The documents incorporated byreference are available for viewing on the SEDAR website at www.sedar.com.In addition, copies of the documents may be obtained on request withoutcharge from [insert complete address and telephone and the name of a contactperson].

Documents listed in the table and information provided in those documents arenot incorporated by reference to the extent that their contents are modified orsuperseded by a statement in this offering memorandum or in any othersubsequently filed document that is also incorporated by reference in thisoffering memorandum.”

Using the following table, list all of the documents incorporated by reference (asrequired by Instruction D.1):

Description of document (In the case of material Date of documentchange reports, provide a brief description ofthe nature of the material change)




2.3 Existing Documents Not Incorporated by Reference - State:

“Other documents available on the SEDAR website (for example, most pressreleases, take-over bid circulars, prospectuses and rights offering circulars) arenot incorporated by reference into this offering memorandum unless they arespecifically referenced in the table above. Your rights as described in item 11 ofthis offering memorandum apply only in respect of information contained inthis offering memorandum and documents or information incorporated byreference.”

2.4 Existing Information Not Incorporated by Reference - Certain specifiedinformation (as outlined in Instruction D.2) contained in the documentsincorporated by reference may be, but is not required to be, incorporated byreference into the offering memorandum. If the issuer does not wish to incorporatethat information into the offering memorandum, the issuer must state that andinclude a statement in the offering memorandum identifying:

(a) the information that is not being incorporated by reference; and

(b) the document in which the information is contained.

2.5 Future Documents Not Incorporated by Reference - State:

“Documents filed after the date of this offering memorandum are not deemed tobe incorporated into this offering memorandum. However, if you subscribe forsecurities and an event occurs, or there is a change in our business or affairs,that makes the certificate to this offering memorandum no longer true, we willprovide you with an update of this offering memorandum, including a newlydated and signed certificate, and will not accept your subscription until youhave re-signed the agreement to purchase the securities.”

Item 3: Interests of Directors, Executive Officers, Promoters and PrincipalHolders

3.1 Using the following table, provide information about each director, executiveofficer, promoter and each person who, directly or indirectly, beneficially owns orcontrols 10% or more of any class of voting securities of the issuer (a “principalholder”). If the principal holder is not an individual, state in a note to the table thename of any person or company that, directly or indirectly, beneficially owns orcontrols more than 50% of the voting rights of the principal holder.

Name and municipality of principal residence Position(s) with the issuer




3.2 State: “You can obtain further information about directors and executive officersfrom [insert the name and date of the document(s) with the most currentinformation, e.g., management information circular, annual information form ormaterial change report].”

3.3 State: “Current information regarding the securities held by directors, executiveofficers and principal holders can be obtained from [refer to the SEDI website atwww.sedi.ca or, if information cannot be obtained from the SEDI website, refer tothe securities regulatory authority(ies) or regulator(s) from which the informationcan be obtained, including any website(s)]. [Name of issuer or other term used torefer to issuer] can not guarantee the accuracy of this information.”

3.4 Loans - Disclose the principal amount of any debenture or loan, the repaymentterms, security, due date and interest rate due to or from the directors,management, promoters and principal holders as at a date not more than 30 daysprior to the date of the offering memorandum.

Item 4: Capital Structure

Using the following table, provide the required information about outstandingsecurities of the issuer (including options, warrants and other securities convertibleinto shares). If necessary, notes to the table may be added to describe the materialterms of the securities.

Description of Number Price Number outstanding as at Number Numbersecurity authorized to per [a date not more than 30 outstanding outstanding

be issued security days prior to the offering after min. after max.memorandum date] offering offering

Item 5: Securities Offered

5.1 Terms of Securities - Describe the material terms of the securities being offered,including:

(a) voting rights or restrictions on voting;

(b) conversion or exercise price and date of expiry;

(c) rights of redemption or retraction; and

(d) interest rates or dividend rates.

5.2 Subscription Procedure

(a) Describe how a purchaser can subscribe for the securities and the method ofpayment.

(b) State that the consideration will be held in trust and the period that it will beheld (refer at least to the mandatory two day period).

(c) Disclose any conditions to closing e.g., receipt of additional funds from othersources. If there is a minimum offering, disclose when consideration will bereturned to purchasers if the minimum is not met.




Item 6: Income Tax Consequences and RRSP Eligibility

6.1 State: “You should consult your own professional advisers to obtain advice on theincome tax consequences that apply to you”.

6.2 If income tax consequences are a material aspect of the securities being offered(e.g., flow-through shares), provide:

(a) a summary of the significant income tax consequences to Canadian residents;and

(b) the name of the person or company providing the income tax disclosure in (a).

6.3 Provide advice regarding the RRSP eligibility of the securities and the name of theperson or company providing the advice or state “Not all securities are eligible forinvestment in a registered retirement savings plan (RRSP). You should consultyour own professional advisers to obtain advice on the RRSP eligibility of thesesecurities.”

Item 7: Compensation Paid to Sellers and Finders

If any person or company has or will receive any compensation (e.g., commission,corporate finance fee or finder’s fee) in connection with the offering, provide thefollowing information to the extent applicable:

(a) a description of each type of compensation and the estimated amount tobe paid for each type;

(b) if a commission is being paid, the percentage that the commission willrepresent of the gross proceeds of the offering (assuming both the minimumand maximum offering);

(c) details of any broker’s warrants or agent’s option (including number ofsecurities under option, exercise price and expiry date); and

(d) if any portion of the compensation will be paid in securities, details ofthe securities (including number, type and, if options or warrants, theexercise price and expiry date).

Item 8: Risk Factors

Describe in order of importance, starting with the most important, the risk factorsmaterial to the issuer that a reasonable investor would consider important indeciding whether to buy the issuer’s securities.

Risk factors will generally fall into the following three categories:

(a) Investment Risk - risks that are specific to the securities being offered.Some examples include:

• arbitrary determination of price;

• no market or an illiquid market for the securities;

• resale restrictions; and

• subordination of debt securities.




(b) Issuer Risk - risks that are specific to the issuer. Some examplesinclude:

• insufficient funds to accomplish the issuer’s business objectives;

• no history or a limited history of sales or profits;

• lack of specific management or technical expertise;

• management’s regulatory and business track record;

• dependence on key employees, suppliers or agreements;

• dependence on financial viability of guarantor;

• pending and outstanding litigation; and

• political risk factors.

(c) Industry Risk - risks faced by the issuer because of the industry inwhich it operates. Some examples include:

• environmental and industry regulation;

• product obsolescence; and

• competition.

Item 9: Reporting Obligations

9.1 Disclose the documents that will be sent to purchasers on an annual or on-goingbasis.

9.2 If corporate or securities information about the issuer is available from agovernment, securities regulatory authority or regulator, SRO or quotation andtrade reporting system, disclose where that information can be located (includingwebsite address).

Item 10: Resale Restrictions

For trades in Alberta, British Columbia, New Brunswick, Newfoundland andLabrador, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island,Québec, Saskatchewan and Yukon, state:

“These securities will be subject to a number of resale restrictions, includinga restriction on trading. Until the restriction on trading expires, you will notbe able to trade the securities unless you comply with an exemption from theprospectus and registration requirements under securities legislation.

Unless permitted under securities legislation, you cannot trade the securitiesbefore the date that is 4 months and a day after the distribution date.”

Item 11: Purchasers’ Rights

State the following:

“If you purchase these securities you will have certain rights, some of whichare described below. For information about your rights you should consult alawyer.

(1) Two -Day Cancellation Right - You can cancel your agreement topurchase these securities. To do so, you must send a notice to us by midnighton the 2nd business day after you sign the agreement to buy the securities.




(2) Statutory Rights of Action in the Event of a Misrepresentation -[Insert this section only if the securities legislation of the jurisdiction inwhich the trade occurs provides purchasers with statutory rights in theevent of a misrepresentation in an offering memorandum. Modify thelanguage, if necessary, to conform to the statutory rights.] If there is amisrepresentation in this offering memorandum, you have a statutory rightto sue:

(a) [name of issuer or other term used to refer to issuer] to cancel youragreement to buy these securities; or

(b) for damages against [state the name of issuer or other term used torefer to issuer and the title of any other person or company againstwhom the rights are available].

This statutory right to sue is available to you whether or not you relied onthe misrepresentation. However, there are various defences available to thepersons or companies that you have a right to sue. In particular, they have adefence if you knew of the misrepresentation when you purchased thesecurities.

If you intend to rely on the rights described in (a) or (b) above, you must do sowithin strict time limitations. You must commence your action to cancel theagreement within [state time period provided by the securities legislation].You must commence your action for damages within [state time periodprovided by the securities legislation].

(3) Contractual Rights of Action in the Event of a Misrepresentation -[Insert this section only if the securities legislation of the jurisdiction in which thepurchaser is resident does not provide purchasers with statutory rights in theevent of a misrepresentation in an offering memorandum.] If there is amisrepresentation in this offering memorandum, you have a contractual right tosue [name of issuer or other term used to refer to issuer]:

(a) to cancel your agreement to buy these securities; or

(b) for damages.

This contractual right to sue is available to you whether or not you relied on themisrepresentation. However, in an action for damages, the amount you mayrecover will not exceed the price that you paid for your securities and will notinclude any part of the damages that [name of issuer or other term used to refer toissuer] proves does not represent the depreciation in value of the securitiesresulting from the misrepresentation. [Name of issuer or other term used to referto issuer] has a defence if it proves that you knew of the misrepresentation whenyou purchased the securities.

If you intend to rely on the rights described in (a) or (b) above, you must do sowithin strict time limitations. You must commence your action to cancel theagreement within 180 days after you signed the agreement to purchase thesecurities. You must commence your action for damages within the earlier of 180days after learning of the misrepresentation and 3 years after you signed theagreement to purchase the securities.”




Item 12: Date and Certificate

State the following on the certificate page of the offering memorandum:

“Dated [insert the date the certificate page of the offering memorandum issigned].

This offering memorandum does not contain a misrepresentation.”

Instructions for CompletingForm 45-106F3

Offering Memorandum for Qualifying Issuers

A. General Instructions

1. Only a “qualifying issuer” may use this form.

2. An issuer using this form to draft an offering memorandum must incorporate byreference certain parts of its existing continuous disclosure base. An issuer thatdoes not want to do this must use Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers.

3. Draft the offering memorandum so that it is easy to read and understand. Beconcise and use clear, plain language. Avoid technical terms. If technical termsare necessary, provide definitions.

4. Address the items required by the form in the order set out in the form. However,it is not necessary to provide disclosure about an item that does not apply.

5. The issuer may include additional information in the offering memorandum otherthan that specifically required by the form. The offering memorandum isgenerally not required to contain the level of detail and extent of disclosurerequired by a prospectus. However, an offering memorandum must provide aprospective purchaser with sufficient information to make an informed investmentdecision.

6. The issuer may wrap the offering memorandum around a prospectus or similardocument. However, all matters required to be disclosed by the offeringmemorandum must be addressed and the offering memorandum must provide across-reference to the page number or heading in the wrapped document wherethe relevant information is contained. The certificate to the offering memorandummust be modified to indicate that the offering memorandum, including thedocument around which it is wrapped, does not contain a misrepresentation.

7. It is an offence to make a misrepresentation in the offering memorandum. Thisapplies both to information that is required by the form and to additionalinformation that is provided. Include particulars of any material facts, which havenot been disclosed under any of the Item numbers and for which failure to disclosewould constitute a misrepresentation in the offering memorandum. Refer also tosection 3.8(3) of Companion Policy 45-106CP for additional information.

8. Refer to National Instrument 43-101 Standards of Disclosure for Mineral Projects(NI 43-101) when disclosing scientific or technical information for a mineralproject of the issuer.




9. If an oil and gas issuer is disclosing information about its oil and gas activities, itmust ensure that the information is disclosed in accordance with Part 4 andPart 5 of National Instrument 51-101 Standards of Disclosure for Oil and GasActivities (NI 51-101). Under section 5.3 of NI 51-101, disclosure of reserves orresources must be consistent with the reserves and resources terminology andcategories set out in the Canadian Oil and Gas Evaluation Handbook. For thepurposes of this instruction, references to reporting issuer in Part 4 and Part 5of NI 51-101 will be deemed to include all issuers.

10. Securities legislation restricts what can be told to investors about the issuer’sintent to list or quote securities on an exchange or market. Refer to applicablesecurities legislation before making any such statements.

11. If an issuer uses this form in connection with a distribution under an exemptionother than section 2.9 (offering memorandum) of National Instrument 45-106Prospectus and Registration Exemptions, the issuer must modify the disclosure initem 12 to correctly describe the purchaser’s rights. If a purchaser does not havestatutory or contractual rights of action in the event of a misrepresentation in theoffering memorandum, that fact must be stated in bold on the face page.

12. During the course of a distribution of securities, any material forward-lookinginformation disseminated must only be that which is set out in the offeringmemorandum. If an extract of FOFI, as defined in NI 51-102 ContinuousDisclosure Obligations (NI 51-102), is disseminated, the extract or summary mustbe reasonably balanced and have a cautionary note in boldface stating that theinformation presented is not complete and that complete FOFI is included in theoffering memorandum.

B. Financial Statements

1. All financial statements incorporated by reference into the offering memorandummust comply with NI 51-102 and National Instrument 52-107 AcceptableAccounting Principles, Auditing Standards and Reporting Currency.

2. Forward-looking information included in an offering memorandum must complywith section 4A.2 of NI 51-102 and must include the disclosure described insection 4A.3 of NI 51-102. In addition to the foregoing, FOFI or a financial outlook,each as defined in NI 51-102, included in an offering memorandum must complywith Part 4B of NI 51-102. Additional guidance may be found in the companionpolicy to NI 51-102.

C. Required Updates to the Offering Memorandum

1. If the offering memorandum does not incorporate by reference the issuer’s AIF,and audited financial statements for its most recently completed financial year,update the offering memorandum for any financial statements that are requiredto be filed prior to the distribution to incorporate by reference the documents assoon as the documents are filed on SEDAR.

2. Except for documents referred to in C.1, the offering memorandum does not haveto be updated to incorporate by reference interim financial statements or otherdocuments referred to in D.1 unless it is necessary to do so to prevent the offeringmemorandum from containing a misrepresentation.




D. Information about the Issuer

1. Existing Documents Incorporated by Reference - In addition to any other documentthat an issuer may choose to incorporate by reference, the issuer must incorporatethe following documents:

(a) the issuer’s AIF for the issuer’s most recently completed financial year forwhich annual financial statements are either required to be filed or have beenfiled;

(b) material change reports, except confidential material change reports, filedsince the end of the financial year in respect of which the issuer’s AIF is filed;

(c) the interim financial statements for the issuer’s most recently completedinterim period for which the issuer prepares interim financial statements that arerequired to be filed or have been filed and which ends after the most recentlycompleted financial year referred to in (d);

(d) the comparative financial statements, together with the accompanyingauditor’s report, for the issuer’s most recently completed financial year for whichannual financial statements are required to be filed or have been filed;

(e) if, before the offering memorandum is filed, financial information about theissuer for a financial period more recent than the period for which financialstatements are required under D.1(c) and (d) is publicly disseminated by, or onbehalf of, the issuer through news release or otherwise, the content of the newsrelease or public communication;

(f) management’s discussion and analysis (MD&A) as required under NI 51-102for the period specified in D.1(c) and D.1(d);

(g) each business acquisition report required to be filed under NI 51-102 foracquisitions completed since the beginning of the financial year in respect ofwhich the issuer’s AIF is filed, unless the issuer incorporated the businessacquisition report by reference into its AIF for its most recently completedfinancial year for which annual financial statements are either required to be filedor have been filed, or incorporated at least 9 months of the acquired business orrelated businesses operations into the issuer’s most recent audited financialstatements;

(h) any information circular filed by the issuer since the beginning of thefinancial year in respect of which the issuer’s most recent AIF is filed, other thanan information circular prepared in connection with an annual general meeting ifthe issuer has filed and incorporated by reference an information circular for asubsequent annual general meeting;

(i) if the issuer has oil and gas activities, as defined in National Instrument51-101 Standards of Disclosure for Oil and Gas Activities, the most recent Form51-101F1, Form 51-101F2 and Form 51-101F3, filed by an SEC issuer, unless:

(i) the issuer’s current AIF is in the form of Form 51-102F2; or

(ii) the issuer is otherwise exempted from the requirements of NI 51-101;

(j) any other disclosure document which the issuer has filed pursuant to anundertaking to a provincial and territorial securities regulatory authority orregulator since the beginning of the financial year in respect of which the issuer’smost recent AIF is filed; and




(k) any other disclosure document of the type listed above that the issuer hasfiled pursuant to an exemption from any requirement under securities legislationsince the beginning of the financial year in respect of which the issuer’s mostrecent AIF is filed.

2. Mineral Property – If a material part of the funds available as a result of thedistribution is to be expended on a particular mineral property and if the issuer’smost recent AIF does not contain the disclosure required under section 5.4 ofForm 51-102F2 for the property or that disclosure is inadequate or incorrect dueto changes, disclose the information required under section 5.4 of Form 51-102F2.

An issuer may incorporate any additional document provided that the documentis available for viewing on the SEDAR website and that, on request by apurchaser, the issuer provides a copy of the document to the purchaser, withoutcharge.




FORM 45-106F4

Risk Acknowledgement• I acknowledge that this is a risky investment.

• I am investing entirely at my own risk.

• No securities regulatory authority or regulator has evaluated or endorsedthe merits of these securities or the disclosure in the offering memorandum.

• The person selling me these securities is not registered with a securitiesregulatory authority or regulator and has no duty to tell me whether thisinvestment is suitable for me. [Instruction: Delete if sold by registrant]

• I will not be able to sell these securities except in very limited circumstances.I may never be able to sell these securities. [Instruction: Delete if issuer isreporting]

• The securities are redeemable, but I may only be able to redeem them inlimited circumstances. [Instruction: Delete if securities are not redeemable]

• I will not be able to sell these securities for 4 months. [Instruction: Delete ifissuer is not reporting or if the purchaser is a Manitoba resident]

• I could lose all the money I invest.

I am investing $ _____________________________ in total; this includes any amount[total consideration]

I am obliged to pay in future.

____________________________________________ will pay $________________of this[name of issuer] [amount of fee or commission ]

to ____________________________________________________ as a fee or commission.[name of person selling the securities]

I acknowledge that this is a risky investment and that I could lose all themoney I invest.

___________________________ ___________________________________Date Signature of Purchaser

___________________________________Print name of Purchaser

Sign 2 copies of this document. Keep one copy for your records.

W A

R N

I N G




You have 2 business days to cancel your purchase [Instruction: The issuer mustcomplete this section before giving the form to the purchaser.]

To do so, send a notice to [name of issuer] stating that you want to cancel yourpurchase. You must send the notice before midnight on the 2nd business day after yousign the agreement to purchase the securities. You can send the notice by fax or emailor deliver it in person to [name of issuer] at its business address. Keep a copy of thenotice for your records.

Issuer Name and Address: ______________________________________________________

Fax: _____________________________ E-mail:____________________________________

You are buying Exempt Market Securities

They are called exempt market securities because two parts of securities law do notapply to them. If an issuer wants to sell exempt market securities to you:

• the issuer does not have to give you a prospectus (a document that describes theinvestment in detail and gives you some legal protections); and

• the securities do not have to be sold by an investment dealer registered with asecurities regulatory authority or regulator.

There are restrictions on your ability to resell exempt market securities. Exempt marketsecurities are more risky than other securities.

You will receive an offering memorandum Read the offering memorandumcarefully because it has important information about the issuer and its securities. Keepthe offering memorandum because you have rights based on it. Talk to a lawyer fordetails about these rights.

You will not receive advice [Instruction: Delete if sold by registrant]

You will not get professional advice about whether the investment is suitable for you.But you can still seek that advice from a registered adviser or registered dealer. InAlberta, Manitoba, Northwest Territories, Nunavut, Prince Edward Island, Québec,Saskatchewan and Yukon to qualify as an eligible investor, you may be required toobtain that advice.

The securities you are buying are not listed [Instruction: Delete if securities arelisted or quoted]

The securities you are buying are not listed on any stock exchange, and they may neverbe listed. You may never be able to sell these securities.

The issuer of your securities is a non-reporting issuer [Instruction: Delete ifissuer is reporting]

A non-reporting issuer does not have to publish financial information or notify thepublic of changes in its business. You may not receive ongoing information about thisissuer.

For more information on the exempt market, call your local securities regulatoryauthority or regulator. [Instruction: Insert the name, telephone number and websiteaddress of the securities regulatory authority or regulator in the jurisdiction in whichyou are selling these securities.]

[Instruction: The purchaser must sign 2 copies of this form. The purchaser andthe issuer must each receive a signed copy.]




FORM 45-106F5

Risk AcknowledgementSaskatchewan Close Personal Friends and Close Business Associates

I acknowledge that this is a risky investment:

• I am investing entirely at my own risk.

• No securities regulatory authority or regulator has evaluated or endorsedthe merits of these securities.

• The person selling me these securities is not registered with a securitiesregulatory authority or regulator and has no duty to tell me whether thisinvestment is suitable for me. [Instruction: Delete if sold by registrant]

• I will not be able to sell these securities except in very limited circumstances.I may never be able to sell these securities. [Instruction: Delete if issuer isreporting]

• The securities are redeemable, but I may only be able to redeem them inlimited circumstances. [Instruction: Delete if securities are not redeemable]

• I will not be able to sell these securities for 4 months. [Instruction: Delete ifissuer is not reporting]

• I could lose all the money I invest.

• I do not have a 2-day right to cancel my purchase of these securities or thestatutory rights of action for misrepresentation I would have if I werepurchasing the securities under a prospectus. I do have a 2-day right tocancel my purchase of these securities if I receive an amended offeringdocument.

I am investing $ _____________________________________ in total; this includes any[total consideration]

amount I am obliged to pay in future.

I am a close personal friend or close business associate of _____________________ ,[state name]

who is a ____________________________________________________________________[state title - founder, director, executive officer or control person]

of _________________________________________________________________________ .[state name of issuer or its affiliate – if an affiliate state

“an affiliate of the issuer” and give the issuer’s name]

I acknowledge that I am purchasing based on my close relationship

with _______________________________________________________________________[state name of founder, director, executive officer or control person]

whom I know well enough and for a sufficient period of time to be able to assess her/his capabilities and trustworthiness.

I acknowledge that this is a risky investment and that I could lose all themoney I invest.

__________________________ ___________________________________Date Signature of Purchaser

___________________________________Print name of Purchaser

W A

R N

I N G




You are buying Exempt Market Securities

They are called exempt market securities because two parts of securities law do notapply to them. If an issuer wants to sell exempt market securities to you:

• the issuer does not have to give you a prospectus (a document that describesthe investment in detail and gives you some legal protections); and

• the securities do not have to be sold by an investment dealer registered with asecurities regulatory authority or regulator.

There are restrictions on your ability to resell exempt market securities. Exempt marketsecurities are more risky than other securities.

You may not receive any written information about the issuer or its business

If you have any questions about the issuer or its business, ask for written clarificationbefore you purchase the securities. You should consult your own professional advisersbefore investing in the securities.

You will not receive advice [Instruction: Delete if sold by registrant]

Unless you consult your own professional advisers, you will not get professional adviceabout whether the investment is suitable for you.

The issuer of your securities is a non-reporting issuer [Instruction: Delete ifissuer is reporting]

A non-reporting issuer does not have to publish financial information or notify thepublic of changes in its business. You may not receive ongoing information about thisissuer. You can only sell the securities of a non-reporting issuer in very limitedcircumstances. You may never be able to sell these securities.

The securities you are buying are not listed [Instruction: Delete if securities arelisted or quoted]

The securities you are buying are not listed on any stock exchange, and they may neverbe listed. There may be no market for these securities. You may never be able to sellthese securities.

For more information on the exempt market, refer to the Saskatchewan FinancialServices Commission’s website at http://www.sfsc.gov.sk.ca.

[Instruction: The purchaser must sign 2 copies of this form. The purchaser and theissuer must each receive a signed copy.]

2 Oct 2009 SR 81/2009 s13.




PART XLIV[Clause 2(rr)]

NATIONAL INSTRUMENT 33-105UNDERWRITING CONFLICTS

PART 1 DEFINITIONS, INTERPRETATION AND APPLICATION


“associated party” means, if used to indicate a relationship with a person orcompany:

(a) a trust or estate in which:

(i) that person or company has a substantial beneficial interest,unless that trust or estate is managed under discretionary authority bya person or company that is not a member of any professional group ofwhich the first mentioned person or company is a member; or

(ii) that person or company serves as trustee or in a similar capacity;

(b) an issuer in respect of which that person or company beneficially ownsor controls, directly or indirectly, voting securities carrying more than 10percent of the voting rights attached to all outstanding voting securities ofthe issuer; or

(c) a relative, including the spouse, of that person, or a relative of thatperson’s spouse, if:

(i) the relative has the same home as that person; and

(ii) the person has discretionary authority over the securities held bythe relative;

“connected issuer” means, for a registrant:

(a) an issuer distributing securities, if the issuer or a related issuer of theissuer has a relationship with any of the following persons or companies thatmay lead a reasonable prospective purchaser of the securities to question ifthe specified firm registrant and the issuer are independent of each other forthe distribution:

(i) the specified firm registrant;

(ii) a related issuer of the specified firm registrant;

(iii) a director, officer or partner of the specified firm registrant;

(iv) a director, officer or partner of a related issuer of the specifiedfirm registrant; or




(b) a selling securityholder distributing securities, if the sellingsecurityholder or a related issuer of the selling securityholder has arelationship with any of the following persons or companies that may lead areasonable prospective purchaser of the securities to question if the specifiedfirm registrant and the selling securityholder are independent of each otherfor the distribution:

(i) the specified firm registrant;

(ii) a related issuer of the specified firm registrant;

(iii) a director, officer or partner of the specified firm registrant;

(iv) a director, officer or partner of a related issuer of the specifiedfirm registrant;

“direct underwriter” means, for a distribution:

(a) an underwriter that is in a contractual relationship with the issuer orselling securityholder to distribute the securities that are being offered inthe distribution; or

(b) a dealer manager, if the distribution is a rights offering;

“foreign issuer” has the meaning ascribed to that term in NationalInstrument 71-101 The Multijurisdictional Disclosure System;

“independent underwriter” means, for a distribution, a direct underwriterthat is not the issuer or the selling securityholder in the distribution and inrespect of which neither the issuer nor the selling securityholder is a connectedissuer or a related issuer;

“influential securityholder” means, in relation to an issuer:

(a) a person or company or professional group that:

(i) holds, has the power to direct the voting of, or has direct or indirectbeneficial ownership of, voting securities entitling the person orcompany or professional group to cast more than 20 percent of the votesfor the election or removal of directors of the issuer;

(ii) holds, has the power to direct the voting of, or has direct orindirect beneficial ownership of, equity securities entitling the personor company or professional group to receive more than 20 percent of thedividends or distributions to the holders of the equity securities of theissuer, or more than 20 percent of the amount to be distributed to theholders of equity securities of the issuer on the liquidation or windingup of the issuer;

(iii) controls or is a partner of the issuer if the issuer is a generalpartnership; or




(iv) controls or is a general partner of the issuer if the issuer is alimited partnership;

(b) a person or company or professional group that:

(i) holds, has the power to direct the voting of, or has direct or indirectbeneficial ownership of:

(A) voting securities entitling the person or company orprofessional group to cast more than 10 percent of the votes for theelection or removal of directors of the issuer; or

(B) equity securities entitling the person or company orprofessional group to receive more than 10 percent of thedividends or distributions to the holders of the equity securities ofthe issuer, or more than 10 percent of the amount to be distributedto the holders of equity securities of the issuer on the liquidationor winding up of the issuer; and

(ii) either:

(A) together with its related issuers:

(I) is entitled to nominate at least 20 percent of thedirectors of the issuer or of a related issuer of the issuer; or

(II) has officers, directors or employees who are also directorsof the issuer or a related issuer of the issuer, constituting atleast 20 percent of the directors of the issuer or of the relatedissuer; or

(B) is a person or company of which the issuer, together with itsrelated issuers:

(I) is entitled to nominate at least 20 percent of thedirectors of the person or company or at least 20 percent ofthe directors of a related issuer of the person or company; or

(II) has officers, directors or employees who are also directorsof the person or company or a related issuer of the person orcompany, constituting at least 20 percent of the directors ofthe person or company or of the related issuer of the personor company; or

(c) a person or company:

(i) of which the issuer holds, has the power to direct the voting of, orhas direct or indirect beneficial ownership of:

(A) voting securities entitling the issuer to cast more than 10percent of the votes for the election or removal of directors of theperson or company; or




(B) equity securities entitling the issuer to receive more than 10percent of the dividends or distributions to the holders of theequity securities of the person or company, or more than 10percent of the amount to be distributed to the holders of equitysecurities of the person or company on the liquidation or windingup of the person or company; and

(ii) either:

(A) that, together with its related issuers:

(I) is entitled to nominate at least 20 percent of thedirectors of the issuer or of a related issuer of the issuer; or

(II) has officers, directors or employees who are also directorsof the issuer or a related issuer of the issuer, constituting atleast 20 percent of the directors of the issuer or of the relatedissuer; or

(B) of which the issuer, together with its related issuers:

(I) is entitled to nominate at least 20 percent of thedirectors of the person or company or at least 20 percent ofthe directors of a related issuer of the person or company; or

(II) has officers, directors or employees who are also directorsof the person or company or a related issuer of the person orcompany, constituting at least 20 percent of the directors ofthe person or company or of the related issuer of the personor company; or

(d) if a professional group is within paragraph (a) or (b), the specified firmspecified firm registrant of the professional group;

“professional group” means a group comprised of a specified firm registrantand all of the following persons or companies:

(a) any employee of the specified firm registrant;

(b) any partner, officer or director of the specified firm registrant;

(c) any affiliate of the specified firm registrant;

(d) any associated party of any person or company described inparagraphs (a) through (c) or of the specified firm registrant;

“related issuer” means a party described in subsection 1.2(2);




“special warrant” means a security that, by its terms or the terms of anaccompanying contractual obligation, entitles or requires the holder to acquireanother security without payment of material additional consideration andobliges the issuer of the special warrant or the other security to undertake effortsto file a prospectus to qualify the distribution of the other security; and

“specified firm registrant” means a person or company registered, or requiredto be registered, under securities legislation as a registered dealer, registeredadviser or registered investment fund manager.

1.2 Interpretation

(1) For the purposes of calculating a percentage of securities that are owned,held or under the direction of a person or company in the definition of“influential securityholder”:

(a) the determination shall be made:

(i) first, by including in the calculation only voting securities or equitysecurities that are outstanding;

and

(ii) second, if the person or company is not an influential securityholderby reason of a calculation under subparagraph (i), by including allvoting securities or equity securities that would be outstanding if alloutstanding securities that are convertible or exchangeable into votingsecurities or equity securities, and all outstanding rights to acquiresecurities that are convertible into, exchangeable for, or carry the rightto acquire, voting securities or equity securities, are considered to havebeen converted, exchanged or exercised, as the case may be; and

(b) securities held by a specified firm registrant in its capacity as anunderwriter in the course of a distribution are considered not to be securitiesthat the specified firm registrant holds, has the power to direct the voting of,or has direct or indirect beneficial ownership of.

(2) A person or company is a “related issuer” of another person or company if:

(a) the person or company is an influential securityholder of the otherperson or company;

(b) the other person or company is an influential securityholder of theperson or company; or

(c) each of them is a related issuer of the same third person or company.

(3) Calculations of time required to be made in this Instrument in relation to a“distribution” shall be made in relation to the date on which the underwriting oragency agreement for the distribution is signed.

1.3 Application of Instrument - This Instrument does not apply to a distributionof:

(a) securities described in the provisions of securities legislation listed inAppendix A; or

(b) mutual fund securities.




PART 2 RESTRICTIONS ON UNDERWRITING

2.1 Restrictions on Underwriting

(1) No specified firm registrant shall act as an underwriter in a distribution ofsecurities in which it is the issuer or selling securityholder, or as a directunderwriter in a distribution of securities of or by a connected issuer or a relatedissuer of the specified firm registrant, unless the distribution is made under aprospectus or another document that, in either case, contains the informationspecified in Appendix C.

(2) For a distribution of special warrants or a distribution made under aprospectus, no specified firm registrant shall act:

(a) as an underwriter if the specified firm registrant is the issuer or sellingsecurityholder in the distribution; or

(b) as a direct underwriter if a related issuer of the specified firm registrantis the issuer or selling securityholder in the distribution.

(3) Subsection (2) does not apply to a distribution:

(a) in which:

(i) at least one specified firm registrant acting as direct underwriteracts as principal, so long as an independent underwriter underwritesnot less than the lesser of:

(A) 20 percent of the dollar value of the distribution; and

(B) the largest portion of the distribution underwritten by aspecified firm registrant that is not an independent underwriter;or

(ii) each specified firm registrant acting as direct underwriter acts asagent and is not obligated to act as principal, so long as an independentunderwriter receives a portion of the total agents’ fees equal to anamount not less than the lesser of:

(A) 20 percent of the total agents’ fees for the distribution; and

(B) the largest portion of the agents’ fees paid or payable to aspecified firm registrant that is not an independent underwriter;and

(b) the identity of the independent underwriter and disclosure of the role ofthe independent underwriter in the structuring and pricing of the distributionand in the due diligence activities performed by the underwriters for thedistribution is contained in:

(i) a document relating to the special warrants that is delivered to thepurchaser of the special warrants before that purchaser enters into abinding agreement of purchase and sale for the special warrants, for adistribution of special warrants; or

(ii) the prospectus, for a distribution made under a prospectus.




2.2 Calculation Rules - The following rules shall be followed in calculating the sizeof a distribution and the amount of independent underwriter involvement required forpurposes of subsection 2.1(3):

(a) For a distribution that is made entirely in Canada, the calculation shallbe based on the aggregate dollar value of securities distributed in Canada orthe aggregate agents’ fees relating to the distribution in Canada, and theaggregate dollar value of the distribution underwritten, or aggregate dollarvalue of agents’ fees received, by the independent underwriter in Canada.

(b) For a distribution that is made partly in Canada of securities of anissuer that is not a foreign issuer, the calculation shall be based on theaggregate dollar value of securities distributed in Canada and outside ofCanada or the aggregate agents’ fees relating to the distribution in Canadaand outside of Canada, and the aggregate dollar value of the distributionunderwritten, or aggregate dollar value of agents’ fees received, by theindependent underwriter in Canada and outside of Canada.

(c) For a distribution that is made partly in Canada by a foreign issuer andthat is not exempt from the requirements of subsection 2.1(2) bysubsection 2.1(3) or by section 3.2, the calculation shall be based on thedollar value of securities distributed in Canada or the agents’ fees relating tothe distribution paid or payable in Canada, and the dollar value of thedistribution underwritten, or aggregate dollar value of agents’ fees received,by the independent underwriter in Canada.

PART 3 NON-DISCRETIONARY EXEMPTIONS

3.1 Exemption from Disclosure Requirement - Subsection 2.1(1) does not apply to adistribution that:

(a) is made under a document other than a prospectus if each of thepurchasers of the securities:

(i) is a related issuer of the specified firm registrant;

(ii) purchases as principal; and

(iii) does not purchase as underwriter; or

(b) is made under section 2.8 of National Instrument 45-102 Resale ofSecurities.

3.2 Exemption from Independent Underwriter Requirement - Subsection 2.1(2)does not apply to a distribution of securities of a foreign issuer if more than 85 percentof the aggregate dollar value of the distribution is made outside of Canada or if morethan 85 percent of the agents’ fees relating to the distribution are paid or payableoutside of Canada.




PART 4 VALUATION REQUIREMENT

4.1 Valuation Requirement - A purchaser of securities offered in a distribution forwhich information is required to be given under subsection 2.1(1) shall be given adocument that contains a summary of a valuation of the issuer by a member of theCanadian Institute of Chartered Business Valuators, a chartered accountant or by aregistered dealer of which the issuer is not a related issuer, and that specifies areasonable time and place at which the valuation may be inspected during thedistribution, if:

(a) the issuer in the distribution:

(i) is not a reporting issuer;

(ii) is a registered dealer, or an issuer all or substantially all of whoseassets are securities of a registered dealer;

(iii) is issuing voting securities or equity securities; and

(iv) is effecting the distribution other than under a prospectus; and

(b) there is no independent underwriter that satisfies subsection 2.1(3).

PART 5 EXEMPTION

5.1 Exemption



5.2 Evidence of Exemption - Without limiting the manner in which an exemptionunder section 5.1 may be evidenced, the issuance by the regulator of a receipt for aprospectus or an amendment to a prospectus is evidence of the granting of theexemption if:

(a) the person or company that sought the exemption has delivered to theregulator, on or before the date that the preliminary prospectus or an amendmentto the preliminary prospectus was filed, a letter or memorandum describing thematters relating to the exemption and indicating why consideration should begiven to the granting of the exemption; and

(b) the regulator has not sent written notice to the contrary to the person orcompany that sought the exemption before, or concurrent with, the issuance of thereceipt.





APPENDIX A

EXEMPT SECURITIES

Jurisdiction Section Legislation Reference

All Sections 2.20, 2.21, 2.35, 2.38 and 2.39 of NationalInstrument 45-106 Prospectus and RegistrationExemptions

All except Ontario Sections 2.34, 2.36 and 2.37 of National Instrument45-106 Prospectus and Registration Exemptions

Alberta Section 87(h), (h.1) and (h.2) of the Securities Act(Alberta)

Manitoba Subsection 19(2)(g) and (h) of the Securities Act(Manitoba)

Newfoundland and Labrador Subsections 36(2)(h) and (i) of the Securities Act(Newfoundland and Labrador)

Nova Scotia Clause 41(2)(i) of the Securities Act (Nova Scotia)

Ontario Paragraphs 73(1)(a) and (b) of the Securities Act(Ontario)

Sections 2.4 to 2.6 of OSC Rule45-501 Paragraphs 2.34(2)(b),(d.1),(e) and (f) of NationalInstrument 45-106 Prospectus and RegistrationExemptions

Prince Edward Island Subsection 2(4)(f) and (g) of the Securities Act (PrinceEdward Island)

Quebec Section 41 of the Securities Act (Québec)

Saskatchewan Subsection 39(2)(i) and (j) of The Securities Act, 1988(Saskatchewan)





APPENDIX C

REQUIRED INFORMATION

REQUIRED INFORMATION FOR THE FRONT PAGE OF THE PROSPECTUSOR OTHER DOCUMENT

1. A statement in bold type, naming the relevant specified firm registrant orregistrants, that the issuer or the selling securityholder is a connected issuer or arelated issuer of a specified firm registrant or registrants in connection with thedistribution.

2. A summary, naming the relevant specified firm registrant or registrants, of thebasis on which the issuer or selling securityholder is a connected issuer or a relatedissuer of the specified firm registrant or registrants.

3. A cross-reference to the applicable section in the body of the prospectus or otherdocument where further information concerning the relationship between the issuer orselling securityholder and specified firm registrant or registrants is provided.

REQUIRED INFORMATION FOR THE BODY OF THE PROSPECTUS OROTHER DOCUMENT

4. A statement, naming the relevant specified firm registrant or registrants, that theissuer or the selling securityholder is a connected issuer or a related issuer of aspecified firm registrant or registrants for the distribution.

5. The basis on which the issuer or selling securityholder is a connected issuer or arelated issuer for each specified firm registrant referred to in paragraph 4, including:

(a) if the issuer or selling securityholder is a related issuer of the specified firmregistrant, the details of the holding, power to direct voting, or direct or indirectbeneficial ownership of, securities that cause the issuer or selling securityholderto be a related issuer;

(b) if the issuer or selling securityholder is a connected issuer of the specifiedfirm registrant because of indebtedness, the disclosure required by paragraph 6 ofthis Appendix; and

(c) if the issuer or selling securityholder is a connected issuer of the specifiedfirm registrant because of a relationship other than indebtedness, the details ofthat relationship.

6. If the issuer or selling securityholder is a connected issuer of the specified firmregistrant because of indebtedness:

(a) the amount of the indebtedness;

(b) the extent to which the issuer or selling securityholder is in compliance withthe terms of the agreement governing the indebtedness;

(c) the extent to which a related issuer has waived a breach of the agreementsince its execution;

(d) the nature of any security for the indebtedness; and

(e) the extent to which the financial position of the issuer or selling securityholderor the value of the security has changed since the indebtedness was incurred.




7. The involvement of each specified firm registrant referred to in paragraph 4 and ofeach related issuer of the specified firm registrant in the decision to distribute thesecurities being offered and the determination of the terms of the distribution,including disclosure concerning whether the issue was required, suggested or consentedto by the specified firm registrant or a related issuer of the specified firm registrantand, if so, on what basis.

8. The effect of the issue on each specified firm registrant referred to in paragraph 4and each related issuer of that specified firm registrant, including:

(a) information about the extent to which the proceeds of the issue will beapplied, directly or indirectly, for the benefit of the specified firm registrant or arelated issuer of the specified firm registrant; or

(b) if the proceeds will not be applied for the benefit of the specified firmregistrant or a related issuer of the specified firm registrant, a statement to thateffect.

9. If a portion of the proceeds of the distribution is to be directly or indirectly appliedto or towards:

(a) the payment of indebtedness or interest owed by the issuer, an associate orrelated issuer of the issuer, a person or company of which the issuer is anassociate, the selling securityholder, an associate or related issuer of the sellingsecurityholder, a person or company of which the selling securityholder is anassociate, to the specified firm registrant or a related issuer of the specified firmregistrant; or

(b) the redemption, purchase for cancellation or for treasury, or other retirementof shares other than equity securities of the issuer, an associate or related issuerof the issuer, a person or company of which the issuer is an associate, the sellingsecurityholder, an associate or related issuer of the selling securityholder, or of aperson or company of which the selling securityholder is an associate, held by thespecified firm registrant or a related issuer of the specified firm registrantparticulars of the indebtedness or shares in respect of which the payment is to bemade and of the payment proposed to be made.

10. Any other material facts with respect to the relationship or connection betweeneach specified firm registrant referred to in paragraph 4, a related issuer of eachspecified firm registrant and the issuer that are not required to be described by theforegoing.

SPECIFIED FIRM REGISTRANT AS ISSUER OR SELLINGSECURITYHOLDER

11. If the specified firm registrant is the issuer or selling securityholder in thedistribution, then the information required by this Appendix shall be provided to theextent applicable.

23 Sep 2005 SR 100/2005 s10; 2 Oct 2009 SR81/2009 s14.




PART XLV[Clause 2(ss)]

NATIONAL INSTRUMENT 81-107INDEPENDENT REVIEW COMMITTEE FOR INVESTMENT FUNDS

Introduction

This National Instrument (the Instrument) contains both rules and accompanyingcommentary on those rules. The Canadian Securities Administrators (the CSA orwe), have made these rules under authority granted by the securities legislation oftheir jurisdiction.

The commentary may explain the implications of a rule, offer examples or indicatedifferent ways to comply with a rule. It may expand on a particular subjectwithout being exhaustive. The commentary is not legally binding, but it does reflectthe views of the CSA. Commentary always appears in italic type and, outside ofthis introduction, is titled ‘Commentary’.


1.1 Investment funds subject to Instrument

(1) This Instrument applies to an investment fund that is a reporting issuer.

(2) In Québec, this Instrument does not apply to a reporting issuer organizedunder:

(a) an Act to establish the Fonds de solidarité des travailleurs du Québec(F.T.Q.) R.S.Q., chapter F-3.2.1;

(b) an Act to establish Fondaction, le Fonds de dévelopement de laConfédération des syndicats nationaux pour la coopération et l’emploi(R.S.Q., chapter F-3.1.2); and

(c) an Act constituting Capital régional et coopératif Desjardins (R.S.Q.,chapter C-6.1).

Commentary

1 This Instrument applies to all publicly offered mutual funds and non-redeemable investment funds. Investment funds subject to this Instrument include:

- labour sponsored or venture capital funds;

- scholarship plans;

- mutual funds and closed-end funds listed and posted for trading on astock exchange or quoted on an over-the-counter market; and

- investment funds not governed by National Instrument 81-102 MutualFunds (NI 81-102).

2 This Instrument does not regulate mutual funds that are not reporting issuers(commonly referred to as pooled funds), for example, mutual funds that sellsecurities to the public only under capital raising exemptions in securitieslegislation.




1.2 Definition of conflict of interest matter

In this Instrument, “a conflict of interest matter” means:

(a) a situation where a reasonable person would consider a manager, or anentity related to the manager, to have an interest that may conflict with themanager’s ability to act in good faith and in the best interests of theinvestment fund; or

(b) a conflict of interest or self-dealing provision listed in Appendix A thatrestricts or prohibits an investment fund, a manager or an entity related tothe manager from proceeding with a proposed action.

Commentary

1 Section 5.1 of this Instrument requires that a manager refer all conflict ofinterest matters to the independent review committee (IRC).

2 The CSA do not consider the “reasonable person” test described in clause (a) tocapture inconsequential matters. It is expected that, among the factors themanager will look to for guidance to identify conflict of interest matters caught bythis Instrument will be industry best practices. The CSA expect, however, eachmanager to consider the nature of its investment fund operations when making itsdecisions about which conflict of interest matters it faces for the funds it manages.

3 The types of conflicts of interest faced by the portfolio manager or portfolioadviser (or sub-adviser) or any other entity related to the manager this Instrumentcaptures relate to the decisions made on behalf of the investment fund that mayaffect or influence the manager’s ability to make decisions in good faith and in thebest interests of the investment fund. This Instrument is not intended to capture theconflicts of interest at the service provider level generally.

The CSA expect the manager to consider whether a particular portfolio manager orportfolio adviser or any other ‘entity related to the manager’ would have anyconflicts of interest falling within the definition.

For example, clause (a) might, depending on the circumstances, capture theseconflicts of the portfolio manager or portfolio adviser:

- portfolio management processes for the investment fund, includingallocation of investments among a family of investment funds; and

- trading practices for the investment fund, including negotiating softdollar arrangements with dealers with whom the adviser places portfoliotransactions for the investment fund.

4 The CSA contemplate that an “entity related to the manager” will have its ownpolicies and procedures to address any conflicts of interest in its operations. It isexpected the manager will make reasonable inquiries of these policies andprocedures. The conflicts of interest facing these entities, including any third partyportfolio manager or portfolio adviser, may affect, or be perceived to affect, themanager’s ability to make decisions in the best interests of the investment fund.The manager is expected to refer such conflicts to the IRC under this Instrument.




5 For greater certainty, clause (b) requires that a “conflict of interest matter”includes any course of action that the investment fund, the manager or an entityrelated to the manager would otherwise be restricted or prohibited from proceedingwith because of a conflict of interest or self-dealing prohibition in securitieslegislation. These include the types of transactions described under subsection 5.2(1)of this Instrument.

1.3 Definition of entity related to the manager

In this Instrument, “entity related to the manager” means:

(a) a person or company that can direct or materially affect the direction ofthe management and policies of the manager or the investment fund, otherthan as a member of the independent review committee; or

(b) an associate, affiliate, partner, director, officer or subsidiary of themanager or of a person or company referred to in paragraph (a).

Commentary

1 The CSA consider an ‘entity related to the manager’ in clause (a) to include:

- the portfolio manager or portfolio adviser (or sub-adviser) of the investmentfund, including any third party portfolio manager or portfolio adviser;

- the administrator of a scholarship plan; and

- any person or company that can materially direct or affect the manager’smanagement or policies, including through contractual agreements orownership of voting securities.

1.4 Definition of independent

(1) In this Instrument, a member of the independent review committee is“independent” if the member has no material relationship with the manager,the investment fund, or an entity related to the manager.

(2) For the purposes of subsection (1), a material relationship means arelationship which could reasonably be perceived to interfere with the member’sjudgment regarding a conflict of interest matter.

Commentary

1 Under subsection 3.7(3), all members of the IRC must be independent of themanager, the investment fund and entities related to the manager. The CSA believethat all members must be independent because the principal function of the IRC isto review activities and transactions that involve inherent conflicts of interestbetween an investment fund and its manager. Given this role, it is important thatthe members of the IRC are free from conflicting loyalties.

2 While the members of the IRC should not themselves be subject to inherentconflicts or divided loyalties, the CSA recognize that there may be inherentconflicts relating to inter-fund issues where a single IRC acts for a family ofinvestment funds. In those cases, this Instrument requires members to conductthemselves in accordance with their written charter and in accordance with thestandard of care set out in this Instrument.

The CSA do not consider the IRC’s ability to set its own reasonable compensation tobe a material relationship with the manager or investment fund undersubsection 1.4(1).




3 A material relationship referred to in subsection 1.4(1) may include anownership, commercial, charitable, industrial, banking, consulting, legal,accounting or familial relationship. The CSA expect managers and IRC membersto consider both past and current relationships when determining whether amaterial relationship exists.

For example, depending on the circumstances, the following individuals may beindependent under section 1.4:

- an independent member of an existing advisory board or IRC of aninvestment fund;

- an independent member or former independent member of the board ofdirectors, or of a special committee of the board of directors, of an investmentfund;

- a former independent member of the board of directors, or specialcommittee of the board of directors, of the manager;

- an individual appointed as a trustee for an investment fund; and

- an independent member of the board of directors, or of a special committeeof the board of directors, of a registered trust company that acts as trustee foran investment fund.

By way of further example, the CSA consider it unlikely that the followingindividuals would be independent under section 1.4:

- a person who is or has recently been an employee or executive officer of themanager or investment fund; and

- a person whose immediate family member is or has recently been anexecutive officer of the manager or investment fund.

The CSA also consider that it would be rare that a member of the board ofdirectors, or special committee of the board of directors, of a manager could be“independent” within the meaning of this Instrument. One such example of when amember of the board of directors of a manager could be “independent” may beowner-operated investment funds, sold exclusively to defined groups of investors,such as members of a trade or professional association or co-operative organization,who directly or indirectly, own the manager. In the case of these investment funds,the CSA view the interests of the independent members of the board of directors ofthe manager and investors as aligned.

1.5 Definition of inter-fund self-dealing investment prohibitions

In this Instrument, “inter-fund self-dealing investment prohibitions” meansthe provisions listed in Appendix B that prohibit:

(a) a portfolio manager from knowingly causing any investment portfoliomanaged by it to purchase or sell; or

(b) an investment fund from purchasing or selling;

the securities of an issuer from or to the account of a responsible person, anassociate of a responsible person or the portfolio manager.




1.6 Definition of manager

In this Instrument, “manager” means a person or company that directs thebusiness, operations and affairs of an investment fund.

Commentary

1 The CSA are of the view that the term “manager” should be interpreted broadly.

The term “manager” is intended to include a group of members on the board of aninvestment fund or the general partner of an investment fund organized as alimited partnership, where it acts in the capacity of ‘manager’/decision-maker.

2 The CSA have, in connection with prospectus reviews, on occasion encounteredinvestment funds structured in unusual ways. The CSA may examine aninvestment fund if it seems that it was structured to avoid the operation of thisInstrument.

1.7 Definition of standing instruction

In this Instrument, “standing instruction” means a written approval orrecommendation from the independent review committee that permits themanager to proceed with a proposed action under section 5.2 or 5.3 on an ongoingbasis.

PART 2 FUNCTIONS OF THE MANAGER

2.1 Manager standard of care

A manager in exercising its powers and discharging its duties related to themanagement of the investment fund must:

(a) act honestly and in good faith, and in the best interests of the investmentfund; and

(b) exercise the degree of care, diligence and skill that a reasonably prudentperson would exercise in comparable circumstances.

Commentary

1 This section introduces a required standard of care for managers in certainjurisdictions and is intended to create a uniform standard of care provision formanagers of investment funds subject to this Instrument.

2.2 Manager to have written policies and procedures

(1) Before proceeding with a conflict of interest matter or any other matter thatsecurities legislation requires the manager to refer to the independent reviewcommittee, the manager must:

(a) establish written policies and procedures that it must follow on thatmatter or on that type of matter, having regard to its duties under securitieslegislation; and

(b) refer the policies and procedures to the independent review committeefor its review and input.

(2) In establishing the written policies and procedures described in subsection (1),the manager must consider the input of the independent review committee, if any.




(3) The manager may revise its policies and procedures if it provides theindependent review committee with a written description of any significantchanges for the independent review committee’s review and input beforeimplementing the revisions.

Commentary

1 Section 2.2 contemplates that a manager should identify for each investmentfund the conflict of interest matters it expects will arise and that will be required tobe referred to the IRC under section 5.1, and review its policies and procedures forthose matters with the IRC.

Section 2.2 further requires the manager to establish policies and procedures forother matters it expects will arise and that will be required by securities legislationto be referred to the IRC, for example, certain reorganizations and transfers ofassets between related mutual funds under Part 5 of NI 81-102.

2 A manager is expected to establish policies and procedures that are consistentwith its obligations to the investment fund under securities legislation to makedecisions in the best interests of the fund. Clause (1)(a) is intended to reinforce thisobligation.

A manager that manages more than one investment fund may establish policiesand procedures for an action or category of actions for all of the investment funds itmanages. Alternatively, the manager may establish separate policies and proceduresfor the action or category of actions for each of its investment funds, or groups of itsinvestment funds.

However structured, the CSA expect the written policies and procedures themanager establishes to be designed to prevent any violations by the manager andthe investment fund of securities legislation in the areas that this Instrumentaddresses, and to detect and promptly correct any violations that occur.

3 A manager is expected to follow the policies and procedures established underthis section. In referring a matter to the IRC under section 5.1, the CSA expect themanager to inform the IRC whether its proposed action follows its written policiesand procedures on the matter.

If an unanticipated conflict of interest matter arises for which the manager doesnot have a policy and procedure, the CSA expect the manager to bring the matterand its proposed action to the IRC for its review and input at the time the matter isreferred to the IRC.

4 Small investment fund families may require fewer written policies andprocedures than large fund complexes that, for example, have conflicts of interestas a result of affiliations with other financial service firms.

2.3 Manager to maintain records

A manager must maintain a record of any activity that is subject to the review ofthe independent review committee, including:

(a) a copy of the policies and procedures that address the matter;

(b) minutes of its meetings, if any; and

(c) copies of materials, including any written reports, provided to theindependent review committee.




Commentary

1 This section is intended to assist the CSA in determining whether the manageris adhering to this Instrument, and in identifying weaknesses in the manager’spolicies and procedures if violations do occur. The CSA expect managers to keeprecords in accordance with existing best practices.

2 A manager is expected under this section to keep minutes only of any materialdiscussions it has at meetings with the IRC or internally on matters subject to thereview of the IRC.

The CSA do not view this section or this Instrument as preventing the IRC andmanager from sharing record keeping and maintaining joint records of IRC andmanager meetings.

3 The CSA expect a manager to keep records of the actions it takes in respect of amatter referred to the IRC. This includes any otherwise restricted or prohibitedtransactions described in subsection 5.2(1) for which the manager requires theIRC’s approval under Part 6 of this Instrument or under Part 4 of NI 81-102.

2.4 Manager to provide assistance

(1) When a manager refers to the independent review committee a conflict ofinterest matter or any other matter that securities legislation requires it to refer,or refers its policies and procedures related to such matters, the manager must:

(a) provide the independent review committee with information sufficientfor the independent review committee to properly carry out its responsibilities,including:

(i) a description of the facts and circumstances giving rise to thematter;

(ii) the manager’s policies and procedures;

(iii) the manager’s proposed course of action, if applicable; and

(iv) all further information the independent review committeereasonably requests;

(b) make its officers who are knowledgeable about the matter available toattend meetings of the independent review committee or respond toinquiries of the independent review committee about the matter; and

(c) provide the independent review committee with any other assistance itreasonably requests in its review of the matter.

(2) A manager must not prevent or attempt to prevent the independent reviewcommittee, or a member of the independent review committee, from communicatingwith the securities regulatory authority or regulator.




PART 3 INDEPENDENT REVIEW COMMITTEE

3.1 Independent review committee for an investment fund

An investment fund must have an independent review committee.

Commentary

1 A manager is expected to establish an IRC using a structure that is appropriatefor the investment funds it manages, having regard to the expected workload ofthat committee. For example, a manager may establish one IRC for each of theinvestment funds it manages, for several of its investment funds or for all of itsinvestment funds.

2 This Instrument does not prevent investment funds from sharing an IRC withinvestment funds managed by another manager. This Instrument also does notprevent a third party from offering IRCs for investment funds. Managers ofsmaller families of investment funds may find these to be cost-effective ways toestablish IRCs for their investment funds.

3.2 Initial appointments

The manager must appoint each member of an investment fund’s first independentreview committee.

3.3 Vacancies and reappointments

(1) An independent review committee must fill a vacancy on the independentreview committee as soon as practicable.

(2) A member whose term has expired, or will soon expire, may be reappointedby the other members of the independent review committee.

(3) In filling a vacancy on the independent review committee or reappointing amember of the independent review committee, the independent review committeemust consider the manager’s recommendations, if any.

(4) A member may not be reappointed for a term or terms of office that, if served,would result in the member serving on the independent review committee forlonger than 6 years, unless the manager agrees to the reappointment.

(5) If, for any reason, an independent review committee has no members, themanager must appoint a member to fill each vacancy as soon as practicable.

Commentary

1 Consistent with the manager’s role to appoint the first members of an IRC, if atany time the IRC has no members, the manager will also appoint the replacementmembers. The CSA anticipate that the circumstances contemplated in subsection (5)will occur rarely, such as in the event of a change of manager or change in controlof the manager. In these circumstances, managers should consider their timelydisclosure obligations under securities legislation.

2 The manager may suggest candidates and may provide assistance to the IRC inthe selection and recruitment process when a vacancy arises. Subsection (3)requires the IRC to consider the manager’s recommendation, if any, when filling avacancy or reappointing a member of the IRC.




The CSA believe that allowing the IRC to select its own members and decide theterm a member can serve will foster independent-minded committees that will befocussed on the best interests of the investment fund. The CSA also consider themembers of the IRC to be best-positioned to judge the manner in which aprospective member can contribute to the effectiveness of the IRC.

3 The maximum term limit of 6 years specified in subsection (4) for a member toserve on an investment fund’s IRC is intended to enhance the independence andeffectiveness of the IRC. An IRC may reappoint a member beyond the maximumterm, but only with the agreement of the manager.

3.4 Term of office

The term of office of a member of an independent review committee must be notless than 1 year and not more than 3 years, and must be set by the manager or theindependent review committee, as the case may be, at the time the member isappointed.

Commentary

1 To ensure continuity and continued independence from the manager, the CSArecommend that the terms of all IRC members be staggered.

3.5 Nominating criteria

Before a member of the independent review committee is appointed, the manageror the independent review committee, as the case may be, must consider:

(a) the competencies and skills the independent review committee, as awhole, should possess;

(b) the competencies and skills of each other member of the independentreview committee; and

(c) the competencies and skills the prospective member would bring to theindependent review committee.

Commentary

1 Section 3.5 sets out the criteria the manager and the IRC must consider beforeappointing a member of the IRC. Subject to these requirements, the manager andthe IRC may establish nominating criteria in addition to those set out in thissection.

3.6 Written charter

(1) The independent review committee must adopt a written charter thatincludes its mandate, responsibilities and functions, and the policies andprocedures it will follow when performing its functions.

(2) If the independent review committee and the manager agree in writing thatthe independent review committee will perform functions other than thoseprescribed by securities legislation, the charter must include a description of thefunctions that are the subject of the agreement.

(3) In adopting the charter, the independent review committee must considerthe manager’s recommendations, if any.




Commentary

1 The CSA expect the written charter to set out the necessary policies andprocedures to ensure the IRC performs its role adequately and effectively and incompliance with this Instrument. An IRC acting for more than one investmentfund may choose to establish a separate charter for each fund. Alternatively, anIRC may choose to establish one charter for all of the investment funds it overseesor groups of investment funds.

2 The IRC should consider the specific matters subject to its review whendeveloping the policies and procedures to be set out in its charter.

3 Without discussing all of the policies and procedures that may be set out in thewritten charter, the CSA expect that the written charter will include the following:

- policies and procedures the IRC must follow when reviewing conflict ofinterest matters, criteria for the IRC to consider in setting its compensationand expenses and the compensation and expenses of any advisors employedby the IRC,

- a policy relating to IRC member ownership of securities of the investmentfund, manager or in any person or company that provides services to theinvestment fund or the manager,

- policies and procedures that describe how a member of the IRC is toconduct himself or herself when he or she faces a conflict of interest, or couldbe perceived to face a conflict of interest, with respect to a matter beingconsidered or to be considered by the IRC,

- policies and procedures that describe how the IRC is to interact with anyexisting advisory board or board of directors of the investment fund and themanager, and

- policies and procedures that describe how any subcommittee of the IRC towhich has been delegated any of the functions of the IRC, is to report to theIRC.

4 The manager and the IRC may agree that the IRC will perform functions inaddition to those prescribed by this Instrument and elsewhere in securitieslegislation. This Instrument does not preclude those arrangements, nor does thisInstrument regulate those arrangements.

3.7 Composition

(1) An independent review committee must have at least three members.

(2) The size of the independent review committee is to be determined by themanager, with a view to facilitating effective decision-making, and may only bechanged by the manager.

(3) Every independent review committee member must be independent.

(4) An independent review committee must appoint a member as Chair.

(5) The Chair of an independent review committee is responsible for managingthe mandate, and responsibilities and functions, of the independent reviewcommittee.




Commentary

1 To ensure its effectiveness, a manager should consider the workload of the IRCwhen determining its size. The CSA expect that the manager will seek the input ofthe IRC prior to changing the size of the IRC.

2 The CSA anticipate that the Chair of the IRC will lead IRC meetings, fostercommunication among IRC members, and ensure the IRC carries out itsresponsibilities in a timely and effective manner.

The CSA expect the IRC Chair will be the primary person to interact with themanager on issues relating to the investment fund. An IRC Chair and the managermay agree to have regular communication as a way for the IRC Chair to keepinformed of the operations of the investment fund between meetings, and of anysignificant events relating to the investment fund.

3 The requirement that all members of the IRC be independent does not precludethe IRC from consulting with others who can help the members understandmatters that are beyond their specific expertise, or help them understand industrypractices or trends, for example.

3.8 Compensation

(1) The manager may set the initial compensation and expenses of an independentreview committee that is appointed under section 3.2 or subsection 3.3(5).

(2) Subject to subsection (1), the independent review committee must setreasonable compensation and proper expenses for its members.

(3) When setting its compensation and expenses under subsection (2), theindependent review committee must consider:

(a) the independent review committee’s most recent assessment of itscompensation under clause 4.2(2)(b); and

(b) the manager’s recommendations, if any.

Commentary

1 This section permits the manager to determine the amount and type ofcompensation and expenses the IRC members will initially receive. To avoid undueinfluence from the manager, subsection (2) requires that, subsequent to the initialsetting of compensation and other than in the unusual circumstance described insubsection 3.3(5), members of the IRC have the sole authority for determining theircompensation. The Instrument permits the manager to recommend to the membersof the IRC the amount and type of compensation to be paid, and requires the IRC toconsider that recommendation.




2 The CSA expect the IRC and the manager to decide the IRC’s compensation in amanner consistent with good governance practices. Among the factors the IRC andthe manager should consider when determining the appropriate level ofcompensation are the following:

- the number, nature and complexity of the investment funds and the fundfamilies for which the IRC acts;

- the nature and extent of the workload of each member of the IRC,including the commitment of time and energy that is expected from eachmember;

- industry best practices, including industry averages and surveys on IRCcompensation; and

- the best interests of the investment fund.

3 The CSA expect that the IRC and the manager will discuss any instance wherethe IRC disagrees with the manager’s recommendations under clause (3)(b), in anattempt to reach an agreement that is satisfactory to both the IRC and themanager.

3.9 Standard of care

(1) Every member of an independent review committee, in exercising his or herpowers and discharging his or her duties related to the investment fund, and, forgreater certainty, not to any other person, as a member of the independent reviewcommittee must:

(a) act honestly and in good faith, with a view to the best interests of theinvestment fund; and

(b) exercise the degree of care, diligence and skill that a reasonablyprudent person would exercise in comparable circumstances.

(2) Every member of an independent review committee must comply with thisInstrument and the written charter of the independent review committeerequired under section 3.6.

(3) A member of the independent review committee does not breach clause (1)(b),if the member exercised the care, diligence and skill that a reasonably prudentperson would exercise in comparable circumstances, including reliance in goodfaith on:

(a) a report or certification represented as full and true to the independentreview committee by the manager or an entity related to the manager; or

(b) a report of a person whose profession lends credibility to a statementmade by the person.

(4) A member of the independent review committee has complied with his or herduties under clause (1)(a) if the member has relied in good faith on:

(a) a report or certification represented as full and true to the independentreview committee by the manager or an entity related to the manager; or

(b) a report of a person whose profession lends credibility to a statementmade by the person.




Commentary

1 The standard of care for IRC members under this section is consistent with thespecial relationship between the IRC and the investment fund.

The CSA consider the role of the members of the IRC to be similar to corporatedirectors, though with a much more limited mandate, and therefore we wouldexpect any defences available to corporate directors to also be available to IRCmembers.

2 The CSA consider the best interests of the investment fund referred to inclause(1)(a) to generally be consistent with the interests of the securityholders inthe investment fund as a whole.

3 It is not the intention of the CSA to create a duty of care on the part of the IRC toany other person under clause (1)(b).

3.10 Ceasing to be a member

(1) An individual ceases to be a member of an independent review committeewhen:

(a) the investment fund terminates;

(b) the manager of the investment fund changes, unless the new manageris an affiliate of the former manager; or

(c) there is a change of control of the manager of the investment fund.

(2) An individual ceases to be a member of an independent review committee if:

(a) the individual resigns;

(b) the individual’s term of office expires and the member is not reappointed;

(c) a majority of the other members of the independent review committeevote to remove the individual; or

(d) a majority of the securityholders of the investment fund vote to removethe individual at a special meeting called for that purpose by the manager.

(3) An individual ceases to be a member of the independent review committee ifthe individual is:

(a) no longer independent within the meaning of section 1.4 and the causeof the member’s non-independence is not temporary for which the membercan recuse himself or herself;

(b) of unsound mind and has been so found by a court in Canada orelsewhere;

(c) bankrupt;

(d) prohibited from acting as a director or officer of any issuer in Canada;

(e) subject to any penalties or sanctions made by a court relating toprovincial and territorial securities legislation; or

(f) a party to a settlement agreement with a provincial or territorialsecurities regulatory authority.




(4) If an individual ceases to be a member of the independent review committeedue to a circumstance described in subsection (2), the manager must, as soon aspracticable, notify the securities regulatory authority or regulator of the date andthe reason the individual ceased to be a member.

(5) The notification referred to in subsection (4) is satisfied if it is made to theinvestment fund’s principal regulator.

(6) The notice of a meeting of securityholders of an investment fund called toconsider the removal of a member under clause (2)(d) must comply with the noticerequirements set out in section 5.4 of National Instrument 81-102 Mutual Funds.

(7) For any member of the independent review committee who receives notice orotherwise learns of a meeting of securityholders called to consider the removal ofthe member under clause (2)(d):

(a) the member may submit to the manager a written statement givingreasons for opposing the removal; and

(b) the manager must, as soon as practicable, send a copy of the statementreferred to in clause (a) to every securityholder entitled to receive notice ofthe meeting and to the member unless the statement is included in orattached to the notice documents required by subsection (6).

Commentary

1 The CSA do not anticipate that the securityholder vote contemplated inclause 3.10(2)(d) will be routine. When a manager calls a meeting of securityholdersto consider the removal of a member, subsection (7) requires that the member willhave an opportunity to respond to the manager’s notice.

2 In the circumstances described in clauses 3.10(1)(b) and (c), all members of theIRC will cease to be members. This does not preclude the new manager fromreappointing the former members of the IRC under subsection 3.3(5).

3 Clause 3.10(3)(a) is meant to exclude a situation where a member may face, orbe perceived to face, a conflict of interest with respect to a specific conflict of interestmatter the IRC is considering.

3.11 Authority

(1) An independent review committee has authority to:

(a) request information it determines useful or necessary from the managerand its officers to carry out its duties;

(b) engage independent counsel and other advisors it determines useful ornecessary to carry out its duties;

(c) set reasonable compensation and proper expenses for any independentcounsel and other advisors engaged by the independent review committee;and

(d) delegate to a subcommittee of at least three members of the independentreview committee any of its functions, except the removal of a member underclause 3.10(2)(c).




(2) If the independent review committee delegates to a subcommittee underclause (1)(d) any of its functions, the subcommittee must report on its activities tothe independent review committee at least annually.

(3) Despite any other provision in this Instrument, an independent reviewcommittee may communicate directly with the securities regulatory authority orregulator with respect to any matter.

Commentary

1 The CSA recognize that utilizing the manager’s staff and industry experts maybe important to help the members of the IRC deal with matters that are beyond thelevel of their expertise, or help them understand different practices amonginvestment funds.

While this Instrument does not require legal counsel or other advisers for the IRCto be independent of the manager or the investment fund, there may be instanceswhen the members of the IRC believe they need access to counsel or advisers whoare free from conflicting loyalties. Clause (1)(b) gives the IRC the discretion andauthority to hire independent legal counsel and other advisers. The CSA expectthat the IRC will use independent advisors selectively and only to assist, notreplace, IRC decision-making. The CSA do not anticipate that IRCs will routinelyuse external counsel and other advisers.

2 Clause (1)(d) is intended to allow an IRC of more than three members todelegate any of its functions, except the removal of an IRC member, to asubcommittee of at least three members. The CSA expect in such instances that thewritten charter of the IRC will include a defined mandate and reportingrequirements for any subcommittee.

The CSA do not consider delegation by the IRC of a function to a subcommittee toabsolve the IRC from its responsibility for the function.

3 Subsection (3) specifies that the IRC may inform the securities regulatoryauthority or regulator of any concerns or issues that it may not otherwise berequired to report. For example, the IRC may be concerned if very few matters havebeen referred by the manager for review, or it may have found, or have reasonablegrounds to suspect, a breach of securities legislation has occurred. However, theIRC has no obligation to report matters other than those prescribed by thisInstrument or elsewhere in securities legislation.

4 The CSA do not consider that this section or this Instrument prevents themanager from communicating with the securities regulatory authorities withrespect to any matter.

3.12 Decisions

(1) A decision by the independent review committee on a conflict of interestmatter or any other matter that securities legislation requires the independentreview committee to review requires the agreement of a majority of theindependent review committee’s members.

(2) If, for any reason, an independent review committee has two members, adecision by the independent review committee must be unanimous.

(3) An independent review committee with one member may not make adecision.




Commentary

1 This section requires a decision of the members of the IRC to represent themajority. Should the IRC find itself with two members, subsection (2) permits theIRC to continue to make decisions on conflict of interest matters provided theremaining two members agree.

3.13 Fees and expenses to be paid by the investment fund

The investment fund must pay from the assets of its fund all reasonable costs andexpenses reasonably incurred in the compliance of this Instrument.

Commentary

1 A manager is expected to allocate the costs associated with the IRC on anequitable and reasonable basis amongst the investment funds for which the IRCacts.

This Instrument does not prohibit a manager from reimbursing the investmentfund for any of the costs associated with compliance with this Instrument. It isexpected that the prospectus will disclose whether or not the manager willreimburse the investment fund.

2 The CSA do not expect costs that the manager or investment fund wouldordinarily incur in the operation of the investment fund without the presence of theIRC (for example, rent) to be charged to the investment fund under this section.Among the costs the CSA expect will be charged to the investment fund under thissection are the following:

- the compensation and expenses payable to the members of the IRC and toany independent counsel and other advisers employed by the IRC;

- the costs of the orientation and continuing education of the members of theIRC; and

- the costs and expenses associated with a special meeting of securityholderscalled by the manager to remove a member or members of the IRC.

3.14 Indemnification and insurance

(1) In this section, ‘member’ means:

(a) a member of the independent review committee;

(b) a former member of the independent review committee; and

(c) the heirs, executors, administrators or other legal representatives of theestate of an individual in clause (a) or (b).

(2) An investment fund and manager may indemnify a member against all costs,charges and expenses, including an amount paid to settle an action or satisfy ajudgment, reasonably incurred by the person in respect of any civil, criminal,administrative, investigative or other proceeding in which the member is involvedbecause of being or having been a member.

(3) An investment fund and manager may advance moneys to a member for thecosts, charges and expenses of a proceeding referred to in subsection (2). Themember must repay the moneys if the member does not fulfill the conditions ofsubsection (4).




(4) An investment fund and manager may not indemnify a member undersubsection (2) unless:

(a) the member acted honestly and in good faith, with a view to the bestinterests of the investment fund; and

(b) in the case of a criminal or administrative action or proceeding that isenforced by a monetary penalty, the member had reasonable grounds forbelieving that the individual’s conduct was lawful.

(5) Despite subsection (2), a member referred to in that subsection is entitled toan indemnity from the investment fund in respect of all costs, charges andexpenses reasonably incurred by the member in connection with the defence ofany civil, criminal, administrative, investigative or other proceeding to which themember is subject because of the member’s association with the investment fundas described in subsection (2), if the member seeking indemnity:

(a) was not judged by the court or other competent authority to havecommitted any fault or omitted to do anything that ought to have been done;and

(b) fulfills the conditions set out in subsection (4).

(6) An investment fund and manager may purchase and maintain insurance forthe benefit of any member referred to in subsection (2) against any liabilityincurred by the member in his or her capacity as a member.

Commentary

1 This Instrument requires that members of an IRC be accountable for theiractions. At the same time, this section does not prevent an investment fund or amanager from limiting a member’s financial exposure through insurance andindemnification.

2 This section permits an investment fund and the manager to indemnify andpurchase insurance coverage for the members of the IRC on terms comparable tothose applicable to directors of corporations. The broad goals underlying theindemnity provisions are to allow for reimbursement for reasonable good faithbehaviour, thereby discouraging the hindsight application of perfection to theIRC’s actions.

Under this section, the investment fund is required to indemnify an IRC memberwho has been sued and has successfully defended the action, subject to certainconditions. If the IRC member does not defend the action successfully, theinvestment fund and manager may indemnify the member in certain circumstances.The intention of indemnity is to encourage responsible behaviour yet still permitenough leeway to attract strong candidates.

The two conditions which must be satisfied in either instance under this section foran IRC member to be indemnified are:

- the IRC member must have acted in a manner consistent with his or herfiduciary duty with respect to the action or matter for which the IRC memberis seeking the indemnification; and

- the IRC member must have had reasonable grounds for believing that hisor her conduct was lawful.

The CSA expect any such coverage to be on reasonable commercial terms.




3 It is open to members of the IRC to negotiate contractual indemnities with themanager and the investment fund provided the protection is permissible underthis section.

3.15 Orientation and continuing education

(1) The manager and independent review committee must provide orientationconsisting of educational or informational programs that enable a new independentreview committee member to understand:

(a) the role of the independent review committee and its memberscollectively; and

(b) the role of the individual member.

(2) The manager may provide a member of the independent review committeewith educational or informational programs, as the manager considers useful ornecessary, that enable the member to understand the nature and operation of themanager’s and investment fund’s businesses.

(3) The independent review committee may reasonably supplement theeducational and informational programs provided to its members under thissection.

Commentary

1 The CSA expect members of the IRC to regularly participate in educational orinformational programs that may be useful to the members in understanding andfulfilling their duties.

Section 3.15 sets out only the minimum educational programs that a manager andIRC are expected to provide for members of the IRC. Educational activities couldinclude presentations, seminars or discussion groups conducted by:

- personnel of the investment fund or manager,

- outside experts,

- industry groups,

- representatives of the investment fund’s various service providers, and

- educational organizations and institutions.

2 The CSA expect a discussion of a member’s role referred to in paragraph (1)(b)to include a reference to the commitment of time and energy that is expected fromthe member.

PART 4 FUNCTIONS OF INDEPENDENT REVIEW COMMITTEE

4.1 Review of matters referred by manager

(1) The independent review committee must review and provide its decisionunder section 5.2 or under section 5.3 to the manager on a conflict of interestmatter that the manager refers to the independent review committee for review.

(2) The independent review committee must perform any other functionrequired by securities legislation.




(3) The independent review committee has the authority to choose whether todeliberate and decide on a matter referred to in subsections (1) and (2) in theabsence of the manager, any representative of the manager and any entity relatedto the manager.

(4) Despite subsection (3), an independent review committee must hold at leastone meeting annually at which the manager, any representative of the manageror any entity related to the manager are not in attendance.

(5) The independent review committee has no power, authority or responsibilityfor the operation of the investment fund or the manager except as provided in thissection.

Commentary

1 The Instrument requires the IRC only to consider matters referred to it by themanager that involve or may be perceived to involve a conflict of interest for themanager between its own interests and its duty to manage an investment fund.

Securities legislation also requires the IRC to consider other matters. For example,a change in a mutual fund’s auditor and certain reorganizations and transfers ofassets between related mutual funds under Part 5 of NI 81-102 require the reviewand prior approval of the IRC for the manager to proceed.

2 The manager and the IRC may agree that the IRC will perform functions inaddition to those prescribed by this Instrument and elsewhere in securitieslegislation. This Instrument does not preclude those arrangements, nor does thisInstrument regulate those arrangements.

3 Subsection (3) permits the IRC to decide who, other than IRC members, mayattend any IRC meeting other than the meeting referred to in subsection (4).Subsection (3) also does not preclude the IRC from receiving oral or writtensubmissions from the manager or from holding meetings with representatives ofthe manager or an entity related to the manager or any other person notindependent under this Instrument. The CSA believe utilizing the manager’s staffand industry experts may be important to help the members of the IRC understandmatters that are beyond their specific expertise, or to help them understanddifferent practices among investment funds.

4 The requirement that the IRC hold at least one meeting without anyone elsepresent (including management of the investment fund) is intended to give themembers of the IRC an opportunity to speak freely about any sensitive issues,including any concerns about the manager.

The CSA are of the view that subsection (4) is satisfied if the IRC holds a portion ofany meeting annually without the presence of the manager, any representative ofthe manager or any entity related to the manager.

4.2 Regular assessments

(1) At least annually, the independent review committee must review and assessthe adequacy and effectiveness of:

(a) the manager’s written policies and procedures required under section 2.2;

(b) any standing instruction it has provided to the manager undersection 5.4;




(c) the manager’s and the investment fund’s compliance with any conditionsimposed by the independent review committee in a recommendation orapproval it has provided to the manager; and

(d) any subcommittee to which the independent review committee hasdelegated, under clause 3.11(1)(d), any of its functions.

(2) At least annually, the independent review committee must review andassess:

(a) the independence of its members; and

(b) the compensation of its members.

(3) At least annually, the independent review committee must review and assessits effectiveness as a committee, as well as the effectiveness and contribution ofeach of its members.

(4) The review by the independent review committee required under subsection (3)must include a consideration of:

(a) the independent review committee’s written charter referred to insection 3.6;

(b) the competencies and knowledge each member is expected to bring tothe independent review committee;

(c) the level of complexity of the issues reasonably expected to be raised bymembers in connection with the matters under review by the independentreview committee; and

(d) the ability of each member to contribute the necessary time required toserve effectively on the independent review committee.

Commentary

1 Section 4.2 sets out the minimum assessments the independent review committeemust perform. Subject to these requirements, the IRC may establish a process for(and determine the frequency of) additional assessments as it sees fit.

2 The annual self-assessment by the IRC should improve performance bystrengthening each member’s understanding of his or her role and fostering bettercommunication and greater cohesiveness among members.

3 When evaluating individual performance, it is expected that the IRC considerfactors such as the member’s attendance and participation in meetings, continuingeducation activities and industry knowledge. The manager may also provide IRCmembers with feedback which the IRC may consider.

It is expected the self-assessment should focus on both substantive and proceduralaspects of the IRC’s operations. When evaluating the IRC’s structure andeffectiveness, the IRC should consider factors such as the following:

- the frequency of meetings;

- the substance of meeting agendas;

- the policies and procedures that the manager has established to refermatters to the IRC;

- the usefulness of the materials provided to the members of the IRC;




- the collective experience and background of the members of the IRC;

- the number of funds the IRC oversees; and

- the amount and form of compensation the members receive from anindividual investment fund and in aggregate from the fund family.

4 The CSA expect the members of an IRC to respond appropriately to address anyweaknesses found in a self-assessment. For example, it may be necessary toimprove the IRC members’ continuing education, recommend ways to improve thequality and sufficiency of the information provided to them, or recommend to themanager decreasing the number of investment funds under the IRC’s oversight.

In rare circumstances, the IRC may consider removing a member of the IRC ascontemplated under clause 3.10(2)(c) as a result of the self-assessment.

4.3 Reporting to the manager

The independent review committee must as soon as practicable deliver to themanager a written report of the results of an assessment under subsections 4.2(1)and (2) that includes:

(a) a description of each instance of a breach of any of the manager’spolicies or procedures of which the independent review committee is aware,or that it has reason to believe has occurred;

(b) a description of each instance of a breach of a condition imposed by theindependent review committee in a recommendation or approval it hasprovided to the manager, of which the independent review committee isaware, or that it has reason to believe has occurred; and

(c) recommendations for any changes the independent review committeeconsiders should be made to the manager’s policies and procedures.

4.4 Reporting to securityholders

(1) An independent review committee must prepare, for each financial year ofthe investment fund and no later than the date the investment fund files itsannual financial statements, a report to securityholders of the investment fundthat describes the independent review committee and its activities for thefinancial year and includes:

(a) the name of each member of the independent review committee at thedate of the report, with:

(i) the member’s length of service on the independent review committee;

(ii) the name of any other fund family on whose independent reviewcommittee the member serves; and

(iii) if applicable, a description of any relationship that may cause areasonable person to question the member’s independence and thebasis upon which the independent review committee determined thatthe member is independent;




(b) the percentage of securities of each class or series of voting or equitysecurities beneficially owned, directly or indirectly, in aggregate, by all themembers of the independent review committee of the investment fund:

(i) in the investment fund if the aggregate level of ownershipexceeds 10%;

(ii) in the manager; or

(iii) in any person or company that provides services to the investmentfund or the manager;

(c) the identity of the Chair of the independent review committee;

(d) any changes in the composition or membership of the independentreview committee during the period;

(e) the aggregate compensation paid to the independent review committeeand any indemnities paid to members of the independent review committeeby the investment fund during the period;

(f) a description of the process and criteria used by the independent reviewcommittee to determine the appropriate level of compensation of itsmembers and any instance when, in setting the compensation and expensesof its members, the independent review committee did not follow therecommendation of the manager, including:

(i) a summary of the manager’s recommendation; and

(ii) the independent review committee’s reasons for not following therecommendation;

(g) if known, a description of each instance when the manager acted in aconflict of interest matter referred to the independent review committee forwhich the independent review committee did not give a positiverecommendation, including:

(i) a summary of the recommendation; and

(ii) if known, the manager’s reasons for proceeding without followingthe recommendation of the independent review committee and theresult of proceeding;

(h) if known, a description of each instance when the manager acted in aconflict of interest matter but did not meet a condition imposed by theindependent review committee in its recommendation or approval, including:

(i) the nature of the condition;

(ii) if known, the manager’s reasons for not meeting the condition;

(iii) whether the independent review committee is of the view that themanager has taken, or proposes to take, appropriate action to deal withthe matter; and

(iv) a brief summary of any recommendations and approvals themanager relied upon during the period.




(2) The report required under subsection (1) must, as soon as practicable:

(a) be sent by the investment fund, without charge, to a securityholder ofthe investment fund, upon the securityholder’s request;

(b) be made available and prominently displayed by the manager on theinvestment fund’s, investment fund family’s or manager’s website, if it has awebsite;

(c) be filed by the investment fund with the securities regulatory authorityor regulator; and

(d) be delivered by the independent review committee to the manager.

Commentary

1 The report to be filed with the securities regulatory authorities should be filedon the SEDAR group profile number of the investment fund as a continuousdisclosure document. The CSA expect that the investment fund will pay anyreasonable costs associated with the filing of the report.

2 It is expected the report will be displayed in an easily visible location on thehome page of the website of the investment fund, the investment fund family or themanager, as applicable. The CSA expect the report to remain on the website at leastuntil the posting of the next report.

3 The disclosure required in subclause (1)(a)(iii) is expected to be provided only ininstances where a member could reasonably be perceived to not be ‘independent’under this Instrument.

4.5 Reporting to securities regulatory authorities

(1) If the independent review committee is aware of an instance where themanager acted in a conflict of interest matter under subsection 5.2(1) but did notcomply with a condition or conditions imposed by securities legislation or theindependent review committee in its approval, the independent review committeemust, as soon as practicable, notify in writing the securities regulatory authorityor regulator.

(2) The notification referred to in subsection (1) is satisfied if it is made to theinvestment fund’s principal regulator.

Commentary

1 Subsection (1) captures a breach of a condition imposed for an otherwiseprohibited or restricted transaction described in subsection 5.2(1), for which themanager has acted under Part 6 of this Instrument or under Part 4 of NI 81-102.This includes a breach of a condition imposed by the IRC as part of its approval(including a standing instruction), or, for example, any conditions imposed forinter-fund trading under section 6.1 of this Instrument or section 4.3 of NI 81-102,for transactions in securities of related issuers under section 6.2 of this Instrument,and for purchases of securities underwritten by related underwriters undersection 4.1 of NI 81-102.

The CSA consider that a breach of a condition imposed by securities legislation(including this Instrument) or by the IRC in a transaction described insubsection 5.2(1) will result in the transaction having been made in contraventionof securities legislation. In such instances, the securities regulatory authoritiesmay consider taking various actions, including requiring the manager to unwindthe transaction and pay any costs associated with doing so.




2 The CSA expect that the IRC will include in its notification the steps themanager proposes to take, or has taken, to remedy the breach, if known.

3 Notification under this section is not intended to be a mechanism to resolvedisputes between an IRC and a manager, or to raise inconsequential matters withthe securities regulatory authorities.

4 The CSA do not view this section or this Instrument as preventing the managerfrom communicating with the securities regulatory authorities with respect to anymatter.

4.6 Independent review committee to maintain records

An independent review committee must maintain records, including:

(a) a copy of its current written charter;

(b) minutes of its meetings;

(c) copies of any materials and written reports provided to it;

(d) copies of materials and written reports prepared by it; and

(e) the decisions it makes.

Commentary

1 Section 4.6 sets out the minimum requirements regarding the record keeping byan IRC. The CSA expect IRCs to keep records in accordance with existing bestpractices.

2 The IRC is expected under clause (b) to keep minutes only of any materialdiscussions it has at meetings with the manager or internally on matters subject toits review.

The CSA do not view this section or this Instrument as preventing the IRC andmanager from sharing record keeping and maintaining joint records of IRC andmanager meetings.

3 The CSA expect the IRC to keep records of any actions it takes in respect of amatter referred to it, in particular any transaction otherwise prohibited orrestricted by securities legislation, as described in subsection 5.2(1), for which themanager has sought the approval of the IRC.

PART 5 CONFLICT OF INTEREST MATTERS

5.1 Manager to refer conflict of interest matters to independent reviewcommittee

(1) Subject to section 5.4, when a conflict of interest matter arises, and beforetaking any action in the matter, the manager must:

(a) determine what action it proposes to take in respect of the matter,having regard to:

(i) its duties under securities legislation; and

(ii) its written policies and procedures on the matter; and

(b) refer the matter, along with its proposed action, to the independentreview committee for its review and decision.




(2) If a manager must hold a meeting of securityholders to obtain securityholderapproval before taking an action in a conflict of interest matter, the manager mustinclude a summary of the independent review committee’s decision undersubsection (1) in the notice of the meeting.

Commentary

1 Section 5.1 recognizes that a manager may not be able to objectively determinewhether it is acting in the best interests of the investment fund when it has aconflict of interest. This section requires managers to refer all conflict of interestmatters – not just those subject to prohibitions or restrictions under securitieslegislation - to the IRC so that an independent perspective can be brought to bearon the manager’s proposed action.

A decision tree for different types of conflict of interest matters is set out inAppendix A to the Commentary.

While the CSA expect the IRC to bring a high degree of rigour and scepticalobjectivity to its review of conflict of interest matters, the CSA do not consider it therole of the IRC to second-guess the investment or business decisions of a manager oran entity related to the manager.

2 Section 5.1 sets out how the manager must proceed when faced with a conflict ofinterest matter.

Referring proposed actions involving conflict of interest matters to the IRC for itsreview is not considered by the CSA to detract from the manager’s obligations to theinvestment fund under securities legislation to make decisions in the best interestsof the fund. Subclause (a)(i) is intended to reinforce this obligation.

3 In referring a matter to the IRC, a manager is expected to inform the IRCwhether its proposed action follows its written policies and procedures on thematter under section 2.2.

If an unanticipated conflict of interest matter arises for which the manager doesnot have an existing written policy and procedure, the CSA expect the manager tobring the matter and its proposed action to the IRC for its review and input at thetime the matter is referred to the IRC.

4 There may be matters that are subject to a securityholder vote that also involvea “conflict of interest matter” under this Instrument. For example, increases in thecharges of the manager to the mutual fund will be a conflict of interest matter aswell as a matter subject to a securityholder vote under Part 5 of NationalInstrument 81-102 Mutual Funds. For these matters, subsection (2) requires amanager to refer the matter first to the IRC before seeking the approval ofsecurityholders, and to include a summary of the IRC’s decision in the writtennotice to securityholders.

5.2 Matters requiring independent review committee approval

(1) A manager may not proceed with a proposed action under section 5.1 withoutthe approval of the independent review committee if the action is:

(a) an inter-fund trade as described in subsection 6.1(2) of this Instrumentor a transaction as described in subsection 4.2(1) of NationalInstrument 81-102 Mutual Funds;




(b) a transaction in securities of an issuer as described in subsection 6.2(1)of this Instrument; or

(c) an investment in a class of securities of an issuer underwritten by anentity related to the manager as described in subsection 4.1(1) of NationalInstrument 81-102 Mutual Funds.

(2) An independent review committee must not approve an action unless it hasdetermined, after reasonable inquiry, that the action:

(a) is proposed by the manager free from any influence by an entity relatedto the manager and without taking into account any consideration relevantto an entity related to the manager;

(b) represents the business judgment of the manager uninfluenced byconsiderations other than the best interests of the investment fund;

(c) is in compliance with the manager’s written policies and proceduresrelating to the action; and

(d) achieves a fair and reasonable result for the investment fund.

Commentary

1 For the transactions described in subsection (1), provided the manager receivesthe IRC’s approval under this section, and satisfies the additional conditionsimposed under the applicable sections of Part 6 of this Instrument or Part 4of NI 81-102, the manager will be permitted to proceed with the action withoutobtaining regulatory exemptive relief.

The IRC may give its approval for certain actions or categories of actions in theform of a standing instruction as described in section 5.4. If no standinginstruction is in effect, the manager is required to seek the IRC’s approval prior toproceeding with any action set out in subsection (1). An IRC may consider asguidance any conditions in prior exemptive relief orders, waivers or approvalsobtained from the securities regulatory authorities when contemplating theappropriate terms and conditions in its approval.

2 If the IRC does not approve a proposed action described in subsection (1), themanager is not permitted to proceed without obtaining exemptive relief from thesecurities regulatory authorities. The CSA consider it in the best interests of theinvestment fund, and ultimately investors, for the IRC to be able to stop anyproposed action which does not meet the test in subsection (2).

3 The CSA would usually expect that, before the IRC approves a proposed actiondescribed in subsection (1), it will have requested from the manager or others areport or certification to assist in its determination that the test in subsection (2)has been met.

4 The CSA expect that the manager will discuss with the IRC any instance wherethe IRC does not approve a proposed action, so that an alternative actionsatisfactory to both the manager and the IRC can be found, if possible.




5 The CSA consider that the ability of the manager to seek the removal of amember or members of the IRC under clause 3.10(2)(d) sufficiently addresses anyconcern that a manager may have about an IRC’s ongoing refusal to approvematters.

5.3 Matters subject to independent review committee recommendation

(1) Before a manager may proceed with a proposed action under section 5.1other than those set out in subsection 5.2(1):

(a) the independent review committee must provide a recommendation tothe manager as to whether, in the committee’s opinion after reasonableinquiry, the proposed action achieves a fair and reasonable result for theinvestment fund; and

(b) the manager must consider the recommendation of the independentreview committee.

(2) If the manager decides to proceed with an action in a conflict of interestmatter that, in the opinion of the independent review committee after reasonableinquiry, does not achieve a fair and reasonable result for the investment fundunder clause (1)(a), the manager must notify in writing the independent reviewcommittee before proceeding with the proposed action.

(3) Upon receiving the notification described in subsection (2), the independentreview committee may require the manager to notify securityholders of theinvestment fund of the manager’s decision.

(4) A notification to securityholders under subsection (3) must:

(a) sufficiently describe the proposed action of the manager, therecommendation of the independent review committee and the manager’sreasons for proceeding;

(b) state the date of the proposed implementation of the action; and

(c) be sent by the manager to each securityholder of the investment fund atleast 30 days before the effective date of the proposed action.

(5) The investment fund must, as soon as practicable, file the notificationreferred to in subsection (4) with the securities regulatory authority or regulatorupon the notice being sent to securityholders.

Commentary

1 This section captures all conflict of interest matters a manager encounters otherthan those listed in subsection 5.2(1). This includes conflict of interest mattersprohibited or restricted by securities legislation not specified in subsection 5.2(1),and a manager’s business and commercial decisions made on behalf of the




investment fund that may be motivated, or be perceived to be motivated, by themanager’s own interests rather than the best interests of the investment fund.Examples include:

- increasing charges to the investment fund for costs incurred by themanager in operating the fund;

- correcting material errors made by the manager in administering theinvestment fund;

- negotiating soft dollar arrangements with dealers with whom the managerplaces portfolio transactions for the investment fund; and

- choosing to bring services in-house over using third-party service providers.

The CSA expect that, in seeking guidance in identifying conflict of interest matterscaught by this Instrument, among the factors the manager will look to for guidanceto identify conflict of interest matters will be industry best practices. However, theCSA also acknowledge that each manager will need to consider the nature of itsinvestment fund operations in determining a conflict of interest matter.

2 The CSA expect the IRC’s recommendation to state a positive or negativeresponse as to whether they view the proposed action as achieving a fair andreasonable result for the investment fund.

3 For a proposed action in a conflict of interest matter under this section that isprohibited or restricted by securities legislation (but not specified insubsection 5.2(1)), a manager will still need to seek exemptive relief from thesecurities regulatory authorities.

4 Subsection (2) recognizes that, in exceptional circumstances, the manager maydecide to proceed with a proposed course of action despite a negative recommendationfrom the IRC. In such instances, subsection (2) requires the manager to notify theIRC before proceeding with the action. If the IRC determines that the proposedaction is sufficiently important to warrant notice to securityholders in theinvestment fund, the IRC has the authority to require the manager to give suchnotification before proceeding with the action.

The CSA anticipate that the situation of a manager proceeding with a conflict ofinterest matter, despite a negative recommendation by the IRC, will occurinfrequently.

5 The notification referred to in subsection (5) should be filed on the SEDARgroup profile number of the investment fund as a continuous disclosure document.




5.4 Standing instructions by the independent review committee

(1) Despite section 5.1, the manager is not required to refer a conflict of interestmatter nor its proposed action to the independent review committee if themanager complies with the terms of a standing instruction that is in effect.

(2) For any action for which the independent review committee has provided astanding instruction, at the time of the independent review committee’s regularassessment described in subsection 4.2(1):

(a) the manager must provide a written report to the independent reviewcommittee describing each instance that it acted in reliance on a standinginstruction; and

(b) the independent review committee must:

(i) review and assess the adequacy and effectiveness of the manager’swritten policies and procedures on the matter or on that type of matterwith respect to all actions permitted by each standing instruction;

(ii) review and assess the manager’s and investment fund’s compliancewith any conditions imposed by it in each standing instruction;

(iii) reaffirm or amend each standing instruction;

(iv) establish new standing instructions, if necessary; and

(v) advise the manager in writing of all changes to the standinginstructions.

(3) A manager may continue to rely on a standing instruction under subsection (1)until such time as the independent review committee notifies the manager thatthe standing instruction has been amended or is no longer in effect.

Commentary

1 Section 5.4 recognizes that there are certain actions or categories of actions ofthe manager for which it may be appropriate for the IRC to choose to provide astanding instruction. For example, this may include a manager’s ongoing voting ofproxies on securities held by the investment fund when the manager has a businessrelationship with the issuer of the securities, or, a manager’s decision to engage ininter-fund trading.

2 The CSA expect that, before providing or continuing a standing instruction tothe manager for an action or category of actions, the IRC will have:

- reviewed the manager’s written policies and procedures with respect to theaction or category of actions;




- requested from the manager or other persons a report or certification toassist in deciding whether to give its approval or recommendation for theaction or category of actions under subsection 5.2(1) or 5.3(1), as the case maybe;

- considered whether a standing instruction for the particular action orcategory of actions is appropriate for the investment fund; and

- established very clear terms and conditions surrounding the standinginstruction for the action or category of actions.

An IRC may consider including in any standing instruction any terms orconditions in prior exemptive relief orders, waivers or approvals obtained from thesecurities regulatory authorities.

3 As part of the IRC’s review under subclause (2)(b)(ii), the IRC is expected to bemindful of its reporting obligation under section 4.5 of this Instrument, whichincludes notifying the securities regulatory authorities of any instance where themanager, in proceeding with an action, did not meet a condition imposed by theIRC in its approval (this includes a standing instruction).

4 This section is intended to improve the flexibility and timeliness of themanager’s decisions concerning a proposed course of action in a conflict of interestmatter.

PART 6 EXEMPTED TRANSACTIONS

6.1 Inter-fund trades


(a) “current market price of the security” means:

(i) if the security is an exchange-traded security or a foreign exchange-traded security:

(A) the closing sale price on the day of the transaction asreported on the exchange upon which the security is listed or thequotation trade reporting system upon which the security isquoted;

(B) if there are no reported transactions for the day of thetransaction, the average of the highest current bid and lowestcurrent ask for the security as displayed on the exchange uponwhich the security is listed or the quotation trade reportingsystem upon which the security is quoted; or

(C) if the closing sale price on the day of the transaction isoutside of the closing bid and closing ask, the average of thehighest current bid and lowest current ask for the security asdisplayed on the exchange upon which the security is listed or thequotation trade reporting system upon which the security isquoted; or

(ii) for all other securities, the average of the highest current bid andlowest current ask determined on the basis of reasonable inquiry;




(b) “market integrity requirements” means:

(i) if the security is an exchange-traded security, the purchase or sale:

(A) is printed on a marketplace that executes trades of thesecurity; and

(B) complies with the market conduct and display requirementsof the marketplace, its regulation services provider and securitiesregulatory authorities;

(ii) if the security is a foreign exchange-traded security, the purchaseor sale complies with the requirements that govern transparency andtrading of foreign exchange-traded securities on the foreign exchangeor foreign quotation and trade reporting system; or

(iii) for all other securities, the purchase or sale is through a dealer, ifthe purchase or sale is required to be reported by a registered dealerunder applicable securities legislation.

(2) The portfolio manager of an investment fund may purchase a security of anyissuer from, or sell a security of any issuer to, another investment fund managedby the same manager or an affiliate of the manager, if, at the time of thetransaction:

(a) the investment fund is purchasing from, or selling to, another investmentfund to which this Instrument applies;

(b) the independent review committee has approved the transaction undersubsection 5.2(2);

(c) the bid and ask price of the security is readily available;

(d) the investment fund receives no consideration and the only cost for thetrade is the nominal cost incurred by the investment fund to print orotherwise display the trade;

(e) the transaction is executed at the current market price of the security;

(f) the transaction is subject to market integrity requirements; and

(g) the investment fund keeps written records, including:

(i) a record of each purchase and sale of securities;

(ii) the parties to the trade; and

(iii) the terms of the purchase or sale;

for five years after the end of the fiscal year in which the trade occurred, themost recent two years in a reasonably accessible place.

(3) The provisions of National Instrument 21-101 Marketplace Operation, andPart 6 and Part 8 of National Instrument 23-101 Trading Rules, do not apply to aportfolio manager or portfolio adviser of an investment fund, or an investmentfund, with respect to a purchase or sale of a security referred to in subsection (2) ifthe purchase or sale is made in accordance with that subsection.

(4) The inter-fund self-dealing investment prohibitions do not apply to aportfolio manager or portfolio adviser of an investment fund, or an investmentfund, with respect to a purchase or sale of a security referred to in subsection (2) ifthe purchase or sale is made in accordance with that subsection.




(5) The dealer registration requirement does not apply to a portfolio manager ofan investment fund, with respect to a purchase or sale of a security referred to insubsection (2) if the purchase or sale is made in accordance with that subsection.

(6) In subsection (5), “dealer registration requirement” has the meaningascribed to that term in National Instrument 14-101 Definitions.

Commentary

1 The term ‘inter-fund self-dealing investment prohibitions’ is defined in section 1.5of this Instrument. It is intended to capture the prohibitions in the securitieslegislation and certain regulations of each securities regulatory authority regardinginter-fund trades.

2 This section is intended to exempt investment funds from the prohibitions in thesecurities legislation and certain regulations that preclude inter-fund trades. It isnot intended to apply to securities issued by an investment fund that are purchasedby another fund within the same fund family.

The CSA are of the view that this section applies to inter-fund trades between fundfamilies of the same manager provided the purchase or sale is made in accordancewith subsection (2).

3 This section is also intended to provide a portfolio manager with a dealerregistration exemption, where necessary, for inter-fund trades made in accordancewith this section, but will not apply to any other activities of the portfolio manager.The exemption is based on compliance with this Instrument and the limitation ofits application to prospectus-qualified investment funds. The CSA note that theRegistration Reform project may re-examine this exemption.

4 This section sets out the minimum conditions for inter-fund trades to proceedwithout regulatory exemptive relief. An IRC may consider including in anyapproval any terms or conditions in prior exemptive relief orders, waivers orapprovals obtained from the securities regulatory authorities.

5 This section does not specify the policies and procedures that a manager musthave to effect inter-fund trades. However, the CSA expect the manager’s policies toinclude factors or criteria for:

- allocating securities purchased for or sold by two or more investmentfunds managed by the manager; and

- ensuring that the terms of purchase or sale will be no less beneficial to theinvestment fund than those generally available to other market participantsin arm’s-length transactions.

6 The CSA expect that the IRC may give its approval in the form of a standinginstruction under section 5.4, to give the manager greater flexibility to takeadvantage of perceived market opportunity.

7 Clause (2)(c) requires that the market quotations for the transactions betransparent. The CSA expect that if the price information is publicly availablefrom a marketplace, newspaper or through a data vendor, for example, this will bethe price. If the price is not publicly available, the CSA expect the investment fundto obtain at least one quote from an independent, arm’s-length purchaser or seller,immediately before the purchase or sale.




8 The CSA consider the requirement in clause (2)(f) to be a way to facilitate pricediscovery and integrity. The CSA believe this is essential to well-functioning andefficient capital markets. Subclause (1)(b)(iii) is intended to capture, for corporatedebt securities, the requirement, if applicable, to report the trade to CanPx, and forilliquid securities, the requirement, if applicable, to report the trade to theCanadian Unlisted Board (CUB).

9 Clause (2)(g) sets out the minimum expectations regarding the records aninvestment fund must keep of its inter-fund trades made in reliance on this section.The records should be detailed, and sufficient to establish a proper audit trail ofthe transactions.

6.2 Transactions in securities of related issuers

(1) An investment fund may make or hold an investment in the security of anissuer related to it, its manager, or an entity related to the manager, if:

(a) at the time that the investment is made:

(i) the independent review committee has approved the investmentunder subsection 5.2(2); and

(ii) the purchase is made on an exchange on which the securities ofthe issuer are listed and traded; and

(b) no later than the time the investment fund files its annual financialstatements, the manager of the investment fund files with the securitiesregulatory authority or regulator the particulars of the investment.

(2) The mutual fund conflict of interest investment restrictions do not apply to amutual fund with respect to an investment referred to in subsection (1) if theinvestment is made in accordance with that subsection.

(3) In subsection (2), “mutual fund conflict of interest investmentrestrictions” has the meaning ascribed to that term in National Instrument 81-102Mutual Funds.

(4) Repealed. 2 Oct 2009 SR 81/2009 s15.

Commentary

1 This section is intended to relieve investment funds in Québec, and mutualfunds elsewhere in Canada, from the prohibitions in the securities legislation ofeach securities regulatory authority that preclude investments in securities ofrelated issuers.

2 This section sets out the minimum conditions for purchases to proceed withoutregulatory exemptive relief. An IRC may consider including in any approval anyterms or conditions in prior exemptive relief orders, waivers or approvals obtainedfrom the securities regulatory authorities.

The CSA expect that the IRC may give its approval in the form of a standinginstruction as described in section 5.4 to allow the manager greater flexibility in itsdecisions.

3 This section contemplates that the manager will comply with the applicablereporting requirements under securities legislation for each purchase. The filingreferred to in clause (1)(b) should be filed on the SEDAR group profile number ofthe investment fund, as a continuous disclosure document.




4 If an IRC gives its approval for the investment fund to purchase securities of anissuer described in this section, and then subsequently withdraws its approval foradditional purchases, the CSA will not consider the continued holding of thesecurities to be subject to clause 1.2(b) of the Instrument. However, we will expectthe manager to consider whether continuing to hold those securities is a conflict ofinterest matter that clause 1.2(a) of the Instrument would require the manager torefer to the IRC.

PART 7 EXEMPTIONS

7.1 Exemptions

(1) The securities regulatory authority or regulator may grant an exemptionfrom this Instrument, in whole or in part, subject to such conditions or restrictionsas may be imposed in the exemption.


7.2 Existing exemptions, waivers or approvals

Any exemption, waiver or approval under a provision of securities legislation thatwas effective before this Instrument came into force and that deals with thematters that this Instrument regulates, will expire one year after this Instrumentcomes into force.

Commentary

1 The CSA have, in a number of jurisdictions, granted exemptions and waiversfrom the conflict of interest and self-dealing provisions in securities legislation topermit the manager and/or the investment fund to make investments not otherwisepermitted by securities legislation. Some of those exemptions and waivers containedsunset provisions that provided for the expiry of the exemption or waiver upon thecoming into force of legislation or a CSA policy or rule that effectively provides forfund governance.

For greater certainty, the CSA note that the coming into force of section 7.2 of thisInstrument will effectively cause all exemptions and waivers that deal with thematters regulated by this Instrument - not just those exemptions and waivers thatdeal with the matters under subsection 5.2(1) - to expire one year after its cominginto force whether or not they contained a sunset provision.


8.1 Effective date

This Instrument comes into force on November 1, 2006.

8.2 Transition

(1) Despite section 8.1, this Instrument does not apply to an investment funduntil the earlier of:

(a) the date on which the manager provides to the securities regulatoryauthority or regulator the notification referred to in subsection (4); and

(b) the date one year after this Instrument comes into force.

(2) Despite subsection (1), six months from the date this Instrument comes intoforce the manager must appoint the first members of the independent reviewcommittee under section 3.2 in compliance with this Instrument.




(3) Despite section 4.4, the independent review committee’s first report tosecurityholders must be completed by the 120th day after the end of the firstfinancial year of the investment fund to which this Instrument applies.

(4) A manager of an investment fund must notify the securities regulatoryauthority or regulator in writing if it intends to comply with this Instrument priorto the expiration of the transition period under subsection (1).

(5) The notification referred to in subsection (4) is satisfied if the notification ismade to the investment fund’s principal regulator.

Commentary

1 Section 8.2 is intended to address transitional concerns.

The CSA expect that all investment funds will be compliant with this Instrumentfollowing the expiry of the transition period under subsection 8.2(1), twelve monthsafter the Instrument is in force. For an investment fund established after the expiryof the transition period, it is expected that the investment fund will be compliantwith this Instrument before any purchase order for securities of the investmentfund is accepted.

2 Subsection 8.2(2) allows a manager an extra six months from the date thisInstrument is in force to appoint the initial members of the IRC.

While a six-month transition period exists for the appointment of IRC members, theCSA strongly encourage a timely appointment of the IRC by the manager so thatwithin the twelve month transitional period there is sufficient time for the IRC toadopt its charter, to review the manager’s policies and procedures, and to review(subject to manager referral) any existing conflict of interest matters.

The transition period is also intended to give the manager sufficient time to referexisting and new conflict of interest matters to the IRC for its review anddetermination.

3 The CSA anticipate a manager or investment fund may wish to rely on theInstrument before the expiry of the transition period so that it may proceed withIRC approval for an otherwise prohibited or restricted transaction in securitieslegislation described in subsection 5.2(1). This may not occur unless there iscomplete compliance with the Instrument. Subsection (4) is intended to assist theCSA in knowing which managers of investment funds are proceeding in thismanner before the expiry of the transition period.

4 For investment funds established before the expiry of the transition period, theCSA expect the manager to establish policies and procedures on any conflict ofinterest matters (if they do not already have them), and to refer to the IRC thesepolicies and procedures and any decisions related to such matters prior to the endof the transition period.

5 The CSA do not consider a manager’s organization of an investment fund (suchas the initial setting of fees or the initial choice of service providers) to be subject toIRC review, unless the manager’s decisions give rise to a conflict of interestconcerning the manager’s obligations to existing investment funds within themanager’s fund family. However, the CSA expect the manager will establishpolicies and procedures for any conflict of interest matters arising from theinvestment fund’s organization or otherwise, and refer to the IRC these policies andprocedures and any decisions related to such matters.




It is anticipated that the manager will wish to engage the IRC early in theestablishment of the investment fund to ensure the IRC is adequately informed ofpotential new conflicts of interest.

6 An investment fund, whether established before or after the date this Instrumentcomes into force, has a total transition period of up to twelve months from the datethe Instrument comes into force to comply with the Instrument. Only if themanager of an investment fund intends to comply with the Instrument in itsentirety before the expiry of the transition period is the notice in subsection (4)required.

7 It is expected that investment funds will incorporate any new disclosureobligations arising out of this Instrument as part of their annual prospectusrenewal or continuous disclosure filing following the expiry of the transitionperiod.

8 The CSA do not consider the expenses incurred by existing investment funds inestablishing an IRC under this Instrument to be caught by section 5.1 of NI 81-102.We do not view section 5.1 as intending to capture the costs associated withcompliance by an investment fund with new regulatory requirements.




APPENDIX A

CONFLICT OF INTEREST OR SELF-DEALING PROVISIONS

JURISDICTION SECURITIES LEGISLATION REFERENCE

Alberta Part 15 – Insider Trading and Self-Dealing ofthe Securities Act (Alberta)

British Columbia Part 15 – Self-Dealing of the Securities Act(British Columbia)

Manitoba Part XI – Insider Trading of the Securities Act(Manitoba)

Newfoundland and Labrador Part XX – Insider Trading and Self-Dealing ofthe Securities Act (Newfoundland andLabrador)

New Brunswick Part 10 – Insider Trading and Self-Dealing ofthe Securities Act (New Brunswick)

Northwest Territories Part 11 - Insider Reporting and Early Warningof the Securities Act (Northwest Territories)

Nova Scotia Sections 112 – 128 of the Securities Act(Nova Scotia)

Ontario Part XXI – Insider Trading and Self-Dealing ofthe Securities Act (Ontario)

Quebec Section 236 of the Securities Regulation(Québec)

Saskatchewan Part XVII – Insider Trading and Self-Dealing –Mutual Funds of The Securities Act, 1988(Saskatchewan)

Alberta, British Columbia, Manitoba,Newfoundland and Labrador,New Brunswick, Northwest Territories,Nova Scotia, Nunavut, Ontario,Prince Edward Island, Quebec,Saskatchewan and Yukon Part 4 of National Instrument 81-102

Mutual Funds and section 13.5 of NationalInstrument 31-103 - Registration Requirementsand Exemptions




APPENDIX B

INTER-FUND SELF-DEALING CONFLICT OF INTEREST PROVISIONS

JURISDICTION LEGISLATION REFERENCE

Alberta Section 13.5(2)(b) of National Instrument 31-103Registration Requirements and Exemptions

British Columbia Section 127(1)(b) of the Securities Act (BritishColumbia)Section 13.5(2)(b) of National Instrument31-103 Registration Requirements and Exemptions

Manitoba Section 13.5(2)(b) of National Instrument 31-103Registration Requirements and Exemptions

New Brunswick Section 144(1)(b) of the Securities Act (NewBrunswick)Section 11.7(6) of Local Rule 31-501Registration RequirementsSection 13.5(2)(b) of NationalInstrument 31-103 Registration Requirements andExemptions

Newfoundland and Labrador Section 119(2)(b) of the Securities Act (Newfoundlandand Labrador)Section 103(6) of Reg. 805/9Section 13.5(2)(b) of National Instrument 31-103Registration Requirements and Exemptions

Northwest Territories Section 13.5(2)(b) of National Instrument 31-103Registration Requirements and Exemptions

Nova Scotia Section 126(2)(b) of the Securities Act (NovaScotia)Section 32(6) of the General SecuritiesRulesSection 13.5(2)(b) of National Instrument 31-103Registration Requirements and Exemptions

Nunavut Section 13.5(2)(b) of National Instrument 31-103Registration Requirements and Exemptions

Ontario Section 13.5(2)(b) of National Instrument 31-103Registration Requirements and Exemptions

Prince Edward Island Section 38.1(6) of Securities Act RegulationSection 13.5(2)(b) of National Instrument 31-103Registration Requirements and Exemptions

Quebec Section 13.5(2)(b) of National Instrument 31-103Registration Requirements and Exemptions

Saskatchewan Section 13.5(2)(b) of National Instrument 31-103Registration Requirements and Exemptions

Yukon Section 13.5(2)(b) of National Instrument 31-103Registration Requirements and Exemptions

10 Nov 2006 SR 104/2006 s9; 2 Oct 2009 SR 81/2009 s15.
