Securities Law & Instruments

R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")


HAMILTON AIRLINES (2000) INC. (The "Company")

(Section 68 of the Act)

WHEREAS section 68 of the Act states "[w]here it appears to the Director that apreliminary prospectus is defective in that it does not substantially comply with therequirements of Ontario securities law as to form and content, the Director may, withoutgiving notice, order that the trading permitted by subsection 65(2) in the security to whichthe preliminary prospectus relates shall cease until a revised preliminary prospectussatisfactory to the Director is filed and forwarded to each recipient of the defectivepreliminary prospectus according to the record maintained under section 67";

WHEREAS section 55 of the Act provides that the Director shall issue a receipt fora preliminary prospectus forthwith upon the filing thereof;

WHEREAS upon the filing of a preliminary prospectus staff conducts a review todetermine, by reference to a checklist, if the prerequisites to the issuance of a receipt forthe preliminary prospectus have been met;

WHEREAS after the administrative review is completed and a receipt for thepreliminary prospectus is issued, a substantive review of the preliminary prospectus isconducted;

WHEREAS on March 3, 2000, the Director issued a receipt for a preliminaryprospectus dated March 1, 2000 filed by the Company in connection with its initial publicoffering (the "Preliminary Prospectus");

WHEREAS staff has now completed a substantive review of the PreliminaryProspectus and is of the view that: (i) the disclosure in the Preliminary Prospectus ismaterially deficient such that it does not meet the statutory standard of full, true and plaindisclosure. Specifically, the Preliminary Prospectus does not clearly identify the type ofsecurity being offered as it refers interchangeably to, among others, "Rights Certificates","certificates", "Common Shares", Subscription Receipts" and "Subscription certificate".Additionally, the Preliminary Prospectus contains numerous material factual statementswithout stating their source, including that the Company "should have little difficulty inbeing granted both domestic and international licenses". The Preliminary Prospectus alsocontains a myriad of statistical information most of which is not attributable to a verifiablesource; (ii) the Company lacks the necessary human resources to competently managea public company; and (iii) the Company does not have a business per se in that it has norevenues to date, limited cash resources and has not obtained the necessary regulatoryapprovals and licenses necessary to unfolding the objectives disclosed in the PreliminaryProspectus;

WHEREAS as a result of a substantive review of the Preliminary Prospectus, staffrecommends that, pursuant to section 68 of the Act, the Director cease trade all securitiesof the Company relating to the Preliminary Prospectus;

AND WHEREAS the Director is of the view that to make this Order is consistent withsection 68 of the Act as the Preliminary Prospectus is defective in that it does notsubstantially comply with the requirements of Ontario securities law as to form and contentsuch that trading in accordance with subsection 65(2) of the Act would be contrary to thepublic interest;

IT IS ORDERED pursuant to section 68 of the Act that the trading permitted bysubsection 65(2) of the Act in any security to which the Preliminary Prospectus relatesshall cease until a revised preliminary prospectus satisfactory to the Director is filed andforwarded to any recipient of the Preliminary Prospectus.

April 11th, 2000.

"Kathryn Soden"