Securities Law & Instruments

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - relief granted fromthe eligibility requirements under National Policy Statement No. 47 and applicableQuebec legislation to permit issuer to file initial annual information form - "public floattest" to be met on a date within sixty days of filing preliminary short form prospectus

Applicable Ontario Provisions

National Policy Statement No. 47 sections 4.1(1)(c), 4.1(2)(b)(i) and 4.5


IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN, MANITOBA, ONTARIO, QUEBEC, NEW BRUNSWICK, NOVA SCOTIA, PRINCE EDWARD ISLAND AND NEWFOUNDLAND

AND

IN THE MATTER OF THE
MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
STRESSGEN BIOTECHNOLOGIES CORPORATION

MRRS DECISION DOCUMENT


WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec,New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland (the "Jurisdictions")has received an application from StressGen Biotechnologies Corporation ("StressGen")for a decision under the securities legislation and securities directions of the Jurisdictions(the "Legislation") that the provisions of Section 4.1(2) of National Policy Statement 47("NP 47") and section 169 of the Regulations Respecting Securities (Quebec) ("QRRS")(collectively, the "Eligibility Requirements") be waived to permit StressGen to be eligibleto participate in the prompt offering qualification system (the "POP System").

AND WHEREAS under the Mutual Reliance Review System for Exemptive ReliefApplications (the "System"), the Executive Director of the British Columbia SecuritiesCommission is the principal regulator for this application;

AND WHEREAS StressGen has represented to the Decision Makers that:

1. StressGen was incorporated on April 5, 1990 under the Company Act (BritishColumbia) and maintains its head office in Victoria, B.C.;

2. StressGen is a biotechnology company which is researching and developingproducts based on the therapeutic application of stress proteins;

3. StressGen has been a reporting issuer under the Legislation of each of theJurisdictions for greater than 12 months and, is not in default under anyrequirement of the Legislation;

4. the authorized share capital of StressGen consists of 125,000,000 shares dividedinto 100,000,000 Common Shares and 25,000,000 Preferred Shares;

5. as at June 30, 2000, 42,546,344 Common Shares and no Preferred Shares wereissued and outstanding;

6. StressGen's Common Shares are currently listed and posted for trading on TheToronto Stock Exchange;

7. the financial year-end of StressGen is December 31;

8. as at December 31, 1999, 32,775,894 Common Shares and no Preferred Shareswere issued and outstanding, of which 4,244,603 were beneficially owned, directlyor indirectly, or over which control or direction was exercised by Persons (asdefined in the Eligibility Requirements) that alone or together with their respectiveaffiliates or Associates (as defined in NP 47 and the QRRS) beneficially owned orexercised control or direction over more than 10% of the Common Shares (the"Insider Shares");

9. the aggregate market value of the Common Shares for the month of December1999, being the last calendar month of its financial year, calculated in accordancewith the Eligibility Requirements was more than $75,000,000 including the value ofthe Insider Shares, but was less than $75,000,000 excluding the value of theInsider Shares;

10. as at June 30, 2000, 42,546,344 Common Shares were issued and outstanding,none of which were Insider Shares, and the aggregate market value of StressGen'sCommon Shares, calculated in accordance with the Eligibility Requirements was$261,277,098.50 (based on the arithmetic average closing trading price for themonth of June 2000 of $6.141); and

11. StressGen would be eligible to participate in the POP System on the filing andacceptance of its Initial AIF under Proposed National Instrument 44-101, whichwould replace the current time period for calculating the aggregate market value ofan issuer's equity securities under the Eligibility Requirements for its Initial AIF witha calculation as of a date within 60 days before the filing of the issuer's preliminaryshort form prospectus;

AND WHEREAS under the System this MRRS Decision Document evidences thedecision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;

The Decision of the Decision Makers under the Legislation is that the EligibilityRequirements are waived so that StressGen is eligible to participate in the POP Systemprovided that:

(a) StressGen complies in all other respects with the requirements of NP 47 and theQRRS;

(b) the aggregate market value of the outstanding common shares of StressGen,calculated in accordance with the Eligibility Requirements is $75,000,000 or moreon a date within 60 days before the date of the filing of StressGen's preliminaryshort form prospectus;

(c) the eligibility certificate to be filed in respect of StressGen's Initial AIF shall statethat StressGen satisfies the eligibility criteria set out in sections 4.1(1)(a) and4.1(1)(b) of NP 47, and shall make reference to this Decision; and

(d) this Decision terminates on the earlier of:

(i) 140 days after the end of StressGen's financial year ended December 31,2000; and

(ii) the date a renewal AIF is filed by StressGen in respect of its financial yearended December 31, 2000.

August 8th, 2000.

"M. Sheehy"