Future Shop Ltd.

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - variation ofdecision document dated November 22, 1999 to provide that the first trade insecurities of the issuer acquired on the exchange of interests in a limitedpartnership shall be permitted 4 months following their acquisition instead of 12months as specified in the original decision document.

Applicable Ontario Statutes

Securities Act, R.S.O. 1990, c.S.5, as am., ss. 25, 53, 144.

Applicable Ontario Rules

Rule 45-501 Exempt Distributions (1998) 21 O.S.C.B. 6548.

WHEREAS the local securities regulatory authority or regulator (the"Decision Maker") in each of British Columbia, Alberta, Manitoba, Saskatchewan,Ontario, Quebec, New Brunswick, Nova Scotia, Newfoundland and Prince EdwardIsland (the "Jurisdictions") issued a decision (the "Original Decision") on November22, 1999 under the securities legislation of the Jurisdictions (the "Legislation")exempting trades in certain securities by Future Shop Ltd. ("Future Shop") and thelimited partners (the "Partners") of futureshop.com lp (the "Partnership") from theregistration and prospectus requirements and the take-over bid rules in theLegislation;

AND WHEREAS Future Shop has applied to the Decision Makers for adecision under the Legislation varying the Original Decision;

AND WHEREAS under the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Executive Director of the British ColumbiaSecurities Commission is the principal regulator for this application;

AND WHEREAS Future Shop has represented to the Decision Makers that:

1. the Original Decision related to a proposed offering (the "Offering") of up to2,000,000 Units to purchasers resident in the Jurisdictions, generating grossproceeds to the Partnership of $20,000,000;

2. 730,500 Units were distributed in the Offering, generating gross proceedsto the Partnership of $7,305,000; as a result of the shortfall in the Offering,the Partnership proposes to undertake a second offering (the "SecondOffering") of up to 1,500,000 Units, generating gross proceeds to thePartnership of up to $15,000,000;

3. the Call Options (as defined in the Original Decision) granted as part of theOffering were exerciseable, at the sole option of Future Shop, to acquire all,but not less than all, of the Units then outstanding at any time during theperiod commencing on January 1, 2001 and ending April 15, 2001 (the "FirstCall Period") or during the period commencing on January 1, 2002 andending on April 15, 2002 (the "Second Call Period") or in certain other limitedcircumstances; the consideration payable on the exercise of the Call Optionsincluded a number of Future Shop common shares (the "ExchangedShares") determined by reference to the "current market price" of FutureShop's common shares, subject to a deemed maximum and minimum priceof $18.00 and $6.00, respectively;

4. due to market conditions (namely, a substantial increase in the trading priceof Future Shop's common shares on The Toronto Stock Exchange), the CallOptions to be granted by Partners who purchase under the Second Offeringwill be on different pricing terms from those granted by the Partners in theOffering; in the Second Offering, Future Shop will be entitled to exercise theCall Option by either, in its sole discretion, a cash payment of $10 per Unitor issuance of Exchanged Shares determined in accordance with the formulaset out in the Original Decision, but with an increase in the deemedmaximum current market price of Future Shop's common shares from $18.00to $30.00; as a result of these changes to the Call Option, paragraph 16 ofthe representations to the Original Decision does not accurately describe theexercise of the Call Options insofar as it applies to the mechanics forexercise of the Call Options to be granted pursuant to the Second Offering;

5. the Original Decision further provided that the first trade in ExchangedShares acquired by the Partners on the exercise of the Call Options will bedeemed to be a distribution or subject to the registration and prospectusrequirements of the Legislation unless a twelve month period had elapsedfrom the date of issue of the Call Options; because the Partnership intendsto retain the timing of the First Call Period and Second Call Period in theSecond Offering and because the First Call Period is now closer in time, tothe extent that Future Shop elects to exercise the Call Options during theFirst Call Period, Partners who purchase Units under the Second Offeringwill not be able to rely on the Original Decision to obtain free tradingExchanged Shares upon such exercise;

6. Future Shop has filed an annual information form under Blanket Order #98/7of the British Columbia Securities Commission entitled "In the Matter of theSystem for Shorter Hold Periods with an Annual Information Form" andunder Alberta Rule 45-501 entitled "System for Shorter Hold Period forIssuers Filing an AIF", each which allows for a four month hold periodinstead of a twelve month hold period, provided that an issuer distributingthe securities is a "qualifying issuer" under, and otherwise complies with theterms of BOR #98/7 and Rule 45-501, as applicable;

AND WHEREAS under the System this MRRS Decision Documentevidences the decision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the testcontained in the Legislation that provides the Decision Makers with the jurisdictionto make the Decision has been met;

THE DECISION of the Decision Makers under the Legislation is that theOriginal Decision be varied as follows:

1. deleting the number "12" in paragraph 3(a) of the recitals and in paragraph3(a) of the operative portion of the Original Decision and replacing it with thenumber "4";

2. inserting the words "and Manitoba" after Quebec in paragraph 3(a) of therecitals and in paragraph 3(a) of the operative portion of the OriginalDecision;

3. inserting the following new condition (b) in paragraph 3 of the recitals andin paragraph 3 of the operative portion of the Original Decision:

"at the date of the distribution of the Call Option, Future Shop (i) complieswith BOR #98/7 and Rule 45-501, except for the condition requiring FutureShop to distribute a security of its own issue and, (ii) signs certificates asrequired under BOR #98/7 and Rule 45-501, including that Future Shop isa "qualifying issuer" as defined in BOR #98/7 and Rule 45-501, provided thatsuch certificates need not state that the Call Option is a security of FutureShop's own issue;"

4. renumbering (b) to (f) in paragraph 3 of the recitals and paragraph 3 of theoperative portion of the Original Decision accordingly; and

5. deleting paragraph 16 of the representations to the Original Decision in itsentirety and replacing it with the following:

"16. the purchase price payable for the Units upon the exercise of the CallOption by Future Shop will be as follows:

(a) if the Call Option is exercised during the First Call Period, thatnumber of freely-tradeable common shares of Future Shop (the"Exchanged Shares") determined by dividing $9.50 by the "currentmarket price" of Future Shop's common shares, with "current marketprice" being calculated as 95% of the weighted average trading priceof Future Shop's common shares on the TSE for the 20 consecutivetrading days ending five trading days before the date fixed forcompletion under the Call Option, subject to certain deemedmaximum and minimum values or, at the sole option of Future Shop,a cash payment of $10.00 and, in either case, together with oneDiscount Right (as defined below) per Unit;

(b) if the Call Option is exercised during the Second Call Period, theExchanged Shares or cash payment and Discount Rights ascalculated in clause 16(a) together with a cash payment per Unit ofthe greater of (i) $49.00 per Unit and (ii) eight times the grossrevenues per Unit for the 12 month period ending December 31,2001, less $9.50, divided by the number of Units then outstanding;and

(c) if the Call Option is exercised during an Accelerated Call Periodwhich occurs (i) prior to the commencement of the First Call Period,$12.00 per Unit, or (ii) after the expiry of the First Call Period butbefore the commencement of the Second Call Period, $54.00 perUnit, less any unpaid amount on the subscription price for suchUnits."

with the result that the Original Decision as varied by this Decision will be in theform attached as Schedule "A".

August 16^th, 2000.

"Brenda Leong"