Securities Law & Instruments

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - relief from theregistration and prospectus requirements in respect of certain trades made inconnection with a merger involving a Canadian reporting issuer and a U.K. companywhere exemptions not available for technical reasons - first trade in shares of U.K.issuer shall be a distribution unless executed on a stock exchange outside of Canada.

Continuous Disclosure - exchangeco exempted from continuous disclosurerequirements provided U.K. issuer files continuous disclosure materials in Canada.U.K. issuer not required to reconcile to Canadian GAAP provided it maintains a deminimis presence in Canada.

Insider Reporting - certain insiders of exchangeco exempted from insider reportingrequirements.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c.S.5, as am., 25, 53, 72(5), 74(1), 75, 77, 78, 79,80(b)(iii), 81,107,108,109 and 121(2).

Applicable Ontario Rules

Rule 45-501 Exempt Distributions, (1998) 21 OSCB 6548.

Rule 72-501 Prospectus Exemption for First Trade over a Market Outside Ontario,(1998) 21 OSCB 3873.

IN THE MATTER OF THE SECURITIES LEGISLATION OFBRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA, QUEBEC,ONTARIO, NEW BRUNSWICK, NOVA SCOTIA,PRINCE EDWARD ISLAND, NEWFOUNDLAND, YUKON TERRITORY,NORTHWEST TERRITORIES, AND NUNAVUT

AND

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

ND

IN THE MATTER OF
PSION P.L.C., PSION CANADA INC., PSION CANADA HOLDINGS INC.
AND
TEKLOGIX INTERNATIONAL INC.

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, Prince Edward Island, Nova Scotia, Newfoundland, the Yukon Territory,Northwest Territories and Nunavut (collectively, the "Jurisdictions") has received anapplication from PSION P.L.C. ("PSION"), PSION Canada Inc. ("Exchangeco"), PSIONCanada Holdings Inc. ("Callco") and Teklogix International Inc. ("Teklogix") (collectively,the "Applicant") for a decision pursuant to the securities legislation, regulations, rulesand/or policies of the Jurisdictions (the "Legislation") that:

(a) certain trades in securities made in connection with or resulting from theproposed merger (the "Merger") of PSION and Teklogix, to be effected byway of a plan of arrangement (the "Arrangement") under Section 182 of theBusiness Corporations Act (Ontario) (the "OBCA") shall be exempt from therequirements contained in the Legislation to be registered to trade in asecurity (the "Registration Requirement") and to file a preliminary prospectusand a prospectus and receive receipts therefor (the "ProspectusRequirement");

(b) Exchangeco be exempt from the requirements of the Legislation to issue apress release and file reports regarding material changes (the "MaterialChange Reporting Requirements"), to file and deliver annual reports, whereapplicable, interim and annual financial statements (the "Financial StatementRequirements") and an information circular (the "Proxy Requirements");

(c) the requirement contained in the Legislation for an insider of a reportingissuer to file reports disclosing the insider's direct or indirect beneficialownership of, or control or direction over, securities of the reporting issuer(the "Insider Reporting Requirement") shall not apply to certain insiders ofExchangeco and its successors; and

(d) the first trades in PSION ordinary shares and the exchangeable shares inthe capital of Exchangeco (the "PSION Exchangeable Shares") issuable inconnection with the Arrangement are not subject to the ProspectusRequirements subject to certain terms and conditions.

AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission is the principalregulator for this application;

AND WHEREAS the Applicant has represented to the Decision Makers that:

1. PSION is a public company in the United Kingdom whose ordinary shares are listedon The London Stock Exchange (the "LSE").

2. PSION is currently subject to the reporting requirements of the LSE and the UnitedKingdom List Authority (the "UKLA") and is not a reporting issuer or the equivalentthereof under the Legislation or under the securities legislation of the United States.

3. PSION's authorized capital consists of 532,619,920 PSION Ordinary Shares, 5pence par value of which 396,968,615 were issued and outstanding at June 30,2000.

4. Callco is an indirect wholly-owned subsidiary of PSION. It was incorporated underthe Canada Business Corporations Act (the "CBCA") on August 4, 2000 to hold thevarious call rights related to the PSION Exchangeable Shares.

5. The authorized capital of Callco consists solely of common shares. Uponcompletion of the Arrangement, all of the issued and outstanding common sharesof Callco will be held directly or indirectly by PSION.

6. Exchangeco is an indirect wholly-owned subsidiary of PSION incorporated underthe CBCA on August 4, 2000 for the purpose of implementing the Arrangement.

7. The authorized share capital of Exchangeco will consist of an unlimited number ofcommon shares, an unlimited number of PSION Exchangeable Shares and anunlimited number of junior preferred shares issuable in series. Upon completion ofthe Arrangement, all of the outstanding common shares will be held by Callco andall of the outstanding PSION Exchangeable Shares (if any) will be held by formerTeklogix shareholders who elect to receive PSION Exchangeable Shares inexchange for their Teklogix Common Shares under the Arrangement.

8. Upon the completion of the Arrangement and in the event that PSIONExchangeable Shares are issued pursuant to the Arrangement, the PSIONExchangeable Shares will be listed on The Toronto Stock Exchange ("the TSE")and Exchangeco will, where applicable, become a reporting issuer or the equivalentthereof under the Legislation.

9. Teklogix is a reporting issuer (or equivalent) in each of the Jurisdictions and itsshares are listed and posted for trading on the TSE.

10. Teklogix is authorized to issue an unlimited number of common shares (the"Teklogix Common Shares") and an unlimited number of preferred shares (the"Teklogix Preferred Shares"). As at July 11, 2000, 14,441,742 Teklogix CommonShares were issued and outstanding, no Teklogix Preferred Shares were issuedand outstanding and options to acquire (the "Teklogix Options") 1,110,613 TeklogixCommon Shares were granted and outstanding under the Teklogix Stock OptionPlans.

11. On July 11, 2000, PSION and Teklogix entered into a merger agreement (the"Merger Agreement"). The Merger will be effected by way of the Arrangement,pursuant to which PSION, through Exchangeco, will own all of the issued andoutstanding Teklogix Common Shares.

12. Subject to the terms of an interim order (the "Interim Order") issued by the OntarioSuperior Court of Justice (the "Court") on August 11, 2000, the required approvalof the holders of the Teklogix Common Shares ("Teklogix shareholders") andholders of Teklogix Options ("Teklogix Optionholders") (Teklogix shareholders andTeklogix Optionholders collectively referred to as the "Teklogix Securityholders")to the Arrangement will be 66-2/3% of the votes cast at a meeting (the "Meeting");each Teklogix shareholder will be entitled to one vote for each Teklogix CommonShare held and each Teklogix Optionholder will be entitled to one vote for eachTeklogix Common Share such holder would have received on a valid exercise ofsuch holder's Teklogix Options.

13. In connection with the Arrangement, Teklogix has sent to the TeklogixSecurityholders a management proxy circular dated August 11, 2000 (the"Circular"). The Circular will contain prospectus-level disclosure of the businessand affairs of each of PSION and by inclusion by reference Teklogix, the particularsof the Arrangement and the securities to be issued in connection therewith.

14. Under the Arrangement, each holder of Teklogix Common Shares (other thanPSION and its affiliates and a holder who exercises its right of dissent) will beentitled to elect to receive, at its option, the number of PSION ExchangeableShares equal to the exchange ratio (the "Exchange Ratio") set out in the MergerAgreement (provided that at least 2,000,000 PSION Exchangeable Shares areissuable pursuant to valid elections by Teklogix shareholders) or the number of thePSION Ordinary Shares equal to the Exchange Ratio or Cdn.$35 cash for eachTeklogix Common Share held, subject to a maximum aggregate cash amount ofCdn.$225 million or a combination thereof.

15. Upon the completion of the Arrangement and in the event that PSIONExchangeable Shares are issued pursuant to the Arrangement, the PSIONExchangeable Shares are intended to be listed and posted for trading on the TSE.

16. Under the Arrangement, Teklogix Options which are not conditionally exercisedprior to the effective time of the Arrangement will become options to purchasePSION Ordinary Shares.

17. The provisions attaching to the PSION Exchangeable Shares (the "PSIONExchangeable Share Provisions"), together with the voting and exchange trustagreement (the "Voting and Exchange Trust Agreement") to be entered into byPSION, Exchangeco and a trustee (the "Trustee") and a support agreement (the"Support Agreement") to be entered into by PSION, Exchangeco and Callco willprovide the holders thereof with a security of a Canadian issuer having economicand voting rights which are, in all material respects, equivalent (without taking intoaccount tax effects) to those of a PSION Ordinary Share. Each PSIONExchangeable Share will entitle the holder to dividends from Exchangeco payableat the same time as, and equivalent to, each dividend paid by PSION on a PSIONOrdinary Share.

18. The PSION Exchangeable Shares will be non-voting (except as required by theExchangeable Share Provisions or by applicable law) and will be retractable at theoption of the holder at any time. Subject to the overriding Retraction Call Right ofCallco referred to below, upon retraction, the holder will be entitled to receive fromExchangeco for each PSION Exchangeable Share retracted an amount equal to thethen current market price for a PSION Ordinary Share, to be satisfied by thedelivery of one PSION Ordinary Share, plus an amount equal to all declared andunpaid dividends on each such PSION Exchangeable Share held by such holderon any dividend record date which occurred prior to the retraction date (suchaggregate amount, the "Retraction Price"). Upon being notified by Exchangeco ofa proposed retraction of PSION Exchangeable Shares, Callco will have anoverriding call right (the "Retraction call Right") to purchase from the holder all ofthe PSION Exchangeable Shares that are subject of the retraction notice for a priceper share equal to the Retraction Price.

19. The PSION Exchangeable Shares may be redeemed for PSION Ordinary Shareson a one-for-one basis at Exchangeco's option after January 31, 2010 or earlier incertain circumstances, including when fewer than 1,000,000 PSION ExchangeableShares are held by non-PSION entities.

20. Subject to the overriding Redemption Call Right of Callco referred to below in thisparagraph, Exchangeco will be entitled to redeem all the PSION ExchangeableShares then outstanding, commencing on January 31, 2010 the "RedemptionDate"). The board of directors may accelerate the Redemption Date in certaincircumstances, as described in the Circular, including if there are fewer than1,000,000 PSION Exchangeable Shares outstanding (other than PSIONExchangeable Shares held by PSION and its affiliates, and as such number ofshares may be adjusted as deemed appropriate by the board of directors to giveeffect to anti-dilution adjustments). Upon such redemption, a holder will be entitledto receive from Exchangeco, for each PSION Exchangeable Share redeemed, anamount equal to the current market price of a PSION Ordinary Share, to be satisfiedby the delivery of one PSION Ordinary Share, plus an amount equal to all declaredand unpaid dividends on each such PSION Exchangeable Share held by suchholder on any dividend record date which occurred prior to the Redemption Date(such aggregate amount, the "Redemption Price"). Upon being notified byExchangeco of a proposed redemption of PSION Exchangeable Shares, Callco willhave an overriding call right (the "Redemption Call Right") to purchase all of theoutstanding PSION Exchangeable Shares (other than those held by PSION or itsaffiliates) for a price per share equal to the Redemption Price.

21. Subject to the overriding Liquidation Call Right of Callco referred to below, on theliquidation, dissolution or winding-up of Exchangeco, a holder of PSIONExchangeable Shares will be entitled to receive from Exchangeco for each PSIONExchangeable Share held an amount equal to the current market price of a PSIONOrdinary Share on the last business day prior to the liquidation date, to be satisfiedby the delivery of one PSION Ordinary Share, plus an amount equal to all declaredand unpaid dividends on each such PSION Exchangeable Share held by suchholder on any dividend record date which occurred prior to the liquidation date(such aggregate amount, the "Liquidation Price"). Upon a proposed liquidation,dissolution or winding-up of Exchangeco, Callco will have an overriding call right(the "Liquidation Call Right") to purchase all of the outstanding PSIONExchangeable Shares from the holders thereof (other than PSION or its affiliates)for a price per share equal to the Liquidation Price.

22. Pursuant to the Voting and Exchange Trust Agreement, PSION will issue a sepcialvoting share (the "PSION Special Voting Share") to the Trustee and which will beheld for the benefit of the holders of PSION Exchangeable Shares outstanding fromtime to time (other than PSION and its affiliates) in accordance with the terms of theVoting and Exchange Trust Agreement. The Special Voting Share will carry anumber of voting rights, exercisable at any meeting of the holders of PSIONOrdinary Shares. Each voting right attached to the PSION Special Voting Sharemust be voted by the Trustee pursuant to the instructions received from the holdersof the PSION Exchangeable Shares. In the absence of any such instructions froma holder, the Trustee will not be entitled to exercise the related voting rights. Uponthe exchange of a PSION Exchangeable Share for a PSION Ordinary Share, theholder of the PSION Exchangeable Share becomes a holder of a PSION OrdinaryShare and the right of such holder to exercise votes attached to the PSION SpecialVoting Share (as well as the votes themselves relating to that holder) terminates.

23. Under the Voting and Exchange Trust Agreement, upon the liquidation, dissolutionor winding-up of Exchangeco, PSION will be required to purchase each outstandingPSION Exchangeable Share and each holder will be required to sell all of its PSIONExchangeable Shares (such purchase and sale obligations are hereafter referredto as the "Automatic Exchange Right"). The purchase price for each PSIONExchangeable Share purchased by PSION will be an amount equal to the thencurrent market price of a PSION Ordinary Share, to be satisfied by the delivery tothe Trustee, on behalf of the holder, of one PSION Ordinary Share, together with,on the designated payment date therefor and to the extent not already paid byExchangeco, all declared and unpaid dividends on each such PSION ExchangeableShare.

24. Under the Voting and Exchange Trust Agreement, upon the liquidation, dissolutionor winding-up of PSION, PSION will be required to purchase each outstandingPSION Exchangeable Share and each holder will be required to sell all of its PSIONExchangeable Shares (such purchase and sale obligations are hereafter referredto as the "Automatic Exchange Rights on Liquidation"), for a purchase price pershare equal to the then current market price of a PSION Ordinary Share, to besatisfied by the delivery to the Trustee, on behalf of the holder, of one PSIONOrdinary Share, together with, on the designated payment date therefor and to theextent not already paid by Exchangeco, all declared and unpaid dividends on eachsuch PSION Exchangeable Share.

25. Contemporaneously with the closing of the Arrangement, PSION, Exchangeco andCallco will enter into the Support Agreement which will restrict PSION fromdeclaring or paying dividends on the PSION Ordinary Shares unless equivalentdividends are declared and paid on the PSION Exchangeable Shares. In addition,pursuant to the Support Agreement, PSION may not make any changes to thePSION Ordinary Shares (e.g., subdivision, consolidation or reclassification) unlessthe sale or economically equivalent changes are simultaneously made to thePSION Exchangeable Shares or such changes are approved by the holders of thePSION Exchangeable Shares.

26. The Arrangement involves, or may involve, a number of trades (the "Trades")including: (i) the issuance of the PSION Exchangeable Shares, ReplacementOptions and PSION Ordinary Shares; (ii) the issuance of PSION Ordinary Sharesupon the exchange of the PSION Exchangeable Shares, the issuance of PSIONOrdinary Shares upon the exercise of a Replacement Option; (iii) the creation andexercise of all the various rights under the Voting and Exchange Trust Agreement,Support Agreement and Exchangeable Share Provisions; (iv) and the issuance ofshares by PSION and its affiliates (including Exchangeco and Callco) in connectionwith the Arrangement.

27. The fundamental investment decision to be made by a holder of Teklogix CommonShares and Teklogix Options is made at the time of the Teklogix SecurityholdersMeeting when such holder votes in respect of the Arrangement. As a result of thisdecision, any Teklogix Options which have not been conditionally exercisedbecome Replacement Options and any holder of Teklogix Common Shares (otherthan PSION and its affiliates and a holder who exercises its right of dissent)receives PSION Exchangeable Shares, PSION Ordinary Shares, cash or acombination thereof in exchange for such Teklogix Common Shares. The PSIONExchangeable Shares will be the economic equivalent in all material respects ofPSION Ordinary Shares. All subsequent exchanges of PSION ExchangeableShares will be in furtherance of the holder's initial investment decision, the approvalof the Arrangement.

28. The initial investment decision will be made on the basis of the Circular, whichcontains prospectus-level disclosure of the business and affairs of each of PSIONand Exchangeco, on the particulars of the Arrangement and on the securities to beissued in connection therewith.

29. PSION will send concurrently to all holders of PSION Exchangeable Shares andPSION Ordinary Shares resident in Canada all disclosure material furnished toholders of PSION Ordinary Shares resident in the United Kingdom, including,without limitation, copies of its proxy solicitation materials, its annual financialstatements and its semi-annual financial statements which financial statements willbe prepared solely in accordance with United Kingdom generally acceptedaccounting principles ("UK GAAP").

AND WHEREAS pursuant to the System, this MRRS Decision Document evidencesthe decision 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 pursuant to the Legislation is that:

1. the Prospectus Requirement and the Registration Requirement shall not apply toany of the Trades.

2. the first trade in PSION Exchangeable Shares acquired under the Arrangementshall be deemed to be a distribution or a primary distribution to the public under theLegislation of the Jurisdiction in which the trade takes place (the "ApplicableLegislation"), unless:

(a) Exchangeco is a reporting issuer or the equivalent under the ApplicableLegislation or where the Applicable Legislation does not recognize the statusof a reporting issuer, the requirements described in paragraph 4 below aremet;

(b) if the seller is in a "special relationship" with or is an "insider" of Exchangeco(where such term is defined in the Applicable Legislation) the seller hasreasonable grounds to believe that Exchangeco is not in default of anyrequirement of the Applicable Legislation;

(c) no unusual effort is made to prepare the market or to create a demand forthe PSION Exchangeable Shares, and no extraordinary commission orconsideration is paid in respect of such first trade;

(d) disclosure of the exempt trade is made to the Decision Maker(s) (theDecision Makers hereby confirming that the filing of the Circular with theDecision Makers constitutes disclosure to the Decision Makers of the exempttrade); and

(e) such first trade, except in Quebec, is not made from the holdings of anyperson, company or combination of persons or companies holding asufficient number of any securities of PSION (with PSION ExchangeableShares counted as securities of PSION) to affect materially the control ofPSION (with any holding of any person, company or combination of personsor companies exceeding 20% of the outstanding voting securities ofExchangeco and PSION on a consolidated basis shall, in the absence ofevidence to the contrary, be deemed to affect materially the control ofPSION) unless:

(i) Exchangeco is a reporting issuer (or equivalent) under the ApplicableLegislation, if applicable, and is not in default of any requirement ofthe Applicable Legislation;

(ii) the seller files with the applicable Decision Maker(s) and any otherstock exchange recognized by such Decision Maker(s) for thispurpose on which the PSION Exchangeable Shares are listed at leastseven days and not more than fourteen days prior to such first trade,

(A) a notice of intention to sell in the form prescribed by theApplicable Legislation for control block distributions (the"Control Block Rules") disclosing particulars of the controlposition known to the seller, the number of PSIONExchangeable Shares to be sold and the method ofdistribution; and

(B) a declaration signed by the seller as at a date not more thantwenty-four hours prior to its filing and prepared and executedin accordance with the Control Block Rules and certified asfollows:

"the seller for whose account the securities to which this certificaterelates are to be sold hereby represents that the seller has noknowledge of any material change which has occurred in the affairsof the issuer of the securities which has not been generally disclosedand reported to the [name of securities regulatory authority in thejurisdiction where the trade takes place], nor has the seller anyknowledge of any other material adverse information in regard to thecurrent and prospective operations of the issuer which have not beengenerally disclosed";

provided that the notice required to be filed under Section 2(v)(B)(I)and the declaration required to be filed under the Section 2(v)(B)(II)shall be renewed and filed at the end of sixty days after the originaldate of filing and thereafter at the end of each twenty-eight day periodso long as any of the PSION Exchangeable Shares specified underthe original notice have not been sold or until notice has been filedthat the PSION Exchangeable Shares so specified or any part thereofare no longer for sale;

(iii) the seller files with the applicable Decision Maker(s) within three daysafter the completion of any such first trade, a report of the trade in theform prescribed by the Applicable Legislation;

(iv) no unusual effort is made to prepare the market or to create ademand for the PSION Exchangeable Shares and no extraordinarycommission or other consideration is paid in respect of such firsttrade; and

(v) the seller (or affiliated entity) has held the PSION ExchangeableShares and/or the Teklogix Common Shares, in the aggregate, for aperiod of at least six months provided that if:

(A) the Applicable Legislation provides that, upon a seller to whomthe Control Block Rules apply, acquiring additional securitiesof a class pursuant to certain prescribed exemptions fromprospectus requirements under such legislation, all securitiesof such class are subject to a hold period commencing thedate the last security of the class was acquired under suchprescribed exemptions; and

(B) the seller acquires PSION Exchangeable Shares or PSIONOrdinary Shares pursuant to any such prescribed exemptions;

all PSION Exchangeable Shares and PSION Ordinary Shares held bythe seller will be subject to the hold period established by theApplicable Legislation commencing on the date any such subsequentPSION Exchangeable Shares and PSION Ordinary Shares areacquired;

3. the first trade in PSION Ordinary Shares acquired under the Arrangement, theexchange of PSION Exchangeable Shares or upon the issuance of ReplacementOptions shall be deemed to be a distribution or a primary distribution to the publicunless such trade is executed through the facilities of a stock exchange or marketoutside of Canada in accordance with all laws and rules applicable to such stockexchange or market; and

4. that the Material Change Reporting Requirements, the Financial StatementRequirements and the Proxy Requirements shall not apply to Exchangeco, andwhere applicable PSION, and the Insider Reporting Requirements shall not applyto an insider of Exchangeco who is an insider only by virtue of being a director orsenior officer of Exchangeco or a subsidiary of Exchangeco who is not otherwisean insider of PSION, for so long as:

(a) PSION sends concurrently to all holders of PSION Exchangeable Sharesand PSION Ordinary Shares resident in Canada all disclosure materialfurnished to holders of PSION Ordinary Shares resident in the UnitedKingdom, including, without limitation, copies of its proxy solicitationmaterials, its annual financial statements and its semi-annual financialstatements which financial statements will be prepared solely in accordancewith UK GAAP;

(b) the financial statements to be provided by PSION in accordance with clause4(a) are reconciled to Canadian GAAP for each reporting periodcommencing immediately following a reporting period during which thenumber of PSION Ordinary Shares and PSION Exchangeable Shares, in theaggregate, held beneficially by persons or companies in Canada represent10% or more of the total number of issued and outstanding PSION OrdinaryShares;

(c) as regards the Insider Reporting Requirements applicable to a director orsenior officer of Exchangeco, where the director or officer does not receiveinformation as to material facts or material changes concerning PSION in theordinary course before such information is generally disclosed;

(d) PSION files with each Decision Maker copies of all documents required tobe filed by it with the LSE and the UKLA;

(e) the Circular includes a statement that, as a consequence of this order,Exchangeco and its insiders will be exempt from certain disclosurerequirements applicable to reporting issuers and its insiders in Canada, andspecifies those requirements Exchangeco and its insiders have beenexempted from, and identifies the disclosure that will be made in substitutiontherefor;

(f) PSION complies with the requirements of the UKLA and LSE in respect ofmaking public disclosure of material information on a timely basis andforthwith issues in Canada and files with the Decision Makers any pressrelease that discloses a material change in PSION's affairs; and Exchangecocomplies with the Material Change Reporting requirements in respect ofmaterial changes in the affairs of Exchangeco that would be material toholders of PSION Exchangeable Shares but would not be material to holdersof PSION Ordinary Shares;

(g) PSION includes in all mailings of proxy solicitation materials (if any) toholders of PSION Exchangeable Shares a clear and concise statementexplaining the reason for the mailed material being solely in relation toPSION and not in relation to Exchangeco, such statement to include areference to the economic equivalency between the PSION ExchangeableShares and the PSION Ordinary Shares and the right to direct voting atPSION's shareholders' meetings pursuant to the Voting and Exchange TrustAgreement (without taking into account tax effects);

(h) PSION remains the direct or indirect beneficial owner of all the issued andoutstanding common shares of Exchangeco; and

(i) except for securities issued to PSION or to wholly-owned subsidiaries ofPSION, Exchangeco does not issue any securities to the public other thanthe PSION Exchangeable Shares.

September 15th, 2000.

"J. A. Geller"      "K. D. Adams"