Securities Law & Instruments

Headnote

MutualReliance Review System for Exemptive Relief Applications - reliefgranted from registration requirements for trades of public companyshares and from the registration and prospectus requirements fortrades of promissory notes, all by the issuer under an issuerbid - relief also granted from the valuation requirement and certaindisclosure requirements in the issuer bid circular in connectionwith the issuer bid - 12 registered shareholders of issuer inOntario holding 1.4% of outstanding shares of issuer - no beneficialowners in Ontario - issuer bid made in compliance with BritishColumbia requirements but issuer unable to rely on statutory deminimus exemption from Ontario issuer bid requirements as issuerobtaining exemption from certain of the British Columbia issuerbid requirements.

ApplicableOntario Statutes Cited

SecuritiesAct, R.S.O. 1990, c.S.5, as am., ss 25, 53, 74(1) and 104(2)(c).

ApplicableOntario Rules Cited

Rule61-501 - Insider Bids, Issuer Bids, Going Private Transactionsand Related Party Transactions, ss. 3.3, 3.4(1) and 9.1.

Forms

Form33, Item 22.


INTHE MATTER OF

THESECURITIES LEGISLATION OF BRITISH COLUMBIA,

ALBERTAAND ONTARIO

AND

INTHE MATTER OF

THEMUTUAL RELIANCE REVIEW SYSTEM

FOREXEMPTIVE RELIEF APPLICATIONS

AND

INTHE MATTER OF EX FUND CAPITAL INC.

MRRSDECISION DOCUMENT

WHEREAS the local securities regulatory authorityor regulator (the "Decision Maker") in each of British Columbia,Alberta and Ontario (the "Jurisdictions") has received an applicationfrom Ex Fund Capital Inc. (the "Filer") for a decision underthe securities legislation of the Jurisdictions (the "Legislation")that, in connection with the proposed purchase by the Filerof its outstanding common shares (the "Shares") under an issuerbid (the "Offer"), the Filer be exempt from the requirementsin the Legislation:


(a)to be registered to trade in a security (the "Registration Requirements")for trades by the Filer of common shares of Cardiocomm SolutionsInc. ("Cardiocomm"), Photochannel Networks Inc. ("Photochannel")and Cryopak Industries Inc. ("Cryopak") or of Notes (as definedbelow) under the Offer;


(b)to file and obtain a receipt for a preliminary prospectus anda prospectus (the "Prospectus Requirements") for trades by theFiler of Notes under the Offer;


(c)to obtain a formal valuation of the Shares and provide disclosurein the issuer bid circular (the "Circular") of such valuationor a summary thereof (the "Valuation Requirements");


(d)that the Circular include, with respect to Cardiocomm, Photochanneland Cryopak, the information prescribed in the form of prospectusappropriate for those companies (the "Public Company DisclosureRequirements"); and


(e)that the Circular include, with respect to the Filer, the informationprescribed in the form of prospectus appropriate for the Filer(the "Ex Fund Disclosure Requirements");


AND WHEREAS under the Mutual Reliance Systemfor Exemptive Relief Applications (the "System"), the BritishColumbia Securities Commission is the principal regulator forthis application;


AND WHEREAS the Filer has represented to theDecision Makers that:


1.the Filer was incorporated under the Company Act (British Columbia)on February 5, 1996;


2.the Filer is a reporting issuer in British Columbia and is nota reporting issuer in anyother of the Jurisdictions;


3.the Filer is not in default of any requirement under the Legislation;


4.the Filer is a venture capital fund company that, by itselfand with its two wholly-owned subsidiaries, holds equity securitiesof:


(a) three private companies, including common shares (the "BrookdaleShares") of Brookdale International Systems Inc. ("Brookdale"),and


(b) four public companies, Cardiocomm, Photochannel and Cryopak,all of which are listed on the Canadian Venture Exchange, andUnity Wireless Corp. ("Unity"), which is quoted on the over-the-counterbulletin board in the United States (the "OTC BB");


5.the Filer's authorized share capital is 100,000,000 Shares and20,000,000 Class A Preference shares without par value; as atNovember 27, 2001, 21,130,423 Shares and no Class A Preferenceshares were outstanding;


6.none of the Filer's securities are listed on any stock exchangeor quotation system;


7.the Filer has received final forgiveness orders under the SmallBusiness Venture Capital Act permitting it to distributeits assets, including the equity securities, to its shareholders;the Filer proposes to carry out this distribution through theOffer;


8.under the Offer, the Filer proposes to acquire all of its outstandingShares in exchange for:


(a) approximately $0.0875 in cash (the "Cash Amount"),


(b) 0.1544 common shares of Cardiocomm,


(c) 0.0237 common shares of Photochannel,


(d) 0.0205 common shares of Cryopak, and


(e) one promissory note to be issued by the Filer (the "Note"),


foreach Share tendered and not withdrawn under the Offer;


9.the Cash Amount will be based on a pro rata portionof the Filer's cash on hand on the day immediately before thedate the Offer is made, less estimated expenses the Filer mayincur before paying for the Shares tendered under the Offer,plus the estimated value on the day immediately before the datethe Offer is made of the shares of the three private companiesowned by the Filer, and the average trading price of the sharesof Unity on the OTC BB on the 20 trading days prior to the daythe Offer is made;


10.each Note will entitle the holder to receive from the Filer,from time to time, an amount equal to the cash portion of anyconsideration received by the Filer from a disposition of anyof the Brookdale Shares or as a result of a corporate changein Brookdale (once the aggregate amount of money received bythe Filer from such dispositions and corporate changes equals$88,750), less any taxes and expenses incurred by the Filerin connection with the disposition or as a result of the corporatechange, divided by 21,130,423;


11.the Filer does not propose to distribute the private companyshares under the Offer because of restrictions on transfer inthe private companies' articles; the Filer does not proposeto distribute the shares of Unity under the Offer because OTCBB traded shares are not eligible for registered retirementsavings plans;


12.the Filer has approximately 100 shareholders;


13.Discovery Capital Corporation ("DCC"), a British Columbia company,owns 432,736, or 2.0%, of the outstanding Shares and Ex FundTechnologies Corp. ("ETC"), a British Columbia company and awholly-owned subsidiary of DCC, owns 17,529,041, or 83.0%, ofthe outstanding Shares;


14.as at November 29, 2001, other than DCC and ETC, the Filer had:


(a) 81 registered shareholders in British Columbia holding 2,633,116,or 12.5%, of the outstanding Shares,


(b) there are no beneficial shareholders in Ontario and 12 registeredshareholders in Ontario holding 299,149, or 1.4%, of outstandingShares, each of whom was a trustee under a British Columbiaresident's registered retirement savings plan, and


(c) one registered shareholder in Alberta holding 40,000, or0.2%, of the outstanding Shares;


15.DCC and ETC have advised the Filer that, as at November 29,2001, neither of them intend to tender their Shares to the Offer;


16.there are no exemptions from the Registration Requirements insome of the Jurisdictions for trades of common shares of Cardiocomm,Photochannel and Cryopak by the Filer under the Offer;


17.there are no exemptions from the Registration Requirements orthe Prospectus Requirements in some of the Jurisdictions fortrades of Notes by the Filer under the Offer;


18.the Circular will include:


(a) an opinion as to the fairness, from a financial point ofview, of the Offer to the Filer's shareholders,


(b) information as to where publicly available information regardingCardiocomm, Photochannel and Cryopak may be obtained, and


(c) except to the extent exemptive relief is granted by thisdecision, the disclosure prescribed by the Legislation for issuerbids;


AND WHEREAS under the System, the MRRS DecisionDocument evidences the decision of each Decision Maker (collectivelythe "Decision");


AND WHEREAS each of the Decision Makers issatisfied that the test contained in the Legislation that providesthe Decision Maker with the jurisdiction to make the Decisionhas been met;


THE DECISION of the Decision Makers under theLegislation is that:


1.the Registration Requirements shall not apply to trades by theFiler of common shares of Cardiocomm, Photochannel and Cryopakunder the Offer;


2.the Registration Requirements and the Prospectus Requirementsshall not apply to trades by the Filer of Notes under the Offerprovided that the first trade in Notes acquired under the Offeris deemed to be a distribution under the Legislation;


3.the Filer is exempt from the Valuation Requirements, the PublicCompany Disclosure Requirements and the Ex Fund Disclosure Requirementsin connection with the Offer.

December 14, 2001.

"Brenda Leong"