Securities Law & Instruments

Headnote

Subsection83.1(1) - Issuer deemed to be a reporting issuer in Ontario -Issuer has been a reporting issuer in Alberta since August 19,1999 and in British Columbia since November 26, 1999 - Issuerlisted and posted for trading on the Canadian Venture Exchange- Continuous disclosure requirements of Alberta and British Columbiasubstantially the same as those of Ontario.

StatutesCited

SecuritiesAct, R.S.O. 1990, c. S.5, as am., ss. 83.1(1).

INTHE MATTER OF

THESECURITIES ACT,

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


AND


INTHE MATTER OF

SHELTON CANADA CORP.


ORDER

(Subsection83.1(1))


UPONthe application of Shelton Canada Corp. (the "Company") foran order pursuant to subsection 83.1(1) of the Act deeming theCompany to be a reporting issuer for the purposes of Ontariosecurities law;

ANDUPON considering the application and the recommendationof the staff of the Ontario Securities Commission (the "Commission");

ANDUPON the Company representing to the Commission asfollows:

1.The Company was incorporated on December 19, 1994 under theBusiness Corporation Act (Alberta) as Shelton CanadaCorp.

2.The Company's authorized share capital consists of an unlimitednumber of Common Shares and an unlimited number of PreferredShares. As of January 25, 2002, the issued and outstanding sharecapital consists of 6,350,000 Common Shares and no PreferredShares.

3.The Company's head office is located in Etobicoke, Ontario.

4.The Company became a reporting issuer under the SecuritiesAct (Alberta) ("ASA") on August 19, 1999 and became a reportingissuer under the Securities Act (British Columbia)("BCSA") on November 26, 1999 as a result of the merger of theVancouver Stock Exchange and the Alberta Stock Exchange to formthe Canadian Venture Exchange ("CDNX"). The Company is not areporting issuer in Ontario, and is not a reporting issuer,or equivalent, in any other jurisdiction, except British Columbiaand Alberta.

5.The Company was listed as a junior capital pool company withits Common Shares trading under the symbol "STO" on the AlbertaStock Exchange (now known as the CDNX) on September 23, 1999,and such Common Shares have been continually listed since thatdate.

6.On October 17, 2000, the CDNX issued a Bulletin confirming itsacceptance for filing of the Company's qualifying transaction.As a result, the Company was no longer designated a junior capitalpool company as of October 18, 2000.

7.The Company has a significant connection to Ontario as it has4,342,040 Common Shares of the Company or approximately 68.4%of the total issued and outstanding Common Shares of the Companyheld by beneficial and registered shareholders resident in Ontarioas at January 25, 2002.

8.The Company has maintained its continuous disclosure obligationsunder the ASA and BCSA since it became a reporting issuer ineach respective jurisdiction, which requirements are substantiallysimilar to those under the Act.

9.The continuous disclosure materials filed by the Company sinceAugust 19, 1999 under the ASA and since November 26, 1999 underthe BCSA are available on the System for Electronic DocumentAnalysis and Retrieval.

10.The Company is not in default of any requirements of the ASA,BCSA or the CDNX, or any of the rules, regulations or policiesthereunder.

11.The Company has not been subject to any penalties or sanctionsimposed against the Company by a court relating to Canadiansecurities legislation or by a Canadian securities regulatoryauthority, and has not entered into any settlement agreementswith any Canadian securities regulatory authority.

12.Neither the Company nor any of its officers, directors, norany of its shareholders holding sufficient securities of theCompany to affect materially the control of the Company has:(i) been the subject of any penalties or sanctions imposed bya court relating to Canadian securities legislation or by aCanadian securities regulatory authority, (ii) entered intoa settlement agreement with a Canadian securities regulatoryauthority, or (iii) been subject to any other penalties or sanctionsimposed by a court or regulatory body that would be likely tobe considered important to a reasonable investor making an investmentdecision.

13.Neither the Company nor any of its officers, directors, norany of its shareholders holding sufficient securities of theCompany to affect materially the control of the Company, isor has been subject to: (i) any known ongoing or concluded investigationsby: (a) a Canadian securities regulatory authority, or (b) acourt or regulatory body, other than a Canadian securities regulatoryauthority, that would be likely to be considered important toa reasonable investor making an investment decision; or (ii)any bankruptcy or insolvency proceedings, or other proceedings,arrangements or compromises with creditors, or the appointmentof a receiver, receiver-manager or trustee within the preceding10 years.

14.None of the officers or directors of the Company, nor any ofits shareholders holding sufficient securities of the Companyto affect materially the control of the Company, is or has beenat the time of such event, an officer or director of any otherissuer which is or has been subject to: (i) any cease tradeor similar orders, or orders that denied access to any exemptionsunder Ontario securities law, for a period of more than 30 consecutivedays, within the preceding 10 years; or (ii) any bankruptcyor insolvency proceedings, or other proceedings, arrangementsor compromises with creditors, or the appointment of a receiver,receiver-manager or trustee, within the preceding 10 years.

ANDUPON the Commission being satisfied that to do so wouldnot be prejudicial to the public interest;

ITIS HEREBY ORDERED pursuant to subsection 83.1(1) ofthe Act that the Company be deemed a reporting issuer for purposesof Ontario securities law.

February6, 2002.

"MargoPaul"