Securities Law & Instruments

Headnote

MutualReliance Review System for Exemptive Relief Applications - DutchAuction Issuer Bid - With respect to securities tendered at orbelow the clearing price, offer providing for full take-up andpayment for shares tendered by odd lot holders - Offeror exemptfrom the requirement in the legislation to take up and pay forsecurities proportionately according to the number of securitiesdeposited by each securityholder and the associated disclosurerequirement

ApplicableOntario Statutory Provisions

SecuritiesAct, R.S.O. 1990, c.S.5, as am., ss. 95(7) and 104(2)(c).

ApplicableOntario Regulations

Regulationmade under the Securities Act, R.R.O. 1990, Reg. 1015, as am.,ss. 189(b).

ApplicableOntario Rules

Rule61-501 - Insider Bids, Issuer Bids, Going Private Transactionsand Related Party Transactions

MRRSDECISION DOCUMENT

INTHE MATTER OF

THESECURITIES LEGISLATION OF QUEBEC AND ONTARIO

AND

INTHE MATTER OF

THEMUTUAL RELIANCE REVIEW SYSTEM FOR

EXEMPTIVERELIEF APPLICATIONS

AND

INTHE MATTER OF

BMTCGROUP INC.

MRRSDECISION DOCUMENT

WHEREASthe Canadian securities regulatory authority or regulator (the"Decision Maker") in each of the Provinces of Quebec and Ontario(the "Jurisdictions") has received an application from BMTC GroupInc. ("BMTC" or the "Company") for a decision pursuant to thesecurities legislation of the Jurisdictions (the "Legislation")that, in connection with the proposed purchase by BMTC of a portionof its outstanding Class A Subordinate Voting Shares (the "Shares")pursuant to an issuer bid (the "Bid"), BMTC be exempt from therequirement in the Legislation to:

(i)take-up and pay for securities proportionately according to thenumber of securities deposited by each security holder (the "ProportionateTake-up and Payment Requirement");

(ii)provide disclosure in the issuer bid circular (the "Circular")of such proportionate take-up and payment (the "Associated DisclosureRequirement"); and

(iii)obtain a valuation of the Shares and provide disclosure in thecircular of such valuation or a summary thereof (the "ValuationRequirement").

ANDWHEREAS pursuant to the Mutual Reliance Review Systemfor Exemptive Relief Applications (the "System"), the Quebec SecuritiesCommission is the Principal Regulator for this application;

ANDWHEREAS BMTC has represented to the Decision Makers asfollows:

1.BMTC is a reporting issuer in each of the Jurisdictions and isnot on the list of defaulting reporting issuers.

2.The authorized capital of BMTC includes an unlimited number ofShares, of which approximately 6,874,418 were issued and outstandingas of January 31, 2002.

3.The Shares are listed and posted for trading on The Toronto Stockexchange (the "TSE").

4.The Bid will be made pursuant to a Modified Dutch Auction procedureas follows:

(a)the maximum number of Shares (the "Specified Number") that theCompany intends to purchase under the Bid will be specified inthe Circular and all Shares validly tendered and not withdrawnwill be taken up by BTMC up to the Specified Number;

(b)the range of prices (the "Range") within which the Company iswilling to repurchase its Shares under Bid will also be specifiedin the Circular;

(c)any holder of Shares (each, a "Shareholder") wishing to tenderto the Bid will have the right either to: (i) specify the lowestprice within the Range that the shareholder is willing to sellthe tendered Shares (an "Auction Tender"); or (ii) elect to bedeemed to have tendered at the Clearing Price (as determined inaccordance with paragraph 4(d) below) (a "Clearing Price Tender");

(d)the clearing price (the "Clearing Price") tendered to the Bidwill be the lowest price that will enable BMTC to purchase theSpecified Number of Shares and will be determined based upon thenumber of shares tendered pursuant to an Auction Tender and notwithdrawn at each price within the Range and the number of Sharestendered pursuant to a Clearing Price Tender, with each ClearingPrice Tender being considered a tender at the lowest price inthe Range for the purpose of calculating the Clearing Price;

(e)all Shares tendered at or below the Clearing Price by Shareholderswho hold "odd lots" (i.e. lots of less than 100 shares each) willbe taken up and paid for at the Clearing Price and will not besubjected to pro ration, provided that such Shareholders tenderall of their Shares to the Bid;

(f)all other Shares tendered at or below the Clearing Price pursuantto either an Auction Tender or a Clearing Price Tender will betaken up and paid for at the Clearing Price, subject to pro rationif the aggregate number of shares tendered at or below the ClearingPrice pursuant to Auction Tenders and the number of Shares tenderedto Clearing Price Tenders exceeds the Specified Number;

(g)if, as a result of pro ration and after giving effect to the purchaseof the number of Shares determined as set out in paragraph 4(d)above, a depositing shareholder were to hold fewer than 100 Sharesheld by the Shareholder under separate certificates or in differentaccounts, and Shares not tendered by the Shareholder pursuantto separate Auction tenders or Clearing Price Tenders and retainedby the Shareholder as a result of pro ration, BMTC will purchaseall such Shares at the Clearing Price, providing that all suchShares are properly deposited to the Bid;

(h)all Shares tendered at prices above the Clearing Price will bereturned to the appropriate Shareholders;

(i)all Shares tendered by Shareholders who specify a tender pricefor such tendered Shares that falls outside the Range will beconsidered to have been improperly tendered, will be excludedfrom the determination of the Clearing Price, will not be purchasedby BMTC and will be returned to the tendering Shareholders; and

(j)all shares tendered by Shareholders who fail to specify any tenderprice for such tendered Shares and fail to indicate that theyhave tendered their Shares pursuant to a Clearing Price Tenderwill be considered to have tendered pursuant to a Clearing PriceTender.

5.Prior to the expiry of the Bid, all information regarding thenumber of Shares tendered and the prices at which such Sharesare tendered will be kept confidential and the depository underthe Bid will be directed by BMTC to maintain such confidentialityuntil the Clearing Price is determined.

6.Since the Bid is for less than all the Shares, if the number ofShares tendered to the Bid at or below the Clearing Price exceedsthe Specified Number of Shares which BMTC is prepared to purchase,the legislation would require BMTC to take-up and pay for depositedShares proportionately, according to the number of Shares depositedby each Shareholder. In addition, the legislation would requiredisclosure in the Circular that BMTC would, if Shares tenderedto the Bid exceeded the Specified Number of shares which BMTCis prepared to purchase, take-up Shares proportionately accordingto the number of Shares tendered by each Shareholder.

7.The Circular will:

(a)disclose the mechanics for the take-up and payment for, or returnof, Shares as described in paragraph 4 above; and

(b)explain that, by tendering Shares at the lowest price in the Range,a Shareholder can reasonably expect that Shares so tendered willbe purchased at the Clearing Price, subject to pro ration as describedin paragraph 4 above;

(c)disclose the Liquidity Opinion, as described below; and

(d)disclose that the TSE will have sent the Director a statementindicating concurrence with the Liquidity opinion.

8.Prior to making the Bid, BMTC will retain an independent registereddealer to provide an opinion that a liquid market existed priorto the Bid and that following completion of the Bid, shareholderswill continue to have available a market which is not materiallyless liquid than the market which now exists prior to the Bid(the "Liquidity Opinion").

9.Prior to commencing the Bid, BMTC will receive a statement fromthe TSE that it concurs with the Liquidity Opinion and this statementwill also be sent to the Director.

10.No formal valuation will be prepared in connection with the issuerbid, or disclosed in the Circular, as BMTC submits that it willrely on the liquidity exemption available under Legislation.

ANDWHEREAS pursuant to the System, this MRRS Decision Documentevidences the decision of each Decision Maker (collectively, the"Decision");

ANDWHEREAS each of the Decision Makers is satisfied thatthe test contained in the Legislation that provides the DecisionMaker with the jurisdiction to make the Decision has been met;

THEDECISION of the Decision Makers in the Jurisdictionspursuant to the Legislation is that, in connection with the Bid,BMTC is exempt from each of the Proportionate Take-up and PaymentRequirement, the Associated Disclosure Requirement and the ValuationRequirement, provided that Shares tendered to the Bid are takenup and paid for, or returned to the Shareholders, in the mannerand circumstances described in paragraph 4 above.

February19, 2002.

"GuyLemoine"       "Claire Richer"