Securities Law & Instruments

Headnote

Subsection83.1(1) - Issuer deemed a reporting issuer in Ontario - Issuerhas been a reporting issuer in Alberta since October 13, 2000and in British Columbia since January 29, 2001 - Issuer listedand posted for trading on the Canadian Venture Exchange - Issuernot designated as a capital pool company by CDNX - Continuousdisclosure requirements of British Columbia and Alberta substantiallythe 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

AVALONWORKS CORP.

ORDER

(Subsection83.1(1))

UPONthe application of Avalon Works Corp. (the "Issuer") for an orderpursuant to subsection 83.1(1) of the Act deeming the Issuer tobe a reporting issuer for the purposes of Ontario securities law;

ANDUPON considering the application and the recommendationof the staff of the Commission;

ANDUPON the Issuer representing to the Commission as follows:

1.The Issuer was incorporated on April 6, 2000 pursuant to the provisionsof the Canada Business Corporations Act.

2.The Issuer's head office, which was formerly located in the Provinceof Quebec, is now located in Ottawa, Ontario.

3.The Issuer has been a reporting issuer under the SecuritiesAct (Alberta) (the "Alberta Act") since October 13, 2000following the issuance of a receipt by the Alberta SecuritiesCommission (the "ASC") on October 13, 2000 for the Issuer's initialpublic offering prospectus dated September 29, 2000 pursuant toASC Rule 46-501 - Junior Capital Pool Offerings.

4.The Issuer's common shares ("Common Shares") were listed and postedfor trading on the Canadian Venture Exchange Inc. ("CDNX") onJanuary 29, 2001, upon which date the Issuer also became a reportingissuer under the Securities Act (British Columbia) (the"BC Act").

5.The Issuer acquired all of the issued and outstanding common sharesof Danek Associates Inc. ("DAI") following its shareholders' approvalof such acquisition at its annual and special meeting of shareholdersheld on April 30, 2001 (the "Qualifying Transaction"). In connectionwith the Qualifying Transaction, a total of 12,000,000 CommonShares were issued to a total of 6 Ontario residents.

6.In connection with the Qualifying Transaction, the Issuer preparedand sent to its shareholders, and filed with the appropriate securitiesregulatory authorities, an information circular dated March 21,2001 (the "Information Circular") containing prospectus-leveldisclosure with respect to the business and affairs of the Issuer,DAI and the Qualifying Transaction.

7.Effective May 4, 2001, the Issuer was no longer designated asa Capital Pool Company by the CDNX.

8.The authorized share capital of the Issuer consists of an unlimitednumber of Common Shares and an unlimited number of First PreferredShares and Second Preferred Shares. There are currently 18,360,000Common Shares issued and outstanding and no First Preferred Sharesor Second Preferred Shares issued and outstanding.

9.The Common Shares are currently listed and posted for tradingon CDNX.

10.The Issuer has a significant connection to Ontario in that: (i)residents of Ontario hold no less than 12,000,000 Common Sharesrepresenting approximately 65% of the Issuer's issued and outstandingCommon Shares, (ii) three of the Issuer's four directors are residentin Ontario, and (iii) the Issuer's head office is now locatedin Ontario.

11.The Issuer has maintained its continuous disclosure obligationsunder the Alberta Act and the BC Act since October 13, 2000 andJanuary 29, 2001, respectively, which obligations are substantiallysimilar to those under the Act. The continuous disclosure materialsfiled by the Issuer since October 13, 2000 are available on theSystem for Electronic Document Analysis and Retrieval.

12.Other than in the provinces of Alberta and British Columbia, theIssuer is not a reporting issuer or equivalent under the securitieslegislation of any other jurisdiction in Canada.

13.The Issuer is not in default of any requirements under the BCAct, the Alberta Act, any of the rules and regulations made thereunder,or of any requirements of the CDNX.

14.There have been no penalties or sanctions imposed against theIssuer by a court relating to Canadian securities legislationor by a Canadian securities regulatory authority, and the Issuerhas not entered into any settlement agreement with any Canadiansecurities regulatory authority.

15.Neither the Issuer nor any of its directors, officers nor, tothe best knowledge of the Issuer, its directors and officers,any of its controlling shareholders has: (i) been the subjectof any penalties or sanctions imposed by a court relating to Canadiansecurities legislation or by a Canadian securities regulatoryauthority, (ii) entered into a settlement agreement with a Canadiansecurities regulatory authority, or (iii) been subject to anyother penalties or sanctions imposed by a court or regulatorybody that would be likely to be considered important to a reasonableinvestor making an investment decision.

16.Neither the Issuer nor any of its directors, officers nor, tothe best knowledge of the Issuer, its directors and officers,any of its controlling shareholders, is or has been subject to:(i) any known ongoing or concluded investigations by: (a) a Canadiansecurities regulatory authority, or (b) a court or regulatorybody, other than a Canadian securities regulatory authority, thatwould be likely to be considered important to a reasonable investormaking an investment decision; or (ii) any bankruptcy or insolvencyproceedings, or other proceedings, arrangements or compromiseswith creditors, or the appointment of a receiver, receiver-manageror trustee, within the preceding 10 years.

17.None of the directors or officers of the Issuer, nor to the bestknowledge of the Issuer, its directors and officers, any of itscontrolling shareholders, is or has been at the time of such eventa director or officer of any other issuer which is or has beensubject to: (i) any cease trade or similar orders, or orders thatdenied access to any exemptions under Ontario securities law,for a period of more than 30 consecutive days, within the preceding10 years; or (ii) any bankruptcy or insolvency proceedings, orother proceedings, arrangements or 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) of theAct that the Issuer be deemed a reporting issuer for the purposeof Ontario securities laws.

March1, 2002.

"IvaVranic"