Securities Law & Instruments

Headnote

MutualReliance Review System for Exemptive Relief Applications - issuerhas only one security holder - issuer deemed to have ceased tobe a reporting issuer.

ApplicableOntario Statutory Provisions

SecuritiesAct, R.S.O. 1990, c.S.5, as am. s. 83.

INTHE MATTER OF

THESECURITIES LEGISLATION OF ALBERTA,

SASKATCHEWAN,ONTARIO, QUEBEC, NOVA SCOTIA

ANDNEWFOUNDLAND AND LABRADOR

AND

INTHE MATTER OF

THEMUTUAL RELIANCE REVIEW SYSTEM FOR

EXEMPTIVERELIEF APPLICATIONS

AND

INTHE MATTER OF

CHAPTERSONLINE INC.

MRRSDECISION DOCUMENT

WHEREASthe local securities regulatory authority or regulator (the "DecisionMaker") in each of the Provinces of Alberta, Saskatchewan, Ontario,Quebec, Nova Scotia and Newfoundland and Labrador (the "Jurisdictions")has received an application from Chapters Online Inc. ("ChaptersOnline") for a decision under the securities legislation of eachof the Jurisdictions (the "Legislation") that Chapters Onlinebe deemed to have ceased to be a reporting issuer under the Legislation;

ANDWHEREAS under the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commissionis the principal regulator for this application;

ANDWHEREAS Chapters Online has represented to the DecisionMakers that:

1.Chapters Online was incorporated under the Business CorporationsAct (New Brunswick) on July 23, 1999, is continued underthe Business Corporations Act (Ontario), and is a reportingissuer in each of the Jurisdictions.

2.Chapters Online is not in default of any of the requirements ofthe Legislation, other than its failure to file and deliver itsinterim financial statements as at, and for the financial periodsended, September 30, 2001, and December 31, 2001.

3.Chapters Online's head office is located in Toronto, Ontario.

4.Chapters Online does not intend to seek public financing by wayof an offering of its securities.

5.The authorized capital of Chapters Online consists of an unlimitednumber of common shares (the "Common Shares") of which one CommonShare is issued and outstanding.

6.On October 26, 2001, Indigo Books & Music Inc. ("Indigo")acquired all the issued and outstanding securities of ChaptersOnline. Indigo currently owns all of the issued and outstandingsecurities of Chapters Online.

7.The Common Shares were delisted from The Toronto Stock Exchangeeffective November 12, 2001 and no securities, including debtsecurities, of Chapters Online are listed or quoted on any stockexchange or market.

8.Other than the Common Shares, Chapters Online has no other securities,including debt securities, outstanding.

ANDWHEREAS under 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 pursuant to the Legislationis that Chapters Online is deemed to have ceased to be a reportingissuer under the Legislation.

March20, 2002.

"JohnHughes"