Securities Law & Instruments

Headnote

Mutual Reliance Review Systemfor Exemptive Relief Applications - Issuer has only two beneficialsecurity holders - issuer deemed to have ceased being a reportingissuer.

Applicable Ontario StatutoryProvisions

Securities Act, R.S.O. 1990,c. S.5, as am. s. 83.
 
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
ALBERTA, SASKATCHEWAN, ONTARIO,QUÉBEC,
NOVA SCOTIA AND NEWFOUNDLANDAND LABRADOR

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
DRUG ROYALTY CORPORATIONINC.

MRRS DECISION DOCUMENT

WHEREAS the local securitiesregulatory authority or regulator (the "Decision Maker")in each of the Provinces of Alberta, Saskatchewan, Ontario,Québec, Nova Scotia and Newfoundland and Labrador (the"Jurisdictions") has received an application fromDrug Royalty Corporation Inc. (the "Filer") for adecision under the securities legislation of each of the Jurisdictions(the "Legislation") that the Filer be deemed to haveceased to be a reporting issuer under the Legislation; and

AND WHEREAS pursuantto the Mutual Reliance Review System for Exemptive Relief Applications(the "MRRS"), the Ontario Securities Commission isthe principal regulator for this application;

AND WHEREAS the Filerhas represented to the Decision Makers that:

1. The Filer is a companyexisting under the Canada Business Corporations Act(the "CBCA") and is a reporting issuer or the equivalentin each of the Jurisdictions.

2. The Filer's head officeis located at Suite 202, 8 King Street East, Toronto, Ontario,M5C 1B5.

3. The Filer is not in defaultof any of the requirements of the Legislation other than itsfailure to file and deliver its interim financial statementsand its interim management discussion and analysis of financialcondition and results of operations for the period ended February28, 2002 (the "Interim Filing Requirements"). TheInterim Filing Requirements arose after the date of the Offer(as defined below).

4. The authorized capitalof the Filer consists of an unlimited number of common shares(the "Common Shares") and an unlimited number ofpreference shares, issuable in series. The issued and outstandingcapital of the Filer consists of 40,874,340 Common Shares.The Filer has no debt securities outstanding.

5. On March 19, 2002, DRCAcquisition Inc. (the "Offeror") made an offer (the"Offer") to purchase all of the issued and outstandingCommon Shares.

6. The Offeror is a corporationexisting under the CBCA and is a wholly-owned subsidiary ofInwest Investments Ltd. ("Inwest").

7. On April 25, 2002, theOfferor acquired 37,698,836 Common Shares or approximately92.2% of the Common Shares pursuant to the Offer. On April29, 2002, the Offeror gave notice to the Filer that the Offerorwas exercising its rights under section 206 of the CBCA toacquire all of the Common Shares not tendered to the Offerorunder the Offer.

8. As a result of the Offerand the subsequent compulsory acquisition procedures pursuantto the CBCA, Inwest and the Offeror are the only beneficialholders of Common Shares.

9. The Common Shares werede-listed from trading on the Toronto Stock Exchange at theclose of trading on May 2, 2002. No securities, includingdebt securities, of the Filer are listed or quoted on anyother exchange or market.

10.The Filer does not intendto seek public financing by way of a public offering of itssecurities.

AND WHEREAS under theMRRS, this MRRS Decision Document evidences the decision ofeach Decision Maker (collectively, the "Decision");

AND WHEREAS each DecisionMaker is of the opinion the test contained in the Legislationthat provides the Decision Maker with the jurisdiction to makethe Decision has been met;

THE DECISION of the DecisionMakers pursuant to the Legislation is that the Filer is deemedto have ceased to be a reporting issuer under the Legislation.

June 17, 2002.

"John Hughes"