Securities Law & Instruments

Headnote

MRRS - Distribution of shares of a non-reportingissuer as a dividend in specie is not subject to registrationand prospectus requirements - de minimis Canadian shareholders.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 25, 53, 74(1).

Multi Lateral Cited

Multi Lateral Instrument 45-102 Resale of Securities.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN,

MANITOBA, ONTARIO, QUÉBEC,AND

NEWFOUNDLAND AND LABRADOR

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

MFC BANCORP LTD. AND

MYMETICS CORPORATION

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Québec, and Newfoundland and Labrador (the "Jurisdictions")has received an application from MFC Bancorp Ltd. (the "Corporation")for a decision under the securities legislation of the Jurisdictions(the "Legislation") that the requirement to be registeredto trade in a security and the prospectus requirement containedin the Legislation (the "Registration and Prospectus Requirements")shall not apply to the distribution by the Corporation of commonshares ("Mymetics Shares") of Mymetics Corporation("Mymetics") to its shareholders ("MFC Shareholders")resident in Canada as a dividend in specie (the "Distribution").

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the British Columbia Securities Commission is the principalregulator for the Application;

AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice14-101;

AND WHEREAS the Corporation has representedto the Decision Makers that:

1. the Corporation is organized under thelaws of the Yukon Territory, is a reporting issuer in BritishColumbia, Alberta and Québec and is not in defaultof any requirement under the Legislation;

2. the Corporation owns companies that operatein the financial services industry, focusing on merchant banking,and provides specialized banking and corporate finance servicesinternationally;

3 the authorized capital of the Corporationconsists of an unlimited number of common shares and an unlimitednumber of Class A Preferred Shares issuable in series;

4. as of July 16, 2002, approximately 14,763,361common shares (including 1,870,000 shares held by a subsidiary,but excluding shares held by wholly-owned subsidiaries andshares pending cancellation) and no Class A Preferred Sharesof the Corporation were outstanding;

5. the Corporation's common shares are quotedfor trading on the NASDAQ National Market under the symbol"MXBIF" and on the Frankfurt Stock Exchange underthe symbol "MFC GR", and its 8% convertible subordinatedbonds due April 1, 2008 are listed for trading on the TSXVenture Exchange under the symbol "MXB.DB.U";

6. Mymetics was incorporated under the lawsof the Commonwealth of Pennsylvania in 1994 and was reincorporatedunder the laws of the State of Delaware in November 1996;

7. Mymetics is not a reporting issuer or equivalentin any Jurisdiction and has no intention of becoming a reportingissuer or the equivalent in any Jurisdiction;

8. the Mymetics Shares are registered withthe U.S. Securities and Exchange Commission (the "SEC")under Section 12 of the U.S. Securities Exchange Act of1934 and Mymetics has been filing continuous disclosurereports with the SEC since 1995;

9. the Mymetics Shares are quoted for tradingon the OTC Bulletin Board in the United States;

10. the authorized capital of Mymetics consistsof 80,000,000 Mymetics Shares, par value $0.01 per share,and 5,000,000 preferred shares, par value $0.01 per share;

11. as of July 16, 2002, approximately 34,504,213Mymetics Shares, and 15,372 preferred shares (which are convertibleinto 16,393,316 Mymetics Shares) of Mymetics, were outstanding;

12. the Corporation directly or indirectlyowns or controls approximately 14,298,293 Mymetics Sharesrepresenting approximately 41% of the outstanding MymeticsShares;

13. under the Distribution, the Corporationintends to distribute approximately 14,025,193 of the MymeticsShares held by it to MFC Shareholders as a dividend inspecie on the basis of 0.95 of a Mymetics Share for eachoutstanding common share of the Corporation; no fractionalshares will be issued in connection with the Distribution;the number of Mymetics Shares to be received by MFC Shareholderswill be rounded down to the nearest whole share in the eventthat a shareholder is entitled to a fractional share representing0.5 or less of a Mymetics Share and will be rounded up tothe nearest whole share in the event that a shareholder isentitled to a fractional share representing more than 0.5of a Mymetics Share;

14. the Distribution will comply with thelaws of the Yukon Territory and the State of Delaware, theU.S. Securities Exchange Act of 1934, the U.S. SecuritiesAct of 1933, and other applicable securities laws of theUnited States;

15. as of July 16, 2002, of the Corporation'soutstanding shares, approximately 14,763,361 shares were entitledto participate in the Distribution, of which approximately3,025,577 were held by approximately 65 holders of recordin Canada as follows:

Province

Number of MFC Shares Held

Number of Holders of Record

Percentage Total Outstanding MFCShares

British Columbia

1,373,825

6

8.52%

Alberta

3,031

3

0.018%

Manitoba

3,106

4

0.019%

Saskatchewan

1,916

7

0.012%

Ontario

1,583,966

25

9.82%

Quebec

49,606

18

0.308%

Newfoundland

10,127

2

0.063%

 

3,025,577

65

18.76%

16. upon completion of the Distribution, holdersof Mymetics Shares resident in Canada will hold approximately9.7% of the total outstanding Mymetics Shares and will representless than 10% of the holders of Mymetics Shares;

17. Mymetics has filed a registration statementon Form S-1 with the SEC to register the Mymetics Shares tobe distributed to MFC Shareholders and the 16,393,316 MymeticsShares issuable upon conversion of the 15,372 preferred sharesof Mymetics; the Corporation will mail the prospectus formingpart of the registration statement to MFC Shareholders inCanada;

18. after the Distribution, Mymetics willconcurrently send to holders of Mymetics Shares resident inCanada all disclosure materials it sends to holders of MymeticsShares resident in the United States;

19. the Distribution would be exempt fromthe Registration and Prospectus Requirements of the Legislationbut for the fact that Mymetics is not a reporting issuer orequivalent under the Legislation;

AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(collectively, the "Decisions");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that the Registration and Prospectus Requirementsshall not apply to trades by the Corporation of Mymetics Sharesin connection with the Distribution provided that the firsttrade in Mymetics Shares acquired under this Decision in a Jurisdictionshall be deemed to be a distribution or primary distributionto the public under the Legislation of such Jurisdiction (the"Applicable Legislation") unless:

(a) except in Québec, the conditionsin section 2.14(1) of Multilateral Instrument 45-102 Resaleof Securities are satisfied; or

(b) in Québec, the alienation is madethrough an exchange, or a market, outside of Canada or toa person or company outside of Canada.

August 7, 2002.

"Noreen Bent"