Securities Law & Instruments

Headnote

Section 144 -- Application for revocation of cease trade order -- issuer subject to cease trader as a result of failure to file financial statements -- issuer has made a separate application to not be a reporting issuer in all of the jurisdictions in which it is currently a reporting issuer -- full revocation granted effective as of the date the issuer is determined to not be a reporting issuer.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990 c. S.5, as am., ss. 127, 144.

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, c. S.5, AS AMENDED

(THE "ACT")

AND

IN THE MATTER OF

CLEARLY CANADIAN BEVERAGE CORPORATION

(THE "APPLICANT")

ORDER

WHEREAS the securities of the Applicant are currently subject to a cease trade order made by the Director dated May 25, 2009, made under paragraph 2 and paragraph 2.1 of subsection 127(1) of the Act directing that all trading in and acquisitions of the securities of the Applicant, whether direct or indirect, shall cease until further order by the Director (the "Ontario CTO");

AND WHEREAS pursuant to section 144 of the Act, the Ontario CTO was partially revoked on May 4, 2010 solely to permit trades in securities of the Applicant in connection with certain transactions contemplated by reorganization of the share capital of the Applicant by the Applicant (the "Reorganization") under a proposal to its creditors under the Bankruptcy and Insolvency Act (Canada) (the "Proposal").

AND WHEREAS the Applicant has applied to the Ontario Securities Commission (the "OSC") pursuant to section 144 of the Act (the "Application") for a full revocation of the Ontario CTO;

AND WHEREAS the Applicant has represented to the OSC that:

1. The Applicant is a British Columbia company under the Business Corporations Act (British Columbia) and was incorporated on March 18, 1981.

2. The Applicant's head office is located at Unit 11/12, 220 Viceroy Road, Vaughn, Ontario. Prior to March 2008, the Applicant's head office was located at 2267 West 10th Avenue, Vancouver, British Columbia.

3. The Applicant is a reporting issuer in Ontario and British Columbia.

4. The Applicant is in the business of selling sparkling flavoured water, packaged dried fruits and nuts, and organic baby food.

5. The Applicant's share have been publicly traded on various exchanges in North America since the 1980's. Most recently, the Applicant's limited voting common shares (the "Limited Voting Shares") were quoted for trading in the United States on the Pink Sheets under the trading symbol "CCBEF.PK".

6. The Ontario CTO was issued due to the default of the Applicant to file its audited financial statements and management's discussion and analysis, as prescribed by National Instrument Continuous Disclosure Obligations, for the year ended December 31, 2008 (together, the "2008 Financials") within the prescribed deadline. No further financial statements or management's discussion and analysis have been filed by the Applicant since that time.

7. In addition to the Ontario CTO, the Applicant is subject to a cease trade order issued by the British Columbia Securities Commission on May 11, 2009 (the "BC CTO") for failure of the Applicant to file its 2008 Financials.

8. On March 17, 2010, while experiencing severe cash flow problems, and with its debts being significantly greater than its assets, the Applicant filed the Proposal with its creditors.

9. The Applicant issued a press release on March 18, 2010, and filed a material change report in Canada and a Form 6-K in the United States on March 19, 2010, announcing the filing of the Proposal.

10. The Proposal contemplated, amongst other things:

(a) the Reorganization by:

(i) creating an unlimited number of new common shares (the "New Common Shares"),

(ii) issuing the New Common Shares to the Applicant's creditors who, under the Proposal, elected to accept the issuance of such New Common Shares in full payment of the amount outstanding on their claims against the Applicant,

(iii) cancelling all issued common shares (being the Limited Voting Shares and the variable multiple voting shares) and preferred shares of the Applicant,

(iv) cancelling all warrants, options, rights to purchase shares, share subscription rights and conversion rights of the Applicant, and

(v) issuing a cash payment, expected to equate to $0.25 on the dollar, to the Applicant's creditors who, under the Proposal, elected to accept such cash payment in full payment of the amount outstanding on their claims against the Applicant;

(b) the approval of the Supreme Court of British Columbia (the "Court"); and

(c) the Applicant applying to cease to be a reporting issuer in British Columbia and Ontario.

11. On April 1, 2010, the Applicant's creditors voted in favour of the Proposal, which was approved by the Court on April 26, 2010 (the "Court Order").

12. The Applicant applied to the British Columbia Securities Commission (the "BCSC"), and was granted on May 3, 2010, a partial revocation of the BC CTO in connection with the Reorganization under the Proposal.

13. The Applicant was granted on May 4, 2010, a partial revocation of the Ontario CTO under section 144 of the Act to effect the transactions contemplated by the Proposal.

14. All of the former non-trade creditors of the Applicant elected to receive New Common Shares in full payment of the amount outstanding on their claims against the Applicant.

15. The closing of the transactions contemplated by the Proposal has taken place in accordance with the Court Order and, effective May 26, 2010, the outstanding securities of the Applicant, are held by 12 security holders.

16. The outstanding securities of the Applicant are beneficially owned, directly or indirectly, by fewer than 15 security holders in each of the jurisdictions in Canada and less than 51 security holders in total in Canada.

17. The Applicant issued a press release on July 6, 2010, and filed a material change report in Canada and a Form 6-K in the United States on July 6, 2010, announcing that its Limited Voting Shares issued and outstanding as of May 26, 2010 are cancelled and the common shareholders of record of the Applicant as of May 26, 2010 are no longer shareholders of the Applicant.

18. The Applicant's only outstanding securities are the New Common Shares.

19. The quotation of the Filer's Limited Voting Shares on the Pink Sheets ceased on August 13, 2010.

20. No securities of the Applicant are currently listed, traded or quoted for trading on any "marketplace" in Canada (as defined in National Instrument 21-101 Marketplace Operation), and the Applicant does not currently intend to have any of its securities listed, traded or quoted on such a marketplace in Canada.

21. The Applicant has currently no intention to seek financing by way of private or public placement in a jurisdiction of Canada.

22. Except for the defaults that led to the issuance of the Ontario CTO and the BC CTO, and other continuous disclosure defaults since the issuance of the Ontario CTO and the BC CTO, the Applicant has complied with applicable securities legislation, regulations and instruments.

23. The Applicant is not in a financial position to make any public filings, in accordance with the Act, of any financial statements, management's discussion and analysis or certificates relating thereto, either on an annual or quarterly basis.

24. The Applicant has applied to the securities regulatory authority or regulator in each of Ontario and British Columbia for a decision under the securities legislation of such jurisdictions that the Applicant is not a reporting issuer under such securities legislation (the "Reporting Issuer Exemptive Relief Sought"). The Filer has been advised by staff of the BCSC, the principal regulator for such application, that the Reporting Issuer Exemptive Relief Sought will be granted concurrently upon the grant of the Ontario CTO and BC CTO.

25. If the Reporting Issuer Exemptive Relief Sought is granted, the Applicant will no longer be a reporting issuer in any jurisdiction in Canada.

26. The Applicant has also filed an application with the BCSC for a full revocation of the BC CTO.

AND UPON considering the Application and the recommendation of the staff of the OSC;

AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to section 144 of the Act, that the Ontario CTO is fully revoked as of the date on which the Applicant ceases to be a reporting issuer under the Act.

DATED September 24, 2010.

"Michael Brown"
Assistant Manager
Corporate Finance Branch