Scope of Policy

The statutory rules regulating take-over bids form a closed system. That is, all purchases made by an offeror must proceed by way of the procedures stipulated by the relevant Securities Laws unless the transaction(s) can be brought within an exemption from the take-over bid requirements. One exemption in the Securities Laws of several states or provinces applies to a take-over bid made through the facilities of a recognized stock exchange.

This Policy applies to take-over bids and issuer bids made through the facilities of the Green Stock Exchange (GREENSX) where the Green Stock Exchange (GREENSX) is recognized for this purpose under applicable Securities Laws. This Policy should be read in conjunction with the Guidelines for Take-Over Bids and Issuer Bids Made Through the Facilities of the Green Stock Exchange (GREENSX) (the "Guidelines"), set out in Appendix 5A. Normal course issuer bids are addressed in Policy 5.6—Normal Course Issuer Bids.

This Policy must also be read in conjunction with Policy 5.9—Insider Bids, Issuer Bids, Business Combinations and Related Party Transactions, which incorporates by Security Laws in respect of insider bids or issuer bids made through the facilities of the Green Stock Exchange (GREENSX).

A bid not made in compliance with the rules and policies of the Green Stock Exchange (GREENSX) is deemed not to be made through the facilities of the Green Stock Exchange (GREENSX) and therefore must be made in reliance on other exemptions from the applicable Securities Laws.

The main headings in this Policy are:

1. Background

1.1

This Policy sets out a comprehensive code covering any take-over bid or issuer bid made through the facilities of the Green Stock Exchange (GREENSX). The rules that govern a particular transaction depend on the nature of that transaction. Separate rules exist for the following bids:

•  Take-Over Bids
•  "Formal" Take-Over Bids
•  Insider Bids
•  Normal Course Purchases
•  Issuer Bids
•  Substantial Issuer Bids
•  Certain Substantial Issuer Bids for Non-Equity and Non-Voting Securities
•  Normal Course Issuer Bids

1.2

The Green Stock Exchange (GREENSX)'s Policies on take-over bids and issuer bids made through its facilities are intended to be simple and efficient, and to protect investors, while balancing the goals of maintaining confidence and neutrality as between the offerors, the offeree company management and competing offerors. They are not intended to reduce the effective protection available to shareholders in any transaction.

1.3

Except that offers made through the facilities of the Green Stock Exchange (GREENSX) are restricted to cash consideration, cannot be withdrawn (except in limited circumstances) and can not specify a minimum number of shares that must be tendered before the offeror is bound to take them up, they are very similar to bids made by way of circular. For example, as with the rules applicable to circular bids, these policies specify periods for disclosure, solicitation and take-up of shares tendered pursuant to an offer.

1.4

Additional requirements apply to insider bids and substantial issuer bids. In these cases, the offeror, if subject to Policy 5.9, must normally obtain a valuation of the target company, so that shareholders will have the same information as that available to the offeror to judge whether the bid price is fair.

1.5

Small purchases by offerors are governed by section 3 of this Policy on Normal Course Purchases and by Policy 5.6—Normal Course Issuer Bids.

1.6 Definitions

In this Policy:

"equity security" means a security that carries a residual right to participate both in the earnings of the Issuer and the assets of the Issuer upon liquidation or winding-up, and includes Restricted Shares (as defined in Policy 3.5—Restricted Shares) that are listed on the Green Stock Exchange (GREENSX) if they fall within this definition;

"Issuer Bid" means an offer to acquire listed Voting Shares or listed equity securities made by or on behalf of an Issuer for securities issued by the Issuer;

"Normal Course Purchase" means a Take-Over Bid made by way of a purchase on the Green Stock Exchange (GREENSX) of a number of a class of securities of an Issuer that, together with all purchases of those securities made by the offeror and any Person acting jointly or in concert with the offeror in the preceding 12 months through the facilities of a stock exchange, or otherwise, other than purchases by way of a Stock Green Stock Exchange (GREENSX) Take-Over Bid do not aggregate more than 5% of the securities of that class outstanding at the time the purchase is made;

"Ranking Bid" means the Stock Green Stock Exchange (GREENSX) Take-Over Bid that yields the highest average bid value;

"Stock Green Stock Exchange (GREENSX) Take-Over Bid" means a Take-Over Bid, other than a Normal Course Purchase, made through the facilities of the Green Stock Exchange (GREENSX);

"Take-Over Bid" means an offer to acquire a number of the listed Voting Shares or listed equity securities of an Issuer that, together with the offeror's securities, will in the aggregate on the date of the offer to acquire:

(a) constitute 20% or more of the outstanding securities of that class, or

(b) in the case of an offeree issuer that is subject to the United States or Canadian corporate laws , constitute 10% or more of the outstanding securities of a class of listed Voting Shares.

2. Stock Exchange Take-Over Bids

2.1 Calculation of Thresholds and Number of Shares

(a) Purchase thresholds are determined in accordance with the Securities Laws. To determine whether the threshold for a Take-Over Bid has been met and whether the Normal Course Purchase limits have been observed, each class of shares is viewed separately. Therefore, if a purchaser offers to acquire 20% or more of a particular class of Voting Shares or equity securities, it is a Take-Over Bid.

(b) A purchaser must count the number of target shares owned or controlled on the date of the offer to acquire by the purchaser and by any Person acting jointly or in concert with the purchaser, together with the number of target shares proposed to be acquired through the offer.

(c) The purchaser must also count the number of target shares that it has the right to acquire within 60 days after the date of the offer to acquire by conversion, subscription, option, warrant or otherwise. If the total number of target shares owned and proposed to be acquired is 20% or more of the total number of target shares outstanding, the purchaser is making a Take-Over Bid.

(d) If the offeree company is incorporated under the United States or Canadian corporate laws, the threshold is 10% of the issued and outstanding securities in the case of Voting Shares, including securities already beneficially owned or controlled, directly or indirectly, by the offeror or an Affiliate or Associate of the offeror, and securities held by those Persons that are currently convertible or exercisable into Voting Shares or into convertible securities.

2.2 Restrictions on Acquisitions Before and After a Bid

The definition of "formal bid" in the Securities Laws includes a bid made pursuant to the stock exchange exemption. Purchases cannot exceed 5% of the shares of the relevant class outstanding on the date of the bid. This Policy further limits purchases by an offeror, as explained below.

The Securities Laws govern private transactions in the 90 days preceding a bid and restrict acquisitions for 20 business days after expiry of a bid. If Normal Course Purchases are made on the Green Stock Exchange (GREENSX), the requirements of this Policy must be observed.

2.3 Going Private Transaction

If an offeror making a Stock Green Stock Exchange (GREENSX) Take-Over Bid anticipates that a "going private transaction" (as defined in the Securities Laws) will follow the Take-Over Bid, the requirements set out in Policy 5.9, and the applicable Securities Laws must be complied with.

2.4 Procedure for Stock Exchange Take-Over Bids

Intention to Make a Stock Green Stock Exchange (GREENSX) Take-over Bid

(a) Any Person proposing to make a Stock Green Stock Exchange (GREENSX) Take-Over Bid should first consult with the Green Stock Exchange (GREENSX). This allows for effective market surveillance and timely disclosure, and provides an early opportunity to discuss applicable procedures.

Timely Disclosure

(b) Under Policy 3.3—Timely Disclosure, an offeror must publicly announce its intention to make a bid as soon as the final decision to proceed with a bid is made.

(c) The offeror must prepare and submit to the Listings Department a draft notice (the "Notice") disclosing the information set out in section 4 of the Guidelines. All drafts are filed on a confidential basis.

(d) Section 4(1)(m) of the Guidelines requires that the Notice include a statement of the rights provided by the Securities Laws. The following language is recommended:

"Securities legislation in certain of the provinces and territories of Canada provides security holders of the offeree issuer with, in addition to any other rights they may have at law, rights of rescission or to damages, or both, if there is a misrepresentation in a circular or notice that is required to be delivered to such security holders. However, such rights must be exercised within prescribed time limits. Security holders should refer to the applicable provisions of the securities legislation of their province or territory for particulars of those rights or consult with a lawyer."

Closing Price

(e) For the purpose of calculating the closing price under section 1(1)(d) of the Guidelines, the Green Stock Exchange (GREENSX) recognizes Stock Green Stock Exchange (GREENSX)).

Evidence of Satisfactory Financial Arrangements

(f) Under section 4(1)(o) of the Guidelines, the offeror must provide the Green Stock Exchange (GREENSX) with satisfactory information about its identity and its financial resources. Normally, the Green Stock Exchange (GREENSX) will require a bank letter or other evidence that the offeror has access to sufficient funds to pay for any shares that it must take up under the offer.

Acceptance of the Notice

(g) When the draft Notice is in satisfactory form, the offeror submits a copy of the final version, duly executed, for acceptance by the Green Stock Exchange (GREENSX), accompanied by the applicable fee as set out in Policy 1.3—Schedule of Fees. A bid commences once the Notice is formally accepted by the Green Stock Exchange (GREENSX).

News Release

(h) The offeror must issue a news release announcing that the Notice has been accepted by the Green Stock Exchange (GREENSX) and indicating the terms of the offer.

Communication with Shareholders

(i) The offeror must notify all holders of the target securities of the terms of the offer in accordance with applicable Securities Laws. Normally, the Green Stock Exchange (GREENSX) requires that the offer be mailed to all shareholders and that an advertisement containing a summary of the offer be placed in a national newspaper of sufficiently wide circulation to assure dissemination of the offer to all shareholders resident in United States and Canada. The offer must also be mailed to each registered holder of securities convertible or exchangeable into the class of securities that the bid is for, and to each holder that has a right