4 - Distribution Requirements

THE MANITOBA SECURITIES COMMISSION MSC RULE 2005-26 (Section 149.1, The Securities Act)

NATIONAL INSTRUMENT 44-101 SHORT FORM PROSPECTUS DISTRIBUTIONS

TABLE OF CONTENTS PART TITLE PAGE PART 1 DEFINITIONS AND INTERPRETATION 1 1.1 Definitions 1 1.2 References to information included in a document 6 1.3 References to information to be included in a document 6 1.4 Interpretation of "short form prospectus" 6 1.5 Interpretation of "payments to be made" 6 PART 2 QUALIFICATION TO FILE A PROSPECTUS IN THE FORM 6 OF A SHORT FORM PROSPECTUS 2.1 Short form prospectus 6 2.2 Basic qualification criteria 7 2.3 Alternative qualification criteria for issuers of approved 7 rating non-convertible securities 2.4 Alternative qualification criteria for issuers of guaranteed 8 non-convertible debt securities, preferred shares and cash settled derivatives 2.5 Alternative qualification criteria for issuers of guaranteed 9 convertible debt securities or preferred shares 2.6 Alternative qualification criteria for issuers of asset-backed 9 securities 2.7 Exemptions for new reporting issuers and successor issuers 10 2.8 Notice of Intention and Transition 11 PART 3 DEEMED INCORPORATION BY REFERENCE 12 3.1 Deemed incorporation by reference of filed documents 12 3.2 Deemed incorporation by reference of subsequently filed 12 documents 3.3 Incorporation by reference 12 - i -

PART TITLE PAGE PART 4 FILING REQUIREMENTS FOR A SHORT FORM 12 PROSPECTUS 4.1 Required documents for filing a preliminary short form 12 prospectus 4.2 Required documents for filing a short form prospectus 13 4.3 Review of unaudited financial statements 14 4.4 Consents of experts 15 4.5 Language of documents 16 PART 5 AMENDMENTS TO A SHORT FORM PROSPECTUS 17 5.1 Form of amendment 17 5.2 Required documents for filing an amendment 17 5.3 Auditor’s comfort letter 17 5.4 Forwarding amendments 18 5.5 Amendment to preliminary short form prospectus 18 5.6 Amendment to short form prospectus 18 PART 6 NON-FIXED PRICE OFFERINGS AND REDUCTION OF 18 OFFERING PRICE UNDER SHORT FORM PROSPECTUS 6.1 Non-fixed price offerings and reduction of offering price 18 under short form prospectus

PART 7 SOLICITATIONS OF EXPRESSIONS OF INTEREST 19 7.1 Solicitations of expressions of interest 19 PART 8 EXEMPTION 20 8.1 Exemption 20 8.2 Evidence of exemption 20 PART 9 TRANSITION, REPEAL, EFFECTIVE DATE AND CITATION 21 9.1 Applicable rules 21 9.2 Repeal 21 9.3 Effective date 21 9.4 Citation 21 - ii -

THE MANITOBA SECURITIES COMMISSION MSC RULE 2005-26 (Section 149.1, The Securities Act)

NATIONAL INSTRUMENT 44-101 SHORT FORM PROSPECTUS DISTRIBUTIONS

PART 1 – DEFINITIONS AND INTERPRETATION Definitions 1.1 In this Instrument "AIF" has the same meaning as in NI 51-102 for a reporting issuer other than an investment fund, and for an investment fund means an annual information form as such term is used in NI 81-106;

"alternative credit support" means support, other than a guarantee, for the payments to be made by an issuer of securities, as stipulated in the terms of the securities or in an agreement governing rights of, or granting rights to, holders of the securities, that

(a) obliges the person or company providing the support to provide the issuer with funds sufficient to enable the issuer to make the stipulated payments, or

(b) entitles the holder of the securities to receive, from the person or company providing the support, payment if the issuer fails to make a stipulated payment;

"applicable CD rule" means, for a reporting issuer other than an investment fund, NI 51-102 and, for an investment fund, NI 81-106;

"approved rating" has the same meaning as in NI 51-102; "approved rating organization" has the same meaning as in NI 51-102; "asset-backed security" has the same meaning as in NI 51-102; "business acquisition report" has the same meaning as in NI 51-102; "cash equivalent" means an evidence of indebtedness that has a remaining term to maturity of 365 days or less and that is issued, or fully and unconditionally guaranteed as to principal and interest, by

(a) the government of Canada or the government of a jurisdiction of Canada,

- 2 - (b) the government of the United States of America, the government of one of the states of the United States of America, the government of another sovereign state or a permitted supranational agency, if, in each case, the evidence of indebtedness has an approved rating, or

(c) a Canadian financial institution, or other entity that is regulated as a banking institution, loan corporation, trust company, or insurance company or credit union by the government, or an agency of the government, of the country under whose laws the entity is incorporated or organized or a political subdivision of that country, if, in either case, the Canadian financial institution or other entity has outstanding short term debt securities that have received an approved rating from any approved rating organization;

"cash settled derivative" means a derivative, the terms of which provide for settlement only by means of cash or cash equivalent the amount of which is determinable by reference to the underlying interest of the derivative;

"convertible" means, if used to describe securities, that the rights and attributes attached to the securities include the right or option to purchase, convert into or exchange for or otherwise acquire equity securities of an issuer, or any other security that itself includes the right or option to purchase, convert into or exchange for or otherwise acquire equity securities of an issuer;

"credit supporter" means a person or company who provides a guarantee or alternative credit support for any of the payments to be made by an issuer of securities as stipulated in the terms of the securities or in an agreement governing rights of, or granting rights to, holders of the securities;

"current AIF" means, (a) if the issuer has filed an AIF for its most recently completed financial year, that AIF, or (b) the issuer’s AIF filed for the financial year immediately preceding its most recently completed financial year if

(i) the issuer has not filed an AIF for its most recently completed financial year, and (ii) the issuer is not yet required under the applicable CD rule to have filed its annual financial statements for its most recently completed financial year,

"current annual financial statements" means, (a) if the issuer has filed its comparative annual financial statements in accordance with the applicable CD rule for its most recently completed financial year, those financial statements together with the auditor’s report accompanying the financial statements and, if there has been a change of auditors since the comparative period, an auditor’s report on the financial statements for the comparative period, or

- 3 - (b) the issuer’s comparative annual financial statements filed for the financial year immediately preceding its most recently completed financial year, together with the auditor’s report accompanying the financial statements and, if there has been a change of auditors since the comparative period, an auditor’s report on the financial statements for the comparative period if

(i) the issuer has not filed its comparative annual financial statements for its most recently completed financial year, and

(ii) the issuer is not yet required under the applicable CD rule to have filed its annual financial statements for its most recently completed financial year;

"derivative" means an instrument, agreement or security, the market price, value or payment obligation of which is derived from, referenced to, or based on an underlying interest;

"designated foreign jurisdiction" has the same meaning as in NI 52-107; "equity securities" means securities of an issuer that carry a residual right to participate in the earnings of the issuer and, upon the liquidation or winding up of the issuer, in its assets;

"executive officer" has the same meaning as in NI 51-102; "foreign disclosure requirements" has the same meaning as in NI 52-107; "Form 44-101F1" means Form 44-101F1 Short Form Prospectus of this Instrument; "Form 51-102F2" means Form 51-102F2 Annual Information Form of NI 51-102; "Form 51-102F3" means Form 51-102F3 Material Change Report of NI 51-102; "Form 51-102F4" means Form 51-102F4 Business Acquisition Report of NI 51-102; "Form 51-102F5" means Form 51-102F5 Information Circular of NI 51-102; "full and unconditional credit support" means (a) alternative credit support that (i) entitles the holder of the securities to receive payment from the credit supporter, or enables the holder to receive payment from the issuer within 15 days of any failure by the issuer to make a payment as stipulated, and

(ii) results in the securities receiving the same credit rating as, or a higher credit rating than, the credit rating they would have received if payment had been fully and unconditionally guaranteed by the credit supporter, or would result in the securities receiving such a rating if they were rated, or

- 4 - (b) a guarantee of the payments to be made by the issuer of securities as stipulated in the terms of the securities or in an agreement governing rights of, or granting rights to, holders of the securities such that the holder of the securities is entitled to receive payment from the guarantor within 15 days of any failure by the issuer to make a payment as stipulated;

"information circular" has the same meaning as in NI 51-102; "interim period" has the same meaning as in the applicable CD rule; "investment fund" has the same meaning as in NI 81-106; "material change report" means, for a reporting issuer other than an investment fund, a completed Form 51-102F3, and for an investment fund, a completed Form 51-102F3 adjusted as directed by NI 81-106;

"MD&A" has the same meaning as in NI 51-102 in relation to a reporting issuer other than an investment fund, and in relation to an investment fund means an annual or interim management report of fund performance as defined in NI 81-106;

"mineral project" has the same meaning as in NI 43-101; "NI 13-101" means National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR);

"NI 43-101" means National Instrument 43-101 Standards of Disclosure for Mineral Projects;

"NI 44-102" means National Instrument 44-102 Shelf Distributions; "NI 51-102" means National Instrument 51-102 Continuous Disclosure Obligations; "NI 52-107" means National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency;

"NI 81-106" means National Instrument 81-106 Investment Fund Continuous Disclosure; "non-convertible" means, if used to describe a security, a security that is not convertible; "permitted supranational agency" means the International Bank for Reconstruction and Development, the International Finance Corporation, the Inter-American Development Bank, the Asian Development Bank, the Caribbean Development Bank, the European Bank for Reconstruction and Development, the African Development Bank and any person or company prescribed under paragraph (g) of the definition of "foreign property" in subsection 206(1) of the ITA;

- 5 - "reorganization" means (a) a statutory amalgamation, (b) a statutory merger, or (c) a statutory arrangement; "restricted security" has the same meaning as in NI 51-102; "short form eligible exchange" means each of the Toronto Stock Exchange, Tier 1 and Tier 2 of the TSX Venture Exchange and the Canadian Trading and Quotation System Inc.;

"special warrant" means a security that, by its terms or the terms of an accompanying contractual obligation, entitles or requires the holder to acquire another security without payment of material additional consideration and obliges the issuer of either security to undertake efforts to file a prospectus to qualify the distribution of the other security;

"successor issuer" means an issuer existing as a result of a reorganization, other than, in the case where the reorganization involved a divestiture of a portion of an issuer’s business, an issuer that succeeded to or otherwise acquired the portion of the business divested;

"underlying interest" means, for a derivative, the security, commodity, financial instrument, currency, interest rate, foreign exchange rate, economic indicator, index, basket, agreement, benchmark or any other reference, interest or variable, and, if applicable, the relationship between any of the foregoing, from, to or on which the market price, value or any payment obligation of the derivative is derived, referenced or based; and

"U.S. credit supporter" means a credit supporter that (a) is incorporated or organized under the laws of the United States of America or any state or territory of the United States of America or the District of Columbia,

(b) either (i) has a class of securities registered under section 12(b) or section 12(g) of the 1934 Act, or

(ii) is required to file reports under section 15(d) of the 1934 Act, (c) has filed with the SEC all 1934 Act filings for a period of 12 calendar months immediately before the filing of the preliminary short form prospectus,

(d) is not registered or required to be registered as an investment company under the Investment Company Act of 1940 of the United States of America, and

- 6 - (e) is not a commodity pool issuer; "U.S. GAAS" has the same meaning as in NI 52-107. References to information included in a document 1.2 References in this Instrument to information included in a document refer to both information contained directly in the document and information incorporated by reference in the document.

References to information to be included in a document 1.3 Provisions of this Instrument that require an issuer to include information in a document require an issuer either to insert the information directly in the document or to incorporate the information in the document by reference.

Interpretation of "short form prospectus" 1.4 In this Instrument, other than in Parts 4 through 8 or unless otherwise stated, a reference to a short form prospectus includes a preliminary short form prospectus.

Interpretation of "payments to be made" 1.5 For the purposes of the definition of "full and unconditional credit support", payments to be made by an issuer of securities as stipulated in the terms of the securities include any amounts to be paid as dividends in accordance with, and on the dividend payment dates stipulated in, the provisions of the securities, whether or not the dividends have been declared.

PART 2 – QUALIFICATION TO FILE A PROSPECTUS IN THE FORM OF A SHORT FORM PROSPECTUS

Short form prospectus 2.1(1) An issuer shall not file a prospectus in the form of Form 44-101F1 unless the issuer is qualified under any of sections 2.2 through 2.6 to file a prospectus in the form of a short form prospectus.

2.1(2) An issuer that is qualified under any of sections 2.2 through 2.6 to file a prospectus in the form of a short form prospectus for a distribution may file, for that distribution,

(a) a preliminary prospectus, prepared and certified in the form of Form 44-101F1; and (b) a prospectus, prepared and certified in the form of Form 44-101F1.

- 7 - Basic qualification criteria 2.2 An issuer is qualified to file a prospectus in the form of a short form prospectus for a distribution of any of its securities in the local jurisdiction, if the following criteria are satisfied:

(a) the issuer is an electronic filer under NI 13-101; (b) the issuer is a reporting issuer in at least one jurisdiction of Canada; (c) the issuer has filed with the securities regulatory authority in each jurisdiction in which it is a reporting issuer all periodic and timely disclosure documents that it is required to have filed in that jurisdiction

(i) under applicable securities legislation, (ii) pursuant to an order issued by the securities regulatory authority, or (iii) pursuant to an undertaking to the securities regulatory authority; (d) the issuer has, in at least one jurisdiction in which it is a reporting issuer, (i) current annual financial statements, and (ii) a current AIF; (e) the issuer’s equity securities are listed and posted for trading on a short form eligible exchange and the issuer is not an issuer

(i) whose operations have ceased, or (ii) whose principal asset is cash, cash equivalents, or its exchange listing. Alternative qualification criteria for issuers of approved rating non-convertible securities 2.3(1) An issuer is qualified to file a prospectus in the form of a short form prospectus for a distribution of non-convertible securities in the local jurisdiction, if the following criteria are satisfied:

(a) the issuer is an electronic filer under NI 13-101; (b) the issuer is a reporting issuer in at least one jurisdiction of Canada; (c) the issuer has filed with the securities regulatory authority in each jurisdiction in which it is a reporting issuer all periodic and timely disclosure documents that it is required to have filed in that jurisdiction

(i) under applicable securities legislation,

- 8 - (ii) pursuant to an order issued by the securities regulatory authority, or (iii) pursuant to an undertaking to the securities regulatory authority; (d) the issuer has, in at least one jurisdiction in which it is a reporting issuer, (i) current annual financial statements, and (ii) a current AIF; (e) the securities to be distributed (i) have received an approved rating on a provisional basis, (ii) are not the subject of an announcement by an approved rating organization, of which the issuer is or ought reasonably to be aware, that the approved rating given by the organization may be down-graded to a rating category that would not be an approved rating, and

(iii) have not received a provisional or final rating lower than an approved rating from any approved rating organization.

2.3(2) Paragraph (1)(e) does not apply to an issuer filing a short form prospectus that is a base shelf prospectus under NI 44-102.

Alternative qualification criteria for issuers of guaranteed non-convertible debt securities, preferred shares and cash settled derivatives 2.4(1) An issuer is qualified to file a prospectus in the form of a short form prospectus for a distribution of non-convertible debt securities, non-convertible preferred shares or non-convertible cash settled derivatives in the local jurisdiction, if the following criteria are satisfied:

(a) a credit supporter has provided full and unconditional credit support for the securities being distributed,

(b) at least one of the following is true: (i) the credit supporter satisfies the criteria in paragraphs 2.2(a), (b), (c) and (d) if the word "issuer" is replaced with "credit supporter" wherever it occurs;

(ii) the credit supporter is a U.S. credit supporter and the issuer is incorporated or organized under the laws of Canada or a jurisdiction of Canada;

(c) unless the credit supporter satisfies the criteria in paragraph 2.2(e) if the word "issuer" is replaced with "credit supporter" wherever it occurs, at the time the preliminary short form prospectus is filed

- 9 - (i) the credit supporter has outstanding non-convertible securities that (A) have received an approved rating, (B) have not been the subject of an announcement by an approved rating organization, of which the issuer is or ought reasonably to be aware, that the approved rating given by the organization may be down-graded to a rating category that would not be an approved rating, and

(C) have not received a rating lower than an approved rating from any approved rating organization, and

(ii) the securities to be issued by the issuer (A) have received an approved rating on a provisional basis, (B) have not been the subject of an announcement by an approved rating organization, of which the issuer is or ought reasonably to be aware, that the approved rating given by the organization may be down-graded to a rating category that would not be an approved rating, and

(C) have not received a provisional or final rating lower than an approved rating from any approved rating organization.

2.4(2) Subparagraph (1)(c)(ii) does not apply to an issuer filing a short form prospectus that is a base shelf prospectus under NI 44-102.

Alternative qualification criteria for issuers of guaranteed convertible debt securities or preferred shares 2.5 An issuer is qualified to file a prospectus in the form of a short form prospectus for a distribution of convertible debt securities or convertible preferred shares in the local jurisdiction, if the following criteria are satisfied:

(a) the debt securities or the preferred shares are convertible into securities of a credit supporter that has provided full and unconditional credit support for the securities being distributed;

(b) the credit supporter satisfies the criteria in section 2.2 if the word "issuer" is replaced with "credit supporter" wherever it occurs.

Alternative qualification criteria for issuers of asset-backed securities 2.6(1) An issuer established in connection with a distribution of asset-backed securities is qualified to file a prospectus in the form of a short form prospectus for a distribution of asset-backed securities in the local jurisdiction, if the following criteria are satisfied:

(a) the issuer is an electronic filer under NI 13-101;

- 10 - (b) the issuer has, in at least one jurisdiction of Canada, (i) current annual financial statements, and (ii) a current AIF; (c) the asset-backed securities to be distributed (i) have received an approved rating on a provisional basis, (ii) have not been the subject of an announcement by an approved rating organization, of which the issuer is or ought reasonably to be aware, that the approved rating given by the organization may be down-graded to a rating category that would not be an approved rating, and

(iii) have not received a provisional or final rating lower than an approved rating from any approved rating organization.

2.6(2) Paragraph (1)(c) does not apply to an issuer filing a short form prospectus that is a base shelf prospectus under NI 44-102.

Exemptions for new reporting issuers and successor issuers 2.7(1) Paragraph 2.2(d), paragraph 2.3(1)(d) and paragraph 2.6(1)(b) do not apply to an issuer if

(a) the issuer is not exempt from the requirement in the applicable CD rule to file annual financial statements within a prescribed period after its financial year end, but the issuer has not yet been required under the applicable CD rule to file annual financial statements, and

(b) unless the issuer is seeking qualification under section 2.6, the issuer has filed and obtained a receipt for a final prospectus that included the issuer’s comparative annual financial statements for its most recently completed financial year or the financial year immediately preceding its most recently completed financial year, together with the auditor’s report accompanying those financial statements and, if there has been a change of auditors since the comparative period, an auditor’s report on the financial statements for the comparative period.

2.7(2) Paragraph 2.2(d), paragraph 2.3(1)(d) and paragraph 2.6(1)(b) do not apply to an issuer if

(a) the successor issuer is not exempt from the requirement in the applicable CD rule to file annual financial statements within a prescribed period after its financial year end, but the issuer has not yet, since the completion of the reorganization which resulted in the successor issuer, been required under the applicable CD rule to file annual financial statements, and

(b) an information circular relating to the reorganization that resulted in the successor issuer

- 11 - was filed by the successor issuer or an issuer that was a party to the reorganization, and such information circular

(i) complied with applicable securities legislation, and (ii) included disclosure in accordance with Item 14.2 or 14.5 of Form 51-102F5 for the successor issuer.

Notice of intention and transition 2.8(1) An issuer is not qualified to file a short form prospectus under this Part unless it has filed a notice declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the issuer filing its first preliminary short form prospectus after the notice

(a) with its notice regulator, and (b) in substantially the form of Appendix A. 2.8(2) The notice under subsection (1) is effective until withdrawn. 2.8(3) For the purposes of subsection (1), "notice regulator" means, as determined on the date the notice is filed, the securities regulatory authority or regulator of the jurisdiction of Canada

(a) in which the issuer’s head office is located, if the issuer is not an investment fund and the issuer is a reporting issuer in that jurisdiction,

(b) in which the investment fund manager’s head office is located, if the issuer is an investment fund and the issuer is a reporting issuer in that jurisdiction, or

(c) with which the issuer has determined that it has the most significant connection, if paragraphs (a) and (b) do not apply to the issuer.

2.8(4) For the purposes of this section, if, on December 29, 2005, an issuer had a current AIF under National Instrument 44-101 Short Form Prospectus Distributions that was in force on December 29, 2005, the issuer is deemed to have filed a notice on December 14, 2005 declaring its intention to be qualified to file a short form prospectus.

2.8(5) For the purposes of this Part, if, on December 29, 2005, an issuer or a credit supporter had an annual information form in Form 44-101F1 AIF, prior to its repeal on May 18, 2005, that was a current AIF under National Instrument 44-101 Short Form Prospectus Distributions that was in force on December 29, 2005, the issuer or credit supporter is deemed to have a current AIF under this Part until the date it is first required under the applicable CD rule to file its annual financial statements.