Notices

NOTICE OF AMENDMENTS TO NATIONAL INSTRUMENT 45-106 PROSPECTUS AND REGISTRATION EXEMPTIONS AND COMPANION POLICY 45-106CP PROSPECTUS AND REGISTRATION EXEMPTIONS October 1, 2010 Introduction We, the Canadian Securities Administrators (CSA or we), are implementing amendments to: • National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106), and • Companion Policy 45-106CP Prospectus and Registration Exemptions (45- 106CP). This notice forms part of a series of notices that address changes to securities legislation arising from the upcoming changeover to International Financial Reporting Standards (IFRS). Background NI 45-106 provides certain exemptions from the prospectus requirements of Canadian securities legislation. NI 45-106 refers to and relies on references to Canadian generally accepted accounting principles (Canadian GAAP), which are established by the Canadian Accounting Standards Board (AcSB). In February 2006, the AcSB published a strategic plan to transition, over a period of five years, Canadian GAAP for public enterprises to IFRS, as adopted by the International Accounting Standards Board (IASB). In March 2008, the timing of the transition was confirmed. IFRS will apply to most Canadian publicly accountable enterprises for financial years beginning on or after January 1, 2011. The AcSB has incorporated IFRS into the Handbook of the Canadian Institute of Chartered Accountants (the Handbook) as Canadian GAAP for most publicly accountable enterprises. As a result, the Handbook contains two sets of standards for public companies: • Part I of the Handbook – Canadian GAAP for publicly accountable enterprises that applies for financial years beginning on or after January 1, 2011, and • Part V of the Handbook - Canadian GAAP for public enterprises that is the pre­ changeover accounting standards (current Canadian GAAP).

NI 45-106 also refers to and relies on references to current Canadian generally accepted auditing standards (Canadian GAAS), which are established by the Canadian Auditing and Assurance Standards Board (AASB). The AASB published their strategic plan to adopt International Standards on Auditing as Canadian Auditing Standards in February 2007. These standards will continue to be known as Canadian GAAS in the Handbook. Canadian Auditing Standards are effective for audits of financial statements for periods ending on or after December 14, 2010. Consistent with these changes, the CSA is repealing and replacing National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency (to be renamed Acceptable Accounting Principles and Auditing Standards) (NI 52-107). The new version of NI 52-107 will require domestic issuers to comply with IFRS for financial years beginning on or after January 1, 2011 and will set out the accounting principles and auditing standards that apply to financial statements filed in a jurisdiction. The implementation of the new version of NI 52-107 is described in a separate notice (NI 52-107 Notice). The amendments do not reflect the impact of exposure drafts or discussion papers from the IASB prior to their adoption into IFRS. The CSA is implementing amendments to National Instrument 14-101 Definitions to include a definition of IFRS that incorporates amendments made to IFRS from time to time. Substance and Purpose of the Amendments The purpose of these changes is to accommodate the transition to IFRS and the new version of NI 52-107. A small number of housekeeping changes are also being made. The amendments: • replace current Canadian GAAP terms and phrases with IFRS terms and phrases, • change disclosure requirements in instances where IFRS contemplates different financial statements than current Canadian GAAP, • provide a 30 day extension to the deadline for reporting issuers to include in an offering memorandum the first interim financial report in the year of adopting IFRS in respect of an interim period beginning on or after January 1, 2011, and • clarify an existing provision or, where part or all of the provision is no longer accurate or appropriate, amend or delete it. Appendix B sets out the amendments to NI 45-106 and 45-106CP. Transition After the IFRS changeover date on January 1, 2011, non calendar year-end issuers will continue to prepare financial statements in accordance with current Canadian GAAP until the start of their new financial year. To accommodate for this, we have included transition provisions in the amendment instruments that provide that the amendments 2

only apply to an offering memorandum of an issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011. Thus, during the transition period, • issuers only including or incorporating by reference financial statements in an offering memorandum prepared in accordance with current Canadian GAAP will be required to comply with the version of NI 45-106 that contains current Canadian GAAP terms and phrases, and • issuers including or incorporating by reference financial statements in an offering memorandum that comply with IFRS will be required to comply with the version of NI 45-106 that contains IFRS terms and phrases. After the transition period all issuers will be required to comply with the version of NI 45-106 that contains IFRS terms and phrases. To further assist issuers and their advisors and to increase transparency, during the transition period certain jurisdictions will post two different unofficial consolidations of NI 45-106 and 45-106CP on their websites: • the existing versions of NI 45-106 and 45-106CP that contain current Canadian GAAP terms and phrases, which apply to an offering memorandum of an issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning before January 1, 2011; and • the new versions of NI 45-106 and 45-106CP that contain IFRS terms and phrases, which apply to an offering memorandum of an issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011. 52/53 week financial years Notwithstanding the above, the amendment instrument for NI 45-106 now includes a transition provision which provides the amendments may be applied by an issuer to an offering memorandum or an amendment to an offering memorandum of the issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of the new version of NI 52-107. That exemption in NI 52-107 permits issuers that have financial year ends close to, but not on December 31, 2010, the option to transition to IFRS when their new financial year begins. Written Comments The CSA, except the Autorité des marchés financiers and the New Brunswick Securities Commission, published the amendments to NI 45-106 and 45-106CP for comment on October 16, 2009 (the October 2009 Materials). No comments were received. 3

The Autorité des marchés financiers and the New Brunswick Securities Commission published the amendments to NI 45-106 and 45-106CP for comment on March 12, 2010. No comments were received. Summary of Changes to the October 2009 Materials See Appendix A for a summary of the changes made to the October 2009 Materials. The changes include terminology changes to maintain consistency with NI 52-107. Implementation In some jurisdictions, Ministerial approval is required for these changes. Provided all necessary approvals are obtained, the amendments will come into force on January 1, 2011. Where applicable, Appendix C provides information about each jurisdiction’s approval process. Local Notices and Amendments In conjunction with the implementation of the amendments to NI 45-106 and 45-106CP, certain securities regulatory authorities will amend local securities legislation. Any local changes or other information required by local securities legislation are reflected in Appendix C to this notice. Questions Please refer your questions to any of: Gordon Smith Senior Legal Counsel, Corporate Finance British Columbia Securities Commission (604) 899-6656 Toll free: 800 373-6393 (toll free across Canada) gsmith@bcsc.bc.ca Manny Albrino, CA Associate Chief Accountant British Columbia Securities Commission (604) 899-6641 Toll free: 800 373-6393 (toll free across Canada) malbrino@bcsc.bc.ca George Hungerford Senior Legal Counsel, Corporate Finance British Columbia Securities Commission (604) 899-6690 Toll free: 800 373-6393 (toll free across Canada) ghungerford@bcsc.bc.ca 4

Charlotte Howdle Senior Securities Analyst Alberta Securities Commission (403) 297-2990 charlotte.howdle@asc.ca Taryn Montgomery Legal Counsel Alberta Securities Commission (403) 297-4968 Taryn.Montgomery@asc.ca Tracy Clark Legal Counsel Alberta Securities Commission (403) 355-4424 Tracy.Clark@asc.ca Dean Murrison Deputy Director, Legal/Registration Securities Division Saskatchewan Financial Services Commission (306) 787-5879 Dean.Murrison@gov.sk.ca Chris Besko Legal Counsel - Deputy Director The Manitoba Securities Commission (204) 945-2561 cbesko@gov.mb.ca Winnie Sanjoto Senior Legal Counsel, Corporate Finance Ontario Securities Commission (416) 593-8119 wsanjoto@osc.gov.on.ca Jason Koskela Legal Counsel, Corporate Finance Ontario Securities Commission (416) 595-8922 jkoskela@osc.gov.on.ca 5

Sylvie Anctil-Bavas Chef comptable Autorité des marchés financiers (514) 395-0337, ext. 4291 sylvie.anctil-bavas@lautorite.qc.ca Susan Powell Senior Legal Counsel, Regulatory Affairs New Brunswick Securities Commission (506) 643-7697 susan.powell@nbsc-cvmnb.ca Shirley Lee Director, Policy and Market Regulation Nova Scotia Securities Commission (902) 424-5441 leesp@gov.ns.ca Steve Dowling Superintendent of Securities Prince Edward Island (902) 368-4552 sddowling@gov.pe.ca Don Boyles Program & Policy Development Securities Commission of Newfoundland and Labrador Government of Newfoundland & Labrador (709) 729-4501 dboyles@gov.nl.ca Louis Arki, Director, Legal Registries Department of Justice, Government of Nunavut (867) 975-6587 larki@gov.nu.ca Donn MacDougall Deputy Superintendent, Legal & Enforcement Office of the Superintendent of Securities Government of the Northwest Territories PO Box 1320 Yellowknife, NT X1A 2L9 Tel: (867) 920-8984 Fax: (867) 873-0243 E-mail: donald_macdougall@gov.nt.ca 6

Frederik J. Pretorius Manager Corporate Affairs (C-6) Dept of Community Services Government of Yukon (867) 667-5225 Fred.Pretorius@gov.yk.ca 7

Appendix A Summary of Changes to the October 2009 Materials A. Changes to the October 2009 Materials We made the following changes. NI 45-106 Section Term, Phrase or Explanation of Change Matter 1.1 “acquisition date” We moved this definition from Part C Section 2 of the F2 form to NI 45-106. The term has now been defined to have the same meaning as in an issuer’s GAAP. 1.1 “issuer’s GAAP” The term has now been defined to have the same meaning as in NI 52-107. 1.1 “private enterprise” The term has now been defined to have the same meaning as in Part 3 of NI 52-107. 1.1 “publicly accountable The term has now been defined to have the same enterprise” meaning as in Part 3 of NI 52-107. 1.1 “retrospective” and Those terms have now been defined to have the “retrospectively” same meaning as in Canadian GAAP applicable to publicly accountable enterprises. F or m 45-106F 2 Section Term, Phrase or Explanation of Change Matter Instructions Acquisition statements Non-reporting issuers may prepare acquisition B.1 prepared by non- statements in accordance with the requirements reporting issuers of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards as if the issuer was a venture issuer as defined in NI 51-102. We clarified that for the purposes of Form 45-106F2, the “applicable time” in the definition of a venture issuer is the acquisition date. Instructions “NI 52-107” We now refer to the full name of the instrument B.1, D.2 in the materials. 8

Section Term, Phrase or Explanation of Change Matter Instructions “explicit and We deleted the reference to “explicit” to conform B.4(c)(i) unreserved statement of with NI 52-107. compliance with IFRS” Instructions “unreserved statement” We added a reference to “unreserved statement” B.5(d)(i) to conform with NI 52-107. Instructions Omission of We revised the text of this section to clarify that B.8 comparative an issuer cannot omit comparative information if information it previously prepared financial statements in accordance with either its current GAAP or, if applicable, its previous GAAP. Instructions Change reference from We made this change to be consistent with NI D.3(c)(ii) “reservation of 52-107. opinion” to “unmodified opinion” Instructions Operating statement for We deleted the specific line items to be included D.4(d)(i) an oil and gas property in an operating statement for an oil and gas property and made reference to subsection 3.11(5) of NI 52-107 where the specified requirements are noted. B . T r ansition, Dr afting and H ousekeeping C hanges We also made certain drafting and housekeeping changes to various provisions. 52/53 week financial years The amendment instrument for NI 45-106 now includes a transition provision which provides the amendments may be applied by an issuer to an offering memorandum or an amendment to an offering memorandum of the issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of the new version of NI 52-107. That exemption in NI 52-107 permits issuers that have financial year ends close to, but not on December 31, 2010, the option to transition to IFRS when their new financial year begins. 9

Appendix B Amendments to National Instrument 45-106 Prospectus and Registration Exemptions and Companion Policy Schedule B-1 THE MANITOBA SECURITIES COMMISSION MSC RULE 2010-26 (Section 149.1, The Securities Act) AMENDMENT INSTRUMENT FOR NATIONAL INSTRUMENT 45-106 PROSPECTUS AND REGISTRATION EXEMPTIONS 1. National Instrument 45-106 Prospectus and Registration Exemptions is amended by this Instrument. 2. Section 1.1 is amended (a) by adding the following after "accredited investor": "acquisition date" has the same meaning as in the issuer’s GAAP;, (b) by adding the following after "financial assets": "financial statements" includes interim financial reports;, (c) by adding the following after "investment fund": "issuer’s GAAP" has the same meaning as in National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;, (d) by adding the following after "person": "private enterprise" has the same meaning as in Part 3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;, (e) by adding the following after "private enterprise": "publicly accountable enterprise" has the same meaning as in Part 3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;, and (f) by adding the following after "related liabilities": "retrospective" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises;

- 2 - "retrospectively" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises;, 3. Clause 5.2(e)(i)(C) is amended by striking out "statements" and substituting "reports". 4. Subsection 6.2(1) is amended by striking out "section 6.1(a)" and substituting "section 6.1(1)(a)". 5. Subsection 6.5(1) is amended by striking out "subsection 2.9(12) or subsection 3.9(12)" and substituting "subsection 2.9(15)". 6. Item 1.1 Available Funds of Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers is amended by striking out "H" in the table and substituting "G". 7. Item 4.2 of Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers is amended (a) by striking out the heading "4.2 Long Term Debt" and substituting "4.2 Long Term Debt Securities", and (b) by striking out "the current portion of the long-term debt" and substituting "the portion of the debt". 8. Item 8(b) of Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers is amended by striking out "sales" and substituting "revenue". 9. Part B Financial Statements – General of the Instructions for Completing Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers is amended (a) by repealing section 1 and substituting the following: All financial statements, operating statements for an oil and gas property that is an acquired business or a business to be acquired, and summarized financial information as to the aggregated amounts of assets, liabilities, revenue and profit or loss of an acquired business or business to be acquired that is, or will be, an investment accounted for by the issuer using the equity method included in the offering memorandum must comply with National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, regardless of whether the issuer is a reporting issuer or not. Under National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, financial statements are generally required to be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises. An issuer using this form cannot use Canadian GAAP applicable to private enterprises, except, subject to the requirements of NI 52-107, certain issuers may use Canadian GAAP applicable to private enterprises for financial statements for a business referred to in C.1. An issuer that is not a reporting issuer may prepare acquisition statements in accordance with the requirements of NI 52-107 as if the issuer were a venture issuer as defined in NI 51-102. For the purposes

- 3 - of Form 45-106F2, the "applicable time" in the definition of a venture issuer is the acquisition date., (b) in paragraph 3(a) by striking out "an income statement" and substituting "a statement of comprehensive income", by striking out "statement of retained earnings" and substituting "statement of changes in equity", and by striking out "cash flow statement" and substituting "statement of cash flows", (c) in paragraph 3(b) by striking out "balance sheet" and substituting "statement of financial position", (d) in paragraph 4(a) by striking out "an income statement" and substituting "a statement of comprehensive income", by striking out "statement of retained earnings" and substituting "statement of changes in equity", and by striking out "cash flow statement" and substituting "statement of cash flows", (e) in paragraph 4(b) by striking out "balance sheet" and substituting "statement of financial position" and by striking out "and", (f) in paragraph 4(c) by striking out "(c) notes to the financial statements." and substituting: (c) a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the offering memorandum comply with IFRS in the case of an issuer that (i) discloses in its annual financial statements an unreserved statement of compliance with IFRS, and (ii) does any of the following: (A) applies an accounting policy retrospectively in its annual financial statements; (B) makes a retrospective restatement of items in its annual financial statements; (C) reclassifies items in its annual financial statements, (d) in the case of an issuer’s first IFRS financial statements as defined in NI 51-102, the opening IFRS statement of financial position at the date of transition to IFRS as defined in NI 51-102, and (e) notes to the financial statements. 4.1 If an issuer presents the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income filed under Item 4 above.,

- 4 - (g) in section 5 by striking out "interim financial statements" and substituting "an interim financial report", (h) in paragraphs 5(a) and 5(b) by striking out "an income statement" and substituting "a statement of comprehensive income", by striking out "statement of retained earnings" and substituting "statement of changes in equity", and by striking out "cash flow statement" and substituting "statement of cash flows", (i) in paragraph 5(c) by striking out "balance sheet" and substituting "statement of financial position", and by striking out "the periods required by paragraphs (a) and (b) and" , and substituting "the period required by paragraph (a) and the end of the immediately preceding financial year", (j) by adding the following after paragraph 5(c): (d) a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the offering memorandum comply with IFRS in the case of an issuer that (i) discloses in its interim financial report an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and (ii) does any of the following: (A) applies an accounting policy retrospectively in its interim financial report; (B) makes a retrospective restatement of items in its interim financial report; (C) reclassifies items in its interim financial report, (e) in the case of the first interim financial report in the year of adopting IFRS, the opening IFRS statement of financial position at the date of transition to IFRS, (f) for an issuer that is not a reporting issuer in at least one jurisdiction of Canada immediately before filing the offering memorandum, if the issuer is including an interim financial report of the issuer for the second or third interim period in the year of adopting IFRS include (i) the issuer’s first interim financial report in the year of adopting IFRS, or (ii) both (A) the opening IFRS statement of financial position at the date of transition to IFRS, and (B) the annual and date of transition to IFRS reconciliations required by IFRS 1 First-time Adoption of International Financial Reporting Standards to explain how