1. TAKE NOTICE that a hearing will be held at 10:00 a.m., on June 26, 2000, at the 7th Floor Hearing Room, 865 Hornby Street, Vancouver, British Columbia (the “Hearing), to give Noram Capital Management Inc. (“Noram”) and Andrew Willman (“Willman”) ^ an opportunity to be heard before the British Columbia Securities Commission (the “Commission”) considers whether it is in the public interest to make an order:

1.1 ^ under section 162 of the Act that ^ Willman ^ pay an administrative penalty;

1.2 under section 161(1)(d) of the Act that ^ Willman ^ resign, and be prohibited from becoming or acting, as a director or officer of any issuer in British Columbia;

1.3 under section 161(1)(d) of the Act that Willman ^ be prohibited from engaging in investor relations activities in British Columbia;

1.4 ^ under section 174 of the Act that Noram Capital Management Inc. (“Noram”) and Willman ^ pay for the costs of the Hearing; and

1.7 any other orders as that the Commission deems appropriate in the circumstances.

2.1 Noram is a company incorporated in the province of Ontario and extra-provincially registered in British Columbia, with its address for service, c/o McCarthy Tetrault, 1300 – 777 Dunsmuir Street, Vancouver, British Columbia.

2.2 Noram is registered as a Portfolio Manager under the Act, and must comply with all the requirements of the Act and the Rules and regulations made under the Act.

2.3 Willman is a resident of Ontario and has been, since July 1995, a director and the president of Noram. Willman is registered as an advising director or officer. His registration is currently suspended.

Minimum Working Capital Requirement

2.4 ^ One of the requirements applicable to Noram, pursuant to section 20 of the Rules, is that it maintains working capital of a minimum of $25,000 plus the $10,000 deductible under the bond required under section 21 of the Rules.

2.5 In its financial statements for the year ending June 30, 1998 (the “1998 financial statements”), which Staff received on June 4, 1999, Noram reported a capital deficiency in the amount of $847,662 and therefore was in breach of section 20 of the Rules.

2.6 Subsequent to June 1999, Staff requested Noram to provide to Staff, on a monthly basis, the monthly capital records required under section 41 of the Rules, in order to allow Staff to monitor the elimination of the capital deficiency.

2.7 Noram provided unaudited monthly capital records, which showed that the working capital of Noram fluctuated as follows:

2.7.1 as at January 31, 1999: a surplus of $16,095;
2.7.2 as at February 28, 1999: a surplus of $2,341;
2.7.3 as at March 31, 1999: a surplus of $22,262;
2.7.4 as at April 30, 1999: a deficit of $19,039;
2.7.5 as at May 31, 1999: a deficit of $10,589; and
2.7.6 as at June 30, 1999 a deficit of $42,386.

2.8 On August 12, 1999, Staff informed Noram in writing that if the capital deficiency was not eliminated by the end of August 1999, the company’s registration may be suspended until such time as the deficiency had been eliminated.

2.9 On August 24, 1999 Staff received the financial statements for Noram as at July 31, 1999, (the “July 1999 financial statements”) showing a deficiency of $927,974. This figure did not include the capital requirement of $35,000 under section 20 of the Rules, which would have the effect of increasing the deficiency to $962,974.

2.10 On September 29, 1999, Noram filed with Staff of the Commission its unaudited financial statements as at August 31, 1999 (the “August 1999 financial statements”), which disclosed a deficiency in its working capital of $520,872, including its capital requirement of $35,000.

2.11 The August 1999 financial statements include a forgiveness of debt in the amount of $1,096,784, which appears to be an adjustment of the liability for the Noram Health and Welfare Trust and which became an item subject to income tax.

2.12 Even with the elimination of the liability to the Noram Health & Welfare Trust, Noram remained undercapitalized.

2.13 The August 1999 financial statements, show as a liability of Noram an amount due to shareholders of $131,899, which was a liability of Noram’s since at least the financial year that ended June 30, 1998. Noram ^ provided Staff of the Commission with an undated and partly completed document purporting to subordinate the amount of $131,899 to other creditors of Noram generally, which is not in the form required by section 25 of the Rules, does not provide essential information about the purported subordination, and may not be enforceable, meaning that Noram’s capital deficiency could increase by $131,899 over and above the amount of $520,872 set out in paragraph 2.11 of this notice of hearing.
2.14 Noram filed its audited financial statements for the year ended June 30, 1999 (the “1999 financial statements”), on January 5, 2000. These financial statements disclose a continued capital deficiency, without considering the issue of subordination of debt referred to in paragraph 2.14 of this notice of hearing.

2.15 ^ Noram ^ failed to eliminate its capital deficiency and therefore continued to be in breach of section 20 of the Rules.

Financial Statements Filed Late

2.16 Noram is also required, pursuant to section 69 of the Rules, to file its annual financial statements with Staff within 90 days from the end of each financial year. Noram’s financial year ends on June 30, and its financial statements are due on or before September 28 of the same year.

2.17 Noram ^ breached section 69 of the Rules in that it:

2.17.1 filed its 1998 financial statements with Staff on June 4, 1999; and

2.17.2 filed its 1999 financial statements with Staff on January 5, 2000.

2.18 As a result Noram contravened section 155(1)(a) of the Act twice.

Misleading Financial Statements

2.19 In its July 1999 financial statements Noram, for the first time, disclosed that $926,523 of its current assets are encumbered. As a consequence, this amount could not form part of Noram’s working capital and not declaring it created the impression of a smaller capital deficiency than actually existed.

2.20 These encumbrances have been in existence, and were known to Willman ^ since at least November 1998.

2.21 As a result, Noram failed to state properly the full nature of its capital deficiency, in breach of section 168.1(1) of the Act [formerly section 155(1)(c)] and contravened section 155(1)(b) of the Act.

Bond Expired

2.22 Noram is required, under section 21 of the Rules, to maintain bonding in a form and amount considered necessary by the Executive Director.

2.23 Noram’s bond expired on January 18, 2000 and it advised its insurer not to renew it. As a result, Noram was in breach of section 21 and not eligible for further registration.

Noram Hearing

2.24 On January 20, 2000, the Commission conducted a hearing into allegations made by staff in the Amended Notice of Hearing in this matter concerning Noram. On March 8, 2000, the Commission cancelled Noram’s registration and imposed an administrative penalty of $25,000 against Noram.

Willman ^

2.25 As a director of Noram, Willman ^ caused Noram to breach section 20 of the Rules by incurring and maintaining a capital deficiency as referred to in paragraphs 2.5 to 2.16 of this notice of hearing.

2.26 As a director of Noram, Willman, under s. 155(4) of the Act, contravened section 155(1)(a)(ii) of the Act, by authorizing, permitting or acquiescing in Noram’s late filing of financial statements as referred to in paragraphs 2.16 to 2.18 of this notice of hearing.

2.27 As a director of Noram, Willman, under s.155(4) of the Act, contravened section 155(1)(b) of the Act, by authorizing, permitting or acquiescing in Noram filing misleading financial statements in breach of section 168.1(1) of the Act as referred to in paragraphs 2.19 to 2.21 of this notice of hearing.