Rtica Corporation - s. 144

Headnote

Section 144 - application for partial revocation of cease trade order - variation of cease trade order to permit private placement, subject to conditions.

Applicable Ontario Statutory Provisions

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

May 31, 2006

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, c. S-5, AS AMENDED (the Act)

AND

IN THE MATTER OF

RTICA CORPORATION

ORDER

(Section 144 of the Act)

WHEREAS the securities of Rtica Corporation (the Applicant) are currently subject to a cease trade order dated October 3, 2005 made pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act, as extended by a further order dated October 14, 2005 made pursuant to paragraph 2 of subsection 127(1) of the Act (collectively, the Cease Trade Order) ordering that trading in the securities of the Applicant cease;

AND WHEREAS the Applicant has applied to the Ontario Securities Commission (the Commission) pursuant to Section 144 of the Act for an order varying the Cease Trade Order with respect to the Private Placement (as defined below);

AND WHEREAS the Applicant has represented to the Commission that:

1. The Applicant was incorporated on May 30, 1997 under the laws of Alberta, and was subsequently continued under the laws of the Business Corporations Act (Ontario) on April 25, 2001. The Applicant maintains a head office at 999 Barton Street, Stoney Creek, Ontario. The Applicant's records are currently located at the offices of Stikeman, Graham, Keeley & Spiegel LLP, located at 220 Bay Street, Suite 700, Toronto, Ontario M5J 2W4.

2. The authorized share capital of the Applicant consists of an unlimited number of common shares, of which 38,203,780 common shares are issued and outstanding as of May 30, 2006. In addition to its common shares, the Applicant has debt securities outstanding. The debt securities of the Applicant consists of an aggregate of $1,256,914 in promissory notes and, including accrued interest, a total of $2,767,034 in convertible debentures. A conversion of the convertible debentures outstanding in accordance with the terms thereof would result in an issue of 19,227,634 common shares of the Applicant on a fully diluted basis.

3. The Applicant is a reporting issuer or the equivalent under the securities legislation of the provinces of Ontario, British Columbia and Alberta. The Applicant is not a reporting issuer in any other jurisdiction in Canada. The Applicant is subject to cease trade orders in the provinces of Alberta and British Columbia.

4. The common shares of the Applicant are listed on the NEX board of the TSX Venture Exchange but have been suspended from trading, and are not listed or quoted on any other exchange or market in Canada or elsewhere.

5. The Cease Trade Order was issued due to the failure by the Applicant to file with the Commission audited annual financial statements and related MD&A for the year ended May 31, 2005 and interim financial statements and related MD&A for the three months ended August 30, 2005 as required by the Act (the Statements). The Applicant has further failed to file interim financial statements and related MD&A for the six months ended November 30, 2005 and for the nine months ended February 28, 2006 (together with the Statements, the Financial Statements).

6. The Financial Statements were not filed with the Commission due to a lack of funds to pay for the preparation and, in respect of the annual financial statements for the year ended May 31, 2005, audit of such statements.

7. The Applicant intends to complete a private placement (the Private Placement) of convertible debentures (the Debentures) to an offshore third party lender, Thames Capital (Bermuda) Ltd. and an accredited investor resident in Ontario, in the aggregate amount of approximately $70,000. Distribution of the Debentures will be effected pursuant to National Instrument 45-106 -- Prospectus and Registration Exemptions. The Private Placement will be completed in accordance with all applicable policies of the NEX board of the TSX Venture Exchange and applicable securities legislation.

8. All of the direct and indirect beneficial owners of Thames Capital (Bermuda) Ltd. are accredited investors resident in Ontario.

9. The Debentures will mature one year from the date of issue, bearing an interest rate at 10% per annum. The Debentures will be convertible into common shares of the Applicant at a rate of $0.05 per common share.

10. The Applicant will use the proceeds from the Private Placement to complete the audit and filing of the Financial Statements, bring its continuous disclosure records up to date and improve the Applicant's financial position. The Applicant further intends to, within a reasonable time following closing of the Private Placement, apply to the Commission for a full revocation of the Cease Trade Order.

11. As the Private Placement would involve trades of securities and acts in furtherance of trades in connection with the issue by the Applicant of the Debentures in the aggregate amount of $70,000, the Private Placement could not be completed without a partial revocation of the Cease Trade Order.

AND WHEREAS the Director is 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 Cease Trade Order be and is hereby varied solely to permit trades and acts in furtherance of trades in connection with the Private Placement as to the issuance of the Convertible Debentures, but not the conversion thereof, nor as to the issuance of any other securities by the Applicant, provided that:

(a) prior to the issuance of the Debentures the potential investors in the Debentures, and each direct and indirect beneficial owner of the potential investors, as applicable, will:

(i) receive a copy of the Cease Trade Order;

(ii) receive a copy of this Order; and

(iii) receive written notice from the Applicant and acknowledge that all of the Applicant's securities, including the Debentures and any securities of the Applicant issued upon conversion of the Debentures, will remain subject to the Cease Trade order until it is revoked; and

(b) this Order will terminate on the earlier of:

(i) the closing of the Private Placement; and

(ii) 60 days from the date hereof.