Northern Financial Corporation its subsidiary, Northern Securities Inc., have agreed to acquire a brokerage business based in Vancouver, known simply as The Firm. It is expected that the acquisition will close by Oct. 31, 2002. The acquisition is subject to due diligence, the entering into of a definitive agreement and regulatory approval.

The Firm is one of the largest independent securities firms in Vancouver. It carries on an extensive retail brokerage and trading business from offices in Vancouver, Kamloops and Calgary. The Firm also has a corporate finance and advisory business focused on small cap companies and has 95 employees and 15,000 clients.

The combined brokerage business of Northern and the Firm will continue under the name Northern Securities. The acquisition of the Firm will result in
Northern Securities becoming a national brokerage firm with offices in Vancouver, other offices in British Columbia, Calgary and Toronto.

The business combination brings together the complementary strengths of retail brokerage and trading in the Firm with the investment banking, retail,
institutional and online businesses of Northern. Both Northern and the Firm focus exclusively on small cap companies, with special emphasis in mining,
technology and special situations.

As part of the acquisition, the Firm will invest a minimum of $750,000 and a maximum of $1,500,000 in Northern Financial which will in turn be invested in Northern Securities. Northern Financial has recently announced a rights offering which, if fully subscribed, will result in an investment of approximately $1.4 M, part of which will also be invested in Northern
Securities.

Northern Financial will issue shares to the Firm at the prevailing market price at the time of the closing of the acquisition in a total amount equal to the market value of the business assets (computers, equipment andfurniture). In addition, for the acquisition, Northern Securities will pay to the Firm an amount based on the profitability of the Firm’s business over a three
year period, subject to a maximum amount equal to the book value of the Firm less the amount paid on the closing date for the business assets.