TONKO DEVELOPMENT CORP.

MATERIAL CHANGE REPORT

Section 118(1) of the Securities Act (Alberta) Section 75(2) of the Securities Act (Ontario) Section 73 of the Securities Act (Québec)

Item 1. Reporting Issuer:

The name and address of the reporting issuer is Tonko Development Corp. (“Tonko”), with its principal office at 600, 999 – 8^th Street S.W., Calgary, Alberta, T2R 1J5 and its registered office at Suite 3300, 421 – 7^th Avenue S.W., Calgary, Alberta, T2P 4K9.

Item 2. Date of Material Change:

The material change occurred on January 24, 2002.

Item 3. News Release:

A press release reporting the material change was issued on January 25, 2002 through BCE Emergis Inc.

Item 4. Summary of Material Change:

Tonko announced that it has entered into an agreement pursuant to which Pyxis Real Estate Equities Inc. (“Pyxis”) has agreed to offer to acquire all of the Tonko shares at a price of $4.10 per share.

Item 5. Full Description of Material Change:

Tonko announced that it has executed a Support Agreement with Pyxis pursuant to which Pyxis will make a public offer for all shares of Tonko. The offer will be $4.10 in cash per share. The offer will be mailed as soon as practicable to all Tonko shareholders and is expected to close by mid-March, 2002. The offer will be conditional on 66 2/3% of the Tonko shares being tendered.

Jeff Kohn, Peter Cohos and Rob Proud, senior management of Tonko, and Rick Grafton, Bruce Libin and John Zaozirny, all outside directors of Tonko, have signed agreements committing to tender to and support the offer. This reflects 32.4% of the Tonko shares on a fully diluted basis.

The Board of Directors of Tonko has unanimously resolved to recommend the offer to the Tonko shareholders. Among other things, the Board relied upon the advice of each of its financial advisors in making its determination to sign the Support Agreement and recommend the offer to Tonko shareholders, including a fairness opinion from Griffiths McBurney & Partners.

Pyxis is a company that specializes in the ownership and development of commercial real estate. Pyxis owns over 1.7 million square feet of office and retail properties located across the country including the Ogilvy Retail Centre in Montreal.

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The Board of Directors of Tonko has recommended shareholders reject and not tender to the $3.75 offer of SeaCliff Investments Limited. The SeaCliff offer expires January 31, 2002.

Item 6. Reliance on Section 118(2) of the Securities Act:

Not Applicable

Item 7. Omitted Information:

Not Applicable

Item 8. Senior Officers:

Jeffrey D. Kohn, Chairman Telephone: (403) 245-4447

Item 9. Statement of Senior Officer:

The foregoing accurately discloses the material changes referred to herein.

DATED January 28, 2002 at Calgary, Alberta.

TONKO DEVELOPMENT CORP.

By: “Andrew D. Grasby” Andrew D. Grasby, Corporate Secretary

IT IS AN OFFENCE UNDER THE SECURITIES ACT AND THE SECURITIES REGULATION FOR A PERSON OR COMPANY TO MAKE A STATEMENT IN A DOCUMENT REQUIRED TO BE FILED OR FURNISHED UNDER THE ACT OR THE REGULATION THAT, AT THE TIME AND IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH IT IS MADE, IS A MISREPRESENTATION.

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