In the Matter of Mavrix Fund Management Inc., 2009 CanLII 33536

June 25, 2009

In the Matter of the Securities Legislation of Ontario (the “Jurisdiction”)

and

In the Matter of the Process for Exemptive Relief Applications in Multiple Jurisdictions

and

In the Matter of Mavrix Fund Management Inc. (“Mavrix”) and In the Matter of the mutual funds listed in Schedule A (the “Mavrix Mutual Funds”) DECISION

Background

The principal regulator in the Jurisdiction has received an application from Mavrix, as manager of the Mavrix Mutual Funds, for a decision under the securities legislation of the Jurisdiction of the principal regulator (the “Legislation”):

(a) approving the change of control of Mavrix resulting from the Transaction (as defined below) (the “Change of Control”) in satisfaction of the requirement in section 5.5(2) of National Instrument 81-102 – Mutual Funds (“NI 81-102”); and

(b) abridging from 60 to 38 days the notice period prescribed by section 5.8(1)(a) of NI 81-102 for delivering notice of the Change of Control to the unitholders of the Mavrix Mutual Funds (the “Mavrix Unitholders”) (the “Abridgement”).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) Mavrix has provided notice that Section 4.7(1) of Multilateral Instrument 11-102 Passport System (“MI 11-102”) is intended to be relied upon in each of the provinces and territories of Canada other than Ontario (together with the Jurisdiction, the “Jurisdictions”).

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by Mavrix and Growth Works Ltd. (“GWL”):

Mavrix

1. Mavrix is:

(a) incorporated under the Business Corporations Act (Ontario) (the “OBCA”) and a reporting issuer in each of the Jurisdictions. The common shares of Mavrix are listed on the Toronto Stock Exchange;

(b) registered under the Securities Act (Ontario) (the “OSA”) as a dealer in the category of limited market dealer and as an adviser in the categories of investment counsel and portfolio manager;

(c) the manager of the Mavrix Mutual Funds, which currently include 18 mutual funds, which represented 85% of the assets under management (“AUM”) of Mavrix as of December 31, 2008, and two additional mutual funds, namely Mavrix Tax Deferred Income Fund (formerly Northern Rivers Monthly Income and Capital Appreciation Fund) and Mavrix Tax Deferred Income Trust Pool (formerly Northern Rivers Monthly Income and Capital Appreciation Trust Pool) to which Mavrix has provided management and trustee services since April 30, 2009;

(d) the portfolio advisor to all of the Mavrix Mutual Funds except:

(i) Mavrix Global Fund, whose portfolio advisor is Pictet International Management Limited; and

(ii) Mavrix Tax Deferred Income Fund and Mavrix Tax Deferred Income Trust Pool, whose portfolio advisors are Cassels Investment Management Inc. and Brookfield Investment Funds Management Inc.;

(e) a provider of consulting and portfolio management services to speciality funds, which currently include 6 flow-through limited partnerships, 5 of which represented 15% of the AUM of Mavrix as of December 31, 2008; and

(f) not in default of securities legislation in any of the Jurisdictions.

2. None of the investment vehicles managed by Mavrix is on any list of defaulting reporting issuers maintained by any securities regulatory authority.

3. Mavrix is experiencing financial difficulty and requires a sale or refinancing transaction in the near term to ensure compliance with the working capital requirements applicable to it as a registrant under the OSA.

The Transaction

4. On May 1, 2009, Mavrix, GWL and GWL’s wholly-owned subsidiary, 1796862 Ontario Ltd. (formerly 6983561 Canada Ltd.) (“Acquisition Co.”), entered into a letter of intent with respect to a proposed transaction which, if completed, would result in Acquisition Co. acquiring all of the outstanding common shares of Mavrix and Mavrix becoming a wholly-owned indirect subsidiary of GWL (the “Transaction”). The Transaction would be considered a change of control transaction for Mavrix. Mavrix issued a press release announcing the Transaction on May 1, 2009.

5. Acquisition Co. entered into support agreements with shareholders holding approximately 57% of the common shares of Mavrix who agreed to vote in favour of the proposed plan of arrangement under the Business Corporations Act (Ontario) (the “OBCA”) or tender their shares pursuant to a take-over bid.

6. Mavrix created a special committee (“Special Committee”) of its board of directors (“Board of Directors”), and called a special meeting of its shareholders to be held on June 24, 2009, to consider the Transaction.

7. The Special Committee and the Board of Directors have determined that the Transaction is in the best interests of Mavrix. On May 20, 2009, Mavrix, GWL and Acquisition Co. entered into an arrangement agreement (the “Arrangement Agreement”). Mavrix issued a press release announcing this on May 20, 2009.

8. Notice of the Change of Control was mailed to all of the Mavrix Unitholders on May 21, 2009 (the “Notice Date”).

9. The Transaction will close on or about June 30, 2009, subject to a number of conditions including obtaining all necessary regulatory, board, shareholder and other approvals, and the satisfaction of all conditions related to the Transaction.

GrowthWorks

10. GWL is a private holding corporation incorporated in 1999 under the Canada Business Corporations Act (“CBCA”) whose group of subsidiaries offers investment fund management services and includes Growth Works Capital Ltd. (“GWC”), a subsidiary that provides portfolio advisory/investment management services. Acquisition Co. was incorporated under the CBCA and continued under the OBCA by GWL for the purpose of the Transaction and has no operating business.

11. No one shareholder holds greater than 10% of the outstanding voting securities of GWL other than as follows:

Name of Shareholder	Class	Type of Ownership	Number of Shares	Percentage of Shares
David Levi	Common	Direct and Indirect	1,642,410	21.62%
Working Enterprises Ltd.	Common	Direct	3,039,000	40.00%

12. Working Enterprises Ltd. is owned by seven trade unions representing approximately 460,000 employees in British Columbia. The remaining shares of GWL are held by directors, officers, employees and former employees of GWC, and trusts for those persons and the family members of those persons.

13. With approximately $700 million in AUM primarily held by retail venture capital investment funds (“GW RVCs”), GWL’s group of subsidiaries is one of the largest retail venture capital management groups in Canada.

14. GWC is the manager and/or the portfolio advisor/investment manager of the GW RVCs and has a skilled and knowledgeable team of professionals. GWC has been registered with one or more securities regulatory authorities for over 10 years.

15. Mr. David Levi is the President and Chief Executive Officer of GWL and GWC. In August of 2008, Mr. Levi had announced his intention to transition from his position as President and Chief Executive Officer of GWL and GWC, while remaining on the board of directors of GWL. In February of 2009, Mr. Levi announced that he would remain in his position as President and Chief Executive Officer of GWL and GWC for the medium term.

Change of Control

16. The Board of Directors of Mavrix (the “Board of Directors”) currently has seven members. It is proposed that, upon completion of the Transaction, three of these members will resign and the following individuals who are also currently directors and officers of GWL and/or GWC and/or Acquisition Co. will join the Board of Directors:

Name of proposed Mavrix Director	Position with GWL	Position with GWC	Position with Acquisition Co.
Alex Irwin	N/A	Chief Operating Officer	Chief Operating Officer
Timothy Lee	N/A	Senior Vice-President, Investments	N/A
David Levi	President, CEO and Director	President, CEO and sole Director	President, CEO and sole Director
Clint Matthews	Chief Financial Officer and Vice President, Finance	Chief Financial Officer and Vice President, Finance	Chief Financial Officer and Vice President, Finance
Murray Munro	Secretary	Senior Vice President, National Sales Marketing and Government Relations	N/A

17. As existing officers and directors in the GWL group of companies, the new members joining the Board of Directors all have considerable experience in the management of mutual funds and other investment funds.

18. GWL and Acquisition Co. currently intend to maintain the Mavrix Mutual Funds as a separately managed fund family and continue the operations of Mavrix as operated. It is currently anticipated that the role of Mavrix as the manager of the Mavrix Mutual Funds will not change following the Change of Control. No changes are expected to the officers, portfolio advisors, fundamental investment objectives, restrictions and strategies, service providers or administration of the Mavrix Mutual Funds for at least a 60 day period following the Notice Date. The new members joining the Board of Directors have and, if there were to be changes to the officers of Mavrix, such new officers would have, the requisite integrity and experience to fulfill such roles.

19. Upon the Change of Control, all current members of the Independent Review Committee for the Mavrix Mutual Funds (“IRC”) will cease to be members of the IRC by operation of section 3.10(1)(c) of National Instrument 81-107 - Independent Review Committee for Investment Funds (“NI 81-107”) and, subject to their consent, are expected to be subsequently re-appointed as members of the IRC by Mavrix as contemplated in the commentary to sections 3.3(5) and 3.10 of NI 81-107.

20. While the Transaction will result in a Change of Control, it is not expected to have any negative impact on the management of the Mavrix Mutual Funds. Mavrix and GWL believe that the Change of Control and the Abridgement will not be prejudicial to the interests of Mavrix Unitholders.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Change of Control is approved and the Abridgement is granted provided that:

(a) the Mavrix Unitholders are given at least 38 days notice of the Change of Control; and

(b) no changes are made to the management, administration or portfolio management of the Mavrix Mutual Funds for at least 60 days following the Notice Date.

signed Vera Nunes ___________________________________________

Name: Vera Nunes Title: Assistant Manager, Investment Funds Ontario Securities Commission

Schedule “A” Mavrix Mutual Funds

Mavrix Asia Pacific Fund Mavrix Balanced Monthly Pay Fund Mavrix Dividend & Income Fund Mavrix Explorer Fund Mavrix Global Fund Mavrix Global Enterprise Fund Mavrix Growth Fund Mavrix Sierra Equity Fund Mavrix Small Companies Fund Mavrix Strategic Bond Fund Mavrix Money Market Fund Mavrix Multi Series Fund Ltd. – Canadian Equity Series Mavrix Multi Series Fund Ltd. – Explorer Series Mavrix Multi Series Fund Ltd. – Global Enterprises Series Mavrix Multi Series Fund Ltd. – Growth Series Mavrix Multi Series Fund Ltd. – Income Series Mavrix Multi Series Fund Ltd. – Short Term Income Series Mavrix Strategic Small Cap Fund Mavrix Tax Deferred Income Fund (formerly Northern Rivers Monthly Income and Capital Appreciation Fund) Mavrix Tax Deferred Income Trust Pool (formerly Northern Rivers Monthly Income and Capital Appreciation Trust Pool)

Headnote

NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Approval of a change of control of a mutual fund manager and abridgement of the related 60 day notice requirement to 38 days – Decision conditional on no changes being made to the management, administration or portfolio management of the mutual funds for at least 60 days subsequent to notice being provided to securityholders.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, sections 5.5(2), 5.8(1)(a) and 19.1.