Just Energy Exchange Corp. and Just Energy Income Fund (Re), 2009 CanLII 38521

Headnote National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – application from subsidiary of parent company for a decision exempting the subsidiary from the requirements of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, National Instrument 52-110 Audit Committees and National Instrument 58-101 Disclosure of Corporate Governance Practices; and for a decision exempting the insiders of the subsidiary from the insider reporting requirements of the Securities Act (Ontario) and from the requirement to file an insider profile under National Instrument 55-102 System for Electronic Disclosure by Insiders – Subsidiary is a reporting issuer – Subsidiary has exchangeable securities outstanding that are not designated exchangeable securities under section 13.3 of NI 51-102 and has convertible debentures outstanding that are not designated credit support securities under section 13.4 of NI 51-102 – relief granted on conditions substantially similar to the conditions contained in sections 13.3 and 13.4 of NI 51-102.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c.S.5, as am., ss. 107 and 121(2)(a)(ii) National Instrument 51-102 Continuous Disclosure Obligations, ss. 13.1, 13.3 and 13.4 National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings s. 4.5 National Instrument 52-110 Audit Committees s. 8.1 National Instrument 55-102 System for Electronic Disclosure by Insiders, s. 6.1 National Instrument 58-101 Disclosure of Corporate Governance Practices s. 3.1

July 15, 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

Just Energy Exchange Corp. (Amalco) and Just Energy Income Fund (the Fund, and together with

Amalco, the Filers)

Decision

Background

The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that, subject to certain conditions:

(a) Amalco be exempt from the requirements of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) and related Legislation (the Continuous Disclosure Relief);

(b) Amalco be exempt from the requirements of National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109) (the Certification Relief);

(c) Amalco be exempt from the requirements of National Instrument 52-110 Audit Committees (NI 52-110) (the Audit Committee Relief);

(d) the insiders of Amalco be exempt from:

(i) the insider reporting requirements under the Legislation (the Statutory Insider Reporting Requirements) in respect of securities of Amalco; and

(ii) the requirement to file an insider profile under National Instrument 55-102 System for Electronic Disclosure by Insiders (NI 55-102) (the Insider Reporting Relief) in respect of securities of Amalco; and

(e) Amalco be exempt from the requirements of National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101) (the Corporate Governance Relief);

(collectively, the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

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

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, the Northwest Territories, Yukon and Nunavut.

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. In addition, the following defined terms have the meanings hereinafter set forth:

(a) AcquisitionCo means Just Energy Exchange Corp., as it existed prior to its amalgamation with Universal pursuant to the Arrangement at the Effective Time;

(b) Arrangement means the series of transactions completed by way of plan of arrangement under the CBCA pursuant to the Arrangement Agreement effective as of the Effective Time pursuant to which, among other things: (i) AcquisitionCo acquired all of the issued and outstanding Universal Shares; and (ii) AcquisitionCo and Universal amalgamated to form Amalco, which continued under the name "Just Energy Exchange Corp.";

(c) Arrangement Agreement means the amended and restated arrangement agreement dated effective as of April 22, 2009 among the Fund, Ontario Energy Savings Corp. (the administrator of the Fund), AcquisitionCo and Universal;

(d) CBCA means the Canada Business Corporations Act;

(e) Effective Time means 12:01 a.m. (Toronto time) on July 1, 2009;

(f) Universal means Universal Energy Group Ltd., as it existed prior to its amalgamation with AcquisitionCo pursuant to the Arrangement at the Effective Time; and

(g) Universal Shares means the common shares of Universal, as they existed prior to the completion of the Arrangement.

Representations

This decision is based on the following facts represented by the Filers:

Just Energy Income Fund

1. The Fund is an unincorporated open-ended limited purpose trust established under the laws of the province of Ontario pursuant to a declaration of trust dated February 14, 2001, as amended. The Fund's head office is located in Toronto, Ontario.

2. The Fund's trust units (Units) are listed on the Toronto Stock Exchange (TSX) under the symbol "JE.UN".

3. The Fund is a reporting issuer or the equivalent in each of the provinces and territories of Canada and is not on the lists of defaulting reporting issuers maintained pursuant to the legislation of any such jurisdiction.

UEGL ExchangeCo. Corp.

4. UEGL ExchangeCo Corp. (ExchangeCo) is a corporation existing under the CBCA. ExchangeCo's head office is located in Toronto, Ontario.

5. The common shares of ExchangeCo are not listed or posted for trading on any stock exchange.

6. ExchangeCo is not a reporting issuer or the equivalent in any of the provinces and territories of Canada.

7. The Fund owns all of the issued and outstanding common shares of ExchangeCo.

Just Energy Exchange Corp. (Pre-Arrangement)

8. Prior to the completion of the Arrangement:

(a) AcquisitionCo was a corporation existing under the CBCA with a head office located in Toronto, Ontario;

(b) the common shares (AcquisitionCo Shares) and exchangeable shares, series 1 (AcquisitionCo Exchangeable Shares) of AcquisitionCo were not listed or posted for trading on any stock exchange;

(c) AcquisitionCo was not a reporting issuer or the equivalent in any of the provinces and territories of Canada; and

(d) the Fund owned all of the issued and outstanding AcquisitionCo Shares and no AcquisitionCo Exchangeable Shares were issued and outstanding.

Universal Energy Group Ltd. (Pre-Arrangement)

9. Prior to the completion of the Arrangement:

(a) Universal was a corporation existing under the CBCA with a head office located in Toronto, Ontario;

(b) the Universal Shares were listed on the TSX under the symbol "UEG" and the 6.00% convertible unsecured subordinated debentures due September 30, 2014 of Universal (UEGL Convertible Debentures) were listed on the TSX under the symbol "UEG.DB"; and

(c) Universal was a reporting issuer or the equivalent in each of the provinces and territories of Canada.

The Arrangement

10. At the Effective Time, the following transactions (among others) occurred pursuant to the Arrangement:

(a) AcquisitionCo acquired all of the issued and outstanding Universal Shares from the holders thereof in consideration of the issuance of 0.58 of an AcquisitionCo Exchangeable Share for each 1.0 Universal Share acquired; and

(b) AcquisitionCo and Universal amalgamated to form Amalco, and in connection therewith:

(i) the AcquisitionCo Shares became common shares of Amalco (Amalco Shares);

(ii) the AcquisitionCo Exchangeable Shares became exchangeable shares, series 1 of Amalco (the Amalco Exchangeable Shares); and

(iii) Amalco assumed the obligations of Universal under the trust indenture (the Debenture Indenture) governing the UEGL Convertible Debentures such that the UEGL Convertible Debentures became debentures of Amalco (Amalco Convertible Debentures).

Just Energy Exchange Corp. (Post-Arrangement)

11. Amalco is a corporation existing under the CBCA formed pursuant to the amalgamation of AcquisitionCo and Universal with a head office located in Toronto, Ontario.

12. Amalco is a reporting issuer or the equivalent in each of the provinces and territories of Canada because Amalco inherited the reporting issuer status of Universal. Therefore, Amalco is required to comply with the requirements applicable to reporting issuers pursuant to the Legislation (the Reporting Issuer Requirements).

13. Amalco's outstanding capital is comprised of:

(a) the Amalco Shares, all of which are owned by the Fund;

(b) the Amalco Exchangeable Shares, which are listed on the TSX; and

(c) the Amalco Convertible Debentures, which are listed on the TSX.

14. Amalco is a subsidiary of the Fund and its operational and financial results are consolidated with the operational and financial results of the Fund for the purposes of the Fund’s satisfaction of its continuous disclosure obligations.

15. Other than the issuance of additional Amalco Exchangeable Shares on conversion of Amalco Convertible Debentures, Amalco has no intention of: (i) accessing the capital markets in the future by issuing any further securities to the public; and (ii) issuing any securities other than those that are currently outstanding.

The Amalco Exchangeable Shares

16. The Amalco Exchangeable Shares have certain rights, privileges, restrictions and conditions attaching to them (the Exchangeable Share Provisions), including that the Amalco Exchangeable Shares:

(a) are exchangeable (subject to adjustment) on a one-for-one basis for Units at any time at the option of the holder by making a retraction request, provided that the Fund and ExchangeCo have an overriding call right (the Retraction Call Right) to purchase all but not less than all of the Amalco Exchangeable Shares subject to the retraction request in exchange for a price (the Retraction Price) per Amalco Exchangeable Share equal to one Unit (subject to adjustment) and a cash payment for any accrued but unpaid dividends on such Amalco Exchangeable Shares;

(b) may be redeemed by Amalco in certain circumstances, including at any time following the third anniversary of the Effective Time, and must be redeemed by Amalco on the fifth anniversary of the Effective Time (or such later date as the board of directors of Amalco shall determine), in each case in consideration of the payment of an amount per Amalco Exchangeable Share to be satisfied by the issuance of one Unit (subject to adjustment), together with a cash payment for any accrued but unpaid dividends on each such Amalco Exchangeable Share (the Redemption Price), provided that the Fund and ExchangeCo have an overriding right (the Redemption Call Right) to purchase all but not less than all of the Amalco Exchangeable Shares then outstanding (other than Amalco Exchangeable Shares held by the Fund or ExchangeCo) for a purchase price per share equal to the Redemption Price;

(c) do not (except as required by law, in respect of changes to the rights, privileges, restrictions and conditions attaching to the Amalco Exchangeable Shares or in respect of a Designated Conversion Transaction (as defined in the Exchangeable Share Provisions)), entitle the holders thereof to receive notice of or to attend any meeting of the shareholders of Amalco or to vote at any such meeting;

(d) entitle the holders thereof to receive cumulative preferential cash dividends in an amount per Amalco Exchangeable Share equal to 66 2/3% of any cash distributions declared and paid on the Units. The record date for the determination of the holders of Amalco Exchangeable Shares entitled to receive payment of, and the payment date for, any dividend declared on the Amalco Exchangeable Shares will be the same dates as the record date for the determination of the holders of Units entitled to receive payment of, and the payment date for, any cash distribution declared on the Units, respectively; and

(e) in the event of the liquidation, dissolution or winding up of Amalco or any other distribution of the assets of Amalco among its shareholders for the purpose of winding up its affairs, entitle a holder of Amalco Exchangeable Shares, subject to applicable law, to receive from the assets of Amalco in respect of each Amalco Exchangeable Share held by such holder, before any distribution of any part of the assets of Amalco among the holders of Amalco Shares or any other shares ranking junior to the Amalco Exchangeable Shares, an amount (the Liquidation Amount) per Amalco Exchangeable Share to be satisfied by the issuance of one Unit (subject to adjustment), together with a cash payment for any accrued but unpaid dividends on each such Amalco Exchangeable Share, provided that if such event occurs, the Fund and ExchangeCo have an overriding right (the Liquidation Call Right) to purchase all of the outstanding Amalco Exchangeable Shares (other than Amalco Exchangeable Shares held by the Fund and ExchangeCo) from the holders of Amalco Exchangeable Shares on the effective date of such liquidation for a purchase price per share equal to the Liquidation Amount.

17. Pursuant to a voting and exchange trust agreement (the Voting and Exchange Trust Agreement) entered into at the Effective Time among the Fund, AcquisitionCo, ExchangeCo and Computershare Trust Company of Canada (the Trustee):

(a) holders of the Amalco Exchangeable Shares have voting rights in the Fund. At the Effective Time, the Fund issued to the Trustee a special voting right (the Special Voting Right) for the benefit of the holders of the Amalco Exchangeable Shares (other than the Fund or any affiliate of the Fund). The Special Voting Right carries, in the aggregate, that number of votes, exercisable at any meeting of unitholders of the Fund at which holders of Units are or would be entitled to vote, equal to the number of Amalco Exchangeable Shares outstanding at such time (excluding those owned by the Fund and any affiliate of the Fund). Each holder of an Amalco Exchangeable Share is entitled to instruct the Trustee as to the manner in which the votes attached to the Special Voting Right and corresponding to the Amalco Exchangeable Shares held by such holder are to be voted. The voting rights attached to the Special Voting Right are exercisable by the Trustee only upon receipt of instructions from the relevant holders of the Amalco Exchangeable Shares (other than the Fund or any affiliate of the Fund);

(b) all continuous disclosure documents provided by the Fund to the holders of its Units will concurrently be provided to the holders of the Amalco Exchangeable Shares; and

(c) in order for the holders of the Amalco Exchangeable Shares to participate on a pro rata basis with holders of Units in the distribution of assets of the Fund in connection with the liquidation, dissolution or winding up of the Fund or any other distribution of the assets of the Fund among its unitholders for the purpose of winding up its affairs, on the fifth business day prior to the effective date of any such event, all of the then outstanding Amalco Exchangeable Shares will be automatically exchanged for Units.

18. At the Effective Time, the Fund, AcquisitionCo, ExchangeCo and the Trustee entered into a support agreement (the Support Agreement) pursuant to which the Fund agreed that it will not declare or pay cash distributions on the Units unless a cumulative preferential cash dividend in an amount per Amalco Exchangeable Share equal to 66 2/3% of any cash distributions declared and paid on each Unit is concurrently declared and paid on the Amalco Exchangeable Shares. The Fund and ExchangeCo also agreed to do all things necessary to enable Amalco to pay and otherwise perform its obligations with respect to the satisfaction of the Liquidation Amount, any exchange of Amalco Exchangeable Shares by a holder thereof or any redemption of Amalco Exchangeable Shares by Amalco. The Fund agreed to do all things necessary to enable ExchangeCo to pay and otherwise perform any of its obligations with respect to the exercise by ExchangeCo of any of the Retraction Call Right, the Redemption Call Right or the Liquidation Call Right. The Support Agreement also provides that, without the prior approval of Amalco and the holders of the Amalco Exchangeable Shares, the Fund will not issue or distribute Units, securities exchangeable for or convertible into or carrying rights to acquire Units, rights, options or warrants to subscribe for or to purchase Units, evidences of indebtedness or other assets of the Fund to the holders of all or substantially all of the Units, nor will the Fund subdivide, redivide, reduce, combine, consolidate or change the Units, unless the same or an economically equivalent change, issuance or distribution is simultaneously made to the Amalco Exchangeable Shares or the holders thereof.

19. As a result of the terms and conditions of the Exchangeable Share Provisions, the Voting and Exchange Trust Agreement and the Support Agreement, except as described in paragraph 16(d) above with respect to dividend entitlements, the Amalco Exchangeable Shares provide the holders thereof with economic and voting rights which are, as nearly as possible except for tax implications, equivalent to the Units.

The Amalco Convertible Debentures

20. At the Effective Time, the Fund fully, unconditionally and irrevocably guaranteed (the "Fund Guarantee") the payment and performance when due of all obligations of Amalco under the Debenture Indenture by entering into a supplemental indenture with the trustee under the Debenture Indenture. The Fund Guarantee entitles the holders of the Amalco Convertible Debentures to receive payment from the Fund within five business days of any failure by Amalco to make a payment.

21. The Amalco Convertible Debentures are convertible into Amalco Exchangeable Shares at a rate determined by the adjustment provisions contained in the Debenture Indenture and the exchange ratio under the Arrangement (and subject to further adjustment from time to time in accordance with the terms of the Debenture Indenture). The Amalco Convertible Debentures are not convertible into Amalco Shares.

Availability of Exemption in Section 13.3 of NI 51-102

22. Section 13.3(2) of NI 51-102 provides that except as provided in Section 13.3(2), a reporting issuer that is an "exchangeable security issuer" satisfies the requirements of NI 51-102 if, among other things, the exchangeable security issuer does not issue any securities, and does not have any securities outstanding, other than the types of securities listed in Section 13.3(2)(c) of NI 51-102, including "designated exchangeable securities". Section 13.3(3) provides a similar exemption in respect of the insider reporting requirement and the requirement to file an insider profile under NI 55-102. NI 51-102 defines a "designated exchangeable security" as an exchangeable security which provides the holder of the security with economic and voting rights which are, as nearly as possible except for tax implications, equivalent to the underlying securities.

23. Amalco is not entitled to rely on the exemptions in Section 13.3 of NI 51-102 in respect of the Amalco Exchangeable Shares for the following reasons:

(a) the holders of Amalco Exchangeable Shares are entitled to receive cumulative preferential cash dividends in an amount per Amalco Exchangeable Share equal to 66 2/3% of any cash distributions declared and paid on the Units on a per Unit basis. As a result, the Amalco Exchangeable Shares do not provide the holders thereof with economic rights which are equivalent in all respects to the underlying securities (i.e. the Units), and therefore the Amalco Exchangeable Shares do not satisfy the definition of "designated exchangeable security" in all respects; and

(b) the Amalco Convertible Debentures are outstanding, which holders are entitled to convert into additional Amalco Exchangeable Shares, neither of which securities will be a type of security listed in Section 13.3(2)(c) of NI 51-102.

24. Each of NI 52-109, NI 52-110 and NI 58-101 contains an exemption from the requirements of such instrument for reporting issuers that are entitled to rely on the exemption contained in Section 13.3 of NI 51-102. Amalco is therefore not entitled to rely on the exemptions contained in such instruments and absent relief must comply with the requirements of such instruments.

Availability of Exemption in Section 13.4 of NI 51-102

25. Section 13.4(2) of NI 51-102 provides that except as provided in Section 13.4(2), a reporting issuer that is a "credit support issuer" satisfies the requirements of NI 51-102 if, among other things, the credit support issuer does not issue any securities, and does not have any securities outstanding, other than the types of securities listed in Section 13.4(2)(c) of NI 51-102, including "designated credit support securities". Section 13.4(3) provides a similar exemption in respect of the insider reporting requirement and the requirement to file an insider profile under NI 55-102. NI 51-102 defines "designated credit support securities" as, among other things, non-convertible debt or convertible debt that is convertible into non-convertible securities of the credit supporter or non-convertible preferred shares or convertible preferred shares that are convertible into securities of the credit supporter.

26. Amalco is not entitled to rely on the exemptions in Section 13.4 of NI 51-102 in respect of the Amalco Convertible Debentures for the following reasons:

(a) the holders of Amalco Convertible Debentures are entitled to convert the Amalco Convertible Debentures into Amalco Exchangeable Shares, which in turn are exchangeable for Units. As a result, the Amalco Convertible Debentures are not non-convertible debt or convertible debt that is convertible into non-convertible securities of the credit supporter (i.e. the Fund) or non-convertible preferred shares or convertible preferred shares that are convertible into securities of the credit supporter, and therefore the Amalco Convertible Debentures do not satisfy the definition of "designated credit support securities" in all respects; and

(b) the Amalco Exchangeable Shares are outstanding, which securities are not a type of security listed in Section 13.4(2)(c) of NI 51-102.

27. Each of NI 52-109, NI 52-110 and NI 58-101 contains an exemption from the requirements of such instrument for reporting issuers that are entitled to rely on the exemption contained in Section 13.4 of NI 51-102. Amalco is therefore not entitled to rely on the exemptions contained in such instruments and absent relief must comply with the requirements of such instruments.

Amalco's Compliance with the Reporting Issuer Requirements is of Limited Value to Investors

28. Continuous disclosure about the Fund is more relevant to holders of the Amalco Exchangeable Shares and the Amalco Convertible Debentures than continuous disclosure about Amalco because the economic value of the Amalco Exchangeable Shares (including the dividends payable on such shares) and the Amalco Convertible Debentures is ultimately determined by the operational and financial performance of the Fund and not Amalco, and because the Amalco Exchangeable Shares are directly, and the Amalco Convertible Debentures are indirectly, exchangeable for Units.

29. In order for Amalco to comply with the Reporting Issuer Requirements, Amalco and the Fund will have to dedicate a substantial amount of management time and financial resources to this task. However, compliance with the Reporting Issuer Requirements by Amalco will not improve the ability of the holders of the Amalco Exchangeable Shares and the Amalco Convertible Debentures to make informed investment decisions about such securities.

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 Exemption Sought is granted provided that:

1. in respect of the Continuous Disclosure Relief, the Certification Relief, the Audit Committee Relief and the Corporate Governance Relief:

(a) the Fund is the beneficial owner of all the issued and outstanding voting securities of Amalco;

(b) the Fund is a reporting issuer in a designated Canadian jurisdiction (as defined in NI 51-102) and has filed all documents it is required to file under NI 51-102;

(c) Amalco does not issue any securities other than:

(i) designated exchangeable securities (as such term is defined in NI 51-102);

(ii) designated credit support securities (as such term is defined in NI 51-102);

(iii) securities issued to and held by the Fund or an affiliate of the Fund;

(iv) debt securities issued to and held by banks, loan corporations, loan and investment corporations, savings companies, trust corporations, treasury branches, savings or credit unions, financial services cooperatives, insurance companies or other financial institutions;

(v) securities issued under exemptions from the registration requirement and prospectus requirement in Section 2.35 of National Instrument 45-106 Prospectus and Registration Exemptions; and

(vi) Amalco Exchangeable Shares;

(d) Amalco does not have any securities outstanding other than the types of securities described in paragraph 1(c) above and Amalco Convertible Debentures;

(e) Amalco files in electronic format:

(i) a notice indicating that it is relying on the continuous disclosure documents filed by the Fund and setting out where those documents can be found for viewing in electronic format; or

(ii) copies of all documents the Fund is required to file under securities legislation, other than in connection with a distribution, at the same time as the filing by the Fund of those documents with a securities regulatory authority or regulator;

(f) the Fund, Amalco or the Trustee concurrently sends to all holders of Amalco Exchangeable Shares all disclosure materials that are sent to holders of Units in the manner and at the time required by securities legislation;

(g) the Fund, Amalco or the Trustee concurrently sends to all holders of the Amalco Convertible Debentures all disclosure materials that are sent to holders of similar debt of the Fund in the manner and at the time required by securities legislation;

(h) the Fund:

(i) complies with Canadian securities legislation in respect of making public disclosure of material information on a timely basis; and

(ii) immediately issues in Canada and files any news release that discloses a material change in its affairs;

(i) Amalco issues in Canada a news release and files a material change report in accordance with Part 7 of NI 51-102 for all material changes in respect of the affairs of Amalco that are not also material changes in the affairs of the Fund;

(j) the Fund includes in all mailings of proxy solicitation materials to holders of Amalco Exchangeable Shares a clear and concise statement that:

(i) explains the reason the mailed material relates solely to the Fund;

(ii) indicates that the Amalco Exchangeable Shares are (other than with respect to dividend entitlements) the economic equivalent to the Units; and

(iii) describes the voting rights associated with the Amalco Exchangeable Shares;

(k) Amalco files, in electronic format, in the notice referred to in paragraph 1(e)(i) above or in or with the copy of the interim and annual consolidated financial statements filed under paragraph 1(e)(ii) above, for the periods covered by the interim or annual consolidated financial statements of the Fund filed, consolidating "summary financial information" (as such term is defined in NI 51-102) for the Fund prepared in accordance with Section 13.4(1.1) of NI 51-102 and presented with a separate column for each of the following: (i) the Fund; (ii) Amalco; (iii) any other subsidiaries of the Fund on a combined basis; (iv) consolidating adjustments; and (v) the total consolidated amounts; and

(l) no person or company other than the Fund has provided a guarantee or alternative credit support (as such term is defined in NI 51-102) for the payments to be made under any issued and outstanding securities of Amalco; and

2. in respect of the Insider Reporting Relief:

(a) if the insider is not the Fund: (i) the insider does not receive, in the ordinary course, information as to material facts or material changes concerning the Fund before the material facts or material changes are generally disclosed; and (ii) the insider is not an insider of the Fund in any capacity other than by virtue of being an insider of Amalco;

(b) the Fund is the beneficial owner of all the issued and outstanding voting securities of Amalco;

(c) if the insider is the Fund, the Fund does not beneficially own any designated exchangeable securities of Amalco other than securities acquired through the exercise of the exchange right and not subsequently traded by the Fund;

(d) if the insider is the Fund, the Fund does not beneficially own any designated credit support securities of Amalco;

(e) the Fund is a reporting issuer in a designated Canadian jurisdiction and has filed all documents it is required to file under NI 51-102;

(f) Amalco has not issued any securities other than the types of securities described in paragraph 1(c) above; and

(g) Amalco does not have any securities outstanding other than the types of securities described in paragraph 1(c) above and Amalco Convertible Debentures.

As to the Exemption Sought (other than from the Statutory Insider Reporting Requirements):

“Jo-Anne Matear”

Assistant Manager, Corporate Finance

Ontario Securities Commission

As to the Exemption Sought from the Statutory Insider Reporting Requirements:

“James E.A. Turner” “Paulette Kennedy”

Vice-Chair Commissioner

Ontario Securities Commission Ontario Securities Commission