November 26, 2015

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction)

and

IN THE MATTER OF ARROW CAPITAL MANAGEMENT INC. (the Filer) and Exemplar Yield Fund (the Terminating Fund)

The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Terminating Fund for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) approving the proposed merger (the Merger) of the Terminating Fund into Exemplar Growth and Income Fund (the Continuing Fund, and together with the Terminating Fund, the Funds) pursuant to paragraph 5.5(1)(b) of National Instrument 81-102 Investment Funds (NI 81-102) (the Approval 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 Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon and Northwest Territories (collectively, the Passport Jurisdictions).

Terms defined in MI 11-102, National Instrument 14-101 Definitions and NI 81-102 have the same meaning if used in this decision, unless otherwise defined.

This decision is based on the following facts represented by the Filer in respect of the Filer and the Funds:

The Filer and the Funds

1. The Filer is a corporation existing under the laws of Ontario having its registered head office in Toronto, Ontario.

2. The Filer is registered in the following categories in the jurisdictions as indicated below:

(a) Ontario: Portfolio Manager (PM), Investment Fund Manager (IFM), Exempt Market Dealer (EMD) and Commodity Trading Manager under the Commodity Futures Act (Ontario);

(b) Alberta: EMD;

(c) British Columbia: EMD;

(d) Quebec: EMD and IFM; and

(e) Newfoundland and Labrador: IFM.

3. The Filer is the investment fund manager and portfolio manager of each of the Funds.

4. Each of the Funds is an open-end mutual fund trust established under the laws of Ontario by a declaration of trust pursuant to which the Filer is the trustee. The head office of each Fund is located in Toronto, Ontario.

5. Each of the Funds is a reporting issuer under the applicable securities legislation of all the provinces and territories in Canada, other than Nunavut, and subject to NI 81-102.

6. The various series of the Terminating Fund and the Continuing Fund are qualified for distribution in the Jurisdiction and the Passport Jurisdictions pursuant to the simplified prospectus and annual information form of the Funds, and of the other mutual funds forming part of the Exemplar Mutual Funds fund family, dated June 29, 2015. Securities of the Funds are not distributed in Nunavut.

7. Neither the Filer nor either of the Funds is in default of securities legislation in any jurisdiction of Canada.

The Meeting and Proposed Merger

8. In its capacity as the manager of the Funds, the Filer is proposing to merge the Terminating Fund into the Continuing Fund.

9. The unitholders of the Terminating Fund and of the Continuing Fund will be asked to approve the Merger at a joint meeting of the unitholders of the Terminating Fund and of the Continuing Fund expected to be held on or around November 27, 2015, but for greater clarity, the unitholders of each Fund will be asked to approve the proposed Merger separately.

10. Subject to receipt of the unitholder approvals and the Approval Sought, the Merger is expected to occur on or about November 30, 2015 or as soon as practicable thereafter (the Effective Date).

11. If the respective unitholder approvals are not received at the joint meeting in respect of the Terminating Fund and the Continuing Fund, then the Merger will not proceed.

12. The Merger will be completed as a "qualifying exchange" or a tax-deferred transaction under the Income Tax Act (Canada) (the Tax Act), and the proposed procedure to effect the Merger is as follows:

(a) Any investment held by the Terminating Fund that is not consistent with the investment objective of the Continuing Fund or acceptable to the portfolio manager of the Continuing Fund will be sold prior to the Effective Date. As a result, the Terminating Fund will temporarily hold cash and/or money market instruments and will not be invested in accordance with its investment objectives for a brief period of time prior to the Merger. The value of any investment sold prior to the Effective Date will depend on prevailing market conditions.

(b) Prior to the Merger, each of the Terminating Fund and the Continuing Fund will distribute to their respective unitholders sufficient net income and net realized capital gains so that neither of the Funds will be subject to tax under Part I of the Tax Act for the taxation year ended at the time of the Merger.

(c) On the Effective Date, the Terminating Fund will transfer all of its assets less an amount required to satisfy the liabilities of the Terminating Fund, to the Continuing Fund, in exchange for units of the Continuing Fund. The units of the Continuing Fund received by the Terminating Fund will have an aggregate net asset value (NAV) equal to the value of the net assets transferred by the Terminating Fund.

(d) Immediately following the above-noted transfer, the Terminating Fund will redeem its outstanding units and distribute the units of the Continuing Fund received by the Terminating Fund to unitholders of the Terminating Fund, in exchange for all such unitholders' existing units of the Terminating Fund on a series-for-series and dollar-for-dollar basis, as follows:

(i) Unitholders of Series A, Series F and Series I units of the Terminating Fund will receive Series A, Series F and Series I units of the Continuing Fund, respectively, and such corresponding series of units have the same rate of management fee and, except as described in the Information Circular (defined below), are otherwise the same.

(ii) Since the management fee rate is 2.25% of series NAV per annum for Series L units of the Terminating Fund and is 2.30% of series NAV per annum for Series L units of the Continuing Fund, the holders of Series L units of the Terminating Fund will receive Series A units of the Continuing Fund, which are subject to a lower management fee rate of 2.00% of series NAV per annum. Unitholders owning Series L units of the Termination Fund will have their deferred sales charge schedule eliminated as a result of the Merger for units held at the Effective Date. No other series of the Terminating Fund has a deferred sales charge option.

(iii) As such, the management fees of each applicable series of the Continuing Fund are substantially the same as, or lower than, the management fees of the corresponding series of the Terminating Fund.

(e) Each unitholder of the Terminating Fund will receive the corresponding series of units of the Continuing Fund with a value equal to the value of the corresponding series of units the Terminating Fund as set out above as determined on the Effective Date.

(f) Immediately following the Merger, unitholders of the Terminating Fund will hold units of the Continuing Fund of a series corresponding to the series of, and of equivalent value to, their units of the Terminating Fund.

(g) As soon as reasonably possible following the Merger, the Terminating Fund will be wound up.

13. Costs and expenses associated with the Merger will be borne by the Filer and will not be charged to the Funds. The costs of the Merger include legal, printing, mailing and regulatory fees, as well as proxy solicitation and brokerage costs.

14. No sales charges will be payable by unitholders of the Funds in connection with the Merger.

Comparison of Terminating Fund and Continuing Fund

15. The Merger satisfies all of the requirements for pre-approved reorganizations and transfers set out in section 5.6(1) of NI 81-102, except the requirement set out in subsection 5.6(1)(a)(ii) as a reasonable person may not consider the Terminating Fund and Continuing Fund to have substantially similar investment objectives.

Unitholder Disclosure

16. A press release describing the proposed Merger has been issued and the press release, material change report, the amendment to the simplified prospectus and annual information form, the amended and restated fund facts of the Terminating Fund and the amended and restated fund facts of the Continuing Fund (the CF Fund Facts), all dated October 26, 2015, and which give notice of the proposed Merger, have been filed via SEDAR.

17. A notice of meeting, management information circular (the Information Circular), proxy and CF Fund Facts of the applicable series of each Continuing Fund (the Meeting Materials) were mailed to unitholders of each Fund commencing on or about October 26, 2015 and have been filed via SEDAR.

18. The Meeting Materials contain the CF Fund Facts, a description of the proposed Merger, information about the Terminating Fund and the Continuing Fund and a description of their differences and income tax considerations for investors of the Terminating Fund. The Meeting Materials also describe the various ways in which investors can obtain a copy of the simplified prospectus and annual information form of the Continuing Fund, as well as the most recent interim and annual financial statements and management reports of fund performance for the Continuing Fund, at no cost.

19. While the Information Circular indicated that as at September 30, 2015, the Terminating Fund (with net assets of $5,448,674) was larger than the Continuing Fund (with net assets of $4,559,367), as at November 11, 2015, the Terminating Fund (with net assets of approximately $4,635,000) was smaller than the Continuing Fund (with net assets of approximately $4,885,000). While the Filer issued and filed a press release and filed a material change report and amendment to the offering documents in respect of the proposed Merger for both Funds, and is seeking approval of investors of the Continuing Fund to the proposed Merger, the Filer does not consider the proposed Merger material for the Continuing Fund.

Unitholder Purchases and Redemptions

20. Units of the Funds are redeemable daily at their NAV per unit calculated daily.

21. Unitholders will continue to have the right to redeem their securities of the Terminating Fund up to the close of business on the last business day before the effective date of the Merger.

22. Subject to receiving the necessary approvals, including unitholder approval at the joint unitholder meeting, effective as of the close of business on November 27, 2015, the Terminating Fund will cease distribution of securities and any new purchases of securities will not be allowed. The Terminating Fund will remain closed to purchase-type transactions, except pursuant to the Terminating Fund's pre-authorized purchase program, until it is merged with the Continuing Fund on the Effective Date. All systematic programs shall remain unaffected until the business day immediately before the Effective Date.

23. Following the Merger, all optional services (such as systematic withdrawal plans) will continue to be available to investors. Unitholders of the Terminating Fund will be automatically enrolled in comparable plans with respect to their corresponding securities of the Continuing Fund unless they advise otherwise.

24. Unitholders may change or cancel any systematic program at any time and unitholders of the Terminating Fund who wish to establish one or more systematic programs in respect of their holdings in the Continuing Fund may do so following the Merger.

25. Unitholders of the Terminating Fund who elected to receive distributions in cash from the Terminating Fund before the Merger will receive distributions in cash from the Continuing Fund after the Merger.

IRC Review

26. The Filer has presented the proposed Merger to the independent review committee of the Funds (the IRC) and has obtained a positive recommendation that the Merger, if implemented, would achieve a fair and reasonable result for the Funds.

27. A summary of the IRC's recommendation has been included in the notice of special meeting sent to unitholders of the Terminating Fund as required by section 5.1(2) of NI 81-107.

Benefits of Merger

28. The Filer believes that the Merger is in the best interest of the Terminating Fund and the Continuing Fund and their unitholders and will be beneficial to unitholders of the Terminating Fund and the Continuing Fund for the following reasons:

(a) under the Merger, investors in the Terminating Fund are provided greater flexibility to decide when a disposition and possible taxable event is triggered because they have the option to redeem their units before the Merger if they so choose, or they can participate in the tax-deferred Merger and avoid a disposition and possible taxable event that would occur in connection with the liquidation of the Terminating Fund;

(b) the Continuing Fund is a better alternative for investors than the Terminating Fund as it provides the opportunity for greater long term growth and a more diverse portfolio;

(c) the Merger will provide economies of scale by eliminating duplicative administrative and regulatory costs of operating the Terminating Fund and the Continuing Fund as separate mutual funds;

(d) following the Merger, the Continuing Fund will have more assets allowing for increased portfolio diversification opportunities and a smaller proportion of assets set aside to fund redemptions; and

(e) there will be a savings in brokerage charges through a merger rather than liquidating the portfolio of securities of the Terminating Fund.

Decision

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

The decision of the principal regulator under the Legislation is that the Approval Sought is granted, provided that the Filer obtains the prior unitholder approvals for the Merger at the joint meeting held for that purpose, or any adjournments thereof.

signed "Stephen Paglia"

_______________________________ Stephen Paglia Acting Manager, Investment Funds and Structured Products Branch Ontario Securities Commission