Laurel Hill Advisory Group Company

Headnote

Passport System -- Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted, subject to certain conditions, from the Dealer Registration Requirement set out in subsection 25(1)(a) of the Securities Act (Ontario) in respect of certain trades by and to the Filer under its "asset reunification program."

Multilateral Instruments Cited

Multilateral Instrument 11-102 Passport System.

Ontario Statutory Provisions Cited

Securities Act, R.S.O. 1990, c.S. 5, as am., ss. 25(a).

July 22, 2008

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

THE LAUREL HILL ADVISORY GROUP COMPANY

(the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) granting exemptions from:

(a) the restrictions in subsection 25(1)(a) of the Securities Act (Ontario) (the Act) prohibiting the Filer from trading in a security or acting as an underwriter unless the Filer is registered as a dealer, or is registered as a salesperson or as a partner or as an officer of a registered dealer and is acting on behalf of the dealer and the registration has been made in accordance with Ontario securities law and the Filer has received written notice of the registration from the Director and, where the registration is subject to terms and conditions, the Filer complies with such terms and conditions; and

(b) the restrictions in subsection 25(1)(c) of the Act prohibiting the Filer from acting as an adviser unless the Filer is registered as an adviser, or is registered as a representative or as a partner or as an officer of a registered adviser and is acting on behalf of the adviser, and the registration has been made in accordance with Ontario securities law and the Filer has received written notice of the registration from the Director and, where the registration is subject to terms and conditions, the Filer complies with such terms and conditions,

in connection with trades pursuant to or in connection with the Filer's Program (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 Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon for the equivalent provisions of the securities legislation of British Columbia, Alberta, Saskatchewan, Manitoba, Québec, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, the Yukon Territory and Nunavut Territory (together with Ontario, 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.

"Program" means the Filer's asset reunification program, including the Sale Alternative, described below.

Representations

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

1. The Filer is an unlimited liability company incorporated under the laws of the Province of Nova Scotia and is wholly-owned by The Laurel Hill Advisory Group II, Inc., a US S corporation incorporated under the laws of the State of New York. The Filer's registered office is located in Nova Scotia and the Filer's head office is located in Ontario. The Filer is not registered as a dealer or adviser under the Legislation or the securities legislation of any of the Jurisdictions. The Filer is not in default of the Legislation or the securities legislation of any of the Jurisdictions.

2. The Filer's business consists of proxy solicitation and other shareholder response services, including information agent services and small shareholder programs. These services are currently offered to issuers and their securityholders located in Canada. The Filer also wishes to provide the Program to issuers.

3. The purpose of the Program is to assist issuers (Issuers) in locating former securityholders (Securityholders) of (a) entities (Targets) acquired by or merged into such Issuers (or parties related to the Issuers), or (b) mutual companies following their conversion into a shareholder-owned company, commonly referred to as a "demutualization," who, in each of the above circumstances, have failed to tender their shares or other securities of the Target (the Unexchanged Securities), and to facilitate the exchange of such Unexchanged Securities. The Program derives its name because it reunifies Securityholders with the consideration (the Consideration) to which they were entitled under the merger or acquisition transaction or the demutualization (each a Transaction), whether such Consideration consists of cash, non-cash (New Securities), or both.

4. Those Securityholders that participate in the Program are charged a fee by the Filer equal to a flat rate per Unexchanged Security (typically in the range of 10 to l5% of the Consideration to which such Securityholders are entitled under the relevant Transaction) and in the case of lost Unexchanged Securities certificates, an additional flat rate per Unexchanged Security (typically in the range of 5% of value) to make arrangements for issuance of replacement certificates (collectively, the Fee). Securityholders are under no obligation to participate in the Program and are free to exchange their Unexchanged Securities directly. The Filer does not provide any advice to Securityholders with respect to whether or not to participate in the Program. There is no cost to the Issuer for participating in the Program.

5. Where the Consideration consists of sufficient cash to cover the Fee, Securityholder consent is obtained by the Filer for the deduction of the Fee from the Consideration received under the exchange, with the balance being remitted to the Securityholder. Where the Consideration does not consist of sufficient cash to cover the Fee, Securityholders will appoint the Filer as agent to cause the sale on the Securityholder's behalf of sufficient New Securities to satisfy the Fee (the Sale Alternative), and a certificate representing the balance of the New Securities will be remitted to the Securityholder. To the extent the Fee exceeds the proceeds of sale, the Securityholder will not be required to make up any difference. To the extent the proceeds of sale exceed the Fee, the excess will be remitted by cheque to the Securityholder.

6. The Program will be implemented as follows:

(a) Securityholders will be mailed a package of documents (an Information Package) approved by the relevant Issuer informing them of their entitlement to exchange their Unexchanged Securities;

(b) the Information Package will describe the services to be provided by the Filer under the Program and details of the Sale Alternative, if applicable;

(c) Securityholders will be invited to clarify any questions they may have about the Program by contacting the Filer, but Securityholders with inquiries concerning the Transaction itself or related matters will be encouraged to contact their professional advisors;

(d) the Information Package will state clearly that participation in the Program is voluntary;

(e) the Filer will bear all costs of administering the Program, including the cost of all commission fees incurred on behalf of Securityholders in connection with execution of the Sale Alternative; and

(f) Securityholders will receive a report from the Filer outlining the details of the administration of the Program, including the Fee and the number of New Securities transferred or sold and the proceeds of any sale, if applicable.

7. To the extent that the Filer's activities with respect to the Program, including exchanges of Unexchanged Securities pursuant to the Program and trades in New Securities by Securityholders to the Filer, constitute trades of securities for the purposes of the dealer and adviser registration requirements in the Legislation, the Filer would be prohibited from engaging in such activities in the absence of the ruling hereby requested.

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 in the jurisdictions of Ontario and Newfoundland and Labrador, the Filer shall have registered under the securities legislation of each respective jurisdiction as a dealer in the category of limited market dealer within six months of the date hereof.