RBC Dominion Securities Inc. et al. - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Issuer is a connected issuer, but not a related issuer,in respect of registrants that are underwriters in proposed distributions of medium term notes by the issuer - Underwritersexempt from the independent underwriter requirement in the legislation provided that issuer not in financial difficulty.

Applicable Ontario Regulations

Regulation made under the Securities Act, R.S.O. 1990, Reg. 1015, as am., ss. 219(1), 224(1)(b) and 233.

Applicable Ontario Rules

Proposed Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts (published for comment February 6, 1998).

IN THE MATTER OF

THE SECURITIES LEGISLATION OF ONTARIO

BRITISH COLUMBIA, ALBERTA, QUEBEC AND NEWFOUNDLAND

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

RBC DOMINION SECURITIES INC. AND

CIBC WORLD MARKETS INC. AND

SEARS CANADA INC.

MRRS DECISION DOCUMENT

WHEREAS the securities regulatory authority or regulator (the "Decision Maker") in each of Ontario, BritishColumbia, Alberta, Quebec and Newfoundland (the "Jurisdictions") has received an application from RBC DominionSecurities Inc. ("RBCDS") and CIBC World Markets Inc. ("CIBCWM") (collectively, the "Filers") for a decision, pursuantto the securities legislation of the Jurisdictions (the "Legislation"), that the requirement (the "Independent UnderwriterRequirement") contained in the Legislation which restricts a registrant from acting as an underwriter in connection witha distribution of securities by an issuer made by means of a prospectus, where the issuer is a connected issuer (or theequivalent) of the registrant unless a portion of the distribution at least equal to that portion underwritten by non-independent underwriters is underwritten by independent underwriters, shall not apply to the Filers in respect of eachproposed distribution (the "Offerings") of an aggregate amount of up to $500,000,000 medium term notes (the "Notes")of Sears Canada Inc. (the "Issuer") to be made pursuant to a short form shelf prospectus (the "Prospectus") datedFebruary 9, 2001 which has been filed with the Decision Maker of each of the Jurisdictions and a prospectus supplement(the "Prospectus Supplement") expected to be filed with the Decision Maker of each of the Jurisdictions.

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System"), the Ontario Securities Commission is the principal regulator for this application;

AND WHEREAS the Filers have represented to the Decision Makers that:

1. The Issuer is a corporation governed by the Canada Business Corporations Act. The Issuer's head office isat 222 Jarvis Street, Toronto, Ontario.

2. The Issuer is a "reporting Issuer" or the equivalent thereof, and to the Filers' knowledge is not in default, in eachof the provinces and territories of Canada.

3. The Issuer is engaged in the retail business.

4. The Issuer's common shares are listed on the Toronto Stock Exchange Inc.

5. RBCDS will be the lead dealer for certain of the Offerings and its executive and registered office is at 200 BayStreet, Royal Bank Plaza, P. O. Box 50, Toronto, Ontario, M5J 2W7.

6. RBCDS is a corporation governed by the Canada Business Corporations Act and is a wholly owned subsidiaryof a Canadian chartered bank, the Royal Bank of Canada (the "Royal Bank").

7. CIBCWM will be the lead dealer for certain of the Offerings and its head office is at BCE Place, 161 Bay Street,Toronto, Ontario, M5J 2S8.

8. CIBCWM is a corporation governed by the Business Corporations Act (Ontario) and is a wholly ownedsubsidiary of a Canadian chartered bank, the Canadian Imperial Bank of Commerce (the "CIBC").

9. In connection with the Offerings, the Issuer has filed the Prospectus with the Decision Makers and a MRRSdecision document (a receipt) was issued on February 12, 2001.

10. The Prospectus, together with the Prospectus Supplements, will qualify the distribution of the Notes which maybe offered from time to time in an aggregate principal amount of up to $500,000,000.

11. The Filers, together with BMO Nesbitt Burns Inc., Scotia Capital Inc. and TD Securities Inc. (collectively, the"Dealers") intend to act as the Issuer's exclusive agents to solicit, from time to time, offers to purchase theNotes.

12. The approximate proportionate share of the initial Offering to be distributed by each of the Dealers is expectedto be as follows:

13. The Issuer has a credit facility in the amount of $50 million from the Royal Bank and a credit facility from theCIBC in the amount of $50 million (together the "Credit Facilities"). The Issuer intends to draw down on theCredit Facilities in the approximate amount of $100 million to repay certain debentures issued by the Issuermaturing on March 1, 2001. Such amount drawn on the Credit Facilities will be repaid from the net proceedsof the Offerings.

14. The Royal Bank or the CIBC did not participate, and will not in the future participate, in any decision to makethe Offerings of the Notes under Prospectus Supplements nor in the determination of the terms of the Offeringsor the use of proceeds thereof.

15. BMO Nesbitt Burns Inc., Scotia Capital Inc. and TD Securities Inc. are independent dealers (collectively, the"Independent Dealers") within the meaning in the proposed Multi-jurisdiction Instrument 33-105 ­ UnderwritersConflicts (the "Proposed Instrument"). The Independent Dealers will distribute at least 20% of the Notesdistributed during each Offering conducted while the Credit Facilities remain outstanding, and have been andwill participate in the due diligence relating to the Offerings and in the structuring and pricing of the Offerings.

16. The Filers will not benefit in any manner from the distribution of the Notes other than the payment of the feesin connection with the distribution of such Notes.

17. By virtue of the Credit Facilities, the Issuer may, in connection with the Offerings, be considered a "connectedissuer" or the equivalent to each of RBCDS and CIBCWM pursuant to the Legislation.

18. The Issuer is not a "related issuer" or the equivalent to the Filers or any other Dealers within the meaning of theProposed Instrument.

19. The nature and details of the relationship between the Issuer and the Filers will be described in the ProspectusSupplement and the Prospectus Supplement will contain the information specified in Appendix "C" of theProposed Instrument with respect of each Offering made while the Credit Facilities remain outstanding.

20. The Issuer is not a "specified party" within the meaning of the Proposed Instrument.

AND WHEREAS pursuant to the System, this MRRS Decision Document evidences the decision of eachDecision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Makers with the jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that the Independent UnderwriterRequirement shall not apply to the Filers in connection with the Offerings provided the Issuer is not a related issuer, asdefined in the Proposed Instrument, to the Filers at the time of the Offering and is not a specified party, as defined in theProposed Instrument, at the time of the Offering.

March 8, 2001.

"J.A. Geller"       "Robert W. Davis"