Goodman & Company, Investment Counsel Ltd. - MRRS Decision

Headnote

Novel future-oriented exemption from subsection 4.1(1) of National Instrument 81-102 Mutual Funds to enable mutual funds to purchase securities of an issuer during the period of distribution of the issuer's securities and for the 60 days following completion of the distribution in which a related underwriter acts in connection with the offering of securities, subject to a number of conditions including that the related underwriter does not have greater than a 5 percent underwriting interest in the offering of securities of the issuer.

Rule Cited

National Instrument 81-102 Mutual Funds, ss. 4.1(1), 19.1.

January 19, 2006

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUEBEC, NEW BRUNSWICK,

NOVA SCOTIA, PRINCE EDWARD ISLAND,

NEWFOUNDLAND AND LABRADOR,

AND THE NORTHWEST TERRITORIES,

NUNAVUT AND THE YUKON

(the "Jurisdictions")

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

GOODMAN & COMPANY, INVESTMENT COUNSEL LTD.

(the "Applicant")

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the "Decision Maker") in each of the Jurisdictions has received an application dated May 13, 2004 (the "Application") from the Applicant (or "Dealer Manager") on behalf of the mutual funds listed in Appendix "A" for which the Applicant currently acts as manager or portfolio adviser or both (the "Existing Funds") and any other mutual fund subject to National Instrument 81-102 Mutual Funds ("NI 81-102") which may be created in the future for which the Applicant or an affiliate of the Applicant will act as manager or portfolio adviser or both (the "Future Funds", and together with the Existing Funds, the "Funds" or "Dealer Managed Funds"), for a decision under section 19.1 of NI 81-102 (the "Legislation") for:

• an exemption from subsection 4.1(1) of NI 81-102, to enable the Dealer Managed Funds to purchase a preferred share, a common share or an income participating security of an issuer, or any security (such as a unit) of an issuer which allows the holder to participate in the earnings or growth of any entity, including any partnership or trust (the "Securities") during the period of distribution of the issuer's securities (the "Distribution") and for the 60-day period (the "60-Day Period") following completion of the Distribution (the Distribution and the 60-Day Period together, the "Prohibition Period"), notwithstanding that Dundee Securities Corporation ("DSC") (or a "Related Underwriter") acts as an underwriter in connection with the offering of Securities pursuant to a prospectus filed with the Canadian securities regulatory authorities (each a "Relevant Offering"), such relief referred to as the "Requested Relief".

Under the Mutual Reliance Review System for Exemptive Relief Applications:

(a) the Ontario Securities Commission is the principal regulator for this Application, and

(b) this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meanings in this decision (the "Decision") unless they are defined in this Decision. In addition to capitalized terms defined elsewhere in this Decision, the following terms have the following meanings:

"Bought Deal" means a Relevant Offering which is made pursuant to an agreement under which an underwriter or underwriters, as principal(s), agree(s) to purchase Securities from an issuer or selling security holder with a view to a distribution of such Securities pursuant to a short form prospectus filed in accordance with National Instrument 44-101 Short Form Prospectus Distributions or any comparable system in any of the Jurisdictions and such agreement is entered into prior to or contemporaneously with the filing of the preliminary short form prospectus in respect of the Relevant Offering.

Representations

This Decision is based on the following facts represented by the Applicant:

1. Each of the Dealer Managed Funds is or will be an open-ended mutual fund trust or corporation established under the laws of the Province of Ontario. The securities of each of the Dealer Managed Funds are or will be qualified for distribution in the Jurisdictions pursuant to simplified prospectuses and annual information forms that have been prepared and filed in accordance with the securities legislation of the Jurisdictions.

2. The Applicant is or will be the manager, trustee (where applicable), portfolio adviser to certain of the Funds, principal distributor and registrar of the Dealer Managed Funds. The Applicant currently is, and will be in the future, a "dealer manager" with respect to the Funds, and each Fund is or will be a "dealer managed fund", as such terms are defined in section 1.1 of NI 81-102.

3. The Applicant is a corporation incorporated under the laws of Ontario, and is registered as an adviser in the categories of investment counsel and portfolio adviser in Ontario. The Applicant holds similar adviser registrations in Quebec, British Columbia, Alberta, Manitoba, Saskatchewan, Nova Scotia and New Brunswick. The head office of the Dealer Manager is in Toronto, Ontario.

4. The investment objective of each Dealer Managed Fund permits it to invest in the relevant Securities.

5. DSC may be a party to the underwriting agreement with an issuer of Securities in a Relevant Offering. In respect of each Relevant Offering in which a Related Underwriter participates as an underwriter, the Dealer Manager may cause the Dealer Managed Funds to invest in Securities during the Prohibition Period of the Relevant Offering.

6. DSC will not have greater than a 5 percent underwriting interest in a Relevant Offering of Securities of an issuer.

7. The investment prohibition contained in subsection 4.1 of NI 81-102 (the "Investment Prohibition") provides an exemption if the dealer manager or any of its associates or affiliates only acts as a member of a selling group distributing five percent or less of the underwritten securities. However, this de minimis exemption is not available to entities that are underwriting a distribution (as opposed to being in the selling group), and therefore the Dealer Managed Funds cannot avail themselves of this exemption even in Relevant Offerings in which DSC has a relatively modest share.

8. DSC is comparatively smaller than the Dealer Managed Funds, which are part of one of the largest mutual fund groups in Canada and are investors in Relevant Offerings. As a result, issuers and underwriters creating syndicates may be discouraged from including DSC in an underwriting syndicate because they do not want to be in a position in which the Funds are precluded from investing in a distribution. DSC has been particularly disadvantaged in terms of its ability to participate in income trust Distributions because of the importance of the Dealer Managed Funds as potential purchasers.

9. To the extent DSC does participate as an underwriter in a Relevant Offering, the Investment Prohibition restricts the Dealer Managed Funds from making certain investments in the issuer's Securities during the relevant Prohibition Period and can result in the portfolio adviser incurring extra costs, which are ultimately borne by the relevant Fund, to substitute investments for those that it is prohibited from buying.

10. The short timeframe to purchase Securities in Relevant Offerings done by way of Bought Deals does not give the Applicant the opportunity to apply for relief to purchase Securities during the Distribution.

11. Despite the affiliation between the Applicant and DSC, they operate independently of each other and in separate locations. In particular, the investment banking and related dealer activities of DSC and the investment portfolio management activities of the Applicant are separated by "ethical" walls. Accordingly, no information flows from one to the other concerning their respective business operations or activities generally except in the following or similar circumstances:

(a) in respect of compliance matters (for example, the Applicant and DSC communicate to enable the Applicant to maintain an up-to-date restricted-issuer list to ensure that the Applicant complies with applicable securities laws); and

(b) the Applicant and DSC may share general market information such as discussion on general economic conditions, bank rates, etc.

12. The Applicant has not been and will not (going forward) be involved in the work of the Related Underwriter. Similarly, the Related Underwriter has not been and will not be involved in the decisions of the Applicant as to whether the Dealer Managed Funds will purchase Securities during the Prohibition Period of a Relevant Offering.

13. In respect of each Relevant Offering, the Dealer Managed Funds will not be required or obliged to purchase any of the Securities during the Prohibition Period prior to placing an order for such Securities.

14. Any purchase of Securities during the Prohibition Period of a Relevant Offering will be consistent with the investment objectives of the Dealer Managed Funds and represent the business judgment of the Applicant uninfluenced by considerations other than the best interests of the Dealer Managed Funds, or in fact be in the best interests of the Dealer Managed Funds.

15. To the extent that the Dealer Manager manages two or more Dealer Managed Funds and other client accounts that are managed on a discretionary basis (the "Managed Accounts"), the Securities purchased for them in a Relevant Offering in which the Related Underwriter participates as an underwriter will be allocated:

(a) in accordance with the allocation factors or criteria stated in the written policies or procedures put in place by the Dealer Manager for its Dealer Managed Funds and Managed Accounts; and

(b) taking into account the amount of cash available to each Dealer Managed Fund for investment.

16. The Applicant will mandate its independent review committee (the "Independent Committee"), appointed in respect of the Dealer Managed Funds, to review each Dealer Managed Fund's purchases of Securities during the Prohibition Period of a Relevant Offering made pursuant to this Decision.

17. The Independent Committee will have at least three members and every member must be independent. A member of the Independent Committee is not independent if the member has a direct or indirect material relationship with the Applicant, the Dealer Managed Funds, or any affiliate or associate thereof. For the purpose of this Decision, a material relationship means a relationship which could, in the view of a reasonable person, reasonably interfere with the exercise of the member's independent judgement regarding conflicts of interest facing the Applicant.

18. Prior to the first reliance on this Decision, the Independent Committee will have reviewed and approved the Applicant's written policies or procedures regarding its purchases of Securities to be made pursuant to this Decision which, as a minimum, sets out the conditions of this Decision.

19. The Independent Committee may, at the request of the Dealer Manager, provide written instructions permitting, on a continuing basis (each a "Standing Approval"), purchases of Securities during the Prohibition Period for Relevant Offerings made by way of Bought Deals pursuant to this Decision; provided that the Standing Approval may only apply to purchases throughout the Prohibition Period for a Relevant Offering if the Dealer Managed Funds make a purchase of Securities during the Distribution for such Relevant Offering. The Standing Approval must at a minimum include the terms and conditions of this Decision and (i) the maximum percentage of a Dealer Managed Fund's net asset value that the particular purchase in a Relevant Offering may represent, and (ii) the maximum percentage of the total Relevant Offering that the Dealer Manager may purchase in such Relevant Offering for a Dealer Managed Fund.

20. Prior to the first purchase by the Dealer Managed Funds of Securities of an issuer during the Prohibition Period for each Relevant Offering done by way of a Bought Deal to be made pursuant to this Decision, the Independent Committee will have provided a Standing Approval, which continues to be in effect throughout the Prohibition Period; provided, however, that if the Dealer Managed Funds do not purchase Securities in such Relevant Offering during the Distribution for such Relevant Offering, the Independent Committee will have reviewed and approved the proposed first purchase of Securities to be made pursuant to this Decision during the 60-Day Period following the Distribution for such Relevant Offering.

21. Prior to the first purchase by a Dealer Managed Fund of Securities of an issuer during the Prohibition Period for each Relevant Offering not done by way of a Bought Deal to be made pursuant to this Decision, the Independent Committee will have reviewed and approved the proposed first purchase of Securities to be made pursuant to this Decision during the Prohibition Period for such Relevant Offering.

22. The Independent Committee's approval in paragraphs 19, 20, and 21 will include a determination by the Independent Committee after reasonable inquiry, which may include but is not limited to engaging independent counsel and other advisors it determines necessary to carry out its duties, that purchases of Securities as proposed by the Dealer Manager and made in reliance on this Decision during the Prohibition Period for the Relevant Offering(s):

(a) will be made by the Dealer Manager free from any influence by the Related Underwriter or any affiliate or associate thereof and without taking into account any consideration relevant to the Related Underwriter or any associate or affiliate thereof; and

(b) will represent the business judgment of the Dealer Manager uninfluenced by considerations other than the best interests of the Dealer Managed Funds, or

(c) will, in fact, in the best interests of the Dealer Managed Funds; and

(d) will be made in compliance with the Applicant's written policies or procedures referred to in paragraph IV of this Decision below.

23. The members of the Independent Committee will exercise their powers and discharge their duties honestly, in good faith, and in the best interests of investors in the Dealer Managed Funds and, in so doing, exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances.

24. The Independent Committee will review and assess on a regular basis, but not less frequently than once every calendar quarter, the adequacy and effectiveness of (i) any Standing Approvals that it has granted; and (ii) the Applicant's written policies and procedures referred to in paragraph IV of this Decision below, in ensuring compliance with this Decision.

Decision

Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Makers with the jurisdiction to make this Decision has been met.

The Decision of the Decision Makers under the Legislation is that the Requested Relief is granted, notwithstanding that the Related Underwriter may act as one of the underwriters in a Relevant Offering, provided that, in respect of the Dealer Manager and the Dealer Managed Funds, the following conditions are satisfied:

The Investment Decision

I. At the time of each purchase (the "Purchase") by a Dealer Managed Fund during a Prohibition Period for a Relevant Offering of Securities issued in such Relevant Offering, the following conditions are satisfied:

(a) the Purchase

(i) represents the business judgment of the Dealer Manager uninfluenced by considerations other than the best interests of the Dealer Managed Fund, or

(ii) is, in fact, in the best interests of the Dealer Managed Fund;

(b) the Purchase is consistent with, or is necessary to meet, the investment objective of the Dealer Managed Fund as disclosed in its simplified prospectus;

(c) the Dealer Managed Fund does not accept solicitation by the Related Underwriter for Purchases for the Dealer Managed Fund; and

(d) the issuer is not a "related issuer" or a "connected issuer", as defined in National Instrument 33-105 Underwriting Conflicts, of the Dealer Manager or its affiliates or associates;

(e) if the Relevant Offering is done by way of a Bought Deal, provided that the Dealer Managed Fund makes a Purchase in the Distribution for such Relevant Offering, the Purchase is made pursuant to a Standing Approval of the Independent Committee which continues to be in effect throughout the Prohibition Period;

(f) if the Relevant Offering is done by way of a Bought Deal and the Dealer Managed Fund does not make a Purchase during the Distribution for such Relevant Offering, the Independent Committee has, prior to the first Purchase to be made during the 60-Day Period, reviewed and approved the proposed first Purchase to be made during the 60-Day Period for such Relevant Offering;

(g) if the Relevant Offering is not done by way of a Bought Deal, the Independent Committee has reviewed and approved the proposed first Purchase to be made during the Prohibition Period for such Relevant Offering, prior to the first Purchase in the Prohibition Period for such Relevant Offering; and

(h) the approvals in paragraphs I(e), (f) and (g) above, shall include a determination that the Independent Committee has formed the opinion after reasonable inquiry, which may include but is not limited to engaging independent counsel and other advisors it determines necessary to carry out its duties, that purchases of Securities as proposed by the Dealer Manager and made in reliance on this Decision during the Prohibition Period for the Relevant Offering(s):

(i) will be made by the Dealer Manager free from any influence by the Related Underwriter or any affiliate or associate thereof and without taking into account any consideration relevant to the Related Underwriter or any associate or affiliate thereof; and

(ii) will represent the business judgment of the Dealer Manager uninfluenced by considerations other than the best interests of the Dealer Managed Fund; or

(iii) will, in fact, be in the best interests of the Dealer Managed Fund; and

(iv) will be made in compliance with the Applicant's written policies or procedures referred to in paragraph IV of this Decision below;

Transparency

II. Prior to the first reliance on this Decision, the internet website of the Dealer Managed Fund or Dealer Manager, as applicable, discloses,

and

on the date which is the earlier of (i) the date when an amendment to the simplified prospectus of the Dealer Managed Fund is filed for reasons other than this Decision and (ii) the date on which the initial or renewal simplified prospectus is receipted, Part A of the simplified prospectus of the Dealer Managed Fund discloses,

(a) that the Dealer Managed Fund may invest in Securities during the Prohibition Period pursuant to this Decision, notwithstanding that the Related Underwriter has acted as underwriter in the Relevant Offering of the same class of such Securities;

(b) the existence, purpose, duties, obligations and standard of care of the Independent Committee, the names of its members and a brief description of pertinent personal background information on the Independent Committee members;

(c) the fact that they meet the independent requirements set forth in this Decision;

(d) whether and how they are compensated for their review; and

(e) that a securityholder of the Dealer Managed Fund may request a copy of the disclosure referred to in paragraph XXIII below (which may be provided by way of an electronic link to the location at which the SEDAR Report is filed on SEDAR);

III. On the date which is the earlier of

(i) the date when an amendment to the annual information form of the Dealer Managed Fund is filed for reasons other than this Decision and

(ii) the date on which the initial or renewal annual information form is receipted,

the annual information form of the Dealer Managed Fund discloses the information referred to in paragraph II(a) through (e) above and describes the policies or procedures referred to in paragraph IV below and the fact that Standing Approvals may be granted by the Independent Committee;

IV. Prior to effecting any Purchase pursuant to this Decision, the Dealer Manager has in place written policies or procedures to ensure that,

(a) there is compliance with the conditions of this Decision; and

(b) in connection with any Purchase,

(i) there are stated factors or criteria for allocating Securities purchased for two or more Dealer Managed Funds and other accounts managed by the Dealer Manager ("Managed Accounts"), and

(ii) there is full documentation of the reasons for any allocation to a Dealer Managed Fund or Managed Account that departs from the stated allocation factors or criteria;

V. On the request by a securityholder of a Dealer Managed Fund, the Dealer Manager shall disclose the information referred to in paragraph XXIII below (which may be provided by way of an electronic link to the location at which the SEDAR Report is filed on SEDAR);

The Nature of the Purchase

VI. The Dealer Manager does not place an order to purchase, on a principal or agency basis, with the Related Underwriter;

VII. For Purchases during the Distribution only, the Dealer Manager:

(a) expresses an interest to purchase on behalf of the Dealer Managed Funds and the Managed Accounts a fixed number of Securities (the "Fixed Number") to an underwriter other than the Related Underwriter;

(b) agrees to purchase the Fixed Number or such lesser amount as has been allocated to the Dealer Manager, in the case of such Relevant Offering, no more than five (5) business days after the receipt for the final prospectus has been issued;

(c) does not place an order with an underwriter of the Relevant Offering to purchase an additional number of Securities under the Relevant Offering prior to the completion of the Distribution, provided that if the Dealer Manager was allocated less than the Fixed Number, in the case of a Relevant Offering, at the time the final prospectus was filed for the purposes of the closing of the Relevant Offering, the Dealer Manager may place an additional order for such number of additional Securities equal to the difference between the Fixed Number and the number of Securities allotted to the Dealer Manager at the time of the final prospectus in the event the underwriters exercise the over-allotment option; and

(d) in the case of a Relevant Offering, does not sell Securities purchased by the Dealer Manager under the Relevant Offering prior to the listing of such Securities on the Toronto Stock Exchange (the "TSX") or another recognized market.

VIII. Each Purchase during the 60-Day Period is made on the TSX or another recognized market;

IX. For Purchases during the 60-Day Period, an underwriter provides to the Dealer Manager written confirmation that the "dealer restricted period", as defined in Ontario Securities Commission Rule 48-501 Trading During Distributions, Formal Bids and Share Exchange Transactions, in respect of the Relevant Offering has ended;

X. Except to the extent evidenced by this Decision and specific approvals granted by the Decision Makers pursuant to the Legislation or securities legislation of the Jurisdictions, the Purchases comply with the Legislation and securities legislation of the Decision Makers.

The Nature of the Offering

XI. The Offering of the Securities is made by prospectus filed with one or more securities regulators in Canada;

XII. Except for Purchases done during the Prohibition Period for a Relevant Offering done by way of a Bought Deal, the minimum number of Securities in a Relevant Offering qualified for distribution under the prospectus in the Relevant Offering is sold on the closing date stated in the prospectus as the expected closing date;

XIII. The Related Underwriter does not purchase Securities for its own account except Securities sold by the Related Underwriter on the closing of such Relevant Offering;

Nature of the Underwriting Interest

XIV. DSC shall not have greater than a five percent underwriting interest in a Relevant Offering;

Independent Review

XV. The Dealer Managed Funds have an Independent Committee to review the Dealer Managed Funds' Purchases;

XVI. The Independent Committee has a written mandate describing its duties and standard of care which, as a minimum, sets out the conditions of this Decision;

XVII. The members of the Independent Committee exercise their powers and discharge their duties honestly, in good faith, and in the best interests of investors in the Dealer Managed Funds and, in so doing, exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances;

XVIII. The Independent Committee will review and assess on a regular basis, but not less frequently than once every calendar quarter, (i) the adequacy and effectiveness of any Standing Approvals granted by it; and (ii) the adequacy and effectiveness of the Applicant's written policies and procedures referred to in paragraph IV of this Decision to ensure compliance with this Decision;

Liability

XIX. A Dealer Managed Fund does not relieve the members of the Independent Committee from liability for loss that arises out of a failure to satisfy the standard of care set out in paragraph XVII above;

XX. A Dealer Managed Fund does not indemnify the members of the Independent Committee against legal fees, judgments and amounts paid in settlement as a result of a breach of the standard of care set out in paragraph XVII above;

XXI. A Dealer Managed Fund does not incur the cost of any portion of liability insurance that insures a member of the Independent Committee for a liability for loss that arises out of a failure to satisfy the standard of care set out in paragraph XVII above;

XXII. The cost of any indemnification or insurance coverage paid for by the Dealer Manager or any associate or affiliate of the Dealer Manager to indemnify or insure the members of the Independent Committee in respect of a loss that arises out of a failure to satisfy the standard of care set out in paragraph XVII above is not paid either directly or indirectly by the Dealer Managed Fund;

Post-Transaction Disclosure

XXIII. The Dealer Manager files a certified report on SEDAR (the "SEDAR Report") in respect of the Dealer Managed Fund, no later than 30 days after the end of the Prohibition Period for each Relevant Offering if it made a Purchase during the Prohibition Period for the Relevant Offering, that contains a certification by the Dealer Manager that contains:

(a) the following particulars of each Purchase:

(i) the number of Securities purchased by the Dealer Managed Fund during the Prohibition Period of such Relevant Offering;

(ii) the date of the Purchase and purchase price;

(iii) if applicable, that the Securities were Purchased under a Standing Approval;

(iv) whether it is known that any underwriter or syndicate member has engaged in market stabilization activities in respect of the Securities in such Relevant Offering;

(v) if the Securities were purchased for two or more Dealer Managed Funds and other Managed Accounts of the Dealer Manager, the aggregate amount so purchased and the percentage of such aggregate amount that was allocated to each Dealer Managed Fund; and

(vi) the dealer from whom the Dealer Managed Fund purchased the Securities and the fees or commissions, if any, paid by the Dealer Managed Fund in respect of such Purchase;

(b) a certification by the Dealer Manager that each Purchase:

(i) was made free from any influence by the Related Underwriter or any affiliate or associate thereof and without taking into account any consideration relevant to the Related Underwriter or any associate or affiliate thereof; and

(ii) represented the business judgment of the Dealer Manager uninfluenced by considerations other than the best interest of the Dealer Managed Fund, or

(iii) was, in fact, in the best interests of the Dealer Managed Fund;

(c) confirmation of the existence of the Independent Committee to review the Purchase by the Dealer Managed Fund during the Prohibition Period of each Relevant Offering, the names of the members of the Independent Committee, the fact that they meet the independence requirements set forth in this Decision, and whether and how they were compensated for their review; and

(d) a certification by each member of the Independent Committee that:

(i) where Purchases were made in the Distribution only, or in the Distribution and during the 60-Day Period, for a Relevant Offering done by way of a Bought Deal, the Standing Approval continued in effect throughout the Prohibition Period;

(ii) after reasonable inquiry, the terms and conditions of any Standing Approvals are adequate and effective and any necessary amendments to ensure that any Standing Approvals remain adequate and effective have been made;

(iii) where Purchases were made by the Dealer Managed Fund during the Prohibition Period for each Relevant Offering not done by way of a Bought Deal or only during the 60-Day Period for any Relevant Offering done by way of a Bought Deal, the Independent Committee reviewed and approved the proposed first Purchase during the Prohibition Period or the 60-Day Period as the case may be;

(iv) after reasonable inquiry the member is of the opinion that the policies and procedures referred to in paragraph 0 above are adequate and effective to ensure compliance with this Decision and that any necessary amendments have been made to ensure such policies and procedures remain adequate and effective to ensure compliance with this Decision; and

(v) that the decision made on behalf of the Dealer Managed Fund by the Dealer Manager to purchase on behalf of the Dealer Managed Fund and each Purchase by the Dealer Managed Fund:

(A) was made in compliance with the conditions of this Decision, the Applicant's written policies or procedures referred to in paragraph 0 of this Decision above, and if applicable, the terms and conditions of any Standing Approvals;

(B) was made by the Dealer Manager free from any influence by the Related Underwriter or any affiliate or associate thereof and without taking into account any consideration relevant to the Related Underwriter or any associate or affiliate thereof; and

(C) represented the business judgment of the Dealer Manager uninfluenced by considerations other than the best interests of the Dealer Managed Fund, or

(D) was, in fact, in the best interests of the Dealer Managed Fund.

XXIV. The Independent Committee advises the Decision Makers in writing of:

(a) any determination by it that the condition set out in paragraph 00 above has not been satisfied with respect to any Purchase;

(b) any determination by it that any other condition of this Decision has not been satisfied;

(c) any action it has taken or proposes to take following the determinations referred to above; and

(d) any action taken, or proposed to be taken, by the Dealer Manager in response to the determinations referred to above.

Sunset

XXV. This Decision, as it relates to the jurisdiction of a Decision Maker, will terminate the earlier of:

(a) one year from the date of the Decision; or

(b) the coming into force of any legislation or rule of the Decision Makers dealing with matters regulated by Section 4.1 of NI 81-102.

Yours truly,

"Leslie Byberg"

APPENDIX "A" -- Existing Mutual Funds