Sentry Select Capital Corp. et al.

Headnote

Transfer of assets between non-redeemable investment funds in connection with proposed merger exempted from the self-dealing prohibition in paragraph 118(2)(b) of the Act and subsection 115(6) of the Regulation -- Merger subject to unitholder approval -- All costs of the Merger to be borne by the Manager.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., paragraph 118(2)(b) and clause 121(2)(a)(ii).

Ontario Regulation 1015 - General Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., ss. 115(6)d.

July 8, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

AND

IN THE MATTER OF

SENTRY SELECT CAPITAL CORP.

(the "Filer")

AND

DIVERSIFIED INCOME TRUST II AND

ALLIANCE SPLIT INCOME TRUST AND

PREMIER VALUE INCOME TRUST

(collectively, the "Funds")

ORDER

Background

The Ontario Securities Commission (the "Decision Maker") has received an application from the Filer for a decision under the securities legislation of Ontario (the "Legislation") granting relief from:

(a) the restriction in paragraph 118(2)(b) of the Securities Act (Ontario) (the "Act") which prohibits a portfolio manager from purchasing or selling the securities of any issuer from or to the account of the portfolio manager, and

(b) the restriction in subsection 115(6) of Ontario Regulation 1015, which prohibits a purchase or sale of any security in which an associate of an investment counsel has a direct or indirect beneficial interest from or to any portfolio managed or supervised by the investment counsel,

in connection with a proposed mergers between Diversified Income Trust II ("DIT II") and Alliance Split Income Trust ("Alliance") (the "Terminating Funds") and Premier Value Income Trust (the "Continuing Fund") (the "Requested Relief").

Interpretation

Defined terms contained in National Instrument 14-101 - Definitions have the same meaning in this decision unless they are defined in this decision.

Representations:

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

1. The Filer intends to merge the Terminating Funds and the Continuing Fund (the "Mergers"), which will involve the transfer of assets of the Terminating Funds in exchange for units of the Continuing Fund (the "Continuing Fund Units").

2. At the time that the steps are effected to implement the Mergers, the Filer will be the "portfolio manager", or "investment counsellor" of each of the Funds for purposes of the Legislation.

3. The Filer is registered in Ontario as an adviser under the categories Investment Counsel and Portfolio Manager.

4. As well, the Filer is trustee and manager or administrator of the Funds.

5. Each Fund was established pursuant to a declaration of trust under the laws of the Province of Ontario. Each Fund is a "non-redeemable investment trust" as defined in the Legislation and is not a mutual fund for the purposes of the Legislation.

6. DIT II offered its units in all of the Provinces of Canada pursuant to a final prospectus dated October 30, 2002 and its units are listed on the Toronto Stock Exchange ("TSX").

7. Alliance offered its capital units and preferred securities in all of the Provinces of Canada pursuant to a final prospectus dated April 15, 2004 and its capital units and preferred securities are listed on the TSX.

8. The Continuing Fund offered its units in all of the Provinces of Canada pursuant to a final prospectus dated January 27, 2005 and its units are listed on the TSX.

9. Unitholders of each Terminating Fund approved their respective Merger at special meetings of unitholders held on June 18, 2008 (the "Meetings"). In connection with the Meetings, the Filer, as manager or administrator of each Terminating Fund sent to the unitholders of the Terminating Funds a notice of special unitholders meeting and management information circular each dated May 23, 2008 and a related form of proxy (collectively, the "Meeting Materials").

10. It is proposed that the Mergers will occur on or about August 1, 2008 (the "Merger Dates"), subject to regulatory approvals, where necessary.

11. As required by National Instrument 81-107 -- Independent Review Committee, an Independent Review Committee ("IRC") has been appointed for the Funds, and the Filer presented the terms of the Mergers to the IRC for recommendation. The IRC reviewed the proposed Mergers and recommended that they be put to unitholders of each Terminating Fund for their consideration on the basis that the Mergers would achieve fair and reasonable result for each of the Funds.

12. Each of the Terminating Funds and the Continuing Fund will jointly elect for the Mergers to be completed on a tax-deferred basis.

13. The Mergers are expected to take place using the following steps:

(a) DIT II will sell sufficient assets to raise proceeds equal to the aggregate principal amount of the outstanding preferred securities of Alliance plus accrued but unpaid interest (the "Preferred Security Amount") and will use the proceeds to redeem at their net asset value ("NAV") per unit that number of DIT II units held by Alliance having an aggregate NAV per unit equal to the Preferred Security Amount. Alliance will use the Preferred Security Amount to redeem the outstanding preferred securities.

(b) Alliance will transfer all of its remaining assets, consisting primarily of units of DIT II, to the Continuing Fund in exchange for units of the Continuing Fund and the assumption by the Continuing Fund of all of the liabilities of Alliance. The units of the Continuing Fund received by Alliance will have an aggregate NAV equal to the NAV of Alliance (after writing off any unamortized issue costs relating to its initial public offering) and will be issued at the NAV per unit of the Continuing Fund in each case as of the close of business on the business day prior to Merger Date.

(c) immediately thereafter, the units of the Continuing Fund received by Alliance will be distributed to unitholders of Alliance in proportion to the number of units they held in Alliance. Each unitholder will receive units of the Continuing Fund having the same aggregate NAV as their capital units of Alliance as of the close of business on the business day prior to the Merger Date.

(d) DIT II will transfer all of its assets to the Continuing Fund in exchange for units of the Continuing Fund and the assumption by the Continuing Fund of all of the liabilities of DIT II. The units of the Continuing Fund received by DIT II will have an aggregate NAV equal to the NAV of DIT II and will be issued at the NAV per unit of the Continuing Fund in each case as of the close of business on the business day prior to Merger Date.

(e) immediately thereafter, the units of the Continuing Fund received by DIT II will be distributed to unitholders of DIT II in proportion to the number of units they held in DIT II. Each unitholder will receive units of the Continuing Fund havingthe same aggregate NAV as their units of DIT II as of the close of business on the business day prior to the Merger Date.

(f) as a result of the Merger of Alliance with the Continuing Fund, the Continuing Fund will acquire units of DIT II. As a result of the Merger of DIT II with the Continuing Fund, the Continuing Fund will acquire units in itself, which will be cancelled.

(g) immediately following the completion of the Mergers, the Terminating Funds will be wound up and terminated.

(h) the Filer will issue a press release forthwith after the Mergers are completed announcing the completion of the Mergers and the ratio by which units of the Terminating Funds were exchanged for units of the Continuing Fund.

14. All costs and expenses associated with the Mergers will be borne by the Filer.

15. The transfer of the investment portfolio of each of Terminating Funds to the Continuing Fund as a step in the Mergers may be considered a sale of securities caused by the "portfolio manager" from the respective Terminating Fund to the account of an associate of the "portfolio manager", contrary to the Legislation.

16. The transfer of the investment portfolio of each of the Terminating Funds to the Continuing Fund as a step in the Mergers may be considered a sale of securities in which an associate of an investment counsel has a direct or indirect beneficial interest to a portfolio managed or supervised by the investment counsel, contrary to the Legislation.

17. The Funds have similar investment objectives, fee structures and valuation procedures.

18. In the absence of this order, the Filer would be prohibited from purchasing and selling the securities of the Terminating Funds in connection with the Mergers.

Decision

The Decision Maker is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met. The decision of the Decision Maker under the Legislation is that the Requested Relief is granted.