Issuer is "connected issuer" but not "related issuer" in respect of several registrants whocomprise underwriting sydicate in proposed securities distribution by issuer - Issuerhaving entered into agreement for credit facility with group of lenders that are affiliated withunderwriters - issuer not in financial difficulty - underwriters exempted from the regulatoryrequirement that an independent registrant underwrite a portion of the distribution equalto the portion to be underwritten by the "connected" underwriters.
Securities Act, R.S.O. 1990, c.S.5, as am. (the "Act").
Regulation made under the Act, Reg. 1015, as am., ss. 224(1)(b)
R.S.O. 1990, CHAPTER S. 5, AS AMENDED (the "Act")
IN THE MATTER OF
RBC DOMINION SECURITIES INC.
(Section 233 of the Regulation)
WHEREAS RBC Dominion Securities Inc. ("RBCDS") has made an application tothe Ontario Securities Commission (the "Commission") for an order pursuant to section233 of the Regulation, exempting RBCDS, RBC Dominion Securities Corporation, TDSecurities Inc., TD Securities (USA) Inc, CIBC World Markets Inc. and CIBC WorldMarkets Corp. from the requirements of clause 224(1)(b) in connection with an offering (the"Offering") of common shares (the "Common Shares") of Bracknell Corporation("Bracknell");
AND WHEREAS the Applicant has presented to the Commission that:
1. Bracknell is a corporation existing under the Business Corporations Act (Ontario).
2. Bracknell carries on business in the facilities infrastructure services industry,providing customers with essential building services such as electrical andtelecommunication systems, mechanical and heating, ventilation and airconditioning for both new construction and maintenance and systems upgrades.
3. Bracknell is a reporting issuer in Ontario, whose common shares are listed on TheToronto Stock Exchange, and, in connection with the distribution of the CommonShares, is eligible to use the prompt offering qualification system under NationalPolicy No. 47.
4. Bracknell proposes to file a preliminary short form prospectus (the "PreliminaryProspectus") with the securities commissions or similar authorities of each of theprovinces to qualify the distribution of the Common Shares on March 9, 1999.
5. RBCDS will be the lead underwriter for the offering of Common Shares by Bracknelland it is currently expected that the initial underwriting syndicate will also includeRBCDS, RBC Dominion Securities Corporation, TD Securities Inc., TD Securities(USA) Inc, CIBC World Markets Inc., CIBC World Markets Corp., Merrill LynchCanada Inc. and Dundee Securities Corporation (collectively with RBCDS, the"Underwriters").
6. The proportionate percentage share of the Offering to be underwritten by each ofthe Underwriters will be as follows:
RBC Dominion Securities Inc. - 44%
CIBC World Markets Inc. - 17%
TD Securities Inc. - 17%
Merrill Lynch Canada Inc. - 17%
Dundee Securities Corporation - 5%
7. On February 29, 2000, Bracknell signed an amended and restated agreement (the"Senior Credit Facility") with a group of lenders including Royal Bank of Canada (anaffiliate of RBCDS and RBC Dominion Securities Corporation), Toronto-DominionBank (an affiliate of TD Securities Inc. and TD Securities (USA) Inc.) and CanadianImperial Bank of Commerce (an affiliate of CIBC World Markets Inc. and CIBCWorld Markets Corp.) (collectively the "Banks") providing for total credit availabilityof US$212.5 million. In addition, on March 6, 2000, Bracknell signed a commitmentletter with Toronto-Dominion Bank to borrow up to US$50 million.
8. By virtue of the indebtedness owed to the Banks, Bracknell may, in connection withthe Common Shares, be considered to be a "connected issuer" of RBCDS, RBCDominion Securities Corporation, TD Securities Inc., TD Securities (USA) Inc, CIBCWorld Markets Inc. and CIBC World Markets Corp. for the purposes of clause224(1)(b) of the Regulation.
9. The syndicate comprised of the Underwriters will not meet the proportionalityrequirements of clause 224(1)(b) of the Regulation.
10. The decision to issue the Common Shares, including the determination of the termsof the Offering, was made through negotiations between Bracknell and theUnderwriters without the involvement of the Banks.
11. Bracknell is not in financial difficulty and is not under any immediate financialpressure to undertake the Offering.
AND WHEREAS the Commission is satisfied that to do so would not be prejudicialto the public interest;
IT IS HEREBY ORDERED pursuant to section 233 of the Regulations, that RBCDS,RBC Dominion Securities Corporation, TD Securities Inc., TD Securities (USA) Inc., CIBCWorld Markets Inc. and CIBC World Markets Corp. are exempt from the requirements ofclause 224(1)(b) of the Regulation, in respect of the Offering.
March 14th, 2000.
"J. A. Geller" "R. Stephen Paddon"