TD Securities Inc. &DataRadio Inc. - MRRS Decision

Headnote

Section 233 of Regulation - Issuer is a connected issuer of one of the underwriters - Related underwriter exempted fromclause 224(1)(b) of Regulation where there is participation by an independent agent corresponding to that required bysection 2.1 of proposed Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts.

Applicable Ontario Statute

Securities Act, R.S.O. 1990, c.S.5, as am.

Applicable Ontario Regulation

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

Applicable Ontario Rule

Proposed Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts, (1998), 21 OSCB 788, as amended (1999), 22OSCB 149.

IN THE MATTER OFTHE CANADIAN SECURITIES LEGISLATION OF

QUEBEC, BRITISH COLUMBIA, ONTARIO AND NEWFOUNDLAND

AND

IN THE MATTER OFTHE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

TD SECURITIES INC. AND DATARADIO INC.

MRRS DECISION DOCUMENT

WHEREAS an application has been received by the securities commission (the "Decision Maker") of Quebec,British Columbia, Alberta, Ontario and Newfoundland (the "Jurisdictions") from TD Securities Inc. ("TDSI") for a decisionpursuant to the securities legislation of Quebec, British Columbia, Alberta, Ontario and Newfoundland (the "Legislation")that the requirements to comply with the rule against acting as an Underwriter in connection with a distribution ofsecurities of a connected issuer of the underwriter (the "Independent Underwriter Requirement") contained in theLegislation shall not apply to TDSI in connection with a proposed initial public offering of common shares by DataradioInc. (the "Issuer") (the "Offering") to be made by means of a prospectus (the "Prospectus");

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

AND WHEREAS the Issuer and TDSI have represented to the Decision Makers that:

1. The Issuer is a designer and manufacturer of wireless data equipment for the private network wireless datacommunications industry.

2. The Issuer is a corporation resulting from an amalgamation under the Canada Business Corporations Act("CBCA") on September 6, 1985, of Dataradio Inc., a company incorporated under the CBCA on September 6,1983, and Presud Communications Inc., a company incorporated under the CBCA on December 8, 1981. Thehead office of the Issuer is located in Québec.

3. The Issuer filed a preliminary prospectus dated October 20^th, 2000 (the "Preliminary Prospectus") in allCanadian provinces. The Issuer currently has an authorized capital consisting of an unlimited number ofcommon shares and an unlimited number of preferred shares, issuable in series, of which 20,000,000 commonshares and no preferred shares are outstanding on the date hereof..

4. On May 5, 2000, the Issuer entered into a $1,500,000 secured revolving credit facility (the "CommittedRevolver") and a $4,500,000 commercial instalment loan (the "Commercial Loan" and collectively with theCommitted Revolver, the "Credit Facilities") with the Toronto Dominion Bank (the "Bank").

5. Pursuant to an agreement dated October 5, 2000, the Bank agreed to increase the Committed Revolver to$3,000,000 and extend the term for the Committed Revolver to October 5, 2001. This agreement was subject,amongst other things, to the acceptance by the Issuer that the final repayment date for the outstanding balanceof the Commercial Loan be changed from December 31, 2001 to November 30, 2000.

6. TDSI is a wholly-owned subsidiary of the Bank.

7. As of September 30, 2000, the amount drawn by the Issuer on the Committed Revolver was $ 914,000.

8. As of September 30, 2000, the amount drawn by the Issuer on the Commercial Loan was $ 724,000.

9. It is possible that a total of up to $3,641,000 will be drawn by the Issuer on the Credit Facilities before theclosing of the transaction.

10. By virtue of the Credit Facilities, the Issuer may, in connection with the Offering, be considered a "ConnectedIssuer" of TDSI in accordance with the Multi-Jurisdictional Instrument 33-105 and Companion Policy 33-105­ Underwriting Conflicts ("33-105"). The Issuer is not a "Related Issuer" as defined in 33-105.

11. It is anticipated that the Offering will be approximately $50 million.

12. Part of the proceeds of the Offering will be used by the Issuer to repay the amounts drawn under the CreditFacilities.

13. No default has been reported under the Credit Facilities.

14. The audited consolidated balance sheet of the Issuer as at July 31, 2000 indicates that shareholders' equityis $9,808,000. Based on the audited consolidated balance sheet of the Issuer as at July 31, 2000, the sum ofthe Credit Facilities outstanding at September 30, 2000 represents 16.70% of the Issuer's shareholders' equity.Based on the audited consolidated balance sheet of the Issuer as at July 31, 2000 and the possible $3,641,000to be drawn on the Credit Facilities before the closing of the transaction, the sum of the Credit Facilities couldrepresent 37.12% of the Issuer's shareholders' equity. The Issuer is not in a Minor Debt Relationship asdefined in 33-105.

15. Pursuant to an agreement (the "Underwriting Agreement") to be made between the Issuer, TDSI, CIBC WorldMarkets Inc. ("CIBC WM"), National Bank Financial Inc. ("National") and BMO Nesbitt Burns Inc. ("Nesbitt")(collectively the "Underwriters"), the Underwriters will purchase the common shares under the Offering on theterms and conditions described therein.

16. The Issuer is neither a "Connected Issuer" nor a "Related Issuer" of CIBC WM for the purposes of the Offering.

17. CIBC WM will underwrite at least 20% of the dollar value of the Offering, will participate in the structuring andpricing of the Offering and has and will continue to participate in the due diligence activities performed by theUnderwriters for the Offering.

18. The Preliminary Prospectus and the Prospectus will contain a certificate signed by the Underwriters.

19. TDSI will not receive any benefits from the Offering other than the payment of its fees in connection therewith.

20. Each of the Underwriters will be, at the time of final receipt of the Prospectus, registered as a dealer in thecategories of "broker" and "investment dealer" in all provinces and territories.

21. The Preliminary Prospectus and the Prospectus will disclose the nature of the relationship between the Issuer,TDSI and the Bank and the existence of the Credit Facilities as specified in Appendix "C" of 33-105.

22. The Underwriters will subscribe to the offering according to the following table:

Underwriter Percentage of Offering

23. The decision to make the Offering, including the terms and conditions of distribution, were made throughnegotiations between the Issuer and the Underwriters without the involvement of the Bank.

24. The Issuer is not in financial difficulty, is not under immediate financial pressure to proceed with the Offeringand is not in default in any of its obligations. The Issuer is not a "specified party" as such term is defined in 33-105.

AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

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

The Decision of the Decision Makers under the Legislation is that the Independent Underwriter Requirement shall notapply to TDSI in connection with the Offering provided that:

a) CIBC WM underwrites at least 20% of the Offering;

b) CIBC WM participates in the due diligence, prospectus drafting and pricing in relation to the Offeringand the extent of its participation is fully described in the Prospectus;

c) CIBC WM signs the underwriters certificate in the Prospectus;

d) the Prospectus contains the disclosure stated in paragraph 21 above; and

e) the relationship between the Issuer and TD will be disclosed in the Prospectus.

November 24, 2000.

(s) Jean Lorrain

M^e Jean Lorrain

Le Directeur de la Conformité et application