Hardof Wolf Group Inc. & Dylex Ltd. - MRRS Decision

Headnote

Relief granted pursuant to section 74(1) from registration requirement in section 25 for trades made by shareholders ofone issuer in connection with a capital reorganization and acquisition.

Statutes Cited

Canada Business Corporations Act, R.S.C. 1985, c. C-44.

Securities Act, R.S.O. 1990, c.S.5, as am., s. 25, s. 74.

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,
MANITOBA, ONTARIO, NEW BRUNSWICK, PRINCE EDWARD ISLAND,
NOVA SCOTIA, NEWFOUNDLAND, THE YUKON TERRITORY, NUNAVUT AND THE NORTHWESTTERRITORIES

AND

IN THE MATTER OF
THE MUTUAL RELIANCE SYSTEM FOR
EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
HARDOF WOLF GROUP INC. AND
DYLEX LIMITED

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of BritishColumbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Prince Edward Island, Nova Scotia,Newfoundland, the Yukon Territory, Nunavut and the Northwest Territories (collectively, the "Jurisdictions") has receivedan application from Hardof Wolf Group Inc. (the "Acquiror") for a decision, pursuant to the securities legislation (the"Legislation") of the Jurisdiction that the requirement of the Legislation that prohibits a person or company from tradingin a security unless the person or company is registered in the appropriate category of registration under the Legislation(the "Registration Requirement"), shall not apply to the transfer to the Acquiror of Special Shares (as defined below) ofDylex Limited ("Dylex"), to be made by the holders in connection with a proposed acquisition of Dylex by the Acquiror;

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

AND WHEREAS the Acquiror has represented to the Decision Makers that:

1. The Acquiror is a private company incorporated pursuant to the laws of the Province of Nova Scotia.

2. Dylex is a corporation incorporated under the Canada Business Corporations Act (the "CBCA") with itsregistered and principal office in the Province of Ontario.

3. Dylex is a reporting issuer, or the equivalent, in each of the provinces and territories of Canada and thecommon shares (the "Common Shares") of Dylex are listed and posted for trading on the Toronto StockExchange (the "TSE").

4. On April 25, 2001, the closing price of the Common Shares on the TSE was $1.24.

5. Dylex's authorized capital consists of an unlimited number of Common Shares, of which 51,881,799 wereissued and outstanding on March 27, 2001.

6. On March 27, 2001, the Acquiror and Dylex entered into an acquisition agreement (the "Acquisition Agreement")pursuant to which the Acquiror may acquire all of the outstanding Common Shares of Dylex, at $1.30 perCommon Share, payable in cash, in a transaction (the "Proposed Transaction") that will take the form of acapital reorganization, to be voted on by the holders of Common Shares at a meeting (the "Meeting") scheduledto be held on May 15, 2001. Following the completion of the Proposed Transaction, Dylex will be a whollyowned subsidiary of the Acquiror.

7. The Proposed Transaction will consist of the following principal steps:

(a) Subject to approval of the Dylex shareholders at the Meeting, the articles of Dylex will be amendedby way of special resolution so as to change the provisions attaching to the existing Common Shares(such shares being referred to after the change as "Special Shares") to provide for the transfer of suchSpecial Shares to the Acquiror, upon delivery of a notice (the "Transfer Notice") by Dylex to its transferagent;

(b) Upon delivery of the Transfer Notice, each holder of the Special Shares shall be deemed to havetransferred to the Acquiror all of the holder's right, title and interest in the Special Shares;

(c) The Acquiror shall deposit with the transfer agent sufficient funds to pay to the holders of the SpecialShares $1.30 per Special Share, upon deposit by the holder of the certificate representing theirSpecial Shares.

AND WHEREAS pursuant to the MRRS this Decision Document evidences the decision of each of the DecisionMarkers (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 pursuant to the Legislation is that the Registration Requirement in theLegislation shall not apply to any trades in Special Shares made by the holders to the Acquiror as described in paragraph7, above.

May 11, 2001.

"Paul M. Moore" "Robert W. Korthals"