Securities Law & Instruments

INTHE MATTER OF

THESECURITIES LEGISLATION

OFALBERTA, BRITISH COLUMBIA, MANITOBA,

NEWFOUNDLANDAND LABRADOR, NOVA SCOTIA, ONTARIO,

QUEBEC,AND SASKATCHEWAN

AND

INTHE MATTER OF

THEMUTUAL RELIANCE REVIEW SYSTEM

FOREXEMPTIVE RELIEF APPLICATIONS

AND

INTHE MATTER OF

TEXTRON FINANCIAL CANADA FUNDING CORP.

MRRSDECISION DOCUMENT

WHEREAS the local securities regulatory authority orregulator (the "Decision Maker") in each of British Columbia,Alberta, Saskatchewan, Manitoba, Ontario, Québec, NovaScotia, and Newfoundland and Labrador(the "Jurisdictions") hasreceived an application from Textron Financial Corporation ("TFC")and its subsidiary Textron Financial Canada Funding Corp. (the"Issuer", and together with TFC, the "Filer") for a decisionunder the securities legislation of the Jurisdictions (the "Legislation")that the requirements contained in the Legislation that:


(a) the Issuer file with the Decision Makers and send to itssecurity holders audited annual financial statements and anannual report, where applicable;


(b) the Issuer file with the Decision Makers and send to itssecurity holders unaudited interim financial statements;


(c) the Issuer issue and file with the Decision Makers pressreleases and file with the Decision Makers material change reports;


(d) the Issuer comply with the proxy and proxy solicitationrequirements, including filing with the Decision Makers an informationcircular or report in lieu thereof and, if applicable, sendingsuch documents to applicable securityholders of the Issuer;


(e) insiders of the Issuer file with the Decision Makers insiderreports; and


(f) that, in Ontario, Quebec and Saskatchewan, the Issuer filewith the applicable Decision Maker an annual information form,and, where applicable, interim and annual management discussionand analysis; (collectively the "Continuous Disclosure Requirements"),shall not apply;


AND WHEREAS under the Mutual Reliance Review Systemfor Exemptive Relief Applications (the "System"), the Nova ScotiaSecurities Commission is the principal regulator for this application;


AND WHEREAS the Filer has represented to the DecisionMakers that:


1.TFC was incorporated under the laws of the State of Delawareon February 5, 1962 and is currently a reporting issuer or theequivalent in the Jurisdictions.


2.TFC has been a reporting company under the United States SecuritiesExchange Act of 1934, as amended (the "1934 Act") since 1999with respect to its debt securities. TFC has filed with theUnited States Securities and Exchange Commission (the "SEC")all filings required to be made with the SEC under sections13 and 15 (d) of the 1934 Act since it first became a reportingcompany.


3.As at December 30, 2000, TFC had approximately US$3.7 billionin long term debt and US$966 million in commercial paper andshort term debt outstanding. All of TFC's outstanding long-termdebt is rated "A-" by Standard & Poor's and "A2" by Moody'sInvestors Service.


4.The common stock in the capital of TFC is owned by Textron Inc.("Textron"), a publicly owned Delaware corporation. TFC derivesa portion of its business from financing the sale and leaseof products manufactured and sold by Textron.


5.TFC is a diversified commercial finance company with operationsin four core segments: small business, middle markets, specialtyfinance and structured capital.


6.TFC's total assets as at December 30, 2000 were approximatelyUS$6.1 billion and its net profit for the year ended December30, 2000 was US$118 million.


7.The Issuer was incorporated under the Companies Act (Nova Scotia)as an unlimited liability company on October 31, 2000, and isa wholly-owned subsidiary of TFC.


8.The registered and principal office of the Issuer is in NovaScotia.


9.The Issuer is a financing subsidiary of TFC with no operations,revenues or cash flows other than those related to the issuance,administration and repayment of debt securities that are andwill be fully and unconditionally guaranteed by TFC.


10.The Issuer's business activities are limited to financing thebusiness activities of Textron Financial Canada Limited, TFC'sCanadian based operating subsidiary and it will have no otheroperations.


11.TFC satisfies all the criteria set out in paragraph 3.1(a) ofNational Instrument 71-101 ("NI 71-101") (the "General EligibilityCriteria") and is eligible to use the multi-jurisdictional disclosuresystem ("MJDS") for the purpose of distributing investment graderating (as defined in NI 71-101) non-convertible debt in Canadabased on compliance with United States prospectus requirementswith certain additional Canadian disclosure.


12.TFC may issue non-convertible debt securities on a continuousbasis in the United States and Canada and the Issuer may issuenon-convertible debt securities, which will be fully and unconditionallyguaranteed by TFC (the "Notes"), on a continuous basis in Canadaand in the United States. The Notes have an investment graderating (as defined in N1 71-101).


13.The offering by the Issuer of the Notes in Canada (the " CanadianOffering") is to be effected under an MJDS prospectus and oneor more prospectus supplements (collectively, the "Prospectus")of the Filers, prepared in accordance with U.S. securities lawsand filed as part of a registration statement with the SEC underthe United States Securities Act of 1933, as amended.


14.For the purposes of the Canadian Offering, a final version ofthe Prospectus has been filed with the Decision Makers in accordancewith the provisions of NI 71-101, which are available for offeringswhich meet the alternative eligibility criteria for offeringsof guaranteed non-convertible debt that have an investment graderating as set out in paragraph 3.2 of NI 71-101 (the "AlternativeEligibility Criteria") and a decision document was issued onDecember 4, 2001.


15.The Issuer became a reporting issuer or its equivalent in allof the Jurisdictions and a reporting company under the 1934Act as a result of filing and receiving a receipt for the Prospectus.


16.The Prospectus discloses that the Filer has filed an applicationwith each of the Decision Makers for an exemption from the ContinuousDisclosure Requirements and provides a description on how theFiler proposes to satisfy the Continuous Disclosure Requirementsif the exemption is granted.


17.An MRRS Decision Document was issued on November 8, 2001 (the71-101 Decision") by the Decision Makers providing that therequirement in section 3.2(b) of NI 71-101 that the Issuer bea "U.S. issuer" (as defined in NI 71-101) shall not apply tothe Issuer in connection with the offering of the Notes underthe Canadian Offering, provided that at the time of the CanadianOffering:


(a) TFC satisfies the General Eligibility Criteria;


(b) the Issuer complies with all of the filing requirementsand procedures set out in NI 71-101, except as varied by the71-101 Decision; and


(c) TFC remains the direct or indirect beneficial owner of allthe issued and outstanding voting securities of the Issuer.


AND WHEREAS under the System this MRRS Decision Documentevidences the decision of each Decision Maker (collectively,the "Decision").


AND WHEREAS each of the Decision Makers is satisfiedthat the test contained in the Legislation that provides theDecision Maker with the jurisdiction to make the Decision hasbeen met.


THE DECISION of the Decision Makers pursuant to theLegislation is that the Continuous Disclosure Requirements shallnot apply to the Issuer for so long as:


(a) TFC satisfies the Continuous Disclosure Requirements asa "U.S. issuer" in accordance with the provisions of Parts 14through 18 of NI 71-101;


(b) TFC maintains a class of securities registered under section12 of the 1934 Act;


(c) TFC maintains direct or indirect 100% beneficial ownershipof the voting securities of the Issuer;


(d) TFC continues to fully and unconditionally guarantee theNotes (and any future issuances of debt securities by the Issuerunder a prospectus offering) as to payments required to be madeby the Issuer to holders of the Notes or such debt securities,as the case may be;


(e) the Issuer carries on no other business than that set outin paragraphs 9 and 10 of the Decision;


(f) the Issuer is in compliance with the requirements of theLegislation to issue a press release and file a report withthe Decision Makers upon the occurrence of a material changein respect of the affairs of the Issuer that is not also a materialchange in the affairs of TFC;


(g) the Issuer does not issue additional securities other thanthe Notes (or any other series of notes which hereafter maybe issued) or debt securities ranking pari passu with the Notes;


(h) if notes of another series or debt securities ranking paripassu with the Notes are hereinafter issued by the Issuer, TFCshall fully and unconditionally guarantee such notes or debtsecurities as to the payments required to be made by the Issuerto holders of such notes or debt securities; and

(i) all filing fees that would otherwise be payable by the Issuerin connection with the Continuous Disclosure Requirements arepaid.

December21, 2001.

"H.Leslie O'Brien"