Securities Law & Instruments


MutualReliance Review System for Exemptive Relief Applications - Relieffrom registration and prospectus requirements granted for tradesin connection with a statutory arrangement where exemptions notavailable for technical reasons - Relief not granted for potentialin specie distribution of securities of holding companyheld by reporting issuer on a redemption of units by a unitholder- First trade in securities acquired under decision deemed a distributionunless certain conditions of Multilateral Instrument 45-102 -Resale of Securities are satisfied.

ApplicableOntario Statutory Provisions

SecuritiesAct, R.S.O. 1990, c. S.5, as amended, s. 25, 53 and ss. 74(1).

ApplicableOntario Rules

OSCRule 45-501 - Exempt Distributions (2001) 24 OSCB 5549, s. 2.8.

MultilateralInstrument Cited

MI 45-102- Resale of Securities (2001) 24 OSCB 5522, s. 2.6.
















WHEREASthe Canadian securities regulatory authority or regulator (collectively,the "Decision Makers") in each of Alberta, British Columbia,Manitoba, New Brunswick, Newfoundland and Labrador, the NorthwestTerritories, Nova Scotia, Nunavut, Ontario, Prince Edward Island,Québec, Saskatchewan and the Yukon Territory (the "Jurisdictions")has received an application from Versacold Income Fund (the"Fund"), Versacold Holdings Corp. ("Versacold Holdings") andVersacold Group Partnership (the "Partnership") for a decisionunder the securities legislation of the Jurisdictions (the "Legislation")that the requirements under the Legislation to be registeredto trade in a security (the "Registration Requirement") andto file and obtain a receipt for a preliminary prospectus anda prospectus (the "Prospectus Requirement"), shall not applyto certain trades of securities in connection with the Partnershipand Versacold Holdings' acquisition of the issued and outstandingcommon shares ("Versacold Common Shares") of Versacold Corporation(the "Company") pursuant to a plan of arrangement (the "Planof Arrangement") under section 252 of the Company Act(British Columbia) (the "Company Act") involving the Companyand its shareholders (the "Transaction");

ANDWHEREAS under the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the British Columbia SecuritiesCommission is the principal regulator for this application;

ANDWHEREAS the Fund, Versacold Holdings and the Partnershiphave represented to the Decision Makers that:

1.The Fund is an open-ended, limited purpose trust established,under the laws of British Columbia pursuant to a declaration oftrust dated December 19, 2001, to hold the securities of VersacoldHoldings.

2.On December 24, 2001 the Fund filed a preliminary prospectus ineach of the Jurisdictions and on January 4, 2002 the Fund filedan amended and restated preliminary prospectus in each of theJurisdictions; the Fund will file a final prospectus in each ofthe Jurisdictions prior to closing of the Transaction and, uponreceipt of the MRRS decision document with respect to such finalprospectus, the Fund will become a reporting issuer or the equivalentin each of the Jurisdictions.

3.The Fund was established with nominal capitalization and currentlyhas only nominal assets and no liabilities and the only activitycurrently anticipated to be carried on by the Fund will be theholding of securities of Versacold Holdings.

4.The Fund is authorized to issue an unlimited number of trust unitsdesignated as units ("Fund Units") and an unlimited number oftrust units designated as special voting units ("Special VotingUnits"); as of January 10, 2002, one Fund Unit was issuedand outstanding and owned by the Company and no Special VotingUnits were outstanding.

5.The Fund has received conditional approval from the Toronto StockExchange (the "TSE") for the listing on the TSE of the Fund Unitsissuable in connection with the Transaction subject to, amongother things, completion of the Transaction.

6.Versacold Holdings is a wholly-owned subsidiary of the Fund andwas incorporated under the laws of British Columbia on December 14,2001 to participate in the Transaction by acquiring VersacoldCommon Shares (other than those to be acquired by the Partnership).

7.The authorized capital of Versacold Holdings consists of 500,000,000 commonvoting shares, 500,000,000 common non-voting shares and 500,000,000 preferredshares issuable in series of which, as of January 10, 2002,there were 10 common voting shares outstanding, all of whichwere owned by the Fund; following the completion of the Transaction,all of the issued and outstanding securities of Versacold Holdingswill be owned by the Fund.

8.Versacold Holdings is not a reporting issuer (or the equivalent)in any of the Jurisdictions.

9.The Company is incorporated under the Company Act and is the leadingsupplier within Canada of public refrigerated warehousing anddistribution services.

10.The authorized capital of the Company consists of 50,000,000 VersacoldCommon Shares and 20,000,000 Preferred Shares of which, as ofJanuary 10, 2002, there were 9,670,605 Versacold CommonShares outstanding and 389,500 Versacold Common Shares were reserved,in the aggregate, for issuance upon the exercise of outstandingoptions; an aggregate of 1,000 Preferred Shares of the Companyare outstanding and held by the Partnership; under the Plan ofArrangement, on the effective date ("Effective Date"), a new classof Non-Voting Common Shares of the Company will be created; followingthe completion of the Transaction, all of the outstanding sharesof the Company will be owned by the Partnership or by direct orindirect subsidiaries of the Fund.

11.The Versacold Common Shares are presently listed on the TSE andthe Company is a reporting issuer (or the equivalent) in eachof the Jurisdictions; following the Effective Date, the VersacoldCommon Shares will be delisted from the TSE and the Company willapply to cease to be a reporting issuer, where applicable.

12.The Partnership is currently a general partnership formed underthe laws of British Columbia which is comprised of two wholly-ownedsubsidiaries of the Company.

13.Prior to the completion of the Transaction, the partnership agreementgoverning the Partnership will be amended to convert the Partnershipfrom a general partnership to a limited partnership and to createtwo classes of limited partnership units designated as "ClassA Limited Partnership Units" (the "Class A LP Units"), and "ClassB Limited Partnership Units" (the "Class B LP Units"); upon completionof the Transaction, all issued and outstanding general partnershipinterests and Class A LP Units will be held by the present generalpartners of the Partnership and all Class B LP Units will be heldby former holders of Versacold Common Shares who have electedto exchange their Versacold Common Shares for Class B LP Units.

14.The Partnership is not a reporting issuer (or the equivalent)in any of the Jurisdictions.

15.The Transaction will be effected by way of the Plan of Arrangement,which will require (i) the approval of three-quarters of the votescast by the holders of Versacold Common Shares present in personor by proxy at the extraordinary general meeting (the "Meeting")of such holders to be held to consider and approve the Transaction,and (ii) the approval of the Supreme Court of British Columbia.

16.The management information circular (the "Circular") deliveredto holders of Versacold Common Shares in connection with the Meetingconforms with the Company Act and applicable securities laws andan interim order of the Supreme Court of British Columbia (the"Interim Order") and contains prospectus-level disclosure of thebusiness and affairs of the Fund, the Company and the Partnershipand a detailed description of the Transaction and the Plan ofArrangement.

17.On the Effective Date, in accordance with elections made or deemedto be made by holders of Versacold Common Shares:

(i)the outstanding Versacold Common Shares (except those held byeligible holding companies or by shareholders who exercise theirrights of dissent in accordance with the Interim Order) will beexchanged for Class B LP Units or notes ("Notes") of VersacoldHoldings, or a combination of the foregoing;

(ii)outstanding shares of eligible holding companies will be exchangedfor Notes;

(iii)all Notes will be exchanged for Fund Units; and

(iv)all Versacold Common Shares acquired by the Partnership in exchangefor Class B LP Units will be exchanged for Non-Voting Common Sharesof the Company under the Plan of Arrangement.

18.Upon the completion of the Transaction, all of the issued andoutstanding Versacold Common Shares will be held by VersacoldHoldings or by eligible holding companies wholly-owned by VersacoldHoldings, and all of the Preferred Shares and Non-Voting CommonShares of the Company will be held by the Partnership.

19.The rights, privileges, restrictions and conditions attachingto the Class B LP Units under the limited partnership agreement(the "Limited Partnership Agreement") governing the Partnership,together with the Exchange Agreement and the investment agreementdescribed below, will provide the holders of the Class B LP Unitswith a security having economic rights which are, as nearly aspracticable, equivalent to those of a Fund Unit and will giveholders of Versacold Common Shares who are residents of Canadathe opportunity to pursue certain tax efficiencies with respectto the exchange of their Versacold Common Shares; the Class BLP Units will be exchangeable by the holders for Fund Unitson a one-for-one basis at any time at the option of the holder,and must be exchanged upon the occurrence of certain events.

20.The Limited Partnership Agreement will provide that the ClassB LP Units will be entitled to vote only in certain limited circumstances(except as required by applicable law) and each Class B LP Unitwill entitle the holder to distributions from the Partnershippayable at the same time as, and equivalent to, each distributionpaid by the Fund on a Fund Unit; on the liquidation, dissolutionor winding-up of the Partnership, a holder of Class B LP Unitswill be entitled to receive from the Partnership an amount equalto all declared and unpaid distributions on each such Class BLP Unit held by the holder on any distribution record dateprior to the date of liquidation, dissolution or winding-up butwill not otherwise be entitled to participate in a distributionof the assets of the Partnership; Class B LP Units mayonly be transferred in certain limited circumstances.

21.The Limited Partnership Agreement will further provide that uponcertain actions, such as distributions of stock dividends, options,rights or warrants for the purchase of securities or other assets,subdivisions, reclassifications, reorganizations and other changes,being taken in respect of the Fund Units generally, the same oran economically equivalent action will be taken by the Partnershipin respect of the Class B LP Units.

22.Under the Plan of Arrangement, each of the holders of Class BLP Units will receive one Special Voting Unit for each Class BLP Unit it receives; each Special Voting Unit will entitle theholder to one vote at meetings of the Fund's unitholders but willhave none of the other rights attached to Fund Units; the SpecialVoting Units to be issued to the holders of Class B LP Units maybe transferred only under the same circumstances as the associatedClass B LP Units, will be evidenced only by the certificates representingsuch Class B LP Units and will be automatically redeemed for nominalconsideration upon the exchange of Class B LP Units for Fund Units.

23.Under an exchange agreement (the "Exchange Agreement") to be enteredinto by Versacold Holdings, the Fund, the Partnership and eachholder of Class B LP Units contemporaneously with the closingof the Transaction:

(i)Versacold Holdings will grant to the holders of the Class B LPUnits a put right (the "Exchange Right"), to require VersacoldHoldings to purchase from a holder of Class B LP Units allor any part of his or her Class B LP Units for an amountper unit equal to the current market price of a Fund Unit, tobe satisfied by the delivery to the holder of one Fund Unit; and

(ii)Versacold Holdings will have the right (the "Call Right") to acquirethe Class B LP Units of a holder in certain circumstances,as described in the Circular for an amount per unit equal to thecurrent market price of a Fund Unit, to be satisfied by the deliveryof one Fund Unit.

24.Under the Exchange Agreement the Fund has agreed that, to theextent further Class B LP Units are issued, it willissue a corresponding number of Special Voting Units to the holdersof the Class B LP Units.

25.Upon the insolvency of Versacold Holdings or in any other eventin which Versacold Holdings is unable to purchase Class BLP Units upon exercise of the Exchange Right, the Partnershipshall redeem the Class B LP Units which are the subjectof such request for nominal consideration and the former holderof such Class B LP Units will then have the right, underthe Exchange Agreement, to acquire a corresponding number of FundUnits directly from the Fund for nominal consideration.

26.At the closing of the Transaction, the Fund and the Partnershipwill enter into an investment agreement which will provide thatthe Fund will purchase certain securities of Versacold Holdingsin exchange for Fund Units in sufficient numbers to allow VersacoldHoldings to meet its obligations, from time to time, under theExchange Agreement.

27.The steps under the Transaction and the attributes of the ClassB LP Units contained in the Limited Partnership Agreement andthe Exchange Agreement involve or may involve a number of tradesof securities (all such trades, other than any trade of securitiesof Versacold Holdings by the Fund to holders of Fund Units uponexercise of the right of redemption attached to such Fund Unitsare, collectively, the "Trades").

28.There may be no registration or prospectus exemptions availableunder the Legislation for certain of the Trades.

ANDWHEREAS under the System, this MRRS Decision Documentevidences the decision of each of the Decision Makers (collectively,the "Decision");

ANDWHEREAS each of the Decision Makers is satisfied thatthe test contained in the Legislation that provides the DecisionMaker with the jurisdiction to make the Decision has been met;

THEDECISION of the Decision Makers under the Legislationis that:

1.The Registration Requirement and the Prospectus Requirement shallnot apply to the Trades.

2.The first trade in Class B LP Units and Special Voting Units,other than in exchange for Fund Units, and the first trade ofFund Units, acquired under the Decision shall be deemed to bea distribution or a primary distribution to the public, unless:

(a)except in Québec, the conditions in subsections (3), (4)or (5) of section 2.6 of Multilateral Instrument 45-102 Resaleof Securities ("MI 45-102") are satisfied, except that for thepurposes of determining the period of time that the Fund has beena reporting issuer under section 2.6 of MI 45-102 the period oftime that the Company was a reporting issuer immediately beforethe Transaction may be included; and

(b)in Québec,

(i)the issuer is and has been a reporting issuer in Québecfor the 12 months immediately preceding the trade,

(ii)no unusual effort is made to prepare the market or to create ademand for the securities that are the subject of the trade,

(iii)no extraordinary commission or consideration is paid to a personor company in respect of the trade, and

(iv)if the selling shareholder is an insider or officer of the issuer,the selling shareholder has no reasonable grounds to believe thatthe issuer is in default of securities legislation.

January31, 2002.

"DerekE. Patterson"