Securities Law & Instruments

Headnote

MutualReliance Review System for Exemptive Relief Applications - reliefgranted to an issuer from the requirement to file and deliverto security holders interim and annual financial statements, annualreports, and annual filings in lieu of an information circular,subject to certain conditions.

ApplicableOntario Statutory Provisions

SecuritiesAct, R.S.O. 1990, c.S.5, as am, s. 77, 78, and 79, s.80(b)(iii),

INTHE MATTER OF

THESECURITIES LEGISLATION OF

BRITISHCOLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA,

ONTARIO,QUÉBEC, NOVA SCOTIA AND NEWFOUNDLAND AND LABRADOR

AND

INTHE MATTER OF

THEMUTUAL RELIANCE REVIEW SYSTEM

FOREXEMPTIVE RELIEF APPLICATIONS

AND

INTHE MATTER OF

THETORONTO-DOMINION BANK

AND

INTHE MATTER OF

TDMORTGAGE INVESTMENT CORPORATION

MRRSDECISION DOCUMENT

WHEREASthe local securities regulatory authority or regulator (the "DecisionMaker, and, collectively, the "Decision Makers") in each of theProvinces of British Columbia, Alberta, Saskatchewan, Manitoba,Ontario, Québec, Newfoundland and Labrador and Nova Scotia(the "Jurisdictions") has received an application (the "Application")from TD Mortgage Investment Corporation ("TDMIC") and the Toronto-DominionBank (the "Bank") for a decision under the securities legislationof the Jurisdictions (the "Legislation") that the requirementscontained in the Legislation to:

a)file interim financials and audited annual financial statements("Financial Statements") with the Decision Makers and deliversuch Financial Statements to the security holders of TDMIC;

b)make an annual filing (Annual Filing") with the Decision Makersin lieu of filing an information circular, where applicable; and

c)file an annual report ("Annual Report") and an information circularwith the Decision Maker in Québec and deliver such reportor information circular to the security holders of TDMIC residentin Québec;

shallnot apply to TDMIC, subject to certain terms and conditions;

ANDWHEREAS under the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Alberta Securities Commissionis the principal regulator for this application;

ANDWHEREAS the TDMIC and the Bank have represented to theDecision Makers that:

TheToronto-Dominion Bank

1.the Bank is a Canadian chartered bank governed by the BankAct (Canada) (the "Bank Act"). The Bank is a reporting issueror equivalent in the Jurisdictions and is not, to its knowledge,in default of any requirement of the Legislation;

2.the authorized share capital of the Bank consists of an unlimitednumber of common shares ("Bank Common Shares"), of which 628,317,509common shares were outstanding as at July 31, 2001, and an unlimitednumber of Non-cumulative Class A Preferred Shares, issuable inseries, of which the following series were outstanding as at July31, 2001; 7,000,000 Series G; 9,000,000 Series H; 16,065 SeriesI; 6,000,000 Series K; and 2,000,000 Series L;

3.the Bank Common Shares are listed and posted for trading on TheToronto Stock Exchange (the "TSE"), the New York, Tokyo and Londonstock exchanges;

TDMortgage Investment Corporation

4.TDMIC is a corporation governed by the Trust and Loan CompaniesAct (Canada) (the "Act"). TDMIC is a reporting issuer orits equivalent in the Jurisdictions and is not, to its knowledge,in default of any requirement of the Legislation;

5.the outstanding securities of TDMIC consist of: (i) 87,600 commonshares, all of which are held by the Bank; and (ii) 350,000 HigherYielding Bank Related Income Derivative Securities, each consistingof one non-cumulative Preferred Share Series A of TDMIC (the "HYBRIDS")that were distributed in a public offering pursuant to a prospectusdated November 27, 1997;

6.the HYBRIDS are listed and posted for trading on the TSE;

7.the business objective of TDMIC is to acquire and hold CanadaMortgage and Housing insured residential first mortgages acquiredprimarily from the Bank and/or its affiliates (the "Mortgage Assets").The HYBRIDS provide the Bank with a cost-effective means of raisingcapital for Canadian bank regulatory purposes;

HYBRIDS

8.each HYBRIDS entitles the holder (a "HYBRIDS Holder") to receivea fixed cash distribution (the "Indicated Yield") of $32.30 perHYBRIDS payable by TDMIC on the last day of April and Octoberof each year (an "Indicated Yield Payment Date");

9.upon the occurrence of certain adverse tax events (a "Tax Event")prior to October 31, 2007, the HYBRIDS will be exchangeable, atthe option of the Bank without the consent of the holders thereof(the "Bank Tax E vent Exchange Right"), for a formula determinednumber of Bank Common Shares;

10.on and after October 31, 2007, each HYBRIDS will be exchangeable,at the option of the HYBRIDS Holder, for a formula determinednumber of Bank Common Shares in accordance with the terms of aBank Share Exchange Agreement, (the "Bank Share Exchange Agreement")made between the Bank, TDMIC and CIBC Mellon Trust Company astrustee for the HYBRIDS Holders;

11.on and after October 31, 2007, each HYBRIDS will be exchangeable,at the option of the Bank, for a formula determined number ofBank Common Shares in accordance with the Bank Share ExchangeAgreement;

12.each HYBRIDS will be automatically exchanged without the consentof the holder, for Non-cumulative Class A Preferred Shares, SeriesX of the Bank ("Series X Shares") if: (i) TDMIC fails to declareof pay or set aside for payment when due the Indicated Yield onany Indicated Yield Payment Date; (ii) the Bank fails to declareand pay or set aside for payment when due any dividend on anyissue of its Non-cumulative Preferred Shares; (iii) the Superintendentof Financial Institutions (Canada) (the "Superintendent") takescontrol of the Bank pursuant to the Bank Act or of TDMIC pursuantto the Act or proceedings are commenced for the winding up ofthe Bank or TDMIC pursuant to the Winding-Up and RestructuringAct (Canada); (iv) the Superintendent has determined thatthe Bank has a Tier 1 risk-based capital ratio of less than 5.0%or a total risk-based capital ratio of less than 8.0%; or (v)the Superintendent, by order, directs the Bank to act pursuantto subsection 485(3) of the Bank Act, or directs TDMIC to actpursuant to subsection 473(3) of the Act, to increase its capitalor to provide additional liquidity and either the Bank or TDMIC,as the case may be, elects to cause the exchange as a consequenceof the issuance of such order or either the Bank or TDMIC, asthe case may be, does not comply with such order to the satisfactionof the Superintendent within the time specified therein;

13.the Series X Shares will be convertible on and after October 31,2007, at the option of the holder, into Bank Common Shares

14.the HYBRIDS may be redeemed by TDMIC for cash on and after October31, 2007, subject to the approval of the Superintendent;

15.the HYBRIDS are non-voting except as required by applicable law;

16.in certain circumstances (as described in paragraph 12 above),including at a time when the Bank's financial condition is deterioratingor preceedings for the winding-up of the Bank have been commenced,the HYBRIDS will be automatically exchanged for preferred sharesof the Bank without the consent of HYBRIDS Holders and, as a result,HYBRIDS Holders will have no claim or entitlement to the assetsof TDMIC, other than indirectly in their capacity as preferredshareholders of the Bank;

17.in the event that the HYBRIDS are automatically exchanged forSeries X Share (as described in paragraph 12 above), the cost-effectivemanner by which the Bank was able to raise capital for Canadianbank regulatory purposes through the issuance of the HYBRIDS wouldbe lost;

18.the Bank and TDMIC have entered into an Advisory Agreement pursuantto which the Bank provides advice and counsel with respect withcertain matters to TDMIC and provides certain employees to serveas officers of TDMIC to administer the day-to-day operations ofTDMIC;

19.the Mortgage assets of TDMIC are serviced by the Bank, TD MortgageCorporation ("TDMC") and TD Pacific Mortgage Corporation ("TDPMC")pursuant to a Mortgage Sales and Servicing Agreement entered intoamong TDMIC, the Bank, and TDMC and TDPMC;

20.the Bank intends that disclosure with respect to TDMIC will beprovided in a note to the Bank's audited annual financial statementsand that the Bank's Financial Statements (and the Bank's AnnualReport, in the case of holders of HYBRIDS resident in the Provinceof Québec) will be sent to holders of HYBRIDS at the sametime and in the same manner as if the holders of HYBRIDS wereholders of Bank Common Shares;

21.Notice will be provided to holders of HYBRIDS that as a resultof the relief granted herein to TDMIC, such holders will receivethe continuous disclosure filings of the Bank described in paragraph20 above;

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

ANDWHEREAS each Decision Maker is satisfied that the testcontained in the Legislation that provides the Decision Makerwith the jurisdiction to make the Decision has been met;

THEDECISION of the Decision Makers under the Legislationis that the requirement contained in the Legislation:

(a)to file Financial Statements with the Decision Makers and deliversuch statements to holders of HYBRIDS;

(b)to make an Annual filing, where applicable, with the DecisionMakers in lieu of filing and information circular; and

(c)to file an Annual Report and an information circular with theDecision Maker in Québec and deliver such report of informationcircular to holders of HYBRIDS resident in Québec;

shallnot apply to TDMIC for so long as:

(i)the Bank remains a reporting issuer under the Legislation;

(ii)the Bank sends its annual financial statements, interim financialstatements, annual and interim management discussion and analysisto holders of HYBRIDS and its Annual Report to holders of HYBRIDSresident in the Province of Québec at the same time andin the same manner as if the holders of HYBRIDS were holders ofBank Common Shares;

(iii)all outstanding securities of TDMIC are either preferred sharesor common shares;

(iv)the rights and obligations of holders of additional preferredshares in the capital of TDMIC are the same in all material respectsas the rights and obligations of the holders of HYBRIDS at thedate hereof;

(v)the Bank or its affiliates are the beneficial owners of all outstandingcommon shares of TDMIC;

andprovided that if a material change occurs in the affairs of TDMIC,this Decision shall expire 30 days after the date of such change.

March11, 2002.

"AgnesLau"