Securities Law & Instruments


Registered dealer exempted from the requirementto be registered as an adviser, contained in clause 25(1)(c)of the Act, in connection with its acting as an adviser to co-investorsidentified in the decision pursuant to a co-investment agreementand advisory agreements - Dealer is registered under the Actas an "investment dealer", but is not exempted fromthe requirement to obtain registration as an adviser pursuantto section 148 of Regulation 1015.

Regulation Cited

Regulation made under the Securities Act, R.R.O.1990, Reg. 1015, as am.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 25(1)(c) and 74(1).









(Subsection 74(1))

UPON the application (the "Application")of Trilon Securities Corporation (the "Financial Advisor")to the Ontario Securities Commission (the "Commission")for a ruling, pursuant to subsection 74(1) of the Act, thatthe Financial Advisor shall not be subject to the registrationrequirement in clause 25(1)(c) of the Act in connection withits acting as an adviser to Co-Investors (as defined below);

AND UPON the Financial Advisor havingrepresented to the Commission that:

1. The Financial Advisor is registered underthe Act as a dealer in the category of "investment dealer",but is not exempted from the requirement to obtain registrationas an adviser pursuant to section 148 of Regulation 1015 madeunder the Act.

2. Pursuant to an agreement (the "Co-InvestmentAgreement") made among the Financial Advisor, TricapManagement Limited (the "Manager) and the following personsand companies (the "Initial Co-Investors"), as co-investors,the Initial Co-Investors have agreed to invest in parallelin the securities of certain companies in accordance withcertain investment objectives and on certain terms and conditionsset out in the Co-Investment Agreement:

(i) Canada Pension Plan Investment Board("CPPIB");

(ii) CIBC Capital Partners, a division ofCanadian Imperial Bank of Commerce ("CIBC");

(iii) The Toronto-Dominion Bank ("TD");

(iv) Brascan Corporation ("Brascan"),its subsidiary, Brascan Financial Corporation (formerly"Trilon Financial Corporation") ("BrascanFinancial"), and other subsidiaries of Brascan (Brascan,Brascan Financial and its other subsidiaries are hereinaftercollectively referred to as "Brascan Co-Investors");

(v) Mr. Peter Tanaka ("Tanaka");and

(vi) Doncaster Consolidated Ltd. ("Doncaster").

3. GE Capital Canada Equipment Finance Inc.("GE") and Mr. John B. MacIntyre ("MacIntyre"),a member of the advisory board described in paragraph 20 below,have also been admitted as co-investors pursuant to the Co-InvestmentAgreement (the Initial Co-Investors, GE and MacIntyre arehereinafter collectively referred to as the "Co-Investors".)

4. The Manager is an affiliate of the FinancialAdvisor.

5. CPPIB is a Canadian crown corporation.

6. Each of CIBC and TD is a bank listed inSchedule I to the Bank Act (Canada).

7. Brascan Financial is a reporting issuerunder the Act with consolidated total assets, at March 31,2002, of approximately Cdn. $3.7 billion.

8. Brascan is a reporting issuer under theAct with consolidated total assets, at December 31, 2001,of approximately Cdn. $21.9 billion.

9. GE is a subsidiary of the General ElectricCompany, a U.S. company whose common stock is listed on theNew York Stock Exchange with consolidated total assets asat December 31, 2001 of approximately U.S. $495 billion.

10. Doncaster is a corporation that is controlledby Mr. John G. Lacey ("Lacey") and the sole shareholdersof Doncaster are Lacey and members of his family.

11. Each of the Co-Investors has providedcommitments (a "Co-Investor Commitment") to co-investpursuant to the Co-Investment Agreement in the amounts setout below:







Brascan Co-Investors










12. Under the terms of the Co-Investment Agreement,the Co-Investors will make investments in (i) debt and equityinvestments in under-performing companies primarily in Canadathat require financial and/or operational restructuring, strategicre-direction or enhanced management attention; and (ii) securitiesof primarily Canadian companies in financial distress, ineach case with a view to gaining effective control over, orexerting significant influence on, the reorganization process.Investments will be made over a period of five years (whichmay be shortened in certain circumstances). The Co-InvestmentAgreement has a term of ten years, which may be extended foran additional two years to permit the orderly liquidationof investments.

13. Pursuant to the terms of advisory agreements(each, an "Advisory Agreement") between each Co-Investorand the Financial Advisor, the Financial Advisor has agreedto provide financial services to the Co-Investors during theterm of the Co-Investment Agreement including sourcing investmentsand providing investment finance services to the Co-Investorssuch as investigating, analyzing, structuring and negotiatingpotential investments and the disposition thereof.

14. Pursuant to the terms of management agreementsbetween each Co-Investor and the Manager, the Manager hasagreed to provide general management and administrative servicesto the Co-Investors during the term of the Co-Investment Agreement.

15. The primary focus of the Financial Advisorwill be to source investment opportunities in situations inwhich the Financial Advisor will play an active role or havea significant influence. However, the Financial Advisor mayalso source investments in situations where the FinancialAdvisor will have less influence. The Financial Advisor intendsto source potential investments consisting of various classesof securities and other obligations of companies in financialdistress. Investments will not be made in derivatives otherthan stock index, interest rate and foreign currency optionsfor hedging purposes and the issuance, sale, assignment orpurchase of (a) call options traded on a national securitiesexchange or quotation and trade reporting system in Canadaor the United States relating to positions held or anticipatedto be held by the Co-Investors, (b) put options relating totrade payables or other commercial obligations of companiesin financial distress held by creditors of such entities ortheir assigns, and (c) over-the-counter equity swap transactionsentered into as a substitute for ownership of an underlyingsecurity which is the subject of such transaction.

16. Under the terms of the Co-Investment Agreement,each Co-Investor has the option to decide whether or not itwill invest in each investment opportunity that is presentedto the Co-Investors by the Financial Advisor. If a Co-Investorexercises its option not to make a particular investment,at the option of the Financial Advisor, it will no longerhave the right to participate in future investment opportunitiespresented to the Co-Investors.

17. Under the terms of the Advisory Agreements,each Co-Investor is required to pay the Financial Advisoran advisory fee, calculated based on a percentage of the profitsrealized on the investments made by that Co-Investor pursuantto the Co-Investment Agreement, after the return to the Co-Investorof its investment plus a preferred return.

18. A Co-Investor generally may not sell,transfer, pledge or assign its investment in a portfolio companyor its rights to co-invest, except to certain affiliates,or except with the consent of the Manager. The Manager willnot permit any assignment other than in compliance with applicablelaws.

19. Each Co-Investor will receive (i) annualreports on the investments made by the Co-Investor pursuantto the Co-Investment Agreement, including financial statementsprepared in accordance with generally accepted accountingprinciples and a report of the Manager's determination ofthe fair market value of the investments made pursuant tothe Co-Investment Agreement; (ii) when calculations of theadvisory fee payable to the Financial Advisor are made, particularsof the Manager's calculation of the Financial Advisor's advisoryfee, which is subject to audit if a Co-Investor requests;(iii) quarterly reports of the Financial Advisor and Manager,including details of Co-Investor expenses and organizationalexpenses incurred in such quarter, and (iv) annual tax information.

20. An advisory board has been establishedcomprising restructuring experts to provide advice and recommendationsto the Manager with respect to portfolio strategy and duediligence matters and to advise in connection with certainconflict situations. The members of the advisory board areTanaka, Lacey and MacIntyre. Each of Tanaka, Lacey and MacIntyrehas been offered the opportunity to participate as a Co-Investorin consideration for his agreement to serve as a member ofthe advisory board. The advisory board members have been approvedby the Co-Investors.

21. Each of Tanaka, Lacey and MacIntyre hassubstantial expertise in restructuring transactions. Tanakahas held a number of senior executive positions, includingthe position of General Manager, Ministry of Industry Trade& Technology, Ontario where he managed an investment budgetin excess of $100 million per annum and served as the seniorexecutive and chief negotiator on major investment cases forthe Province of Ontario. MacIntyre has held numerous seniorexecutive positions within TD, including serving as Presidentof TD Capital, where he oversaw TD's global private equitybusiness comprising over $2 billion invested in over one hundredcompanies. Lacey has served as Chairman of the Board of AlderwoodsGroup, Inc. since January, 2002, is a member of the boardsof directors of several other entities and has previouslyserved as Chairman of the Board of The Loewen Group Inc. andas President and Chief Executive Officer of the Oshawa GroupLtd., WIC Western International Communications Inc. and Scott'sHospitality Inc.

AND WHEREAS the Commission is satisfiedthat to do so would not be prejudicial to the public interest.

IT IS RULED, pursuant to subsection 74(1)of the Act, that the Financial Advisor shall not be subjectto the requirement to register as an adviser contained in clause25(1)(c) of the Act in connection with its acting as an adviserto Co-Investors pursuant to the Co-Investment Agreement andthe Advisory Agreements.

August 9, 2002.

"Paul M. Moore"                    "HaroldP. Hands"