Superior Plus Income Fund - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- Exemption granted from the requirement in item 14.2 of Form 51-102F5 to include certain financial statements in an information circular - Legislation requires financial statements be included in the information circular for certain entities participating in and resulting from the arrangement -- The information circular will be sent to the fund's unitholders in connection with a proposed internal reorganization pursuant to which its business operations will be conducted through a newly formed partnership -- The arrangement does not contemplate the acquisition of any additional operating assets or the disposition of any of the fund's existing operating assets - Neither the number of issued and outstanding units nor the relative holdings of units by any unitholder will be altered as a result of the completion of the arrangement -- The circular will provide sufficient information, including sufficient financial information, to enable unitholders to form a reasoned judgement concerning the nature and effect of the arrangement.

Applicable Ontario Statutory Provisions

National Instrument 51-102 Continuous Disclosure Obligations, Form 51-102F5 -- Information Circular, Item 14.2.

Citation: Superior Plus Income Fund, 2006 ABASC 1614

August 24, 2006

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ALBERTA AND ONTARIO (THE JURISDICTIONS)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

SUPERIOR PLUS INCOME FUND (THE FILER)

MRRS DECISION DOCUMENT

Background

1. The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that the Filer be exempt from the requirements of item 14.2 of Form 51-102F5 -- Information Circular of National Instrument 51-102 -- Continuous Disclosure Obligations to include the financial statements in respect of each entity whose securities are being changed, exchanged, issued or distributed in connection with a restructuring transaction, and each entity that would result from a restructuring transaction, in a management information circular sent in connection with a meeting of securityholders at which a restructuring transaction will be considered (the Financial Statement Requirement).

2. The management information circular (the Information Circular) of the Filer in respect of which the relief is required is to be sent to the holders (Unitholders) of units (Units) of the Filer in connection with a special meeting of Unitholders expected to be held on September 28, 2006 (the Meeting) at which Unitholders will consider an arrangement transaction (the Arrangement) of the Filer and its wholly owned subsidiaries.

3. Superior MFC Inc. (MFC), a corporation to be incorporated under the Canada Business Corporations Act (the CBCA) of which the Filer will be the sole shareholder, is proposing the Arrangement to internally reorganize the Filer pursuant to which the Filer's business operations will be conducted through a newly formed partnership, Superior Plus LP (SPP) and related subsidiaries of SPP rather than through Superior Plus Inc. (SPI), a corporation continued under the CBCA, of which the Fund is the sole shareholder.

Application of Principal Regulator System

4. Under Multilateral Instrument 11-101 Principal Regulator System (MI 11-101) and the Mutual Reliance Review System for Exemptive Relief Applications:

4.1 the Alberta Securities Commission is the principal regulator for the Filer;

4.2 the Filer is relying on the exemption in Part 3 of MI 11-101 in all of the provinces and territories in Canada except Alberta and Ontario; and

4.3 this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

5. Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are otherwise defined in this decision.

Representations

6. This decision is based on the following facts represented by the Filer:

6.1 The Filer is an open-ended mutual fund trust established under the laws of the Province of Alberta pursuant to a declaration of trust (the Declaration of Trust) made as of August 2, 1996, as amended and restated on October 7, 2003.

6.2 The Filer is a reporting issuer, where such status exists, in each of the provinces and territories of Canada and is not in default of its obligations as a reporting issuer.

6.3 The authorized capital of the Filer includes an unlimited number of trust units (the Fund Units) which may be issued pursuant to the Declaration of Trust. As at the date hereof, 85,528,851 Fund Units are issued and outstanding. The Fund Units are listed and posted for trading on the Toronto Stock Exchange under the symbol SPF.UN.

6.4 SPI is authorized to issue an unlimited number of Class A common shares (SPI Class A Common Shares), an unlimited number of Class B common shares (SPI Class B Common Shares) and an unlimited number of preferred shares. As at the date hereof, 22.9 million SPI Class A Common Shares and 22.9 million SPI Class B Common Shares are issued and outstanding. There are no preferred shares issued or outstanding. All of the issued and outstanding SPI Class A Shares and SPI Class B Shares are held by the Filer.

6.5 SPI has issued notes (the SPI Notes) in various series to the Filer in the aggregate principal amount of $1.469 billion. The SPI Notes mature on October 1, 2026 and pay a weighted average interest rate of 12.4%.

6.6 Prior to the Arrangement:

6.6.1 a new corporation, (Fund-AdminCo) will be incorporated by the Filer under the CBCA. The Filer will subscribe for one Fund-AdminCo common share;

6.6.2 a new corporation, (SGPL), will be incorporated by Fund-AdminCo under the CBCA. Fund-AdminCo will subscribe for one SGPL common share;

6.6.3 SPI and SGPL will enter into an agreement to form a limited partnership (SPP) under the Partnership Act (Alberta);

6.6.4 MFC will be incorporated by the Filer under the CBCA and will not carry on any business prior to the Arrangement. The issued and outstanding capital of MFC will consist of three classes of shares: (i) MFC Common Shares; (ii) MFC Class A Shares; and (iii) MFC Class B Shares; and

6.6.5 SPI and SPP will enter into an agreement of purchase and sale under which SPI will transfer all assets of SPI (the SPI Assets) in exchange for SPP limited partnership units (LP Units).

6.7 As part of the Arrangement:

6.7.1 the Filer will make a cash subscription for MFC Class A Shares and will distribute the MFC Class A Shares to the Unitholders as a return of capital;

6.7.2 SPI and MFC will amalgamate to form (Amalco-MFC) and Amalco-MFC and SGPL will amalgamate to form a new company Amalco-SPI (Amalco-SPI); and

6.7.3 following a series of transactions, SPP will hold the SPI Assets, rather than SPI, and the Filer will hold directly a 99.9% partnership interest in SPP and Amalco-SPI will hold 0.1%.

6.8 The Arrangement is being undertaken to reorganize the manner in which the Filer holds its assets pursuant to which its business operations will be conducted through SPP and related subsidiaries of SPP rather than through SPI and its related subsidiaries. The rights of Unitholders in respect of the Filer and their relative indirect interests in and to the revenues of the Filer's business will not be affected by the Arrangement. The Arrangement does not contemplate the acquisition of any additional operating assets or the disposition of any of the Filer's existing operating assets.

6.9 Following completion of the Arrangement, neither the number of issued and outstanding Fund Units nor the relative holdings of the Fund Units by any Unitholder will be altered as a result of the completion of the Arrangement and the Filer will continue to indirectly own all of its existing operating assets.

6.10 While changes to the financial statements of the Filer will likely be required to reflect the Filer's organizational structure following the Arrangement, the financial position of the Filer at that time will largely be the same as is reflected in the Filer's audited financial statements for the year ended December 31, 2005 and the interim unaudited financial statements of the Filer for the six months ended June 30, 2006.

6.11 Fund-AdminCo will be incorporated solely to give effect to the Arrangement and it will not carry on any business prior to the Arrangement. Following the Arrangement, Fund-AdminCo will not carry on any business other than to act as the administrator of the Filer. Fund-AdminCo's only assets following completion of the Arrangement will be one common share in Amalco-SPI and a nominal amount of cash necessary to perform its functions as the administrator of the Filer.

6.12 Following the amalgamation of MFC and SPI to create Amalco-MFC, and following the amalgamation of Amalco-MFC and SGPL to create Amalco-SPI, Amalco-SPI's only purpose will be to act as the general partner of SPP. Amalco-SPI's only asset following completion of the Arrangement will be a 0.1% partnerships interest in SPP.

6.13 The Information Circular will contain prospectus level disclosure for the Filer in accordance with applicable securities legislation including, the audited consolidated annual financial statements of the Filer for the financial year ended December 31, 2005 and the interim unaudited financial statements of the Filer for the six months ended June 30, 2006 (which include the financial results for SPI on a consolidated basis for the same period) will be filed on SEDAR and will be incorporated by reference into the Information Circular (collectively, the Fund Financial Statements).

6.14 The Information Circular will contain prospectus level disclosure for SPP, SGPL, MFC, Amalco-SPI, Amalco-MFC and Fund-AdminCo in accordance with applicable securities legislation (other than the financial statement disclosure required by the Financial Statement Requirement).

Decision

7. The Decision Makers being satisfied that they have jurisdiction to make this decision and that the relevant test under the Legislation has been met. The decision of the Decision Makers is that the Financial Statement Requirement for MFC, SPP, SGPL, Amalco-SPI, Amalco-MFC and Fund-AdminCo shall not apply to the Information Circular, provided the Filer complies with all other requirements of the Legislation, including but not limited to the requirement that the Information Circular include the Fund Financial Statements.