Covington Fund II Inc. -- s. 4(b) of the Regulation

Headnote

Consent given to an offering corporation under the Business Corporations Act (Ontario) to continue under the Canada Business Corporations Act.

Statutes Cited

Business Corporations Act, R.S.O. 1990, c .B.16, as am., s. 181.

Securities Act, R.S.O. 1990, c. S.5, as am.

Regulations Cited

Regulation made under the Business Corporations Act, O. Reg. 289/00, as am., s. 4(b).

IN THE MATTER OF

ONT. REG. 289/00 AS AMENDED

(THE "REGULATION")

MADE UNDER

THE BUSINESS CORPORATION ACT

R.S.O. 1990 C. B16 AS AMENDED (the "OBCA")

AND

IN THE MATTER OF

COVINGTON FUND II INC.

CONSENT

(Subsection 4(b) of the Regulation)

UPON the application of Covington Fund II Inc. (the "Fund") to the Ontario Securities Commission (the "Commission") requesting a consent from the Commission for the Fund to continue in another jurisdiction pursuant to subsection 4(b) of the Regulation;

AND UPON considering the application and the recommendation of the staff of the Commission;

AND UPON the Fund having represented to the Commission that:

1. The Fund is proposing to submit an application to the Director under the Business Corporations Act (Ontario) (the "OBCA") pursuant to section 181 of the OBCA (the "Application for Continuance") for authorization to continue as a corporation under the Canada Business Corporations Act (the "CBCA").

2. Pursuant to subsection 4(b) of the Regulation, where a corporation is an offering corporation, the Application for Continuance must be accompanied by a consent from the Commission.

3. The Fund was incorporated under the OBCA by articles of incorporation dated September 20, 1999. The head office of the Fund is located at 87 Front Street, East, Suite 400, Toronto, Ontario, M5E 1B8.

4. The Fund is an offering corporation under the OBCA and is a reporting issuer under the Securities Act, R.S.O. 1990, c. s. 5, as amended (the "Act"). The Fund intends to remain a reporting issuer in Ontario.

5. The continuance of the Fund under the CBCA was approved by the shareholders of the Corporation at the annual and special meeting of shareholders held on November 25, 2010.

6. After the shareholders approved the continuance by passing a special resolution, the Fund will adjourn the meeting, continue under the CBCA, and then proceed to ask shareholders to consider a special resolution approving the acquisition of the assets of six other labour sponsored investment funds (the "Transaction").

7. In order to avail itself of the merger provisions under the Income Tax Act (Canada) (the "Tax Act") when the Fund completes the Transaction, it must be incorporated under the CBCA.

8. The Fund is not in default under any provision of the Act or the regulations of the Act.

9. The Fund is not a party to any proceeding nor, to the best of its knowledge, information and belief, any pending proceeding under the Act.

10. Pursuant to the Section 185 of the OBCA, all shareholders of record as of the record date for the Meeting are entitled to dissent rights with respect to the Application for Continuance (the "Dissent Rights").

11. The management information circular dated October 28, 2010 (the "Circular") was provided to all shareholders in connection with the Meeting and advised the shareholders of the Fund of their Dissent Rights.

12. The principal reason for the Application for Continuance is to allow the Fund to avail itself of the merger provisions of the Tax Act at the time it participates in the Transaction, as more particularly described in the Circular distributed to shareholders in connection with the annual and special meeting of shareholders held on November 25, 2010.

13. The material rights, duties and obligations of a corporation governed by the CBCA are substantially similar to those of a corporation governed by the OBCA.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

THE COMMISSION HEREBY CONSENTS to the continuance of the Fund as a corporation under the Canada Business Corporation Act.

DATED this 25th day of November, 2010.