Low Volatility U.S. Equity Income Fund

  • Date: 2016-01-19

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AMENDING AGREEMENT THIS AMENDING AGREEMENT is made as of the 30th day of January, 2015 B E T W E E N: STRATHBRIDGE ASSET MANAGEMENT INC., a corporation incorporated under the laws of Canada (hereinafter called the “Manager”) - and RBC INVESTOR SERVICES TRUST, a trust company incorporated under the laws of Canada (hereinafter called the “Trustee”) WHEREAS Low Volatility U.S. Equity Income Fund (the “Fund”) was established pursuant to a trust agreement (the “Agreement”) between the Manager and the Trustee dated February 26, 2013; AND WHEREAS the approval of Unitholders to the amendments set forth below has been obtained as required by the Agreement; AND WHEREAS the parties hereto wish to amend the Agreement upon the terms set out herein; NOW THEREFORE in consideration of the premises and of the mutual covenants herein contained, the parties hereto hereby agree as follows: 1.

The “Specific Investment Restrictions” section of Schedule A to the Agreement is hereby deleted and replaced with the following: “Specific Investment Restrictions The Fund’s investment restrictions provide that the Fund may: (a)

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invest (i) up to 75% of the Net Asset Value of the Fund in securities of issuers included in the S&P 100 Index each of which has a trailing 12 month Beta relative to the S&P 100 Index of less than 1.0 on the date on which the securities are purchased (“Beta” means a financial term used as a measure of the return of a security or a portfolio in relation to the market, in this case the S&P 100 Index); and (ii) no more than 25% of the Net Asset Value of the Fund is invested in securities of other issuers included in the S&P 100 Index and in public investment funds including exchange traded funds and other Strathbridge funds (provided that no more than 15% of the Net Asset Value of the Fund may be invested in securities of other Strathbridge funds) that provide exposure to such securities;

-2(b)

not invest more than 10% of the net assets of the Fund in securities of any single issuer, other than securities issued or guaranteed by the Government of Canada or a province or territory thereof or of the Government of the United States or other cash equivalents;

(c)

not purchase equity securities of issuers other than those permitted under paragraph (a) and may only purchase debt securities if such securities are cash equivalents;

(d)

write a call option in respect of any security only if such security is actually held by the Fund in the portfolio at the time the option is written;

(e)

not dispose of any security that is subject to a call option written by the Fund unless such option has either terminated or expired;

(f)

write put options in respect of any security only if (i) the Fund is permitted to invest in such security in the portfolio, and (ii) so long as the options are exercisable, the Fund continues to hold cash equivalents sufficient to acquire the securities underlying the options at the aggregate strike prices of such options;

(g)

reduce the total amount of cash equivalents held by the Fund only if the total amount of cash equivalents held by the Fund remains an amount not less than the aggregate strike price of all outstanding put options written by the Fund;

(h)

purchase call options and put options with the effect of closing out existing call options and put options written by the Fund;

(i)

invest not more than 10% of its net assets to purchase call options in respect of securities in which the Fund is permitted to invest;

(j)

purchase put options on individual securities in the portfolio, indexed put options, and, notwithstanding paragraphs (a) and (c), inverse exchange-traded funds that provide exposure to the S&P 100 Index;

(k)

purchase derivatives or enter into derivatives or other transactions to facilitate achieving the investment objectives of the Fund;

(l)

not undertake any activity, take any action, omit to take any action or make or hold any investment that would result in the Fund failing to qualify as a “mutual fund trust” within the meaning of the Tax Act;

(m)

not make or hold any investment that would result in the Fund becoming a “SIFT trust” within the meaning of subsection 122.1(1) of the Tax Act;

(n)

not invest in: (i) any security that is an offshore investment fund property that would require the Fund to include significant amounts in the Fund’s income pursuant to section 94.1 of the Tax Act or proposed section 94.1 of the Tax Act as set forth in draft legislation to amend the Tax Act contained in Bill C-48, which

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-3received first reading in the House of Commons on November 21, 2012 (“Bill C48”); or (ii) any interest in a non-resident trust that would require the Fund to include amounts in income in connection with such interest pursuant to sections 91 or 94 of the Tax Act or proposed sections 94 or 94.2 of the Tax Act as set forth in draft legislation to amend the Tax Act contained in Bill C-48 (or amendments to such proposals, provisions as enacted into law or successor provisions thereto); (o)

not invest in any security that would be a “tax shelter investment” within the meaning of the Tax Act; and

(p)

not invest in any security of an issuer that would be a foreign affiliate of the Fund for purposes of the Tax Act.

Notwithstanding the foregoing, at the Manager’s discretion, the Fund may be invested entirely in cash or cash equivalents denominated in Canadian or U.S. dollars.” 2.

Except for the amendments to the Agreement made pursuant to this Amending Agreement, all terms and conditions of the Agreement shall continue in full force and effect in accordance with its provisions, and the same are hereby ratified and confirmed.

3.

This Amending Agreement does not constitute and shall not be construed as a revocation or termination of or resettlement of the trust governed by the Agreement.

4.

Capitalized terms used but not defined in this Amending Agreement shall have the meanings ascribed thereto in the Agreement.

5.

This Amending Agreement enures to the benefit of and is binding upon the parties and their successors and permitted assigns.

6.

No amendment, supplement, modification or waiver or termination of this Amending Agreement and, unless otherwise specified, no consent or approval by any party, is binding unless made in accordance with the terms of the Agreement.

7.

This Amending Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

8.

If, in any jurisdiction, any provision of this Amending Agreement or its application to any party or circumstance is restricted, prohibited or unenforceable, the provision shall, as to that jurisdiction, be ineffective only to the extent of the restriction, prohibition or unenforceability without invalidating the remaining provisions of this Amending Agreement and without affecting the validity or enforceability of such provision in any other jurisdiction, or without affecting its application to other parties or circumstances.

9.

This Amending Agreement may be executed in counterparts and delivered by means of facsimile or portable document format (PDF), each of which when so executed and delivered shall be an original, but all such counterparts together shall constitute one and the same amendment.

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IN WITNESS WHEREOF this Amending Agreement has been executed by the proper officers of the parties hereto duly authorized in that regard as of the date first above written. STRATHBRIDGE ASSET MANAGEMENT INC. By: “John Germain” Name: John Germain Title: Chief Financial Officer

By: “David Roode” Name: David Roode Title: President, Fund Services

RBC INVESTOR SERVICES TRUST

By: “Bibi Khan” Name: Bibi Khan Title: Senior Manager, Client Service

By: “Monica Richards” Name: Monica Richards Title: Manager, Client Service

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