IG Realty Investments Inc. and the Special Committee to IG Realty Investments Inc. - s. 104(2)(c)

Headnote

Clause 104(2)(c) - private issuer has 85 shareholders - private issuer to engage in acquisition of business from shareholder - term of acquisition that private issuer repurchase a portion of the vendor's shares of private issuer - private issuer shareholders bound by terms of shareholders' agreement - acquisition and repurchase must be approved by shareholders owning 75% of outstanding shares - repurchase will not materially affect control of private issuer -- private issuer exempt from issuer bid requirements, subject to conditions.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 95, 96, 97, 98, 100, 104(2)(c).

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, c. S.5, AS AMENDED

(the Act)

AND

IN THE MATTER OF

IG REALTY INVESTMENTS INC. AND THE

SPECIAL COMMITTEE TO

IG REALTY INVESTMENTS INC.

ORDER

(Subsection 104(2)(c))

UPON the application of the special committee of the board of directors of IG Realty Investments Inc. (the Applicant) and IG Realty Investments Inc. (IGRI) to the Ontario Securities Commission (the Commission) for an order pursuant to clause 104(2)(c) of the Act that the proposed purchase (the Repurchase) of 19,669 common shares of IGRI currently registered in the name of Giffels Management Limited (GML) by IGRI is exempt from the requirements of sections 95, 96, 97, 98 and 100 of the Act;

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

AND UPON the Applicant and IGRI having represented to the Commission that:

1. The Applicant is the special committee for IGRI, a corporation existing under the Business Corporations Act (Ontario) that has its registered, executive and head office in Toronto, Ontario.

2. All of the members of the Applicant are independent of the management of each of IGRI and GML.

3. IGRI is not a reporting issuer in any jurisdiction in Canada and has no securities listed for trading on any exchange.

4. IGRI was originally incorporated and organized by GML for the purpose of, among other things, sourcing, acquiring, developing, leasing, financing, managing, operating and selling various industrial, commercial and residential real estate projects, and investing in undeveloped real property.

5. As of the date hereof, the authorized capital of IGRI consisted of an unlimited number of common shares (the Common Shares), each entitled to one vote per share, of which 1,013,686 Common Shares are currently issued and outstanding and one million Class V preference shares, of which none are currently issued and outstanding.

6. Each shareholder of IGRI, either directly or by way of assumption and agreement to be bound, is party to a shareholders' agreement made as of October 22, 2004, as amended (the Shareholder Agreement).

7. The Applicant was established to, among other things, evaluate the acquisition of GML's real estate asset, property and development management business (the GML Business) to internalize IGRI's management and thereby enhance shareholder value.

8. GML is a corporation existing under the Business Corporations Act (Ontario) and has its registered, executive and head office in Toronto, Ontario at the same address as IGRI.

9. GML is in the business of providing real estate asset, property and development management services in the industrial, commercial and residential marketplaces. Pursuant to a management services agreement dated October 17, 2005 (the Services Agreement), GML is the exclusive manager of the assets and business of IGRI. Under separate contracts, GML also provides real estate asset, property and development management services to certain entities in which IGRI holds an ownership interest.

10. GML currently holds 93,507 Common Shares representing 9.22% of the total issued and outstanding Common Shares.

11. IGRI has a total of 85 shareholders.

12. IGRI entered into a letter of intent with GML and its parent company Ingenium Group Inc. dated October 15, 2007 (the LOI) to, among other things, acquire the GML Business from GML, including GML's management team, management contracts and certain other assets owned and used in the GML Business (the Acquisition).

13. The Repurchase is a condition to closing the Acquisition in favour of GML. The Repurchase will be accomplished at a price of $152.53 per Common Share (the Repurchase Price).

14. The LOI and Repurchase were negotiated at arm's-length between GML and the Applicant.

15. The Repurchase Price was established in accordance with the past valuation practice of IGRI management and subsequently reviewed and approved by the Applicant and agreed to through arm's-length negotiation between GML and the Applicant in the context of the Acquisition.

16. The Applicant reviewed and approved the Acquisition, Repurchase and Repurchase Price.

17. The Repurchase will be done in accordance with and pursuant to an amendment to the Shareholder Agreement (the Amendment) and is otherwise subject to compliance with applicable corporate and securities laws. The Amendment is required to permit repurchases of IGRI shares for cancellation. To be effective, the Amendment must receive approval of shareholders of IGRI (including GML) holding at least 75% of the issued and outstanding Common Shares.

18. The shareholders of IGRI have been given notice of the terms and conditions of the Acquisition and the Repurchase and an opportunity to consent to the Amendment. The Repurchase will not proceed without approval of the Amendment in accordance with the Shareholder Agreement.

19. To date, IGRI has already received consent and approval to the Amendment from shareholders, including GML, holding 55.3% of the issued and outstanding Common Shares.

20. The Repurchase will be funded with cash on hand and IGRI will not require any additional debt to fund the Repurchase.

21. The Repurchase will not materially affect control of IGRI.

22. The Repurchase does not constitute an exempted issuer bid pursuant to section 93(3)(g) of the Act because the number of its shareholders (exclusive of holders in the employment of the issuer or its affiliates) is more than 50.

23. The Repurchase does not constitute an exempted issuer bid pursuant to section 93(3)(d) of the Act because GML is not an employee of IGRI within the conventional meaning of the term.

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

IT IS ORDERED, pursuant to subsection 104(2)(c) of the Act, that the Repurchase is exempt from the requirements of sections 95, 96, 97, 98 and 100 of the Act, provided that the Amendment is approved by shareholders of IGRI holding at least 75% of the issued and outstanding Common Shares.

DATED this 18th day of December, 2007