HeadnoteRule61-501 - Insider Bid - Insider owning virtually all of target'scommon shares making bid for all outstanding preferred shares- Only 3 shareholders resident in Ontario holding approximately8.4% of preferred shares - Valuation obtained from independentvaluator - Insider and target unable to comply with subsection2.3(2) as no members of board of directors of target independentof insider bidder - Relief granted from subsection 2.3(2) subjectto certain conditions
OSCRule 61-501 - Insider Bids, Issuer Bids, Going Private Transactionsand Related Party Transactions, ss. 2.3(2) and 9.1.
INTHE MATTER OF
RULE61-501 ("RULE 61-501")
INTHE MATTER OF
INTERNATIONALPROPERTIES GROUP LTD., IPG MERGER SUB INC.
(Rule61-501 Section 9.1)
UPON the application (the "Application") of InternationalProperties Group Ltd. ("IPG"), IPG Merger Sub Inc. (the "Offeror"),and Investorplus.com Inc. (the "Company"), to the Director ofthe Ontario Securities Commission (the "Commission") for a decisionpursuant to section 9.1 of Rule 61-501 that, in connection withthe offer (the "Offer") by IPG, through the Offeror, to purchaseall of the outstanding shares of Series A Preferred Stock, parvalue $0.001 per share ("Series A Preferred Stock") of the Companyat a price of U.S.$2.66 per share, the Offeror and the Companybe exempt from subsection 2.3(2) of Rule 61-501;
AND UPON considering the Application and the recommendationof staff of the Commission;
AND UPON IPG and the Offeror having represented tothe Director of the Commission (the "Director") as follows:
1.IPG is a corporation amalgamated under the laws of the BusinessCorporations Act (Alberta).
2.IPG is a reporting issuer in Ontario and is not on the listof defaulting reporting issuers maintained by the Commission.
3.IPG's authorized capital consists of an unlimited number ofClass "A" Voting Shares and an unlimited number of RedeemablePreferred Shares. As at November 30, 2001, there were issuedand outstanding: (a) 35,303,029 Class "A" Voting Shares; (b)13,776,793 Redeemable Preferred Shares; and (c) 1,305,917 optionsto purchase Class "A" Voting Shares.
4.The Class "A" Voting Shares and the Redeemable Preferred Sharesof IPG are listed on The Toronto Stock Exchange under the symbolsIPX.A and IPX.PR.A, respectively.
5.The Offeror is a corporation incorporated under the laws ofthe State of Delaware.
6.The authorized capital of the Offeror consists of 100 sharesof Common Stock, par value $0.001 per share, of which all 100shares are owned by IPG.
7.The Offeror is not a reporting issuer in Ontario.
8.The Company is a corporation incorporated under the laws ofthe State of Delaware.
9.The authorized capital of the Company consists of 50,000,000shares of Common Stock, par value $0.001 per share (the "CommonStock"), and 20,000,000 shares of Preferred Stock, of which1,351,200 shares have been designated as Series A PreferredStock and 1,758,308 shares have been designated as Series BPreferred Stock, par value $0.001 per share (the "Series B PreferredStock"). As at November 30, 2001, there were issued and outstanding:(a) 8,060,000 shares of Common Stock, of which 8,000,000 sharesare held by the Offeror; (b) 1,340,300 shares of Series A PreferredStock; (c) no Series B Preferred Stock; and (d) options to purchase650,000 shares of Common Stock.
10.In all matters that may come before the Company's stockholders,each share of Series A Preferred Stock entitles its holder toa number of votes equal to the number of shares of Common Stockthat such share would be converted into pursuant to the conversionprovisions of the certificate of incorporation of the Company.Each share of Series A Preferred Stock may be converted on eithera voluntary or a mandatory basis at a conversion ratio of oneshare of Common Stock to each share of Series A Preferred Stock,subject to anti-dilution protection.
11.The Company is not a reporting issuer in Ontario and is notlisted on any exchange or trading over-the-counter.
12.IPG, through the Offeror, is conducting a take-over bid forall of the outstanding shares of Series A Preferred Stock ata price of U.S. $2.66 per share. The take-over bid is an insiderbid for the purposes of Rule 61-501 by virtue of IPG's ownershipof Common Stock of the Company.
13.A special committee of the directors of IPG (the "Special Committee")was formed on or about April 12, 2001 for the purpose of (1)evaluating on behalf of IPG various alternatives to enable IPGto acquire sole ownership of the Company and (2) ensuring onbehalf of the Company that such alternatives resulted in a returnto holders of the Series A Preferred Stock of a fair portionof their investment in the Company.
14.An independent committee of the Company could not be formedbecause five of the six members of the Company's board of directorsare directors of IPG and the sixth director is a senior officerof IPG.
15.The Special Committee, on behalf of the Company, retained RothCapital Partners, LLC ("Roth Capital") to conduct an independentvaluation of the Company (the "Valuation"). The Special Committeeselected Roth Capital and supervised the preparation of theValuation. The Valuation was prepared by Roth Capital and addressedto the Board of Directors of the Company.
16.The Valuation complies with the requirements of Part 6 of Rule61-501 and such valuation shall be disclosed in the take-overbid circular (the "Circular") prepared in connection with theOffer pursuant to the requirements of Rule 61-501.
17.There are only three holders of Series A Preferred Stock residentin the Province of Ontario, who hold an aggregate of 112,762shares of Series A Preferred Stock, being 8.4% of the issuedand outstanding Series A Preferred Stock. One of these shareholdersowns 93,984 shares of Series A Preferred Stock, being 7% ofthe issued and outstanding Series A Preferred Stock.
18.Fairness opinions in respect to the Offer have been issued byRoth Capital on behalf of the holders of Series A PreferredStock of the Company and Thomson Kernaghan & Co. Limitedon behalf of the shareholders of IPG, and such fairness opinionswill be disclosed in the Circular.
AND UPON the Director being satisfied thatto do so would not be prejudicial to the public interest;
IT IS DECIDED pursuant to section 9.1 of Rule61-501 that, in connection with the Offer, the Offeror and theCompany shall not be subject to subsection 2.3(2) of Rule 61-501,provided that the Valuation is filed with and disclosed in theCircular and the Offeror complies with the other applicableprovisions of Rule 61-501.
December 11, 2001.