Securities Law & Instruments

Headnote

Section 1(11) -- order that issuer is a reporting issuer for purposes of Ontario securities law -- issuer already a reporting issuer in British Columbia and Alberta -- issuer's securities listed for trading on the TSX Venture Exchange -- continuous disclosure requirements in British Columbia and Alberta are substantially the same as those in Ontario.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(11).

IN THE MATTER OF

THE SECURITIES ACT, R.S.O. 1990,

CHAPTER S.5, AS AMENDED ("the Act")

AND

IN THE MATTER OF

INSTORAGE REAL ESTATE INVESTMENT TRUST

 

ORDER

(Section 1(11))

UPON the application of InStorage Real Estate Investment Trust (the REIT) to the Ontario Securities Commission (the Commission) for an order pursuant to clause 1(11)(b) of the Act that the REIT is a reporting issuer for the purposes of Ontario securities law;

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

AND UPON the REIT having represented to the Commission as follows:

1. The REIT is an open-ended, limited purpose trust established under the laws of Ontario pursuant to a Declaration of Trust dated June 20, 2006. The REIT's head office is located at Suite 1000, 350 Bay Street, Toronto, Ontario, Canada;

2. SCOSS Capital Corp. (SCOSS) is a corporation existing under the Canada Business Corporations Act (the CBCA), with its registered head office at Suite 1000, 350 Bay Street, Toronto, Ontario, Canada;

3. The REIT, SCOSS, InStorage Limited Partnership (InStorage LP), IS Operating Trust, InStorage GP Corp., InStorage GP Trust and InStorage Trustee Corp. entered into an arrangement agreement dated June 22, 2006, (the Arrangement Agreement). On August 4, 2006, in accordance with the terms of the Arrangement Agreement, SCOSS was effectively converted from a corporate entity into the REIT pursuant to a court approved plan of arrangement (the Arrangement) under the CBCA;

4. Prior to the arrangement, the common shares of SCOSS (SCOSS Shares) traded on the TSX Venture Exchange (the TSXV);

5. Following completion of the Arrangement, the SCOSS Shares were delisted from the TSXV on August 11, 2006, when the trust units of the REIT (the Units) commenced trading under the symbol "IS.UN";

6. Both prior to and following completion of the Arrangement, SCOSS was a reporting issuer in each of British Columbia, Alberta, Ontario and Nova Scotia;

7. On October 2, 2006, SCOSS ceased to be a reporting issuer in British Columbia pursuant to a Notice under British Columbia Instrument 11-502. On October 17, 2006, SCOSS was deemed to have ceased to be a reporting issuer in each of Ontario, Alberta and Nova Scotia pursuant to an order made under the securities laws of each such jurisdiction;

8. Prior to the completion of the Arrangement, the REIT was not a reporting issuer in any jurisdiction in Canada. Following completion of the Arrangement on August 4, 2006, the REIT is a continuing issuer following an exchange of securities in connection with an arrangement and is included in the definition of a "reporting issuer" in Alberta and British Columbia;

9. The REIT did not become a reporting issuer in Ontario or Nova Scotia as a continuing issuer following the exchange of securities under the Arrangement since, at the time of the Arrangement, SCOSS had not been a reporting issuer in each such jurisdiction for at least 12 months;

10. The REIT is not currently a reporting issuer or the equivalent in any jurisdiction in Canada other than Alberta and British Columbia;

11. The authorized capital of the REIT consists of an unlimited number of Units and an unlimited number or special voting units (Special Voting Units). As at the close of business on December 18, 2006, there were 84,276,320 Units and 12,990,346 Special Voting Units issued and outstanding;

12. The REIT is not on the lists of defaulting reporting issuers maintained pursuant to section 141 of the Securities Act (Alberta) and section 77 of the Securities Act (British Columbia). The REIT has not been the subject of any enforcement actions by the Alberta or British Columbia securities commissions or by the TSXV, and the REIT is not in default of the securities legislation, regulations, rules, policies or instruments applicable in Alberta or British Columbia;

13. The REIT is not in default under the rules, regulations, and policies of the TSXV.

14. The REIT has a significant connection to Ontario in that:

(a) Ontario residents (excluding CDS & Co.) are registered holders of more than 20% of the total number of issued and outstanding Units;

(b) each of the Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer of the REIT resides in Ontario; and

(c) the REIT's head office is located in Ontario.

15. The continuous disclosure requirements of the Securities Act (Alberta) and the Securities Act (British Columbia) are substantially the same as the continuous disclosure requirements under the Act;

16. The materials filed by the REIT as a reporting issuer in the Provinces of Alberta and British Columbia are available on the System for Electronic Document Analysis and Retrieval;

17. Neither the REIT nor SCOSS nor any of their trustees, directors, or officers or, to the knowledge of the REIT and its trustees and officers, any controlling unitholder, has:

(a) been the subject of any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority;

(b) entered into a settlement agreement with a Canadian securities regulatory authority; or

(c) been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor making an investment decision;

18. Neither the REIT nor SCOSS nor any of their trustees, directors, or officers nor, to the knowledge of the REIT and its trustees and officers, any of its controlling unitholders, is or has been subject to:

(a) any known ongoing or concluded investigations by:

(i) a Canadian securities regulatory authority, or

(ii) a court or regulatory body, other than a Canadian securities regulatory authority, that would be likely to be considered important to a reasonable investor making an investment decision; or

(b) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromise with creditors, or the appointment of a receiver, receiver-manager or trustee, within the preceding 10 years;

19. None of the trustees or officers of the REIT nor, to the knowledge of the REIT and its trustees and officers, any of its controlling unitholders, is or has been at the time of such event an officer or director of any other issuer which is or has been subject to:

(a) any cease trade or similar orders, or orders that denied access to any exemptions under Ontario securities law, for a period of more than 30 consecutive days, within the preceding 10 years; or

(b) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or the appointment of a receiver, receiver-manager or trustee, within the preceding 10 years,

except as follows:

(i) Mr. Alay Shah, who is acting as Vice-President Finance of Carttera Management Inc., in its capacity as manager of the REIT's operating business owned by InStorage LP, was Vice-President and Corporate Controller of Mosaic Group Inc. in December 2002 when it and certain of its subsidiaries filed for creditor protection under Canadian and United States insolvency laws; and

20. The REIT will remit all participation fees due and payable by it pursuant to Commission Rule 13-502 -- Fees by no later than two business days from the date of this Order.

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

IT IS ORDERED pursuant to clause 1(11)(b) of the Act that the REIT is a reporting issuer for the purposes of Ontario securities law.

DATED February 20, 2007

"Jo-Anne Matear"
Assistant Manager, Corporate Finance
Ontario Securities Commission