Midland Golf and Country Club Limited

Headnote

Subsection 74(1) - issuance of shares to playing members of golf club not subject tosections 25 or 53 of the Act - first trade subject to subsection 72(5) of the Act andsubsection 2.18(3) of Ontario Securities Commission Rule 45-501 Exempt Distributionsor subsection 2.2(b) of Rule 45-501

Statutes Cited

Securities Act, R.S.O. 1990, c.S.5, as am. ss. 25, 35(2)(7), 35(2)(10), 53, 72(5), 73(1),74(1).

Rules Cited

Ontario Securities Commission Rule 45-501 Exempt Distributions (1998), 21 O.S.C.B.6548.

UPON the application of Midland Golf and Country Club Limited (the "Applicant") tothe Ontario Securities Commission (the "Commission") for a ruling pursuant to subsection74(1) of Act that trades in a new class of common shares (the "New Common Shares") andclass C preferred shares (the "Class C Shares") (collectively, the New Common Shares andClass C Shares, the "Shares") of the Applicant from time to time to playing members as thatterm is defined in the Applicant's by-laws ("Playing Members") of the Midland Golf andCountry Club (the "Club") will not subject to sections 25 and 53 of the Act;

AND UPON considering the Application and the recommendation of the staff of theCommission;

AND UPON the Applicant having represented to the Commission that:

1. The Applicant was created by Letters Patent dated March 16, 1922 and is currentlysubject to the Corporations Act (Ontario). The Applicant's objects include thepromotion, organization, conduct and management of a golf, country and social club.The Applicant owns and operates the Club.

2. The Applicant is not a private company within the meaning of the Act and is not areporting issuer under the Act and has no intention of becoming a reporting issuerunder the Act.

3. The authorized share capital of the Applicant consists of 2,000 common shares("Midland Shares"), of which 1,211 Midland Shares have been issued and areoutstanding.

4. In connection with a reorganization of its share capital, the Applicant plans to applyfor a supplemental letters patent (the "SLP") under the Corporations Act (Ontario).

5. Upon the issuance of the SLP, the authorized capital of the Applicant will consist of4,000 New Common Shares, 296 Class A Preferred Shares, 504 Class B PreferredShares and 4,000 Class C Shares.

6. Each Class C Share will have a par value of $1,450.00, will be redeemable at theoption of the Applicant, will not be entitled to dividends, will have no voting rights butwill be entitled to participate on a liquidation of the Applicant for an amount per shareequal to the par value. Class C Shares will only be issued to Playing Members. TheClass C Shares will be redeemable by the Applicant or transferable only to theApplicant upon either the death of the Class C shareholder or upon the Class Cshareholder ceasing to be a Playing Member of the Club. In either case, theApplicant will redeem the Class C Shares upon the Club finding a new PlayingMember who will provide the Applicant with the $1,450.00 subscription price.

7. Each New Common Share will be without nominal or par value, will have no right ofretraction or redemption but will have one vote per share and be purchasable forcancellation.

8. Each subscriber for a Class C Share will also be required to concurrently subscribefor one New Common Share at a subscription price of $1.00.

9. Each Playing Member will be required to enter into a subscription agreement whichwill restrict their ability to sell their New Common Share or Class C Share to anyperson other than the Applicant.

10. The transfer restrictions imposed upon the New Common Shares by the subscriptionagreement are intended to enable the Applicant to ensure that control of theApplicant remains with Playing Members.

11. The Applicant cannot rely on the registration exemptions contained in paragraphs 7and 10 of subsection 35(2) or the corresponding prospectus exemption in clause73(1)(a).

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

IT IS RULED pursuant to subsection 74(1) of the Act that the issuance by theApplicant of Shares to Playing Members will not be subject to sections 25 or 53 of the Act,provided that:

A. the first trade in Shares acquired pursuant to this ruling by the Playing Members shallbe a distribution unless such first trade is made in accordance with the provisions ofsubsection 72(5) of the Act and section 2.18(3) of Commission Rule 45-501 ExemptDistributions ("Rule 45-501") as if the securities had been issued pursuant to one ofthe exemptions referenced in subsection 72(5) of the Act, or unless such first tradewould be exempt from sections 25 and 53 of the Act under subsection 2.2(b) of Rule45-501;

B. prior to a Playing Member subscribing for Shares, the Corporation shall deliver to thePlaying Member a copy of this ruling together with a copy of the SupplementaryLetters Patent, a subscription agreement and a statement to the effect that, as aconsequence of this ruling, certain protections, rights and remedies provided by theAct, including statutory rights of rescission and/or damages, will be unavailable to thePlaying Member, and that there are certain restrictions imposed on the dispositionof the Shares; and

C. the exemptions contained in this Order cease to be effective if any one of theprovisions of the SLP relevant to the exemptions granted herein are amended in anymaterial respect without written notice to, and consent of, a Director of theCommission.

March 10^th, 2000.

"Howard I. Wetston"     "Morley P. Carscallen"