Marmora Mortgage Corporation Limited

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Relief granted fromthe registration, issuer bid and prospectus requirements in respect of trades in certainsecurities of a mortgage investment corporation the articles of which contain restrictionssimilar to the private company restrictions - Relief extends private company exemptionsto an issuer whose articles permit it to issue securities to up to fifty (50) persons exclusiveof employees of closely related business entities provided that the right to transfersecurities is restricted and that no securities are offered to the public - First trade inpreviously issued securities of the issuer subject to first trade restrictions upon deletion ofrestrictions from issuer's articles as if issuer ceased to be a private company.

Applicable Ontario Statute

Securities Act, R.S.O. 1990, c.S.5, as am., ss. 25, 53, 74(1), 93(3)(g), 95, 96, 97 ,98, 100and 104(2)(c).

WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker") in each of Alberta and Ontario (the "Jurisdictions") has received an applicationfrom Marmora Mortgage Corporation Limited (the "Filer") for a decision under thesecurities legislation of the Jurisdictions (the "Legislation") that:

(a) the registration and prospectus requirements shall not apply to trades in securitiesof the Filer; and

(b) the requirements under the Legislation relating to issuer bids, including the generalprovisions relating to delivery of a bid, minimum deposit periods, taking up,withdrawal and payment for deposited securities, the bid financing provisions,issuer bid circular provisions, and delivery provisions of the Legislation (the "IssuerBid Requirements") shall not apply to the Filer;

AND WHEREAS under the Mutual Reliance Review System for Exemptive ReliefApplications (the "System"), the Ontario Securities Commission is the principal regulatorfor this application;

AND WHEREAS the Filer has represented to the Decision Makers that:

1. The Schickedanz Brothers group of companies ("Schickedanz Group") wasestablished to carry on a real estate business in Canada in the early 1950's by KurtSchickedanz, his brothers Gerhard and Gustav and their first cousin DanielSchickedanz (collectively, the "First Generation Founders"), each of whom isresident in Ontario.

2. The head office of the Schickedanz Group is located in the Province of Ontario.

3. Each of the First Generation Founders has an operating corporation (the "FamilyOpcos").

4. Schickedanz Bros. Limited ("SBL") is an operating company that is owned by theFirst Generation Founders and a trust for the benefit of their respectivegrandchildren.

5. The Family Opcos and SBL (collectively the "Opcos") have formed variouspartnerships (the "Partnerships") and joint ventures (the "Joint Ventures") for thepurposes of pursuing various real estate opportunities. The Schickedanz Groupcurrently carries on its Canadian real estate business in the Provinces of Ontario,Alberta and British Columbia through the Partnerships and Joint Ventures. In somecases the Partnerships and Joint Ventures are wholly-owned by the Opcos; in othercases there are minority outside investors. There are no employees resident inBritish Columbia.

6. The two Partnerships that are relevant to this application are Schickedanz Bros.Properties ("Properties") and Schickedanz Bros. Calgary Partnership (the "CalgaryPartnership").

7. The one Joint Venture that is relevant to this application is the Ballantree Golf Club("BGC") which is in the process of constructing and operating a golf course inToronto. The Opcos are the only participants in BGC.

8. The Filer is an Ontario corporation and is a private company under the Legislation,is not a reporting issuer under the Legislation and has its head office in theprovince of Ontario.

9. The Filer was established by the Schickedanz family for the purpose of advancing,acquiring and owning mortgages and is a "mortgage investment corporation" forCanadian income tax purposes.

10. The authorized capital of the Filer consists of:

(a) an unlimited number of voting common shares without nominal or par value(the "Common Shares") of which one (1) Common Share is outstanding andis owned by Kurt Schickedanz; and

(b) an unlimited number of non-voting special shares ("Special Shares") ofwhich 8,604,109 Special Shares were outstanding as at February 29, 2000,being the Filer's most recent year-end, valued at $1.00 per Special Share.

11. Holders of Special Shares are, subject to the provisions of the BusinessCorporations Act (Ontario), entitled to require the Filer to redeem all or any numberof the Special Shares registered in the name of such holder: (i) on the last day ofeach fiscal year of the Filer; (ii) six months prior to the last day of such fiscal year;(iii) and any other day or days as the directors of the Filer may designate (each, a"Valuation Date").

12. On each Valuation Date the directors of the Filer determine the net capital value ofthe Special Shares by valuing all of the assets of the Filer and dividing that amountby the number of outstanding Special Shares at that date. Typically, stockdividends are declared on each Valuation Date, which has kept the value of theSpecial Shares at $1.00 per Special Share.

13. Participation by all shareholders of the Filer is on a voluntary basis. Contributionsby employees are matched by the employer up to a specified level in accordancewith a group pension plan.

14. In accordance with the private company restrictions currently contained in itsarticles of incorporation (the "Articles"), there are currently not more than fifty (50)shareholders of the Filer, exclusive of employees and former employees.

15. It is proposed to modify the Articles of the Filer to read substantially as follows:

(a) The number of shareholders of the Corporation is limited to not more thanfifty (50), two or more persons who are joint registered holders of one (1) ormore shares being counted as one shareholder, exclusive of:

(i) employees or former employees of Properties, Calgary Partnershipor BCG or the spouses of such employees or former employees,

(ii) First Generation Founders, their spouses, descendants or spousesof their descendants, and

(iii) trusts, including without limitation, registered retirement savings plansor registered retirement income funds established for the benefit of,or in respect of whom the annuitant thereof is, any of the personsdescribed in paragraphs (a), (b) or (c),

(collectively, the "Excluded Shareholders");

(b) restrict the right to transfer securities of the Filer; and

(c) prohibit any invitation to the public to subscribe for securities of the Filer;

(collectively, the "Extended Private Company Restrictions").

AND WHEREAS under the System this MRRS Decision Document evidences thedecision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Makers with the jurisdiction to make the Decisionhas been met;

THE DECISION of the Decision Makers under the Legislation is that:

1. trades in Common Shares and Special Shares shall not be subject to theprospectus and registration requirements, provided that:

(a) at the time of such trade, the Articles or by-laws of the Filer contain theExtended Private Company Restrictions,

(b) the trade is not made to the public, and

(c) upon deletion of the Extended Private Company Restrictions from theArticles or by-laws of the Filer, or the amendment of the Extended PrivateCompany Restrictions, the first trades in previously issued Common Sharesor Special Shares shall be a distribution unless:

(i) the Filer is a reporting issuer under the Legislation in the Jurisdictionin which such first trade occurs, and has been a reporting issuer insuch Jurisdiction for at least 12 months,

(ii) if the seller is in a special relationship with the Filer, as defined underthe Legislation, the seller has reasonable grounds to believe that theFiler is not in default of any requirement of the Legislation,

(iii) no unusual effort is made to prepare the market or to create ademand for Common Shares or Special Shares and no extraordinarycommission or consideration is paid in respect of such first trade,

(iv) the Filer has filed with the applicable Decision Makers such reportwith respect to its outstanding securities as may be required by theapplicable Legislation, and

(v) the trade is not from the holdings of a person or company, orcombination of persons and companies, acting in concert or by virtueof an agreement, arrangement, commitment or understanding, whichholds in total a sufficient number of the voting rights attached to alloutstanding voting securities of the Filer to affect materially thecontrol of the Filer, and if a person or company or combination ofpersons and companies holds more than 20% of the voting rightsattached to all outstanding voting securities of the Filer, the personor company or combination of persons and companies is deemed, inthe absence of evidence to the contrary, to hold a sufficient numberof the voting rights to affect materially the control of the Filer; and

2. any acquisition of Special Shares or Common Shares by the Filer shall not besubject to the Issuer Bid Requirements, provided that:

(a) the Filer is not a reporting issuer under the Legislation,

(b) there is not a published market in respect of Special Shares or CommonShares, and

(b) at the time of such acquisition, the Articles or by-laws of the Filer contain theExtended Private Company Restrictions.

September 29^th , 2000.

"J.A. Geller"      "Robert W. Davis"