Securities Law & Instruments


Mutual Reliance Review System for ExemptiveRelief Applications - Decision declaring corporation to be nolonger a reporting issuer following the acquisition of all ofits outstanding securities by another issuer.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,s. 83.













WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof the provinces of Alberta, Saskatchewan, Ontario and Quebec(the "Jurisdictions") has received an applicationfrom TGS Properties Inc. ("TGSPI") for a decisionunder the securities legislation of the Jurisdictions (the "Legislation")that TGSPI be deemed to have ceased to be a reporting issuerunder the Legislation;

AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System")the Alberta Securities Commission is the principal regulatorfor this application;

AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice 14-101;

AND WHEREAS TGSPI has represented tothe Decision Makers that:

1.1 TGSPI was incorporated under the lawsof the Province of Alberta on September 17, 2002;

1.2 TGSPI has not carried on any active businesssince incorporation other than in respect of the REIT Reorganization(described below) and the Arrangement (described below);

1.3 TGSPI has no operations other than thosecarried on by its subsidiaries and no assets other than theshares it holds in its subsidiaries;

1.4 the head office of TGSPI is located at1000, 1520 - 4th Street S.W., Calgary, Alberta, T2R 1H5 andthe registered office is 1000, 400 - 3rd Avenue S.W., Calgary,Alberta, T2P 4H2;

1.5 at a special meeting of security holdersof T.G.S. Properties Ltd. ("TGS Properties") heldon October 30, 2002, a resolution to approve the reorganizationof TGS Properties into a real estate investment trust anda real estate development company was approved (the "Reorganization");

1.6 the Reorganization received approval fromthe Court of Queen's Bench on November 25, 2002, and the transactionclosed on December 6, 2002;

1.7 as part of the Reorganization on December6, 2002, TGSPI, the new public company, was formed to continuethe remaining business of TGS Properties and continued primarilyas a commercial real estate and land development company andTGS Properties became a wholly-owned subsidiary of TGSPI;

1.8 on March 10, 2003, TGSPI mailed to theholders ("Shareholders") of common shares ("CommonShares") of TGSPI, the holders ("Debentureholders")of 8% convertible debentures due December 31, 2005 of TGSPI("Debentures") and the holders ("Optionholders")of options to acquire Common Shares ("Options")(collectively, the "Securityholders") an InformationCircular in respect of a proposed arrangement (the "Arrangement");

1.9 the Securityholders approved the Arrangementat a special meeting of the Securityholders of TGSPI heldon April 7, 2003, pursuant to which the following transactionswere concluded:

1.9.1 the Articles of Incorporation of TGSPIwere amended to create an unlimited number of voting commonshares (the "Special Common Shares"); and

1.9.2 Airstate Ltd. (a private Alberta company)transferred 21,739,131 common shares held in DestinationResorts Inc. (a private Alberta company) to TGSPI in exchangefor 32,326,037 Special Common Shares; and

1.9.3 Freedom Investments Ltd. (a privateAlberta company) transferred 2,000,000 common shares heldin Destination Resorts Inc. to TGSPI in exchange for 2,973,995Special Common Shares; and

1.9.4 each outstanding Common Share (otherthan Common Shares held by Blair Richardson, Blair E. Richardson1991 Children's Trust (the "Trust"), 3065722 NovaScotia Company ("3065722"), British Colony --TGS, LLC and Airstate Ltd.("Airstate") (collectively,the "Participating Shareholders")) was transferredto 1032377 Alberta Ltd. (a newly incorporated private Albertacompany) ("1032377") and the Shareholders thereofshall be entitled to receive from 1032377 in respect ofeach such Common Share an amount that is equal to $1.20;and

1.9.5 each outstanding Debenture which wasnot converted at the effective date of the Arrangement waspurchased by TGSPI and cancelled and the Debentureholdersthereof shall be entitled to receive from TGSPI in respectof each Debenture an amount that is equal to the principalamount of a debenture plus any accrued unpaid interest thereon;and

1.9.6 each outstanding Option which wasnot exercised at the effective date of the Arrangement wascancelled and the Optionholders thereof shall be entitledto receive from TGSPI in respect of each such Option anamount that is equal to the positive difference between$1.20 and the exercise price of their Options;

1.10 the Arrangement received approval fromthe Court of Queen's Bench on April 8, 2003 and the transactionclosed on April 9, 2003;

1.11 on April 9, 2003, Articles of Amendmentwere filed to create and permit the issuance of Series 1 PreferredShares of TGSPI. Pursuant to a Share Purchase Agreement datedApril 9, 2003 between 1032377 and TGSPI, 1032377 exchangedall of its Common Shares held in TGSPI in exchange for 15,272,939Series 1 Preferred Shares;

1.12 the authorized capital of TGSPI consistsof an unlimited number of Common Shares, Class "A"Common voting shares, Class "B" Common voting shares,Special Common Shares (created pursuant to the Arrangement)and preferred shares, issuable in series;

1.13 at present, there are 25,395,505 CommonShares, 37,800,032 Special Common Shares and 15,272,939 Series1 Preferred Shares issued and outstanding as fully paid andnon-assessable securities of the Corporation;

1.14 of the 25,395,505 Common Shares currentlyoutstanding, 20,096,905 are held by Blair Richardson, 645,625are held by the Trust, 463,500 are held by 3065722, 1,702,960are held by British Colony - TGS, LLC and 2,486,515 are heldby Airstate;

1.15 of the 37,800,032 Special Common Sharescurrently outstanding, 833,333 are held by 3065722, 33,992,704are held by Airstate and 2,973,995 are held by Freedom InvestmentsLtd.,

1.16 all of the Series I Preferred Sharesare held by 1032377;

1.17 all of the remaining shareholders ofTGSPI are aware that TGSPI has made an application to ceaseto be a reporting issuer under the Legislation and have indicatedthat they understand the nature of the application and haveno objection to it;

1.18 no Class "A" Common votingshares or Class "B" Common voting shares have beenissued;

1.19 TGSPI is a reporting issuer in each ofthe provinces of British Columbia, Alberta, Saskatchewan,Manitoba, Ontario and Quebec;

1.20 the Common Shares and Debentures of TGSPIwere delisted from the Toronto Stock Exchange on April 14,2003 and no securities of TGSPI are listed or quoted on anyexchange or market;

1.21 other than the Common Shares, SpecialCommon Shares and Series 1 Preferred Shares, TGSPI has nosecurities, including debt securities, outstanding;

1.22 TGSPI does not intend to seek publicfinancing by way of an offering of its securities;

1.23 Other than failing to file the interimfinancial statements for the period ending March 31, 2003,TGSPI is not in default of the securities legislation of theJurisdictions;

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

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that TGSPI is deemed to have ceased to bea reporting issuer under the Legislation.

June 26, 2003.

"Patricia M. Johnston"