Leader Auto Resources LAR Inc.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Exemption from prospectus requirement in connection with trades of Shares of the Filer in to franchised new-vehicle dealers, subject to conditions

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 74(1)

February 3, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUEBEC AND ONTARIO

(the "Filing Jurisdictions")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

LEADER AUTO RESOURCES LAR INC.

(the "Filer")

DECISION

Background

The securities regulatory authority or regulator in each of the Filing Jurisdictions (the "Decision Makers") has received an application from the Filer under the securities legislation of the Filing Jurisdictions (the "Legislation") for an exemption from the prospectus requirements of the legislation (the "Requested Exemption") so that such requirements do not apply to the issuance of the Filer's Class A Common Shares and Class C Preferred Shares (collectively the "Securities") to franchised new-vehicle dealers.

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

a) the Autorité des marchés financiers (The "Autorité") is the principal regulator for this application,

b) the Filer has provided notice that subsection 4.7(1) of Regulation 11-102 respecting Passport System ("Regulation 11-102") is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, Yukon, Northwest Territories and Nunavut;

c) the decision is the decision of the principal regulator and constitutes the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in Regulation 14-101 respecting Definitions and Regulation 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts declared by the Filer:

1. The Filer is an entity resulting from the merger of Leader Auto Resources LAR Inc., formerly L.A.R. Warehousing Inc. ("Old LAR"), and 7735677 Canada Inc. by way of an arrangement under Section 192 of the Canadian Business Corporations Act (the "Arrangement"), effective March 1, 2011 (the "Effective Date");

2. The head office of the Filer is situated at 2525, route Transcanadienne, in the City of Pointe-Claire (Quebec), H9R 4V6;

3. The Filer is a buying group the purpose of which is to consolidate the purchases of goods and services of franchised new-vehicle dealers in order to optimize their purchasing power and generate economies of scale;

4. The Filer is not a reporting issuer in any Canadian jurisdiction and is not in default of legislation or securities legislations in the following jurisdictions: British Columbia, Alberta, Saskatchewan, Manitoba, Yukon, North-West Territories and Nunavut;

5. As of the Effective Date, the geographical distribution of the 658 shareholders of the Filer was as follows: one in Alberta, 94 in Ontario, 477 in Quebec, 34 in New Brunswick, 33 in Nova Scotia, 8 in Prince Edward Island and 11 in Newfoundland and Labrador;

6. The shareholder of the Filer presently residing in Alberta acquired the entirety of its Class A Shares from the Old LAR and resided in the province of Quebec at the time so that the issuance of his shares was governed by the laws of the province of Quebec;

7. In the past, the Commission des valeurs mobilières du Québec and the Ontario Securities Commission granted to the Old LAR exemptions from prospectus and dealer registration requirements for the issuance of Class A Shares with franchised new-vehicle dealers, which exemptions ceased to be effective since the Effective Date;

8. The Old LAR also issued in the past Class A Shares to residents of New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador (the "Four Jurisdictions"). The Filer cannot however confirm that these issuances with the residents of the Four Jurisdictions were made in compliance with the applicable securities legislation;

9. Pursuant to its constating documents, general by-law and unanimous shareholders' agreement in force as of the Effective Date:

(a) the Filer can only issue its Securities to franchised new-vehicle dealers; and

(b) only the Filer can repurchase its Securities held by a shareholder who ceases to be a franchised new-vehicle dealer.

10. As the shareholders of the Filer cannot sell nor transfer their Securities to a third party, including another shareholder, no market exists for the resale or transfer of the Securities;

11. All issued Securities are pledged, with delivery, as security for the performance of the shareholder's obligations to the Filer, including the payment of purchases made by the franchised new-vehicle dealer from the Filer, the whole pursuant to Pledge and Deposit Agreements entered into amongst the shareholders, the Filer and a depositary.

12. The Filer wants to continue to grow its business and intends to issue Securities to other franchised new-vehicle dealers.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Makers to make the decision.

The decision of the Decision Makers under the Legislation is that the Requested Relief is granted provided that the prospectus requirements will apply to the first trade of the Securities, except if made in favour of the Filer in accordance with its constating documents, general by-law and unanimous shareholders' agreement in force as of the Effective Date.

"Jean Daigle"
Director, Corporate Finance