CIBC World Markets Inc., RBC Dominion Securities Inc. and TD Securities Inc. and Legacy Hotels Real Estate Investment Trust

Headnote

Section 233 of the Regulation - Certain registrants underwriting a proposed distributionof units by an issuer exempt from clause 224(1)(b) of the Regulation where the issuer isa connected issuer, but not a related issuer, of such registrants.

Applicable Regulations

Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., ss. 219(1),224(1)(b) and 233.

Rules Cited

Proposed Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts (1998), 21O.S.C.B. 781, as amended, (1999), 22 O.S.C.B. 149.

UPON the application of CIBC World Markets Inc. ("CIBC WM"), on behalf of itself,RBC Dominion Securities Inc. ("RBC DS") and TD Securities Inc. ("TDSI") (collectively, the"Applicants") to the Ontario Securities Commission (the "Commission") for an order,pursuant to section 233 of the Regulation, exempting the Applicants from the requirementsof clause 224(1)(b) of the Regulation in connection with the proposed public offering (the"Offering") of units (the "Units") of Legacy Hotels Real Estate Investment Trust (the"Issuer") to be made by means of a short form prospectus, subject to certain conditions.

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

AND UPON the Applicants having represented to the Commission that:

1. The Issuer is an unincorporated closed-end real estate investment trust, governedby the laws of the Province of Alberta. The Issuer has been a reporting issuerunder the Act since October 29, 1997. The Issuer is not on the list of defaultingreporting issuers maintained by the Commission for inspection by the public.

2. The Issuer's principal place of business and location of its senior officers are theProvince of Ontario.

3. As at June 30, 2000, the Issuer had outstanding approximately 59 million Units and$400 million debentures.

4. The Issuer was established to invest in hotels and undertake related activities forthe benefit of its unitholders. The day-to-day operations and administration of theIssuer are conducted by Canadian Pacific Hotel Management Corporation pursuantto an Advisory Agreement with the Issuer dated as of November 10, 1997 inaccordance with operating policies established by the trustees of the Issuer.

5. The Issuer intends to file a preliminary short form prospectus (the "PreliminaryProspectus") shortly and intends to file a final short form prospectus (the"Prospectus") as soon as possible thereafter with the Commission and each of thesecurity regulatory authorities in the other provinces of Canada to qualify theOffering.

6. The Issuer will enter into an underwriting agreement with the Applicants and otherunderwriters yet to be named (collectively with the Applicants, the "Underwriters")whereby the Issuer will agree to issue and sell, and the Underwriters will agree topurchase, the Units.

7. At this time, the exact percentage of the Offering to be underwritten by each of theUnderwriters has not been finally determined, although it is anticipated that theApplicants will underwrite, in the aggregate, approximately 80% of the Offering.

8. The Issuer arranged an acquisition facility (the "Credit Facility") with Royal Bank ofCanada ("RBC"), Canadian Imperial Bank of Commerce ("CIBC") and The TorontoDominion Bank ("TD") (collectively, the "Banks") by agreement dated as ofDecember 24, 1997. Pursuant to the Credit Facility, the commitments of RBC,CIBC and TD are $40 million, $35 million and $25 million, respectively. CIBC WMis a wholly-owned subsidiary of CIBC, RBC DS is a wholly-owned subsidiary ofRBC and TDSI is a wholly-owned subsidiary of TD. In addition, Legacy HotelsCorporation, a wholly-owned subsidiary of the Issuer, has a revolving operatingcredit facility with RBC; as at June 30, 2000, no amounts were outstanding underthis facility. As at June 30, 2000, the Issuer owed $73 million to the Banks pursuantto the Credit Facility (the "Indebtedness"). The approximate allocation of theIndebtedness is as follows:

CIBC: $25.5 million

RBC: $29.2 million

TD: $18.3 million

9. The proceeds of the Offering, before deducting the Underwriters' fees andexpenses of the Offering, are currently expected to be approximately $57 million.It is currently anticipated that the net proceeds of the Offering will be used topartially repay the Indebtedness. This use of proceeds will be disclosed in thePreliminary Prospectus and in the Prospectus.

10. Accordingly, the Issuer may be considered a "connected issuer" of the Applicantswithin the meaning of subsection 219(1) of the Regulation. The Issuer is not a"related issuer" of the Applicants within the meaning of subsection 219(1) of theRegulation.

11. Because the Issuer may be a connected issuer of the Applicants, it is anticipatedthat the underwriting syndicate for the Offering will not comply with theproportionality requirements of clause 224(1)(b) of the Regulation as varied by therule of the Commission entitled In the Matter of the Limitations on a RegistrantUnderwriting Securities of a Related Issuer or Connected Issuer (1997), 20 OSCB1217, as amended.

13. The Applicants are registered under the Act in the categories of "broker" and"investment dealer".

14. The nature and details of the relationship between the Issuer, the Applicants, CIBC,RBC and TD will be described in the Preliminary Prospectus and in the Prospectus.

15. The Applicants will receive no benefit relating to the Offering other than thepayment of their fees in connection therewith.

16. The decision to issue the Units, including the determination of the terms of thedistribution, were made through negotiations between the Issuer and the Applicantswithout the involvement of CIBC, RBC or TD.

18. The Applicants advise that the Issuer is in good financial condition and that it is nota "specified party" as defined in the Proposed Multi-Jurisdictional Instrument 33-105Underwriting Conflicts (" MJI 33-105").

19. The certificate in the Preliminary Prospectus and in the Prospectus will be signedby each of the Underwriters as required by the Act.

20. The disclosure required by Schedule C to MJI 33-105 will be provided in thePreliminary Prospectus and the Prospectus.

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

IT IS ORDERED pursuant to section 233 of the Regulation that the requirementsof clause 224(1)(b) of the Regulation shall not apply to the Applicants in connection withthe Offering provided that the information required by Appendix C to MJI 33-105 iscontained in the Preliminary Prospectus and the Prospectus and the Issuer is not a"specified party" as defined in MJI 33-105 at the time of the Offering.

July 25^th, 2000.

"J. A. Geller"       "J. F. Howard"