Securities Law & Instruments


Mutual Reliance Review System for ExemptiveRelief Applications - closed-end real estate investment trustexempt from prospectus and registration requirements in connectionwith issuance of units to existing unit holders pursuant todistribution reinvestment plan whereby distributions are reinvestedin additional units of the trust, subject to certain conditions- first trade in additional units deemed a distribution unlessmade in compliance with MI 45-102.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 25, 53 and 74(1).

Multilateral Instrument Cited

Multilateral Instrument 45-102 Resale of Securities(2001), 24 OSCB 5522.















WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker")in each of the Provinces of British Columbia, Alberta, Saskatchewan,Manitoba, Ontario, Québec, Nova Scotia, New Brunswick,Prince Edward Island, Newfoundland, and Labrador (the "Jurisdictions")has received an application from Alexis Nihon Real Estate InvestmentTrust (the "REIT") for a decision, pursuantto the securities legislation of the Jurisdictions (the "Legislation")that the requirement contained in the Legislation to be registeredto trade in a security and to file and obtain a receipt fora preliminary prospectus and a final prospectus (the "Registrationand Prospectus Requirements") shall not apply to thedistribution of units of the REIT pursuant to a distributionreinvestment plan to be implemented by the REIT (the "DRIP");

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Commission des valeurs mobilières is the principalregulator for this application;

AND WHEREAS the REIT has representedto the Decision Makers that:

1. The REIT is an unincorporated closed-endinvestment trust established under the laws of the Provinceof Québec pursuant to a contract of trust dated October18, 2002, as it may be amended, supplemented and/or restatedfrom time to time;

2. The REIT is not a "mutual fund"as defined in the Legislation because the unitholders of theREIT (the "Unitholders") are not entitledto receive on demand an amount computed by reference to thevalue of a proportionate interest in the whole or in partof the net assets of the REIT as contemplated in the definitionof 'mutual fund" in the Legislation;

3. The REIT is currently a reporting issuerunder the Legislation. On December 13, 2002, the REIT fileda prospectus (final) (the "Prospectus") inconnection with an initial public offering (the "Offering")of its units (the "Units") in each of theJurisdictions. On the same date, the Commission des valeursmobilières du Québec, on behalf of each DecisionMaker, issued a receipt for the Prospectus;

4. Each Unit represents a proportionate undividedownership interest in the REIT and entitles Unitholders toone vote at any meeting of Unitholders and to participatepro rata in the distributions of the REIT. The REIT is authorizedto issue an unlimited number of Units. As of the date hereof,one Unit is issued and outstanding;

5. The REIT has applied to have the Unitslisted and posted for trading on The Toronto Stock Exchange(the "TSX");

6. The REIT was establish to acquire fromthe Alexis Nihon group of companies, on or prior to the closingof the Offering, directly and through certain associates ofthe REIT, up to twenty-five (25) income-producing office,retail, industrial and mixed-use properties, including a multi-familyresidential property, all located in the Greater MontrealArea, as well as certain other assets related to such properties;

7. The objectives of REIT are to: (i) provideUnitholders with stable and growing cash distributions, payablemonthly and to the maximum extent practicable, income tax-deferred,from the REIT's investments in diversified portfolio of income-producingproperties located primarily in the Greater Montreal Area;and (ii) to improve and maximize Unit value through futureacquisitions of additional income-producing properties andthe ongoing management of the REIT's properties or intereststherein;

8. The REIT intends to distribute to Unitholdersmonthly on or about the 15th of each calendar month(other than January) and on December 31st of eachcalendar year, in cash, not less than 85% of its distributableincome, for the preceding calendar month, and in the caseof distributions made on December 31, for the calendar monththen ended;

9. The REIT intends to establish a DRIP pursuantto which Canadian resident Unitholders may, at their option,invest cash distributions paid on their Units in additionalUnits (the "Additional Units") asan alternative to receiving cash distributions. The DRIP willnot be available to Unitholders who are not Canadian residents;

10. Distributions due to participants in theDRIP (the "DRIP Participants") will be paidto National Bank Trust Inc. in its capacity as agent underthe DRIP (in such capacity, the "DRIP Agent")and applied to purchase Additional Units. All Additional Unitspurchased under the DRIP will be purchased by the DRIP Agentdirectly from the REIT. The price of Additional Units purchasedwith such cash distributions will be the volume weighted averageof the trading price for the Units on the TSX for the fivetrading days immediately preceding the relevant distributiondate. DRIP Participants will receive a further bonus distributionpayable in Units (the "Bonus Units", theAdditional Units and the Bonus Units being hereinafter referredto as "Plan Units") equal in value to 3%of each distribution that is reinvested under the DRIP;

11. No commissions, service charges or brokeragefees will be payable by the DRIP Participants in connectionwith the DRIP and all administrative costs will be borne bythe REIT;

12. The Plan Units will be registered in thename of the DRIP Agent, as agent for the DRIP Participantsin the DRIP. An account will be maintained by the DRIP Agentor its nominee for each DRIP Participant. Accounts under theDRIP will be maintained in the names on which Units were registeredat the time DRIP Participants enrolled in the DRIP;

13. Participation in the DRIP may be terminatedby a DRIP Participant at any time except during the time betweena distribution record date and the corresponding distributiondate, inclusively, by giving written notice to the DRIP Agent;

14. The REIT may amend, suspend or terminatethe DRIP at any time, provided that such action shall nothave a retroactive effect which would prejudice the interestsof the DRIP Participants;

15. Legislation in some of the Jurisdictionsprovides exemptions from the Registration and Prospectus Requirementsfor reinvestment plans. Such examinations are not availableto the REIT because such exemptions are with respect to thedistribution of one or more of the following: (i) dividends;(ii) interest; (iii) distributions of capital gains; or (iv)distributions out of earnings or surplus. Technically, thedistributions payable to Unitholders will be distributionsof income and may not fall within any of these categories;

16. In addition, Legislation in some of theJurisdictions provides exemptions from the Registration andProspectus Requirements for reinvestment plans of mutual funds.However, such exemptions are technically not available tothe REIT because the REIT is not a "mutual fund"as defined under the Legislation of such Jurisdictions;

17. Legislation in the Jurisdictions providesthat the first trade in securities acquired by a DRIP Participantwill be a distribution unless such first trade complies withthe applicable resale conditions contained in the Legislationincluding that the REIT has been, a reporting issuer for atleast 12 months prior to the first trade. Because the REITonly became a reporting issuer on December 13, 2002, Unitholderswho receive Plan Units under the DRIP up to December 13, 2003will be unable to trade the Plan Units they receive underthe DRIP;

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

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

THE DECISION of the Decision Makers pursuantto the Legislation is that the trades of Plan Units by the REITto the DRIP Participants pursuant to the DRIP shall not be subjectto the Registration and Prospectus Requirements of the Legislationprovided that:

(a) at the time of the trade the REIT isa reporting issuer or the equivalent under the Legislationand is not in default of any requirements of the Legislation;

(b) no sales charge is payable in respectof the distributions of Plan Units from treasury;

(c) the REIT has caused to be sent to theperson or company to whom the Plan Units are traded, notmore than 12 months before the trade, a statement describing:

(i) their right to withdraw from the DRIPand to make an election to receive cash instead of AdditionalUnits on the making of a distribution by the REIT; and

(ii) instructions on how to exercise theright referred to in 0;

(d) except in Québec, the first tradeof Plan Units acquired pursuant to the DRIP in a Jurisdictionshall be deemed a distribution or primary distribution tothe public under the Legislation unless the conditions inparagraphs 2 through 5 of subsection 2.6(4) of MultilateralInstrument 45-102 are satisfied; and

(e) in Québec, the first trade (alienation)of Plan Units acquired pursuant to the DRIP shall be deemeda distribution or primary distribution to the public unless;

(i) at the time of the first trade theREIT is a reporting issuer in Québec and is notin default of any of the requirements of securities legislationin Québec;

(ii) no unusual effort is made to preparethe market or to create a demand for the Plan Units;

(iii) no extraordinary commission or considerationis paid to a person or company other than the vendor ofthe Plan Units in respect of the trade; and

(iv) the vendor of the Plan Units, ifin a special relationship with the REIT, has no reasonablegrounds to believe that the REIT is in default of anyrequirements of the securities legislation in Québec.

(f) disclosure of the distribution of thePlan Units is made to the relevant Jurisdictions by providingthe particulars of the date of the distribution of suchPlan Units, the number of such Plan Units and the purchaseprice paid or to be paid for such Plan Units in:

(i) an information circular or take-overbid circular filed in accordance with the Legislation;or

(ii) a letter filed with the DecisionMaker in the relevant Jurisdiction by a person or companycertifying that the person or company has knowledge ofthe facts contained in the letter,

when the REIT distributes such Plan Units forthe first time and thereafter, not less frequently than annually,unless the aggregate number of Plan Units so traded in any monthsexceeds 1% of the Units outstanding at the beginning of a monthin which the Plan Units were traded, in which case a separatereport shall be filed in each relevant Jurisdiction in respectof that month within ten days of the end of such month.

January 10, 2003.

"Josée Deslauriers"