Securities Law & Instruments


Mutual Reliance Review System for ExemptiveRelief Applications -- open-end investment trust -- trades oftrust units to existing unit holders under a distribution reinvestmentplan exempt from prospectus and registration requirements --relief subject to conditions.

Applicable Ontario Statutory Provisions

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

Multilateral Instruments Cited

Multilateral Instrument 45-102 Resale of Securities24 OSCB 7029.

Ontario Rules Cited

Ontario Securities Commission Rule 45-502 --Dividend or Interest Reinvestment and Stock Dividend Plans.















WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Saskatchewan, Manitoba, Ontario, Québec,New Brunswick, Nova Scotia, Prince Edward Island ("PEI")and Newfoundland and Labrador (the "Jurisdictions")has received an application (the "Application") fromDundee Real Estate Investment Trust ("Dundee REIT")for a decision under the securities legislation of the Jurisdictions(the "Legislation") that the requirement containedin the Legislation to be registered to trade in a security (the"Registration Requirement") and to file and obtaina receipt for a preliminary prospectus and a prospectus (the"Prospectus Requirement") shall not apply to the distributionof REIT Units, Series A of Dundee REIT ("REIT Units, SeriesA") pursuant to Dundee REIT's distribution reinvestmentand unit purchase plan (the "Plan");

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor the 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 Dundee REIT has representedto the Decision Makers that:

1. Dundee REIT is an unincorporated, open-endedreal estate investment trust established under the laws ofProvince of Ontario pursuant to an amended and restated declarationof trust made as of June 30, 2003. The head office of DundeeREIT is located in Toronto, Ontario.

2. On June 30, 2003, Dundee REIT indirectlyacquired substantially all of the commercial revenue producingproperties of Dundee Realty Corporation ("DRC").The acquisition of such properties was part of a transaction(the "Acquisition") effected, in part, by way ofa statutory plan of arrangement involving DRC and its shareholdersthat resulted in the acquisition of DRC by DRC Holding Corp.,a company currently owned by the former principal shareholderof DRC, Dundee Bancorp Inc., its affiliates and certain membersof management of DRC.

3. Dundee REIT is authorized to issue an unlimitednumber of two classes of units, REIT Units and Special TrustUnits. The REIT Units are issuable in one or more series,of which two series have been designated as "REIT Units,Series A" and "REIT Units, Series B", respectively.

4. Each REIT Unit, Series A and REIT Unit,Series B represents an undivided beneficial interest in DundeeREIT and in distributions made by Dundee REIT, whether ofnet income, net realized capital gains or other amounts and,in the event of termination or winding up of Dundee REIT,in the net assets of Dundee REIT remaining after satisfactionof all liabilities. The distribution entitlement of the REITUnits, Series A and REIT Units, Series B is derived from differentsources. In the case of the REIT Units, Series A, the distributionentitlement is derived from the securities of Dundee PropertiesOperating Trust A held by Dundee REIT while, in the case ofthe REIT Units, Series B, the distribution entitlement isderived from the securities of Dundee Properties OperatingTrust B held by Dundee REIT. However, the trustees of DundeeREIT are required to take all necessary steps to ensure thatthe timing, amount and nature of the distributions on theREIT Units, Series A and the REIT Units, Series B will bethe same.

5. As at July 31, 2003, 9,370,192 REIT Units,Series A, 6,909,245 Special Trust Units and no REIT Units,Series B were issued and outstanding.

6. The REIT Units, Series A are listed onthe Toronto Stock Exchange ("TSX") and commencedtrading on July 2, 2003 under the symbol "D.UN".

7. Neither the REIT Units, Series B nor theSpecial Trust Units are listed or quoted on any exchange ormarket.

8. Dundee Properties Limited Partnership ("DundeeProperties LP") is a limited partnership formed underthe laws of the Province of Ontario, of which Dundee Properties(GP) Inc. ("Properties General Partner") is thesole general partner. All of the outstanding shares of PropertiesGeneral Partner are held by Dundee REIT. The head office ofDundee Properties LP is located in Toronto, Ontario.

9. Dundee Properties LP is authorized to issue(a) two initial units, (b) an unlimited number of LP ClassA Units, (c) an unlimited number of LP Class B Units, issuablein two series, which series have been designated as "LPClass B Units, Series 1" and "LP Class B Units,Series 2", respectively, and (d) such other classes ofpartnership interests as Properties General Partner may decidefrom time to time.

10. As at July 31, 2003, no initial units,9,370,192 LP Class A Units, 6,909,245 LP Class B Units, Series1 and 1 LP Class B Unit, Series 2 were issued and outstanding.

11. All of the LP Class A Units and LP ClassB Units, Series 2 are indirectly held by Dundee REIT.

12. All of the issued and outstanding LP ClassB Units, Series 1 are held by DRC and Dundee ConsolidatedProperties, a limited partnership of which DRC is the solegeneral partner and a limited partner.

13. Each LP Class B Unit, Series 1 may besurrendered for or, if such surrender cannot be effected,indirectly exchanged for one REIT Unit, Series B at any timeby the holder thereof.

14. In connection with the Acquisition, oneSpecial Trust Unit was issued by Dundee REIT in respect ofeach issued and outstanding LP Class B Unit, Series 1 of DundeeProperties LP. The purpose of the Special Trust Units of DundeeREIT is to provide a means by which holders of LP Class BUnits, Series 1 of Dundee Properties LP may vote at meetingsof unitholders of Dundee REIT.

15. The REIT Units, Series A, REIT Units,Series B and the LP Class B Units, Series 1 of Dundee PropertiesLP, together with the Special Trust Units, have economic andvoting rights which are equivalent in all material respects.

16. Dundee REIT is not a "mutual fund"as defined in the Legislation because the holders of the REITUnits, Series A, REIT Units, Series B and Special Trust Unitsare not entitled to receive on demand, or within a specifiedperiod after demand, an amount computed by reference to thevalue of their proportionate interest in the whole or in apart of the net assets of Dundee REIT.

17. Dundee REIT became a reporting issuerin each of the Provinces of Canada where such a concept existson or about June 30, 2003, as a result of the Acquisition,and is not in default of any of its obligations as a reportingissuer. Under securities legislation in British Columbia,Dundee REIT is deemed to have been a reporting issuer as atJune 30, 2003 for the longest period of time that DRC, asa party to the Acquisition, had been a reporting issuer atthe date of the Acquisition.

18. Dundee REIT intends to make monthly cashdistributions to the holders of REIT Units, Series A and REITUnits, Series B on the following basis: (i) not less than80% of Dundee REIT's distributable series A income will bedistributed on or about the 15th day of the eachmonth to the holders of record of REIT Units, Series A asat the last business day of the previous month; and (ii) notless than 80% of Dundee REIT's distributable series B incomewill be distributed on or about the 15th day ofthe each month to the holders of record of REIT Units, SeriesB as at the last business day of the previous month.

19. Dundee REIT intends to establish the Planpursuant to which holders of REIT Units, Series A and REITUnits, Series B, other than such holders who are residentin the United States, may, at their option, invest all ora portion of the cash distributions paid on their REIT Units,Series A or REIT Units, Series B, as the case may be, in additionalREIT Units, Series A ("Additional Units") as analternative to receiving cash distributions.

20. Following enrolment in the Plan by a holderof REIT Units, Series A or REIT Units, Series B (a "PlanParticipant"), all or a designated portion of each monthlycash distribution payable to each Plan Participant will beautomatically paid to Computershare Trust Company of Canadain its capacity as agent under the Plan (the "Plan Agent")and will be applied by the Plan Agent to purchase AdditionalUnits directly from Dundee REIT.

21. Distributable series A income or distributableseries B income, as the case may be, due to Plan Participantswill be automatically reinvested in Additional Units at aprice per Additional Unit to be determined by Dundee REIT,but which is expected to be calculated by reference to theweighted average closing price of REIT Units, Series A onthe TSX for the five trading days immediately preceding therelevant distribution payment date (the "Market Price").Plan Participants will be entitled to receive a further distributionof Additional Units equal in value to 4% of each distributionthat is reinvested under the Plan. No commission, servicecharges or brokerage fees will be payable by the Plan Participantsunder the Plan.

22. The Plan also allows Plan Participantsto make optional cash payments ("Optional Cash Payments")which will be used by the Plan Agent to purchase AdditionalUnits. Each Plan Participant who elects to make Optional CashPayments must invest a minimum of $1,000 per remittance andmay invest up to a maximum of $250,000 per calendar year.The aggregate number of Additional Units that may be purchasedby all Plan Participants with Optional Cash Payments in afinancial year will be limited to 2% of the aggregate numberof REIT Units, Series A and REIT Units, Series B outstandingat the commencement of that financial year.

23. A cash adjustment for any fractional AdditionalUnit held for a Plan Participant will be paid by the PlanAgent upon the withdrawal from or termination by such PlanParticipant of its participation in the Plan, or upon terminationof the Plan, based on a market price to be determined by DundeeREIT.

24. The Plan Agent's fees for administeringthe Plan will be paid by Dundee REIT out of its assets.

25. A Plan Participant may terminate its participationin the Plan at any time by written notice to the Plan Agent.After a termination is processed by the Plan Agent, distributionsdeclared by Dundee REIT will be payable to such holder ofREIT Units, Series A or REIT Units, Series B, as the casemay be, in cash or otherwise in the form declared by DundeeREIT.

26. Dundee REIT reserves the right to amend,suspend or terminate the Plan at any time in its sole discretion,in which case Plan Participants and the Plan Agent will besent written notice thereof in accordance with the Plan.

27. The Legislation in the Jurisdictions providesexemptions from the Registration Requirement and the ProspectusRequirement for trades in securities made pursuant to certaintypes of reinvestment plans. These exemptions are only availablewhere the reinvestment plan entitles an investor to directthat dividends, interest or distributions of capital gainsbe applied to the purchase of additional securities of theissuer or where the issuer distributes securities to its securityholdersas a stock dividend or other distribution out of earningsor surplus. These exemptions are not available to Dundee REITbecause the cash distributions payable to the unitholdersof Dundee REIT are, at least partially, distributions of income,rather than dividends, interest or distributions of capitalgains, and the distribution of Additional Units pursuant tothe Plan are not stock dividends or other distributions outof earnings or surplus.

28. The Legislation in Ontario, British Columbia,Saskatchewan and Nova Scotia also provide exemptions fromthe Registration Requirement and the Prospectus Requirementfor trades in mutual fund securities pursuant to mutual fundreinvestment plans. However, Dundee REIT is not a "mutualfund" under the Legislation because Dundee REIT doesnot determine the redemption price for the REIT Units, SeriesA, REIT Units, Series B or Special Trust Units with referenceto the value of a proportionate interest in the whole or inpart of the net assets of Dundee REIT.

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 pursuantto the Legislation is that the trades of Additional Units byDundee REIT to the Plan Participants pursuant to the Plan shallnot be subject to the Registration Requirement and the ProspectusRequirement of the Legislation, provided that:

(a) at the time of the trade, Dundee REITis a 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 trade;

(c) Dundee REIT has caused to be sent to theperson or company to whom the Additional Units are traded,not more that 12 months before the trade, a copy of the Planwhich contains a statement describing:

(i) the person's or company's right to withdrawfrom the Plan and to make an election to receive cash insteadof Additional Units on the making of a distribution by DundeeREIT; and

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

(d) in the financial year during which thetrade takes place, the aggregate number of Additional Unitsissued pursuant to the Optional Cash Payments shall not exceedtwo percent of the aggregate number of REIT Units, SeriesA and REIT Units, Series B outstanding at the commencementof such financial year;

(e) except in Québec, New Brunswickand PEI, the first trade or resale of Additional Units acquiredpursuant to the Plan in a Jurisdiction shall be deemed tobe a distribution or primary distribution to the public underthe Legislation unless the conditions set out in paragraphs1 through 5 of subsection 2.6(4) of Multilateral Instrument45-102 Resale of Securities are satisfied at the timeof such first trade or resale; and

(f) in Québec, the first trade (alienation)of Additional Units acquired pursuant to the Plan shall bedeemed to be a distribution or primary distribution to thepublic unless:

(i) at the time of the first trade, DundeeREIT is a reporting issuer in Québec and is not indefault on any of the requirements of securities legislationin Québec;

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

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

(iv) the vendor of the Additional Units,if an insider of Dundee REIT, has no reasonable groundsto believe that Dundee REIT is in default of any requirementof the securities legislation in Québec.

September 2, 2003.

"H. Lorne Morphy"
"Wendell S. Wigle"