Atlas Cold Storage Income Trust and Eimskip Atlas Canada, Inc. - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- take-over bid and subsequent business combination -- Rule 61-501 requires sending of information circular and holding of meeting in connection with second step business combination -- target's declaration of trust provides that a resolution in writing executed by unitholders holding more than 662/3% of the outstanding units is valid and binding as if such voting rights had been exercised in favour of such resolution at a meeting of Unitholders -- second step business combination to be subject to minority approval, calculated in accordance with section 8.2 of Rule 61-501 -- relief granted from requirement that information circular be sent and meeting be held

Applicable Ontario Rules

OSC Rule 61-501 Insider Bids, Issuer Bids, Business Combinations and Related Party Transactions, ss. 4.2, 9.1.

August 28, 2006

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO AND QUEBEC

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

-AND-

IN THE MATTER OF THE

UNSOLICITED TAKE-OVER BID FOR

ATLAS COLD STORAGE INCOME TRUST

BY EIMSKIP ATLAS CANADA, INC. (THE "FILER")

MRRS DECISION DOCUMENT

Background

1. The local securities regulatory authority or regulator (the "Decision Maker") in each of Ontario and Quebec (the "Jurisdictions") has received an application from the Filer in connection with an unsolicited take-over bid (the "Offer") for Atlas Cold Storage Income Trust ("Atlas"), for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that the requirement of the Legislation that (a) the Subsequent Acquisition Transaction (as defined below) be approved at a meeting of the unitholders of Atlas ("Unitholders") and, (b) that an information circular be sent to Unitholders in connection with the Subsequent Acquisition Transaction, be waived (the "Requested Relief').

2. Under the Mutual Reliance Review System for Exemptive Relief Applications

2.1. the Ontario Securities Commission (the "OSC") is the principal regulator for this application, and

2.2. this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

3. Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision.

Representations

4. This decision is based on the following representations by the Filer:

4.1. The Filer is a private corporation incorporated under the Canada Business Corporations Act for the purpose of making the Offer and has not carried on any business other than that incidental to making the Offer. It is a wholly-owned indirect subsidiary of Avion Group HF ("Avion"). The Filer's head and registered offices are located at Toronto, Ontario. The authorized share capital of the Filer is an unlimited number of common shares ("Shares").

4.2. Avion is a limited liability company domiciled in Iceland. It was formed to invest in the transportation industry and currently has three business divisions: shipping and logistics; aviation services; and charter and leisure. Its head and registered offices are located at Kopavogur, Iceland.

4.3. The consideration under the Offer will consist of cash at a premium to the market price of the Units at a level to be determined.

4.4. As a result of: i) the fact that the Filer is a wholly-owned subsidiary of Avion; and ii) the terms of a lock-up agreement to be entered into between the Filer, Avion and Kingstreet, Avion and KingStreet are considered joint offerors with the Filer.

4.5. KingStreet is a private investment fund formed under the laws of Manitoba. Its general partner is KingStreet Real Estate Growth GP No. 2 Inc. KingStreet's head and registered offices are located at 161 Bay Street, Suite 3140, BCE Place, Canada Trust Tower, Toronto, Ontario M5J 2S1.

4.6. Avion and KingStreet collectively beneficially own approximately 13.7% of the outstanding Units, based on publicly available information. Accordingly, the Offer technically will be an "insider bid" for the purposes of the Legislation. The Filer intends to rely on the exemption from the requirement to prepare a valuation of Atlas and summarize the valuation in the Circular in subparagraph 2.4(1)2 of OSC Rule 61-501 ("61-501") and subparagraph 2.4(1) 2 of Autorite des marches financiers Regulation Q-27 ("Q-27") and has applied for exemptive relief from the provinces of Canada whose legislation imposes a similar requirement.

4.7. Atlas is an income trust established under the laws of the Province of Ontario. The Units are listed on The Toronto Stock Exchange. Through its operating subsidiary, Atlas operates a Canadian and United States based network of public refrigerated warehouse facilities providing temperature controlled storage, a transportation management services business and a third party logistics management services business. The head and registered offices of Atlas are located at Toronto, Ontario.

4.8. The Offer was made on August 17, 2006. The consideration under the Offer is payable in cash in an amount representing a premium to the market price of the Units as at August 2, 2006 (the day before the Offer was publicly announced). A condition of the Offer, among other conditions, is that there shall have been validly deposited under the Offer, and not withdrawn that number of Units which, together with any Units held as of the expiry time of the Offer by or on behalf of the Filer or any joint offerors, represents at least 66 2/3% of the Unis, on a fully-diluted basis, at the time Units are taken up under the Offer (the "Minimum Condition").

4.9. In the event that the Filer takes up and pays for Units deposited pursuant to the Offer, the Filer may proceed with a compulsory acquisition of the Units not deposited to the Offer (the "Compulsory Acquisition") as permitted by section 13.15 of the amended and restated declaration of trust of Atlas dated June 25, 2001 (the "DOT").

4.10. In the event that the Minimum Condition is satisfied but the Filer cannot proceed with a Compulsory Acquisition and the Filer takes up and pays for Units pursuant to the Offer, the Filer may proceed with an amendment to the DOT to provide that Units shall be redeemable at the option of Atlas for cash (which is the same form as the consideration being paid by the Filer under the Offer) at the Offer price (the "Subsequent Acquisition Transaction"), provided that if the Subsequent Acquisition Transaction is not pursued in such form, the Filer reserves the right, subject to compliance with applicable securities laws, to acquire the assets of Atlas or the balance of the Units as soon as practicable by way of an arrangement, amalgamation, merger, reorganization, consolidation, recapitalization, redemption or other transaction involving the Filer and/or an affiliate of the Filer and/or its subsidiaries and Atlas;

4.11. In order to effect the Subsequent Acquisition Transaction, rather than seeking Unitholder approval at a special meeting of the Unitholders to be called for such purpose, the Filer intends to rely on section 12.10 of the DOT, which specifies that a resolution in writing executed by Unitholders holding more than 66 2/3% of the outstanding Units at any time shall be as valid and binding for all purposes of the DOT as if such Unitholders had exercised at that time all of the voting rights to which they were then entitled under the DOT in favour of such resolution at a meeting of Unitholders.

4.12. Notwithstanding section 12.10 of the DOT, in certain circumstances the Legislation requires that the Subsequent Acquisition Transaction be approved at a meeting of Unitholders called for that purpose.

4.13. To effect the Subsequent Acquisition Transaction, the Filer will obtain minority approval, as that term is defined in the legislation, calculated in accordance with the terms of section 8.2 of OSC Rule 61-501 and section 8.2 of AMF Regulation Q-27 ("Minority Approval"), albeit not at a meeting of Atlas Unitholders, but by written resolution.

Decision

5. Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.

6. The decision of the Decision Makers under the Legislation is that the Requested Relief is granted provided that Minority Approval shall have been obtained, albeit not at a meeting of Atlas Unitholders, but by written resolution.