PBB Global Logistics Income Fund and Livingston International Income Fund - MRRS Decision

Headnote

Mutual Reliance Review System -- OSC Rule 61-501 -- 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 Rule

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

October 14, 2005

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 POTENTIAL UNSOLICITED TAKE-OVER BID FOR

PBB GLOBAL LOGISTICS INCOME FUND

BY LIVINGSTON INTERNATIONAL INCOME FUND

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the Decision Maker) in each of Ontario and Quebec (the Jurisdictions) has received an application from Livingston International Income Fund (the Applicant), in connection with a potential unsolicited take-over bid (the Bid) for PBB Global Logistics Income Fund (PBB), for a decision pursuant to the securities legislation of the Jurisdictions (the Legislation) that:

1. the requirement of the Legislation that (a) the Subsequent Acquisition Transaction (as defined below) be approved at a meeting of the unitholders of PBB (PBB Unitholders), and (b) an information circular be sent to PBB Unitholders in connection with the Subsequent Acquisition Transaction, be waived; and

2. the application and this MRRS Decision Document granting waiver of such requirement be maintained confidential until the earlier of:

(a) 90 days from the date of this Decision Document;

(b) such time as the Bid is announced; and

(c) one business day after notice to the Applicant and Stikeman Elliott LLP of the Autorité des marchés financiers du Québec or the Ontario Securities Commission's intention to remove confidentiality

(collectively, the Requested Relief).

Under the Mutual Reliance Review System for Exemptive Relief Applications

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

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

Representations

This decision is based on the following representations by the Applicant:

1. The outstanding PBB Units are held by The Canadian Depository for Securities Limited in book-entry only form.

2. If the Applicant decides to proceed with the Bid, it is currently expected that:

(a) the Bid would be for all of the outstanding PBB Units in consideration for a specified number of trust units of the Applicant (Applicant Units) to represent a premium to the market price of the PBB Units at a level to be determined;

(b) a condition of the Bid, among other conditions, would be that there shall have been validly deposited under the Bid and not withdrawn that number of PBB Units which, together with any PBB Units held as of the expiry time of the Bid by or on behalf of the Applicant or its subsidiaries, represents at least 66 2/3% of the PBB Units, on a fully-diluted basis, at the time PBB Units are taken up under the Bid;

(c) in the event that the Applicant takes up and pays for PBB Units pursuant to the Bid, the Applicant may proceed with a merger transaction which would involve (i) the transfer of all of the assets and liabilities of PBB to the Applicant in exchange for Applicant Units, and (ii) the distribution of such Applicant Units to the PBB Unitholders upon a redemption of their PBB Units on the same basis per PBB Unit as under the Bid, on a taxable basis (and the cancellation of any such Applicant Units received by the Applicant itself) (the Subsequent Acquisition Transaction), provided that if the Subsequent Acquisition Transaction is not pursued in such form, the Applicant reserves the right, subject to compliance with applicable securities laws, to acquire the assets of PBB or the balance of the PBB Units as soon as practicable by way of an arrangement, amalgamation, merger, reorganization, consolidation, recapitalization, redemption or other transaction involving the Applicant and/or an affiliate of the Applicant and/or its subsidiaries and PBB;

(d) in order to effect the Subsequent Acquisition Transaction, rather than seeking PBB Unitholder approval at a special meeting of the PBB Unitholders to be called for such purpose, the Applicant intends to rely on section 12.10 of the Declaration of Trust of PBB, as it may be amended from time to time (the PBB DOT), which specifies that a resolution in writing executed by PBB Unitholders holding more than 66 2/3% of the outstanding PBB Units at any time is for all purposes as valid and binding as if such voting rights had been exercised in favour of such resolution at a meeting of PBB Unitholders;

(e) notwithstanding section 12.10 of the PBB DOT, in certain circumstances the Legislation requires that the Subsequent Acquisition Transaction be approved at a meeting of PBB Unitholders called for that purpose; and

(f) to effect the Subsequent Acquisition Transaction, the Applicant 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 Policy Q-27 (the Minority Approval), albeit not at a meeting of PBB Unitholders, but by written resolution.

Decision

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.

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 PBB Unitholders, but by written resolution.