Securities Law & Instruments

Headnote

MutualReliance Review System for Exemptive Relief Applications - Open-endinvestment trust exempt from prospectus and registration requirementsin connection with issuance of units to existing unitholders pursuantto distribution reinvestment plan (DRIP) whereby distributionsof Distributable Income are reinvested in additional units ofthe trust, subject to certain conditions - First trade in additionalunits deemed a distribution unless MI 45-102 - Resale of Securitiesis complied with.

ApplicableOntario Statutory Provisions

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

RulesCited

OSCRule 45-502 - Dividend or Interest Reinvestment and Stock DividendPlans, (1998) 21 OSCB 3685.

MultilateralInstrument Cited

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

INTHE MATTER OF

THESECURITIES LEGISLATION OF

BRITISHCOLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA,

ONTARIO,QUÉBEC, NOVA SCOTIA, NEW BRUNSWICK,

PRINCEEDWARD ISLAND, NEWFOUNDLAND AND LABRADOR, YUKON,

NUNAVUTAND NORTHWEST TERRITORIES

AND

INTHE MATTER OF

THEMUTUAL RELIANCE REVIEW

SYSTEMFOR EXEMPTIVE RELIEF APPLICATIONS

AND

INTHE MATTER OF

IPCUS INCOME COMMERCIAL REAL ESTATE INVESTMENT TRUST

MRRSDECISION DOCUMENT

WHEREASthe local securities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Saskatchewan, Manitoba,Ontario, Québec, Nova Scotia, New Brunswick, Prince EdwardIsland, Newfoundland and Labrador, Yukon, Nunavut and NorthwestTerritories (the "Jurisdictions") has received an applicationfrom IPC US Income Commercial Real Estate Investment Trust ("IPCREIT") for a decision, pursuant to the securities legislationof the Jurisdictions (the "Legislation") that the requirementcontained in the Legislation to be registered to trade in a securityand to file and obtain a receipt for a preliminary prospectusand a final prospectus (the "Registration and Prospectus Requirements")shall not apply to the distribution or resale of units of IPCREIT pursuant to a distribution reinvestment plan (the "DRIP");

ANDWHEREAS under the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commissionis the principal regulator for this application;

ANDWHEREAS IPC REIT has represented to the Decision Makersthat:

1.IPC REIT is an unincorporated open-end investment trust establishedunder the laws of the Province of Ontario by a declaration oftrust dated November 8, 2001, which declaration of trust was amendedand restated on December 19, 2001 (the "Declaration of Trust").

2.The beneficial interests in IPC REIT are divided into a singleclass of units (the "Units") and IPC REIT is authorized to issuean unlimited number of Units. As of the date hereof, 16,645,000Units are presently issued and outstanding.

3.Each Unit represents a proportionate undivided beneficial interestin IPC REIT, and entitles holders of Units ("Unitholders") toone vote at any meeting of Unitholders and to participate prorata in the distributions of IPC REIT.

4.The Units of IPC REIT are currently listed and posted for tradingon the Toronto Stock Exchange (the "TSE").

5.IPC REIT is not a "mutual fund" as described in the Legislationbecause the Unitholders are not entitled to receive on demandan amount computed by reference to the value of a proportionateinterest in the whole or in part of the net assets of IPC REITas contemplated in the definition of "mutual fund" in the Legislation.

6.IPC REIT became a reporting issuer or the equivalent thereof ineach province and territory in Canada on December 13, 2001 whenit obtained a receipt for its prospectus dated December 13, 2001(the "Prospectus"). As of the date hereof, IPC REIT is not indefault of any requirements under the Legislation.

7.IPC REIT was established to continue and expand the commercialreal estate business of IPC (US), Inc. (the "Company") and itssubsidiaries. The Company was founded in 1998 in response to opportunitiesto acquire real estate in the mid-size cities of Louisville, Kentuckyand Wichita, Kansas, and in other urban markets in the Statesof New Hampshire, New York, New Jersey and Massachusetts.

8.IPC REIT's focus will be on the acquisition, management, leasingand redevelopment of office and retail properties in its existingand similarly situated markets primarily in the United States.

9.The objectives of IPC REIT are: (i) to generate stable U.S. dollar-linkedcash distributions on a tax efficient basis; (ii) to grow IPCREIT and increase its Distributable Income (as such term is definedin the Declaration of Trust) through an aggressive acquisitionprogram by accessing the network of relationships and depth ofcommercial property and financing experience offered by Paul Reichmann;and (iii) to enhance the value of IPC REIT's assets and to maximizelong-term Unit value through efficient management.

10.IPC REIT currently intends to make cash distributions to Unitholdersmonthly, equal to, on an annual basis, approximately 80% of itsDistributable Income.

11.IPC REIT intends to establish the DRIP pursuant to which Unitholdersmay, at their option, invest cash distributions paid on theirUnits in additional Units ("Additional Units"). The DRIP willnot be available to Unitholders who are not Canadian residents.

12.Distributions due to participants in the DRIP ("DRIP Participants")will be paid to CIBC Mellon Trust Company in its capacity as agentunder the DRIP (in such capacity, the "DRIP Agent") and appliedto purchase Additional Units. All Additional Units purchased underthe DRIP will be purchased by the DRIP Agent directly from IPCREIT.

13.The price of Additional Units purchased with such cash distributionswill be the volume weighted average of the closing price for aboard lot of Units on the TSE for the five trading days immediatelypreceding the relevant distribution date. Unitholders who electto participate in the DRIP will receive a further distributionof Additional Units equal in value to 3% of each distributionthat is reinvested under the DRIP.

14.No commissions, service charges or brokerage fees will be payableby DRIP Participants in connection with the DRIP and all administrativecosts will be borne by IPC REIT.

15.Additional Units purchased under the DRIP will be registered inthe name of the DRIP Agent, as agent for the DRIP Participants.

16.Unitholders may terminate their participation in the DRIP at anytime by written notice to the DRIP Agent. Such notice, if receivedprior to a distribution date, will have effect for such distribution.Thereafter, distributions payable to such Unitholders will beby cheque.

17.IPC REIT may amend, suspend or terminate the DRIP at any time,provided that such action shall not have a retroactive effectwhich would prejudice the interests of the DRIP Participants.All DRIP Participants will be sent notice of any such amendment,suspension or termination.

18.The distribution of the Additional Units by IPC REIT pursuantto the DRIP cannot be made in reliance on certain registrationand prospectus exemptions contained in the Legislation as theDRIP involves the reinvestment of Distributable Income distributedby IPC REIT and not the reinvestment of distributions of dividends,interest, capital gains or earnings of surplus of IPC REIT.

19.The distribution of the Additional Units by IPC REIT pursuantto the DRIP cannot be made in reliance on registration and prospectusexemptions contained in the Legislation for distribution reinvestmentplans of mutual funds, as IPC REIT is not a "mutual fund" as definedin the Legislation.

20.As of the date hereof, IPC REIT would be considered a "qualifyingissuer" for purposes of Multilateral Instrument 45-102 - Resaleof Securities.

ANDWHEREAS under the System, this MRRS Decision Documentevidences the decision of each of the Decision Makers (collectively,the "Decision");

ANDWHEREAS each of the Decision Makers is satisfied thatthe test contained in the Legislation that provides the DecisionMakers with the jurisdiction to make the Decision has been met;

THEDECISION of the Decision Makers pursuant to the Legislationis that the trades of Additional Units by IPC REIT to the DRIPParticipants pursuant to the DRIP shall not be subject to theRegistration and Prospectus Requirements of the Legislation providedthat:

(a)at the time of the trade IPC REIT is a reporting issuer or theequivalent under the Legislation and is not in default of anyrequirements of the Legislation;

(b)no sales charge is payable in respect of the trade;

(c)IPC REIT has caused to be sent to the person or company to whomthe Additional Units are traded, not more than 12 months beforethe trade, a statement describing:

(i)their right to withdraw from the DRIP and to make an electionto receive cash instead of Units on the making of a distributionof income by IPC REIT; and

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

(d)prior to April 13, 2002 (the date on which IPC REIT will havebeen a reporting issuer for four months), the aggregate numberof Additional Units issued or issuable to beneficial holders ofUnits pursuant to the DRIP shall not exceed 0.75% of the aggregatenumber of Units outstanding at the time of the trade;

(e)disclosure of the initial distribution of the Additional Unitsis made to the relevant Jurisdictions by providing the particularsof the date of the distribution of such Additional Units, thenumber of such Additional Units and the purchase price paid orto be paid for such Additional Units in:

(A)an information circular or take-over bid circular filed in accordancewith the Legislation; or

(B)a letter filed with the Decision Maker in the relevant Jurisdictionby a person or company certifying that the person or company hasknowledge of the facts contained in the letter,

whenIPC REIT distributes such Additional Units for the first timeand thereafter, not less frequently than annually, unless theaggregate number of Additional Units so traded in any month exceeds1% of the Units outstanding at the beginning of a month in whichthe Additional Units were traded, in which case a separate reportshall be filed in each relevant Jurisdiction (other than Québec)in respect of that month within ten days of the end of such month;

(f)except in Québec, the first trade in Additional Units acquiredpursuant to this Decision in a Jurisdiction shall be deemed adistribution or primary distribution to the public under the Legislationof such Jurisdiction unless the conditions in Subsections 2.6(3)or (4) of Multilateral Instrument 45-102 are satisfied; and

(g)in Québec, the first trade (alienation) in Additional Unitsacquired pursuant to this Decision shall be deemed a distributionor primary distribution to the public unless:

(i)at the time of the first trade, IPC REIT is and has been a reportingissuer in Québec for the four months immediately precedingthe trade;

(ii)no unusual effort is made to prepare the market or to create ademand for the Units;

(iii)no extraordinary commission or consideration is paid to a personor company in respect of the trade; and

(iv)if the seller of the Additional Units is an insider of IPC REIT,the seller has reasonable grounds to believe that IPC REIT isnot in default of any requirement of the Legislation of Québec.

March8, 2002.

"PaulMoore"       "R. Stephen Paddon"