BMO Nesbitt Burns Inc. & Royal Host Real Estate Investment Trust. - s. 233

UPON the application of BMO Nesbitt Burns Inc. (the "Applicant") to the Ontario Securities Commission (the "Commission") for an order, pursuant to Section 233 of the Regulation, exempting the Applicant from the requirements of clause 224(1)(b) of the Regulation in connection with a distribution (the "Offering") of trust units (the "Trust Units") of Royal Host Real Estate Investment Trust (the "Issuer") to be made by means of a short form prospectus;

AND UPON considering the application and the recommendation of the staff of the Commission;

AND UPON the Applicant having represented to the Commission as follows:

1. The Issuer is a trust governed by the laws of the Province of Alberta.

2. The Issuer is a reporting issuer under the Act. The Issuer's outstanding Trust Units are listed on The Toronto Stock Exchange.

3. The Issuer has entered into an underwriting agreement (the "Underwriting Agreement") with BMO Nesbitt Burns Inc., Raymond James Ltd., National Bank Financial Inc., RBC Dominion Securities Inc. and Scotia Capital Inc. (collectively, the "Underwriters") with respect to the Offering.

4. The Issuer filed a preliminary short form prospectus (the "Preliminary Prospectus") with the Commission and with the securities regulatory authorities in each of the other provinces of Canada on March 8, 2001 in order to qualify the Trust Units for distribution in those provinces.

5. The proportionate percentage share of the Offering to be underwritten by each of the Underwriters is as follows:

BMO Nesbitt Burns Inc. 40%

Raymond James Ltd. 24%

National Bank Financial Inc. 12%

RBC Dominion Securities Inc. 12%

Scotia Capital Inc. 12%

6. The Issuer has a $36.5 million loan agreement with the Bank of Montreal (the "Bank") and the Applicant is an affiliate of the Bank.

7. Of the net proceeds of the Offering, $6.5 million will be used to reduce the indebtedness under the Issuer's loan agreement with the Bank and the balance of approximately $13.5 million will be used to upgrade and reposition its existing properties and for working capital and general trust purposes.

8. The Issuer may be considered a "connected issuer" of the Applicant within the meaning of subsection 219(1) of the Regulation. The Issuer is not a "related issuer" within the meaning of subsection 219(1) of the Regulation.

9. The nature of the relationship among the Issuer, the Applicant and the Bank is described in the Preliminary Prospectus and will be described in the final short form prospectus relating to the Offering (the "Prospectus), in accordance with Item 14.1(a) of Form 44-101F3 to National Instrument 44-101 Short Form Prospectus Distributions ("NI 44-101") .

10. The Prospectus will contain a certificate signed by each Underwriter in accordance with Item 21.2 of Form 44-101F3 to NI 44-101.

11. The decision to issue the Trust Units, including the determination of the terms of the distribution, was made through negotiation between the Issuer and the Underwriters without involvement of the Bank.

12. The Underwriters will not receive any benefit from the Offering other than the payment of their fees in connection therewith.

13. The Underwriters, in connection with the Offering, do not comply with the proportionality requirements of clause 224(1)(b) of the Regulation.

14. The Issuer is not in financial difficulty and is not under and immediate financial pressure to undertake the Offering.

15. The disclosure required by Appendix C to the proposed Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts (the "MJI 33-105") is provided in the Preliminary Prospectus.

16. The Issuer is not a "related issuer" (as such term is defined in MJI 33-105) of the Applicant. In addition, the Issuer is not a "specified party" (as such term is defined in the MJI 33-105).

IT IS ORDERED pursuant to Section 233 of the Regulation that the requirements of clause 224(1)(b) of the Regulation shall not apply to the Applicant in connection with the Offering provided that the information required by Appendix C to MJI 33-105 is contained in the Preliminary Prospectus and Prospectus and the Issuer is not a "specified party" as defined in MJI 33-105 at the time of the Offering.

March 16, 2001.

J.A. Geller, Robert W. Davis