DUNDEE INTERNATIONAL REAL ESTATE INVESTMENT TRUST ...

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“Trust Indenture” means the trust indenture dated at August 3, 2011 between the REIT and the Debenture Trustee; “Trustees” means the trustees of the REIT from time to time; “Trust Liability” has the meaning given to that term under “Risk Factors – Unitholder liability may arise”; “TSX” means the Toronto Stock Exchange; “Underwriting Agreement” means the underwriting agreement dated July 21, 2011 between the REIT, DRC, TD Securities Inc., Scotia Capital Inc., CIBC World Markets Inc., RBC Dominion Securities Inc., BMO Nesbitt Burns Inc., Canaccord Genuity Corp., Dundee Securities Ltd., HSBC Securities (Canada) Inc., Brookfield Financial Corp., GMP Securities L.P. and National Bank Financial Inc.; “Unit” means a unit representing an interest in the REIT (other than Special Trust Units) authorized and issued under the Declaration of Trust; “Unitholders” means holders of Units, but “unitholders”, when used in lower case type, refers to all holders of REIT Units, except where the context is clear that unitholders in lower case type refers to holders of units in a Dundee FCP or Sub-Fund I; “Unit Interest Payment Option” means the right of the REIT to elect to issue and deliver freelytradeable Units to the Debenture Trustee in order to raise funds to satisfy all or any part of its obligations to pay interest on the Debentures in accordance with the Trust Indenture; and “United States” means the United States of America. 10
GENERAL We provide investors with the opportunity to gain exposure to commercial real estate exclusively outside of Canada. As at December 31, 2011, our portfolio consisted of approximately 12.3 million square feet of GLA of office, industrial and mixed use properties across Germany. Dundee Realty Corporation (“DRC”) is our asset manager. Our units are listed on the TSX under the trading symbol DI.UN. The REIT is an unincorporated, open-ended real estate investment trust governed by the laws of Ontario. The REIT is a “mutual fund trust” as defined in the Income Tax Act (Canada), but is not a “mutual fund” within the meaning of applicable Canadian securities legislation. Our head office is located at 30 Adelaide Street East, Suite 1600, Toronto, Ontario, M5C 3H1. We are exempt from the SIFT Rules as long as we comply at all times with our investment guidelines which, among other things, only permit us to invest in properties or assets located outside of Canada. We do not rely on the REIT exception under the Tax Act in order to be exempt from the SIFT Rules. As a result, we are not subject to the same restrictions on our activities as those which apply to Canadian real estate investment trusts that do rely on the REIT exception. This gives us flexibility in terms of the nature and scope of our investments and other activities. Because we do not own taxable Canadian property (as defined in the Tax Act), we are not subject to restrictions on the ownership of our units by non-Canadian investors. The REIT’s investment and operating activities are limited, because our operating activities are carried out by our Subsidiaries and the Dundee FCPs. For simplicity, we use terms in this AIF to refer to our investments and operations as a whole. Accordingly, in this AIF, unless the context otherwise requires, when we use terms such as “we”, “us” and “our”, we are referring to the REIT and its Subsidiaries and the Dundee FCPs, giving effect to our acquisition of the Initial Properties. When we use expressions such as “our investments” or “our operations”, we are referring to the investments and operations of the REIT and its Subsidiaries and the Dundee FCPs as a whole. When we use expressions such as “our properties”, “our portfolio”, “we own” or “we invest in” in relation to our properties, we are referring to our ownership of and investment in our properties indirectly through our Subsidiaries and, in relation to the Initial Properties, through the Dundee FCPs holding ownership interests in the Initial Properties as described in the following paragraph. When we use expressions such as “we operate”, we are referring to our operations through our Subsidiaries and through the Dundee FCPs. When we refer to the “REIT”, we are referring only to Dundee International Real Estate Investment Trust. When we refer to “our initial public offering”, we are referring to the initial public offering of the REIT which was completed on August 3, 2011. Legal title to the Initial Properties is registered in the name of Lorac in the German land registers. Lorac holds such legal title, acting as management company in its own name but for the account of the respective Dundee FCPs. When we refer to “our acquisition” of the Initial Properties or that we “acquired” the Initial Properties, we are referring to: (i) the reallocation of all of the rights, claims and other interests and all risks and obligations of Sub-Fund I in the Initial Properties to the Dundee FCPs; (ii) our acquisition of the fixtures pertaining to the Initial Properties; and (iii) our acquisition of 50% of the voting and equity shares of Lorac (collectively, the “Acquisition”), as described in this AIF. When we refer to the Units held by Dundee Corporation, DRC and LSF, we may refer to the percentage of Units held “on a fully-exchanged basis”, which means giving effect to the exchange of all of the outstanding Exchangeable Notes for Units. 11
Page 1 and 2: DUNDEE INTERNATIONAL REAL ESTATE IN
Page 3 and 4: TABLE OF CONTENTS (continued) REAL
Page 5 and 6: GLOSSARY OF TERMS When used in this
Page 7 and 8: “Debentures” means the 5.5% Deb
Page 9 and 10: “Event of Default” has the mean
Page 11 and 12: “Liability Cap” has the meaning
Page 13: “Redemption Date” has the meani
Page 17 and 18: OUR STRUCTURE The following chart i
Page 19 and 20: GENERAL DEVELOPMENT OF THE BUSINESS
Page 21 and 22: Objectives We are committed to: DES
Page 23 and 24: Competitive Conditions A descriptio
Page 25 and 26: The table below highlights the geog
Page 27 and 28: The following is a summary of other
Page 29 and 30: in Initial Properties which are loc
Page 31 and 32: instrument to cap 10% of the Facili
Page 33 and 34: The following table sets forth, as
Page 35 and 36: Individual Bankruptcies None of our
Page 37 and 38: Committees of the Board of Trustees
Page 39 and 40: incentive programs; (c) assessing t
Page 41 and 42: performance of their duties for whi
Page 43 and 44: Management Agreement or such other
Page 45 and 46: outstanding with respect to all rec
Page 47 and 48: 6. Subsidiaries of the REIT and the
Page 49 and 50: DISTRIBUTION POLICY The following o
Page 51 and 52: all its property; or carrying out a
Page 53 and 54: 1. 90% of the “market price” of
Page 55 and 56: Book-Based System for Units; No Cer
Page 57 and 58: Convertible Debentures The Debentur
Page 59 and 60: Interest Payment Election Unless an
Page 61 and 62: (b) a holder of Debentures, to exer
Page 63 and 64: such Global Debenture as shown on t
Page 65 and 66:
the terms of these agreements in th
Page 67 and 68:
issued and outstanding shares of Lo
Page 69 and 70:
In light of the uncertainty describ
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Dundee FCP Unitholders from the Dun
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Risks inherent in the real estate i
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environmental hazards on our proper
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condition, our ability to make dist
Page 79 and 80:
Changes in government regulations m
Page 81 and 82:
Tax Act. The calculation of FAPI of
Page 83 and 84:
under the Debentures should current
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eason. The Asset Management Agreeme
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We may not be able to manage intern
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subject to the discretion of the Tr
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securities, cash or property into w
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transaction, that has materially af
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PURPOSE SCHEDULE A DUNDEE INTERNATI
Page 97 and 98:
AUDIT RESPONSIBILITIES OF THE COMMI
Page 99 and 100:
(a) the quality, appropriateness an
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27. The Committee shall receive and
Page 103 and 104:
December 31, 2011 City State GLA (s
Page 105 and 106:
Page 107 and 108:
Page 109:
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