The acquisition of First Capital REIT will entail the receipt of close to 40% percent of the total consideration to its unitholders as recapture

It is proposed that First Capital REIT and its assets be acquired by a KingSett limited partnership and Choice Properties REIT.

Various properties would be sold by REIT subsidiaries (generally LPs or trusts) to Choice purchasers, with the resulting net proceeds distributed to the REIT unitholders.

Prior to the KingSett acquisition, REIT subsidiary properties that were being retained for KingSett would be stepped up by transferring them down to subsidiary LPs. KingSett would then acquire the REIT units for a combination of cash and Choice units (having previously obtained the Choice units by subscribing for them -so that to that extent, Choice in effect will be purchasing its properties for units rather than cash). As has become customary, this REIT unit acquisition would occur in two steps for Ontario LTT reasons.

The transactions, including the making of an election to not have s. 251.2(6) apply to the timing of the loss restriction event resulting from the issuance of REIT units to Choice, and timely winding-up of underlying LPs, would be designed to ensure that all the resulting gains, both recapture of depreciation and taxable capital gains, would be distributed and allocated to the REIT unitholders.

REIT management anticipates that the ordinary income distributed to the REIT unitholders will amount to between $8 and $9 per REIT unit. Unitholders are advised to consider selling their shares on the TSX with a record date prior to the effective date of the Arrangement.

Neal Armstrong. Summary of Information Circular of First Capital Real Estate Investment Trust (the "REIT") in respect of its sale of assets to Choice Properties Real Estate Investment Trust ("Choice") and acquisition by Premier Acquisition LP (the "Purchaser") under Mergers & Acquisitions - REIT Acquisitions – LP Acquisitions of Trusts.