Shareholder Dividend Reinvestment Plan
May 2005 [This plan has been SUSPENDED effective August 7, 2008, please refer to press release].

This Offering Circular is intended for use only in connection with offers and sales of common shares of First Capital Realty Inc. in Canada under the Shareholder Dividend Reinvestment Plan.

Non-registered beneficial holders of common shares of First Capital Realty Inc. (i.e. shareholders who hold their shares through an intermediary such as a broker, bank or other financial institution) should consult with that intermediary to determine the procedures for participation in the Shareholder Dividend Reinvestment Plan. The administrative practices of such intermediaries may vary and accordingly the various dates by which actions must be taken, documentary requirements and terms set out in the Shareholder Dividend Reinvestment Plan may not be the same as those required by such intermediaries. Some intermediaries may require non-registered beneficial shareholders to become registered shareholders in order to participate in the Shareholder Dividend Reinvestment Plan. There may be a fee charged by some intermediaries for non-registered beneficial shareholders to become registered shareholders, which will not be paid by First Capital Realty Inc. or Computershare Trust Company of Canada.

SHAREHOLDER DIVIDEND REINVESTMENT PLAN

Purpose

The Shareholder Dividend Reinvestment Plan (the “Plan”) provides a means for eligible holders of common shares of First Capital Realty Inc. (“First Capital Realty” or the “Corporation”) to invest in common shares of First Capital Realty without payment of brokerage commissions, fees or service charges.

Overview

Under the Plan, common shareholders of First Capital Realty, who are resident in Canada and who hold at least 500 common shares of First Capital Realty, may elect to reinvest all or a portion of their cash dividends in additional common shares of the Corporation. Common shares purchased with reinvested cash dividends are acquired from treasury at a discount of 2% to the weighted average trading price of the common shares on the Toronto Stock Exchange for the five consecutive trading days immediately prior to the dividend payment date (the “Average Trading Price”).

A resident Canadian shareholder needs to hold at least 500 common shares in order to participate in the Plan. An eligible shareholder also needs to maintain, at all times, at least 500 common shares in the Plan in order to continue to qualify as a participant in the Plan.

Under the terms of the Plan:

 participants may invest cash dividends on all or part of the common shares held by them;

participants are not required to pay brokerage commissions or any other costs associated with the Plan;

full investment of all funds is possible since fractional shares are also credited to the participant’s account; and

statements of account are mailed to participants who are registered shareholders each quarter detailing the investments made on their behalf.

Participation

Registered Holders

Except as described below, registered holders of common shares of the Corporation, resident in Canada, are eligible to join the Plan in respect of all or part of their common shares at any time by completing an Authorization Form and sending it to Computershare Trust Company of Canada (the “Plan Agent”). 

A registered holder will become a participant in the Plan with regard to the reinvestment of dividends as of the first dividend record date following receipt by the Plan Agent of a properly completed Authorization Form, provided that the Plan Agent receives the properly completed Authorization Form at least five business days prior to the record date for a particular dividend. If the Plan Agent receives an Authorization Form after the date that is five business days prior to the record date for a particular dividend, that dividend will be paid to the shareholder in the usual manner and participation in the Plan with regard to dividends will commence with the next dividend record date.

Non-Registered Beneficial Holders

Beneficial owners of common shares of the Corporation, resident in Canada, whose shares are registered in another name, such as the name of a broker, bank or other financial institution, may participate in the Plan after transferring such shares into their own name or by directing such intermediary to enroll in the Plan on their behalf. Beneficial owners of common shares of the Corporation should contact the intermediary who holds their shares to provide instructions on how to participate in the Plan. The intermediary will advise such beneficial owners of whether or not it can provide this service. 

In the event that the intermediary is a participant of the Canadian Depository for Securities (“CDS”), the intermediary must provide notice to CDS of enrollment on behalf of the beneficial owner in the prescribed form prior to 4:00 p.m. (Toronto time) on the business day immediately preceding the applicable dividend record date. CDS will, in turn, be required to provide such notice to the Plan Agent prior to 11:00 a.m. on the applicable dividend record date on which the intermediary intends to participate in the Plan.

General

Once a shareholder has enrolled in the Plan, such shareholder’s participation in the Plan is continuous until exit from the Plan by the shareholder or termination or suspension of the Plan by the Corporation.

Participants should note that common shares of the Corporation acquired outside the Plan are not automatically enrolled in the Plan. Participants purchasing additional common shares outside of the Plan are advised to contact the Plan Agent or their intermediary if these shares are to be enrolled in the Plan.

It has come to the Corporation’s attention that certain investment dealers may acquire substantial amounts of the Corporation’s common shares prior to the dividend record date solely for the purpose of exploiting the arbitrage opportunities that may result from the operation of the Plan.  In these circumstances, the Corporation reserves the right to deny access to the Plan to any such investment dealer or other shareholder.

Method of Purchase

Cash dividends payable on the common shares in a participant’s account under the Plan, less any applicable withholding tax, will be applied automatically on each dividend payment date to the purchase of common shares of the Corporation. Common shares will also be acquired with the cash dividends from common shares accumulated in the participant’s account as at each dividend record date.

A participant’s account will be credited with the number of common shares of the Corporation, including fractional shares computed to six decimal places, which is equal to the amounts to be invested for such participant divided by the applicable purchase price. Full investment of funds under the Plan is possible because fractions of common shares as well as whole common shares are credited to participants’ accounts. The rounding of any fractional interest is determined by the Plan Agent using such methods as it deems appropriate in the circumstances.

Common shares issued pursuant to the Plan will initially be registered in the name of Computershare Trust Company of Canada, as Plan Agent for the participants, and will be held by the Plan Agent in an account in the participant’s name. If Computershare Trust Company of Canada ceases to act as the Plan Agent under the Plan, another trustee will be designated by the Corporation.

Price of Common Shares

Common shares of the Corporation will be issued from treasury at a discount of 2% to the Average Trading Price.

Costs

Generally, all administrative costs of the Plan, including any brokerage commissions, fees or other expenses of the Plan Agent incurred for the purchase of common shares for participants under the Plan are borne by First Capital Realty. There are no charges payable by a participant upon termination of participation in the Plan. However, if a participant requests the sale of any or all common shares held for the participant’s account under the Plan, whether or not in connection with terminating the Plan, the participant will pay applicable brokerage commissions and transfer taxes, if any, on all dispositions of common shares effected for his or her account by the Plan Agent.

Statements of Account

The Plan Agent will maintain an account for each registered holder participating in the Plan. A statement of account will be mailed approximately three weeks after each quarterly investment and will set out the amount of cash dividends paid on the participant’s common shares for the quarter, the applicable purchase price per share and the updated total number of common shares being held for the participant in the Plan. These statements are a participant’s continuing record of the cost of purchases and should be kept for tax purposes. In addition, each registered holder participating in the Plan will receive the appropriate information annually for reporting dividends for tax purposes.

Share Certificates

Generally, certificates for common shares purchased through the Plan will be held for registered holders of common shares participating in the Plan and reported on the quarterly statement of account. This service protects against loss, theft or destruction of share certificates. Registered holders who require a share certificate but who do not wish to terminate participation in the Plan may obtain a certificate for any number of whole common shares held in their account by written request to the Plan Agent received no later than five business days prior to the dividend record date in a particular quarter. Any notification received after that point will be processed after the payment date for that quarter.  A certificate will not be issued for a fraction of a share. Plan accounts are maintained in the names in which certificates were registered with the Corporation at the time the participant enrolled in the Plan. Consequently, certificates for whole common shares withdrawn from the Plan will be registered in exactly the same manner when issued. Certificates will generally be issued to participants within three weeks of receipt by the Plan Agent of the written request. Both the new certificated shares and the shares remaining in a participant’s account will continue to receive dividend reinvestment.

Shares being held for a registered holder of common shares participating in the Plan may not be pledged, sold or otherwise disposed of by the participant. A registered holder participating in the Plan, who wishes to pledge, sell or otherwise dispose of such shares, must request that a certificate for the required number of shares be issued before such action may be taken.

Sale of Shares Held in the Plan

A registered holder participating in the Plan, who wishes to sell any number of common shares enrolled in the Plan, may request the Plan Agent to sell on such participant’s behalf a specified number of whole common shares from the account of such participant. When so requested, the Plan Agent will sell the specified number of common shares on behalf of the participant through a stock broker designated by the Plan Agent, as soon as practicable following receipt by the Plan Agent of the participant’s instructions. The proceeds of such sale, less brokerage commissions, administrative fees and applicable taxes, if any, will be paid to the participant by the Plan Agent. Common shares that are to be sold for a participant may be commingled with the common shares of other participants requesting a sale of shares, in which case the proceeds to each participant will be based on the average sale prices and the average brokerage commissions of all common shares so commingled. 

Withdrawal of Shares Held in the Plan

A participant may at any time withdraw common shares enrolled under the Plan, provided, however, that such participant maintains, at all times, at least 500 common shares enrolled under the Plan. If a participant withdraws common shares from the Plan, dividends subsequently declared by First Capital Realty on the withdrawn common shares will be paid to the participant in cash. Only whole numbers of common shares may be withdrawn from the Plan. The Plan Agent must receive written notice of withdrawal of the common shares in the same time frame as described under “Participation – Dividend Reinvestment”. If the Plan Agent does not receive written notice by the deadline referred to above, withdrawal of the participant’s common shares will take place as soon as practicable after the applicable dividend payment date.

Termination of Participation

Participation in the Plan will terminate if the participant ceases to have 500 common shares enrolled in the Plan, as determined five business days in advance of each dividend record date, or if the Corporation terminates the Plan as described under “Amendment, Suspension or Termination of the Plan”.

Participation in the Plan may also be terminated by written notice to the Plan Agent signed by the registered holder or his/her agent. If such notice is not signed by the registered holder, sufficient evidence of another’s authority to act on behalf of the registered holder must be supplied. If notice of termination is not received by the Plan Agent at least five business days before a common share dividend record date, settlement of the participant’s account will not commence until after the next investment has been completed. Generally, a termination will be processed within three weeks of receipt by the Plan Agent of a written request for termination or within three weeks after a payment date. 

When a participant terminates participation in the Plan, or when the Plan is terminated by the Corporation, a registered holder participating in the Plan will receive a certificate for the whole common shares held in such participant’s account and a cheque payment for any fraction of a common share. The cheque payment for any fraction of a common share will be based on the Average Trading Price of the common shares of the Corporation for the immediately preceding investment date.

A registered holder participating in the Plan who, upon termination, wishes to sell all common shares enrolled in the Plan may request in writing that the Plan Agent sell on such participant’s behalf the common shares from the account of such participant. When so requested, the Plan Agent will sell the specified number of common shares on behalf of the participant through a stock broker designated by the Plan Agent, as soon as practicable following receipt by the Plan Agent of the participant’s instructions. The proceeds of such sale, less brokerage commissions, administrative fees and applicable taxes, if any, will be paid to the participant by the Plan Agent. Common shares that are to be sold for registered holder participating in the Plan may be commingled with the common shares of other participants requesting a sale of shares, in which case the proceeds to each participant will be based on the average sale prices and the average brokerage commissions of all common shares so commingled. 

In the event of the death of a participant, participation in the Plan will be terminated upon receipt by the Plan Agent of evidence of the death and of written instructions to terminate participation in the Plan. Such instructions must be received from the person acting in a representative or fiduciary capacity and must be accompanied by satisfactory evidence of proof of appointment and authority to act. Unless otherwise instructed, a certificate for the whole common shares in the participant’s account will be issued in the name of the deceased participant along with a cheque payment for any fraction of a common share in the account. Requests for issuance of a certificate and/or a cheque payment for a fractional share in the name of an estate must be accompanied by appropriate documentation.

After termination of participation in the Plan, all cash dividends will be paid to the shareholder by way of cheque.

Disposition of Shares Held in Certificated Form

Registered holders participating in the Plan may have shares enrolled in the Plan that are held in certificated form (see ‘‘Share Certificates’’).

If the registered holder sells or transfers any of its shares held in certificated form that are enrolled in the Plan, the participant’s enrollment in the Plan will, solely in respect of any such sold or transferred shares, be terminated effective on the date of sale or transfer. Certificated shares still held by such participant and non certificated shares registered in the Plan will not be affected by any such transfer or sale and any dividend on such shares will continue to be reinvested in the Plan.

In the event the Corporation makes available to its registered holders of common shares any rights to subscribe for additional shares or other securities, rights certificates will be forwarded to participants in the Plan in proportion to the number of whole common shares being held for them. Such rights will not be made available for any fraction of a share held for a participant.

Stock Dividends and Stock Splits

With respect to any common shares held for a participant in the Plan which are not in certificated form, any stock dividends (other than stock dividends paid as a result of participation in a stock dividend plan) and any common shares resulting from a stock split will be credited to the participant’s account based upon the number of whole and fractional shares being so held for the participant in the Plan. In connection with common shares held in certificated form by a Plan participant, certificates for common shares resulting from such a stock dividend or stock split on common shares will be mailed directly to the participant in the same manner as to shareholders who are not participating in the Plan.

Shareholder Voting

Whole common shares held for a participant’s account under the Plan on the record date for a vote of shareholders will be voted in the same manner as the participants’ common shares of record are voted, either by proxy or by the participant in person. If a participant is no longer a holder of record of common shares, the whole common shares held for such participant’s account will be voted in accordance with the instructions of the participant. Shares for which instructions are not received will not be voted.

Responsibilities of Corporation and the Plan Agent

Neither the Corporation nor the Plan Agent will be liable for any act undertaken or any omission to act in connection with the operation of the Plan, including, without limitation, any claims for liability for the prices at which common shares of the Corporation are purchased or sold for the participant’s account and the times that such purchases or sales are made. Participants should recognize that neither the Corporation nor the Plan Agent can assure a profit or protect against a loss on common shares purchased under the Plan. 

The Corporation and the Plan Agent will have the right to reject any request regarding the enrollment, withdrawal or termination of participation in the Plan if such request is not received in proper form. Any such request will be deemed to be invalid until any irregularities have been resolved to the satisfaction of the Corporation and/or the Plan Agent.

The Corporation and the Plan Agent are under no obligation to notify any shareholder of an invalid request.

The Corporation and the Plan Agent must comply with all applicable laws now or hereafter in force, which may impose a duty to permit any properly authorized party to have access to, examine and make copies of any records relating to the Plan.

Amendment, Suspension or Termination of the Plan

The Corporation reserves the right to amend, suspend or terminate the Plan at any time on 30 days’ prior notice to the participants and the Plan Agent, but such action will have no retroactive effect that would prejudice the interests of participants. Any amendment to the Plan will be subject to the prior approval of the Toronto Stock Exchange. Participants will be sent written notice of any such amendment, suspension or termination. If the Plan is terminated by the Corporation, participants will receive a certificate for whole common shares being held for them, a cheque payment for any fraction of a common share. In the event of suspension of the Plan by the Corporation, no investment will be made by the Plan Agent following the effective date of such suspension. Common share dividends that are subject to the Plan and that are paid after the effective date of such suspension will be remitted by the Plan Agent to the participants

Notices

All notices required to be given to a participant in the Plan will be mailed to the participant at the most recent address shown on the records of the Plan Agent.

All communications to the Plan Agent and requests for forms or information regarding the Plan should be directed to:

Computershare Trust Company of Canada Attention: Dividend Reinvestment Department

100 University Avenue 9th Floor Toronto, Ontario, Canada M5J 2Y1

Toll-free: 1-(800)-564-6253
Fax: 1-(888)-453-0330
1-(416)-263-9394
Email: service@computershare.com

A copy of this Offering Circular and the Authorization Form may be obtained from First Capital Realty’s website at www.firstcapitalrealty.ca.

Tax Considerations

The following is a general description of the Canadian income tax issues affecting participants in the Plan based on the laws and administrative policies in effect on the date hereof.

Shareholders should consult their own tax advisors about the tax consequences that will result from their participation in the Plan in light of their own particular circumstances.

Under the Income Tax Act (Canada) (the “Tax Act”), the cost of the common shares acquired pursuant to this Plan will equal the amount paid for such common shares. The cost of common shares acquired under the Plan will generally be averaged with the adjusted cost base of all common shares held by the participant as capital property immediately before the acquisition in accordance with the detailed provisions of the Tax Act.

The fact that dividends are reinvested pursuant to the Plan does not affect the tax payable on such dividends by participants.

A participant will not realize any taxable income when receiving a certificate for whole common shares from the Plan whether upon request for such shares from the participant’s account, upon termination of participation by the participant or upon termination of the Plan by the Corporation. However, a participant who holds shares as capital property may realize a capital gain or capital loss on the disposition of whole common shares acquired through the Plan.

When a participant terminates participation in the Plan or when the Plan is terminated by the Corporation, the participant will receive a cheque payment for fractional holdings. A deemed dividend may arise if the cheque payment for a fractional share exceeds the paid-up capital in respect of such fraction and a capital gain or capital loss may also be realized in certain circumstances. Such deemed dividends and capital gains or capital losses are subject to tax under the Tax Act in the same manner as actual dividends paid on common shares or other capital gains or capital losses realized on a disposition of common shares.

Use of Proceeds

The Corporation will receive proceeds under the Plan when common shares are purchased from treasury. The proceeds received by the Corporation from the issue of these common shares under the Plan will be used for the payment of revolving credit facilities, to fund future acquisition and development activities and for general corporate purposes.

Currency

All monetary amounts identified in the Plan are stated in Canadian dollars.