March 17, 2021
For Translation Purposes Only
Real Estate Investment Fund Issuer:
Mori Hills REIT Investment Corporation(Securities Code: 3234)
1-12-32 Akasaka, Minato-ku, Tokyo
Hideyuki Isobe, Executive Director
Asset Manager:
Mori Building Investment Management Co., Ltd.
Hideyuki Isobe, President & CEO
Inquiries: Akira Nemoto
General Manager of Financial Department
TEL: +81-3-6234-3234
MHR Announces Amendment of Part of the Articles of Incorporation andAppointment of Directors
Mori Hills REIT Investment Corporation (hereafter “MHR”) announced a resolution was adopted at a
meeting of MHR’s board of directors held today to refer several matters to MHR’s nineth general
meeting of unitholders, which is scheduled to be held on April 16, 2021. The matters are anamendment of the Articles of Incorporation and the appointment of directors. The details are outlined
below.
Please note that these matters shall take effect only upon approval by vote at MHR’s nineth general
meeting of unitholders.
1. Amendment of Part of the Articles of Incorporation
The reasons for the amendment are as follows:(1) Pursuant to Article 93 of the Act on Investment Trusts and Investment Corporations (Act No.
198 of 1951, as amended; hereinafter the “Investment Trusts Act”), Article 15, Paragraph 1 ofthe current Articles of Incorporation provides to the effect that if a unitholder neither attends a
general meeting of unitholders nor exercises voting rights, such unitholder shall be deemed tohave voted affirmatively to the proposal submitted to the general meeting of unitholders(except for conflicting proposals) (so-called system of deemed affirmative vote).
On the other hand, recent debate over proposals from minority unitholders of REITs hasbrought to light the possibility of significant proposals (such as proposals that could havesubstantial impact on the interests of unitholders and the investment corporation’s governancestructure and for which submission of conflicting proposals is difficult by nature, and proposals
that are highly likely to cause a serious conflict of interest between unitholders and theinvestment corporation’s directors or the asset manager) being approved not based on decisions
that are in accordance with the intentions of the majority of unitholders made through carefulconsideration by unitholders as a whole, if the unitholders who have not exercised their voting
rights to significant proposals by themselves are deemed to have voted affirmatively to thesignificant proposals by application of the abovementioned “deemed affirmative vote.”
Such has led to the conclusion that it would be appropriate in light of the above to makeamendments so that “deemed affirmative vote” does not apply if minority unitholders or MHR
express clear intentions of opposition in advance based on prescribed procedures in the case ofsignificant proposals. Specifically, significant proposals shall refer to (1) Appointment or
dismissal of an executive director or supervisory director, (2) Dissolution, (3) Consent to the1termination of the asset management entrustment agreement by the asset manager, or (4)Approval or termination of the asset management entrustment agreement by the investment
corporation.
From the perspective of impartiality and fairness, those entitled to express opposition inadvance shall be minority unitholders who meet certain eligibility requirements and MHR.
The procedural requirement when expressing opposition shall be (i) In the case of minority
unitholders, to notify MHR (or both MHR and the person who has the right to convene themeeting, if the person who has the right to convene the meeting is not an executive director orsupervisory director) within a certain period, or (ii) In the case of MHR, to state in the notice ofconvocation or announce on its website.
The provisions concerning “deemed affirmative vote” will be amended to provide for certain
exceptions to the application of “deemed affirmative vote” of the abovementioned content andmake necessary corresponding amendments. (Related to proposed amendments of Article 15,
Paragraph 3 and Paragraph 4)(2) In order to further enhance the link between the amount of the asset management fees
payable to the asset manager and the interests of unitholders, the existing Management Fee 1
and Management Fee 2 will be abolished, and a fee based on the amount of distribution perunit will be newly set as Management Fee 1, a fee based on the NAV per unit as Management
Fee 2, and a fee based on the performance of the investment units against the TSE REIT Index(the difference found upon a comparison of the extent of change in MHR’s investment unit
price with the extent of change in the TSE REIT Index (without dividends)) as Management
Fee 3. Provisions will also be added to the effect that necessary adjustments will be made to
the calculation formulas for the management fees in the event that MHR acquires treasury
investment units or in certain other cases in order to neutralize the impact of such cases on the
management fees. In addition, a Merger Fee will be newly introduced for the case where theasset manager researches and evaluates the assets held by the other party to a merger andperforms other merger-related work in the event of a merger to which MHR is party. (Proposed
amendments of Attachment 1)(3) Transitional provisions will be established to clarify the effective date of the amendments
outlined in (2) above. (Proposed amendments of Article 41)(4) In addition to the above, terminology will be revised to address amendments to laws andregulations and such, expressions will be changed, and words and phrases will be revised andsuch as necessary to arrange the text.
(For details of the amendment of the Articles of Incorporation, please refer to the attached “Noticeof Convocation of the Nineth General Meeting of Unitholders.”)
2. Appointment of Directors
For the purpose of adjusting their respective terms of office for one executive director (Hideyuki
Isobe) and two supervisory directors (Masakuni Tamura and Koji Nishimura) of MHR, havetendered their resignation as their respective roles, effective as of the end of MHR’s nineth general
meeting of unitholders.
Consequently, proposals regarding the appointment of one executive director and four supervisory
directors will be submitted.
• Executive director candidate
Hideyuki Isobe (current post) (Note)• Supervisory director candidates
Masakuni Tamura (current post)
Koji Nishimura (current post)
Miyako Ishijima(to be newly elected)
Emi Kitamura(to be newly elected)(Note) Hideyuki Isobe is President & CEO, Mori Building Investment Management Co., Ltd., theasset manager of MHR.

2

(For details of the appointment of directors, please refer to the attached “Notice of Convocation of
the Nineth General Meeting of Unitholders.”)
3. Schedule
March 17, 2021
April 1, 2021
April 16, 2021

Approval of the board of directors on proposals to be submitted to the nineth
general meeting of unitholders
Delivery of the notice of convocation of the nineth general meeting ofunitholders (scheduled)
Holding of the nineth general meeting of unitholders (scheduled)[Attachment]
Change in Asset Management Fee System
Notice of Convocation of the Nineth General Meeting of Unitholders
MHR’s website address is https://www.mori-hills-reit.co.jp/en/3Change in Asset Management Fee System
Change in asset management fee system to further enhance link with the interests of unitholders
and also newly establish Merger Fee
Before change

After changeManagement
Fee 1

Appraised value of operating assets
× 0.2% (upper limit; annual rate)

Distribution per unit (Note 1) × 1,000,000
× 9.0% (upper limit)

Management
Fee 2

Distributable profits
× 2.0% (upper limit)

NAV per unit (Note 2) × 1,000,000
× 0.4% (upper limit; annual rate)
Performance against TSE REIT Index (Note 3)
× Market capitalization of investment units (Note 4)
× 0.15% (upper limit) (Note 5)

Management
Fee 3

Appraised value of specified assets
× 1.0% (upper limit)

Merger Fee(Note 1) Calculated by dividing distributable profits (income before income taxes before deduction of Management Fee 1 and non-deductible consumption tax, etc. related to Management
Fee 1) by the total number of investment units issued and outstanding.
(Note 2) Calculated by dividing the adjusted NAV as of the prior fiscal period closing date (Net assets + Period-end appraised value of operating assets － Book value of operating assets－ Amount of distribution stated in the statement of cash distributions) by the total number of investment units issued and outstanding as of the same date.
(Note 3) Calculated by deducting the percentage change in the TSE REIT Index (without dividends) from the percentage change in MHR’s investment unit price.
(Note 4) Calculated by multiplying the final price of the investment units of MHR on the relevant last business day by the total number of investment units issued and outstanding as of therelevant last business day.
(Note 5) When the amount of Management Fee 3 is negative, Management Fee 3 shall be deemed zero and the absolute value of such shall be deducted from Management Fee 1 orManagement Fee 2.

Management Fee 3:

Management Fee 1 and Management Fee 2:

Estimated upper limit amount before and after the change
Total amount of Management Fee 1 and 2 decreases after the change(million yen)

Specific calculation method and amount estimated based on
the upper limit of the rate
Introduction of fee system completely based on investment unit priceperformance with no setting of upper limit or lower limit

Calculation formula
Percentage change in MHR’s investment unit
price (a)Percentage change in TSE REIT Index (b)Performance against TSE REIT Index[(a)－(b)] (i)Market capitalization (ii)Rate (upper limit) (iii)Management Fee 3 [(i)×(ii)×(iii)](Note) The upper limit amount that is estimated by using the figures in the assumptions
underlying the operating forecasts for the 30th period and 31st period.

29th period+6.35%+10.93%△ 4.58%279,400 mn yen
0.15%△ 19,213,313 yen(Note) The amount that is estimated based on the upper limit of the rate and by using thevarious figures for the 29th period.

*This material provides only an outline of the change in the asset management fee system. For the details of the change in the asset management fee system, please refer to Notice ofConvocation of the Ninth General Meeting of Unitholders

[NOTICE: This Notice of Convocation is a translation of the Japanese original for convenience
purposes only, and in the event of any discrepancy, the Japanese original shall prevail.](Securities Code: 3234)

April 1, 2021

To Our Unitholders

Mori Hills REIT Investment Corporation
1-12-32 Akasaka, Minato-ku, Tokyo
Hideyuki Isobe, Executive Director

Notice of Convocation of the Nineth General Meeting of Unitholders
Mori Hills REIT Investment Corporation (hereafter “the Investment Corporation”) hereby notifies youof and requests your attendance at the Investment Corporation’s nineth general meeting ofunitholders to be held as outlined below.
From the perspective of preventing the spread of the new coronavirus infection, unitholders arerequested to exercise their voting rights in advance in writing as much as possible at the general
meeting of unitholders. Please refrain from visiting the meeting venue regardless of the healthcondition of the unitholders.
Please note that if you are unable to attend, you are entitled to exercise your voting rights by use of avoting card. Please take the time to review the reference documents for the general meeting ofunitholders attached hereto, indicate your vote in favor or against on the enclosed voting card andthen return the voting card to arrive by 5 p.m. on April 15, 2021 (Thursday).
In addition, the Investment Corporation has made the following provisions concerning “deemedaffirmative vote” in Article 15 of the current Articles of Incorporation pursuant to Article 93 (1) of the
Act on Investment Trusts and Investment Corporations.
Accordingly, please keep in mind that if a unitholder neither attends nor exercises voting rights by useof a voting card, such unitholder will be deemed to have voted affirmatively to each of the proposals at
the general meeting of unitholders.
*Current Articles of Incorporation Article 15 (Deemed Affirmative Vote)
1. If a unitholder neither attends a general meeting of unitholders nor exercises voting rights, such
unitholder shall be deemed to have voted affirmatively to the proposal submitted to the general
meeting of unitholders (except for any conflicting proposals if multiple proposals have been
submitted).
2. The number of voting rights held by the unitholders deemed to have voted affirmatively for the
proposal pursuant to the preceding paragraph shall be included in the number of voting rights ofunitholders present.

-1-Details
1. Date and Time

April 16, 2021 (Friday) 10 a.m.

2. Venue

Toranomon Hills Forum Hall B
Toranomon Hills Mori Tower 4F
1-23-3 Toranomon, Minato-ku, Tokyo(Please refer to the venue map at the end of this document.)

3. Agenda of the General Meeting of Unitholders
Matters to be Resolved
Proposal No. 1:

Amendment of Part of the Articles of Incorporation

Proposal No. 2:

Appointment of one Executive Director

Proposal No. 3:

Appointment of four Supervisory Directors[Requests]◎ Upon attending, please kindly submit the enclosed voting card to the reception at
the venue.
◎ If exercising voting rights by proxy, you are entitled to have one other unitholder
with voting rights attend the general meeting of unitholders as your proxy. Pleasesubmit a document certifying the proxy authority, along with the voting card, to thereception at the venue.

[Information]◎ Method of notification of any amendment of reference documents for the general
meeting of unitholders.
If matters to be stated in the reference documents for the general meeting ofunitholders need to be amended, the amended matters will be posted on theInvestment Corporation’s website (https://www.mori-hills-reit.co.jp/en/).
◎ The notice of resolutions will be posted on the Investment Corporation’s website(https://www.mori-hills-reit.co.jp/en/) after the closing of the general meeting ofunitholders in lieu of mailing.
◎ In light of the domestic situation with the new coronavirus, we will take measures
to prevent the spread of infection. For details, please refer to the next page.
◎ We have decided not to organize the “business results briefing” held by theInvestment Corporation’s asset manager, Mori Building Investment Management
Co., Ltd., which we held after the general meeting of unitholders in previous years,
so as to shorten your time in the meeting venue. We would like to ask for your kindunderstanding regarding this arrangement. Regarding the business results for the
fiscalyear

endingJanuary2021,

please

refer

to

the

website(https://www.mori-hills-reit.co.jp/en/) for Presentation Video on current state of theBusinesses, and Presentation Materials.

-2-About the response to the prevention of the spread of the new coronavirus infection
Due to the situation regarding the new coronavirus in Japan, we plan to take the following measuresin order to ensure the safety of the unitholders, and to prevent the spread of the infection of newcoronavirus. We would like to ask for your kind understanding regarding the meting arrangement at
this time.
In addition, depending on changes to the future situation, we may post a notice of changes to themeasures for the prevention of the spread of the coronavirus infection at the general unitholders
meeting on the website (https://www.mori-hills-reit.co.jp/en/). Accordingly, we would like to ask you tocheck our website for any future changes.
Requests to unitholders- You may exercise your voting rights in writing. In consideration of safety, please consider exercising
your voting rights by using the enclosed Voting Rights Exercise Form instead of attending the generalunitholders meeting.
- Unitholders who are considering to attend the general unitholders meeting, are asked to pay
attention to your health, the epidemic situation of the new coronavirus infection as of the date of themeeting, and the information of the government agencies.
- If you are elderly, having underlying medical conditions, or are pregnant, please consider notattending the general unitholders meeting.
- The general unitholders meeting may be postponed due to unavoidable reasons such as sudden
restrictions on the use of the venue, changes to future situations, and so on. We may post a notice ofthe postponement of the general unitholders meeting, and therefore, please check for updates on thewebsite (https://www.mori-hills-reit.co.jp/en/).
Requests to unitholders who will attend the General Unitholders Meeting- At the venue on the day of the meeting, there is a possibility that we may not be able to secure
enough seats because we will have fewer seats available than usual so as to ensure more space among
the unitholders, directors, and operational staff members of Mori hills REIT. If we cannot make a seatavailable, you may not be able to enter the venue. We ask for your understanding of this possible
arrangement in advance.
- Directors, and operational staff members will be wearing masks. We ask for your understanding of
this arrangement.
- If you are attending the meeting, please wear a mask. Please cooperate by disinfecting your handswith alcohol disinfectant located at the reception of the meeting venue. At the reception, we will checkyour temperature. Please note in advance that if a unitholder’s temperature is 37.5°C or more when
we measure the temperature, we may ask the unitholder to refrain from attending the generalunitholders meeting. In addition, please also note in advance that an operational staff member may
come to talk to a unitholder if the unitholder looks unwell, and the staff member may ask such
unitholder to refrain from attending the meeting.
- Due to the above measures, we expect the reception area of the meeting venue to be crowded.
Accordingly, we would like to ask you to arrive at the meeting venue as early as possible.
- Furthermore, we may have additional necessary measures in place in order to maintain the order ofthe general unitholders meeting. We ask for your kind understanding.
Under the current situation, we would like to ask for your kind understanding and cooperation.

-3-

Reference Documents for the General Meeting of Unitholders
Proposals and Reference Matters
Proposal No. 1: Amendment of Part of the Articles of Incorporation
1. Reasons for Amendment(1) Pursuant to Article 93 of the Act on Investment Trusts and Investment Corporations (Act No.
198 of 1951, as amended; hereinafter the “Investment Trusts Act”), Article 15, Paragraph 1 ofthe current Articles of Incorporation provides to the effect that if a unitholder neither attends a
general meeting of unitholders nor exercises voting rights, such unitholder shall be deemed tohave voted affirmatively to the proposal submitted to the general meeting of unitholders(except for conflicting proposals) (so-called system of deemed affirmative vote).
On the other hand, recent debate over proposals from minority unitholders of REITs hasbrought to light the possibility of significant proposals (such as proposals that could havesubstantial impact on the interests of unitholders and the investment corporation’s governancestructure and for which submission of conflicting proposals is difficult by nature, and proposals
that are highly likely to cause a serious conflict of interest between unitholders and theinvestment corporation’s directors or the asset manager) being approved not based on decisions
that are in accordance with the intentions of the majority of unitholders made through carefulconsideration by unitholders as a whole, if the unitholders who have not exercised their voting
rights to significant proposals by themselves are deemed to have voted affirmatively to thesignificant proposals by application of the abovementioned “deemed affirmative vote.”
Such has led to the conclusion that it would be appropriate in light of the above to makeamendments so that “deemed affirmative vote” does not apply if minority unitholders or MHR
express clear intentions of opposition in advance based on prescribed procedures in the case ofsignificant proposals. Specifically, significant proposals shall refer to (1) Appointment or
dismissal of an executive director or supervisory director, (2) Dissolution, (3) Consent to thetermination of the asset management entrustment agreement by the asset manager, or (4)Approval or termination of the asset management entrustment agreement by the investment
corporation.
From the perspective of impartiality and fairness, those entitled to express opposition inadvance shall be minority unitholders who meet certain eligibility requirements and MHR.
The procedural requirement when expressing opposition shall be (i) In the case of minority
unitholders, to notify MHR (or both MHR and the person who has the right to convene themeeting, if the person who has the right to convene the meeting is not an executive director orsupervisory director) within a certain period, or (ii) In the case of MHR, to state in the notice ofconvocation or announce on its website.
The provisions concerning “deemed affirmative vote” will be amended to provide for certain
exceptions to the application of “deemed affirmative vote” of the abovementioned content andmake necessary corresponding amendments. (Related to proposed amendments of Article 15,
Paragraph 3 and Paragraph 4)(2) In order to further enhance the link between the amount of the asset management fees
payable to the asset manager and the interests of unitholders, the existing Management Fee 1
and Management Fee 2 will be abolished, and a fee based on the amount of distribution perunit will be newly set as Management Fee 1, a fee based on the NAV per unit as Management
Fee 2, and a fee based on the performance of the investment units against the TSE REIT Index(the difference found upon a comparison of the extent of change in MHR’s investment unit
price with the extent of change in the TSE REIT Index (without dividends)) as Management
Fee 3. Provisions will also be added to the effect that necessary adjustments will be made to
the calculation formulas for the management fees in the event that MHR acquires treasury
investment units or in certain other cases in order to neutralize the impact of such cases on the
management fees. In addition, a Merger Fee will be newly introduced for the case where theasset manager researches and evaluates the assets held by the other party to a merger andperforms other merger-related work in the event of a merger to which MHR is party. (Proposed
amendments of Attachment 1)-4-

(3) Transitional provisions will be established to clarify the effective date of the amendments
outlined in (2) above. (Proposed amendments of Article 41)(4) In addition to the above, terminology will be revised to address amendments to laws andregulations and such, expressions will be changed, and words and phrases will be revised andsuch as necessary to arrange the text.

-5-

2. Details of Amendment
The details of the amendment are as follows:(Amended parts are underlined)

Current Articles of Incorporation

Proposed Amendment

Article 15 Deemed Affirmative Vote
1.~2. (Omitted)(Newly established)

Article 15 Deemed Affirmative Vote
1.~2. (No change)
3.
The provisions of the preceding two
paragraphs shall not apply where (i) within
two weeks from the earlier of the date on
which
the
Investment
Corporation
announces on its website or the date on
which the person who has the right toconvene the meeting announces in asimilar manner that a proposal concerning
one of the following items will be submitted
to the general meeting of unitholders,unitholders who have continuously held
investment units of at least 1% of the total
number of investment units issued andoutstanding for six months or more notify
the Investment Corporation (or both theInvestment Corporation and the person
who has the right to convene the meeting,if the person who has the right to convene
the meeting is not an executive director orsupervisory director) of their opposition to
the proposal or (ii) the Investment
Corporation states in the notice ofconvocation or announces on its website its
opposition to a proposal concerning one of
the following items.
(1) Appointment or dismissal of an
executive director or supervisory
director(2) Dissolution(3) Consent to the termination of the asset
management entrustment agreementby the asset management company (asdefined in Article 38)(4) Approval or termination of the asset
management entrustment agreementby the Investment Corporation
4.
The provisions of Paragraphs 1 and 2 shallnot apply to proposals to revise this Article.

(Newly established)
Article 34 Method of Asset Valuation, Criteria,
and Record Date
1. (1)~(6) (Omitted)(7) Rights to derivative transactions set forth in
Article 31, Paragraph 4, Item (4)Article 34 Method of Asset Valuation, Criteria,
and Record Date
1.(1)~(6) (No changed)(7) Rights to derivative transactions set forth in
Article 31, Paragraph 4, Item (4)-6-Current Articles of Incorporation

Proposed Amendment(i)

Claims and obligations arising fromtransactions of derivatives listed on afinancial instruments exchange
The valuation shall be made using thevalue calculated based on the closing priceon the financial instruments exchange(meaning the final price; if there is no final
price, the value calculated based on theindicative price, i.e. either the final lowest
indicative offer price published or the final
highest indicative bid price published; ifboth prices are published, the middle rateshall be used). If no closing price isavailable on the relevant date, thevaluation shall be made by the value
calculated based on the most recent closing
price.
(ii) (Omitted)(8)~(9) (Omitted)
2.~3. (Omitted)

Claims and obligations arising fromtransactions of derivatives listed on afinancial instruments exchange
The valuation shall be made using thevalue calculated based on the closing priceon the financial instruments exchange(meaning the final price; if there is no final
price, the value calculated based on theindicative price, i.e., either the final lowest
indicative offer price published or the final
highest indicative bid price published; ifboth prices are published, the middle rateshall be used, the same shall apply
hereinafter). If no closing price is available
on the relevant date, the valuation shall bemade by the value calculated based on themost recent closing price.
(ii) (No changed)(8)~(9) (No changed)
2.~3. (No change)

Article 37 Policy for Cash Distributions(1)(a) (Omitted)(b) In principle, the amount of distribution shallbe the amount determined by theInvestment Corporation that exceeds theamount equivalent to 90% of the amount of
its profit available for distribution as set
forth in Article 67-15(1) of the Act on Special
Measures
Concerning
Taxation.
The
Investment Corporation may accumulate,reserve, or deal otherwise with a long-term
repairreserve,
payment
reserve,
distribution reserve and any other similar
reserves and allowances, etc., as well asother necessary amounts that are deemednecessary to maintain and improve thevalue of the Operating Assets from theDistributable Amount.

Article 37 Policy for Cash Distributions(1)(a) (No change)(b) In principle, the amount of distribution shallbe the amount determined by the Investment
Corporation that exceeds the amountequivalent to 90% of the amount of its profit
available for distribution as set forth in Article
67-15(1) of the Act on Special Measures
Concerning Taxation (if there is any change inthe calculation of this amount due toamendment of laws, regulations, etc., theamount after the change shall be used). The
Investment Corporation may accumulate,reserve, or deal otherwise with a long-term
repair reserve, payment reserve, distribution
reserve and any other similar reserves andallowances, etc., as well as other necessaryamounts that are deemed necessary tomaintain and improve the value of the
Operating Assets from the Distributable
Amount.
(2)~(5) (No changed)(2)~(5) (omitted)(Newly established)(i)

Article 41 Transitional Provisions
The revisions to Attachment 1 of these Articles
of Incorporation shall take effect on August 1,
2021. This Article shall be deleted after thiseffective date.

-7-

Attachment 1
Attachment 1
The method of calculation and timing of
The method of calculation and timing of
payment of the asset management fees
payment of the asset management fees
payable to the Asset Management Company
payable to the Asset Management Company
shall be as follows and the Investment
shall be as follows and the Investment
Corporation shall pay such asset management
Corporation shall pay such asset management
fees by way of remitting to the bank accountfees by way of remitting to the bank accountdesignated by the Asset Management
designated by the Asset Management
Company.
Company.
1. Asset Management Fee System(1) Management Fee 1

1. Asset Management Fee System(1) Management Fee 1

(i)

(i)

Management Fee 1 for the relevant fiscal
period shall be defined as the amountcalculated by multiplying the total amount of
the appraised value of the assets that are
attributable to the Investment Corporation(the “Operating Assets”) as of the prior Fiscal
Period Closing Date by a ratio separately
agreed upon and not exceeding 0.2%,
prorated by dividing the actual number ofdays in the fiscal period by 365 (rounded
down to the nearest whole yen).

Management Fee 1 for the relevant fiscal
period shall be the amount (rounded down to
the nearest whole yen) obtained when theamount of distribution per unit calculated
every Fiscal Period Closing Date ismultiplied by 1,000,000 and by a rate
separately agreed upon of up to 9.0%.

(ii) The total amount of the appraised value of
Operating Assets at the Fiscal Period Closing
Date shall be the total amount of the value of
the Real Estate-Related Assets appraised inaccordance with each item of Article 34(2)hereof.

(ii) The amount of distribution per unit in (i)above shall be calculated by dividing theamount of Distributable Profits calculated
every Fiscal Period Closing Date by the total
number of investment units issued andoutstanding as of the relevant Fiscal Period
Closing Date.

(Newly Established)(iii) The amount of Distributable Profits in (ii)above shall be the amount of income before
incometaxes
beforedeductionofManagement Fee 1 and non-deductible
consumption tax, etc. related to Management
Fee 1 calculated in accordance with generally
accepted corporate accounting practices (incases where there are any losses carriedforward, the amount after deducting theentire amount thereof).

(2) Management Fee 2(2) Management Fee 2

(i)

(i)

Management Fee 2 for the relevant fiscal
period shall be defined as the amountcalculated by multiplying the amount of theDistributable Profits calculated for the
relevant fiscal period by a rate agreed on
separately to a maximum of 2.0% (rounded
down to the nearest whole yen).

-8-Management Fee 2 for the relevant fiscal
period shall be the amount (rounded down to
the nearest whole yen) obtained when theamount of the NAV per unit as of the priorFiscal Period Closing Date multiplied by
1,000,000 and by a rate separately agreed
upon of up to 0.4% is multiplied by the actual
number of days in the fiscal period anddivided by 365.

(ii) The amount of the Distributable Profits shallbe the amount of (a) net income before tax
before subtracting (b) Management Fee 2
calculated in accordance with generally
accepted corporate accounting practices (incases where there are any loss carriedforward, an amount after deducting theentire amount thereof).

(ii) The NAV per unit in (i) above shall becalculated by dividing the adjusted NAV as ofthe prior Fiscal Period Closing Date by the
total number of investment units issued andoutstanding as of the same date.

(Newly Established)(iii) The adjusted NAV in (ii) above shall becalculated in accordance with the following
formula.
Calculation Formula:
Adjusted NAV = (a) + (b)－(c)(Newly Established)

Where:(a) =The amount of net assets on the balance
sheet as of the prior Fiscal Period Closing
Date(b) =The amount obtained by subtracting thebook value of the assets that are attributable
totheInvestment
Corporation(the“Operating Assets”) as of the prior Fiscal
Period Closing Date (the total amount of
items corresponding to Real Estate-Related
Assets on the balance sheet) from theirappraised value at the prior Fiscal Period
Closing Date (the total amount of the value of
the Real Estate-Related Assets appraised inaccordance with each item of Article 34,
Paragraph 2)(c) =The amount of distribution stated in thestatement of cash distributions for the priorfiscal period.
(3) Management Fee 3(i) Management Fee 3 for the relevant fiscal
period shall be the amount (rounded down to
the nearest whole yen) obtained when theperformance of the investment units against
the TSE REIT Index is multiplied by themarket capitalization of the investment units
and by a rate separately agreed upon of up to
0.15%. In the event that the amount ofManagement Fee 3 is not positive,
Management Fee 3 shall be set to zero andthe absolute value shall be further deductedfrom Management Fee 1 or Management Fee2.

-9-(Newly Established)(ii) The performance of the investment units
against the TSE REIT Index in (i) above shallbe calculated in accordance with thefollowing formula.
Calculation Formula:
Performance of investment units against TSE
REIT Index = (a) − (b)Where:(a)=[Final price of investment units of theInvestment Corporation on the relevant
Fiscal Period Closing Date (if there is no final
price on that day, the final price on the mostrecent day prior to that day) − Final price ofinvestment units of the Investment
Corporation on the prior Fiscal Period
Closing Date] ÷ Final price of investment
units of the Investment Corporation on theprior Fiscal Period Closing Date(b)=[Closing price of the Tokyo Stock Exchange(TSE) REIT Index (without dividends) on therelevant Fiscal Period Closing Date − Closing
price of the TSE REIT Index (without
dividends) on the prior Fiscal Period Closing
Date] ÷ Closing price of the TSE REIT Index(without dividends) on the prior Fiscal Period
Closing Date
However, if the closing price of the TSE REIT
Index (without dividends) on the relevant
Fiscal Period Closing Date is not available
due to the TSE not publishing the TSE REIT
Index (without dividends) or any otherreason, the closing price of the TSE REIT
Index (without dividends) shall be calculatedusing the figure calculated by the Investment
Corporationinaccordancewith
thecalculation method of the TSE REIT Index(without dividends) announced at the mostrecent time on the closing date(iii) The market capitalization of the investment
units in (i) above shall be calculated inaccordance with the following formula.
Calculation Formula:Market capitalization of investment units =Final price of investment units of theInvestment Corporation on the relevant
Fiscal Period Closing Date × Total number ofinvestment units issued and outstanding asof the relevant Fiscal Period Closing Date

- 10 -

(3) Acquisition Fee
In cases where the Investment Corporationacquires Specified Assets, the Acquisition Fee
shall be the amount (rounded down to thenearest whole yen) obtained when thepurchase
price
thereof(excluding
consumption tax, local consumption tax, andexpenses arising in connection with theacquisition) is multiplied by a rate separately
agreed upon of up to 1.0% (for acquisition
from related parties (as set forth in the rulesof the Asset Management Company relating
to related-party transactions), 0.1%).

(4) Acquisition Fee
In cases where the Investment Corporationacquires Specified Assets, the Acquisition Fee
shall be the amount (rounded down to thenearest whole yen) obtained when thepurchase
price
thereof(excluding
consumption tax, local consumption tax, andexpenses arising in connection with theacquisition) is multiplied by a rate separately
agreed upon of up to 1.0% (for acquisition
from related parties (as set forth in the rulesof the Asset Management Company relating
to related-party transactions), 0.1%).

(Newly Established)(5) Merger Fee
In the event of an incorporation-type merger
or an absorption-type merger to which theInvestment Corporation is party (including
cases where the Investment Corporation
becomes the corporation surviving in anabsorption-type merger or the corporation
dissolving in an absorption-type merger; the“Merger”), if the Asset Management
Company researches and evaluates the assets
held by the other party to the Merger andperforms other Merger-related work for theInvestment Corporation and the Merger
takes effect, the Merger Fee shall be theamount (rounded down to the nearest wholeyen) obtained when the appraised value ofthe Specified Assets succeeded to or held by
thecorporation
establishedinanincorporation-type merger or the corporation
surviving in an absorption-type merger out of
the Specified Assets held by the other party
to the Merger as of the effective date of the
Merger is multiplied by a rate separately
agreed upon of up to 1.0%.

(Newly Established)

2. Adjustment Clause(1) In the event that the Investment Corporationacquires treasury investment units and holds
undisposed or unretired treasury investment
units at each Fiscal Period Closing Date, thetotal number of investment units issued andoutstanding at each Fiscal Period Closing
Date shall be the number of investment units
excluding the treasury investment units held.

- 11 -

(Newly Established)(2) In the event of a consolidation or split of theinvestment units of the Investment
Corporation on or after August 1, 2021, thetotal number of investment units issued andoutstanding as at the Fiscal Period Closing
Date for the fiscal period in which theconsolidation or split takes place and after
shall be the number of investment units
adjusted to the number of investment units
before the consolidation or split by the
consolidation ratio or split ratio whencalculating Management Fee
1andManagement Fee 2. Regarding Management
Fee 3, when calculating the performance of
the investment units against the TSE REIT
Index, the final price of the investment unitsof the Investment Corporation as at the
Fiscal Period Closing Date for the fiscal
period in which the consolidation or split
takes place shall be calculated by adjustingby the consolidation ratio or split ratio.

- 12 -

(Newly Established)(3) In the event that new investment units areissued through the exercise of new
investment
unit
subscription
rightspertaining
toanallotment
without
contribution to unitholders (a “Rights
Offering”) and the total number ofinvestment units issued and outstanding
increases,
Management
Fee
1
and
Management Fee 2 after the date of issuancepertaining to the Rights Offering shall becalculated by multiplying the allotment ratioby the amount of distribution per unit andNAV per unit. The allotment ratio shall becalculated by dividing the total number ofinvestment units issued and outstanding
immediately after the Rights Offering by
total number of investment units issued andoutstanding immediately before the Rights
Offering, having deducted the deemed
number of units issued at market value (thenumber of investment units increased by the
Rights Offering multiplied by the ratio
obtained by dividing the paid-in amount perunit at the time of exercise of the newinvestment unit subscription rights by themarket price per unit (in the case of a Rights
Offering, the final price of ordinary trading of
the investment units of the Investment
Corporation on the TSE on the last day of theexercise period of the new investment unit
subscription
rightsallotted
without
contribution in the Rights Offering).
Regarding Management Fee 3, whencalculating
theperformanceoftheinvestment units against the TSE REIT
Index, the final price of the investment unitsof the Investment Corporation as of the
Fiscal Period Closing Date for the fiscal
period in which the Rights Offering is
conducted shall be adjusted by multiplying itby the allotment ratio.

2. Timing of Payment of Asset Management Fees(1)~(2) (Omitted)

3. Timing of Payment of Asset Management Fees(1)~(2) (No changed)(Newly Established)(3) Management Fee 3
Within three (3) months after the end of therelevant Fiscal Period Closing Date

(3) Acquisition Fee (Omitted)(4) Acquisition Fee (No changed)(Newly Established)(5) Merger Fee
No later than the last day of the month
immediately following the month which
includes the effective date of the merger.

- 13 -

Proposal No. 2: Appointment of one Executive Director
For the purpose of adjusting the term of office, executive director Hideyuki Isobe has tendered theresignation as the role at the time of the end of MHR’s general meeting of unitholders. Consequently,
the Investment Corporation requests the appointment of one succeeding executive director.
Furthermore, under the provisions of Article 99 (2) of the Investment Trusts Act and the provision of
the proviso of the first sentence of Article 19, Paragraph 2 of the Articles of Incorporation of theInvestment Corporation, the term of office of the executive director in this proposal shall be (i) fromthe date of the assumption of office of the executive director, which is April 16, 2021, and (ii) until thetime of the conclusion of the general meeting of unitholders at which the appointment of an executive
director is proposed and that is held within 30 days from the day immediately following the day on
which two years have passed since the appointment.
In addition, this proposal was submitted with the consent of all supervisory directors at the meeting of
the board of directors held on March 17, 2021.
The candidate for executive director is as follows.

- 14 -

Name(Date of Birth)

Brief Profile
April 1993

Joined Mitsui Fudosan Co., Ltd.

May 2002

MBA from the Wharton School, University of Pennsylvania

June 2002

Joined Colony Capital Asia PacificNovember 2003

Joined Mori Building Urban Fund Management Co., Ltd.
(presently, Mori Building Investment Management Co., Ltd.)

Hideyuki Isobe(December 1, 1970)

April 2005

General Manager, Business Development Department

October 2005

General Manager, Investment Development Department

July 2007
November 2007

General Manager, Investment Advisory Department
Mori Building Co., Ltd.
General Manager, Finance Planning Department,
Finance Division

April 2008

General Manager, Business Development Department,
Finance Division

June 2010

Mori Building Investment Management Co., Ltd.
President & CEO (current post)

April 2011

Mori Hills REIT Investment Corporation
Executive Director (current post)• Number of the Investment Corporation investment units held:
0 units• Fact falling under significant concurrent holding of positions:
President & CEO, Mori Building Investment Management Co., Ltd.
• Particular vested interest in the Investment Corporation:
Not applicable, other than the concurrent holding of positions stated in “Fact falling undersignificant concurrent holding of positions” above.
• Directors and Officers Liability Insurance:
The Investment Corporation has concluded a liability insurance contract with an insurancecompany, by the insurance contract, will compensate partial or all of the damages incurred by the
responsibility for the execution of Executive Director’s duty or receiving a claim relating to the duty.
If the proposal of the appointment of Executive Director candidate is approved, the Executive
Director candidate will be included in the insured of the insurance contract. In addition, we plan to
update with the same content at the next renewal.
The executive director candidate above currently executes the Investment Corporation’s business
operations in general as executive director of the Investment Corporation.

- 15 -

Proposal No. 3: Appointment of four Supervisory Directors
For the purpose of adjusting their respective terms of office, two supervisory directors Masakuni
Tamura and Koji Nishimura have tendered their resignation as their respective roles at the time ofthe end of MHR’s general meeting of unitholders. Consequently, the Investment Corporation requests
the appointment of four succeeding supervisory directors.
Furthermore, pursuant to the proviso of the first sentence of Article 19, Paragraph 2 of the Articles ofIncorporation of the Investment Corporation, the term of office of the four supervisory directors in this
proposal shall be (i) from the date of the assumption of office of the supervisory directors, which is
April 16, 2021, and (ii) until the time of the conclusion of the general meeting of unitholders at which
the appointment of supervisory directors is proposed and that is held within 30 days from the day
immediately following the day on which two years have passed since the appointment.
The candidates for supervisory director are as follows.

- 16 -

Candidate
No.

Name
(Date of Birth)

Brief Profile
April 1977
September 1985

Joined Mitsui Construction Co., Ltd.
Seconded to Mitsui Trust Bank, Ltd. (presently,
Sumitomo Mitsui Trust Bank, Ltd.), Real Estate
Department

October 1986

Joined Sigma Planning Institute, Inc.

February 1990

Registered as Real Estate Appraiser

September 1990

Sigma Planning Institute, Inc.,
Director

April 1997
1

Masakuni Tamura(May 13, 1954)

ARC Brain
President (current post)

April 2004

Meikai University, Faculty of Real Estate
Sciences, Department of Real Estate Sciences andMeikai University, Graduate School of Real Estate
Sciences, Part-Time Lecturer

February 2006

Mori Hills REIT Investment Corporation
Supervisory Director (current post)

January 2018

Japan Medical Solutions Co., Ltd.
Director (current post)

May 2018

Meiji University, the Organization for theStrategic Coordination of Research andIntellectual Properties, Project Professor• Number of the Investment Corporation investment units held:
0 units• Fact falling under significant concurrent holding of positions:
President, ARC Brain• Particular vested interest in the Investment Corporation:
Not applicable.
• Directors and Officers Liability Insurance:
The Investment Corporation has concluded a liability insurance contract with an insurancecompany, by the insurance contract, will compensate partial or all of the damages incurred by the
responsibility for the execution of Supervisory Director’s duty or receiving a claim relating to theduty. If the proposal of the appointment of Supervisory Director candidate is approved, theSupervisory Director candidate will be included in the insured of the insurance contract. In addition,
we plan to update with the same content at the next renewal.

- 17 -

Candidate
No.

Name
(Date of Birth)

Brief Profile
April 1992

Registered as attorney

April 1992

Joined Matsuo Law Offices(presently, Matsuo & Kosugi)

April 2004

Chuo University Faculty of Law
Full-time Lecturer (current post)

November 2004
2

Koji Nishimura(October 6, 1965)

Matsuo & Kosugi
Partner (current post)

December 2014

Seraku Co., Ltd.
External Director (current post)

April 2017

Mori Hills REIT Investment Corporation
Supervisory Director (current post)

June 2018

Ocean Network Express Holdings,Ltd.
Auditor (current post)

October 2020

Plus Alpha Consulting Co., Ltd.,
External Director (current post)• Number of the Investment Corporation investment units held:
0 units• Fact falling under significant concurrent holding of positions:
Partner, Matsuo & Kosugi• Particular vested interest in the Investment Corporation:
Not applicable.
• Directors and Officers Liability Insurance:
The Investment Corporation has concluded a liability insurance contract with an insurancecompany, by the insurance contract, will compensate partial or all of the damages incurred by the
responsibility for the execution of Supervisory Director’s duty or receiving a claim relating to theduty. If the proposal of the appointment of Supervisory Director candidate is approved, theSupervisory Director candidate will be included in the insured of the insurance contract. In
addition, we plan to update with the same content at the next renewal.

- 18 -

Candidate
No.

Name
(Date of Birth)

Brief Profile
April 1990

Registered as attorney

April 1990

Joined Kizawa Fujiwara Law Offices(presently, Hashimoto Sogo Law Offices)3

Miyako Ishijima(December 27,1956)

September 2015

Member of Housing Dispute Examinationcommittee in Tokyo Bar Association (current post)

June 2019

Member of Committee on Housing Dispute
Settlement Agencies in Japan Federation of Bar
Associations (current post)

September 2020

Opened Ishijima Law Office (current post)• Number of the Investment Corporation investment units held:
0 units• Fact falling under significant concurrent holding of positions:Representative, Ishijima Law office• Particular vested interest in the Investment Corporation:
Not applicable.
• Directors and Officers Liability Insurance:
The Investment Corporation has concluded a liability insurance contract with an insurancecompany, by the insurance contract, will compensate partial or all of the damages incurred by the
responsibility for the execution of Supervisory Director’s duty or receiving a claim relating to theduty. If the proposal of the appointment of Supervisory Director candidate is approved, theSupervisory Director candidate will be included in the insured of the insurance contract. In addition,
we plan to update with the same content at the next renewal.

- 19 -

Candidate
No.

Name
(Date of Birth)

Brief Profile
April 1987

4

Emi Kitamura(June 4, 1963)

Joined Yasuda Trust & Banking Co., Ltd.

December 1990

Registered as Real Estate Appraiser

September 1995

Joined Mimura Tax & Accounting

December 1998

Registered as Certified Public Accountant

August 1999

Registered as Certified Public Tax Accountant

October 2005

Mimura Tax & consulting,Partner

September 2010

Mimura Tax & consulting,
Representative (current post)

June 2013

Miyairi Valve Mfg. Co., Ltd.
Auditor (current post)

May 2017

TSUNAGU GROUP HOLDINGS Inc.
Auditor (current post)• Number of the Investment Corporation investment units held:
0 units• Fact falling under significant concurrent holding of positions:Representative,
Mimura Tax & Consulting• Particular vested interest in the Investment Corporation:
Not applicable.
• Directors and Officers Liability Insurance:
The Investment Corporation has concluded a liability insurance contract with an insurancecompany, by the insurance contract, will compensate partial or all of the damages incurred by the
responsibility for the execution of Supervisory Director’s duty or receiving a claim relating to theduty. If the proposal of the appointment of Supervisory Director candidate is approved, theSupervisory Director candidate will be included in the insured of the insurance contract. In addition,
we plan to update with the same content at the next renewal.

- 20 -

Other Reference Matters
Where there are conflicting proposals among the proposals submitted to the general meeting ofunitholders, the provisions of “deemed affirmative vote” provided in Article 93 (1) of the Investment
Trusts Act and Article 15 of the Articles of Incorporation shall not apply to any of the conflicting
proposals.
Please note that none of the proposals of Proposal No. 1, Proposal No. 2 or Proposal No. 3 above fallunder the category of conflicting proposals.

- 21 -

Map to Venue of the General Meeting of Unitholders
Venue:

Toranomon Hills Forum Hall B
Toranomon Hills Mori Tower 4F
1-23-3 Toranomon, Minato-ku, Tokyo
TEL: +81-3-6406-6226

Asset Manager: Mori Building Investment Management Co., Ltd.
TEL: +81-3-6234-3200<Access>
Tokyo Metro Ginza Line
1-minute walk from Exit B2 ofToranomon Sta.
Tokyo Metro Hibiya Line
Directly connected to B1 Exit.
2-minute walk from A1 Exit of
Toranomon Hills Sta (Nakameguro gates).
2-minute walk from A2 Exit of
Toranomon Hills Sta (Kita-Senju gates).
Toei Subway Mita Line
8-minute walk from Exit A3 of
Uchisaiwaicho Sta.

Traffic and parking congestion is expected around the venue.
Please refrain from driving to the venue.