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WINNIPEG, MB, April 1, 2021 /CNW/ - Marwest Apartment Real
Estate Investment Trust ("Marwest Apartment REIT" or the
"REIT") (TSXV: MAR.P), a capital pool company (as defined
under Policy 2.4 – Capital Pool Companies (the "CPC
Policy") of the TSX Venture Exchange (the "TSXV")), is
pleased to announce that is has called an annual general and
special meeting (the "Meeting") of its holders
("Unitholders") of Class A trust units ("Units" or
"Trust Units") to be held at 9:00
a.m. (Winnipeg time) on
April 30, 2021 at the offices of MLT
Aikins LLP in Winnipeg, Manitoba
for the purpose of electing trustees of the REIT for the ensuing
year, re-appointing the auditors of the REIT and to consider and,
if deemed advisable, approve various resolutions relating to the
REIT's proposed qualifying transaction (the "Qualifying
Transaction") under the CPC Policy, as more particularly
described below. The REIT has established April 1, 2021 as the record date for determining
Unitholders who will be entitled to receive notice and to attend
and vote at the Meeting.
The REIT is also pleased to announce further particulars with
respect to the proposed Qualifying Transaction to be carried out
pursuant to the terms of a qualifying transaction agreement dated
February 15, 2021 (the "Qualifying
Transaction Agreement") among the REIT and certain supporting
security holders of the Target LPs (as defined below), which was
previously announced by the REIT by press release dated
February 16, 2021.
Target LPs and Target Properties
The proposed Qualifying Transaction involves, among other
things, the REIT's indirect acquisition of two limited partnerships
(the "Target LPs") owning an aggregate of two multi-family
residential properties comprising a total of 251 suites in
Winnipeg, Manitoba (the "Target
Properties").
The first Target LP is Marwest Apartments I L.P. ("Kenwood
LP"), a Manitoba limited
partnership which owns "Kenwood Court", a property consisting of
two (2) three-storey buildings comprising 103 units located at
333-337 Warde Avenue in Winnipeg,
Manitoba (the "Kenwood Property"). Constructed
in 2006, the Kenwood Property has a suite mix of 101 two-bedroom
suites and two (2) three-bedroom suites.
The second Target LP is Marwest Apartments VII L.P. ("Brio
LP"), a Manitoba limited
partnership which owns two complexes comprising a total of 148
units located at 160 Eaglewood Drive ("Brio I") and 140
Eaglewood Drive ("Brio II") in Winnipeg, Manitoba (the "Brio
Property"). Constructed in 2018, Brio I consists of five
(5) two-storey buildings comprising of 74 units located at 160
Eaglewood Drive in Winnipeg. Constructed in 2019, Brio II
consists of five (5) two-storey buildings comprising 74 units
located at 140 Eaglewood Drive in Winnipeg, Manitoba. The suite mix of the
Brio Property is comprised of 40 one-bedroom suites, 58 two-bedroom
suites, 44 three-bedroom suites and six (6) four-bedroom
suites.
The only material assets and liabilities of Kenwood LP relate to
the Kenwood Property. As of March 31,
2021, the sole mortgage loan secured against the Kenwood
Property will have a remaining principal amount of $12,507,853. It is on a 10-year term
expiring on May 1, 2030, bearing
interest at a fixed annual rate of 1.71%, and is amortized over a
25-year period.
The only material assets and liabilities of Brio LP for which
the REIT will be responsible for relate to the Brio Property. There
are two first charge mortgage loans, one secured against Brio I and
the other secured against Brio II. As of March 31, 2021 the mortgage loan secured against
Brio I will have a remaining principal amount of $12,949,717. It is on a 5-year term expiring on
October 1, 2023, bearing interest at
a fixed annual rate of 4.014%, and is amortized over a 30-year
period. As of March 31, 2021
the mortgage loan secured against Brio II will have a remaining
principal amount of $17,170,695.
It is on a 10.5-year term expiring on June 1, 2030, bearing interest at a fixed annual
rate of 2.62%, and is amortized over a 40-year period.
Target LP Historical Financial Information
The following is a summary of the aggregate assets, liabilities,
revenues and net profits / losses of the Target LPs as at and for
the fiscal years ended December 31,
2020 and December 31,
2019:
Target
LPs
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December 31,
2020
(audited)
|
December 31,
2019
(audited)_
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Assets
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$57,469,192
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$57,888,279
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Liabilities
|
$43,096,517
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$43,876,534
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Revenues
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$4,458,523
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$3,896,858
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Net Profit /
Loss
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$1,300,729
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$2,049,403
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Separate audited annual financial statements of the Target LPs
for the fiscal years ended December 31,
2020 and December 31, 2019
will be included in the management information circular to be sent
to Unitholders in connection with the Meeting.
Qualifying Transaction
Subject to various conditions of closing, the REIT, through a
subsidiary limited partnership (the "Partnership") that will
be wholly-owned by the REIT immediately prior to the closing of the
Qualifying Transaction, has agreed to acquire:
(a)
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all of the issued and
outstanding limited partnership units ("Kenwood LP Units")
of Kenwood LP from the holders thereof (each, a "Kenwood LP
Unitholder" and, collectively, the "Kenwood LP
Unitholders"), for an aggregate purchase price of $8,192,147
(the "Aggregate Kenwood LP Purchase
Price"). The Aggregate Kenwood LP Purchase Price
reflects the value attributed to the Kenwood Property by the
Kenwood LP Unitholders who are parties to the Qualifying
Transaction Agreement in the amount of $20,700,000.00, less
the existing mortgage indebtedness on the Kenwood Property as at
March 31, 2021 in the amount of $12,507,853; and
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(b)
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all of the issued and
outstanding limited partnership units ("Brio LP Units") of
Brio LP from the holders thereof (each, a "Brio LP
Unitholder" and, collectively, the "Brio LP
Unitholders") for an aggregate purchase price of $3,379,588
(the "Aggregate Brio LP Purchase Price"), which
reflects the value attributed to the Brio Property by the Brio LP
Unitholders who are parties to the Qualifying Transaction Agreement
in the amount of $33,500,000.00, less the existing aggregate
mortgage indebtedness in respect of the Brio Property as at March
31, 2021 in the amount of $30,120,412.
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The Aggregate Kenwood LP Purchase Price and the Aggregate Brio
LP Purchase Price (collectively, the "Aggregate Purchase
Price") will be satisfied entirely through the issuance of
Class B limited partnership units ("Exchangeable LP Units")
of the Partnership at a deemed value of $1.00 per Exchangeable LP Unit or, in the case of
holders of Kenwood LP Units or Brio LP Units who are individuals
and do not transfer their Kenwood LP Units or Brio LP Units to a
taxable Canadian corporation prior to closing, in trust units of
the REIT ("Trust Units") at a deemed value of
$1.00 per Trust Unit. An
aggregate of 11,571,736 Exchangeable LP Units and/or Trust Units
will be issued in satisfaction of the Aggregate Purchase Price.
Each Exchangeable LP Unit will entitle the holder thereof to
exchange it at any time for one Trust Unit and will be accompanied
by a special voting unit (a "Special Voting Unit") of the
REIT entitling the holder thereof to receive notice of, attend and
vote at meetings of holders of Trust Units (and Special Voting
Units). Each Kenwood LP Unitholder and each Brio LP
Unitholder receiving Exchangeable LP Units will be entitled to
elect to "roll in" their Kenwood LP Units or Brio LP Units to the
Partnership on a tax-deferred basis by way of a joint election with
the Partnership under the Income Tax Act (Canada).
The Partnership will also acquire all of the shares of the
general partners of the Target LPs for a nominal sum.
Non-Arm's Length Qualifying Transaction
The Qualifying Transaction is a "related party transaction"
within the meaning of TSXV Policy 5.9 ("TSXV Policy 5.9")
and a Non-Arm's Length Qualifying Transaction within the meaning of
the CPC Policy and closing is subject to receipt of Unitholder
approval, including on a "majority of the minority" basis, at a
special meeting of Unitholders.
Marwest Asset Management Inc. ("Marwest") a company
controlled by Mr. William Martens,
Chief Executive Officer and a trustee, and Mr. Armin W. Martens, Executive Vice-President,
Cornelius W.V. Martens and
Karl Martens and owned equally by
their respective families (collectively, the "Marwest Management
Group"), and the REIT will enter into an asset management and
property management agreement (the "Management Agreement")
effective on the closing of the Qualifying Transaction.
In addition to owning 100% of the shares of the general partner
of Kenwood LP and 50% of the shares of the general partner of Brio
LP, members of the Marwest Management Group and other members of
the Martens family (the "Marwest Group") own an aggregate of
125 Kenwood LP Units, representing 30.34% of the outstanding
Kenwood LP Units and an aggregate of 6,000 Brio LP Units,
representing 50% of the outstanding Brio LP Units, all of which
will be sold to the Partnership in consideration for Exchangeable
LP Units and Trust Units.
Name
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Relationship
|
Ownership % of
Kenwood LP
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Ownership % of
Brio LP
|
Exchangeable LP
Units/Trust Units eligible to receive
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TESC Enterprises
Inc.
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Owned by immediate
family members and Associates of Cornelius W.V. Martens
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6.07%
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12.5%
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919,509
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WCM Holdings
Inc.
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Owned by William
Martens
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9.71%
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7.5%
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1,048,802
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Jakorp Investments
Inc.
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Owned by Karl
Martens
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0%
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5.0%
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168,965
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Colorado Enterprises
Inc.
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Owned by immediate
family members of William Martens
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4.85%
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0%
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397,677
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Mann Realty Advisors
Inc. (1)
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Owned by immediate
family members of Armin W. Martens and Karl Martens and Associates
of such family members
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0%
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5.0%
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168,965
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VEM Holdings
Inc.
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Owned by an immediate
family member of William Martens
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9.71%
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5.0%
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964,319
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Zugspitze Holdings
Ltd.
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Owned by Armin W.
Martens
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0%
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5.0%
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168,965
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Marwest Apartments VI
G.P.
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50% owned by
Associates of William Martens, Armin W. Martens, Cornelius W.V.
Martens and Karl Martens
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0%
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>0.01%
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282
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Corwin Investments
Inc.
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Owned by an immediate
family member of Armin W. Martens
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0%
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5.0%
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168,965
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Rick
Jansen
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Immediate family
member of Armin W. Martens
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0%
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5.0%
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168,965
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(1)
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Each of Armin W.
Martens and Karl Martens are also beneficiaries of a discretionary
trust that holds an indirect interest in Mann Realty Advisors
Inc.
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As a result of the Qualifying Transaction:
(a)
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in the event of the
completion of a private placement of a minimum of 500,000 Trust
Units, without factoring in any purchases by the Marwest Group
thereunder, the Marwest Group will control and/or beneficially own
approximately 4,915,273 Trust Units and Exchangeable LP Units
representing approximately 35.43% of the issued and outstanding
Trust Units on a fully diluted basis (assuming the exchange of all
Exchangeable LP Units); and
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(b)
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in the event of the
completion of a private placement of a maximum of 1,000,000 Trust
Units, without factoring in any purchases by the Marwest Group
thereunder, the Marwest Group will control and/or beneficially own
approximately 4,915,273 Trust Units and Exchangeable LP Units,
representing approximately 34.20% of the issued and
outstanding Trust Units on a fully diluted basis (assuming the
exchange of all Exchangeable LP Units).
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No finder's fee or commission will be paid as consideration for
identifying the Target LPs and no deposit, advance or loan was paid
or will be paid to the Target LPs or any Kenwood LP Unitholder or
Brio LP Unitholder in connection with the Qualifying
Transaction.
Independent Trustee Review and Approval Process
Mr. Luke Cain and Ms.
Kim Riley, the independent trustees
of the REIT as at the date of the Qualifying Transaction Agreement,
negotiated and approved the terms of the Qualifying Transaction
Agreement and the key terms of the agreements to purchase the
Kenwood LP Units and Brio LP Units and the Management
Agreement.
Independent Appraisals of Target Properties
Although the REIT was not required to obtain a formal valuation
(within the meaning of TSXV Policy 5.9) of the Kenwood LP Units or
the Brio LP Units, the REIT obtained an independent appraisal for
each of the Kenwood Property and the Brio Property which support
the consideration to be paid for Kenwood LP and Brio LP. The
independent appraisals are subject to customary assumptions,
qualifications and limitations and will be summarized in the
management information circular to be prepared in connection with
the annual and special meeting of unitholders to be called for the
purpose of approving the Qualifying Transaction.
Management Agreement
Pursuant to the Management Agreement, Marwest will be appointed
to provide asset management services and property management
services to the REIT for an initial term of 10 years, with five (5)
year successive renewals thereafter, subject to earlier termination
in accordance with its terms.
Pursuant to the Management Agreement, Marwest will be entitled
to appoint the executive officers of the REIT from time to time.
The Management Agreement will also provide Marwest with the right
to nominate the Chief Executive Officer to the board of trustees of
the REIT and one (1) additional trustee where Marwest and its
ownership group own 10% or more of the outstanding voting
securities of the REIT and the board of trustees is comprised of
five (5) members or more.
The Management Agreement entitles Marwest to receive, in its
capacity as asset manager: (i) commencing when the REIT completes
its first acquisition following the completion of the Qualifying
Transaction, an annual base asset management fee equal to 0.25% of
the Gross Book Value (as defined in the REIT's declaration of
trust), payable monthly; (ii) commencing with the REIT's first
acquisition following the completion of the Qualifying Transaction,
an acquisition fee in respect of property acquisitions based on a
sliding scale of between 1.0% of the purchase price and 0.5% of the
purchase price; (iii) commencing for the fiscal year ended
December 31, 2023, an incentive fee
equal to 15% of the year-over-year increase in adjusted funds from
operations (AFFO) per unit from the AFFO per unit as at the end of
the prior year, multiplied by the number of outstanding units
(subject to an annual cap in a fiscal year equal to 100% of the
base asset management fee payable in the applicable fiscal year);
and (iv) a construction management fee equal to 5.0% of hard
construction costs up to $1 million
and 4.0% of hard constructions costs above $1 million. The construction management fee is
subject to a tender process and periodic review by the independent
trustees of the REIT. The Management Agreement also entitles
Marwest to receive a fee equal to 4.0% of gross revenues as a
property management fee.
The Management Agreement may be terminated by the REIT in
respect of asset management and/or property management services in
certain circumstances, including: (i) at the end of the initial
term or each renewal term for cause and with the approval of a
majority of the independent trustees; or (ii) upon a decision by a
majority of the independent trustees to internalize services at any
time (including during a term) after the REIT reaches $750 million in market capitalization, provided
that the REIT enters into executive contracts with each of the
REIT's executive officers on market terms, and in either case upon
payment of a fee equal to the 12 months trailing fees paid in
respect of the terminated services.
Marwest may terminate the agreement upon a defined change of
control of the REIT and in such event shall be entitled to a
termination payment equal to three (3) times the 12 months trailing
fees.
Subject to approval of disinterested unitholders, the REIT will
reserve Trust Units equal to 10% of the issued and outstanding
Trust Units and Exchangeable LP Units upon the completion of the
Qualifying Transaction for the issuance to Marwest, which will have
the right to elect to receive up to 50% of any payment of its
annual base asset management fee and up to 50% of any payment of
any incentive fee in Trust Units, at a price equal to the
twenty-day volume-weighted average trading price of the Trust Units
on the payment date (the "20-Day VWAP"), provided that until
the market capitalization of the Trust Units reaches $20 million, the price shall be the greater of
the 20-Day VWAP and the price that Trust Units were issued at the
last public offering or private placement of Trust Units.
To secure an acquisition pipeline, the REIT may from time to
time provide real estate entities owned or controlled by Marwest or
other companies comprising the Marwest Group of Companies with
mezzanine loans in respect of development properties. The
terms and conditions of any mezzanine loan and the rights granted
to the REIT in connection with any such loan will be negotiated
between the independent trustees of the REIT and Marwest at the
time that a mezzanine loan is agreed to and will be subject to all
applicable regulatory and unitholder approvals.
Executive Officers of the REIT and of Marwest
Following the Qualifying Transaction, William Martens will continue as Chief Executive
Officer of the REIT, Armin W.
Martens will continue as Executive Vice-President of the
REIT and Jennifer Nazimek will
continue as Chief Financial Officer of the REIT. Mr.
Cornelius W.V. Martens, an executive
officer of Marwest, will provide assistance to the executive
officers of the REIT, including with respect to investor
relations.
The directors and executive officers of Marwest are William Martens (Director and Chief Executive
Officer), Armin W. Martens (Director
and Executive Vice-President), Jennifer
Nazimek (Chief Financial Officer), Cornelius W.V. Martens (Executive
Vice-President) and Karl Martens
(Executive Vice-President).
Trustees of the REIT
The current Trustees, being Mr. William
Martens, Mr. Cornelius
Martens, Mr. Luke Cain and
Mr. Jason Pellaers will be nominated
for re-election as Trustees for the ensuing year.
The following are biographies of all of the executive officers
and Trustees of the REIT:
William Martens – Winnipeg, Manitoba – Trustee and Chief
Executive Officer
Mr. William Martens, age 45, of
Winnipeg, Manitoba, is a director
and executive officer of various companies comprising the Marwest
Group of Companies, including Marwest Management Canada Ltd., a
property management company, Marwest Construction Ltd., a
construction company, as well as various corporations which act as
general partners of limited partnerships sponsored by the Marwest
Group of Companies focused on the acquisition and/or development of
multi-family residential properties, assisted living retirement
residences and commercial properties. Mr. William Martens also worked in the commercial
real estate financing industry for five years. William Martens has extensive experience in the
real estate industry as a result of his senior roles at the Marwest
Group of Companies since 2015 and obtained a Bachelor of Commerce
(Honours) degree from the University of
Manitoba.
Jennifer Nazimek –
Winnipeg, Manitoba – Chief
Financial Officer and Corporate Secretary
Ms. Jennifer Nazimek, age 42, of
Winnipeg, Manitoba, is the Chief
Financial Officer of various companies comprising the Marwest Group
of Companies, including Marwest Management (Canada) Ltd., a property management company,
Marwest Construction Ltd., a construction company, as well as
various corporations which act as general partners of limited
partnerships sponsored by the Marwest Group of Companies focused on
the acquisition and/or development of multi-family residential
properties, assisted living retirement residences and commercial
properties. Ms. Nazimek holds a Chartered Professional Accountant
and Chartered Accountant designation. Ms. Nazimek has extensive
experience in the real estate industry as a result of her role as
Chief Financial Officer of the Marwest Group of Companies and
obtained a Bachelor of Commerce (Honours) degree from the
University of Manitoba.
Armin W. Martens –
Winnipeg, Manitoba – Executive
Vice-President
Mr. Armin W. Martens, age 35, of
Winnipeg, Manitoba is a director
and executive officer of various companies comprising the Marwest
Group of Companies, including Marwest Management Canada Ltd., a
property management company, Marwest Construction Ltd., a
construction company, as well as various corporations which act as
general partners of limited partnerships sponsored by the Marwest
Group of Companies focused on the acquisition and/or development of
multi-family residential properties, assisted living retirement
residences and commercial properties. Armin
W. Martens has extensive experience in the real estate
industry as a result of his senior roles at the Marwest Group of
Companies since 2010. Armin W.
Martens holds a Bachelor of Business Administration degree
from Trinity Western University.
Cornelius Martens –
Winnipeg, MB – Trustee
Mr. Cornelius Martens, age 79, of
East St. Paul, Manitoba graduated
from the University of Manitoba with a
Bachelor of Science degree in Civil Engineering in 1965. In 1968,
together with his father, he incorporated the first company which
comprised the group of companies known today as the Marwest Group
of Companies. The Marwest Group of Companies is engaged in the
development, construction and management of income producing
properties, including office buildings, shopping centers,
residential and mixed use properties. Since its incorporation until
2015, Mr. Martens served as President and Chief Executive Officer
of the various companies comprising the Marwest Group of
Companies. He is currently the President and Chief Executive
Officer of Marwest Properties Ltd. He is also a co-founder
and past Executive Vice-President of Artis Real Estate Investment
Trust. Mr. Martens was a trustee of Artis Real Estate
Investment Trust from its inception in 2004 until May 2019. Cornelius
Martens has extensive experience in the real estate industry
as a result of his senior roles at the Marwest Group of Companies
and Artis Real Estate Investment Trust.
Luke Cain – Winnipeg, Manitoba – Trustee
Mr. Luke Cain, age 34, of
Winnipeg, Manitoba, is a Senior
Director of Mortgage Origination at Canada ICI Capital Corporation,
one of Canada's largest and most
respected commercial real estate finance firms. Over the past
five years, Mr. Cain has helped originate and fund of over
$4.5 billion of new commercial
mortgages. In fiscal 2020, he was responsible for approximately 150
loans, predominantly in the multi-family asset class, financing
over $1.5 billion. Mr. Cain holds a
B.A. (Economics) from Union College (New
York), and an M.B.A. (Finance) from the University of
Manitoba. Mr. Cain has extensive experience in the real
estate financing industry as a result of his senior role at Canada
ICI Capital Corporation.
Jason Pellaers – Winnipeg, Manitoba – Trustee
Mr. Pellaers, age 45, of Winnipeg,
Manitoba, is currently Vice-President, Finance at NFI Group
Inc. ("NFI"), a TSX-listed issuer (TSX: NFI) that is a
leading global bus manufacturer. In his role as Vice-President,
Finance, Mr. Pellaers is responsible for NFI internal controls over
financial reporting (ICFR) and NFI's external financial reporting
requirements. Mr. Pellaers works directly with the NFI audit
committee in reviewing financial statements and related public
disclosures. Mr. Pellaers has played an integral role in
NFI's mergers and acquisitions activity, having led two recent
acquisitions by NFI and participating as a finance lead member on
multiple other acquisitions. Prior to assuming his current
position in January 2017, Mr.
Pellaers held other important positions at NFI, including Director
of Finance since August 2010. Mr.
Pellaers is a member of the Chartered Professional Accountants of
Canada and is a CPA (CA) and
received a Bachelor of Commerce (Honours) from the University of Manitoba in 1998.
Subject to TSXV approval, prior to the completion of the
Qualifying Transaction, Mr. Pellaers will purchase from Ms.
Kim Riley (who resigned as a Trustee
effective February 16, 2021 due to
other professional commitments) 20,000 seed Trust Units, which will
continue to held in escrow in accordance with the requirements of
the CPC Policy.
Concurrent Private Placement
The REIT has engaged Canaccord Genuity Corp. (the
"Agent") to conduct, on a commercially reasonable "best
efforts" basis, a brokered private placement of a minimum of
500,000 Trust Units and up to a maximum of 1,000,000 Trust Units at
a price of $1.00 per Trust Unit for
gross proceeds of a minimum of $500,0000 and a maximum of $1,000,000 (the "Private Placement").
The net proceeds of the Private Placement will be used to
fund a portion of the expenses of the Qualifying Transaction and
for working capital and general purposes of the REIT.
The REIT has agreed to pay a fee to the Agent equal to seven
percent (7%) of the gross proceeds of sales of Trust Units pursuant
to the Private Placement.
The trustees / directors and officers of the REIT and/or of
Marwest and their associates may purchase Trust Units pursuant to
the Private Placement, however such purchasers are not anticipated
to purchase more than 25% of the Trust Units sold pursuant to the
Private Placement.
Other Terms of the Qualifying Transaction
Subject to approval of the TSXV and unitholders, the REIT
proposes to adopt an Equity Incentive Plan on the closing of the
Qualifying Transaction which permits the REIT to grant
securities-based compensation as follows:
(i)
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a fixed number of
deferred trust units (accompanied by Special Voting Units) and/or
restricted trust units equal to 10% of the number of Trust Units
and Exchangeable LP Units outstanding immediately following the
completion of the Qualifying Transaction; and
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(ii)
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options to purchase
Trust Units in a number equal to 10% of the number of Trust Units
and Exchangeable LP Units from time to time, provided that on the
date of any grant of options, the number of Trust Unit underlying
options, and the number of Trust Units issued or issuable pursuant
to deferred units and/or restricted units, and the number of
Management Fee Units, shall not exceed 20% of the issued and
outstanding Trust Units on such date.
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Conditions of Closing
The Qualifying Transaction is currently anticipated to close as
soon as practicable following the Meeting held on April 30, 2021. The completion of the
Qualifying Transaction is subject to a number of closing conditions
including the following:
(a)
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approval of the
resolution approving the Qualifying Transaction by Unitholder on a
"majority of the minority" basis;
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(b)
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approval of the
Equity Incentive Plan by a majority of votes cast by Unitholders,
provided that no deferred units or restricted units may be issued
unless the Equity Incentive Plan is approved by a majority of
disinterested Unitholders;
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(c)
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approval by
disinterested Unitholders of Marwest's right to: (i) elect to
receive up to 50% of its base annual asset management fee and up to
50% of its incentive fee in Trust Units, and the reservation of
Trust Units equal to 10% of the issued and outstanding Trust Units
and Exchangeable LP Units immediately following the closing of the
Qualifying Transaction; and (ii) Marwest's right to elect to
receive Exchangeable Units upon an internalization of management of
the REIT in accordance with the terms of the Management
Agreement;
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(d)
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approval of
disinterested Unitholders of amendments to the REIT's declaration
of trust dated as of July 2, 2020 to provide Marwest with the
following rights: (i) in the event that Marwest ceases to be
the exclusive asset manager of the REIT for any reason, Marwest
shall be entitled to require the REIT to remove "Marwest" from its
name; and (ii) so long as Marwest is the asset manager of the REIT,
it shall be entitled to appoint the CEO as a Trustee of the REIT
and will be entitled to nominate an additional Trustee where the
Marwest Asset Management Group directly or indirectly beneficially
own collectively 10% or more of the outstanding voting securities
of the REIT (on a non-diluted or fully-diluted basis) and where the
Board of Trustees is or will be comprised of five (5) or more
members;
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(e)
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certain lender
consents; and
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(f)
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continued
satisfactory due diligence with respect to the Kenwood Property and
the Brio Property and no material adverse change occurring in the
Brio LP (or the Brio Property) or the Kenwood LP (or the Kenwood
Property).
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Cash Distribution Policy
The Board of Trustees will consider a cash distribution policy
in the future when income and liquidity allow for it. The REIT's
objective is to pay a stable and sustainable cash distribution to
unitholders which grows over time from a portfolio of quality
multi-family residential properties.
General
In connection with the closing of the Qualifying Transaction,
the REIT will apply to meet the initial listing requirements of the
TSXV for a real estate issuer. Following the Qualifying
Transaction, the REIT intends to continue focusing on the
acquisition of multi-family residential properties located in
Western Canada, although the REIT
is not excluded from investing in properties located in other
jurisdictions of Canada or
the United States.
In light of the concurrent brokered private placement, the REIT
will be requesting a waiver of the sponsorship requirements of TSXV
Policy 2.2 - Sponsorship and Sponsorship Requirements but
there is no assurance that such waiver will be granted.
The REIT's head office will continue to be located at
5th Floor, 220 Portage Avenue in Winnipeg, Manitoba.
Forward-looking Statements
The information in this news release includes certain
information and statements about management's views of future
events, expectations, plans and prospects that constitute forward–
looking statements. These statements are based upon assumptions
that are subject to significant risks and uncertainties. Because of
these risks and uncertainties and as a result of a variety of
factors, the actual results, expectations, achievements or
performance may differ materially from those anticipated and
indicated by these forward–looking statements. Forward–looking
statements in this news release include, but are not limited to,
the potential completion of a qualifying transaction and related
transactions, including a private placement. Any number of factors
could cause actual results to differ materially from these
forward–looking statements as well as future results. Although
management of the REIT believes that the expectations reflected in
forward– looking statements are reasonable, it can give no
assurances that the expectations of any forward– looking statements
will prove to be correct. Except as required by law, the REIT
disclaims any intention and assumes no obligation to update or
revise any forward–looking statements to reflect actual results,
whether as a result of new information, future events, changes in
assumptions, changes in factors affecting such forward–looking
statements or otherwise.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this news
release.
Completion of the qualifying transaction is subject to a
number of conditions, including but not limited to TSX Venture
Exchange approval, Unitholder approvals (including on a "majority
of minority" basis) and third party agreements and consents. The
qualifying transaction cannot close until the required Unitholder
approvals are obtained. There can be no assurance that the
qualifying transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management
information circular to be prepared in connection with the
qualifying transaction, any information released or received with
respect to the qualifying transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits
of the proposed qualifying transaction and has neither approved nor
disapproved the contents of this press release. The Trust Units
will not be registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act") and may not be offered
or sold within the United States
or to or for the account or benefit of U.S. persons, except in
certain transactions exempt from the registration requirements of
the U.S. Securities Act. This press release does not constitute an
offer to sell, or the solicitation of an offer to buy, securities
of the REIT in the United States
or in any other jurisdiction.
Information regarding Target LPs and Target
Properties
This press release sets forth certain information relating to
the Target LPs and the Target Properties. Such information
was provided by the general partners of the Target LPs.
Neither the REIT nor any other person makes any representation or
warranty regarding the accuracy of such information contained in
this press release and readers are cautioned not to place undue
reliance on such information.
SOURCE Marwest Apartment Real Estate Investment Trust