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Retrocom Mid-Market REIT completes property acquisitions valued at US$55 million

Fasken
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Retrocom Mid-Market Real Estate Investment Trust

On July 9, 2008, Retrocom Mid-Market Real Estate Investment Trust (TSX:RMM.UN) completed the acquisition of four properties from a vendor group (the "Vendors") led by Mr. Mitchell Goldhar, owner of SmartCentres Inc., at a combined purchase price of approximately $55 million. The four properties, totaling approximately 522,915 square feet of gross leasable area, are strategically located in the Greater Toronto Area. The purchase price was satisfied by the assumption of existing mortgage debt on the four properties in the amount of approximately $8.9 million and the issuance to the Vendors of 9,110,268 Class B units of Retrocom Limited Partnership (the "Class B Units") at a price of $5.00 per Class B Unit and an equivalent number of special voting units of the REIT (the "Special Voting Units"). The Class B Units are exchangeable on a one-for-one basis for trust units of the REIT and the Special Voting Units carry the same voting rights as trust units of the REIT. As a result of the transaction, Mitchell Goldhar acquired voting control over approximately 38% of the votes attached to all of the securities of the REIT. In addition to the purchase price paid to the Vendors, the REIT issued to SmartCentres Management Inc., a company owned by Mr. Goldhar, warrants to purchase, at any time during the 5-year period after closing, 1.5 million units of the REIT at an exercise price of $5.50 per unit. Furthermore, in connection with the acquisition, the Toronto-Dominion Bank established a credit facility in the amount of $33.5 million in favour of the REIT, which was used by the REIT to repay the 4.5% non-callable convertible debenture in the principal amount of $30 million issued to RioCan Real Estate Investment Trust on July 26, 2005 and due on July 26, 2008. Belinda James, Vice-President and General Counsel of Retrocom Mid-Market REIT, represented the REIT in connection with the transaction, with external assistance from a team from Fasken Martineau led by Anil Aggarwal and Jonathan Levin (securities and general corporate) and including Daniel Batista, Brad Freelan and Alex Nikolic (securities and general corporate); Dan Law, Linda Huynh, Katherine Christie and Dugan Edmison (real estate); Aaron Stefan (banking); and Mitchell Thaw (tax).

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