True North -- summary under Asset Purchases

Overview

The REIT has agreed (in the "Acquisition") to acquire, through three subsidiary Ontario LPs (the "New Partnerships"), 29 residential properties (the "Acquisition Properties") comprising 2,824 suites, located in Ontario and Alberta, from entities controlled by Daniel Drimmer (the "Vendors") for a purchase price of $286M million, to be satisfied by (i) approximately $12.9 million in cash, (ii) the assumption of approximately $65.6 million aggregate principal amount of existing mortgage debt, (iii) approximately $127.5 million aggregate principal amount of new mortgage debt, and (iv) the issuance to the Vendors of 8,890,466 Class B LP Units of the New Partnerships (each such unit to be issued at a price of $9.00) and accompanying Special Voting Units of the REIT. The implied capitalization rate for the Acquisition Properties is 5.40%. The REIT is intended to qualify as a REIT for Canadian income tax purposes.

Drimmer

The REIT manager is owned by Drimmer who also is the REIT's CEO and Chairman. The effective interest of Drimmer in the REIT currently is 18.9% (including a 15% indirect interest in the form of exchangeable Class B LP units of existing subsidiary LPs and matching Special Voting Units) and will increase to 41.2%.

New Partnerships/Class B LP Units

The REIT has agreed to acquire control of the New Partnerships by subscribing for Class A LP Units of the New Partnerships and causing "True North General Partner" (also the general partner for existing subsidiary LPs of the REIT) to acquire the general partnership interest of each of the New Partnerships and thereby indirectly acquire the Acquisition Properties. The Class B LP Units are exchangeable on a one-for-one basis for REIT units pursuant to an Exchange Agreement. Each Class B LP Unit is accompanied by a Special Voting Unit of the REIT.

TN5 LPA

References the "Exchange Agreement" among Starlight Investments Ltd. (including affiliates thereof), the REIT, the General Partner and others, which will be assumed by the Partnership pursuant to the Assumption Agreement, regarding the Exchange Rights attaching to the Class B LP Units (being the right granted under the Exchange Agreement to the holder of Class B LP Units to cause the REIT to exchange each Class B LP Unit for one REIT Unit).

Instalment Notes

Certain of the Vendors have agreed to make monthly instalment payments to the REIT [i.e., the New Partnerships?] under Instalment Notes in order for the REIT to achieve an effective interest rate of 2.5% on the assumed mortgages.