Holland Global/Maplewood REIT

Overview

Under a CBCA Plan of Arrangement, the shareholders of the Corporation (a recently-formed TSXV-listed capital pool company which has not yet made its qualifying acquisition - see TSX-V Policy 2.4 - Capital Pool Companies) will transfer their shares to a subsidiary Ontario LP of the REIT (Maplewood LP ) on a taxable basis in exchange for REIT Units on an 8-for-1 basis (the "Exchange Ratio") - or, if they wish to and elect to transfer on a s. 97(2) rollover basis, they will transfer their shares to Maplewood LP for (exchangeable) Class B LP Units of Maplewood LP in accordance with the Exchange Ratio together with an equal number of special voting units of the REIT. An indirect Netherlands subsidiary of Maplewood LP ("B.V.") will then make the qualifying acquisition of the legal title to a Netherlands property (the "Initial Property"), with its immediate parent (Maplewood Operating LP) acquiring the beneficial ownership. Following the completion of the Arrangement, the REIT and its affiliates will focus on acquiring further Dutch real estate.

Structure

The REIT is a Ontario unit trust. It will hold the Class A LP Units of Maplewood LP, along with the shares of the Ontario General Partner, with some of the former shareholders of the Corporation holding the (exchangeable) Class B LP Units of Maplewood LP. Maplewood LP will hold all of the LP units of Maplewood Operating LP and the shares of the general partner, and also all the shares (being Class A Shares) of the Corporation, which will have nominal value. Maplewood Operating LP will own all the securities of B.V.

Corporation

It is a CBCA corporation which was formed as a capital pool company on January 15, 2013, issued "seed shares" for gross proceeds of $500,000 on February 7, 2013, issued private placement shares for gross proceeds of $2,650,000 on February 8, 2013, and completed an IPO on April 5, 2013 for gross proceeds of $400,000. Its shares are listed on the TSXV. On August 13, 2013 it filed a non-offering prospectus dated August 8 indicating that it has no assets other than cash and that the Arrangement together with the acquisition of the Initial Property by the REIT as a successor to the Corporation will represent its qualifying transaction for CPC purposes.

Initial Property

The Corporation has identified the "Initial Property" (a large scale industrial complex in the Netherlands) as an appropriate initial property for the REIT to acquire. Conemporaneously with the completion of the Arrangement, the REIT will indirectly purchase the Initial Property for a purchase price of $9.1 million (€6.75 million) financed in part with a new mortgage of $5.4 milllion.

Plan of Arrangement

• Shares held by dissenting Shareholders will be deemed to have been transferred to Maplewood LP and cancelled so that their only right is to receive the shares' fair value
• in exchange for Class A LP Units of Maplewood LP, the REIT will contribute to Maplewood LP the number of REIT Units that it will be required to exchange for Shares two bullet points below
• Shares of Shareholders who are not Excluded Shareholders (see below) and have elected to receive exchangeable Class B LP Units will (subject to the applicable pro rata cap) be transferred to Maplewood LP in consideration for the issuance of Class B LP Units and "Ancillary Rights" (i.e., Exchange Rights and Special Voting Units of the REIT) in accordance with the Exchange Ratio
• The remaining Shares will be transferred to Maplewood LP in consideration for REIT Units in accordance with the Exchange Ratio
• The options under the Corporation's stock option plan will be exchanged for identical options on REIT Units, subject to adjustments based on the Exchange Ratio
• The REIT Unit initially issued to the Corporation for $10 will be redeemed for $10
• The issued and outstanding Shares of the Corporation will be exchanged for an equal number of Class A Common Shares and Preferred Shares, with the Preferred Shares then being redeemed for cash

Post-Arrangement steps

• Maplewood LP will make a joint s. 97(2) election with Shareholders who have transferred their Shares for Maplewood Class B LP Units provided they furnish it with the election forms within 60 days of the effective date of the Arrangement.
• A private placement units comprising REIT Units and warrants will be closed with insider private placement purchasers for gross proceeds of $2 million

Excluded Shareholders

These are defined as:

• A Shareholder which is not: a taxable Canadian resident or a Canadian partnership; or
• A person or partnership an interest in which is a tax shelter investment (or who acquires Class B LP Units as a tax shelter investment)

Canadian tax consequences

Exemption from SIFT tax. The REIT will not be considered to be a SIFT trust provided that (as stipulated in the investment guidelines) it does not own any non-portfolio property. Because the REIT does not own taxable Canadian property it is not subject to non-resident ownership restrictions.

FTGP rules

No assurance can be given that the foreign tax credit generator rules will not apply in respect of business-income tax or non-business income tax paid by Maplewood Operating LP and allocated to holders of Maplewood LP units, including the REIT.

Exchange of Shares

The Canadian tax consequences of a disposition of Shares to Maplewood LP for Class B LP Units are not discussed. An exchange for REIT Units is taxable.

Netherlands tax consequences

B.V. and Maplewood Operating LP are considered domestic and foreign tax residents, respectively. The financial statements state that Maplewood LP will be treated as a corporation for Dutch tax purposes. Discussion of fiscal unity rules without discussion of their specific application. B.V. will hold the legal ownership of the Initial Property, whereas beneficial ownership will be held by Maplewood Operating LP, which will be considered to have a Dutch branch business.