VICTORIA, BRITISH COLUMBIA--(Marketwired - Oct. 1, 2013) - The parties have entered into a settlement agreement arising from a Notice of Hearing issued by the BCSC on August 14, 2013 regarding disclosure in our marketing material during the period September 2010 to June 2012.
In the course of selling investments in IGW REIT we disclosed the relationships between IGW REIT, the management company - LEAGUE Assets Corp, and the dealer - LEAGUE Investments Services Inc., as well as the family trusts, within the Offering Memoranda and subscription agreements (the final documents investors are required to read and sign before making an investment). However we did not include this information in certain marketing material.
The settlement agreement includes financial penalties, a requirement to take a course specific to exempt market dealers and a requirement to include a statement approved by the BCSC regarding relationship disclosure. In conjunction with the BCSC, we have also put in place additional measures for our marketing materials to assist in complying with all securities legislation.
The hearing of this matter, which was scheduled for June, 2014, will no longer be required. We are hopeful that the settlement will allow us to focus our energies on the proposed reorganization of the League group of companies that is currently in progress.
Adam Gant, Ultimate Designated Person, LEAGUE Investments Services Inc.
Emanuel Arruda, Chief Operating Officer, LEAGUE Investment Services Inc.
Below is the current disclosure contained in the offering memorandum; which we anticipate including in our marketing literature in future, subject to any amendments made after consultation with the BCSC:
The REIT and IGW REIT Limited Partnership ("IGW REIT LP") are "connected issuers", and may be considered to be "related issuers", of League Investment Services Inc. ("LISI") for the purpose of applicable securities legislation in Canada. The REIT and IGW REIT LP are connected issuers of LISI due to various factors, including the fact that Adam Gant and Emanuel Arruda are officers and directors of League Assets Limited Partnership ("LALP"), League Assets Corp. ("League"), LISI and IGW REIT GP Inc. (the general partner of IGW REIT LP, and are also trustees of the REIT. LISI and League are owned 100% by LALP, an entity in which Messrs. Gant and Arruda have indirect, discretionary beneficial ownership interests through family trusts established for their benefit as well as for the benefit of members of their families. The REIT and IGW REIT LP have appointed League as the manager of the REIT to provide certain services to them. IGW REIT LP has agreed to pay League the fees described in the offering memorandum of the REIT (the "Offering Memorandum"), a copy of which is available from LISI upon request. IGW REIT LP currently owes League approximately $1.4 million for accrued and unpaid fees pursuant to a management agreement entered into between them. League has appointed LISI to act as agent for the sale of securities of the REIT under a distribution agreement pursuant to which League will reimburse LISI for costs incurred in respect of any offerings and pay LISI an administrative fee equal to 1% of those costs. As manager of the IGW REIT LP, League has the power to cause IGW REIT LP to make loans to certain Sponsored Entities and Supported Entities as described in the Offering Memorandum.
The REIT and IGW REIT LP may be considered to be related issuers of LISI by virtue of the fact that, under the declaration of trust governing the REIT, so long as the management agreement with League remains in effect, League has the right to appoint at least one-half of the trustees of the REIT, as more particularly described in the Offering Memorandum, and by virtue of the fact that LISI and League are each owned 100% by LALP.