M4 Trust

May 03, 2011 02:00 ET

M4 Trust Acquires Approximately 20% of Common Shares of Mosaic Capital Corporation Pursuant to a Plan of Arrangement

CALGARY, ALBERTA--(Marketwire - May 3, 2011) - M4 Trust ("M4") is issuing this press release pursuant to the early warning requirements of applicable securities laws in Canada with respect to Mosaic Capital Corporation ("Mosaic").

M4 has acquired ownership and control of 1,631,692 common shares of the Mosaic ("Common Shares"), representing approximately 20% of the outstanding Common Shares of Mosaic. In addition, John Mackay, one of the three trustees of M4 and the Executive Chairman and Chief Executive Officer of Mosaic, acquired ownership and control of 214,252 Common Shares, representing approximately 3% of the outstanding Common Shares.

The Common Shares were acquired in connection with the completion of a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement") among Mosaic Diversified Income Fund (the "Fund"), its unitholders, First West Properties Ltd. ("First West"), its securityholders and Mosaic. Pursuant to the Arrangement the holders of securities of the Fund and First West, including M4 and Mackay, exchanged their securities, as applicable, for Common Shares and 10% perpetual preferred securities of Mosaic ("Preferred Securities") created pursuant to an indenture dated as of April 29, 2011 between Mosaic and Olympia Trust Company.

Pursuant to the Arrangement, holders of preferred units of the Fund received, for each preferred unit held by them, one Preferred Security and 0.143 of a Common Share, holders of common units of the Fund received, for each common unit held by them, 1631.7 Common Shares and holders of common shares of First West received, for each common share held, 0.077 of a Preferred security and 0.154 of a Common Share. For purposes of the Arrangement, the Common Shares were valued at $5.00 per share. As of the date of this press release, the Common Shares and Preferred Securities were not listed for trading on any exchange.

In connection with the Arrangement and the proposed listing of the Common Shares and Preferred Securities on the TSX Venture Exchange, both M4 and Mackay entered into an escrow agreement with Mosaic, Olympia Trust Company and certain other principals of Mosaic whereby they respectively agreed that their holdings in Mosaic would be escrowed with 25% of the escrowed securities being released on the date the TSX Venture Exchange issues its bulletin regarding the listing of the Common Shares and Preferred Securities and the balance being released in three equal tranches on the 6, 12 and 18 months anniversary of the listing bulletin.

M4 may in the future take such actions in respect of its security holdings in Mosaic as it deems appropriate in light of the circumstances, including the purchase of additional securities of Mosaic through privately negotiated transactions or open market purchases, or the sale of all or a portion of its holdings in privately negotiated transactions or the open market to one or more purchasers.

Mackay may in the future take such actions in respect of his security holdings in Mosaic as he deems appropriate in light of the circumstances, including the purchase of additional securities of Mosaic through privately negotiated transactions or open market purchases, or the sale of all or a portion of his holdings in privately negotiated transactions or the open market to one or more purchasers.

Section 2.11 of National Instrument 45-106 Prospectus and Registration Exemptions was relied on for the issuance of the Common Shares in connection with the Arrangement.

John Mackay, Executive Chairman and Chief Executive Officer of Mosaic, is presumed to be a joint actor of M4 under applicable securities laws by reason of being one of the three trustees of M4. References to John Mackay as a joint actor are being included in this news release as a result of such presumption.

For additional information, or for a copy of the early warning report filed, or to be filed, by M4 in respect of the above-noted transaction, please contact John Mackay, Trustee, M4 Trust.

Contact Information

  • M4 Trust
    John Mackay
    Trustee
    (403) 218-6500
    400, 2424 4th Street SW
    Calgary, AB T2S 2T4