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NorRock Realty Finance Corporation Announces Two Letters of Intent and Intention to Complete a Reactivation Transaction

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TORONTO, ONTARIO -- (Marketwire) -- 02/27/13 -- NorRock Realty Finance Corporation ("NorRock") (TSX VENTURE: RF.H), a company listed on the NEX board of the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has entered into two letters of intent for the acquisition of certain real estate and securities assets.

Letter of Intent with IGW Industrial GP Inc.

NorRock has entered into a letter of intent with IGW Industrial GP Inc. ("IGW Industrial") to acquire a commercial property (the "LaSalle Acquisition") known municipally as 695, 795 and 999 - 90th Avenue, Montreal (Borough of LaSalle), Quebec, and legally described as Lot number ONE MILLION FOUR HUNDRED AND FIFTY THOUSAND AND NINETY ONE (1 450 091) of the cadastre of Quebec, Registration division of Montreal (the "LaSalle Property").

About IGW Industrial and the LaSalle Property

IGW Industrial is a federally incorporated corporation. It is the general partner of IGW Industrial Limited Partnership, a limited partnership established in the province of British Columbia.

The LaSalle Property is a 100% freehold interest property with three multi-tenant buildings in the LaSalle industrial submarket. Comprised of a mix of industrial and office-flex space, the LaSalle Property totals 476,296 SF (square feet) of leasable space on 1,263,248 SF of land.

Tenants of the LaSalle Property are comprised of a mix of international corporations, corporate head offices for national enterprises as well as smaller privately owned companies based in Montreal. Tenants have located themselves in the LaSalle area due to its strategic location, business friendly municipal regulations and talented labour pool. Many tenants of the LaSalle Property have invested in current infrastructure and are expected to renew their respective leases.

Among the advantages that have already attracted over 1,500 businesses to the LaSalle area are its proximity to both downtown Montreal and the borough's main access roads, its public transit system, a dynamic business and association community, as well as the presence of bilingual, qualified workers. For workers, the LaSalle area offers advantages, including the considerable number of professional services, stores and other commercial establishments that are located a few streets away from their workplace, as well as easy access to and from Highway 20, Mercier Bridge, Angrignon metro station and bicycle paths.

Letter of Intent with IGW Segregated Debt 1 Limited Partnership and IGW Segregated Debt 2 Limited Partnership

NorRock has entered into a second letter of intent with IGW Segregated Debt 1 Limited Partnership ("IGW Seg Debt 1") and IGW Segregated Debt 2 Limited Partnership ("IGW Seg Debt 2") to acquire indirectly a portfolio of securities (the "Securities Portfolio") (the "Portfolio Acquisition").

About IGW Seg Debt 1 and IGW Seg Debt 2 and the Securities Portfolio

IGW Seg Debt 1 and IGW Seg Debt 2 are each limited partnerships established in the province of British Columbia, as are their respective general partners, IGW Segregated Debt 1 GP Inc. and IGW Segregated Debt 2 GP Inc.

The Securities Portfolio consists of two portfolios and six tranches of commercial mortgage-backed securities with an aggregate face value of $10,167,562. The mortgages are secured by various non-residential properties located in Canada. The tranches of securities have S&P ratings of B, B-, and unrated.

Reactivation Transaction

The LaSalle Acquisition together with the Portfolio Acquisition are intended to constitute a reactivation transaction (the "Reactivation Transaction") of NorRock to enable it to list on the Exchange. The Reactivation Transaction will constitute a reverse takeover transaction ("RTO") as defined in Policy 5.2 of the Corporate Finance Manual of the Exchange.

Business Plan

Following closing of the Reactivation Transaction, it is NorRock's intention to change its business focus from being a secured lender in the commercial real estate industry to carrying on business as a merchant bank focused on creating value for shareholders by making investments in undervalued assets in various industry sectors. The initial investments and the first two transactions undertaken by NorRock will be the assets acquired pursuant to the LaSalle Acquisition and the Portfolio Acquisition.

NorRock will focus on investments in small- and middle-capitalization public and private companies, with emphasis on real estate, infrastructure and financial services sectors in North America. NorRock will seek to generate income primarily from its lending activities, while taking advantage of additional upside through equity participation in the companies which it finances.

NorRock will retain Green Tree Capital Management Corp. ("Green Tree"), a company established under the laws of the Province of Ontario, wherein Green Tree will be engaged to provide administrative services as well as the individuals to fill the senior management positions of NorRock. The terms of the management agreement have not been finalized but it is expected they will be at market rates for comparable services.

Green Tree owns approximately 20% of the issued and outstanding Class A Shares of NorRock. 50% of the shares of Green Tree are owned by Green Tree 2010 Trust. A holding company of Adam Gant and League Assets Corp. are beneficiaries of Green Tree 2010 Trust.

The Reactivation Transaction

Subject to regulatory approval:

1. NorRock will acquire the LaSalle Property (including the assumption of existing debt financing obligations of IGW Industrial related to the LaSalle Property) for an estimated purchase price of $17 million. The estimated purchase price will be satisfied by issuing 23.2 million class A shares (the "Class A Shares"), a promissory note of $2.2 million (the "Promissory Note"), and by the assumption of indebtedness of IGW Industrial in the amount of $9 million. The foregoing amounts are estimates only. The final purchase price and the number of shares to be issued and amount of the assumption of debt by NorRock in satisfaction therefore are subject to adjustment on or prior to closing to reflect ongoing repayment and related activities up to the closing date of the transaction. The Class A Shares shall be issued at a deemed issuance price of $0.25 per share. The Promissory Note will bear interest at 2% per annum, payable quarterly, and shall have a maturity date of August 1, 2016.2. NorRock will acquire indirectly the Securities Portfolio for an estimated purchase price of $6.3 million. The estimated purchase price will be satisfied by issuing 25.3 million Class A Shares. The Class A Shares shall be issued at a deemed issuance price of $0.25 per share. IGW Seg Debt 1 and IGW Seg Debt 2 will distribute the Class A Shares received on the Portfolio Acquisition to their various unit holders.



The proposed Reactivation Transaction will be effected by way of an RTO and an information circular will be completed detailing the terms of the Reactivation Transaction and seeking approval from shareholders of NorRock.

NorRock intends to treat the LaSalle Acquisition and Portfolio Acquisition as related party transactions as defined in Multilateral Instrument 61-101: Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Consequently, NorRock intends to obtain an independent valuation for, and majority of minority shareholder approval of, each of the LaSalle Acquisition and Portfolio Acquisition.

Mr. Gant is Chief Executive Officer and a director of IGW Industrial, and President and a director of each of IGW Segregated Debt 1 GP Inc. and IGW Segregated Debt 2 GP Inc. IGW Industrial is a subsidiary of League IGW Real Estate Investment Trust. League Assets Corp. is the manager of League IGW Real Estate Investment Trust. Each of IGW Segregated Debt 1 GP Inc. and IGW Segregated Debt 2 GP Inc. are subsidiaries of League Assets Corp. League Assets Corp. is a company owned indirectly by Adam Gant and Emanuel Arruda, both residents of British Columbia. Mr. Gant is also a director and the Chief Executive Officer of League Assets Corp.

Due to the fact that the largest shareholder of NorRock is Green Tree, a corporation held fifty percent by an entity in which Adam Gant has an indirect and contingent financial interest, and the fact that Adam Gant is a principal of the general partner corporations of the sellers in the LaSalle Acquisition and the Portfolio Acquisition, NorRock intends to treat the LaSalle Acquisition and the Portfolio Acquisition as related party transactions and voluntarily comply with the requirements of MI 61-101.

It is currently anticipated that the board of directors of NorRock will consist of Jacqueline Boddaert, who is currently the Chief Executive Officer and a director of NorRock, as well as David Prussky, Raymond Steele and Malvin Spooner. The officers will include Jacqueline Boddaert, Chief Executive Officer and Raymond Steele, Chief Financial Officer. The current directors of NorRock, other than Jacqueline Boddaert and David Prussky will resign upon closing of the Reactivation Transaction. Biographies of each of the anticipated directors and officers of NorRock are included below.

David Prussky, Director and Chairman - Mr. Prussky has over 20 years of experience in the investment industry in Canada, with a focus on the merchant banking sector. He is presently a director of three companies listed on the TSX and one company listed on the TSXV. He is also a past director of four public companies in Canada. Mr. Prussky is also a past director and principal in an investment dealer in Canada. Mr. Prussky received his LLB degree from Osgoode Hall, York University and his Masters in Business Administration from York University.

Jacqueline Boddaert, Director and Chief Executive Officer - Ms. Boddaert is CEO for NorRock Realty Finance Corporation, a NEX listed company that invests in a portfolio of secured loans and investments in the Canadian commercial real estate sector. Ms. Boddaert was formerly President and Chief Executive Officer of Monarch Wealth Corporation, a Mutual Fund Dealer based in Toronto, as well as President of Monarch Wealth Assurance Agencies Inc. and Monarch Wealth Deposit Group Inc. These businesses collectively managed over $700 million of client assets. She is presently a board member of the Federation of Mutual Fund Dealers. Ms. Boddaert has over 20 years of diversified business experience as a senior executive in the financial services, packaged goods and pharmaceutical industries and is a graduate of the University of Western Ontario.

Raymond Steele, Director, Chief Financial Officer, Vice-President, Portfolio Manager - Mr. Steele has over 25 years of experience as an investment professional managing money for pension funds, mutual funds, and other institutional clients. In addition he has a vast array of experience with the marketing, administrative, technological, and regulatory aspects of the investment management business. He was a founder, investment manager, and CFO of Mavrix Fund Management Inc., a TSX listed company, from 2001 to 2010. Mr. Steele received a B.Comm. from the University of Ottawa in 1983, and is a Certified Management Accountant, and a Chartered Financial Analyst.

Malvin Spooner, Director, MA, MBA, CFA - Mr. Spooner was the Founder & President of Mavrix Fund Management Inc. He developed a family of mutual funds and limited partnerships which were distributed through the major banks and MFDA dealers across Canada. He is a former director of CanRock Energy Corp. (merged with Alston Energy Inc. May 2012) and is currently a director with Metals Creek Resources Corp.

The Reactivation Transaction is conditional upon, among other things, receiving all necessary regulatory and third party approvals and authorizations, the receipt of an independent valuation of the LaSalle Property and the Securities Portfolio, approval by the shareholders of NorRock, confirmation of no material adverse change having occurred to the LaSalle Property and the Securities Portfolio prior to close, the completion of definitive agreements setting forth the terms and conditions for the closing of the LaSalle Acquisition and the Portfolio Acquisition, the completion of due diligence satisfactory to each party, and the completion of a sponsorship report satisfactory to the Exchange (or waiver by the Exchange of that requirement).

Concurrent Financing

NorRock intends to complete a brokered private placement to raise up to $1,000,000 (the "Concurrent Financing") concurrently with its Reactivation Transaction by issuing up to 4,000,000 Class A shares at $0.25 per share. Proceeds raised will be used for general working capital purposes.

Sponsorship

NorRock is currently confirming the terms of a sponsorship relationship for this transaction with an Exchange member firm, which will be disclosed as soon as an engagement is formalized.

Capitalization

Post-closing of the Reactivation Transaction and the Concurrent Financing, NorRock will have approximately 57.4 million Class A Shares issued and outstanding. It is anticipated that Green Tree will own, directly or indirectly, approximately 2% of the issued and outstanding voting securities; the other current shareholders of NorRock will collectively own approximately 7% of the issued and outstanding voting securities; the subscribers on the Concurrent Financing will collectively own approximately 7% of the issued and outstanding voting securities; and the sellers on the Reactivation Transaction will collectively own, directly or indirectly, approximately 84% of the issued and outstanding voting securities, of which IGW Seg Debt 1 and IGW Seg Debt 2 will distribute approximately 25.3 million Class A Shares (being approximately 44% of the issued and outstanding voting securities) to their unit holders, while IGW Industrial will own, directly or indirectly, approximately 23.2 million Class A Shares, being approximately 40% of the issued and outstanding voting securities of NorRock. As such, IGW Industrial will be an "insider" of NorRock for purposes of applicable securities laws. IGW Industrial is a subsidiary of League IGW Real Estate Investment Trust, a real estate investment trust established under the laws of the province of British Columbia.

For further information about NorRock, please contact Jacqueline Boddaert, CEO, at 416-479-9510 or by email at JBoddaert@norrock.ca. For further information about the LaSalle Property or the Securities Portfolio, please contact Adam Gant, President/CEO of IGW Industrial GP Inc., IGW Segregated Debt 1 GP Inc. and IGW Segregated Debt 2 GP Inc., at 250-592-3395, or by email at Adam.Gant@league.ca.

Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of NorRock should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.



Contacts:
NorRock Realty Finance Corporation
Jacqueline Boddaert
CEO
416-479-9510
JBoddaert@norrock.ca

For further information about the LaSalle Property or the
Securities Portfolio, please contact
Adam Gant
250-592-3395
Adam.Gant@league.ca



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