Early warning report FORM 62-103F1 EARLY WARNING REPORT
Item 1 – Security and Reporting Issuer
1.1 State the designation of securities to which this report relates and the name and address
of the head office of the issuer of the securities.
The designation of securities to which this report relates is trust units ("Units") of Slate Office REIT (“Slate Office” or the "REIT").
The address of the head office of the REIT is:
121 King Street West, Suite 200 Toronto, ON M5H 3T9
1.2 State the name of the market in which the transaction or other occurrence that triggered the requirement to file this report took place.
Not applicable.
Item 2 – Identity of the Acquiror
2.1 State the name and address of the acquiror.
G2S2 Capital Inc. (“G2S2”)
168 Hobsons Lake Drive, Suite 300 Halifax, NS B3S 0G4
G2S2 is a corporation incorporated under the laws of Canada and operates as an investment holding company. G2S2 is controlled by George & Sim Armoyan.
2.2 State the date of the transaction or other occurrence that triggered the requirement to file this report and briefly describe the transaction or other occurrence.
On February 15, 2023, G2S2 entered into a settlement agreement with the REIT pursuant to which G2S2 and the REIT have agreed to appoint G2S2's Chairman, George Armoyan, and Jean-Charles Angers to the Board, effective immediately. Pursuant to the settlement agreement, G2S2 has withdrawn its previously announced requisition for a special meeting of unitholders to, among other items, elect new trustees to the REIT’s board. Instead, in connection with the appointment of Mr. Armoyan and Mr. Angers to the Board, G2S2 has agreed to support the election of all REIT Trustee nominees at the annual meeting of unitholders of the REIT to be held in 2023 and 2024. In light of the settlement, the REIT has canceled the unitholder meeting previously scheduled for March 28, 2023 and will instead announce a new date for the REIT’s 2023 annual meeting of unitholders in due course.
2.3 State the names of any joint actors.
Armco Alberta Inc. ("Armco Alberta"), a wholly owned subsidiary of G2S2.
Item 3 – Interest in Securities of the Reporting Issuer
3.1 State the designation and number or principal amount of securities acquired or disposed of that triggered the requirement to file the report and the change in the acquiror’s securityholding percentage in the class of securities.
Not applicable.
3.2 State whether the acquiror acquired or disposed ownership of, or acquired or ceased to have control over, the securities that triggered the requirement to file the report.
Not applicable.
3.3 If the transaction involved a securities lending arrangement, state that fact. Not applicable.
3.4 State the designation and number or principal amount of securities and the acquiror’s securityholding percentage in the class of securities, immediately before and after the transaction or other occurrence that triggered the requirement to file this report.
As of the date hereof, G2S2 has beneficial ownership of, and control over, 13,297,000 Units, and $1,325,000 principal amount of 5.25% convertible unsecured subordinated debentures due February 28, 2023, $625,000 principal amount of 5.50% convertible unsecured subordinated debentures due December 31, 2026 and $7,596,000 principal amount of 7.50% convertible unsecured subordinated debentures due December 31, 2027 (collectively, the "Convertible Debentures"), which, if converted, would entitle G2S2 to an additional 1,603,076 Units, representing a securityholding percentage of 18.25% of the Units (determined on a partially diluted basis assuming the conversion of only G2S2’s Convertible Debentures).
The Units and Convertible Debentures are registered in the name of Armco Alberta, a wholly owned subsidiary of G2S2.
3.5 State the designation and number or principal amount of securities and the acquiror’s securityholding percentage in the class of securities referred to in Item 3.4 over which
(a) the acquiror, either alone or together with any joint actors, has ownership and control,
G2S2 has ownership and control over the Units and Convertible Debentures described in Section 3.4. The Units and Convertible Debentures are registered in the name of Armco Alberta, a wholly owned subsidiary of G2S2.
(b) the acquiror, either alone or together with any joint actors, has ownership but control is held by persons or companies other than the acquiror or any joint actor, and
Not applicable.
(c) the acquiror, either alone or together with any joint actors, has exclusive or
shared control but does not have ownership.
Not applicable.
3.6 If the acquiror or any of its joint actors has an interest in, or right or obligation associated with, a related financial instrument involving a security of the class of securities in respect of which disclosure is required under this item, describe the material terms of the related financial instrument and its impact on the acquiror’s securityholdings.
Not applicable.
3.7 If the acquiror or any of its joint actors is a party to a securities lending arrangement involving a security of the class of securities in respect of which disclosure is required under this item, describe the material terms of the arrangement including the duration of the arrangement, the number or principal amount of securities involved and any right to recall the securities or identical securities that have been transferred or lent under the arrangement.
Not applicable.
3.8 If the acquiror or any of its joint actors is a party to an agreement, arrangement or understanding that has the effect of altering, directly or indirectly, the acquiror’s economic exposure to the security of the class of securities to which this report relates, describe the material terms of the agreement, arrangement or understanding.
Not applicable.
Item 4 – Consideration Paid
4.1 State the value, in Canadian dollars, of any consideration paid or received per security
and in total.
Not applicable.
4.2 In the case of a transaction or other occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, disclose the nature and value, in Canadian dollars, of the consideration paid or received by the acquiror.
Not applicable.
4.3 If the securities were acquired or disposed of other than by purchase or sale, describe the method of acquisition or disposition.
Not applicable.
Item 5 – Purpose of the Transaction
State the purpose or purposes of the acquiror and any joint actors for the acquisition or disposition of securities of the reporting issuer. Describe any plans or future intentions which the acquiror and any joint actors may have which relate to or would result in any of the following:
(a) the acquisition of additional securities of the reporting issuer, or the disposition of securities of the reporting issuer;
(b) a corporate transaction, such as a merger, reorganization or liquidation, involving the reporting issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of the assets of the reporting issuer or any of its subsidiaries;
(d) a change in the board of directors or management of the reporting issuer, including any plans or intentions to change the number or term of directors or to fill any existing vacancy on the board;
(e) a material change in the present capitalization or dividend policy of the reporting issuer;
(f) a material change in the reporting issuer’s business or corporate structure;
(g) a change in the reporting issuer’s charter, bylaws or similar instruments or another action which might impede the acquisition of control of the reporting issuer by any person or company;
(h) a class of securities of the reporting issuer being delisted from, or ceasing to be authorized to be quoted on, a marketplace;
(i) the issuer ceasing to be a reporting issuer in any jurisdiction of Canada; (j) a solicitation of proxies from securityholders;
(k) an action similar to any of those enumerated above.
G2S2, through its wholly owned subsidiary, Armco Alberta, owns the Units and Convertible Debentures for investment purposes. Subject to the restrictions on acquisitions set forth in the settlement agreement, G2S2 may, from time to time, depending on market and other conditions, increase or decrease its beneficial ownership, control or direction over securities of the
REIT through market transactions, private agreements, or otherwise.
Item 6 – Agreements, Arrangements, Commitments or Understandings With Respect to Securities of the Reporting Issuer
Describe the material terms of any agreements, arrangements, commitments or understandings between the acquiror and a joint actor and among those persons and any person with respect to securities of the class of securities to which this report relates, including but not limited to the transfer or the voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Include such information for any of the securities that are pledged or otherwise subject to a contingency, the occurrence of which would give another person voting power or investment power over such securities, except that disclosure of standard default and similar provisions contained in loan agreements need not be included.
Not applicable
Item 7 – Change in material fact
If applicable, describe any change in a material fact set out in a previous report filed by the acquiror under the early warning requirements or Part 4 in respect of the reporting issuer’s securities.
See Item 2.2.
Item 8 – Exemption
If the acquiror relies on an exemption from requirements in securities legislation applicable to formal bids for the transaction, state the exemption being relied on and describe the facts supporting that reliance.
Not applicable.
Item 9 – Certification
I, as the acquiror, certify, or I, as the agent filing the report on behalf of an acquiror, certify to the best of my knowledge, information and belief, that the statements made in this report are true and complete in every respect.
Dated as of February 16, 2023.
G2S2 CAPITAL INC.
Per: /s/ George Armoyan
George Armoyan Executive Chairman