Summary of Terms

Summary of Terms

The following terms are used in the Offering Memorandum and have the meanings set out below:

Authorized Investments: mortgages, Authorized Interim Investments, Related Investments, Workout Investments or the acquiring, holding, maintaining, improving, leasing or managing of any Real Property or an interest in Real Property where determined, in the Trust Managers sole discretion, to preserve, protect or enhance the Trust or it’s assets;

 

Authorized Interim Investments: investments guaranteed by the Government of Canada or of a province or territory of Canada, cash deposits in or receipts, deposit notes, certificates of deposits, acceptances and other similar instruments issued, endorsed or guaranteed by a Schedule I or Schedule II Bank, CMHC insured Residential Mortgages and AAA Rated Mortgage Backed Securities;

 

BCBCA: British Columbia Business Corporations Act;

 

Board: the Board of Trustees;

 

Board Member: any member of the Board of Trustees of the Trust;

 

Board of Trustees: the Board of Trustees of the Trust;

 

Borrower: any Person, Persons or body corporate, its successors and assigns which borrow funds from the Trust against the Security of Real Property;

 

Closing: each closing of the Offering;

 

CMHC: the Canada Mortgage and Housing Corporation, a Canadian federal crown corporation;

 

Commercial Mortgages: mortgages granted as Security for loans given in respect of properties, land developments and construction projects which have multi residential, retail, commercial, service, office and/or industrial uses;

 

Construction Mortgages: mortgages granted as Security for loans which are advanced against stipulated budgets for multi-family residential and commercial, retail, service, office and/or industrial use projects;

 

Conventional First Mortgage: a first mortgage for which the principal amount, at the time of commitment, does not exceed the lower of 75% of the purchase price of the underlying Real Property securing the mortgage and 75% of the appraised value of the underlying Real Property securing the mortgage;

 

Conventional Mortgage: a conventional first mortgage and/or a conventional second mortgage;

 

Conventional Second Mortgage: a second mortgage for which the principal amount at the time of commitment, together with the principal balance outstanding on the first mortgage on the same Real Property, does not exceed the lower of 75% of the purchase price of the underlying Real Property and 75% of the appraised value of the underlying Real Property;

 

Declaration of Trust: the Declaration of Trust between the Investors and the Trustee dated variously, governed by the laws of British Columbia, pursuant to which the Trust was created, as amended, supplemented or amended and restated from time to time;

 

Director: a director-level employee of a corporation entrusted with discretion in the exercise of a portion of corporate powers;

 

Eligible Mortgages: those mortgages selected for investment and management in the mortgage portfolio by the Trust Manager;

 

Exempt Plans: trusts governed by a Registered Retirement Savings Plan (RRSP), a Registered Retirement Income Fund (RRIF), Deferred Profit Sharing Plan (DPSP) or a Registered Education Savings Plan (RESP);

 

Fair Market Value: in relation to a Unit, means the fair market value of such Unit as determined by the Trustees from time to time, acting reasonably, but in their sole discretion, based upon the price at which the Units were offered for sale in the most recent offering of Units by the Trust less the net issue costs of such Unit, adjusted as determined by the Trustees including, without limitation, an adjustment for profits and losses up to the date of determination; provided however that such fair market value shall not exceed the proportionate share of the net asset value of the Trust represented by such Unit;

 

First Mortgage: a mortgage having priority over all other mortgage loan interests registered against the same Real Property used to secure such mortgage;

 

Fiscal Year: each consecutive period of twelve (12) months coinciding with the calendar year and ending on December 31, provided however that the first fiscal year of the Trust will be the period commencing on April 20, 2015 and ending on December 31, 2015;

 

Fund: the “Trust” or Pendfund Income Fund I, an unincorporated investment trust established under the laws of Canada pursuant to the Declaration of Trust;

 

Guarantee: guarantee of the obligations of the Trust to the Manager, granted by the Trust;

 

Hurdle Rate: an aggregate gross annualized yield equal to the two year Government of Canada bond yield plus 350 basis points;

 

Insured Mortgages: mortgages, the principal repayment of which have been insured with CMHC or another commercially recognized mortgage insurer;

 

Investment Grade: loans underwritten and advanced using parameters which would be acceptable to commercial lending Institutions in Canada such as Credit Unions, Banks and Life Insurance Companies;

 

Investor or Unitholder: “Subscriber” or a holder of Units;

 

Investor’s Funds or Proceeds: monies advanced by the Investor to the Trustee and to be dealt with by the Trustee in accordance with the provisions of this Agreement;

 

Loan: mortgage loan(s) caused to be advanced by the Trustee to Borrowers with the interest payable thereon all in accordance with the mortgage and upon the Security of the Security;

 

Loan Guarantee: any guarantee which may be granted by Borrowers in favour of the Trust as Security for the performance of the obligations of the Borrower to the Trust under the mortgage;

 

Manager: “Trust Manager” or Canada Penfund Mortgage Corporation, a company governed by the laws of British Columbia, and its successors as Manager under the Trust Management Agreement, or any such Person as may from time to time be appointed by the Trustees to manage the day to day operation of the Trust together with any agents duly appointed by the Trust Manager;

 

Management Agreement: the agreement between the Trustee, on behalf of the Trust, and the Trust Manager;

 

Mortgage or Mortgages: a mortgage, or a mortgage of a leasehold interest (or other like instrument, including an assignment of or an acknowledgement of an interest in a Mortgage), hypothecation, deed of trust, charge or other Security interest of or in Real Property used to secure obligations to repay money by a charge upon the underlying Real Property whether evidenced by notes, debentures, bonds, assignments of purchase and sale agreements or other evidences of indebtedness;

 

Mortgage Portfolio: at any time, the portfolio of mortgages or interests therein held by the Trust;

 

Net Asset Value: on a valuation day, the aggregate fair market value of the assets of the Trust on such valuation day less the amount of the liabilities of the Trust at that time;

Net Asset Value Per Unit: on a valuation day, the quotient obtained by dividing the amount equal to the net asset value of the Trust on such valuation day by the total number of Units, including fractions of Units outstanding;

 

Net Subscription Proceeds: the gross proceeds to the Trust from the sale of the Units less the costs of this Offering;

 

Offering: the offering on a private placement basis a maximum of 10,000,000 Units at a price of $10.00 per Unit described in this Offering Memorandum;

 

Officer: a management-level employee of a corporation entrusted with discretion in the exercise of a portion of corporate powers;

 

Performance Incentive Fee: a fee to be paid to the Trust Manager pursuant to the Trust Agreement, in any calendar year where the Trust has gross earnings in excess of the Hurdle Rate, 20% of such excess;

 

Person: includes individuals, corporations, limited partnerships, general partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, pension funds, land trusts, business trusts or other organizations, whether or not legal entities and governments and agencies and political subdivisions thereof;

 

Pool: the total of mortgage and associated assets contained within the Trust;

 

Qualified Appraiser: a person who is an appraiser accredited or licensed by the Appraisal Institute of Canada or any successor thereof;

 

Real Property: property which in law is Real Property and includes, whether or not the same would in law be Real Property, leaseholds, mortgages, undivided joint interests in Real Property and any interests in and to any of the foregoing;

 

Register: record of the names and addresses of Unitholders together with other pertinent information to be kept by, on behalf of, or under the direction of the Trustees;

 

Related Investment: bonds, debentures, notes or other evidence of indebtedness in shares, Units or other evidence of ownership in any entity, including specifically a joint venture or a mortgage investment corporation, engaged directly or indirectly in the funding, holding or investing in mortgages granted as Security for loans, or the sole or principal purpose and activity of which is to invest in, hold and deal in mortgages;

 

Residential Mortgages: mortgages that are registered on or against completed single family residences and multifamily residential properties;

 

Schedule I Bank: a bank listed in Schedule I of the Bank Act (Canada);

 

Second Mortgage: a mortgage having priority over all other mortgage loan interests registered against the same Real Property other than a first mortgage on such Real Property;

 

Securities Authorities: collectively, the British Columbia Securities Commission, the Alberta Securities Commission, the Saskatchewan Securities Commission and the Ontario Securities Commission, and equivalent regulatory authorities in each Province or Territory of Canada in which the Units are qualified for distribution;

 

Subordinate Mortgage: a mortgage other than a first mortgage, including, without limitation a second mortgage;

 

Subscriber: “Unitholder” or a subscriber for Units pursuant to the Offering whose subscription has been accepted by the Trustees, and to whom Units have been issued and not revoked or transferred, and any other holder of Units from time to time (collectively “Subscribers”);

 

Subscription Agreement: the agreement to be entered into between the Trust and Subscribers in furtherance of a subscription for Units under the Offering;

 

Syndication: the sharing of a mortgage or other investment by more than one Person;

 

Tax Act: the Income Tax Act (Canada) and the regulations promulgated thereunder, as amended from time to time;

 

Term Mortgages: mortgages granted as Security for a Loan used to finance a completed or substantially completed income-producing or owner occupied property for a period of time;

 

Trust: the “Fund” or Pendfund Income Fund I, an unincorporated investment trust established under the laws of British Columbia;

 

Trust Agreement: the Trust Agreement between the Trust, Pendfund Income Fund I and the Trustee, Pendfund Income Fund Inc. dated April 20, 2015, governed by the laws of British Columbia, as amended, supplemented or amended and restated from time to time;

 

Trust Funds: at any time, all of the monies, interests, properties and assets that are at such time held by the Trustees for the purposes of the Trust established under the Declaration of Trust, including, without limitation, the initial contribution made by the Settlor of the Trust and all monies realized from the sale of Units or borrowing by the Trust;

 

Trust Management Agreement: the Trust Management Agreement dated as of April 20, 2015, between the Trustee and the Trust Manager, providing for, among other things, the retention of the Trust Manager to perform ongoing administrative services to the Trust, as the same may be amended, renewed, extended, supplemented or amended and restated from time to time;

 

Trust Manager: “Manager” or Canada Penfund Mortgage Corporation, a company governed by the laws of British Columbia, and its successors as Manager under the Trust Management Agreement, or any such Person as may from time to time be appointed by the Trustees to manage the day to day operation of the Trust together with any agents duly appointed by the Trust Manager;

 

Trust Property: all of the monies, interests, properties and assets that are at such time held by the Trustees for the purposes of the Trust established under the Declaration of Trust,

 

Trustee: Pendfund Income Fund Inc., a corporate body incorporated pursuant to the laws of Canada, its successors and assigns, the Trustee of Pendfund Income Fund I;

 

Trustees: members of the Board of Trustees of the Trust;

 

Unitholder: “Subscriber” or a holder of Units or any Investor, Persons, corporations, Trusts, registered retirement savings plans, or other legal entities who invest in the Trust and who have been granted Trust Units as Security for funds invested into the Trust;

 

Units: each of the Units of the Trust;

 

Valuation Date: the last Business Day of each calendar month upon which date the Trustees will determine the aggregate fair market value of Units outstanding on the first business day of the said calendar month;

 

Workout Investments: any evidence of indebtedness, any evidence of ownership in any entity or any other investment made by or at the direction of the Board of Trustees in its sole discretion, on behalf of the Trust, to preserve or protect the Trust or its assets, provided that such investments do not, directly or indirectly, cause the Trust to cease to be considered a “unit trust” (as such term is defined under the Tax Act).

Have any questions or want to schedule a consultation?