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NorRock Realty Finance Corporation Announces Update and Amendment to Proposed Reactivation Transaction

TORONTO, ONTARIO -- (Marketwired) -- 01/30/14 -- NorRock Realty Finance Corporation ("NorRock") (TSX VENTURE:RF.H), a company listed on the NEX board of the TSX Venture Exchange (the "Exchange"), is announcing an amendment to its proposed reactivation transaction that was previously disclosed via press release on February 27, 2013 and June 13, 2013.

LaSalle Acquisition

NorRock is no longer proceeding with its proposed acquisition of the commercial property (the "LaSalle Acquisition") known municipally as 695, 795 and 999 - 90th Avenue, Montreal (Borough of LaSalle), Quebec (the "LaSalle Property").

NorRock had entered into an agreement of purchase and sale with IGW Industrial Limited Partnership ("IGW Industrial") dated May 29, 2013, as amended on June 19, 2013 and August 29, 2013 (collectively the "LaSalle Agreement"). However, IGW Industrial is a petitioner in insolvency proceedings in British Columbia pursuant to the Companies Creditors' Arrangement Act and no longer able to complete the transaction. Accordingly, the LaSalle Agreement has been terminated.

Highview Acquisition

NorRock had previously entered into a letter of intent as well as a subscription agreement with Highview Financial Holdings Inc. ("Highview") to become Highview's strategic capital partner and will continue to proceed with its subscription for 7,000,000 common shares from treasury, such that NorRock shall own, on a fully diluted basis, 70% of the issued and outstanding common shares of Highview (the "Highview Shares") upon the closing of the transaction (the "Highview Acquisition").

About Highview

Highview is a private corporation incorporated under the federal laws of Canada and is the parent company to Highview Asset Management Ltd., an Ontario corporation, and Highview Wealth Practices Inc., a federally incorporated corporation.

Highview is one of Canada's leading outsourced Chief Investment Officer (CIO) firms managing the private wealth of affluent families, the pension and investable assets of their businesses, and the foundations & endowments which they support. While the outsourced CIO industry in the United States & Europe is extremely well-established, Canada is in the early stages of growth in this important new niche segment in the Canadian asset management industry. With approximately $800 million of client assets under its care (AUM & AUA), Highview services its clients directly and in partnership with its professional advisors. Highview is objective and transparent in architecting financial portfolios for its clients and does not engage in any related investment management businesses. Highview is only compensated through client fees for objective and experienced advice and research. Highview's client's assets are always segregated and held by third-party respected institutions.

Highview Asset Management Ltd. is licensed as a Portfolio Manager in the Provinces of Ontario, Alberta and British Columbia.

Highview is controlled by Gary Brent and Mark Barnicutt, each of whom are Ontario residents. Mr. Brent and Mr Barnicutt hold, directly and indirectly, approximately 70% of issued and outstanding shares of Highview.

Reactivation Transaction

The Highview Acquisition is 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 previous business focus from being a secured lender in the commercial real estate industry to carrying on business in the financial services industry with a focus on wealth management.

The Reactivation Transaction

NorRock has assessed a value of $6 million to Highview. As Highview's strategic capital partner, NorRock will be providing a combination of debt and equity capital, totaling approximately $3,500,000, to fund the long-term growth of Highview (which growth is anticipated to be derived both organically and through select acquisitions over the coming years). A portion of this funding will be NorRock's subscription for the 7,000,000 Highview Shares for $362,338. Furthermore, the current promissory note in the amount of $1,455,000, (the "Highview Note") owed by Highview to Green Tree Acquisition Corp. ("GTAC"), may be amended, to the satisfaction of NorRock, to increase the principal amount to $1,615,000, to be used as working capital, as part of the overall investment in Highview. The Highview Note, as amended, is included in the aforementioned amount of funds to be advanced and is a secured note covering all the assets of Highview and its subsidiaries (the "Security Interests") as applicable. In conjunction with the Highview Acquisition, NorRock shall acquire the Highview Note and accompanying Security Interests from GTAC in exchange for Class A Shares of NorRock. The Class A Shares shall be issued at a deemed issuance price of $0.25 per share, being 6,460,000 Class A Shares assuming the principal amount of the Highview Note being $1,615,000.

The existing shareholders of Highview shall enter into a new Highview shareholders' agreement with NorRock on terms satisfactory to NorRock. As part of the strategic investment in Highview, upon closing of the Highview Acquisition, NorRock will acquire the Highview Shares and shall cause Highview to implement a management equity incentive plan which will allow management, over the next few years, to earn up to an additional 15% of the issued and outstanding shares of Highview.

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.

As previously disclosed, NorRock intends to treat the issuance of shares by NorRock to GTAC pursuant to the transfer of the Highview Note in connection with the Highview Acquisition as a related party transaction as defined in Multilateral Instrument 61-101: Protection of Minority Security Holders in Special Transactions ("MI 61-101"). An independent valuation is not required pursuant to MI 61-101; but NorRock shall seek majority of the minority shareholder approval of the transfer of the Highview Note.

GTAC is a corporation incorporated in the province of Ontario. Due to the fact that, 100% of the issued and outstanding shares of GTAC is owned by a trust of which Jacqueline Boddaert, a director and officer of NorRock, is a discretionary beneficiary, NorRock intends to treat the transfer of the Highview Note as a related party transaction and voluntarily comply with the requirements of MI 61-101.

Jane Davis resigned as a director of NorRock on January 20, 2014 for personal health reasons. It is currently anticipated that Malvin Spooner will join the board of directors of NorRock upon closing of the Reactivation Transaction. The officers will include Jacqueline Boddaert, Chief Executive Officer and Raymond Steele, Chief Financial Officer. Biographies 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, 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.

Norman McPhedran, Director - Mr. McPhedran is a senior financial professional with over 35 years of financial, operational and advisory experience. Until his retirement in 2008, Mr. McPhedran was a senior partner of PricewaterhouseCoopers LLP. His career included leadership positions in corporate governance, risk and operational advisory, corporate finance and business recovery in both Canada (Toronto and Calgary) and the United States (New York). Mr. McPhedran serves or has served as Director and Chair of the Audit Committee on two public companies and also has experience on Special Committees and as an IRC member. He also has served on non profit Boards in the Olympic, hospital and professional services sectors. Mr. McPhedran received a BComm (Honours) from Queens University, is a Chartered Accountant and holds the CIRP and ICD.D designations.

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. (TSX VENTURE:MEK).

The Reactivation Transaction is conditional upon, among other things, receiving all necessary regulatory and third party approvals and authorizations, approval by the shareholders of NorRock, confirmation of no material adverse change having occurred to Highview prior to close, 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 $8,000,000 (the "Concurrent Financing") concurrently with its Reactivation Transaction by issuing up to 32,000,000 Class A Shares at $0.25 per share. Proceeds raised will be used for acquisitions and 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 43.3 million Class A Shares issued and outstanding. It is anticipated that the current shareholders of NorRock will collectively own approximately 11% of the issued and outstanding voting securities; the subscribers on the Concurrent Financing will collectively own approximately 74% of the issued and outstanding voting securities; and GTAC will own approximately 6,460,000 Class A Shares, being approximately 15% of the issued and outstanding voting securities. As such, GTAC will be an "insider" of NorRock for purposes of applicable securities laws. GTAC is a private Ontario corporation of which Jacqueline Boddaert is the sole director and officer.

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
[email protected]

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