Court File No. CV-14-10678-OOCL ONTARIO GRACE ADSHADE ...extranets.bdo.ca/TDCIBracebridge/docs/Vol. 1 , 1 of 3.pdf · GRACE ADSHADE, BEAVER VALLEY HOLDINGS LIMITED, PREMIERE SELF

Court File No. CV-14-10678-OOCL

ONTARIOSUPERIOR COURT OF JUSTICE

(Commercial List)

GRACE ADSHADE, BEAVER VALLEY HOLDINGS LIMITED, PREMIERE SELFSTORAGE

Applicants

-and-

TDCI BRACEBRIDGE INC., CAROL TARBACK and OLIVE FIGUEIRA

Respondents

MOTION RECORD(Sale Approval)

Volume 1 of 2

July 24, 2015 CASSELS BROOK & BLACKWELL LLP2100 Scotia Plaza40 King Street WestToronto, ON MSH 3C2

David S. Ward LSUC No. 33541 WTel: 416.869.5960Fax: 416.640.3154Email: [email protected]

Jane Dietrich, LSUC#49302UTel: 416-860-5223Fax: 416-640-3144Email: [email protected]

Erin Craddock LSUC No. 62828)Tel: 416 860-6480Fax: 416 644-9324Email: [email protected]

Lawyers for Receiver, BDO Canada Limited

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E-SERVICE LIST

TO: BDO CANADA LIMITED1717 Second Avenue E, Suite 200P.O. Box 725Owen Sound, OntarioN4K 5 W9

William A. CourageTel: 519 372-0188 x2251Fax: 519 372-0189Email: [email protected]

BDO CANADA LIMITED300 Lakeshore Drive, Suite 202Barrie, OntarioL4N OB4

Stella MillisTel: 705 726-6331Fax: 705 792-3302Email: [email protected]

Receiver of TDCI Bracebridge Inc.

AND TO: CASSELS BROCK & BLACKWELL LLP40 King Street WestSuite 2100, Scotia PlazaToronto, ON MSH 3C2

David WardTel: (416) 869-5960Fax: (416) 640-3154Email: [email protected]

Jane DietrichTel: 416 860-5223Fax: 416 640-3144Email: [email protected]

Erin CraddockTel: 416 860-6480Fax: 416 644-9324Email: [email protected]

Lawyers for the Receiver, BDO Canada Limited

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AND TO: IMPART LAW PROFESSIONAL CORPORATION34 King Street East, Suite 700Toronto, OntarioMSC 2X8

Nathan ChanTel: 416 792-8897Fax: 1 888-589-3248Email: [email protected]

Lawyers for Fovere Glenbarra Energy Fund I Ltd.

AND TO: FERREIRA & BETTENCOURT LLP905 College StreetToronto, ONM6H lAl

Trung NguyenTel: 416-535-1777Fax: 1 855-806-1407Email: [email protected]


AND TO: OWENS WRIGHT LLP20 Holly Street, Suite 300Toronto, OntarioM4S 3B1

Roey B. KertTel: 416 848-4748Fax: 416 486-3309Email: [email protected]


AND TO: BASMAN SMITH LLP1 Dundas Street West, Suite 2400 -Box 37Toronto, OntarioMSG 1Z3

Kevin W. FisherTel: 416 860-1932Fax: 416 365-9276Email: [email protected]

Lawyers for Grace Adshade, Beaver Valley Holdings Limited, Premiere SelfStorage Inc. and Lisa Wertheim-Brault

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AND TO: ORMSTON LIST FRAWLEY LLP40 University Avenue, Suite 720Toronto, OntarioMSJ 1T1

John P. OrmstonTel: 416 594-0791 xl 11Fax: 416 594-9690Email: [email protected]

Lawyers for Carol Tarback

AND TO: SHEPPARD BROWN488 Huron StreetToronto, OntarioMSR 2R3

Thomas M. SheppardTel: 416 966-6885Fax: 416 966-6837Email: [email protected]

Lawyers for TDCI Bracebridge Inc.

AND TO: GOWLINGS LAFLEUR HENDERSON LLP1 First Canadian Place100 King Street WestSuite 1600Toronto, Ontario, MSX 1G5

Clifford ColeTel: 416-862-3631Fax: 416-863-3631Email: [email protected]

Lawyers for Thomas M. Sheppard

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AND TO: DEPARTMENT OF JUSTICE CANADASuite 3400, Box 36, The Exchange Tower130 King Street WestToronto, ONMSX 1K6

Diane WintersTelephone: 416 973-3172Fax: 416 973-0810Email: [email protected]

Edward ParkTelephone: 416 973 3746Email: [email protected]

Lawyers for Canada Revenue Agency

AND TO: MINISTRY OF FINANCELegal Services Branch6th Floor, 33 King Street WestOshawa, OntarioL1H 8H5

Kevin O'HaraTelephone: 905 433-6934Fax: 905 436-4510Email: [email protected]

Lawyers for Ministry of Finance for Ontario

AND TO MELVYN D. EISENBarrister and Solicitor70 Bond Street, Suite 200Toronto, OntarioMSB 1X3

Tel: 416 865-5321Fax: 416 366-3882Email: [email protected]

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AND TO DRYLAND LAWBarrister &Solicitor, Notary Public95 Manitoba Street, Suite 103Bracebridge, OntarioP1L 2B3

Tel: 705.645.5333Fax: 705.645.9333Email: [email protected]

Lawyers for Manna Good Bank of Bracebridge Inc.

AND TO LEE ROCHE & KERRLawyers of MuskokaP.O. Box 990Bracebridge, OntarioP1L 1V2

W. Robert KerrTel: 705.645.2286Fax: 705.645.5541Email: [email protected]

Lawyers for Indial Services Inc.

AND TO: DISTRICT MUNICIPALITY OF MUSKOKA70 Pine StreetBracebridge, Ontario

Debbie CrowderEmail: [email protected]

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~:

AND TO SANCUS PROPERTIES LTD.25 Hollinger Road, Unit 10Toronto, OntarioM4B 3N4

N.J. WaltonTel: 416-276-8160Email: [email protected]

Purchaser

AND TO LITOWITZ PETTLE &SILVER LLP10 Mural Street, Suite 200Richmond Hill, OntarioL4B 1 J3

Howard LitowitzTel: 905-731-4999 x. 201Email: litowitz@litowitz. com

Solicitor for the Purchaser

AND TO: THE CORPORATION OF THE TOWN OF BRACEBRIDGE1000 Taylor CourtBracebridge, OntarioP1L 1R6

Lori McDonaldEmail: [email protected]

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COURIER SERVICE LIST

AND PANASONIC ECO SOLUTIONS CANADA INC.TO: 5770 Ambler Drive, 70

Mississauga, OntarioL4 W 2T3

AND OLIVE FIGUEIRATO: 43 Lambeth Road

Etobicoke, OntarioM9A 2V8

and

345 Ecclestone DriveBracebridge, OntarioP1L 1R1

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INDEX

INDEX

TAB DOCUMENT

1. Notice of Motion (returnable July 30, 2015)

A. Draft form of Order

2. Second Report of the Receiver dated July 24, 2015

APPENDICES

A Receivership Order

B Reasons of Pattillo, J.

C First Report

D Endorsement and Amended Receivership Order

E July 10 Order

F Receiver's Statement of Receipts and Disbursements

G BFI Demand Loan Agreement

H Self Storage Locker Revenue

I July Rent Roll

J Sign Rents Collected by Month

K Redacted Sale Agreement

L Receiver's email of May 25, 2015

M Auction Assets

N Global Assets Solutions Inc. letter agreement, dated July 23, 2015

O Parcel Abstract

P PPSA Search Results

Q Receiver's Affidavit

R Cassels Affidavit

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S Receiver Calculation re Premiere

T July 8 Indial Letter

U Ecclestone Solar Agreement

V Summary of Mortgage Advances

3. Blackline version of Order

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TAB 1



(Commercial List)

GRACE ADSHADE, BEAVER VALLEY HOLDINGS LIMITED, PREMIERE SELF STORAGE

-and -Applicants

TDCI BRACEBRIDGE INC., CAROL TARBACK and CLIVE FIGUEIRA

NOTICE OF MOTION(approval and vesting order)

Respondents

BDO Canada Limited ("BDO"), in its capacity as receiver (the "Receiver") of TDCI

Bracebridge Inc ("TDCI"), will make a motion to a judge presiding over the Commercial List on

Thursday, July 30, 2015 at 10:00 a.m., or as soon after that time as the Motion can be heard at the

court house, 330 University Avenue, 7th Floor, Toronto, Ontario, M5G 1 R7.

PROPOSED METHOD OF HEARING: The motion is to be heard orally;

THE MOTION IS FOR

(a) An order substantially in the form of the draft order (the "Draft Order") attached as

Schedule "1 ", inter alias

(i) approving the sale transaction (the "Sale Transaction") contemplated by

the agreement of purchase and sale made as of June 30, 2015 (the "Sale

Agreement"), between the Receiver and Sancus Properties Ltd.

("Purchaser"), and appended to the second report of the Receiver dated

July 24, 2015 (the "Second Report"), and vesting in the Purchaser TDCI's

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right, title and interest in and to the Purchased Assets (as that term is

defined in the Sale Agreement);

(ii) approving the Receiver's execution of the Sale Agreement and authorizing

it to enter into and complete the Sale Transaction in accordance with the

terms of the Sale Agreement;

(iii) granting the Receiver the authority to engage Global Assets Solutions Inc.

as auctioneer (the "Auctioneer") in respect of certain Auction Assets (as

defined below);

(iv) approving the First Report of the Receiver dated March 13, 2015 (the "First

Report"), and the Second Report and the activities of the Receiver set out

therein;

(v) approving the Receiver's interim statement of receipt and disbursements

for the period February 27, 2015 to July 22, 2015 attached as Appendix "F"

to the Second Report;

(vi) approving the fees and disbursements of the Receiver and its counsel,

Cassels Brock &Blackwell LLP ("Cassels"), for services rendered, from

March 1, 2015 to June 30, 2015, as particularized in the Second Report

and the affidavits of William Courage sworn July 22, 2015, and Jane

Dietrich sworn July 23, 2015 appended thereto (collectively, the "Fee

Affidavits");

(vii) sealing and treating as confidential appendices A to F to the Second

Report pending completion of the Sale Transaction or further order of the

Court; and

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(b) such further and other relief as counsel may request and this Honourable Court

may deem just.

THE GROUNDS FOR THE MOTION ARE

Background

(a) Thie Receiver was appointed in the context of an oppression remedy application.

On February 27, 2015, following a two day oral hearing, the Honourable Mr.

Justice Pattillo appointed the Receiver. The Receiver's mandate extends to

investigating certain aspects of TDCI's business and affairs and conducting an

accounting of funds diverted to the personal use of the respondents Clive Figueira

and Carol Tarback;

(b) In the First Report the Receiver outlined its activities since its appointment,

particularly its efforts to control and stabilize a TDCI's owned development

property in Bracebridge, Ontario;

(c) The Receiver has marketed and sold TDCI's property and entered into the Sale

Agreement, subject to court approval;

Sales Process

(d) Prior to the Receiver's appointment, Melvyn Eisen ("Eisen") had purported to

commence power of sale proceedings. Eisen provided the Receiver with a copy of

an agreement of purchase and sale dated February 10, 2015, between Eisen and

the Purchaser for the property known municipally as 345 Ecclestone Drive,

Bracebridge, Ontario (the "Ecclestone Property") and an adjacent 71 acre parcel

of potentially developable lands (the "Development Lands");

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(e) The Receiver met with the Purchaser and advised that prior to entering an

agreement for the sale of the properties, the Receiver would need to complete a

marketing process and the Purchaser would need to submit an offer to the

Receiver (as opposed to Eisen);

(f) In March 2014, the Receiver engaged two appraisers to value the Ecclestone

Property, the Development Lands and a 35 acre parcel of land for potential

residential development (the "Keith Road Property", with the Ecclestone Property

and Development Lands, collectively, the "Properties"). Both appraisers

submitted their reports to the Receiver by May 5, 2015. The Receiver also

contacted real estate agents who had acted for TDCI in the past to request details

of the listing history and offers submitted through their offices;

(g) The Receiver engaged in a targeted marketing campaign of the Properties and

engaged a real estate broker;

(h) The Receiver's marketing process commenced on May 20, 2015. Specifically, the

Receiver:

(i) contacted brokers and commercial real estate agents in the previous sale

process;

(ii) sent an electronic announcement to over 800 members of the national

BDO network;

(iii) contacted various parties who previously expressed an interest in the

Properties directly to the Receiver;

(iv) placed advertisements in the Globe and Mail on June 2 and 4, 2015; and

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(v) erected a for sale sign on the Ecclestone Property to increase exposure for

the sale.

(i) The Receiver also prepared a teaser ad and an information package, which was

distributed to interested parties who signed a confidentiality agreement. The

Receiver also drafted an asset purchase agreement;

(j) The deadline for the receipt of offers was June 26, 2015;

(k) A total of 24 parties provided expressions of interest, eleven parties signed

confidentiality agreements and four parties toured the Properties. One letter of

intent was submitted by June 26, 2015. The Purchaser also submitted an offer to

the Receiver;

(I) As a result of the sales process, effective June 30, 2015, the Receiver, subject to

Court approval, entered into the Sale Agreement with the Purchaser whereby the

Purchaser has agreed to purchase TDCI's right, title and interest, if any, in and to

the Purchased Assets;

(m) The purchase price for the Purchased Assets is to be satisfied by a combination of

cash consideration and financing to be provided by Eisen by either an

amendment/assumption of the existing Eisen mortgage debt or registration of a

new mortgage in favour of Eisen;

(n) The closing of the Sale Transaction is conditional on the granting of the requested

approval and vesting order by July 31, 2015, and the Purchaser entering into an

agreement with Premier and BVHL for the purchase of any and all personal

property located on the Properties owned by Premier or BVHL (the

"Premier/BVHL Condition"). The Receiver understands that the Purchaser and

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Premier/BVHL have not entered into the agreement contemplated by the

Premier/BVHL Condition and that condition remains outstanding.

(o) For the reasons outlined in more detail in the Second Report, the Receiver is of the

view that the Sale Agreement should be approved as it is the result of a fair,

complete and transparent sales process, is accompanied by a substantial deposit,

and the Sales Transaction provides the greatest value to the stakeholders of any

of the offers received.

Auction of Other Assets

(p) Prior to closing of the Sale Transaction, the Excluded Property (as that term is

defined in the Sale Agreement) needs to be removed from the Ecclestone

Property. The Excluded Property is comprised of both assets of TDCI for which

other no other ownership claims have been asserted, and certain assets for which

Tarback and/or Figuiera have asserted ownership rights (the "Disputed Assets").

The Receiver has had difficulty reconciling what Figueira has claimed to be the

property of either he or Tarback, versus property purchased with TDCI funds due

to, among other reasons, a lack of documentation;

(q) As the Excluded Property must be removed prior to closing of the Sale

Transaction, the Receiver believes that it is most economical to sell the Excluded

Property prior to closing. The Receiver further believes that an on-site auction is

the most efficient way to realize upon the Excluded Property;

(r) The Receiver proposes that the Auctioneer be engaged to conduct the on-site

auction accordance with the terms of a letter agreement dated July 23, 2015, with

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the net proceeds of sale from the auction to be received by the Receiver and to be

held pending further Court order;

Confidential Appendices

(s) Disclosure of the information contained in the Confidential Appendices to the

Second Report included in confidential appendix briefs would negatively impact

the Receiver's ability to carry out its mandate by, among other things, interfering

with the integrity of any subsequent sales process in respect of the Purchased

Assets if the Sales Transaction is not completed, included by impairing the

Receiver's ability to maximize realization of the Purchased Assets were any

information to be made public concerning any discussions of sales process or

value of the Purchased Assets among the Receiver, the parties or any of their

advisors and/or possible bidders for the Purchased Assets.

Ancillary Relief

(t) Further, the Receiver seeks the approval of the First Report and the Second

Report and its activities as set out therein;

(u) As set out in the Fee Affidavits, the Receiver and its counsel have incurred fees in

the course of their respective duties as Receiver and as counsel, and such fees

ought to be approved;

Other

(v) Rule 1.04, 2.01, 3.02, and 37 of the Rules of Civil Procedure;

(w) Such further and other grounds as the lawyers may advise.

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THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the Motion:

(a) The Second Report and the appendices attached thereto; and

(b) Such further and other evidence as the lawyers may advise and this Honourable

Court may permit.

July 24, 2015

TO: Attached Service List

CASSELS BROCK & BLACKWELL LLP2100 Scotia Plaza40 King Street WestToronto, ON M5H 3C2

David S. Ward LSUC #: 33541 WTel: 416.869.5960Fax: 416.640.3154dward@casselsbrock. com

Jane O. Dietrich LSUC#: 49302UTel: 416.860.5223Fax: 416.640.3144jdietrich@casselsbrock. com

Lawyers for BDO Canada Limited, in its capacityas court appointed Receiver of TDCI BracebridgeInc.

Legal`14792862.2

ADSHADE et al

Plai

ntif

fand

TDCI BRACEBRIDGE INC

. et

al

Defendant

Court File No.

CV-14-10687-OOCL

ONTARIO

SUPERIOR COURT OF JUSTICE

COMMERCIAL LIST

PROCEEDING COMMENCED AT

TORONTO

NOTICE OF MOTION

(approval and ves

ting

order)

Cassels Brock &Blackwell LLP

2100 Sco

tia Plaza

40 King St

reet

West

Toro

nto,

ON M5H 3C2

David S. Ward LSUC #: 33541W

Tel:

416.869.5960

Fax:

416.640.3154

[email protected]

Jane O. Dietrich LSUC#: 49302U

Tel:

416.860.5223

Fax:

416.640.3144

[email protected]

Lawyers for BDO Canada Lim

ited

, in

its

capacity as cou

rtap

poin

ted Re

ceiv

er of TDCI Bracebridge Inc.

Lega

l*14

7928

62.2

~~,



COMMERCIAL LIST

THE HONOURABLE ) THURSDAY, THE 30TH

JUSTICE ~ DAY OF JULY, 2015

BETWEEN:


Applicants

-and -


Respondents

APPROVAL AND VESTING ORDER

THIS MOTION, made by BDO Canada Limited in its capacity as the Court-appointed

receiver (the "Receiver") of the undertaking, property and assets of TDCI Bracebridge Inc

("TDCI") for an order (i) approving the sale transaction (the "Sale Transaction") contemplated

by an agreement of purchase and sale (the "Sale Agreement") between the Receiver and

Sancus Properties Ltd. (the "Purchaser") made as of June 30, 2015 and appended to the

Second Report of the Receiver dated July 24, 2015, (the "Second Report"), and vesting in the

Purchaser TDCI's right, title and interest in and to the assets described in the Sale Agreement

(the "Purchased Assets"); (ii) authorizing the Receiver to engage Global Asset Solutions Inc.

(the "Auctioneer") an auctioneer in respect of certain Auction Assets (defined below); (iii)

approving both the First Report of the Receiver, dated March 13, 2015 (the "First Report") and

the Second Report of the Receiver, and the activities described therein; (iv) approving the

Receiver's interim statement of receipts and disbursements as attached to the Second Report;

and (v) approving the fees and disbursements of the Receiver and its counsel, Cassels Brock &

Blackwell LLP ("Cassels"), for services rendered as particularized in the Second Report and the

affidavits of William Courage sworn July 22, 2015, and Jane O. Dietrich sworn July 23, 2015

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appended thereto (collectively, the "Fee Affidavits") was heard this day at 330 University

Avenue, Toronto, Ontario.

ON READING the Second Report, including the affidavit of William Courage sworn July

22, 2015 and the affidavit of Jane Dietrich sworn July 23, 2015, appended respectively as

Appendices "P" and "Q" to the Second Report (collectively, the "Fee Affidavits") and on hearing

the submissions of counsel for the Receiver, no one appearing for any other person on the

service list, although properly served as appears from the affidavit of Mary Carreiro sworn July

24, 2015 filed:

1. THIS COURT ORDERS AND DECLARES that the time for service and filing of the

notice of motion and the motion record herein shall be and hereby is abridged so that the motion

is properly returnable today, and that any further service thereof is hereby dispensed with and

that the service of the notice of motion and the motion record as effected by the Receiver is

hereby validated in all respects.

2. THIS COURT ORDERS AND DECLARES that the Sale Transaction is hereby approved,

and the execution of the Sale Agreement by the Receiver is hereby authorized and approved,

with such minor amendments as the Receiver may deem necessary. The Receiver is hereby

authorized and directed to take such additional steps and execute such additional documents as

may be necessary or desirable for the completion of the Sale Transaction and for the

conveyance of the Purchased Assets to the Purchaser.

3. THIS COURT ORDERS AND DECLARES that upon the delivery of a Receiver's

certificate to the Purchaser substantially in the form attached as Schedule A hereto (the

"Receiver's Certificate"), all of TDCI's right, title and interest in and to the Purchased Assets

described in the Sale Agreement shall vest absolutely in the Purchaser, free and clear of and

from any and all security interests (whether contractual, statutory, or otherwise), hypothecs,

mortgages, trusts or deemed trusts (whether contractual, statutory, or otherwise), liens,

executions, levies, charges, or other financial or monetary claims, whether or not they have

attached or been perfected, registered or filed and whether secured, unsecured or otherwise

(collectively, the "Claims") including, without limiting the generality of the foregoing: (i) any

encumbrances or charges created by the Order of the Honourable Justice Pattillo dated

February 27, 2015; (ii) all charges, security interests or claims evidenced by registrations

pursuant to the Personal Property Security Act (Ontario) or any other personal property registry

system; and (iii) those Claims listed on Schedule C hereto (all of which are collectively referred

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to as the "Encumbrances", which term shall not include the permitted encumbrances,

easements and restrictive covenants listed on Schedule D) and, for greater certainty, this Court

orders that all of the Encumbrances affecting or relating to the Purchased Assets are hereby

expunged and discharged as against the Purchased Assets.

4. THIS COURT ORDERS that upon the registration in the Land Registry Office for the

Registry Division of Muskoka of a Transfer/Deed of Land in the form prescribed by the Land

Registration Reform Act duly executed by the Receiver, the Land Registrar is hereby directed to

enter the Purchaser as the owner of the subject real property identified in Schedule B hereto

(the "Real Property") in fee simple, and is hereby directed to delete and expunge from title to

the Real Property all of the Claims listed in Schedule C hereto.

5. THIS COURT ORDERS that for the purposes of determining the nature and priority of

Claims, the net proceeds from the sale of the Purchased Assets shall stand in the place and

stead of the Purchased Assets, and that from and after the delivery of the Receiver's Certificate

all Claims and Encumbrances shall attach to the net proceeds from the sale of the Purchased

Assets with the same priority as they had with respect to the Purchased Assets immediately

prior to the sale, as if the Purchased Assets had not been sold and remained in the possession

or control of the person having that possession or control immediately prior to the sale.

6. THIS COURT ORDERS AND DIRECTS the Receiver to file with the Court a copy of the

Receiver's Certificate, forthwith after delivery thereof.

7. THIS COURT ORDERS that, pursuant to clause 7(3)(c) of the Canada Personal

Information Protection and Electronic Documents Act, the Receiver is authorized and permitted

to disclose and transfer to the Purchaser all human resources and payroll information in TDCI's

records pertaining to TDCI's past and current employees, including personal information of

those employees contemplated in section 3.6 of the Sale Agreement. The Purchaser shall

maintain and protect the privacy of such information and shall be entitled to use the personal

information provided to it in a manner which is in all material respects identical to the prior use

of such information by TDCI.

8. THIS COURT ORDERS that, notwithstanding:

(a) the pendency of these proceedings;

~~

(b) any applications for a bankruptcy order now or hereafter issued pursuant to the

Bankruptcy and Insolvency Act (Canada) in respect of TDCI and any bankruptcy

order issued pursuant to any such applications; and

(c) any assignment in bankruptcy made in respect of TDCI;

the vesting of the Purchased Assets in the Purchaser pursuant to this Order shall be binding on

any trustee in bankruptcy that may be appointed in respect of TDCI and shall not be void or

voidable by creditors of TDCI, nor shall it constitute nor be deemed to be a fraudulent

preference, assignment, fraudulent conveyance, transfer at undervalue, or other reviewable

transaction under the Bankruptcy and Insolvency Act (Canada) or any other applicable federal

or provincial legislation, nor shall it constitute oppressive or unfairly prejudicial conduct pursuant

to any applicable federal or provincial legislation.

9. THIS COURT ORDERS AND DECLARES that the Transaction is exempt from the

application of the Bulk Sales Act (Ontario).

10. THIS COURT ORDERS that the Receiver be and is hereby authorized to engage the

Auctioneer to conduct an auction of those assets listed in Schedule E hereto (the "Auction

Assets") substantially in accordance with the terms set out in the letter agreement dated July

23, 2015 and attached to the Second Report (the "Auction").

11. THIS COURT ORDERS that the net proceeds from the Auction be received and held by

the Receiver in a separate interest-bearing trust account pending further order of this Court

12. THIS COURT ORDERS that confidential appendices A to F to the Second Report be

sealed and kept confidential and not form part of the public record, but rather shall be placed

separate and apart from the contents of the Court file, in a sealed envelope attached to a notice

that sets out the title of these proceedings and a statement that the contents are subject to a

sealing order and shall only be opened upon the earlier of the filing of the Receiver's Certificate

or further Order of this Court.

13. THIS COURT ORDERS that the activities of the Receiver, as set out in the First

Report and Second Report, be and are hereby approved.

14. THIS COURT ORDERS that the statement of receipts and disbursements of the

Receiver attached as Appendix "F" to the Second Report be and hereby are approved.

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15. THIS COURT ORDERS that the fees and disbursements of the Receiver and its

counsel, as set out in the Fee Affidavits, be and are hereby approved.

16. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,

regulatory or administrative body having jurisdiction in Canada or in the United States to give

effect to this Order and to assist the Receiver and its agents in carrying out the terms of this

Order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully

requested to make such orders and to provide such assistance to the Receiver, as an officer of

this Court, as may be necessary or desirable to give effect to this Order or to assist the Receiver

and its agents in carrying out the terms of this Order.

Schedule A —Form of Receiver's Certificate



COMMERCIAL LIST

BETWEEN:


Applicants

- and -


Respondents

RECEIVER'S CERTIFICATE

RECITALS

A. Pursuant to an Order of the Honourable Justice Pattillo of the Ontario Superior Court of

Justice (the "Court") dated February 27, 2015, BDO Canada Limited was appointed as the

receiver (the "Receiver") of the undertaking, property and assets of TDCI Bracebridge Inc.

("TDCI")

B. Pursuant to an Order of the Court dated July 30, 2015, the Court approved the

agreement of purchase and sale made as of June 30, 2015 (the "Sale Agreement") between

the Receiver and Sancus Properties Ltd. ("Purchaser") and provided for the vesting in the

Purchaser of TDCI's right, title and interest in and to the Purchased Assets, which vesting is to

be effective with respect to the Purchased Assets upon the delivery by the Receiver to the

Purchaser of a certificate confirming (i) the payment or satisfaction by the Purchaser of the

Purchase Price for the Purchased Assets; (ii) that the conditions to Closing as set out in the

Sale Agreement have been satisfied or waived by the Receiver and the Purchaser; and (iii) the

Sale Transaction has been completed to the satisfaction of the Receiver.

C. Unless otherwise indicated herein, terms with initial capitals have the meanings set out

in the Sale Agreement.

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THE RECEIVER CERTIFIES the following:

1. The Purchaser has paid and otherwise satisfied the Purchase Price for the Purchased

Assets payable on the Closing Date pursuant to the Sale Agreement;

2. The conditions to Closing as set out in the Sale Agreement have been satisfied or

waived by the Receiver and the Purchaser; and

3. The Transaction has been completed to the satisfaction of the Receiver.

4. This Certificate was delivered by the Receiver at [TIME] on [DATE].

BDO Canada Ltd., in its capacity as Receiverof the undertaking, property and assets ofTDCI Bracebridge Inc., and not in itspersonal capacity

Per:

Name:

Title:

Schedule B -Real Property

PIN: 48053-0789 (LT)

Legal Description: PART LOT 1 CON 13 DRAPER PT 10, 20, 22, 29 TO 43 (INCLUSIVE)ON 35R23962; TM/ DM354285; S/T EASEMENT OVER PART 20 ON35R23962 AS IN DM68247; ST/ EASEMENT OVER PARTS 22, 35, 36,37 AND 38 ON 35R23962 AS IN DM79544; S/T EASEMENT OVERPART 30, 31, 33, 35, 36, 37, 39, 40 AND 42 ON 35R23962 AS INDM61469; S/T EASEMENT OVER PARTS 31, 32, 36, 40, AND 41 ON358239621 AS IN DM148395; TOGETHER WITH AN EASEMENTOVER PT LT 1 CON 13 DRAPER PT 5, 6, 12 AND 13 ON 35823962 ASIN MT117774; TOGETHER WITH AN EASEMENT OVER PT LT 1 CON13 DRAPER PART 6, 8, 9, 19, AND 21 ON 35823962 AS IN MT117774;TOWN OF BRACEBRIDGE; IN THE DISTRICT MUNICIPALITY OFMUSKOKA

PIN: 48053-0788 (LT)

Legal Description: PART LOTS 1 AND 2 CON 13 DRAPER PARTS 1 TO 9 (INCLUSIVE),11 TO 15 (INCLUSIVE), 19, 21, 44 to 47 (INCLUSIVE), 51 & 53 ONPLAN35R23962; T/W DM354285; S/T EASEMENT OVER PT 2 ON35823962 AS IN DM297032; S/T EASEMENT OVER PARTS 11, 12, 14,21 AND 47 ON 35823962 AS IN DM79544 S/T EASEMENT OVERPARTS 15 AND 19 ON 35823962 AS IN DM68247; S/T EASEMENTOVER PART 44 ON 35823962 AS IN DM61469; S/T EASEMENT OVER

PART 51 ON 35823962 IN FAVOUR OF UNION GAS AS IN MT63908;S/T EASEMENT OVER PART 6, 8, 9, 19, AND 21 ON 35823962 INFAVOUR OF PT LT 1 CON 13 DRAPER PARTS 10, 20, 22, 29 TO 43(INCLUSIVE) ON PLAN 35823962 AS IN MT117774; S/T EASEMENTOVER PARTS 5, 6, 12 AND 13 ON 35823962 IN FAVOUR OF PT LT 1CON 13 DRAPER PARTS 10, 20, 22, 29 TO 43 (INCLUSIVE) ON PLAN35823962 AS IN MT117774; TOWN OF BRACEBRIDGE, IN THEDISTRICT MUNICIPALITY OF MUSKOKA_

PIN: 48053-0196 (LT)

Legal Description: PART LOTS 1 AND 2, CONCESSION 13, DRAPER PART 20 35818142,

BRACEBRIDGE, THE DISTRICT MUNICIPALITY OF MUSKOKA

Schedule C —Claims to be deleted and expunged from title to Real Property

PIN 48053-0789 (LT)

1. Instrument number MT64063, registered on, 2009/03/26 as Charge in favour of DuraAutomotive Systems (Canada), Ltd.

2. Instrument number MT64064, registered on, 2009/03/26 as General Assignment ofRents in favour of Dura Automotive Systems (Canada), Ltd.

3. Instrument number MT108021, registered on, 2012/01/24 as Charge in favour of MelvynEisen

4. Instrument number MT108022, registered on, 2012/01/24 as General Assignment ofRents in favour of Melvyn Eisen

5. Instrument number MT108023, registered on, 2012/01/24 as Transfer of Charge infavour of B26 Trust and Melvyn Eisen

6. Instrument number MT108057, registered on, 2012/01!25 as Transfer of Charge infavour of Thomas Sheppard

7. Instrument number MT108058, registered on, 2012/01/25 as Assignment of GeneralAssignment of Rents in favour of Thomas Sheppard

8. Instrument number MT108089, registered on, 2012/01/25 as Postponement in favour ofB2B Trust and Melvyn Eisen

9. Instrument number MT114385, registered on, 2012/07/05 as Transfer of Charge infavour of Ontario Wealth Management Corporation

10. Instrument number MT114386, registered on, 2012/07/05 as Assignment of GeneralAssignment of Rents in favour of Ontario Wealth Management Corporation

11. Instrument number MT116761, registered on, 2012/48/30 as Transfer of Charge infavour of Carol Tarback

12. Instrument number MT116762, registered on, 2012/08!30 as Assignment of GeneralAssignment of Rents in favour of Carol Tarback

13. Instrument number MT128192, registered on, 2013/07/17 as Transfer of Charge infavour of The Bank of Nova Scotia Trust Company

14. Instrument number MT135548, registered on, 2014/01/29 as Charge in favour of LisaWertheim-Brauft

15. Instrument number MT137785, registered on, 2014/04/22 as Charge in favour MelvynEisen


17. Instrument number MT137794, registered on, 2014/04/22 as Postponement in favour ofMelvyn Eisen


19. Instrument number MT143203, registered on 2014/09/05 as Court Order

20. Instrument number MT149330, registered on, 2015/02/18 as Transfer of Charge infavour of Melvyn Eisen

21. Instrument number MT150348, registered on, 2015/03/23 as Transfer of Charge infavour of Beaver Valley Holdings Limited

PIN 48053-0788 (LT)

1. Instrument number MT64063, registered on, 2009/03/26 as Charge in favour of DuraAutomotive Systems (Canada), Ltd.


3. Instrument number MT108021, registered on, 2012/01/24 as Charge in favour of MelvynEisen


5. Instrument number MT108023, registered on, 2012/01/24 as Transfer of Charge infavour of B2B Trust and Melvyn Eisen

6. Instrument number MT108057, registered on, 2012/01/25 as Transfer of Charge infavour of Thomas Sheppard


8. Instrument number MT108089, registered on, 2012/01/25 as Postponement in favour ofB2B Trust and Melvyn Eisen

9. Instrument number MT114385, registered on, 2012/07!05 as Transfer of Charge infavour of Ontario Wealth Management Corporation

10. Instrument number MT114386, registered on, 2012/07/05 as Assignment of GeneralAssignment of Rents in favour of Ontario Wealth Management Corporation

11. Instrument number MT116761, registered on, 2012!08/30 as Transfer of Charge infavour of Carol Tarback

12. Instrument number MT116762, registered on, 2012/08/30 as Assignment of GeneralAssignment of Rents in favour of Carol Tarback

13. Instrument number MT128192, registered on, 2013/07/17 as Transfer of Charge infavour of The Bank of Nova Scotia Trust Company

14. Instrument number MT135548, registered on, 2014/01/29 as Charge in favour of LisaWertheim-Brault

15. Instrument number MT137785, registered on, 2014!04122 as Charge in favour MelvynEisen


17. Instrument number MT137794, registered on, 2014/04!22 as Postponement in favour ofMelvyn Eisen



20. Instrument number MT149330, registered on, 2015/Q2/18 as Transfer of Charge infavour of Melvyn Eisen


P!N 48053-0196 (Ll~

1. 1. Instrument number MT64063, registered on, 2009/03/26 as Charge in favour ofDura Automotive Systems (Canada), Ltd.


3. Instrument number MT108057, registered on, 2012/01!25 as Transfer of Charge infavour of Thomas Sheppard


5. Instrument number MT116761, registered on, 2012/08/30 as Transfer of Charge infavour of Carol Tarback

6. Instrument number MT116762, registered on, 2012/08/30 as Assignment of GeneralAssignment of Rents in favour of Carol Tarback

7. Instrument number MT137785, registered on, 2014/04/22 as Charge in favour MelvynEisen





Schedule D —Permitted Encumbrances, Easements and Restrictive Covenantsrelated to the Real Property

(unaffected by the Vesting Order)

PIN 48053-0789 (LT)

1. Instrument number DM61469, registered on, 1967/11/06 as Transfer Easement in favour ofNorthern and Central Gas Company Limited as amended by instrument number MT58490

2. Instrument number DM68247, registered on, 1969/02/04 as Transfer Easement in favour ofNorthern and Central Gas Corporation Limited

3. Instrument number DM79544, registered on, 1970/10/19 as Transfer Easement in favour ofThe Bell Telephone Company of Canada

4. Instrument number DM148395, registered on, 1979/10/12 as Transfer Easement in favour ofThe District Municipality of Muskoka

5. Instrument number DM288542, registered on, 1996/02/09 as an Agreement (site plan) infavour of The Corporation of the Town of Bracebridge

PIN 48053-0788 (LT)

1. Instrument number DM61469, registered on, 1967/11/06 as Transfer Easement in favour ofNorthern and Central Gas Company Limited as amended by instrument number MT58490

2. Instrument number DM68247, registered on, 1969/02/04 as Transfer Easement in favour ofNorthern and Central Gas Corporation Limited

3. Instrument number DM79544, registered on, 1970/10/19 as Transfer Easement in favour ofThe Bell Telephone Company of Canada

4. Instrument number DM288542, registered on, 1996/02/09 Agreement (site plan) in favour ofThe Corporation of the Town of Bracebridge

5. Instrument number DM297032, registered on, 1997/04/16 as Transfer Easement in favour ofOntario Hydro

PIN 48053-0196 (LT)

1. Instrument number DM288542, registered on, 1996/02/09 Agreement (site plan) in favour ofThe Corporation of the Town of Bracebridge

Schedule E —Auction Assets

TDCI BRACEBRIDGE I1~TC,, RECEIVERSHIP

LISTING OF ITEMS TO BE SOLD AT AX7CTION(There may be further additions to this list)

TDCI Chattels not included Sancus APS (located throughout building)

Pine sideboardBrown Vinyl 3 Seater sofaBrown Vinyl Tufted Back Wing :Back ChairMachine Made Area Rug 9'6" x 5'6"Persian Area Rug 9' x 12'Brown Leather Sofa &ChairOval Coffee Table2x open bookcase .Maple 42"x 90" tallL shape maple. Desk w/matching ArmoireOak Double Pedestal DeskOffice Chair (Torn)Oak Lateral Filling Cabinet CredenzaOak 1Vlelamine Single Door Cabinet6' painted white 3-door 10 Payne Window CabinetPainted White Wash Double ArmoireG.E Refrigerator1.O~~Z ̀ Oval Board Room Table Double Pedestal1 Ox UPH Board Room ChairsWork Station by TAYCO11 x Metal Doors3 1VIeta1 Door Frames8 ~3anging LightsInsolation &Ceiling Tiles4 Skids 12"x12'" TilesLot of assorted stainless metal polesAssorted old tao'ls &fans15x Gas cansLot of assorted heatersMobile scaffolding 2-sectionAssorted 8'rackng beamsApprox. 30 beams3x Upright racking .6' sectionsLot of drywallAluminium sheets Approx. 9'x4'Plywood30 K~1A Transformer2~ KVA TransformerDisconnectsApprox. 8'x7' Loewen windows (Newt2x assorted metal windows

z

8x Mobile boat storage rackApprox. l 2'34"x6'2003 16'x 7' Double axle trailer with gate .ramps by: J.D.J. 2JIDUTE62431002528Wood crate 4x5Warehouse lights~x Ceiling fans18x Accuglo Accolite 250 watts M-50 lamp13x FlorescentAssorted doors Approx. 20

_.... Vann}'.. _...... ---- - ~- - ...Assorted white melamine cabinetsHose2x Shop carts.Skids of 9"x10' pine flooring, tongue and grooveSkids of old lumber pineSkids of old doorsBin of parts &assorted electrical cards etc.Roast pit on wheels (Home made) 7' axle14 Cedar strip sail boat 24' Mass "T'he Loon" (Third Party —default in dispute)With aluminium single a~cle boat trailer1934 Rolls Royce Hooper body #~ 8069 VIN # GE-D27 6M6x Approx. 8'x10'' garage doorsAssorted windows and .patio doors (Used)Assorted ceiling tiles2x EZ Go Golf.cart.Fireplace insertDust collector2x Skids of assorted 2x4 florescent lightsPair of post jacksAssorted raw lumberCentral Vac15 Commercial wall mount fansAssorted AB Electrical disconnects53' trailer40' container trailerLoad of warehouse lights

3.TDCI Tool Room Chattels - Warehouse (not incladed ~in :Sancus APSI

2 -Husky mechanic tool chest and contentsSkill sawMakita grinderDremel advantage high sped rotary saw1klakita angle grinderBench viceAssorted cordless drillsRigid metal chop saw32' Extension ladder

. _._ __ _Dewalt bench grinder. _. .Makita LS 1212 Mitre sawPallet jackDelta chop sawHonda 24 HP pressure washerYamaha gas generator EF66U0 DE2x TransformersGreat Dane Zero turn riding lawnmower "Chariot"Husyvarna 1$ HP LawnmowerAriens Deluxs 30 snow bowerHusyvarna 6.5 HP Model 580 RSW LawnmowerOmega Pro PK 5020 compressorCommercial fan on wheelsMilwakee Dymodri114096Craftex 14" band sawAssorted levelsSmall tools shovels, rakes, brooms, carts, hammers,Step ladders, hand cart, appliance cart, shop vac

Third Party Chattels - Default Storage Lockers (Premiere)

Locker #1254 (10'x 10')Locker #1245 (5' x 10'jLocker #1262 (i0'xi0')Locker #12U9 (lU'x1.5')Locker #1 i 80 (1:0'x15')Locker # 1224 (1 U' x 1 S'

4Fi~euira/Tarback Chattels — Default S~ora~e Lockers (Premiere)

Locker #1243 (10'x 2.0') Church pew, ash sideboard,3x quiltsLocker #1214 (10'x 15') Oak sideboard, Marble top European sideboardLocker #12.16 (10'x 15') 2x Wing back chairs

Queen Anne style sideboardFainted armoirePainted bo~n~t chest. (pine)-Ash bonnet chest2x Eureka curvy chairs

._ ..... _ ..... _._ _ __ _. _ _. _ _ 2x Eureka curvy loungerOak modern 10-drawer dresserWhite melamine dresser

Locker #1180 (1U'x1.5') Futon &computer equipmentCooler 2 fillers

Locker # 1108 (10'x8') Walnut desk with damage 7'x 42"Walnut office desl~ 5'x34"2x Red stoolsQueen size headboard &footboardMoving pads

Locker #1107 (10'x10') Double pedestal deskAntique walnut double pedestal deskParts; flags etc.

Locker #1106 (10'x10') Walnut finish bedroom armoireWalnut credenzaSofa and sofa chairsMoving pads

5Fi~euira!'Tarback Chattels — TDCI Locker Rooms

Contents in Locker Rooms (# 1301, .# 1302, # 1303 and # 1313)Gor~dola shelving13 '/7 x 10' Hand .knotted rug (office) MedallionPainting on wallOak gate leg table Approx. 7"2x Gary Fisher mountain bikes~x Snow shoes (Each @ $25.00 to $40.00)S-Section chrome shelvingImperial Model 1 SB 3'6 40,000 BTU gas oven

.: ._ .. Singer sewing machine _._ . _ .. _ _... - . -- - - -Whirlpool lop load washing machineWhirlpool dryerDCS Stainless steel stoveUltraLine Professional stainless steel frdge15:2eu ftMaple Louis XV style cupboardMaple Louis XV style cupboardJohn Deer Moline SafeTeak f replace mantleWicker hall tableRustic bathroom industrial look vanity sinkMaytag washing machine (oversize capacity plus)Area rugsSofa setsPine mirrorPainted Welsh cabinetVintage UPH tufted b~ek arm chair7x Assorted art &mirror.2x Painted panelsRainted fireplace screenPlastic child's pedal carl Ox Assorted copper potsMobile coolerThe are of Glen Loate~ book (wooden box)Painted pie crust candle table$.arley twist claw foot parlour tableDining room chairs, UPH chairs, dining room tableStainless steel prep table_Flat screen TV "Visio" HDM; HD TVAntique tab'}eRoom of Halloween stuff2x Large area Persian rugsWalnut finish kitchen islandAssorted Halloween stuffLeft over Misc.S:ecurifort Inc. safeRoom complete work stationI2x Handknotted area rugs

62x Oak antique side tablesAntique walnut rocking chairiVIetal horse cut out end tableBoston RockerCarved teak oversize coffee tableTable with Shabby —Chic dining room tablePine bench2x Child Muskoka chairsYakima roof top carrierWoods Queen size blow u.p bedBlack bar refrigerator

..____B:utcher.hlock_ta~ _ .3x Canoe paddles (painted)Stainless steel tube -sinkDrafting tableRoom contents Gondola shelvingAssorted skies4x Muskoka wood teak arm .chairs2x Twig chairs16' Canoe Water crestGlobal2-door cabinetGrand .&Toy 4-drawer legal f ling cabinet



(Commercial List)


Applicants

-and-

TDCI BRACEBRIDG~ INC., CAROL TARBACK and CLIVE FIGUEIRA

Respondents

SECOND REPORT TO THE COURTSUBMITTED BY BDO CANADA LIMITEDIN ITS CAPACITY AS RECEIVER OF

TDCI BRACEBRIDGE INC.

July 24, 2015

Legal"14869856.7

INDEX OF APPENDICES

Appendix A Receivership Order

Appendix B Reasons of Pattillo, J.

Appendix C First Report

Appendix D Endorsement and Amended Receivership Oi•der

Appendix E July 10 Order

Appendix F Receiver's Statement of Receipts and Disbursements

Appendix G BFI Demand Loan Agreement

Appendix H Self Storage Locker Revenue

Appendix I July Rent Roll

Appendix J Sign Rents Collected by Month

Appendix K Redacted Sale Agreement

Appendix L Receiver's email dated May 25, 2015

Appendix M Auction Assets

Appendix N Global Assets Solutions Inc. letter agreement, dated July 23, 2015

Appendix O Parcel Abstract

Appendix P PPSA Search Results

Appendix Q Receiver's Affidavit

Appendix R Cassels Affidavit

Appendix S Receiver Calculation re Premiere

Appendix T July 8 Indial Letter

Appendix U Ecclestone Solar Agreement

Appendix V Summary of Mortgage Advances

INDEX OF SCHEDULES

Schedule A Issues Relating to Premiere Self Storage

Schedule B Consideration of Solar Assets

Schedule C Mortgage Accounting

INDEX OF CONFIDENTIAL APPENDICES

Confidential Appendix A

Confidential Appendix B

Confidential Appendix C

Confidential Appendix D

Confidential Appendix E

Confidential Appendix F

Altus Appraisals

ACI Appraisal

Letter of Intent

Unredacted Sale Agreement

TDCI Appraisal Summary

Summary of Offers

Court File No. CV-14-10(78-OOCL


(COMMERCIAL LIST)

1N THE MATTER OF SECTION 248(3)(b) OF THE ONTARIO BUSINESSCORPORATIONS ACT,

R.S.O. 1990, C. B.16, AS AMENDED AND

IN THE MATTER OF SECTION 101 OF THE COURTS OF JUSTICE ACT,

R.S.O. 1990 c. C-43, AS AMENDED

IN THE MATTER OF THE RECEIVERSHIP OFTDCI BR.ACEBRIDGE INC.

SECOND REPORT TO THE COURTSUBMITTED BY BDO CANADA LIMITEDIN ITS CAPACITY AS RECEIVER OF

TDCI BRACEBRIDGE INC.

July 24, 2015

Introduction

1. By Order of the Honourable Mr. Justice Pattillo dated February 27, 2015 (the

"Receivership Order"), BDO Canada Limited was appointed as receiver (in such capacity, the

"Receiver"), without security, of all of the assets, undertakings and properties of TDCI

Bracebridge Inc. ("TDCI"). The Receivership Order was granted on a motion brought by Beaver

Valley Holdings Limited ("BVHL"), Grace Adshade ("Adshade") and Premiere Self Storage

Ltd. ("Premiere") (collectively the "Applicants"). A copy of the Receivership Order is attached

hereto as Appendix "A". Justice Pattillo's reasons for decision ("Reasons") are attached as

Appendix "B".

2. As is clear from the Reasons, this is not a conventional secured creditor enforcement

proceeding. Prior to the dispute giving rise to these proceedings, Adshade and the respondent,

Clive Figueira ("Figueira"), were partners in the acquisition and proposed development (through

TDCI) of 124 acres of land in Bracebridge, Ontario.

~C'~

the Excluded Property, including the Disputed Assets, a detailed list of which are attached as

Appendix "~I,M" hereto (the "Auction Assets").

69. The Receiver proposes that Global Assets Solutions Inc. (the "Auctioneer") be engaged to

conduct the on-site auction substantialiv in accordance with the terms of a letter agreement

attached as Appendix "~N" hereto. Given the Receiver's knowledge of the auction market

generally, the nature and location of the assets and the required auction time frame for removal, the

Receiver is of the view that the 20% fee proposed by the Auctioneer is reasonable in the

circumstances.

70. The Receiver understands that Premier may also engage the Auctioneer to conduct an

auction of certain assets located in storage lockers at the Ecclestone Property (for which storage

payment has not been received) at the same time as the proposed auction of the Auction Assets.

71. Accordingly, the Receiver respectfully requests that the Court grant an order approving the

engagement of the Auctioneer on the terms set out in the letter agreement attached as Appendix

"~1N" hereto with respect to the Auction Assets with the net proceeds of sale from the auction

received by the Receiver to be held pending further Court order.

Secured Creditors and Priority Claims

72. A copy of the parcel abstract is attached as Appendix "~O" to this report. The Receiver is

advised that Eisen holds registered mortgages in first and second position totaling $7,250,000.

The former Dura Mortgage, with a face value of $1,700,000 is subordinated to Eisen's mortgages,

as is a mortgage in favour of Lisa Brault.

73. A copy of search results under the Personal Property Security Act as against TDCI is

attached as Appendix "OP". At the date of the appointment of the Receiver, the only registration

was from BVHL notifying of its ownership of the pylon sign in front of Ecclestone.

74. Canada Revenue Agency ("CRA") has conducted audits of the employee source

deductions/payroll ("Payroll") for TDCI. Following the audit the CRA has advanced a claim for

unremitted payroll source amounts of $9,639.33. ~ rr-~-~~t-~e~at-e~-~:e

... , .

. ~ . . ': The Receiver believes that there is an HST

refund available as of the date of the Receivership.

-2-

3. The application (for among other things oppression remedy relied was commenced in

August 2014 and came to trial in February 2015. Justice Pattillo disbelieved Figueira's evidence

and found that his conduct in relation to the Applicants merited the appointment of a receiver

over TDCI pursuant to section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as

amended, and section 248 of the Business Corporations Act, R.S.O. 1990, c. B. 16, as amended.

The Reasons are uniformly critical of Figueira, finding, among other things, that he used TDCI

as his "personal cash machine".

4. It is important to note that Justice Pattillo ordered that the Receiver's mandate go beyond

the typical model order receivership powers. Specifically, the Reasons direct that the Receiver:

(a) "investigate the accounts of TDCI and such further records as may be necessary

to complete an accounting of all funds diverted or converted by Figueira and [the

respondent Carol Tarback ("Tarback")] to their personal use"; and

(b) investigate, report upon, and if possible resolve any issues involving TDCI and

Premiere, a co-applicant storage facility business owned by Adshade.

5. By way of background, TDCI purchased certain lands and buildings in Bracebridge (the

"Ecclestone Property") from Dura Automotive Systems (Canada), Ltd. ("Duc•a") on March 26,

2009 for $3,000,000.

6. The building on the Ecclestone Property has been substantially renovated but is only

partially leased. The revenue generated from the leased space currently provides the only cash

flow for TDCI.

7. Along with the Ecclestone Property, TDCI owns two other pieces of real property

(collectively the "Properties"): (i) an adjacent 71 acre parcel of potentially developable lands (the

"Developments Lands") and (ii) a 35 acre parcel of land for potential residential development

(the "Keith Road Property").

8. On March 13, 2015, the Receiver filed its First Report to the Court (the "First Report").

The First Report detailed conservatory and protective measures taken by the Receiver, provided

background as to power of sale proceedings commenced by first mortgagee Melvyn Eisen

("Eisen"), explained Figueira's interference with the administration of the receivership, and

-3-

described the Receiver's initial valuation and realization activities. A copy of the First Report

(without appendices) is attached as Appendix "C".

9. The Receivership Order was amended by the Court on March 17, 2015 to authorize the

Receiver to borrow up to $500,000 (the "Amended Receivership Order"). The amendment was

required because the Receivership Order inadvertently omitted a borrowing limit. A copy of the

Amended Receivership Order is attached as Appendix "D".

10. Justice Pattillo granted an order on July 10, 2015 (the "July 10 Order") that addressed

certain outstanding TDCI privilege claims and authorized the Receiver to obtain an independent

security review and conduct a mortgage accounting in respect of the Eisen mortgage security. A

copy of the July 10 Order is attached as Appendix "E".

Purpose of the Report

11. The purpose of this second report to the Court of the Receiver (the "Second Report") is

to:

• Report on the activities of the Receiver since the filing of the First Report;

• Report on the conduct of Figueira and the impact on the administration of the

Receivership;

• Seek approval of a sale transaction (the "Sale Transaction") contemplated by an

agreement of purchase and sale made as of June 30, 2015 (the "Sale Agreement")

entered into between the Receiver as vendor and Sancus Properties Ltd. as purchaser

(the "Purchaser") with respect to the Purchased Assets as defined in the Sale

Agreement, including the Properties, and vesting the Purchased Assets in the

Purchaser on closing of the Sale Transaction;

• Seek authority to engage Global Assets Solutions Inc. as auctioneer (the

"Auctioneer") in respect of certain Auction Assets (as defined below);

• Seek approval of the fees and disbursements of the Receiver as set out in the

Receiver's Affidavit (as defined below) and of the Receiver's legal counsel, Cassels

Brock &Blackwell LLP ("Cassels") as set out in the Cassels Affidavit (as defined

below);

• Seek approval of the First Report and this Second Report and the activities of the

Receiver as set out therein including the statement of Receipts &Disbursements

attached as Appendix "F" hereto; and

• Seek an order sealing and treating as confidential the Confidential Appendices until

closing of the Sale Transaction or further order of the Court.

12. In preparing this Second Report, the Receiver has relied upon certain unaudited, draft

and/or internal financial information, TDCI's books and records, discussions with Employees,

and information from obtained from other third parties sources. The Receiver assumes no

responsibility or liability for the loss or damage occasioned by any party as a result of the

circulation, publication, re-production or use of this Second Report or for any use which any

party makes of this Second Report, or any reliance on, or a decision to be made, based upon it,

other than for the express purposes set out herein.

Summary of Receiver's Activities Since Last Report

13. Since March 13, 2015, the Receiver's activities have included, among other things:

• Overseeing and monitoring TDCI's ongoing operations, including stabilizing

operations, reviewing ongoing operating commitments, and overseeing accounting

functions, rent collection and bill payments;

• Attending to critical repairs, including arranging for the installation of a gas meter

and reconnecting gas services to the building, remedying regulatory work orders (i.e.

Bracebridge Fire Department) and ensuring essential services are maintained;

• Considering cash flow constraints and funding/borrowing requirements;

• Monitoring receipts and disbursements, coordinating Receiver's borrowings, and

liaising with various stakeholders as appropriate;

• Attending numerous tenant meetings to address concerns regarding critical repairs

and to provide updates on the Receiver's sales efforts;

• Meeting with prospective tenants and negotiating and entering into lease agreements;

• Planning and implementing a marketing and sales process for TDCI's assets,

including commissioning appraisals of the Properties;

-5-

• Preparing relevant documents for use in the sales process including a confidentiality

agreement, investment summary, and template form of agreement of purchase;

• Facilitating site visits and responding to due diligence information requests from

prospective purchasers;

• Corresponding with prospective purchasers, realty brokers and other key

stakeholders;

• Negotiating agreements of purchase and sale in consultation with legal counsel;

• Updating relevant stakeholders througout the sales and marketing process;

• Corresponding with tenants, staff, creditors, stakeholders and their legal counsel;

• Reviewing and responding to communications and information requests from the

Applicants, mortgagees, and current and former legal counsel to TDCI and Tarback;

• Analyzing issues having to do with a solar power contract and solar array hardware

("Solar Assets") on the Ecclestone Property, particularly with respect to legal rights

asserted in the Solar Assets and the potential realization of value for creditors from

the Solar Assets;

~ Working to indentify and address issues having to do with the relationship between

TDCI and Premiere, particularly matters arising from how their respective businesses

were improperly combined by Figueira; and

• Preparing a mortgage accounting in respect of the Eisen Charges.

Status of Premises

14. In the months since the First Report, the Receiver has continued to expend a significant

amount of time and resources stabilizing TDCI's business and operations and conducting critical

repairs to the Ecclestone Property. Repairs have been required to fix non-functioning HVAC

systems, sprinkler systems and water mains, and to address leaks in the roof and fire code

violations. A gas meter that had been removed due to non-payment of accounts was reinstalled.

Essential heating, alarm and fire suppression systems were restored.

~:~

15. Security and fire watch services were maintained during non-business hours through to

May 19, 2015, as the fire suppression and alarm system at the Ecclestone Property was found to

be inoperative due to a water main break and damage to the pump house. This damage occurred

pre-receivership during the period when the premises were not heated.

Receiver's Borrowings

16. Pursuant to paragraph 21 of the Amended Receivership Order, the Receiver is permitted

to borrow up to $500,000 as is necessary or desirable to fund the receivership.

17. As explained in the First Report, the Receiver anticipated a $365,000 cash flow

deficiency over the March to May period as a result of expenditures required to stabilize

operations, perform critical repairs, and to fund Receivership administration costs.

18. The Receiver arranged a credit facility with Bridging Financial Inc. (the "BFI Demand

Loan") on March 24, 2015. A copy of the BFI Demand Loan agreement is attached as Appendix

«G»

19. The BFI Demand Loan provides for Receiver's Borrowings of up to $500,000 with a

repayment term not to exceed nine months from the date of the initial advance. As of July 15,

2015, $500,000 has been advanced as Receiver's Borrowings which amount remains

outstanding.

Books and Records

20. In the days immediately following its appointment, the Receiver was able to secure

certain TDCI's books and records, including some accounting records, located at the premises.

Other records, particularly documents related to agreements made by Figueira, were not found

on the premises and the Receiver has been advised by TDCI staff that such materials were

removed by Figueira. The Receiver's inability to locate TDCI records has made it impossible for

the Receiver to determine the ownership of certain assets on the premises, some of which have

been claimed by Figueira and Tarback as their personal property.

21. The Receiver contacted counsel for TDCI, Thomas M. Sheppard ("Sheppard"), to seek

access to relevant TDCI legal files, particularly files relating to TDCI financing and development

proposals. The Receiver was advised by Sheppard (or his counsel, Gowlings) that certain of the

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documents requested by the Receiver were subject to potential claims of privilege such that they

would not be produced to the Receiver.

22. TDCI related privilege claims were negotiated between counsel for all parties asserting

an interest in the records. Ultimately, issues in relation to claims of privilege and access to

documents were settled. The settlement is reflected in the terms of the July 10 Order.

23. With the assistance of the July 10 Order, the Receiver has obtained a significant volume

of TDCI books and records from TDCI service providers. Despite repeated requests, Figueira

and Tarback have not produced any TDCI records to the Receiver.

Figueira's Ongoing Interference with Receiver

24. The First Report extensively documents Figueira's activities and non-cooperation with

the Receiver.

25. More recently, Figueira has interfered with the receivership as follows:

• The Receiver has been advised by staff at eMove, a software service provider for the

storage business, that Figueira attempted to change account authority and redirect

funds collected for self storage locker rents. The Receiver was successful in securing

control of the account with eMove and funds are now being directed to the Receiver's

trust account;

• Figueira is believed to have contacted Hostgator, TDCI's website and email services

provider, and terminated all account access and services. Hostgator has refused to

restore access and authority to the Receiver on the basis that the company operates in

the United States and is not bound by the Receivership Order. The Receiver and its

counsel have been in contact with Hostgator, and its parent company, but have so far

not been able to restore access;

• On February 27, 2015, following the grant of the Receivership Order, Figueira and/or

Tarback apparently withdrew $11,003.95 from TDCI's bank account. The Receiver

had demanded return of the funds, but Figueira and Tarback have not complied; and

• Figueira has had ongoing contacts with staff employed at the Ecclestone Property,

notwithstanding the Receiver's direction that communications be through its offices.

Operating Results

26. As discussed in the First Report, BDO was initially engaged by the Applicants and

instructed by this Court to conduct a review of TDCI's business and accounts. BDO submitted

two reports to the Court detailing its observations.

27. BDO's observations included, among other things, incomplete books and records and

source documentation, incorrect and incomplete postings of material transactions, personal

expenses for Tarback and Figueira being paid from TDCI bank accounts, and improper

allocation of revenue and expenses.

28. This Court has found, at paragraph 43 of the Reasons, that Figueira has taken steps to

incorporate the business of the applicant, Premiere, into the business of TDCI. The Receiver's

mandate extends to considering how this was done, but not to "untangling" or "separating out"

Premiere from TDCI.

29. Due to the lack of records, and the poor and incomplete nature of available records, the

Receiver has unfortunately not been able to make significant progress in addressing issues

having to do with Figueira's attempted incorporation of Premiere's business into TDCI. Certain

of the Receiver's observations in respect of Premiere are summarized at Schedule "A" to this

Report.

30. The revenues associated with TDCI, BVHL and Premiere include the following:

• Premiere —rental payments from the self storage lockers;

• TDCI —rental payments from tenants under leases and month-to-month agreements;

• BVHL -Sign rental; and

• TDCI -Warehouse rental.

31. The Receiver has collected rents from the self storage lockers in the amount of

$77,426.45 from March 1 to July 21, 2015. Self storage locker revenue by month is summarized

in the attached Appendix "H".

32. At the commencement of the receivership proceedings, there were a number of tenants

that alleged they had "deals" (for set-off of rents or payment of rents by the provision of certain

services such as legal services for TDCI and Figueira personally, repairs and maintenance and

personal loans to Figueira which remain unpaid) with Figueira and accordingly were refusing to

pay rent to the Receiver. The Receiver advised that there would be no further set-offs

subsequent to the Receivership and that rents would need to be paid effective March 1, 2015.

The tenants who were claiming set-off were JPM Landscaping Ltd ("JPM"), Bask Pro Insulation

and Traffic Ticket Ally ("TTA").

33. The Receiver entered into a new lease agreement with Bask Pro Insulation, however JPM

and TTA would not agree to pay rent and vacated the premises.

34. Since its appointment, the Receiver has entered into eight new leases with tenants on

terms that the Receiver views as commercially fair and reasonable. The additional rental

revenue attributed to these leases totals $8,476 per month. Current rental collections from

tenants total $27,610 per month. A copy of July rent roll is attached as Appendix "I".

35. In addition to rents collected for use of space, certain tenants pay rent for advertising

space on the sign located in front of the Ecclestone Property. The sign is owned by BVHL, one

of the applicants in the proceedings. Monthly rents collected since the Receiver's appointment

total $1,350. A summary of the sign rents collected by month are attached as Appendix "J".

36. The Receiver did not collect any rents associated with the warehouse space other than

rent from Canadian Tire pursuant to a lease agreement of $1,719 per month. The warehouse

space was primarily being used as winter storage for boats and vehicles from approximately

October to May. Rents for the storage of the vehicles and boats were prepaid at the beginning of

the season.

Consideration of Solar Assets

37. As indicated in the summary of the Receiver's activities, the Receiver has devoted some

time to understanding rights and interests related to the Solar Assets. The focus of the review

was to assess potential value as may be realized for the account of TDCI creditors. The

Receiver's observations and conclusions in relation to the Solar Assets are summarized in

Schedule "B" to this Report.

38. As explained below, it is anticipated that the Solar Assets will be the subject of a

transaction between the proposed purchaser of the Properties and the owner of the Solar Assets.

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Vroperty Sale Transaction

39. As discussed in the First Report, prior to the Receivership, Eisen purported to commence

power of sale proceedings in respect of the Properties. Eisen had provided the Receiver with a

copy of an agreement of Purchase and Sale dated February 10, 2015 with a scheduled closing

date of March 10, 2015 between Eisen as mortgagee and the Purchaser for the Ecclestone

Property and the Development Lands (the "Original Sancus Offer"). Eisen expressed to the

Receiver that in his view, the Receiver should complete the transaction contemplated by the

Original Sancus Offer.

40. The Receiver and Cassels held numerous discussions with Eisen regarding the process

that needed to occur prior to the Receiver entering into any sale transaction. That process

included obtaining independent appraisals and conducting a sale and marketing process prior to

seeking court approval of a sale by the Receiver.

41. In this context, the Receiver understands that prior to the receivership proceedings, the

Ecclestone Property had been listed with Avison Young Commercial Real Estate in May of 2013

for $8,250,000 with a later amended listing price of $8,750,000. As well, in August of 2013 the

Development Lands were listed with Colliers at a listing price of $10,500,000.

42. The Receiver also met with the Purchaser and advised that prior to entering into an

agreement with the Receiver, an offer would need to be submitted to the Receiver and could not

be entered into by the Receiver until such time as appraisals had been received and a sale and

marketing process had been completed.

43. The Receiver engaged Altus Group Limited ("Altus") and Appraisers Canada Inc.

("ACI") in March of 2015. Although the Receiver advised the appraisers of the urgency of the

matter, submission of the appraisals was significantly delayed by both parties due to the nature of

the Properties and the complexities of the storage and solar installations.

44. Altus submitted its appraisal reports on May 6, 12 and 13, 2015 for each of the Properties

with an effective date of April 1, 2015 (the "Altus Appraisals"). Copies of the unredacted Altus

Appraisals are attached as Confidential Appendix "A".

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45. ACI submitted its appraisal report on May 5, 2015 for all of the Properties with an

effective date of April 15, 2015 (the "ACI Appraisal"). A copy of the unredacted ACI Appraisal

is attached as Confidential Appendix "B".

46. The Receiver is seeking a sealing order in respect of the Altus Appraisals and the ACI

Appraisal pending closing of the Sale Transaction or further Order of the Court in order to ensure

that the value of the Properties is not impacted if the Sale Transaction for which court-approval

is being sought does not close.

47. As discussed above, the Ecclestone Property and the Development Lands had previously

been listed. The information provided to the Receiver by the various listing agents informed the

marketing and sale process undertaken by the Receiver. The sales and marketing process was

also developed to take into account the current status of the Properties, current market conditions

and the limited funding available to the Receiver.

48. The Receiver's sales and marketing process commenced on May 20, 2015. Specifically,

the Receiver:

• contacted brokers and commercial real estate agents involved in the previous sale

process;

• sent an electronic announcement to over 800 members of the national BDO network;

• contacted various parties who previously expressed an interest in the Properties

directly to the Receiver;

• placed advertisements in the Globe and Mail on June 2 and 4, 2015; and

• erected a for sale sign on the Ecclestone Property to increase exposure of the sale.

49. The Receiver also prepared a teaser, compiled an information package and distributed the

information package to interested parties who signed a Confidentiality Agreement ("CA"). A

template form of Asset Purchase Agreements ("APA") was provided to the prospective

purchasers to ensure as far as possible, terms and conditions of sale were standardized and easily

comparable.

50. Potential parties were advised by the Receiver that the deadline for the receipt of offers

was June 26, 2015.

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51. A total of 24 parties provided expressions of interest, eleven parties signed CAs and were

provided information packages and four parties completed tours of the Properties. One letter of

intent was submitted by June 26, 2015 (the "Letter of Intent"). A copy of the Letter of Intent is

attached as Confidential Appendix "C".

52. As well, an offer was submitted by the Purchaser which, after negotiations, resulted in the

Sale Agreement which was accepted by the Receiver as of June 30, 2015, subject to the approval

of this Court.

53. Key terms of the Sale Agreement include:

• The Purchased Assets include the real property comprising the Properties along

with Accounts Receivable, Contracts, Equipment, Intellectual Property, Books

and Records and Licenses (as those terms are defined in the Sale Agreement), but

excludes the Excluded Property which is listed on Schedule C to the Sale

Agreement (the "Excluded Property");

• The purchase price for the Purchased Assets is to be satisfied by a combination of

cash consideration and financing to be provided by Eisen (by either an

amendment/assumption of the existing Eisen mortgage debt or registration of a

new mortgage in favour of Eisen);

• The assets are being sold on an ̀as is/where is' basis;

• A significant deposit is required to be paid by the Purchaser (and has been

received by the Receiver);

• The Closing Date is anticipated to be August 10, 2015 or such other date as the

Purchaser and Receiver may agree to in writing;

• The Closing is conditional upon

• an approval and vesting order being granted by the Court no later than

July 31, 2015;

• the Purchaser entering into an agreement with Premiere and BVHL for the

purchase of any and all personal property located on the Properties owned

by Premier or BVHL (the "Premier/BVHL Condition"); and

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• the Receiver shall have received an independent opinion or declaration

from the Court that the Eisen Charges are valid and enforceable and have

priority over other registered security interests in the Properties.

54. At this time the Receiver understands that the Purchaser and Premier/BVHL have not

entered in to an agreement as contemplated by the Premier/BVHL Condition and that condition

remains outstanding.

55. The Receiver further understands that the Purchaser has entered into a separate contract

with Fovere Glenbarra Energy Fund 1 Ltd. ("Fovere") for the purchase of the Solar Assets which

the Receiver understands is scheduled to close contemporaneously with the closing of the Sale

Transaction.

56. A copy of the Sale Agreement with the purchase price and amount of financing redacted

is attached as Appendix "K". A copy of the unredacted Sale Agreement is attached as

Confidential Appendix "D". The Receiver is seeking an order sealing the Confidential

Appendices pending the completion the Sale Transaction or further Order of the Court in order to

ensure that value of the Properties is not impacted if the Sale Transaction does not close.

Evaluation of the Sale Agreement

57. The Receiver has summarized all current and recent appraisals and opinions of value in

the attached Confidential Appendix "E". The consideration contemplated by the Sale Agreement

compares favourably to the appraised values as set out in the Altus Appraisals and the ACI

Appraisal obtained by the Receiver. The Receiver has reviewed a copy of an appraisal obtained

by Figueira for purposes of obtaining financing prior to the receivership (the "Prior Appraisal")

and notes that the value in the Prior Appraisal exceeds the consideration contemplated by the

Sale Agreement. Given the information received by the Receiver, including the results of the

sale and marketing process and the value of the appraisals obtained by the Receiver, the Receiver

is of the view that the value set out in the Prior Appraisal is not reflective of the current market.

58. The Receiver has also summarized offers or expressions of interest that were generated

through previous marketing efforts of which it is aware. Such summary is attached as

Confidential Appendix "F". In many cases the offers included representations by the vendor,

TDCI, regarding the amount of rental revenue in the building. Based on the Receiver's review of

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operations both before and since its appointment none of these rental revenue representations

were ever achieved by TDCI.

59. In the Receiver's view the Sale Agreement compares favourably to the appraised values

received by the Receiver and is the highest and is the highest and best offer received by the

Receiver as a result of the sale and marketing process. Therefore the Receiver recommends

acceptance of the Sale Agreement to the Court.

Auction of Other Assets

60. The Receiver is seeking Court approval to auction the Excluded Property and hold the

proceeds of sale pending further Court Order.

61. The Excluded Property needs to be removed from the Ecclestone Property prior to the

closing of the Sale Transaction. The Excluded Property is comprised of both assets of TDCI for

which no other ownership claims have been asserted and certain assets for which

Tarback/Figuiera have asserted ownership rights (the "Disputed Assets") as described below.

62. Specifically, on March 2, 2015 the Receiver was contacted by Ormston List Frawley LLP

("Ormston"), TDCI's former legal counsel and counsel to Tarback, advising that Tarback and

Figueira had certain personal belongs stored on the property and requested that Figueira be

permitted to attend for the purposes of cataloguing that property.

63. The Receiver advised that Figueira and Tarback would be permitted to attend, however

ownership would need to be proven and, if applicable, storage charges would need to be paid

prior to release of any property.

64. The Receiver made arrangements with Figueira to attend on May 20, 2015, with a

representative of the Receiver for the purposes of identifying property of Tarback and Figueira.

During the attendance the Receiver documented items identified by Figueira as being property

owned by Figueira and Tarback. Some of the assets identified were in the general TDCI space.

Other assets were stored in lockers.

65. The Receiver wrote to Ormston on May 25, 2015 summarizing its tour with Figueira and

its difficulty in reconciling what Figueira claimed to be Figueira or Tarback property versus

property purchased with TDCI funds. The issues are identified as follows:

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• Discrepancies with furniture, equipment and other items being claimed as

property by Figueira are materially different than the information provided to the

Receiver by TDCI staff. As an example, a TDCI staff member provided the

Receiver with proof of purchase for a particular item on a personal credit card,

reimbursed by TDCI, which was being claimed by Figueira;

• Adshade has advised that BVHL advanced funds to purchase office furniture for

use in the TDCI premises, which furniture Figueira also claimed;

• TDCI's general ledger reflects purchases for furniture and equipment in the

amount of $77,000, for which there is no back up documentation;

• TDCI's general ledger also reflects furniture purchases for Figueira and Tarback

personally, paid for with TDCI funds; and

• The Receiver encountered difficulties in determining what furniture and

equipment was purchased by TDCI as the accounting records are incomplete,

invoices for purchases are missing, and there is no listing for furniture and

equipment.

A copy of the Receiver's email of May 25, 2015 is attached as Appendix "L".

66. Another attendance was set up with Figueira on June 11, 2015, for the purpose of

cataloging tools alleged to be owned personally by Figueira. During the attendance Figueira did

not catalogue any of the tools, rather he advised the Receiver that all of the tools were his

personal tools, despite TDCI staff advising the Receiver that many tools were purchased with

TDCI funds.

67. On July 8, 2015, Ormston contacted the Receiver requesting that the Receiver provide a

current invoice for the storage fees outstanding in relation to Figueira's and Tarback's property

and confirmation that Figueira and Tarback could retrieve their property subject to payment of

the storage fees. The Receiver advised Ormston that property would not be released to Figueira

or Tarback as the ownership of the property as outlined in the Receiver's May 25

correspondence had not been resolved.

68. Given that the Excluded Property needs to be removed prior to closing of the Sale

Transaction, the Receiver is of the view that it is most economical to sell the property prior to

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closing. The Receiver's view is that an on-site auction is the most efficient way to realize value

for the Excluded Property, including the Disputed Assets, a detailed list of which are attached as

Appendix "M" hereto (the "Auction Assets").

69. The Receiver proposes that Global Assets Solutions Inc. (the "Auctioneer") be engaged

to conduct the on-site auction substantially in accordance with the terms of a letter agreement

attached as Appendix "N" hereto. Given the Receiver's knowledge of the auction market

generally, the nature and location of the assets and the required auction time frame for removal,

the Receiver is of the view that the 20% fee proposed by the Auctioneer is reasonable in the

circumstances.

70. The Receiver understands that Premier may also engage the Auctioneer to conduct an

auction of certain assets located in storage lockers at the Ecclestone Property (for which storage

payment has not been received) at the same time as the proposed auction of the Auction Assets.

71. Accordingly, the Receiver respectfully requests that the Court grant an order approving

the engagement of the Auctioneer on the terms set out in the letter agreement attached as

Appendix "N" hereto with respect to the Auction Assets with the net proceeds of sale from the

auction received by the Receiver to be held pending further Court order.

Secured Creditors and Priority Claims

72. A copy of the parcel abstract is attached as Appendix "O" to this report. The Receiver is

advised that Eisen holds registered mortgages in first and second position totaling $7,250,000.

The former Dura Mortgage, with a face value of $1,700,000 is subordinated to Eisen's

mortgages, as is a mortgage in favour of Lisa Brault.

73. A copy of search results under the Personal Property Security Act as against TDCI is

attached as Appendix "P". At the date of the appointment of the Receiver, the only registration

was from BVHL notifying of its ownership of the pylon sign in front of Ecclestone.

74. Canada Revenue Agency ("CRA") has conducted audits of the employee source

deductions/payroll ("Payroll") for TDCI. Following the audit the CRA has advanced a claim for

unremitted payroll source amounts of $9,639.33. The Receiver believes that there is an HST

refund available as of the date of the Receivership.

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75. The Town of Bracebridge Property Tax Arrears Notice dated July 6, 2015, reflects

outstanding property tax arrears of $107,377.24. It is anticipated that the arrears will be paid on

closing of the Sale Transaction. The Receiver has applied for a realty tax rebate from the Town

of Bracebridge due to vacancies in Ecclestone for the periods prior to and during the Receiver's

occupation.

Security Review and Mortgage Accounting

76. The Sale Agreement provides for the amendment/assumption of the existing mortgage

security of Eisen or the entering into of a new mortgage in favour of Eisen. There is some cash

consideration to paid on Closing of the Sale Transaction, however the bulk of the proceeds are,

in effect, being distributed to Eisen on closing. As noted, it is a condition of closing that the

Receiver receive a independent opinion or court declaration in respect of the Eisen Charges.

77. The Receiver has recently obtained a legal opinion on the validity, enforceability and

registered priority of the Eisen Charges. Cassels has opined, subject to the standard assumptions,

customary qualifications and limitations contained in its opinion, that the Eisen mortgages (i)

create a valid and enforceable charge on the real property of TDCI (Eisen 1st Mortgage

registered against the Ecclestone Property and the Development Lands, while the Eisen 2nd

Mortgage is registered against the Properties); (ii) has been properly registered against the real

property of TDCI as set out in the brackets to (i) above; and (iii) constitutes a legal and binding

obligation of TDCI, enforceable against TDCI in accordance with its terms.

78. In accordance with the July 10 Order, the Receiver has also undertaken an accounting of

the Eisen Charges. The Eisen Mortgage accounting is included as Schedule C to this Report.

Receiver's Receipts and Disbursements

79. The Receiver's Interim Statement of Receipts and Disbursements for the period February

27, 2015 to July 22, 2015 is attached hereto as Appendix "F'.

Professional Fees

80. The Receiver's fees and disbursements for services rendered for the period February 27,

2015 to July 20, 2015 are particularized in the affidavit of William Courage sworn July 22, 2015

(the "Receiver's Affidavit"). Receiver's fees for the period total $224,817.90. A copy of the

Receiver's Affidavit in support of approval of its accounts is attached hereto as Appendix "Q".

81. The fees and disbursements incurred by Cassels during the period February 27, 2015 to

June 30, 2015 are particularized in the affidavit of Jane O. Dietrich sworn July 23, 2015 (the

"Cassels Affidavit"). The total amount of the invoices for this period is $73,157.48 plus

applicable HST (the "Cassels Fees"). A copy of the Cassels Affidavit containing all Cassels

invoices is attached hereto as Appendix "R".

82. The Receiver has reviewed the invoices of Cassels and finds the work performed and

charges to be appropriate and reasonable.

Next Steps

83. As indicated, the Receiver's mandate extends to completing an accounting of "all funds

diverted or converted by Figueira and Tarback to their personal use. This [includes] a tracing of

those funds into any assets purchased or accounts controlled by them."

84. Due to limited resources, and an initial focus on stabilizing operations and realizing value

for the Properties, the Receiver has not as yet undertaken the Figueira/Tarback asset tracing

exercise. The Receiver is considering what resources may be available to do this and will pursue

this mandate as may be appropriate.

85. It is likely that some additional authorities will also be required in order to effectively

conduct an asset tracing. In this regard, the Receiver notes that the Receivership Order does not

specifically direct third party financial institutions to provide the Receiver with access to

Figueira and Tarback's personal account information.

Relief Requested

86. Based upon the foregoing the Receiver respectfully requests that this Honourable Court

issue an order for the relief outlined in paragraph 11 herein.

All of which is respectfully submitted this 24th day of July, 2015.

BDtJ CANADA; LIMITEDIts its capacity as Court Appointed Receiver ofTDCI Br~cebridge Iac.Per:

L~'L'i'William A. Caurag A, CA, FCIRPSenior Vice-President

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Schedule "A"

Issues Relating to Premiere Self Storage

1. The Receiver has considered whether or not it would be possible to "un-tangle" (in the

words of Justice Pattillo), from an historical account perspective, the TDCI business from that of

the applicant Premiere.

2. As is apparent from the analysis in the following paragraphs, which is preliminary, it

would appear impossible to accurately and cost-efficiently untangle these businesses. At most,

one could attempt an account historical reconciliation based on a set of assumptions. However,

the assumptions may themselves be a source of controversy as between Adshade and Figueira.

3. In the Applicants' materials in support of the motion to appoint the Receiver there are

two leases between TDCI and Premiere for 80,491 square feet and 6,816 square feet of space

respectively Aggregate net rental for the first year is $785,763. Rent increases in subsequent

years. Adshade advises that she was coerced to sign these leases by Figueira so that potential

purchasers and potential financing sources for the property would see high rental revenue.

4. The Applicants' materials also include a document entitled "Premiere Office Service

Agreement" between TDCI and Premiere. The agreement relates to offices for TDCI and

prescribe an annual gross rental payment of $57,600.

5. After discussing these agreements with Adshade and TDCI staff, the Receiver has

concluded that the financial terms of these agreements were simply ignored. Annual rents due to

TDCI from Premiere exceed annual revenue achieved by the entire building. While the space

purportedly leased to Premiere comprises the majority of the building, the core business of

Premiere, being lockers, could not possibly achieve this level of revenue.

6. The 2012 and 2013 financial statements of Premiere show rent paid, presumably to

TDCI, of $97,314 and $64,941 respectively. There is no evidence as to the basis for calculation

of rent, or the amount of space leased by Premiere.

7. The 2013 financial statements of Premiere indicate that the capital cost of the lockers is

$99,360 and that leasehold improvements associated with the premises total $73,029. Adshade

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and her counsel have asserted that it was the original intention for Premiere to run a business on

the TDCI premises. The business was to include the office rental business.

8. The Receiver has estimated that the lockers themselves, including the space surrounding

them, occupy 28,694 square feet. This does not include access space from outside or space for

supervisory personnel. Premiere has suggested that it would be willing to rent the locker space

for $5.00 per square foot net plus common costs not to exceed $1.10 per square foot. Based on

the 2014 financial statements for TDCI common costs appear to be approximately $1.80 per

square foot, not including wages and benefits.

9. A significant challenge in operating both the office rental business of TDCI and the

storage business of Premiere is that staff are required on the premises. The office rental business

requires reception and phone services. The rental business of Premiere requires someone to

control access to the storage lockers, find new renters and collect rents.

10. The Receiver agrees that, to the extent possible, an accounting ought to be completed

between the Receiver and Premiere in respect of the locker rentals, and between the Receiver and

BVHL in respect of the sign rentals.

11. To address the lockers, in terms of leased area the Receiver suggests that the area

occupied by the lockers plus 5% (to account for access space to the lockers) be the leased area

including space for employed staff, or 30,129 square feet.

12. The Receiver has identified direct costs for credit card payments and software to operate

the storage business and calculated "normal" costs associated with running the building, not

including extraordinary maintenance expenses, during the Receiver's period of control and

suggests apro-rata allocation of those expenses. While the staff time allocated to the storage

business during the Receiver's operation may be under-represented in this calculation, the

Receiver is of the view that staff have not been able to devote a customary amount of time to the

storage business due to the requirements of the Receiver in dealing with transition, maintenance,

tenant and receivership issues.

13. Attached as Appendix "S" is the Receiver's calculation regarding the entitlement of

Premiere. Based on these calculations Premiere owes TDCI $7,454.22 at present. The Receiver

has provided these calculations to Premiere.

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14. The Receiver is also of the view that BVHL, as owner of the sign, should receive the

rents from that asset. Rents for use of the sign received by the Receiver since its appointment

total $1,350. The Receiver recommends that these funds be paid to BVHL.

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Schedule "13"

Consideration of Solar Assets

1. The Receiver's activities in relation to the Solar Assets include:

• Arranging a meeting between Fovere, the Receiver and Cassels to discuss the solar

contract;

• Obtaining copies of the Feed in Tariff ("FIT") program contract;

• Obtaining documents related to the original installation and financing of the Solar

Assets;

• Reviewing payments made pursuant to the installation;

• Reviewing agreements between Fovere Glenbarra Energy Fund I Ltd. (the owner of

the Solar array) and TDCI.

2. It appears that prior to the appointment of the Receiver Figueira negotiated a sale of the

Solar Assets to an arm's length third party, Ecclestone Drive Solar Inc. ("Ecclestone Solar").

This sale was approved by this Court on January 27, 2015 on the condition that the proceeds be

held in trust by counsel for TDCI. The sale was not completed. The Receiver was appointed

one month later.

3. The Receiver asked Eisen whether allon-Disturbance Agreement was available that

would allow the Receiver to revive a sale. Eisen advised that he would not execute a Non-

Disturbance Agreement without a substantial payment. Further the Receiver's understanding of

the proposed sale transaction was that no rent would be paid to TDCI by the new owner of the

Solar Assets. In the Receiver's view this detracted from the value of the Ecclestone Property.

4. In considering the potential sale of the Solar Assets to a third party the Receiver

considered that the most logical purchaser of the solar assets would be the purchaser of the

Ecclestone Property. The Receiver was advised that Fovere wished to sell the Solar Assets and

associated FIT contract. The Receiver was not able to obtain financing in the time available to

fund the purchase so that it could control the Solar Assets. As the Receiver was unable to

purchase the Solar Assets, Fovere has advised that it has negotiated a sale of the Solar Assets to

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the Purchaser of the Properties. The sale of the Solar Assets is anticipated to close

contemporaneously with the closing of the Sale Transaction for which court-approval is being

sought by the Receiver.

5. The Receiver has been advised by Fovere's counsel that upon the closing of the Sale

Transaction and the closing of the Solar Assets to the Purchaser, payment of accrued rent in the

approximate amount of $14,000 will be paid to the Receiver in addition to a further $75,000

which represents the return of TDCI's deposit paid to Fovere.

6. Notwithstanding the intention to return the deposit to the Receiver, counsel for Fovere

has advised that they received a letter dated July 8, 2015 (the "July 8 Letter") from counsel for

Indial Services Inc. ("Indial") alleging that Indial is entitled to receive $200,000 in respect of

work done for TDCI in respect of the solar installation. Indial has also registered a $200,000

lien under the Repair and Storage Liens Act ("RSLA") against Fovere and Panasonic, the

supplier of the solar panels. A copy of the July 8 Letter is attached as Appendix "T".

7. Counsel for Fovere has advised that they have no obligation to Indial. Panasonic has

confirmed that they used Greenside Electric (a company related to Indial) during the installation

of the solar panels, but that all invoices were paid in full.

8. The Receiver has considered the basis for the Indial claim. As noted above, TDCI

entered into an agreement to sell the Solar Assets to Ecclestone Solar in January 2015. A

component of the transaction was a consulting agreement (the "Ecclestone Solar Agreement")

that provided for the payment of a "consulting fee" to TDCI of $514,415.38. A copy of the

Ecclestone Solar Agreement is attached as Appendix "U". Included in that consulting fee is a

sub-consulting fee payable to Indial. As noted, sale of the Solar Assets to Ecclestone Solar did

not proceed. Further Indial was not a party to the Ecclestone Solar Agreement. Based on the

information reviewed, the Receiver does not consider the Indial lien claim to have merit.

-25 -

Schedule "C"

Mortgage Accounting

First Eisen Mort~a~e

1. In January 2012, $3.5 million was advanced to TDCI, via its counsel Thomas Sheppard

("Sheppard") pursuant to a first mortgage loan from Eisen (the "First Eisen Mortgage"). The

$3.5 million advance was disbursed as follows:

Loan Advance First Eisen Mortgage X3,500,000

Plus:

Return of Deposit $10,000

Less:

Brokerage and legal fees paid to Eisen

Appraisal fees

Interest (Eisen —Jan 24 to 31, 2012)

Payment of lien in favour of GreensideElectric

Satisfaction of the Passarello mortgage(Prior mortgagee)

Settlement of the vendor take backmortgage from Dura

Realty Taxes

Sheppard's legal fees

Tarback

Figuera

Net Proceeds to TDCI $710,056

$91,150

$3,390

$6,041

$80,000

$2,122,43 9

$350,000

$42,244

$39,680

$55,000

$10,000

July 2012 Mort~a~e

2. In July 2012, TDCI obtained a $172,000 mortgage from Ontario Wealth Management

Corporation (the "July 2012 Mortgage"). The July 2012 Mortgage was disbursed as follows:

-26 -

July 2012 Mortgage Proceeds X172,000

Plus:

Deposit $1,460

Less:

Brokerage, appraisal and $15,677consulting fees

Legal Fees —Lender $2,851

Legal Fees —Sheppard $3,633

Realty taxes $30,006

Payment to Heel Strike $37,250Corporation*

Prepaid interest $22,162

Net proceeds paid to TDCI $61,881

*Sheppard is a Director of Heel Strike Corporation

Second Eisen Mort~a~e

3. In August of 2012, Eisen advanced a further $750,000 to TDCI (the "Second Eisen

Mortgage") which loan was secured by a second mortgage on the Properties. The proceeds of

the Second Eisen Mortgage were disbursed as follows:

Loan Advance Second Eisen Mortgage

Less:

July 2012 Mortgage payment($172,000 less prepaid interest of$16,081)

Legal fees and taxes to Town ofBracebridge

Greenside Electric to discharge aconstruction lien

Discharge of judgment in favour ofCentral Painting

X750,000

$1.55,919

$] 6,500

$98,511

$116,557

-27 -

Legal fees to Gowlings $30,000

Legal fees to Sheppard $26,562

Legal fees —discharged mortgage $1,666

Brokerage and legal fees —Eisen $23,100


Miscellaneous payments to TDCI $138,685creditors

Of the legal fees paid to Sheppard, $1,477 was for work performed in connection with the

incorporation of Bedford Properties Inc., of which Tarback is a shareholder and director.

Third Eisen Mort~a~e

4. In February of 2013, Eisen advanced a further $1,500,000 to TDCI (the "Third Eisen

Mortgage"). TDCI used the proceeds of the Third Eisen Mortgage as follows:

Loan Advance Third Eisen Mortgage $1,500,000

Less:

Pay out BVHL mortgage $164,390

Eisen brokerage and legal fees $42,875

One year of prepaid interest on $460,480present and January 2012 mortgage



Miscellaneous payments to TDCI $41,930creditors

Total to TDCI $692,017

5. Although $692,017 in proceeds from the Third Eisen Mortgage was paid to TDCI,

$493,915 was deposited into a savings account that recorded in TDCI's general ledger at the time

of the deposit. The remaining funds were transferred to TDCI's checking account.

Fourth Eisen Mort~a~e

-28-

6. In November 2013, Eisen replaced the Second Eisen Mortgage with a mortgage in the

amount of $1,000,000 ("Fourth Eisen Mortgage"). The additional $250,000 in funding was

disbursed as follows:

Loan Advance Fourth EisenMortgage $250,000

Less:

Eisen brokerage and legal fees $8,868




Payment to Bedford Properties $10,000

Net proceeds to TDCI $1.72,650

7. Although $172,650 in proceeds from the Fourth Eisen Mortgage was paid to TDCI,

$135,000 was deposited into a savings account that was not part of TDCI's general ledger at the

time of the deposit. The remaining funds were transferred to TDCI's checking account.

Fifth Eisen Mort~a~e

8. In April of 2014 Eisen advanced $3,750,000 to TDCI, which retired both the Third and

Fourth Eisen Mortgages (the "Fifth Eisen Mortgage"). The remaining $1,250,000 was disbursed

as follows:

Proceeds of Fifth Eisen 1Vlortgage x1,250,000

Less:

Eisen legal and brokerage fees

Interest (including prepaidinterest)

Legal fees to Gowlings

Legal fees to Sheppard

$109,343

$461,096

$26,311

$35,089

Payment to Basman Smith topostpone Brault mortgage

$50,000

-29-

Payment to Heel StrikeCorporation $85,000

Net Proceeds to TDCI $483,161

Mortgage Accounting Conclusions

9. At the time the Receiver was appointed, there was $7,250,000 outstanding in mortgages.

The majority of funds advanced under the mortgages were paid to either creditors of TDCI or

were paid to TDCI's bank account. Figueira and Tarback received a total of $75,000. A further

$122,250 was paid to Heel Strike Corporation, an entity controlled by Sheppard, in repayment of

loans. The Receiver has been advised by Sheppard that funds were advanced as follows:

June 29, 2012 Carole Tarback $11,000.00

June 29, 2012 Mel Eisen $26,250.00

Jan 22, 2014 TDCI $15,000.00

Feb 28, 2014 TDCI $40,000.00

April 1, 2014 TDCI $25,000.00

Apri12, 2014 TDCI $5,000.00

10. With regards to legal fees, Gowlings received $147,576 in fees, and Sheppard received

$135,506.

11. The Receiver also notes that Sheppard's trust account was used as a supplementary bank

account for TDCI.

12. A summary of the mortgage accounting is attached as Appendix "V"

13. Eisen did not provide details of the calculation of prepaid interest on the mortgages. At

this time the Receiver has not reconciled the actual interest paid by TDCI with prepayments

deducted from mortgage advances.

APPENDIX A

Legal*14875103.1

!~ c' ~`~-~,

:~~~ .

_. ~


ONTARIO

SUPERIOR COURT OF JUSTICE

COMMERCIAL LIST

THE HONOURABLE ) THURSDAY, THE ~/~x ~

JUSTICE PATTILLO ) .26 x̀' DAY OF FEBRUARY, 2015


Applicants

- and -

TDCI BRACEBRIDGE INC., CAROL TARBACK and CLIVE FIGUEIRA.

Respondents

ORDER(appointing Receiver)

THIS MOTION made by the Applicants for an Order pursuant to section 248(3)(b) of the

Ontario Business Corporations Act, R.S.O. 1990, c. B.16, as amended (the "OBCA") and

section 101 of the Courts of Justice Act, RSO 1990, c. C.43, as amended (the "CJA'~)

appointing BDO Canada ("BDO") as receiver and manager (in such capacities, the "Receiver")

without security, of all of the assets, undertakings and properties of TDCI Bracebridge Inc. (the

"Corporation") acquired for, or used in relation to a business carried on by the Corporation,

was heard this day at 330 University Avenue, Toronto, Ontario.

ON READING the Affidavits of Grace Adshade sworn August 20, 2014, September 1,

2014, September 10, 2014, and December 12, 2014, and on reading the Affidavits of Clive

DOCSTOR: 1771742\9

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Figueira sworn September 7, 2014, September 10, 2014, November 14, 2014, December 1, 2014,

and on reading the Affidavit of Carol Tarback sworn December 1, 2014, and on hearing the

submissions of counsel for the Applicants and counsel for the Respondents, and on reading the

consent of BDO to act as the Receiver,

SERVICE

1. THIS COURT ORDERS that the time for service of the Notice of Motion and the Motion

is hereby abridged and validated so that this motion is properly returnable today and hereby

dispenses with further service thereof.

APPOINTMENT

2. THIS COURT ORDERS that pursuant to section 248(3)(b) of the OBCA and section 101

of the CJA, BDO is hereby appointed Receiver, without security, of all of the assets,

undertakings and properties of the Corporation acquired for, or used in relation to a business

ca~Yied on by the Corporation, including all proceeds thereof (the "Property").

RECEIVER'S POWERS

3. THIS COURT ORDERS that the Receiver is hereby empowered and authorized, but not

obligated, to act at once in respect of the Property and, without in any way limiting the generality

of the foregoing, the Receiver is hereby expressly empowered and authorized to do any of the

following where the Receiver considers it necessary or desirable:

(a) to investigate the accounts of the Corporation and such further records as

inay be necessary to complete an accounting of all funds diverted or

converted to the use by the Respondents, Clive Figueira and Carol

Tarback, including a tracing of those funds into any assets purchased by

these Respondents or into the accounts over which they have any direction

or control, including any other corporations or their affiliates;

DOCSTOR: 1771742\9

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(b) to take possession of and exercise control over the Property and any and

all proceeds, receipts and disbursements arising out of or from the

Property;

(c) to receive, preserve, and protect the Property, or any part or parts thereof,

including, but not limited to, the changing of locks and security codes, the

relocating of Property to safeguard it, the engaging of independent

security personnel, the taking of physical inventories and the placement of

such insurance coverage as may be necessary or desirable;

(d) to manage, operate, and cai~-y on the business of the Corporation,

including the powers to enter into any agreements, incur any obligations in

the ordinary course of business, cease to ca1~-y on all or any part of the

business, or cease to perform any contracts of the Corporation;

(e) to engage consultants, appraisers, agents, experts, auditors, accountants,

managers, counsel and such other persons from time to time and on

whatever basis, including on a temporary basis, to assist with the exercise

of the Receiver's powers and duties, including without limitation those

conferred by this Order;

(fl to purchase or lease such machinery, equipment, inventories, supplies,

premises or other assets to continue the business of the Corporation or any

part or parts thereof;

(g) to receive and collect all monies and accounts now owed or hereafter

owing to the Corporation and to exercise all remedies of the Corporation

in collecting such monies, including, without limitation, to enforce any

security held by the Corporation;

(h) to settle, extend or compromise any indebtedness owing to the

Corporation;

DOCSTOR: 1771742\9

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(i) to execute, assign, issue and endorse documents of whatever nature in

respect of any of the Property, whether in the Receiver's name or in they

name and on behalf of the Corporation, for any purpose pursuant to this

Order;

(j) to initiate, prosecute and continue the prosecution of any and all

proceedings and to defend all proceedings now pending or hereafter

instituted with respect to the Corporation, the Property or the Receiver,

and to settle or compromise any such proceedings. The authority hereby

conveyed shall extend to such appeals or applications for judicial review

in respect of any order or judgment pronounced in any such proceeding;

(k) to market any or all of the Property, including advertising and soliciting

offers in respect of the Property or any part or parts thereof and ~

negotiating such terms and conditions of sale as the Receiver in its

discretion may deem appropriate;i

(1) to sell, convey, transfer, lease or assign the Property or any part or parts

thereof out of the ordinary course of business,

(i) without the approval of this Court in respect of any transaction not

exceeding $100,000 provided that the aggregate consideration for

all such transactions does not exceed $250,000 and

(ii) with the approval of this Court in respect of any transaction in

which the purchase price or the aggregate purchase price exceeds

the applicable amount set out in the preceding clause;

and in each such case notice under subsection 63(4) of the Ontario

Personal Property Security Act, [or section 31 of the Ontario Mortgages

• Act, as the case inay be,] shall not be required, and in each case the

Ontario Bulk Sales Act shall not apply.

DOCSTOR: 1771742\9

t

5

(m) to apply for any vesting order or other orders necessary to convey the

Property or any part or parts thereof to a purchaser or purchasers thereof,

free and clear of any liens or encumbrances affecting such Property;

(n) to report to, meet with and discuss with such affected Persons (as defined

below) as the Receiver deems appropriate on all matters relating to the

Property and the receivership, and to share information, subject to such

terms as to confidentiality as the Receiver deems advisable;

(o) to register a copy of this Order and any other Orders in respect of the

Property against title to any of the Property;

(p) to apply for any permits, licences, approvals or permissions as may be

required by any governmental authority and any renewals thereof for and

on behalf of and, if thought desirable by the Receiver, in the name of the

Corporation;

(q) to enter into agreements with any trustee in bankruptcy appointed in

respect of the Corporation, including, without limiting the generality of the

foregoing, the ability to enter into occupation agreements for any property

owned or leased by the Corporation;

(r) to exercise any shareholder, partnership, joint venture or other rights

which the Corporation may have; and

(s) to take any steps reasonably incidental to the exercise of these powers or

the performance of any statutory obligations.

and in each case where the Receiver takes any such actions or steps, it shall be exclusively

authorized and empowered to do so, to the exclusion of all other Persons (as defined below),

including tl~e Corporation, and without interference from any other Person.

DOCSTOR: 1771742\9

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DUTY TO PROVIDE ACCESS AND CO-OPERATION TO THE RECEIVER

4. THIS COURT ORDERS that (i) Carol Tarback and Clive Figueira, (ii) the Corporation,

and (iii) all of the Corporation's current and former directors, officers, employees, agents,

advisors, accountants, auditors, legal counsel and shareholders, and all other persons acting on its

instructions or behalf, and (iii) all other individuals, firms, corporations, governmental bodies or

agencies, or other entities having notice of this Order (all of the foregoing, collectively, being

"Persons" and each being a "Person") shall forthwith advise the Receiver of the existence of any

Property in such Person's possession or control, shall grant immediate and continued access to

the Property to the Receiver, and shall deliver all such Property to the Receiver upon the

Receiver's request.

5. THIS COURT ORDERS that all Persons shall forthwith advise the Receiver of the

existence of any books, documents, securities, contracts, orders, drafts, corporate and accounting

records, and any other papers, records and information of any kind related to the business or

affairs of the Corporation and respective affiliates, and any computer programs, computer tapes,

computer disks, or other data storage media containing any such information (the foregoing,

collectively, the "Records") in that Person's possession or control, and shall provide to the

Receiver or permit the Receiver to make, retain and take away copies thereof and grant to the

Receiver unfettered access to and use of accounting, computer, software and physical facilities

relating thereto, provided however that nothing in this paragraph 5 or in paragraph 6 of this

Order shall require the delivery of Records, or the granting of access to Records, which may not

be disclosed or provided to the Receiver due to the privilege attaching to solicitor-client

communication or due to statutory provisions prohibiting such disclosure.

6. THIS COURT ORDERS that if any Records are stored or otherwise contained on a

computer or other electronic system of information storage, whether by independent service

provider or otherwise, all Persons in possession or control of such Records shall forthwith give

unfettered access to the Receiver for the purpose of allowing the Receiver to recover and fully

copy all of the information contained therein whether by way of printing the information onto

paper or making copies of computer disks or such other manner of retrieving and copying the

information as the Receiver in its discretion deems expedient, and shall not alter, erase or destroy

any Records without the prior written consent of the Receiver. Further, for the purposes of this

DOCSTOR: 1771742\9

-~-

paragraph, all Persons shall provide the Receiver with all such assistance in gaining immediate

access to the information in the Records as the Receiver may in its discretion require including

providing the Receiver with instructions on the use of any computer or other system and

providing the Receiver with any and all access codes, account names and account numbers that

may be required to gain access to the information.

7. THIS COURT ORDERS that the Receiver shall provide each of the relevant landlords

with notice of the Receiver's intention to remove any fixtures from any leased premises at least

seven (7) days prior to the date of the intended removal. The relevant landlord shall be entitled

to have a representative present in the leased premises to observe such removal and, if the

landlord disputes the Receiver's entitlement to remove any such fixture under the provisions of

the lease, such fixture shall remain on the premises and shall be dealt with as agreed between any

applicable secured creditors, such landlord and the Receiver, or by further Order of this Court

upon application by the Receiver on at least two (2) days notice to such landlord and any such

secured creditors.

NO PROCEEDINGS AGAINST THE RECEIVER

8. THIS COURT ORDERS that no proceeding or enforcement process in any court or

tribunal (each, a "Proceeding"), shall be commenced or continued against the Receiver except

with the written consent of the Receiver or with leave of this Court.

NO PROCEEDINGS AGAINST THE CORPORATION OR THE PROPERTY

9. THIS COURT ORDERS that no Proceeding against or in respect of the Corporation or

the Property shall be commenced or continued except with the written consent of the Receiver or

with leave of this Court and any and all Proceedings currently under way against or in respect of

the Corporation or the Property are hereby stayed and suspended pending further Order of this

Court.

NO EXERCISE OF RIGHTS OR REMEDIES

10. THIS COURT ORDERS that all rights and remedies against the Corporation, the

Receiver, or affecting the Property, are hereby stayed and suspended except with the written

consent of the Receiver or leave of this Court, provided however that this stay and suspension

DOCSTOR: 1771742\9

does not apply in respect of any "eligible financial contract", and further provided that nothing in x

this paragraphshall (i) empower the Receiver or the Corporation to carry on any business which

the Corporation is not lawfully entitled to carry on, (ii) exempt the Receiver or the Corporation

from compliance with statutory or regulatory provisions relating to health, safety or the

environment, (iii) prevent the filing of any registration to preserve or perfect a security interest,

or (iv) prevent the registration of a claim for lien.

NO INTERFERENCE WITH THE RECEIVER

11. THIS COURT ORDERS that no Person shall discontinue, fail to honour, alter, interfere

with, repudiate, terminate or cease to perform any right, renewal right, contract, agreement,

licence or permit in favour of or held by the Corporation, without written consent of the Receiver

or leave of this Court.

CONTINUATION OF SERVICES

12. THIS COURT ORDERS that all Persons having oral or written agreements with the

Corporation or statutory or regulatory mandates for the supply of goods Ind/or services,

including without limitation, all computer software, communication and other data services,

centralized banking services, payroll services, insurance, transportation services, utility or other

services to the Corporation are hereby restrained until further Order of this Court from

discontinuing, altering, interfering with or terminating the supply of such goods or services as

may be required by the Receiver, and that the Receiver shall be entitled to the continued use of

the Corporation's current telephone numbers, facsimile numbers, Internet addresses and domain

names, provided in each case that the normal prices or charges for all such goods or services

received after the date of this Order are paid by the Receiver in accordance with normal payment

practices of the Corporation or such other practices as inay be agreed upon by the supplier or

service provider and the Receiver, or as maybe ordered by this Court.

RECEIVER TO HOLD FUNDS

13. THIS COURT ORDERS that all funds, monies, cheques, instruments, and other forms of

payments received or collected by the Receiver from and after the snaking of this Order from any

source whatsoever, including without limitation the sale of all or any of the Property and the

collection of any accounts receivable in whole or in part, whether in existence on the date of this

DOCSTOR: 1771742\9

-9-

Order or hereafter corning into existence, shall be deposited into one or more new accounts to be

opened by the Receiver (the "Post Receivership Accounts") and the monies standing to the credit

of such Post Receivership Accounts from time to time, net of any disbursements provided for

herein, shall be held by the Receiver to be paid in accordance with the terms of this Order or any

further Order- of this Court.

EMPLOYEES

14. THIS COURT ORDERS that all employees of the Corporation shall remain the

employees of the Corporation until such time as the Receiver, on the Corporation's behalf, may

terminate the employment of such employees. The Receiver shall not be liable for any

employee-related liabilities, including any successor employer liabilities as provided for in

section 14.06(1.2} of the BIA, other than such amounts as the Receiver may specifically agree in

writing to pay, or in respect of its obligations under sections 81.4(5) or 81.6(3) of the BIA or

under the Wage Earner Protection Program Act.

PIPEDA

15. THIS COURT ORDERS that, pursuant to clause 7{3)(c) of the Canada Personal

Information Protection and Elect~~onic Doca~ments Act, the Receiver shall disclose personal

information of identifiable individuals to prospective purchasers or bidders for the Property and

to their advisors, but only to the extent desirable or required to negotiate and attempt to complete

one or more sales of the Property (each, a "Sale"). Each prospective purchaser or bidder to

whom such personal information is disclosed shall maintain and protect the privacy of such

information and limit the use of such information to its evaluation of the Sale, and if it does not

complete a Sale, shall return all such information to the Receiver, or in the alternative destroy al]

such information. The purchaser of any Property shall be entitled to continue to use the personal

information provided to it, and related to the Property purchased, in a manner which is in all

material respects identical to the prior use of such information by the Corporation, and shall

z-eturn all other personal information to the Receiver, or ensure that all other personal information

is destroyed.

DOCSTOR: 1771742\9

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~, '~~:

LIMITATION ON ENVIRONMENTAL LIABILITIES ~ "Y

16. THIS COURT ORDERS that nothing herein contained shall require the Receiver to

occupy or to take control, care, charge, possession or management (separately and/or

collectively, "Possession") of any of the Property that might be environmentally contaminated,

might be a pollutant or a contaminant, or might cause or contribute to a spill, discharge, release

or deposit of a substance contrary to any federal, provincial or other law respecting the

protection, conservation, enhancement, remediation or rehabilitation of the environment or

relating to the disposal of waste or other contamination including, without limitation, the

Canadian Environmental Protection Act, the Ontario Environmental Protection Act,-the Ontario

Water Resources Act, or the Ontario Occupational Health and Safety Act and regulations

thereunder (the "Environmental Legislation"), provided however that nothing herein shall

exempt the Receiver from any duty to report or make disclosure imposed by applicable

Environmental Legislation. The Receiver shall not, as a result of this Order or anything done in

pursuance of the Receiver's duties and powers under this Order, be deemed to be in Possession of

any of the Property within the meaning of any Environmental Legislation, unless it is actually in

possession.

LIMITATION ON THE RECEIVER'S LIABILITY

17. THIS COURT ORDERS that the Receiver shall incur no liability or obligation as a result

of its appointment or the carrying out the provisions of this Order, save and except for any gross

negligence or wilful misconduct on its part, or in respect of its obligations under sections 81.4(5)

or 81.6(3) of the BIA or under the Wage Eaf-ner Protection Program Act. Nothing in this Order

shall derogate from the protections afforded the Receiver by section 14.06 of the BIA or by any

other applicable legislation.

RECEIVER'S ACCOUNTS

18. THIS COURT ORDERS that the Receiver and counsel to the Receiver shall be paid their

reasonable fees and disbursements, in each case at their standard rates and charges unless

otherwise ordered by the Court on the passing of accounts, and that the Receiver and counsel to

the Receiver shall be entitled to and are hereby granted a charge (the "Receiver's Charge") on the

Property, as security for such fees and disbursements, both before and after the making of this

DOCSTOR: 1771742\9

Order in respect of these proceedings, and that the Receiver's Charge shall form a first charge on

the Property in priority to all security interests, trusts, liens, charges and encumbrances, statutory

or otherwise, in favour of any Person but subject to sections 14.06(7), 81.4(4), and 81.6(2) of the

BIA.

19. THIS COURT ORDERS that the Receiver and its legal counsel shall pass its accounts

from time to time, and for this purpose the accounts of the Receiver and its legal counsel are

hereby refereed to a judge of the Commercial List of the Ontario Superior Court of Justice

20. THIS COURT ORDERS that prior to the passing of its accounts, the Receiver shall be at

liberty from time to time to apply reasonable amounts, out of the monies in its hands, against its

fees and disbursements, including legal fees and disbursements, incurred at the standard rates

and charges of the Receiver or its counsel, and such amounts shall constitute advances against its

remuneration and disbursements when and as approved by this Court.

FUNDING OF THE RECEIVERSHIP

21. THIS COURT ORDERS that the Receiver be at liberty and it is hereby empowered to

borrow by way of a revolving credit or otherwise, such monies from time to time as it inay

consider- necessary or desirable, provided that the outstanding principal amount does not exceed

$ (or such greater amount as this Court may by further Order authorize) at any time,

at such rate or rates of interest as it deems advisable for such period or periods of time as it may

arrange, for the purpose of funding the exercise of the powers and duties conferred upon the

Receiver by this Order, including interim expenditures. The whole of the Property shall be and

is hereby charged by way of a fixed and specific charge (the "Receiver's Borrowings Charge") as

security for the payment of the monies borrowed, together with interest and charges thereon, in

priority to all security interests, trusts, liens, charges and encumbrances, statutory or otherwise,

in favour of any Person, but subordinate in priority to the Receiver's Charge and the charges as

set out in sections 14.06(7), 81.4(4), and 81.6(2) of the BIA.

22. THIS COURT ORDERS that neither the Receiver's Borrowings Charge nor any other

security granted by the Receiver in connection with its borrowings under this Order shall be

enforced without leave of this Court.

DOCSTOR~ 1771742\9

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23. THIS COURT ORDERS that the Receiver is at liberty and authorized to issue certificates

substantially in the form annexed as Schedule "A" hereto (the "Receiver's Certificates") for any

amount borrowed by it pursuant to this Order.

THIS COURT ORDERS that the monies from time to time borrowed by the Receiver pursuant

to this Order or any further order of this Court and any and all Receiver's Certificates evidencing

the same or any part thereof shall rank on a pari passu basis, unless otherwise agreed to by the

holders of any prior issued Receiver's Certificates

SERVICE AND NOTICE

24. THIS COURT ORDERS that the E-Service Protocol of the Commercial List (the

"Protocol") is approved and adopted by reference herein and, in this proceeding, the service of

documents made in accordance with the Protocol (which can be found on the Commercial List

website at http://www.ontariocourts.ca/sej/practice/practice-directions/toronto/e-service-

protocol/) shall be valid and effective service. Subject to Rule 17.05 this Order shall constitute

an order for substituted service pursuant to Rule 16.04 of the Rules of Civil Procedure. Subject to

Rule 3.01(d) of the Rules of Civil Procedure and paragraph 21 of the Protocol, service of

documents in accordance with the Protocol will be effective on transmission.

25. THIS COURT ORDERS that if the service or distribution of documents in accordance

with the Protocol is not practicable, the Receiver is at liberty to serve or distribute this Order, any

other materials and orders in these proceedings, any notices or other correspondence, by

forwarding true copies thereof by prepaid ordinary mail, courier, personal delivery or facsimile

transmission to the Corporation's creditors or other interested parties at their respective addresses

as last shown on the records of the Corporation and that any such service or distribution by

courier, personal delivery or facsimile transmission shall be deemed to be received on the next

business day following the date of forwarding thereof, or if sent by ordinary mail, on the third

business day after mailing.

GENERAL

26. THIS COURT ORDERS that the Receiver may from time to time apply to this Court for

advice and directions in the discharge of its powers and duties hereunder.

DOCSTOR: 1771742\9

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27. THIS COURT ORDERS that nothing in this Order shall prevent the Receiver from acting

as a trustee in bankruptcy of the Corporation.

28. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,

regulatory or administrative body having jurisdiction in Canada or in the United States to give

effect to this Order and to assist the Receiver and its agents in carrying out the terms of this

Order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully

requested to make such orders and to provide such assistance to the Receiver, as an officer of this

Court, as may be necessary or desirable to give effect to this Order or to assist the Receiver and

its agents in carrying out the terms of this Order.

29. THIS COURT ORDERS that the Receiver be at liberty and is hereby authorized and

empowered to apply to any court, tribunal, regulatory or administrative body, wherever located,

for the recognition of this Order and for assistance in carrying out the terms of this Order, and

that the Receiver is authorized and empowered to act as a representative in respect of the within

proceedings for the purpose of having these proceedings recognized in a jurisdiction outside

Canada.

30. THIS COURT ORDERS that the Applicants shall have its costs of this motion, up to and

including entry and service of this Order, provided for by the terms of the Applicants' security

or, if not so provided by the Applicants' security, then on a substantial indemnity basis to be paid

by the Receiver from the Corporation's estate with such priority and at such time as this Court

may determine.

31. THIS COURT ORDERS that any interested party may apply to this Court to vary or

amend this Order on not less than seven (7) days' notice to the Receiver and to any other party

likely to be affected by the order sought or upon such other notice, if any, as this Court may

order.

ET5 r rREC ~'rT / tI~SCFi1T is i'pR~?~y'1~~0►~ / ~1:~'~i Ali;~~ /pNPo►3~ ~~ l~~~fST~E

~~s 2 ~ ~o~out.

DOCSTOR: 1771742\9

DOCSTOR: 1771742\8

SCHEDULE "A"

RECEIVER CERTIFICATE

CERTIFICATE NO.

AMOUNT $

THIS IS TO CERTIFY that [RECEIVER'S NAME], the receiver (the "Receiver") of the

assets, undertakings and properties [DEBTOR'S NAME] acquired for, or used in relation to a

business carried on by the Debtor, including all proceeds thereof (collectively, the "Property")

appointed by Order of the Ontario superior Court of Justice (Commercial List) (the "Court")

dated the _day of , 20_ (the "Order") made in an action having Court file number

_-CL- ,has received as such Receiver from the holder of this certificate (the "Lender")

the principal sum of $ ,being part of the total principal sum of $

which the Receiver is authorized to borrow under and pursuant to the Order.

2. The principal sum evidenced by this certificate is payable on demand by the Lender with

interest thereon calculated and compounded [daily][monthly not in advance on the day

of each month] after the date hereof at a notional rate per annum equal to the rate of per

cent above the prime commercial lending rate of Bank of from time to time.

3. Such principal sum with interest thereon is, by the terms of the Order, together with the

principal sums and interest thereon of all other certificates issued by the Receiver pursuant to the

Order or to any further order of the Court, a charge upon the whole of the Property, in priority to

the security interests of any other person, but subject to the priority of the charges set out in the

Order and in the Bankruptcy and Insolvency Act, and the right of the Receiver to indemnify itself

out of such Property in respect of its remuneration and expenses.

4. All sums payable in respect of principal and interest under this certificate are payable at

the main office of the Lender at Toronto, Ontario.

5. Until all liability in respect of this certificate has been terminated, no certificates creating

charges ranking or purporting to rank in priority to this certificate shall be issued by the Receiver

to any person other than the holder of this certificate without the prior written consent of the

holder of this certificate.

~~~3~~~~#J I~lyv8-Model_Receivership_Order_(T_Reyes).doc

-2-

6. The chazge securing this certificate shall operate so as to permit the Receiver to deal with

the Property as authorized by the Order and as authorized by any further or other order of the

Court.

7. The Receiver does not undertake, and it is not under any personal liability, to pay any

sum in respect of which it may issue certificates under the terms of the Order.

DATED the day of , 2Q_.

[RECEIVER'S NAME], solely in its capacity

as Receiver of the Property, -and not in its

personal capacity

Per:

Name:

Title:

~~~~~~~~l~l~i 1 4v8-Modef_Receivership_Order_(T_Reyes).doc