MOTION RECORD OF THE RECEIVER, ROSEN ......Court File No. CV-19-622161-00CL ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) B E T W E E N: QUINCY INVESTMENTS LIMITED, 969592 ONSTIO

Court File No. CV-19-622161-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

B E T W E E N:

QUINCY INVESTMENTS LIMITED, 969592 ONSTIO LIMITED, 969593 ONTARIO LIMITED, 3701271 ONTARIO LIMITED, SASSO AUTO CONSULTING INC.,

DAVI MARK DOUBILET and GUS STAMATIOU Applicants

- and -

SUNRISE ACQUISITIONS (BOND HEAD) INC., AMAL FINANCIAL INC., and GALAXY HOLDING INC.

Respondents

IN THE MATTER OF SECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985 C. B-3, AS AMENDED, AND SECTION 101 OF THE COURTS OF

JUSTICE ACT, R.S.O. 1990 C. C.43, AS AMENDED

MOTION RECORD OF THE RECEIVER, ROSEN GOLDBERG INC.

May 6, 2020 DICKINSON WRIGHT LLP 199 Bay Street Suite 2200, P.O. Box 447 Toronto, Ontario, M5L 1G4

DAVID P. PREGER (36870L) Tel: (416) 646-4606 Email: [email protected]

LISA S. CORNE (27974M) Email: [email protected] Tel: (416) 646-4608 Fax: 1(844)670-6009

Lawyers for the Court-appointed Receiver, Rosen Goldberg Inc.

TO: THE SERVICE LIST

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SERVICE LIST TO: CORSIANOS LEE

3800 Steeles Avenue West, Suite 203W Vaughan, ON L4L 4G9 Attention: George Corsianos LSO#48261K (905) 370-1092 (Tel) (905) 370-1095 (Fax) Email: [email protected] Lawyers for the Applicants Quincy Investments Limited, 969592 Ontario Limited, 969593 Ontario Limited, 370271 Ontario Limited, Sasso Auto Consulting Inc., David Mark Doubilet and Gus Stamatiou; Gal International Ltd., Third Mortgagee; Gal Consulting Ltd., Third Mortgagee; and 2307721 Ontario Inc., Third Mortgagee

AND TO: TEPLITSKY COLSON LLP Suite 200, 70 Bond Street Toronto, ON M5B 1X3 Attention: Jonathan D. Kulathungam (416) 865-5318 (Tel) (416) 365-0695 (Fax) Email: [email protected] Lawyers for Sugarcrest Development Inc.

ND TO: FRIEDMAN LAW PROFESSIONAL CORPORATION 150 Ferrand Drive, Suite 800 Toronto, ON M3C 3E5 Attention: William Friedman (416) 496-3340 ext. 112 (Tel) (416) 497-3809 (Fax) Email: [email protected] Attention: Shida Azari (416) 496-3340 ext. 112 (Tel) Email: [email protected] Lawyers for the Fourth Mortgagee, 2635837 Ontario Inc.

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AND TO: OSLER HOSKIN & HARCOURT LLP

100 King Street West 1 First Canadian Place Suite 6200, P.O. Box 50 Toronto, Ontario M5X 1B8 Attention: Michael De Lellis (416) 862-5997 (Tel) (416) 862-6666 (Fax) Email: [email protected] Attention: Jeremy Dacks (416) 862-4923 Email: [email protected] Lawyers for Fifth Mortgagee, FAAN Mortgage Administrators Inc., as Administrators for Building & Development Mortgages Canada Inc.

AND TO: OLYMPIA TRUST COMPANY 2200, 125-9th Avenue SE Calgary Alberta T2G 0P6 Attention: Jonathan Bahnuik (General Counsel) (403) 668-8365 (Tel) (403) 265-1455 (Fax) Email: [email protected] Fifth Mortgagee

AND TO: RAR LITIGATION LAWYERS Professional Corporation 1 West Pearce Street, Suite 505 Richmond Hill ON L4B 3K3 Attention: Rocco A. Ruso (905) 731-8100 ext. 207 (Tel) Email: [email protected] Attention: Natalie Green (905) 731-8100 ext 209 (Tel) Email: [email protected] Lawyers for Fortress Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore and Vince Petrozza

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I N D E X

Tabs Document

1. Notice of Motion dated May 6, 2020

2. Second Report of Rosen Goldberg Inc. dated May 6, 2020

A. Appendix “A” Appointment Order dated July 23, 2019

B. Appendix “B” Approval and Vesting Order dated February 3, 2020

C. Appendix “C” Administrative Order dated February 3, 2020

D. Appendix “D” First Report of Rosen Goldberg Inc. dated January 24, 2020, (without appendices)

E. Appendix “E” Copy of Certified trust cheque in the amount $8,178325.38

F. Appendix “F”

Certificate of Incorporation and Articles of Incorporation for FMC

3. Amended and Restated Approval and Vesting Order Blacklined to the Approval and Vesting Order dated February 3, 2020

TAB 1

5



(COMMERCIAL LIST)

B E T W E E N:

QUINCY INVESTMENTS LIMITED, 969592 ONSTIO LIMITED, 969593 ONTARIO LIMITED, 3701271 ONTARIO LIMITED,

SASSO AUTO CONSULTING INC., DAVID MARK DOUBILET and GUS STAMATIOU

Applicants

- and -

SUNRISE ACQUISITIONS (BOND HEAD) INC.,

AMAL FINANCIAL INC. and GALAXY HOLDING INC.

Respondents



NOTICE OF MOTION (Receiver’s Sale Approval)

Rosen Goldberg Inc., in its capacity as Court-appointed receiver of the lands and premises

registered in the name of Sunrise Acquisitions (Bond Head) Inc. (“Sunrise”), beneficially owned

by Amal Financial Inc. (“AFI”) and Galaxy Holding Inc. (“GHI”) (Sunrise, AFI and GHI are

collectively referred to as the “Debtors”), municipally known as 2875 Highway 27, Bond Head,

Ontario, and the remaining property, assets and undertakings of the Debtors acquired for and used

in relation thereto (collectively, the “Property”) will make a motion to a Judge of the Commercial

List by video conference, in substitution to an in-person hearing at 330 University Avenue,

Toronto, Ontario, in accordance with the Changes to Commercial List operations in light of

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COVID-19 dated March 16, 2020, and the Notice to the Profession of Chief Justice Morawetz

updated April 2, 2020, on a date to be scheduled by the Commercial List.

PROPOSED METHOD OF HEARING: The motion is to be heard by videoconference.

THE MOTION IS FOR:

1. An Amended and Restated Approval and Vesting Order substantially in the form attached

hereto as Schedule “A”:

(a) abridging the time for service of this Notice of Motion and the Motion Record, such

that the Motion is properly returnable on the hearing date, validating service of the

Notice of Motion and Motion Record and dispensing with further service thereof;

and

(b) amending and restating the Approval and Vesting Order of the Honourable Justice

Conway dated February 3, 2020 in this proceeding to reflect that the party taking

title to the Property will be FMC Bond Head Development Holdings Ltd. (“FMC”)

rather than Gal Real Holdings Ltd. (“Gal”);

2. An Order substantially in the form attached hereto as Schedule “B” amending the

Administrative Order of the Honourable Justice Conway dated February 3, 2020 to reflect that no

distribution of sale proceeds to the first mortgagee, Sugarcrest Development Inc. (“Sugarcrest”),

will be necessary in view of the payout of the first mortgage (the “First Mortgage”) on February

28, 2020 by the Applicants under their second mortgage (the “Second Mortgage”);

3. Such further or other orders and relief as counsel may request and this Honourable Court

may permit.

THE GROUNDS FOR THE MOTION ARE:

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1. By Order of Justice O’Marra dated July 23, 2019 Rosen Goldberg Inc. was appointed the

Receiver over the Property.

2. The Property is a 15.4 acre development site fronting on Highway 27.

3. On February 3, 2020, Justice Conway granted an Approval and Vesting Order approving

the Receiver’s sale of the Property to Gal (the “Transaction”).

4. In connection with approving the Transaction, on February 3, 2020, Justice Conway also

granted an Administrative Order.

5. Pursuant to the Administrative Order, a number of confidential appendices to the

Receiver’s First Report dated February 3, 2020 were sealed pending the completion of the

Transaction, including, inter alia, an appraisal of the Property which the Receiver commissioned

following its appointment, a summary of the offers which the Receiver obtained, and the

agreement of purchase and sale between the Receiver and Gal.

6. The Transaction was contemplated to be a partial credit bid on the part of the Applicants

under the Second Mortgage whereby, on closing, prior ranking claims, including the First

Mortgage, would be paid in cash, and the balance of the purchase price would be satisfied, without

physical circulation funds, by the partial reduction of the indebtedness owing under the Second

Mortgage.

7. The Transaction was originally to have been completed on February 22, 2020. However,

after the Approval and Vesting Order and the Administrative Order were granted on February 3,

2020, the Applicants requested a number of extensions of the closing date.

8. As Sugarcrest was unwilling to consent to the payment of the First Mortgage being delayed,

on February 28, 2020, the Applicants paid Sugarcrest the sum of $8,178,325.38 as a protective

disbursement under the Second Mortgage.

-4-

9. Subject to a dispute between the Applicants and Sugarcrest over $29,055.09 in relation to

the administrative fee claimed under the First Mortgage and 3 days of interest, all which the

Receiver will hold in escrow when the Transaction is completed (the “Holdback”), the First

Mortgage was thereby paid out in full by the Applicants.

10. By virtue of the payout of the First Mortgage, the Receiver consented to the Applicants’

repeated requests to extend the closing date, as the Applicants are the only stakeholders of the

Respondents’ estates with an economic interest in the Transaction.

11. The Applicants have now advised the Receiver they are in a position to complete the

Transaction, although they have requested that the Approval and Vesting Order be amended and

restated to reflect that the party taking title to the Property will be FMC a company controlled by

the Applicants, rather than Gal.

12. In light of the Applicants’ payout of the First Mortgage on February 28, 2020 and the

Receiver’s retention of the Holdback, FMC will not be paying the First Mortgage out on closing.

It will, therefore, be necessary to amend paragraph 4 of the Administration Order, which deals

with distribution of the net sale proceeds, to delete the requirement that indebtedness owing under

the First Mortgage be satisfied in cash.

13. The proposed Orders are administrative in nature, will not substantively alter the February

3, 2020 Orders of Justice Conway.

14. Rules 1.04, 2.01, 3.02, 16.08 and 41.05 of the Rules of Civil Procedure and section 249 of

the Bankruptcy and Insolvency Act.

15. Such further or other grounds as counsel may advise and this Honourable Court may

permit.

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

motion:

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1. The Second Report of the Receiver and the appendices thereto; and

2. Such further or other materials as counsel may advise and this Honourable Court may

permit.

May 6, 2020 DICKINSON WRIGHT LLP 199 Bay Street Suite 2200, P.O. Box 447 Toronto, Ontario, M5L 1G4 DAVID P. PREGER (36870L) Email: [email protected] Tel: (416) 646-4606 Fax: 1 (844) 670-6009 Lawyers for the Court-appointed Receiver, Rosen Goldberg Inc.

TO: CORSIANOS LEE

3800 Steeles Avenue West, Suite 203W Vaughan, ON L4L 4G9 Attention: George Corsianos LSO#48261K (905) 370-1092 (Tel) (905) 370-1095 (Fax) Email: [email protected] Lawyers for the Applicants Quincy Investments Limited, 969592 Ontario Limited, 969593 Ontario Limited, 370271 Ontario Limited, Sasso Auto Consulting Inc., David Mark Doubilet and Gus Stamatiou; Gal International Ltd., Third Mortgagee; Gal Consulting Ltd., Third Mortgagee; and 2307721 Ontario Inc., Third Mortgagee

-6-

AND TO: TEPLITSKY COLSON LLP Suite 200, 70 Bond Street Toronto, ON M5B 1X3 Attention: Jonathan D. Kulathungam (416) 865-5318 (Tel) (416) 365-0695 (Fax) Email: [email protected] Lawyers for Sugarcrest Development Inc.

ND TO: FRIEDMAN LAW PROFESSIONAL CORPORATION 150 Ferrand Drive, Suite 800 Toronto, ON M3C 3E5 Attention: William Friedman (416) 496-3340 ext. 112 (Tel) (416) 497-3809 (Fax) Email: [email protected] Attention: Shida Azari (416) 496-3340 ext. 112 (Tel) Email: [email protected] Lawyers for the Fourth Mortgagee, 2635837 Ontario Inc.

AND TO: OSLER HOSKIN & HARCOURT LLP 100 King Street West 1 First Canadian Place Suite 6200, P.O. Box 50 Toronto, Ontario M5X 1B8 Attention: Michael De Lellis (416) 862-5997 (Tel) (416) 862-6666 (Fax) Email: [email protected] Attention: Jeremy Dacks (416) 862-4923 Email: [email protected] Lawyers for Fifth Mortgagee, FAAN Mortgage Administrators Inc., as Administrators for Building & Development Mortgages Canada Inc.

-7-

AND TO: OLYMPIA TRUST COMPANY 2200, 125-9th Avenue SE Calgary Alberta T2G 0P6 Attention: Jonathan Bahnuik (General Counsel) (403) 668-8365 (Tel) (403) 265-1455 (Fax) Email: [email protected] Fifth Mortgagee

AND TO: RAR LITIGATION LAWYERS Professional Corporation 1 West Pearce Street, Suite 505 Richmond Hill ON L4B 3K3 Attention: Rocco A. Ruso (905) 731-8100 ext. 207 (Tel) Email: [email protected] Attention: Natalie Green (905) 731-8100 ext 209 (Tel) Email: [email protected] Lawyers for Fortress Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore and Vince Petrozza

Schedule “A” Amended and Restated Approval and Vesting Order



(COMMERCIAL LIST)

THE HONOURABLE

JUSTICE

) ) )

DAY, THE

DAY OF MAY, 2020

B E T W E N:

QUINCY INVESTMENTS LIMITED, 969592 ONTARIO LIMITED, 969593 ONTARIO LIMITED, 3701271 ONTARIO LIMITED,


Applicants

- and -



Respondents



AMENDED AND RESTATED APPROVAL AND VESTING ORDER

THIS MOTION, made by Rosen Goldberg Inc. in its capacity as the Court-appointed

receiver (the “Receiver”) of the lands and premises registered in the name of Sunrise

Acquisitions (Bond Head) Inc. (“Sunrise”), beneficially owned by Amal Financial Inc. (“AFI”)

and Galaxy Holding Inc. (“GHI”) (Sunrise, AFI and GHI are collectively referred to as the

“Debtors”), municipally known as 2875 Highway 27, Bond Head, Ontario and legally described

- 2 -

in Schedule B hereto and the remaining property, assets and undertakings of the Debtors

acquired for and used in relation thereto (collectively, the “Property”) for an Order amending

and restating the Approval and Vesting Order of the Honourable Justice Conway dated February

3, 2020 in this proceeding, was heard this day by video conference, in substitution to an in-

person hearing at 330 University Avenue, Toronto, Ontario, in accordance with the Changes to

Commercial List operations in light of COVID-19 dated March 16, 2020, and the Notice to the

Profession of Chief Justice Morawetz updated April 2, 2020.

ON READING the Second Report of the Receiver dated May 6, 2020 (the “Second Report”) and on hearing the submissions of counsel for the Receiver, no one appearing for any

other party on the service list, although served as appears from the affidavit of Janet Nairne

sworn May 6, 2020 filed:

1. THIS COURT ORDERS AND DECLARES that the sale transaction (the “Transaction”)

contemplated by an agreement of purchase and sale between the Receiver and Gal Real Four

Holdings Ltd. (“Gal”) dated January 9, 2020 (the “Sale Agreement”) and appended to the First

Report of the Receiver dated January 24, 2020 and the direction from Gal to the Receiver

directing title to FMC Bond Head Development Holdings Ltd. (the “Purchaser”) 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 Transaction and for the

conveyance of the Property to the Purchaser.

2. THIS COURT ORDERS AND DECLARES that upon the delivery of a Receiver’s

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

“Receiver’s Certificate”), all of the Debtors’ rights, titles and interests in and to the Property

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

- 3 -

Honourable Justice O’Marra dated July 23, 2019; (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 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

Property are hereby expunged and discharged as against the Property.

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

Land Titles Division of Simcoe (51) of an Application for Vesting Order in the form prescribed

by the Land Titles Act, the Land Registrar is hereby directed to enter the Purchaser as the owner

of the Property in fee simple, and is hereby directed to delete and expunge from title to the

Property all of the Claims listed in Schedule C hereto.

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

Claims, the net proceeds from the sale of the Property shall stand in the place and stead of the

Property, 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 Property with the same

priority as they had with respect to the Property immediately prior to the sale, as if the Property

had not been sold and remained in the possession or control of the person having that possession

or control immediately prior to the sale.

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

the Receiver’s Certificate, forthwith after delivery thereof.

6. 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 any of the Debtors and any

bankruptcy order issued pursuant to any such applications; and

(c) any assignment in bankruptcy made in respect of any of the Debtors;

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the vesting of the Property in the Purchaser pursuant to this Order shall be binding on any trustee

in bankruptcy that may be appointed in respect of any of the Debtors and shall not be void or

voidable by creditors of the Debtors, 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.

7. 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

B E T W E E N:



Applicants

- and -



Respondents



RECEIVER’S CERTIFICATE

RECITALS

A. Pursuant to an Order of the Honourable Mr. Justice O’Marra of the Ontario Superior

Court of Justice (the “Court”) dated July 23, 2019, Rosen Goldberg Inc. was appointed as the

receiver (the “Receiver”) of the real property registered in the name of Sunrise Acquisitions

(Bond Head) Inc. (“Sunrise”), beneficially owned by Amal Financial Inc. (“AFI”) and Galaxy

Holding Inc. (“GHI”) (Sunrise, AFI and GHI are collectively referred to as the “Debtors”) and

the remaining undertaking, property and assets of the Debtors and the remaining property, assets

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and undertakings of the Debtors acquired for and used in relation thereto (collectively, the

“Property”).

B. Pursuant to an Order of the Court dated May ___, 2020, the Court approved the

agreement of purchase and sale made as of January 9, 2020 (the “Sale Agreement”) between the

Receiver and Gal Real Four Holdings Ltd. and provided for the vesting in FMC Bond Head

Development Holdings Ltd. (the “Purchaser”) of the Debtors’ rights, titles and interests in and

to the Property, which vesting is to be effective with respect to the Property upon the delivery by

the Receiver to the Purchaser of a certificate confirming (i) the payment by the Purchaser of the

Purchase Price for the Property; and (ii) the 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.

THE RECEIVER CERTIFIES the following:

1. The Purchaser has paid and the Receiver has received the Purchase Price for the Property

payable on the Closing Date pursuant to the Sale Agreement;

2. The Transaction has been completed to the satisfaction of the Receiver; and

4. This Certificate was delivered by the Receiver at ________ [TIME] on May _____, 2020.

ROSEN GOLDBERG INC., in its capacity as Receiver of the undertaking, property and assets of Sunrise Acquisitions (Bond Head) Inc., Amal Financial Inc., and Galaxy Holding Inc., and not in its personal capacity

Per: Name: Brahm Rosen Title: President

Schedule B – Property

PIN 58003-0181 LT

Description PART OF LOT 1, CONCESSION 6 WEST GWILLIMBURY, PART 1 PLAN 51R41682; TOWN OF BRADFORD WEST GWILLIMBURY

Address 2875 HWY 27 BOND HEAD

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

REG. NUM.

DATE INSTRUMENT TYPE

AMOUNT PARTIES FROM PARTIES TO

SC1317933 2016/06/30 TRANSFER $11,700,000 SUGARCREST DEVELOPMENTS INC.

SUNRISE ACQUISITIONS (BOND HEAD) INC.

SC1317934 2016/06/30 CHARGE $7,605,000 SUNRISE ACQUISITIONS (BOND HEAD) INC.

SUGARCREST DEVELOPMENTS INC.


QUINCY INVESTMENTS LIMITED 969592 ONTARIO LIMITED 969593 ONTARIO LIMITED FORT 1 INC. 370271 ONTARIO LIMITED SASSO AUTO CONSULTING INC. DOUBILET, DAVID MARK STAMATIOU, GUS


BUILDING & DEVELOPMENT MORTGAGES CANADA INC.

SC1317951 2016/06/30 TRANSFER OF CHARGE


BUILDING & DEVELOPMENT MORTGAGES CANADA INC. OLYMPIA TRUST COMPANY













REG. NUM.



OLYMPIA TRUST COMPANY




















SC1419812 2017/06/14 NOTICE SUNRISE ACQUISITIONS (BOND HEAD) INC.








REG. NUM.







QUINCY INVESTMENTS LIMITED GAL INTERNATIONAL LTD. GAL CONSULTING LTD. 969592 ONTARIO LIMITED 969593 ONTARIO LIMITED 2307271 ONTARIO INC.

SC1472363 2017/11/24 POSTPONEMENT BUILDING & DEVELOPMENT MORTGAGES CANADA INC. OLYMPIA TRUST COMPANY

QUINCY INVESTMENTS LIMITED GAL INTERNATIONAL LTD. GAL CONSULTING LTD. 969592 ONTARIO LIMITED 969593 ONTARIO LIMITED 2307271 ONTARIO INC.


2635837 ONTARIO INC.

SC1516646 2018/06/11 NO ASSGN RENT GEN



SC1516647 2018/06/11 POSTPONEMENT BUILDING & DEVELOPMENT MORTGAGES CANADA INC. OLYMPIA TRUST COMPANY


SC1529395 2018/08/01 APL ABSOLUTE TITLE



FORT 1 INC. QUINCY INVESTMENTS LIMITED

Schedule D – Permitted Encumbrances, Easements and Restrictive Covenants

related to the Real Property

(unaffected by the Vesting Order)

REG. NUM.



SC1317933 2016/06/30 TRANSFER $11,700,000 SUGARCREST DEVELOPMENTS INC.


51R41682 2018/08/01 PLAN REFERENCE

SC1529395 2018/08/01 APL ABSOLUTE TITLE


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Schedule “B” Order



(COMMERCIAL LIST)

THE HONOURABLE

JUSTICE

) ) )

DAY, THE

DAY OF MAY, 2020

B E T W E N:



Applicants

- and -



Respondents



ORDER


receiver (the “Receiver”) of the lands and premises registered in the name of Sunrise Acquisitions

(Bond Head) Inc., beneficially owned by Amal Financial Inc. and Galaxy Holding Inc.,

municipally known as 2875 Highway 27, Bond Head, Ontario and legally described in Schedule

B hereto and the remaining property, assets and undertakings of the Debtors acquired for and used

- 2 -

in relation thereto, for an Order amending the Administrative Order of the Honourable Justice

Conway dated February 3, 2020 in this proceeding (the “Administrative Order”), was heard this

day by video conference, in substitution to an in-person hearing at 330 University Avenue,



updated April 2, 2020.

ON READING the Second Report of the Receiver dated May 6, 2020 (the “Second Report”) and on hearing the submissions of counsel for the Receiver, no one appearing for any

other party on the service list, although served as appears from the affidavit of Janet Nairne sworn

May 6, 2020 filed:

1. THIS COURT ORDERS that the time for service of the Receiver’s Notice of Motion and

the Motion Record, including the Second Report, is hereby abridged and validated so that this

motion is properly returnable today and hereby dispenses with further service thereof.

2. THIS COURT ORDERS that the activities and proposed activities of the Receiver

described in the Second Report be and are hereby approved.

3. THIS COURT ORDERS that paragraph 5 of the Administrative Order be and is hereby

deleted and that paragraph 4 of this Order is hereby substituted therefor.

4. THIS COURT ORDERS that upon completion of the Transaction, the Receiver is hereby

authorized and directed to distribute from the net sale proceeds, the amount owing under the

Receiver’s Charge and the balance of the purchase price shall be deemed to be satisfied, without

physical circulation funds, by the partial reduction of the indebtedness owing under the second

mortgage, including the payment of the first mortgage as a protective payment under the second

mortgage

________________________________

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TAB 2



(COMMERCIAL LIST)

B E T W E E N:



Applicants

- and -



Respondents

IN THE MATTER OF SECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT,

R.S.C. 1985 C. B-3, AS AMENDED, AND SECTION 101 OF THE COURTS OF JUSTICE ACT, R.S.O. 1990 C. C.43, AS AMENDED

SECOND REPORT OF ROSEN GOLDBERG INC.

ROSEN GOLDBERG

I. INTRODUCTION

1. By Order of Justice O’Marra dated July 23, 2019 (the “Appointment Order”) Rosen Goldberg

Inc. was appointed receiver (the “Receiver”) over land and premises registered in the name of Sunrise

Acquisitions (Bond Head) Inc., beneficially owned by Amal Financial Inc. and Galaxy Holding Inc.,

municipally known as 2785 Highway 27, in Bond Head, Ontario (the “Property”). A copy of the

Appointment Order is attached as Appendix “A”.

2. The Property is a 15.4 acre development site fronting on Highway 27.

II. PURPOSE OF THIS REPORT

3. This report is filed in support of the Receiver’s recommendations that:

(a) the Approval and Vesting Order of the Honourable Justice Conway dated February 3,

2020 be amended and restated to reflect that the party taking title to the Property will be

FMC Bond Head Development Holdings Ltd. (“FMC”) rather than Gal Real Holdings

Ltd. (“Gal”); and

(b) the Administrative Order of the Honourable Justice Conway dated February 3, 2020 be

amended to reflect that no distribution of sale proceeds to the first mortgagee, Sugarcrest

Development Inc. (“Sugarcrest”), will be necessary in view of the payout of the first

mortgage (the “First Mortgage”) on February 28, 2020 by the Applicants under their

second mortgage (the “Second Mortgage”).

ROSEN GOLDBERG

2

4. The proposed Orders are administrative in nature, will not substantively alter the February 3,

2020 Orders of Justice Conway, and will enable the Receiver to immediately complete the sale of the

Property.

III. TERMS OF REFERENCE

5. In preparing this report, the Receiver has relied upon information from third party sources

(collectively, the “Information”). Certain of the information contained herein may refer to, or be based

on, the Information. As the Information has been provided by other parties or obtained from documents

filed with the Honourable Court in this matter, the Receiver has relied on the Information and, to the

extent possible, reviewed the Information for reasonableness. However, the Receiver has not audited or

otherwise attempted to verify the accuracy and completeness of the Information in a manner that would

wholly or partially comply with Generally Accepted Assurance Standards pursuant to the CPA Canada

Handbook.

IV. PENDING SALE TRANSACTION

6. On February 3, 2020, Justice Conway granted an Approval and Vesting Order approving the

Receiver’s sale of the Property to Gal (the “Transaction”). A copy of the Approval and Vesting Order

is attached as Appendix “B”.

7. In connection with approving the Transaction, on February 3, 2020, Justice Conway also granted

an Administrative Order. A copy of the Administrative Order is attached as Appendix “C”.

8. Pursuant to the Administrative Order, a number of confidential appendices to the Receiver’s

First Report dated February3, 2020 (the “First Report”) were sealed pending the completion of the

Transaction, including, inter alia, an appraisal of the Property which the Receiver commissioned

following its appointment, a summary of the offers which the Receiver obtained, and the agreement of

ROSEN GOLDBERG

3

purchase and sale between the Receiver and Gal. A copy of the First Report, without appendices, is

attached as Appendix “D”.

9. The Transaction was contemplated to be a partial credit bid on the part of the Applicants under

the Second Mortgage whereby, on closing, prior ranking claims, including the First Mortgage, would be

paid in cash, and the balance of the purchase price would be satisfied, without physical circulation funds,

by the partial reduction of the indebtedness owing under the Second Mortgage.

10. The Transaction was originally to have been completed on February 22, 2020. However, after

the Approval and Vesting Order and the Administrative Order were granted on February 3, 2020, the

Applicants requested a number of extensions of the closing date.

11. As Sugarcrest was unwilling to consent to the payment of the First Mortgage being delayed, on

February 28, 2020, the Applicants paid Sugarcrest the sum of $8,178,325.38 as a protective

disbursement under the Second Mortgage. A copy of the certified trust cheque of the Applicants’

lawyers, Corsianos Lee, to Sugarcrest’s lawyers, Teplitsky Colson LLP, in Trust, in the amount of

$8,178,325.38 is attached as Appendix “E”.

12. Subject to a dispute between the Applicant and Sugarcrest over $29,055.09 in relation to the

administrative fee claimed under the First Mortgage and 3 days of interest, all which the Receiver will

hold in escrow when the Transaction is completed (the “Holdback”), the First Mortgage was thereby

paid out in full by the Applicants.

13. By virtue of the payout of the First Mortgage, the Receiver consented to the Applicants’ repeated

requests to extend the closing date, as the Applicants are the only stakeholders of the Respondents’

estates with an economic interest in the Transaction.

ROSEN GOLDBERG

4

14. The Applicants have now advised the Receiver they are in a position to complete the Transaction,

although they have requested that the Approval and Vesting Order be amended and restated to reflect

that the party taking title to the Property will be FMC Bond Head Development Holdings Ltd. (“FMC”),

a company controlled by the Applicants, rather than Gal.

15. FMC was incorporated on April 29, 2020. A copy of the Certificate of Incorporation and Articles

of Incorporation for FMC is attached as Appendix “F”.

16. In light of the Applicants’ payout of the First Mortgage on February 28, 2020 and the Receiver’s

retention of the Holdback, FMC will not be paying the First Mortgage out on closing. It will, therefore,

be necessary to amend paragraph 4 of the Administration Order, which deals with distribution of the net

sale proceeds, to delete the requirement that indebtedness owing under the First Mortgage be satisfied

in cash.

V. CONCLUSION

17. On the basis of the foregoing, the Receiver recommends that this Honourable Court grant the

relief described in paragraph 3.

All of which is respectfully submitted,

Dated at Toronto, Ontario, this 6th day of May, 2020.

ROSEN GOLDBERG INC., SOLELY IN ITS CAPACITY AS COURT-APPOINTED RECEIVER OF SUNRISE ACQUISITIONS (BOND HEAD) INC., AMAL FINANCIAL INC. AND GALAXY HOLDING INC.

Brahm Rosen, President.

ROSEN GOLDBERG

5

4824-4863-2763 v5 [41225-167]

ROSEN GOLDBERG

Appendix “A”

HE HONOURABLE ✓.,( ✓

JUSTICE O'MARRA

BETWEEN:



COMMERCIAL LIST

TUESDAY, THE 23RD

DAY OF JULY, 2019

QUINCY INVESTMENTS LIMITED, 969592 ONTARIO LIMITED, 969593 ONTARIO LIMITED, 370271 ONTARIO LIMITED, SASSO AUTO CONSULTING INC.,

DAVID MARK DOUBILET and GUS STAMATIOU

Applicants

- and -

SUNRISE ACQUISITIONS (BOND HEAD) INC. AMAL FINANCIAL INC., and GALAXY HOLDING INC.

Respondents

APPLICATION UNDER section 243 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended, and under section 101 of the Courts of Justice Act, R.S.O., 1990, c. C.43

RULES 14.05(3) (d) and (h) of the Rules of Civil Procedure

ORDER (appointing Receiver)

THIS APPLICATION made by the Applicants, Quincy Investments Limited, 969592

Ontario Limited, 969593 Ontario Limited, 370271 Ontario Limited, Sasso Auto Consulting Inc.,

David Mark Doubilet and Gus Stamatiou for an Order pursuant to section 243( 1) of the Bankruptcy

and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the "BIA") and section 101 of the Courts

of Justice Act, R.S.O. 1990, c. C.43, as amended (the "CJA") appointing Rosen Goldberg Inc.

("Rosen Goldberg") as receiver and manager (in such capacity, the "Receiver") without security,

over the lands and premises registered in the name of the respondent, Sunrise Acquisitions (Bond

- 2 -

Head) Inc. ("Sunrise"), beneficially owned by the respondents, Amal Financial Inc. ("AFI") and

Galaxy Holding Inc. ("GHI") (Sunrise, AFI and GHI are collectively referred to as the

"Borrowers"), municipally known as 2875 Highway 27, Bond Head, Ontario and more particularly

described in Schedule "A" (the "Real Property") and the remaining property, assets and

undertaking of the Borrowers acquired for and used in relation to the Real Property (collectively_

with the Real Property, the "Property"), was heard this day at 330 University Avenue, Toronto,

Ontario.

ON READING the affidavit of John Gagliano sworn June 20, 2019 and the Exhibits thereto,

including the Confidential Exhibits, and on hearing submissions of counsel for the Applicants and

counsel for the first mortgagee, Sugarcrest Developments Inc., no one appearing for the

Respondents, Sunrise Acquisitions (Bond Head) Inc., Amal Financial Inc. and Galaxy Holding

Inc., although duly served as appears from the affidavits of service of Domenic Cordiano sworn

June 25, 2019 and the affidavit of service of Christian Paesch sworn June 25, 2019 and on reading

the consent of Rosen Goldberg Inc. to act as the Receiver,

SERVICE

1. THIS COURT ORDERS that the time for service of the Notice of Application and the

Application Record is hereby abridged and validated so that this Application is properly

returnable today and hereby dispenses with further service thereof.

APPOINTMENT

2. THIS COURT ORDERS that pursuant to section 243(1) of the BIA and section 101 of

the CJA, Rosen Goldberg Inc. is hereby appointed Receiver, without security, of 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 take possession of and exercise control over the Property and any and

all proceeds, receipts and disbursements arising out of or from the

Property;

- 3 -

(b) 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;

(c) to manage, operate, and carry on the business of the Borrowers, including

the powers to enter into any agreements, incur any obligations in the

ordinary course of business, cease to carry on all or any part of the

business, or cease to perform any contracts of the Borrowers;

( d) to engage consultants to assess and advise on the extent of work required

to rectify deficiencies at the Real Property;

(e) to engage contractors, tradespersons, quantity surveyors, appraisers,

agents, experts, auditors, accountants, managers, including a property

manager, 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;

(f) to undertake any renovations and make any repairs to the Real Property

necessary to ensure the Real Property is well maintained and licensable

and is in compliance with the applicable laws and building codes;

(g) to purchase or lease such machinery, equipment, inventories, supplies,

premises or other assets to continue the business of the Borrowers or any

part or parts thereof;

(h) to receive and collect all monies and accounts now owed or hereafter owing . to the Borrowers and to exercise all remedies of the Borrowers in collecting

such monies, including, without limitation, to enforce any security held by

the Borrowers;

(i) to settle, extend or compromise any indebtedness owing to the Borrowers;

- 4 -

U) 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 the

name and on behalf of the Borrowers, for any purpose pursuant to this

Order;

(k) to initiate, prosecute arid continue the prosecution of any and all

proceedings and to defend all proceedings now pending or hereafter

instituted with respect to the Borrowers, 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;

(1) to negotiate and settle any and all security interests, trusts, liens

construction liens, trust claims (whether or not perfected), charges and

encumbrances, and claims of secured creditors, statutory or otherwise

against title to the Property;

(m) with court approval, 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;

(n) 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 $50,000.00, provided that the aggregate consideration

for all such transactions does not exceed $250,000.00; 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 may be, shall not be required;

- 5 -

(o) 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;

(p) 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;

(q) to register a copy of this Order and any other Orders in respect of the

Property against title to any of the Property;

(r) 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

Borrowers;

(s) to enter into agreements with any trustee in bankruptcy appointed in

respect of the Borrowers, including, without limiting the generality of the

foregoing, the ability to enter into occupation agreements for any property

owned or leased by the Borrowers;

(t) to exercise any shareholder, partnership, joint venture or other rights which

the Borrowers may have; and

{u) 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 the Borrowers, and without interference from any other Person.

DUTY TO PROVIDE ACCESS AND CO-OPERATION TO THE RECEIVER

4. THIS COURT ORDERS that (i) the Borrowers, (ii) all of their current and former directors,

officers, employees, agents, accountants, legal counsel and shareholders, and all other persons

acting on their 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

- 6 -

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, corporate and accounting

records, and any other papers, records and information of any kind related to the business or

affairs of the Borrowers, and any computer programs, computer tapes, computer disks, or other

data storage media containing any such information (the foregoing, col!ectively, 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 fu lly

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 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

- 7 -

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 BORROWERS OR THE PROPERTY

9. THIS COURT ORDERS that no Proceeding against or in respect of the Borrowers 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 Borrowers 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 Borrowers, 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 does not

apply in respect of any "eligible financial contract" as defined in the BIA, and further provided

that nothing in this paragraph shall (i) empower the Receiver or the Borrowers to carry on any

business which the Borrowers are not lawfully entitled to carry on, (ii) exempt the Receiver or

the Borrowers 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.

11. THIS COURT ORDERS that notwithstanding anything contained herein to the contrary

the first mortgagee, Sugarcrest Developments Inc. may apply to this Court for leave to pursue

enforcement of its First Mortgage, if so advised.

- 8 -

NO INTERFERENCE WITH THE RECEIVER

12. 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 Borrowers, without written consent of the Receiver

or leave of this Court.

CONTINUATION OF SERVICES

13. THIS COURT ORDERS that all Persons having oral or written agreements with the

Borrowers or statutory or regulatory mandates for the supply of goods and/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 Borrowers 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 Borrowers' 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

Borrowers or such other practices as may be agreed upon by the supplier or service provider

and the Receiver, or as may be ordered by this Court.

RECEIVER TO HOLD FUNDS

14. THIS COURT ORDERS that all funds, monies, cheques, instruments, and other forms

· of payments received or collecte.d by the Receiver from and after the making 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

Order or hereafter coming 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

15. THIS COURT ORDERS that all employees of the Borrowers shall remain the employees

of the Borrowers until such time as the Receiver, on the Borrowers' behalf, may terminate the

- ····--------- - ------ ------- --- ---- ---------------------

- 9 -

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 s_uch 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

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

Information Protection and Electronic Documents 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

all 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 Borrowers, and shall

return all other personal information to the Receiver, or ensure that all other personal information

is destroyed.

LIMITATION ON ENVIRONMENTAL LIABILITIES

17. 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 !aw 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

- 10 -

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

18. 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 Earner 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

19. 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 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, save and except for the

Charge/Mortgage registered on title to the Real Property in favour of the first mortgagee,

Sugarcrest Developments Inc. but subject to sections 14.06(7), 81.4( 4), and 81.6(2) of the BIA

· For greater clarity, the Receiver's Charge shall be subordinate in priority to the existing

Charge/Mortgage in favour of Sugarcrest Developments Inc.

20. 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 referred to a judge of the Commercial List of the Ontario Superior Court of Justice.

21. 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 disburse'!lents, 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.

- 11 -

FUNDING OF THE RECEIVERSHIP

22. THIS COURT ORDERS that the Receiver be at liberty and it is hereby empowered to

borrow by way of a revolving credit or otheiwise, such monies from time to time as it may

consider necessary or desirable, provided that the outstanding principal amount does not

exceed $100,000.00 (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 i) the

existing Charge/Mortgage in favour of Sugarcrest Developments Inc.; ii) to the Receiver's

Charge and iii) the charges as set out in sections 14.06(7), 81.4(4), and 81 .6(2) of the BIA.

23. 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.

24. THIS COURT ORDERS that the Receiver is at liberty and authorized to issue certificates

substantially in the form annexed as Schedule "B" hereto (the "Receiver's Certificates") for

any amount borrowed by it pursuant to this Order.

25. THIS COURT ORDERS that except as otherwise expressly provided for herein, or as

may be approved by further of this Court, no further encumbrances on the Property may be

granted that rank in priority or pari passu with the First Mortgage.

SERVICE AND NOTICE

26. 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/scj/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

- 12 -

documents in accordance with· the Protocol will be effective on transmission. This Court

further orders that a Case Website shall be established in accordance with the Protocol with

the following URL: www.rosenqoldberq.com/admin/companyview.php?company id=S0

27. 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 Borrowers' creditors or other interested parties at their respective addresses

as last shown on the records of the Borrowers 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

28. 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.

29. THIS COURT ORDERS that nothing in this Order shall prevent the ~eceiver from acting

as a trustee in bankruptcy of the Borrowers.





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.

31. 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.

- 13 -

32. THIS COURT ORDERS that the Applicants shall have their costs of this Application, 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 full indemnity basis to be

paid by the Receiver from the Borrowers' estate with such priority and at such time as this Court

may determine, but in any event, in priority to any subsequent encumbrances and the security

of any subsequent encumbrances over the Property.

33. 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.

ENTERED AT / INSCRiT A TOROmo ON I BOOK~'-(): LE/ DANS LE REGISTRE NO:

JUL 2 3 2019

PER/PAR:~

- 14 -

SCHEDULE "A"

PT LT 1, CON 6 WEST GWlLLIMBURY PART 1 & 3 51R11519; TOWN OF BRADFORD WEST GWILLIMBURY

PIN: 58003 - 0030 LT

- 15 -

SCHEDULE "B"

RECEIVER CERTIFICATE

CERTIFICATE NO. ------

AMOUNT$ ____ ___ _

1. 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

(collective1y, 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.

- 16 -

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.

6. The charge 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 _ _____ , 20_.

[RECEIVER'S NAME], solely in its capacity as Receiver of the Property, and not in its personal capacity

Per:

Name:

Title:

QUINCY INVESTMENTS LIMITED et al Applicants

- and - SUNRISE ACQUISITIONS {BOND HEAD) INC. et al Respondents



(COMMERCIAL LIST)

Proceeding comr;nenced at TORONTO

ORDER (appointing Receiver)

CORSIANOS LEE . Barristers and Solicitors 3800 Steeles Avenue West Suite 203W Vaughan, Ontario L4L 4G9

George Corsianos (LS0#48261 K) Tel: (905) 370-1092 Fax: (905) 370-1095 E-mail: [email protected]

Lawyers for the Applicants

Appendix “B”

THE HONOURABLE

c.A W, '-f t+J'-JUSTICE KOEH:P~J

BETWEEN:

Court File No. CV -19-6221161-00CL


(COMMERCIAL LIST)

)

)

)

MONDAY, THE 3RD

DAY OF FEBRUARY, 2020

Respondents



APPROVAL AND VESTING ORDER


receiver (the "Receiver") of the real property registered in the name of Sunrise Acquisitions

(Bond Head) Inc. and beneficially owned by Amal Financial Inc., and Galaxy Holding Inc., and

remaining undertaking, property and assets of Sunrise Acquisitions (Bond Head) Inc., Amal

Financial Inc., and Galaxy Holding Inc. ( collectively, the "Debtor") acquired for and used in

relation to the Property for an order approving the sale transaction (the "Transaction")

- 2 -

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

Receiver and Gal Real Four Holdings Ltd. (the "Purchaser") dated January 9, 2020 and appended

to the First Report of the Receiver dated January 24, 2020 (the "Report"), and vesting in the

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

Agreement (the "Purchased Assets"), was heard this day at 330 University Avenue, Toronto,

Ontario.

ON READING the Report and on hearing the submissions of counsel for the Receiver, ..... f 11:J.'-f(Je..rr 7::>c l-e,,Jo~pe'if"f,; :z:;-,, 't,; •

the Applicarrts,.,t and the Purch'aser, no one app1earing for any other person on the service list,

although properly served as appears from the affidavit of Jennifer Samuels sworn January 27,

2020 filed:

1. THIS COURT ORDERS AND DECLARES that the 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 Transaction and for the conveyance of

the Purchased Assets to the Purchaser.

2. 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 the Debtor's right, title and interest in and to the Purchased Assets

described in the Sale Agreement and listed on Schedule B hereto 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

O'Marra dated July 23, 2019; (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 to as the "Encumbrances", which term shall not include the permitted

- 3 -

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.




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.


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.


the Receiver's Certificate, forthwith after delivery thereof.

6. 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 the

Company's records pertaining to the Debtor's past and current employees. 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 the Debtor.

7. THIS COURT ORDERS that, notwithstanding:


- 4 -


Bankruptcy and Insolvency Act (Canada) in respect of the Debtor and any


( c) any assignment in bankruptcy made in respect of the Debtor;

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 the Debtor and shall not be void or

voidable by creditors of the Debtor, 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.





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.

ENTERED AT / INSCRIT A TORONTO ON I BOOK N'O: LE/ DANS LE REGISTRE NO:

FEB O 3 2020

PER/PAR: a,_

)

BETWEEN:

Schedule A - Form of Receiver's Certificate



COMMERCIAL LIST


DAVI MARKDOUBILET and GUS STAMATIOU

Applicants

- and -


Respondents



RECEIVER'S CERTIFICATE

RECITALS

A. Pursuant to an Order of the Honourable Mr. Justice O'Marra of the Ontario Superior

Court of Justice (the "Court") dated July 23, 2019, Rosen Goldberg Inc. was appointed as the

receiver (the "Receiver") of the real property registered in the name of Sunrise Acquisitions

(Bond Head) Inc. and beneficially owned by Amal Financial Inc., and Galaxy Holding Inc., and

remaining undertaking, property and assets of Sunrise Acquisitions (Bond Head) Inc., Amal

Financial Inc., and Galaxy Holding Inc. ( collectively, the "Debtor").

- 2 -

B. Pursuant to an Order of the Court dated February 3, 2020, the Court approved the

agreement of purchase and sale made as of January 9, 2020 (the "Sale Agreement") between the

Receiver and Gal Real Four Holdings Ltd. (the "Purchaser") and provided for the vesting in the

Purchaser of the Debtor'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 by the Purchaser of the Purchase Price for

the Purchased Assets; and (ii) the Transaction has been completed to the satisfaction of the

Receiver.


the Sale Agreement.


1. The Purchaser has paid and the Receiver has received the Purchase Price for the

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


4.

, 2020.

This Certificate was delivered by the Receiver at ____ [TIME] on February __

ROSEN GOLDBERG INC., in its capacity as Receiver of the undertaking, property and assets of Sunrise Acquisitions (Bond Head) Inc., Amal Financial Inc., and Galaxy Holding Inc., and not in its personal capacity

Per:

Name: Brahm Rosen

Title: President

PIN

Description

Address

Schedule B - Purchased Assets

58003-0030 LT

PT LT 1, CON 6 WEST GWILLIMBURY PART 1 & 3 51Rl1519; TOWN OF BRADFORD

2875 HWY27 BOND HEAD

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

REG. DATE INSTRUMENT AMOUNT PARTIES FROM PARTIES TO NUM. TYPE

SC13 l 7933 2016/06/30 TRANSFER $11,700,000 SUGARCREST SUNRISE ACQUISITIONS DEVELOPMENTS (BOND HEAD) INC. INC.

SC1317934 2016/06/30 CHARGE $7,605,000 SUNRISE SUGARCREST ACQUISITIONS DEVELOPMENTS INC. (BOND HEAD) INC.

SC1317935 2016/06/30 CHARGE $6,305,000 SUNRISE QUINCY INVESTMENTS ACQUISITIONS LIMITED (BOND HEAD) 969592 ONTARIO INC. LIMITED

969593 ONTARIO LIMITED FORT 1 INC. 370271 ONTARIO LIMITED SASSO AUTO CONSUL TING INC. DOUBILET, DAVID MARK STAMATIOU, GUS

SC1317936 2016/06/30 CHARGE $7,695,000 SUNRISE BUILDING & ACQUISITIONS DEVELOPMENT (BOND HEAD) MORTGAGES CANADA INC. INC.

SC1317951 2016/06/30 TRANSFER OF BUILDING & BUILDING & CHARGE DEVELOPMENT DEVELOPMENT

MORTGAGES MORTGAGES CANADA CANADA INC. INC.



MORTGAGES MORTGAGES CANADA CANADA INC. INC. OLYMPIA TRUST OLYMPIA TRUST COMPANY COMPANY






MORTGAGES MORTGAGES CANADA CANADA INC. INC.


OLYMPIA TRUST OLYMPIA TRUST COMPANY COMPANY





SC1385049 2017/02/07 TRANSFER OF BUILDING& BUILDING & CHARGE DEVELOPMENT DEVELOPMENT








SC1419812 2017/06/14 NOTICE SUNRISE BUILDING & ACQUISITIONS DEVELOPMENT (BOND HEAD) MORTGAGES CANADA INC. INC.


SC1419813 2017/06/14 TRANSFER OF BUILDING & BUILDING& CHARGE DEVELOPMENT DEVELOPMENT







SC1472362 2017/11/24 CHARGE $3,313,000 SUNRISE QUINCY INVESTMENTS ACQUISITIONS LIMITED (BOND HEAD) GAL INTERNATIONAL INC. LTD.

GAL CONSULTING LTD. 969592 ONTARIO LIMITED 969593 ONTARIO LIMITED 2307271 ONTARIO INC.

SC1472363 2017/11/24 POSTPONEMENT BUILDING & QUINCY INVESTMENTS DEVELOPMENT LIMITED MORTGAGES GAL INTERNATIONAL CANADA INC. LTD. OLYMPIA TRUST GAL CONSULTING LTD. COMPANY 969592 ONT ARIO

LIMITED 969593 ONT ARIO LIMITED 2307271 ONTARIO INC.

SCI 516645 2018/06/11 CHARGE $6,000,000 SUNRISE 2635837 ONTARIO INC. ACQUISITIONS (BOND HEAD) INC.

SC1516646 2018/06/11 NO ASSGN RENT SUNRISE 2635837 ONTARIO INC. GEN ACQUISITIONS

(BOND HEAD) INC.

SC1516647 2018/06/11 POSTPONEMENT BUILDING & 2635837 ONTARIO INC. DEVELOPMENT MORTGAGES CANADA INC. OLYMPIA TRUST COMPANY

SC1529395 2018/08/01 APL ABSOLUTE SUNRISE TITLE ACQUISITIONS

(BOND HEAD) INC.

SC156881 l 2019/01/11 TRANSFER OF FORT 1 INC. QUINCY INVESTMENTS CHARGE LIMITED

REG. NUM.

SC1317933

51R41682

SC1529395

Schedule D - Permitted Encumbrances, Easements and Restrictive Covenants related to the Real Property


DATE INSTRUMENT AMOUNT PARTIES FROM PARTIES TO TYPE

2016/06/30 TRANSFER $11,700,000 SUGARCREST SUNRISE DEVELOPMENTS ACQUISITIONS (BOND INC. HEAD) INC.

2018/08/01 PLAN REFERENCE

2018/08/01 APL SUNRISE ABSOLUTE ACQUISITIONS TITLE (BOND HEAD) INC.

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Appendix “C”

THE HONOURABLE

Co,.w,4~ Q<... JUSTICE.KOERHI~~

BETWEEN:



(COMMERCIAL LIST)

)

)

)

- and -

MONDAY, THE 3RD

DAY OF FEBRUARY, 2020

Applicants


Respondents


J[!STICE ACT, R.S.O. 1990 C. C.43, AS AMENDED

ADMINISTRATIVE ORDER


receiver (the "Receiver") of the real property registered in the name of Sumise Acquisitions (Bond

Head) Inc. and beneficially owned by Amal Financial Inc., and Galaxy Holding Inc., and all

remaining undertaking, property and assets of Sumise Acquisitions (Bond Head) Inc., Amal

- 2 -

Financial Inc., and Galaxy Holding Inc. ( collectively, the "Debtor") acquired for and used in

relation to the real property, for an order approving the Receiver's First Report dated January 24,

2020 and the activities of the Receiver as described therein, an other relief as set out in the Notice

of Motion, was heard this day at 330 University Avenue, Toronto, Ontario.

S v :>I'-' Ct~ -r u.e..; d O t~-,;-- ":C' - t-_

ADrff G the Report and on hearing the submissions of counsel for the Receiver, the

nd the Purchaser, no one appearing for any other person on the service list, although

properly served as appears from the affidavit of Jennifer Samuels sworn January 27, 2020 filed:

1. THIS COURT ORDERS that the time for service of the Notice of Motion and the Motion

Record, including the First Report is hereby abridged and validated such that this motion is

properly returnable today and hereby dispenses with fmiher service thereof.

2. THIS COURT ORDERS that the First Report and the activities and proposed activities of

the Receiver described therein are hereby approved.

3. THIS COURT ORDERS that the Receiver is authorized and directed, nunc pro tune, to

redact from the First Report served on the parties named in the service list, (i) the Appraisal

(hereinafter defined) attached as Confidential Appendix 1; (ii) the Receiver's summary of offers

attached as Confidential Appendix 2; (iii) the unredacted version of the Crystal Homes Corp.

offer attached as Confidential Appendix 3, (iv) the unredacted copy of the Orea Equity offer

attached as Confidential Appendix 4, and (v) the unredacted version of the Agreement of

Purchase and Sale attached as Confidential Appendix 5.

4. THIS COURT ORDERS that the unredacted version of the First Report, including the

confidential appendices thereto, shall be sealed and kept confidential until the Receiver has

completed the sale transaction (the "Transaction") contemplated in the Approval and Vesting

Order made in this proceeding on the date hereof, or further Order of this Court.

5. THIS COURT ORDERS that upon completion of the Transaction, the Receiver is hereby

authorized and directed to distribute from the net sale proceeds, firstly, the amount required to

repay the indebtedness secured by the mortgage in favour of Sugarcrest Developments Inc.,

secondly, the amount required to pay the amounts owing under the Receivers' Charge and, thirdly,

- 3 -

the amount required to partially satisfy the indebtedness secured by the mortgages and security

interests in favour of the Applicants, Quincy Investments Limited, 969592 Onstio Limited, 969593

Ontario Limited, 3701271 Ontario Limited, Sasso Auto Consulting Inc., Davi Mark Doubilet and

Gus Stamatiouthe.

TORONTO 41225-167 1708386v1

ENTERED AT I INSCRIT A TORONTO ON I BOOK N'O: LE/ DANS LE REGISTRE NO:

FEB O 3 .2020

PER/PAR: e,_

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Appendix “D”

ROSEN GOLDBERG 1NSCLV('JC 'f & ~E51' RU CTUR1NC,

BETWEEN:



(COMMERCIAL LIST)


DAVI MARK DOUBILET and GUS STAMATIOU Applicants

- and -


Respondents

IN THE MATTER OF SECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985 C. B-3, AS AMENDED, AND SECTION 101 OF THE COURTS OF JUSTICE ACT,

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

FIRST REPORT OF ROSEN GOLDBERG INC.

I. INTRODUCTION

l. By Order of the Honourable Mr. Justice O'Marra dated July 23, 2019 (the "Appointment

Order"), Rosen Goldberg Inc. was appointed receiver (the "Receiver") over the real property

municipally known as 2785 Highway 27, Bond Head, Ontario, registered in the name of the respondent,

ROSEN GOLDBERG

Sunrise Acquisitions (Bond Head) Inc., and beneficially owned by the respondents. Amal Financial Inc.

and Galaxy Holding Inc. (the "Real Property"), together with all of the remaining property,

undertaking, and assets of the respondents acquired for and used in relation to the Real Property

(collectively, the "Property"). A copy of the Appointment Order is attached hereto as Appendix "A".

JI. PURPOSE OF THIS REPORT

2. The purpose of this First Report is to:

(a) seek the Court's approval of the Receiver's activities described in the First Report,

including, without limitation, the steps taken by the Receiver to market and sell the

Property;

(b) seek the Court's approval of the transaction (the "Transaction") contemplated in an

Offer to Purchase the Properly made by Gal Real Four Holdings Ltd. (the "Purchaser'')

and accepted by the Receiver on January 9, 2020 (the "Accepted Offer");

(c) seek the Court's authorization and direction, 1w11c pro w11c, to redact from the First

Report served on the parties named in the service list, (i) the Appraisal (hereinafter

defined) attached as Confidential Appendix 1; (ii) the Receiver's summary of offers

attached as Confidential Appendix 2; (iii) the unredacted version of the Crystal offer

attached as Confidential Appendix 3, (iv) the unredacted copy of the Orea Equity offer

attached as Confidential Appendix 4, and (v) the unredacted version of the Accepted

Offer attached as Confidential Appendix 5.

(d) seek an Order sealing the unredacted version of the First Report, including the

confidential appendices thereto, until the closing of the Transaction or further Order of

this Court; and

2

ROSEN GOLDBERG

(e) seek the Court's approval to distribute the net proceeds of sale following completion of

the Transaction, to satisfy the Priority Claims (hereinafter defined) and partially satisfy

the amounts owing to the Applicants under the Quincy Second Charge (hereinafter

defined).

III. TERMS OF REFERENCE

3. In preparing this report, the Receiver has relied upon information from third party sources

(collectively, the "Information"). Certain of the information contained herein may refer to, or be based

on, the Information. As the Information has been provided by other parties or obtained from documents

filed with the Honourable Court in this matter, the Receiver has relied on the Information and, to the

extent possible, reviewed the Information for reasonableness. However, the Receiver has not audited

or otherwise attempted to verify the accuracy and completeness of the Information in a manner that

would wholly or partially comply with Generally Accepted Assurance Standards pursuant to the CPA

Canada Handbook.

IV. BACKGROUND

The Property

4. The Real Property is a 15.4 acre development site fronting on Highway 27 in Bond Head,

Ontario. The Township of Bradford West Gwillimbury's current zoning designation of the site is Future

Development and Rural Settlement Area. There is a detached residential dwelling on the site.

3

ROSEN GOLDBERG INSO.V[NCY & RES•~UCTUP.INO

5. As noted above, the Real Property is registered in the name of Sunrise Acquisitions (Bond Head)

Inc., as Trustee for Amal Financial Inc. and Galaxy Holding Inc., who are the beneficial owners. The

Real Property was acquired from Sugarcrest Developments Inc. ("Sugarcrest") in June 2016 for a

purchase price of $11.6 million. Sugarcrest provided a vendor take back mortgage with a face amount

of $7.605 million as part of the sale transaction.

Encumbrances

6. As appears from the parcel register in respect of the Real Property, a copy of which is attached

hereto as Appendix "B", there are several charges registered against the Real Property as described

below:

(a) A mortgage registered in favour of Sugarcrest with a face amount of $7.605 in respect of

the vendor take back mortgage granted on the sale lo the Respondents ("Sugarcrest

Charge");

(b) A mortgage registered by the Applicants with a face amount of $6.305 million ("First

Quincy Charge").

(c) A mortgage registered by Quincy Investments Limited, Gal International Ltd., Gal

Consulting Ltd., 969592 Ontario Limited, 969593 Ontario Limited and 2307271 Ontario

Inc. with a face amount of $3.313 million ("Second Quincy Charge").

(d) A mortgage registered in favour of 2635837 Ontario Inc. with a face amount of $6 million

{"263 Charge"); and

(e) A mortgage registered in favour of Building & Development Mortgages Canada Inc.

("BDMC"), with a face amount of $9.095 million ("BDMC Charge"). Pursuant to an

4

ROSEN GOLDBERG :NSC·LVfNCY & RESTRUClu~,t~C,

Order of the Ontario Superior Court of Justice dated Appeal 20, 2018, FAAN Mortgage

Administrators Inc. was appointed Trustee of BDMC.

V. ACTIVITIES OF THE RECEIVER

7. The Receiver's activities to date include, h1ter a!ia, the following:

.,. Insuring the Property;

.,. Preparing its statutory receiver's report;

.,. Commissioning an appraisal of the Property from Colliers International;

• Communicating with stakeholders;

.,. Dealing with the listing agent for the Property, including meetings and other communications

regarding method of sale, listing prices, timing, etc.;

.,. Ongoing communications with the listing agent during the listing process;

',- Dealing with offers;

;,,- Regularly attending at the Property;

.,. Obtaining a security opinion from the Receiver's independent counsel with respect to the

encumbrances against the Property; and

• Ongoing communications with counsel.

VI. APPRAISAL

8. In order to assist in informing itself of the value of the Property, the Receiver commissioned an

appraisal of the Property by Colliers International. A copy of the appraisal is attached as Confidential

5

ROSEN GOLDBERG JN<.Ct•J,NC'I & RFSTRUCTUR1N6

Appendix "l". In order to maintain the integrity of the sales process, the Receiver requests that the

appraisal be sealed until completion of the Transaction.

VII. SALE AND MARKETING PROCESS

9. Upon its appointment, the Receiver sought proposals from the following three listing brokers

with experience selling development properties of this nature in this geographical area: Lennard

Commercial Realty, Commercial Focus Realty Inc. ("CFR") and Rernax Hallmark Corbo Kelos Group

Realty Ltd. The Receiver reviewed the proposals received from each of these real estate brokers and

ultimately entered into a listing agreement with CFR.

I 0. The listing agreement was entered into on September 18, 2019, as an unpriced tender with a

deadline for submitting bids of October 24, 2019. The deadline to submit offers was subsequently

extended to October 30, 2019.

Marketing process

11. CFR undertook, inter alia, the following activities as the Receiver's listing agent:

• Prepared a teaser brochure which was sent to in excess of three thousand parties;

• Established a list of 500 targeted buyers and circulated the teaser brochure to them;

• Listed the Property on the MLS system, thereby exposing the Property to more than 50,000

realtors in Ontario;

6

ROSEN GOLDBERG

• Prepared a Confidential Information Memorandum;

;- Advertised the Property on various websites, including www.realtor.ca;

, Circulated the teaser brochure to CFR sales force;

;- Established a virtual data room that contained relevant documents and information regarding

the Property;

;- Advertised in the Globe & Mail on October land 3, 2019; and

r Answered telephone and email inquiries in respect of the Property.

12. A summary of CFR 's marketing activities and the corresponding interest generated is noted

hereunder: Parties requesting additional information 155

Parties rrovi<le<l access to data room 77

Offers received at bid deadline 11

I 3. A summary of the offers received is attached as Confidential Appendix "2".

14. Upon review of the offers, the Receiver, through CFR, invited the three highest bidders to

resubmit their offers, giving further consideration to the price and conditions contained in their offers.

There were no significant changes from the original offers submitted. We attach a redacted copy of the

Crystal Homes Corp. ("Crystal") offer as Appendix "C".

15. After further review, and negotiation in respect of the amount of the deposit to be paid, the

Receiver accepted the resubmitted Crystal offer on November 13, 2019. The Crystal offer contained a

7

ROSEN GOLDBERG

conditional period of twenty-eight days. On December 4, 2019 Crystal infirmed the Receiver that it

would not be waiving conditions. A mutual release was executed and the agreement was terminated+.

An unredacted copy of the offer is attached as Confidential Appendix "3".

16. Upon the termination of the Crystal offer, CFR contacted the two next highest offerors who had

submitted bids during the sales process. Neither of these parties were prepared to submit offers that were

equivalent to their initial offers and neither revived their previous offers or submitted a fresh offer.

17. The Receiver therefore commenced discussions with the second mortgagees about the

possibility and structure of a partial credit bid and was ultimately advised that a partial credit bid would

be submitted.

18. Prior to receiving the partial credit bid, an offer was received from Orea Equity ("Orea"), which

contained a short conditional period. The Receiver signed back the offer, increasing the price and the

initial deposit required. The Receiver was advised that Orea was not prepared to increase its price or

initial deposit. A redacted copy of the Orea offer is attached as Appendix "D". An unredacted copy of

the Orea offer is attached as Confidential Appendix "4".

Accepted Offer

19. On January 7, 2020, we received a partial credit bid from GAL Real Four Holdings Inc.

("GAL"). GAL is affiliated with the second ranking mortgagees. On January 9, 2020, the Receiver

accepted the GAL offer, subject only to court approval ("Accepted Offer"). The salient terms of the

Accepted Offer are as follows:

8

ROSEN GOLDBERG IN~Cl'If'J(Y & l'.ES7~UCTUR 1~10

• The offer is on an "as is, where is" basis and is unconditional (other than being subject to court

approval);

• A deposit of $500,000 was submitted with the offer; and

• The purchase price will be satisfied by payment of sufficient funds to repay the amount owing

to Sugarcrest under the first mortgage and any prior ranking claims, including, without

limitation, the amounts owing to the Receiver and secured by the Receiver's Charge created by

paragraph 19 of the Appointment Order (collectively, the "Priority Claims"). The balance of

the purchase price will be satisfied, without circulation of funds, but by partial reduction of the

amounts owing to the second mortgagees under the First Quincy Charge.

20. A copy of the Accepted Offer, with redactions for the purchase price, is attached as Appendix

''E". An unredacted copy of the Accepted Offer is attached as Confidential Appendix "5".

VIII. LEGAL OPINION

21. The Receiver's independent counsel, Dickinson Wright LLP has provided an opinion that,

subject to the usual qualifications, the charges registered on title to the Real Property are valid and

enforceable, and, subject to the Priority Claims, rank in the following order of priority: Firstly, the

Sugarcrest Charge; Secondly, the First Quincy Charge; Thirdly, the Second Quincy Charge; Fourthly,

the 267 Charge; and Lastly, the BDMC Charge. A copy of the security opinion is attached as Appendix

"F".

9

ROSEN GOLDBERG !N'-0.VF'<Cf & ~fSTR\JCT\JR<lsC,

IX. DISTRIBUTION

22. The Receiver is seeking an Order authorizing it to distribute the net cash sale proceeds payable

on closing of the Transaction, in order to satisfy the Priority Claims, including the amount due under

the Receiver's Charge and Sugarcrest Charge. We attach as Appendix ''G" hereto Sugarcrest's current

payout statement the quantum which is subject to the Receiver's reveiw.

23. The balance of the net sale proceeds will be satisfied, without circulation of funds, by the partial

reduction of the amount owing under the First Quincy Charge. We attach as Appendix "H" the payout

statement provided to the Receiver in respect of the current amount owing under the First Quincy

Charge. We note that there will be a Signiant shortfall in respect of the Quincy First Charge. As noted

above, Dickinson Wright LLP has opined that the Sugarcrest Charge and Quincy First Charge are valid

and enforceable and have priority over the other charges registered on title to the Real Property.

X. RECOMMENDATIONS

24. The Receiver recommends that the Accepted Offer be approved by this Honourable Court for

the following reasons:

(a) The Property was widely exposed to the marketplace in a manner that is common for a

property of this nature and a significant number of offers were generated;

(b) The Accepted Offer is unconditional;

(c) The Accepted Offer is in the range of the appraisal obtained by the Receiver;

10

ROSEN GOLDBERG fN~C~VE'l('( & ;.es1RUCTUR \~G

(d) The Accepted Offer provides for full repayment of the first mortgagee, who supports the

transaction; and

(e) Based on the marketing process undertaken, the Receiver does not believe that further

marketing of the Property will result in a superior offer.

XI. CONCLUSION

25. On the basis of the foregoing, the Receiver recommends that this Honourable Court grant the

relief described in paragraph 2.

All of which is respectfully submitted,

Dated at Toronto, Ontario, this 24111 day of January 2020.

ROSEN GOLDBERG INC., SOLELY IN ITS CAPACITY AS COURT-APPOINTED RECEIVER OF SUNRISE ACQUISITIONS (BOND HEAD) INC., AMAL FINANCIAL INC. AND GALAXY HOLDING INC.

1~~~ \tu

11 TORONTO 41225• 167 1703837v4

Appendix “E”

01

PAY TO THE ORDER OF

Ot H i h Thou n n y • V

T pl.'t k, Col o T u

· - 120-4001

,: ~ 1, sq ~,.,ooi.,: L o~~ so•.::_

~ Bank of Montreal

Transaction Record Customer Copy

February 28, 2020 5:32:51 PM Branch Transit: 2558 Operator: 026 Business Date: February 28, 2020 Card Number: No Card Authentication: Manual

Deposit Account:

1 Cheque(s): Total Deposit:

0390 1101-806 $8,178,325.38 $8 , 178 , 325 . 38

Thank you for banking with Bank of Montreal

000012

2 8 0 2 2 0 2 0 DATE D D H H y y 'i y

* 8 '· 1.7 8 , 3 2 5 . 3 8

Appendix “F”

Request ID: Province of Ontario Date Report Produced:Demande no: Province de l’Ontario Document produit le:Transaction ID: Ministry of Government Services Time Report Produced: Transaction no: Ministère des Services gouvernementaux Imprimé à:

Category ID:Catégorie:

Certificate of Incorporation Certificat de constitution

This is to certify that Ceci certifie que

Ontario Corporation No. Numéro matricule de la personne morale en Ontario

is a corporation incorporated, est une société constituée aux termes under the laws of the Province of Ontario. des lois de la province de l’Ontario.

These articles of incorporation Les présents statuts constitutifs are effective on entrent en vigueur le

Director/Directrice Business Corporations Act/Loi sur les sociétés par actions

024480720

075306808

CT

2020/04/29

15:05:54

F M C B O N D H E A D D E V E L O P M E N T H O L D I N G S L T D .

0 0 2 7 5 3 7 3 6

A P R I L 2 9 A V R I L , 2 0 2 0

Page: Ontario Corporation Number Request ID / Demande no Numéro de la compagnie en Ontario

FORM 1 FORMULE NUMÉRO 1 BUSINESS CORPORATIONS ACT / LOI SUR LES SOCIÉTÉS PAR ACTIONS ARTICLES OF INCORPORATION STATUTS CONSTITUTIFS 1. The name of the corporation is: Dénomination sociale de la compagnie: 2. The address of the registered office is: Adresse du siège social: (Street & Number, or R.R. Number & if Multi-Office Building give Room No.) (Rue et numéro, ou numéro de la R.R. et, s’il s’agit édifice à bureau, numéro du bureau) (Name of Municipality or Post Office) (Postal Code/Code postal) (Nom de la municipalité ou du bureau de poste) 3. Number (or minimum and maximum Nombre (ou nombres minimal et maximal) number) of directors is: d’administrateurs: 4. The first director(s) is/are: Premier(s) administrateur(s): First name, initials and surname Resident Canadian State Yes or No Prénom, initiales et nom de famille Résident Canadien Oui/Non Address for service, giving Street & No. Domicile élu, y compris la rue et le or R.R. No., Municipality and Postal Code numéro, le numéro de la R.R., ou le nom de la municipalité et le code postal

CANADA M6M 2P5

1

275373624480720

FMC BOND HEAD DEVELOPMENT HOLDINGS LTD.

31 DENSLEY AVENUE

TORONTOCANADA

ONTARIOM6M 2P5

Minimum 1 Maximum 5

* DOMENICO GIOVANNI

GAGLIANO

YES

31 DENSLEY AVENUE

TORONTO ONTARIO


5. Restrictions, if any, on business the corporation may carry on or on powers the corporation may exercise. Limites, s’il y a lieu, imposées aux activités commerciales ou aux pouvoirs de la compagnie. 6. The classes and any maximum number of shares that the corporation is authorized to issue: Catégories et nombre maximal, s’il y a lieu, d’actions que la compagnie est autorisée à émettre:

2

24480720 2753736

None

The Corporation is authorized to issue:(a) an unlimited number of Class A Special Shares;(b) an unlimited number of Class A Common Shares;(c) an unlimited number of Class B Common Shares; and(d) an unlimited number of Class C Common Shares.


7. Rights, privileges, restrictions and conditions (if any) attaching to each class of shares and directors authority with respect to any class of shares which may be issued in series: Droits, privilèges, restrictions et conditions, s’il y a lieu, rattachés à chaque catégorie d’actions et pouvoirs des administrateurs relatifs à chaque catégorie d’actions que peut être émise en série:

3

24480720 2753736

ARTICLE ONE: DefinitionsIn these provisions, unless there is something in the subject matter orcontext inconsistent therewith: 1.1 Act means the Business Corporations Act (Ontario) as now enacted or asthe same may from time to time be amended or re-enacted. 1.2 Articles has the meaning ascribed thereto in subsection 1(1) of theAct. 1.3 Corporation means the Corporation incorporated pursuant to the Act byarticles of incorporation of which these provisions form a part. 1.4 directors means the directors of the Corporation and reference to anyaction by the directors means action taken by them by resolution as aboard. 1.5 holder in respect of shares held by joint holders, means all such jointholders. 1.6 these provisions means the provisions of this item 7 of these articlesof the Corporation as amended or supplemented from time to time. 1.7 The expressions article or section followed by a number mean and referto the specified article or section of these provisions. ARTICLE TWO: Class A Special SharesThe rights, privileges, restrictions and conditions attaching to the ClassA Special Shares, as a class, are as follows: 2.1 The holders of the Class A Special Shares shall in each fiscal year ofthe Corporation have the right to receive such non-cumulative dividends, ifany, as the directors in their discretion may declare out of the moneyproperly applicable for the payment of dividends, provided that suchdividends, if any, shall be equal to the specific percentage of the Class ARedemption Amount as hereinafter defined, and no more. The specificpercentage shall be the percentage rate prescribed by the Canada RevenueAgency (CRA) as the rate used to calculate taxable benefits forshareholders from interest free loans from time to time. Class A RedemptionAmount means the fair market value of any property sold, transferred to orexchanged with the Corporation as consideration for the issue of Class ASpecial Shares on the date of issue less the amount of non-shareconsideration, if any, paid, assumed or delivered by the Corporation aspartial consideration for the purchase, acquisition or exchange of such



4

24480720 2753736

property, divided by the number of Class A Special Shares issued asconsideration or partial consideration for such purchase, acquisition orexchange. 2.2 The Class A Special Shares are redeemable from time to time and at anytime by the Corporation on the giving of notice as hereinafter provided;the redemption price shall be the Class A Redemption Amount together withan amount equal to any dividends declared or accrued thereon and remainingunpaid; in any case of redemption of Class A Special Shares hereunder, theCorporation shall at least 20 days before the date specified for redemptionmail or deliver to each person who at the date of mailing is a registeredholder of Class A Special Shares to be redeemed a notice in writing of theintention of the Corporation to redeem such Class A Special Shares; suchnotice shall be mailed in a prepaid letter addressed to each suchshareholder at his address as it appears on the books of the Corporation orin the event of the address of any such shareholder not so appearing thento the last known address of such shareholder; provided, however, thataccidental failure to give any such notice to one or more of such holdersshall not affect the validity of such redemption; such notice shall set outthe redemption price and the date on which redemption is to take place and,if part only of the shares held by the person to whom such notice isaddressed are to be redeemed, the number thereof so to be redeemed; on orafter the date so specified for redemption the Corporation shall pay orcause to be paid to or to the order of the registered holders of the ClassA Special Shares to be redeemed the redemption price on presentation andsurrender at the head office of the Corporation or any other placedesignated in such notice of the certificates representing the Class ASpecial Shares called for redemption; such Class A Special Shares shallthereupon be redeemed; if a part only of the Class A Special Sharesrepresented by any certificate be redeemed, a new certificate for thebalance shall be issued at the expense of the Corporation; from and afterthe date specified in any such notice, the Class A Special Shares calledfor redemption shall cease to be entitled to dividends and the holdersthereof shall not be entitled to exercise any of the rights of shareholdersin respect thereof unless payment of the redemption price shall not be madeupon presentation of certificates in accordance with the foregoingprovisions, in which case the rights of the holders shall remainunaffected; the Corporation shall have the right at any time after themailing of notice of its intention to redeem any Class A Special Shares asaforesaid to deposit the amount required to redeem the Class A SpecialShares so called for redemption or of such of the said shares as arerepresented by certificates which have not at the date of such deposit beensurrendered by the holders thereof in connection with such redemption to aClass A Special Shares account in any chartered bank or any trust company



5

24480720 2753736

in Canada named in such notice to be paid without interest to or to theorder of the respective holders of such Class A Special Shares called forredemption upon presentation and surrender to such bank or trust company ofthe certificates representing the same and upon such deposit being made orupon the date specified for redemption in such notice, whichever is thelater, the Class A Special Shares in respect whereof such deposit shallhave been made shall be redeemed and the rights of the holders thereofafter such deposit or such redemption date, as the case may be, shall belimited to receiving without interest their proportionate part of the totalredemption price so deposited against presentation and surrender of thesaid certificates held by them respectively. 2.3 The Class A Special Shares are retractable by the shareholder on thegiving of notice as hereinafter provided; the retraction price shall be theClass A Redemption Amount together with an amount equal to any dividendsdeclared or accrued thereon and remaining unpaid; in any case of retractionof Class A Special Shares hereunder, the shareholder shall at least 30 daysbefore the date specified for retraction mail to the Corporation a noticein writing of the intention of the shareholder to retract such Class ASpecial Shares; such notice shall be mailed in a prepaid letter addressedto the Corporation at its address or its last known address; such noticeshall set out the retraction price and the date on which retraction is totake place; on or before the date so specified for retraction theCorporation shall pay or cause to be paid to or to the order of theregistered holders of the Class A Special Shares to be retracted theretraction price on presentation and surrender at the head office of theCorporation or any other place designated in such notice of thecertificates representing the Class A Special Shares called for retraction;such Class A Special Shares shall thereupon be redeemed. 2.4 The Corporation may, at any time and from time to time, purchase forcancellation the whole or any part of the Class A Special Shares on paymentfor each Class A Special Share of the Class A Redemption Amount, togetherwith all dividends declared thereon and unpaid. 2.5 The holders of the Class A Special Shares shall have the right on theliquidation, dissolution or winding-up of the Corporation, whethervoluntary or involuntary, or other distribution of its assets among itsshareholders for the purpose of winding-up its affairs, in priority to theholders of the Common Shares or any other shares ranking junior to theClass A Special Shares, to receive the Class A Redemption Amount togetherwith an amount equal to any dividends declared or accrued thereon andremaining unpaid, and no more.



6

24480720 2753736

2.6 The provisions of Sections 2.1 through 2.5 inclusive hereof in respectof the Class A Redemption Amount shall be subject to the provisions of thisSection 2.6. In the event that CRA disputes the fair market value of anyproperty sold or transferred to or exchanged with the Corporation inexchange for non-share consideration, if any, and the Class A SpecialShares, is greater or less than the non-share consideration, if any, andthe Class A Redemption Amount, as agreed and determined by the Corporationand the holders of the Class A Special shares, the Class A RedemptionAmount shall be increased or decreased to reflect the value, as ultimatelydetermined, of the Class A Special Shares. The adjustment to the Class ARedemption Amount per share shall be equal to the total increase ordecrease so determined divided by the number of Class A Special Shares soissued. The Class A Redemption Amount of the Class A Special Shares soadjusted shall be deemed retroactively to the date of first issue to havebeen the Class A Redemption Amount. In the event that any of the Class ASpecial Shares have been redeemed prior to the date of the ultimatedetermination, cash settlements will be made by the holder of the saidshares or the Corporation, as the case may be. Reference to value asultimately determined herein shall have the following meaning:(a) such amount as may be agreed by CRA, the Corporation and the holders ofthe Class A Special Shares to have been the fair market value of theproperty sold, transferred or exchanged for such Class A Special Shares; OR(b) in the absence of such agreement, such amount as shall be determined bya court of competent jurisdiction in the matter, after the exhaustion ofall appeals or all times for appeal having expired without appeals havingbeen taken, to be the fair market value of the property sold, transferredor exchanged for such Class A Special Shares. 2.7 The holders of the Class A Special Shares shall not be entitled toreceive notice of or to attend any meetings of shareholders of theCorporation, other than separate meetings of the holders of the Class ASpecial Shares, or to vote at any such meeting of the shareholders of theCorporation. ARTICLE THREE: Class A Common SharesThe rights, privileges, restrictions and conditions attaching to the ClassA Common Shares are as follows: 3.1 Dividends: Subject to the prior rights of the holders of the Class ASpecial Shares, the holders of the Class A Common Shares shall have theright to receive such dividends (if any) as the directors in theirdiscretion may declare. 3.2 Dissolution: Subject to the prior rights of the holders of the Class A



7

24480720 2753736

Special Shares, the holders of the Class A Common Shares shall have theright on the liquidation, dissolution or winding-up of the Corporation,whether voluntary or involuntary, or other distribution of its assets amongits shareholders for the purpose of winding-up its affairs, to receive theremaining assets of the Corporation rateably with the holders of the ClassB and Class C Common Shares. 3.3 Voting rights: The holders of the Class A Common Shares shall beentitled to receive notice of and to attend all meetings of shareholders ofthe Corporation, other than separate meetings of the holders of anotherclass or series of shares, and to vote at any such meeting on the basis ofone vote for each Class A Common Share held. ARTICLE FOUR: Class B Common SharesThe rights, privileges, restrictions and conditions attaching to the ClassB Common Shares are as follows: 4.1 Dividends: Subject to the prior rights of the holders of the Class ASpecial Shares, the holders of the Class B Common Shares shall have theright to receive such dividends (if any) as the directors in theirdiscretion may declare. 4.2 Dissolution: Subject to the prior rights of the holders of the Class ASpecial Shares, the holders of the Class B Common Shares shall have theright on the liquidation, dissolution or winding-up of the Corporation,whether voluntary or involuntary, or other distribution of its assets amongits shareholders for the purpose of winding-up its affairs, to receive theremaining assets of the Corporation rateably with the holders of the ClassA and Class C Common Shares. 4.3 Voting rights: The holders of the Class B Common Shares shall beentitled to receive notice of and to attend all meetings of shareholders ofthe Corporation, other than separate meetings of the holders of anotherclass or series of shares, and to vote at any such meeting on the basis ofone vote for each Class B Common Share held. ARTICLE FIVE: Class C Common SharesThe rights, privileges, restrictions and conditions attaching to the ClassC Common Shares are as follows: 5.1 Dividends: Subject to the prior rights of the holders of the Class ASpecial Shares, the holders of the Class C Common Shares shall have theright to receive such dividends (if any) as the directors in theirdiscretion may declare.



8

24480720 2753736

5.2 Dissolution: Subject to the prior rights of the holders of the Class ASpecial Shares, the holders of the Class C Common Shares shall have theright on the liquidation, dissolution or winding-up of the Corporation,whether voluntary or involuntary, or other distribution of its assets amongits shareholders for the purpose of winding-up its affairs, to receive theremaining assets of the Corporation rateably with the holders of the ClassA and Class B Common Shares. 5.3 Voting rights: The holders of the Class C Common Shares shall beentitled to receive notice of and to attend all meetings of shareholders ofthe Corporation, other than separate meetings of the holders of anotherclass or series of shares, and to vote at any such meeting on the basis ofone vote for each Class C Common Share held.


8. The issue, transfer or ownership of shares is/is not restricted and the restrictions (if any) are as follows: L’émission, le transfert ou la propriété d’actions est/n’est pas restreinte. Les restrictions, s’il y a lieu, sont les suivantes:

9

24480720 2753736

No shares in the capital stock of the Corporation shall be transferredwithout the consent of a majority of the directors of the Corporationsignified in writing or by a resolution of the board of directors.


9. Other provisions, (if any, are): Autres dispositions, s’il y a lieu:

10

24480720 2753736

(1) The directors of the Corporation may, without authorization of theshareholders: (a) borrow money upon the credit of the Corporation; (b) issue, reissue, sell or pledge debt obligations (including, withoutlimitation, bonds, debentures, notes or other similar obligations, whethersecured or unsecured) of the Corporation; (c) subject to the Business Corporations Act and any amendment thereof orsubstitution therefor, give a guarantee on behalf of the Corporation tosecure performance of any obligation of any person; and (d) mortgage, hypothecate, pledge or otherwise create a security interestin all or any property of the Corporation, owned or subsequently acquired,to secure any obligation of the Corporation;and the directors of the Corporation may by resolution delegate any or allof the powers referred to above to a director, committee or directors orany officer of the corporation. (2) The Corporation shall not at any time have outstanding securities ofthe Corporation that are beneficially owned, directly or indirectly, bymore than 50 persons or companies that have purchased as principals, notincluding employees and former employees of the Corporation or itsaffiliates (provided that each person is counted as one beneficial ownerunless the person is created or used solely to purchase or hold securitiesof the Corporation in which case each beneficial owner or each beneficiaryof the person, as the case may be, must be counted as a separate beneficialowner) and is: i. a director, officer, employee, founder or control person of theCorporation, ii. a spouse, parent, grandparent, brother, sister or child of a director,executive officer, founder or control person of the Corporation, iii. a parent, grandparent, brother, sister or child of the spouse of adirector, executive officer, founder or control person of the Corporation, iv. a close personal friend of a director, executive officer, founder orcontrol person of the Corporation, v. a close business associate of a director, executive officer, founder orcontrol person of the Corporation,


9. Other provisions, (if any, are): Autres dispositions, s’il y a lieu:

11

24480720 2753736

vi. a spouse, parent, grandparent, brother, sister or child of the sellingsecurity holder or of the selling security holders spouse, vii. a security holder of the Corporation, viii. an accredited investor, ix. a person of which a majority of the voting securities are beneficiallyowned by, or a majority of the directors are, persons described inparagraphs i to viii, x. a trust or estate of which all of the beneficiaries or a majority of thetrustees or executors are persons described in paragraphs i to ix, or xi. a person that is not the public, all within the meaning of section 2.4 of National Instrument 45-106 underthe Securities Act (Ontario). (3) Any invitation to the public to subscribe for any share, debenture orother securities of the Corporation is prohibited. (4) The Corporation may purchase any of its issued shares, and such sharesmay be cancelled at the option of the board of directors.


10. The names and addresses of the incorporators are Nom et adresse des fondateurs First name, initials and last name Prénom, initiale et nom de or corporate name famille ou dénomination sociale Full address for service or address of registered office or of principal place of business giving street & No. or R.R. No., municipality and postal code Domicile élu, adresse du siège social au adresse de l’établissement principal, y compris la rue et le numéro, le numéro de la R.R., le nom de la municipalité et le code postal

12

24480720 2753736

* DOMENICO GIOVANNI GAGLIANO

TORONTO ONTARIOCANADA M6M 2P5

31 DENSLEY AVENUE

TAB 3

MONDAYDAY, THE 3RD

DAY OF FEBRUARYMAY, 2020

B E T W E E N:

QUINCY INVESTMENTS LIMITED, 969592 ONSTARIO LIMITED,969593 ONTARIO LIMITED, 3701271 ONTARIO LIMITED,

SASSO AUTO CONSULTING INC.,DAVID MARK DOUBILET and GUS STAMATIOU

Applicants

- and -

SUNRISE ACQUISITIONS (BOND HEAD) INC.,AMAL FINANCIAL INC., and GALAXY HOLDING INC.

Respondents

IN THE MATTER OF SECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCYACT, R.S.C. 1985 C. B-3, AS AMENDED, AND SECTION 101 OF THE COURTS OF


AMENDED AND RESTATED APPROVAL AND VESTING ORDER


receiver (the "“Receiver"”) of the real propertylands and premises registered in the name of

Sunrise Acquisitions (Bond Head) Inc. and(“Sunrise”), beneficially owned by Amal Financial

Inc., and Galaxy Holding Inc., and remaining undertaking, property and assets of Sunrise

Acquisitions (Bond Head) Inc., Amal Financial Inc., (“AFI”) and Galaxy Holding Inc. (“GHI”)

THE HONOURABLE

JUSTICE KOEHNEN


ONTARIOSUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

)))

- 2 -

(Sunrise, AFI and GHI are collectively, referred to as the "“Debtors")”), municipally known as

2875 Highway 27, Bond Head, Ontario and legally described in Schedule B hereto and the

remaining property, assets and undertakings of the Debtors acquired for and used in relation

tothereto (collectively, the “Property”) for an Order approving the sale transaction (the

"Transaction") contemplated by an agreement of purchase and sale (the "Sale Agreement")

between the Receiver and Gal Real Four Holdings Ltd. (the "Purchaser") dated January 9, 2020

and appended to the First Report of the Receiver dated January 24, 2020 (the "Report"), and

vesting in the Purchaser the Debtor’s right, title and interest in and to the assets described in the

Sale Agreement (the "Purchased Assets")amending and restating the Approval and Vesting

Order of the Honourable Justice Conway dated February 3, 2020 in this proceeding, was heard

this day by video conference, in substitution to an in-person hearing at 330 University Avenue,



updated April 2, 2020.

ON READING the Second Report of the Receiver dated May 6, 2020 (the “SecondReport”) and on hearing the submissions of counsel for the Receiver, the Applicants, and the

Purchaser, no one appearing for any other personparty on the service list, although properly

served as appears from the affidavit of Jennifer SamuelsJanet Nairne sworn January 27May 6,

2020 filed:

1. THIS COURT ORDERS AND DECLARES that the sale transaction (the

“Transaction”) contemplated by an agreement of purchase and sale between the Receiver and

Gal Real Four Holdings Ltd. (“Gal”) dated January 9, 2020 (the “Sale Agreement”) and

appended to the First Report of the Receiver dated January 24, 2020 and the direction from Gal

to the Receiver directing title to FMC Bond Head Development Holdings Ltd. (the

“Purchaser”) 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

Transaction and for the conveyance of the Purchased AssetsProperty to the Purchaser.

- 3 -

2. THIS COURT ORDERS AND DECLARES that upon the delivery of a Receiver’s

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

"“Receiver'’s Certificate"”), all of the Debtor's’ rights, titles and interests in and to the

Purchased Assets described in the Sale Agreement and listed on Schedule B heretoProperty 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 O’Marra dated July 23, 2019; (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 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 AssetsProperty are hereby expunged and discharged as against the Purchased

AssetsProperty.




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.


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

and stead of the Purchased AssetsProperty, 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 AssetsProperty with the same priority as they had with respect to the Purchased

AssetsProperty immediately prior to the sale, as if the Purchased AssetsProperty had not been

- 4 -

sold and remained in the possession or control of the person having that possession or control

immediately prior to the sale.


the Receiver'’s Certificate, forthwith after delivery thereof.

6. 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 the Company's

records pertaining to the Debtor's past and current employees. 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 the Debtor.

6. 7. THIS COURT ORDERS that, notwithstanding:



Bankruptcy and Insolvency Act (Canada) in respect of any of the Debtors and any


(c) any assignment in bankruptcy made in respect of any of the Debtors;

the vesting of the Purchased AssetsProperty in the Purchaser pursuant to this Order shall be

binding on any trustee in bankruptcy that may be appointed in respect of any of the Debtors and

shall not be void or voidable by creditors of the Debtors, 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.

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



- 5 -


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

B E T W E E N:

QUINCY INVESTMENTS LIMITED, 969592 ONSTARIO LIMITED, 969593 ONTARIO LIMITED, 3701271 ONTARIO LIMITED,

SASSO AUTO CONSULTING INC.,DAVID MARK DOUBILET and GUS STAMATIOU

Applicants

- and -

SUNRISE ACQUISITIONS (BOND HEAD) INC.,AMAL FINANCIAL INC., and GALAXY HOLDING INC.

Respondents

IN THE MATTER OF SECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCYACT, R.S.C. 1985 C. B-3, AS AMENDED, AND SECTION 101 OF THE COURTS OF


RECEIVER’S CERTIFICATE

RECITALS

A. Pursuant to an Order of the Honourable Mr. Justice O’Marra of the Ontario Superior

Court of Justice (the "“Court"”) dated July 23, 2019, Rosen Goldberg Inc. was appointed as the

receiver (the "“Receiver"”) of the real property registered in the name of Sunrise Acquisitions

(Bond Head) Inc. and(“Sunrise”), beneficially owned by Amal Financial Inc., (“AFI”) and

Galaxy Holding Inc. (“GHI”) (Sunrise, AFI and GHI are collectively referred to as the

“Debtors”) and the remaining undertaking, property and assets of Sunrise Acquisitions (Bond

- -= =

- 2 -

Head) Inc., Amal Financial Inc., and Galaxy Holding Inc.the Debtors and the remaining

property, assets and undertakings of the Debtors acquired for and used in relation thereto

(collectively, the “DebtorProperty”).

B. Pursuant to an Order of the Court dated February 3May ___, 2020, the Court approved

the agreement of purchase and sale made as of January 9, 2020 (the "“Sale Agreement"”)

between the Receiver and Gal Real Four Holdings Ltd. (the "Purchaser") and provided for the

vesting in theFMC Bond Head Development Holdings Ltd. (the “Purchaser”) of the Debtor’s’

rights, titles and interests in and to the Purchased AssetsProperty, which vesting is to be effective

with respect to the Purchased AssetsProperty upon the delivery by the Receiver to the Purchaser

of a certificate confirming (i) the payment by the Purchaser of the Purchase Price for the

Purchased AssetsProperty; and (ii) the Transaction has been completed to the satisfaction of the

Receiver.


the Sale Agreement.


1. The Purchaser has paid and the Receiver has received the Purchase Price for the

Purchased AssetsProperty payable on the Closing Date pursuant to the Sale Agreement;


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

_____, 2020.

ROSEN GOLDBERG INC., in its capacity asReceiver of the undertaking, property andassets of Sunrise Acquisitions (Bond Head)Inc., Amal Financial Inc., and GalaxyHolding Inc., and not in its personal capacity

Name: Brahm RosenTitle: President

Per:

- 2 -

Schedule B – Purchased AssetsProperty

PIN 58003-00300181 LT

Description PART OF LOT 1, CONCONCESSION 6 WEST GWILLIMBURY, PART 1 &3PLAN 51R1151941682; TOWN OF BRADFORD WEST GWILLIMBURY

Address 2875 HWY 27BOND HEAD

CHARGE

REG.NUM.

$7,695,000

SUNRISE ACQUISITIONS(BOND HEAD) INC.

SUNRISEACQUISITIONS(BOND HEAD)INC.

BUILDING &DEVELOPMENTMORTGAGES CANADAINC.

SC1317951

PARTIES FROM

2016/06/30

SC1317934

TRANSFER OFCHARGE

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

2016/06/30

BUILDING &DEVELOPMENTMORTGAGESCANADA INC.

PARTIES TO

BUILDING &DEVELOPMENTMORTGAGES CANADAINC.OLYMPIA TRUSTCOMPANY

CHARGE

SC1326727 2016/07/29

$7,605,000

TRANSFER OFCHARGE


BUILDING &DEVELOPMENTMORTGAGESCANADA INC.OLYMPIA TRUSTCOMPANY

DATE


SUGARCRESTDEVELOPMENTS INC.

SC1337816 2016/08/31 TRANSFER OFCHARGE

SC1317933

SC1317935



2016/06/30

SC1349731

2016/06/30

2016/10/06

CHARGE

TRANSFER OFCHARGE

INSTRUMENTTYPE

$6,305,000


TRANSFER



SC1360120 2016/11/09

QUINCY INVESTMENTSLIMITED969592 ONTARIOLIMITED969593 ONTARIOLIMITEDFORT 1 INC.370271 ONTARIOLIMITEDSASSO AUTOCONSULTING INC.DOUBILET, DAVIDMARKSTAMATIOU, GUS

TRANSFER OFCHARGE

BUILDING &DEVELOPMENTMORTGAGES

$11,700,000

BUILDING &DEVELOPMENTMORTGAGES CANADA

SC1317936

AMOUNT

2016/06/30

SUGARCRESTDEVELOPMENTSINC.


SC1389147

INSTRUMENTTYPE

2017/02/24

SC1371673

TRANSFER OFCHARGE

2016/12/15


AMOUNT


TRANSFER OFCHARGE

SC1396652

REG.NUM.

2017/03/28 TRANSFER OFCHARGE

PARTIES FROM





SC1403384 2017/04/24 TRANSFER OFCHARGE

PARTIES TO

SC1375395



2017/01/03

SC1419812 2017/06/14

TRANSFER OFCHARGE

NOTICE SUNRISEACQUISITIONS(BOND HEAD)INC.



SC1419813 2017/06/14


TRANSFER OFCHARGE



SC1385049

SC1423462

DATE

2017/06/26

2017/02/07

TRANSFER OFCHARGE

CANADA INC.OLYMPIA TRUSTCOMPANY

TRANSFER OFCHARGE



INC.OLYMPIA TRUSTCOMPANY


POSTPONEMENT

DATE


QUINCY INVESTMENTSLIMITEDGAL INTERNATIONALLTD.GAL CONSULTING LTD.969592 ONTARIOLIMITED969593 ONTARIOLIMITED2307271 ONTARIO INC.

SC1516645 2018/06/11

SC1435914

CHARGE

INSTRUMENTTYPE

$6,000,000

2017/07/31



TRANSFER OFCHARGE

SC1516646

AMOUNT

2018/06/11 NO ASSGN RENTGEN

REG.NUM.



PARTIES FROM



SC1516647 2018/06/11 POSTPONEMENT

SC1472362


PARTIES TO


2017/11/24

SC1529395 2018/08/01

CHARGE

APL ABSOLUTETITLE

$3,313,000



SC1568811 2019/01/11

QUINCY INVESTMENTSLIMITEDGAL INTERNATIONALLTD.GAL CONSULTING LTD.969592 ONTARIOLIMITED969593 ONTARIOLIMITED2307271 ONTARIO INC.

TRANSFER OFCHARGE

FORT 1 INC. QUINCY INVESTMENTSLIMITED

SC1472363 2017/11/24

PARTIES TO

51R41682 2018/08/01 PLANREFERENCE

INSTRUMENTTYPE

SC1317933 2016/06/30

SC1529395

AMOUNT

2018/08/01

TRANSFER

APLABSOLUTETITLE

DATE

$11,700,000

SUNRISEACQUISITIONS(BOND HEAD) INC.

PARTIES FROM

SUGARCRESTDEVELOPMENTSINC.

REG.NUM.

SUNRISEACQUISITIONS (BONDHEAD) INC.

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


SUNRISE ACQUISITIONS (BOND HEAD) INC. et al.



(COMMERCIAL LIST)

PROCEEDING COMMENCED ATTORONTO

QUINCY INVESTMENTS LIMITED et al.Applicants

AMENDED AND RESTATEDAPPROVAL AND VESTING ORDER

DICKINSON WRIGHT LLP199 Bay StreetSuite 2200, P.O. Box 447Toronto, Ontario, M5L 1G4

DAVID P. PREGER (36870L)Email: [email protected]: (416) 646-4606Fax: (844) 670-6009

LISA S. CORNE (27974M)Email: [email protected]: (416) 646-4608Fax: (844)670-6009

Lawyers for the Court-appointed Receiver,Rosen Goldberg Inc.

4819-5244-3059 v3 [41225-167]4816-7596-9980 v5 [41225-167]

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