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_0. CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL SUPERIOR COURT No.: 500-17-032282-066 PARIS & ITALIA INC., having its offices at 1470 Peel Street, Suite 500A, Montreal, Province of Quebec; H3A 1T1 Plaintiff v. JAMIESON LABORATORIES LTD., having offices and a place of business at 1550 Ampere Street, Boucherville, Province of Quebec, J4B 7L4 Defendant v. RICHARDITALIA Defendant in warranty RE-AMENDED MOTION TO INSTITUTE PROCEEDINGS (Section 110.1 and foliowinQ Code of Civil Procedure) IN SUPPORT OF ITS ACTION, PLAINTIFF RESPECTFULLY SUBMITS THE FOLLOWING: THE PARTIES 1. The Plaintiff, Paris & Italia Inc. (hereinafter "P&I") is a company incorporated in accordance with the laws of Canada and resides and is domiciled at 1470 Peel Street, Suite 500A, Montreal, Quebec, H3A 1T1, Canada; 2. P&I has a portfolio of topical cosmetic and hair care products which it commercializes in association with the trade-marks SNOB GIRLS and SNOB BOYS; 3. The Defendant, Jamieson Laboratories Ltd. (hereinafter "Jamieson") is a corporation incorporated in accordance with the laws of Canada having offices

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Page 1: New CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL … · 2010. 11. 24. · _0. CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL SUPERIOR COURT No.: 500-17-032282-066 PARIS & ITALIA

_0.

CANADAPROVINCE OF QUEBECDISTRICT OF MONTREAL

SUPERIOR COURT

No.: 500-17-032282-066PARIS & ITALIA INC., having its offices at1470 Peel Street, Suite 500A, Montreal,Province of Quebec; H3A 1T1

Plaintiff

v.JAMIESON LABORATORIES LTD., havingoffices and a place of business at 1550AmpereStreet, Boucherville, Province of Quebec, J4B7L4

Defendant

v.RICHARDITALIA

Defendant in warranty

RE-AMENDED MOTION TO INSTITUTE PROCEEDINGS(Section 110.1 and foliowinQ Code of Civil Procedure)

IN SUPPORT OF ITS ACTION, PLAINTIFF RESPECTFULLY SUBMITS THEFOLLOWING:

THE PARTIES

1. The Plaintiff, Paris & Italia Inc. (hereinafter "P&I") is a company incorporated inaccordance with the laws of Canada and resides and is domiciled at 1470 Peel

Street, Suite 500A, Montreal, Quebec, H3A 1T1,Canada;

2. P&I has a portfolio of topical cosmetic and hair care products which itcommercializes in association with the trade-marks SNOB GIRLS and SNOB

BOYS;

3. The Defendant, Jamieson Laboratories Ltd. (hereinafter "Jamieson") is acorporation incorporated in accordance with the laws of Canada having offices

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and a place of business at 1550 Ampere Street, Boucherville, Quebec, J4B 7L4,Canada;

4. Jamieson is a manufacturer and distributor of, inter alia, vitamins, nutritionalsupplements, herbs, and weight management products;

SUPPLIER - DISTRIBUTOR AGREEMENT

5. On July 19, 2004, the parties entered into a Supplier - Distributor Agreement inrespect to products defined as follows:

"1.3 "Product" shall mean any topical cosmetic and hair care product with

the proprietary formulations and specific ingredients and/or active

ingredients and/or a variety of delivery systems marketed under the

Snob Girls TM and Snob Boys TM listed in Appendix A herewith

attached, and which Appendix A may be amended from time to time

by Supplier, including any and all Product Improvements."

6. By virtue of the Agreement, P&I appointed Jamieson as distributor of theproducts in the territory which was defined as meaning the world. The relevantclause reads as follows:

"2. Conditions of Aooointment

Supplier hereby appoints Distributor as its Distributor of the Products

in the Territory (worldwide), within all authorized distribution and retail

channels specified for the Term of this Agreement. The Distributor

undertakes to use its best efforts to solicit orders of the Products and

to promote, distribute and sell the Products in the Territory. If the

Distributor remains in compliance with the provisions of this

agreement, the Supplier will be bound to sell the Product exclusively

to the Distributor in the Territory for the term of the agreement."

7. P&I as supplier under the Agreement undertook to sell products exclusively to thedistributor in the territory for the term of the Agreement if Jamieson remained in

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compliance with the provisions of the Agreement. Exclusivity with respect to theUnited States was however removed from the territory by written consentbetween the parties at a later date;

8. The parties had foreseen a considerable degree of implication on the part 'ofJamieson in respect to developing the market for the products as is reflected inparagraphs 2.5 and 2.6 of the Agreement which read as follows:

"2.5 The Distributor commits to undertake the cost of securing additional

dedicated sales resources to support Snob Girls and Snob Boys

development within the Territory.

2.6 The Distributor agrees to work cooperatively with the Supplier in the

retail market at retailers' head offices and retail stores whereby

Supplier management can participate with Distributor personnel in

new product launch activity, trade and consumer shows, product

demonstrations and other in-field activities important to the market

development of the Supplier's Product."

9. The parties foresaw targeted threshold sales levels as set out in clauses 5.3 and5.4 which read as follows:

"5.3 Targeted Threshold Sales at Distributor cost before marketing

allowance, from the Supplier to the Distributor are as follows:

Marketing Year Targeted Threshold Sales at Distributor costbefore marketing allowance ($Cdn)

Year 1Year2Year3Year4Year5Year 6Year 7Year8Year9Year10

2,000,000

3,800,0006,000,000

8,700,000

11,100,000

13,300,00015,900,00019,000,000

23,000,00027,600,000

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5.4 The Distributor agrees to purchase Product for a minimum of$1,000,000.00 at distributor cost for Year 1 of the contract.

Distributor, for the Year two (2) to Year ten (10) inclusively, agrees to

purchase Product for a minimum of 75% of the actual purchased

dollars of the previous year. In the event that the actual purchase ofany given year fails to meet the required 75% of sales of the previous

year, both Parties, the Supplier and the Distributor could mutually

agree to amend the minimum purchase of any particular year or

Supplier may unilaterally elect to notice Distributor to cancellation ofcontract."

10. The Agreement was to remain in effect until June 30, 2009 subject to anautomatic renewal for another five (5) years. This relatively long duration of theAgreement was agreed to in light of the parties' goal of developing the Plaintiff'sbrands;

11. The Agreement contemplated a guaranty of revenue for the supplier inaccordance with the financial threshold for unit sales of the products. This isreflected in paragraphs 10, 10.1 and 10.2 of the Agreement which state asfollows:

"10. Aareement Thresholds

The Agreement is based on financial thresholds - specifically unit

sales of Product by the Supplier to the Distributor and Guaranteed

Minimum Annual Purchases from the Supplier by the Distributor (per

paragraphs 5.3).

10.1 In Marketing Years one (1) and two (2) the unit sales objectives will

be combined. In every year thereafter the unit sales thresholds will be

established based on the Marketing Year.

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10.2 In any year that the targeted threshold sales (per paragraph 5.3) are

not met, the Distributor will have sixty (60) days at the beginning of the

next Marketing Year to purchase additional Product to attain the

necessary threshold. These purchases are not to be included in the

purchases for the current Marketing Year in determining whether the

threshold for that year had been met. This would only apply for after

the second year of the agreement. In the event that Distributor fails in

any Marketing Year to purchase Product at least equal to the targeted

Threshold Sales as referred to in paragraph 5.3 and fails to cure such

default within sixty (60) days after the end of such Marketing Year, the

Supplier shall be entitled to thereafter terminate this Agreement without

further notice."

12. Jamieson purchased $1,472,003 worth of Products from P&I in the first year ofthe term of the Agreement. This sum included $420,572 contributed by P&I to theMarketing Fund foreseen under the Agreement;

13. The Agreement foresees that the supplier may terminate for cause and sets outthree particular circumstances consisting of cause. The Agreement further addstwo bases upon which either party could terminate the Agreement including "forcemajeure" and an unremediated breach. There is no right of termination withoutcause provided to Jamieson. Furthermore, upon termination of the Agreement,the Supplier is provided the option to purchase from Distributor all or any part ofDistributor's inventory of products at Distributor's cost. As such, P&I had theoption of purchasing inventory upon termination but not the obligation.Furthermore, Jamieson was prohibited from selling products in channels of tradeexcluded under Appendix D. The excluded channels of trade include profes.sionalhair and beauty salons, liquidation outlets, discount stores and dollar stores. Theprohibition against selling in certain channels of trade was stipulated inrecognition of the value which resides in P&I's brands in particular and intellectualproperty in general;

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\II

14. At all relevant times and up to July th 2006, P&I was the owner of three trade-mark applications:

SNOB BOYS: TMO 1,157,901SNOB GIRLS: TMO 1,169,801SNOB PETS: TMO 1,240,952

15. The Agreement was negotiated on behalf of P&I by the majority shareholder,Mr. Donald Paris. The negotiations lasted five (5) months, from March to July2004. Negotiations were between Mr. Paris and Mr. Kevin Edwards of Jamiesonfrom April 2004 onwards. Mr. Edwards knew Mr. Paris was the majorityshareholder of P&I. Mr. Edwards knew that the intellectual property of P&I wasobtained from Mr. Paris. The Agreement was signed by Mr. Paris and there is aclear provision in the Agreement to the effect that all notices and communicationsconcerning the Agreement are to be addressed to Donald Paris on behalf of P&I;

15a) That, furthermore, pursuant to clause 18 of the Agreement, the authorized officerof the Plaintiff is described as being Mr. Donald M. Paris.

16. At all times relevant to this proceeding, P&I has complied with its obligationsunder the Agreement. At no time has P&I threatened to cancel the Agreement;

TERMINATION OF AGREEMENT

17. Unbeknownst to Mr. Paris, at least as early as September 2005, Jamiesonentered into negotiations for the premature termination of the Agreement withRichard Italia who, at all times relevant to this proceeding, was a minorityshareholder in P&I through a corporation;

17a) That the Plaintiff files in support of these presents, en liasse, as exhibit P-14,various correspondence emanating from the Defendant to Mr. Donald Paris onbehalf of the Plaintiff demonstrating quick clearly that Mr. Donald Paris was thecontact person and the only authorized person who was dealing with theDefendant in this matter.

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---

18. Jamieson entered into these negotiations with Richard Italia notwithstanding thatneither P&I or Jamieson were in default of the Agreement. Mr. Italia nevernegotiated the signing of the Supplier - Distributor Agreement and is notmentioned in the Agreement as being a contact person;

19. Pursuant to these negotiations, on December 20, 2005, Jamieson entered into aTermination Agreement which appears to have been signed by Mr. Italia onbehalf of P&I and on behalf of a third party called Global Encapsulation Inc.which, to the best of Plaintiff's knowledge, is a company in which one of Mr.Italia's companies is a controlling shareholder and in respect to which he hasindicated his title to be a "Director" under the Termination Agreement;

20. The Termination Agreement of December 20, 2005 purports to terminate theDistributorAgreementwitheffectas of December1st, 2005;

21. Contrary to any obligation stipulated in the Distributor Agreement, the TerminationAgreement foresees the purchase by P&I of inventory of unsold productpreviously purchased by Jamieson and paid for in accordance with the terms setout in paragraph 5 thereof which reads as follows:

"5. Initially, P&I shall buy back from Jamieson, on an "as is where is"

basis, all of Jamieson's inventory of unsold Products as at December

1, 2005, ("Unsold Product') at a repurchase price in the aggregate of

$781,447.50, being Jamieson's cost thereof per unit in respect to

each Product item ("Cost') multiplied by the number of units of such

Product item, all as more specifically set forth in Schedule '~"attached hereto. Jamieson represents that Schedule "A" is acomplete list of Unsold Product and that such product is in the same

condition as it was when delivered to Jamieson by P&I."

22. The parties went so far as to foresee delivery of unsold products to P&I or pick upof the unsold products by P&I at its expense at the Jamieson warehouse facility

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as set out in paragraph 6 of the Termination Agreement, plus payment by P&I forthe unsold products;

23. The Termination Agreement further removes any obligations on the part ofJamieson in respect to returns of P&I products. This is more specifically set out inparagraph 8 which reads as follows:

"8. It is acknowledged and understood that P&I intends to sell Product

("P&I Product'J directly or indirectly to some or all of the same

customers that Jamieson had been dealing with previously (such

customers are all listed at Schedule B hereto and, for the purposes

hereof are collectively the "Customers'? P&I will notify Jamieson ofany and all sales of P&I Product made by it to each such Customer

from time to time until the Sale Threshold is met in respect of such

Customer. It is intended that Jamieson not be responsible for dealing

with any issues arising in respect of P&I Product, including returns

thereof. To give effect to the foregoing, the Parties covenant and

agree that until 500 Units (as hereinafter defined) of P&I Product

have been sold by P&I to a Customer (the "Sale Threshold'? the

following shall apply:

(a) in respect to Product returned to Jamieson by such

Customer, (i) Jamieson shall issue a credit or refund to the

Customer and shall notify P&I of such returned Product; (ii)

P&I shall arrange for the pick-up of such returned Product at

Jamieson's warehouse facility in Windsor, at P&l's sole

expense;and (Hi) P&I shall reimburseto Jamiesonthe Cost

of such Product which amount shall be paid to Jamieson by

cheque at the same time that the Product is picked up;

(b) in respect to Product returned to P&I by such Customer, (i)

P&I shall issue a credit or refund to the Customer, providing

details thereof to Jamieson; and (ii) Jamieson shall pay to

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rP&I the margin amount, represented by the differential

between the amount credited or refunded to the Customer

by P&I and the Cost, which amount shall be paid to P&I by

cheque on a bi-monthly basis from and after April 3D,2006;

(c) under no circumstances shall Jamieson be obliged to issue

a credit or refund to a particular Customer, or pay to P&I the

margin amount in respect of Product returned by such

Customer, once it has issued a credit or refund and/or paid

the margin amount for all Product it sold to such Customer

while Jamieson was the distributor of the Product."

24. The Agreement even makes P&I solely and exclusively responsible for allproducts returned by customers including products returned directly to Jamiesonand obliges P&I to pick up the products returned to the Jamieson facility at itsown expense and to reimburse Jamieson for any refunded credit it has made toclients in its sole discretion. The Termination Agreement further provides that P&Iagrees to indemnify and save Jamieson harmless from claims arising from or thatmay be incurred by Jamieson in connection with returns;

NEGLIGENCE

25. Even though Jamieson had negotiated the original Distributor Agreement withMr. Paris, and Mr. Paris was indicated as the contact person for notices under theoriginal Agreement, the parties to the Termination Agreement provided the nameof a certain Alexander Petrovic as the contact person for P&I. As to GlobalEncapsulation Inc., a company that intervened in the Termination Agreement,Mr. Italia is set out as the contact person;

26. Alexander Petrovic was not and has never been an employee of P&I andJamieson does not appear to have made any reasonable inquiries to ensure thecontrary;

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27. No corporate resolution of P&I was ever issued by P&I permitting the cancellationof its first and only major contract. This contract represented over ninety-eightpercent (98%) of P&l's income in its first year of activity. No resolution is attachedto the Termination Agreement. Jamieson proceeded to attempt to terminate thisAgreement in the absence of Mr. Paris in the negotiations. Jamieson evennegotiated with Mr. Italia for termination while to its knowledge, Mr. Paris wasactive in the promotion of the line for Jamieson;

27a) The Plaintiff files, in support of these presents, en liasse, as exhibit P-12, photosof promotional activities conducted by the Plaintiff including invoices representingpromotional activities conducted by the Plaintiff up to and including the month ofDecember, 2005, with the full knowledge of the Defendant;

27b) The Defendant was in such bad faith that knowing full well of the expenses andenergies being invested by the Plaintiff in the promotion of these products, it wasall the while negotiating with Mr. Richard Italia for the termination of the saidsupplier/distributor agreement (exhibit P-5);

28. A third party, Global Encapsulation Inc., has intervened in the TerminationAgreement to absolutely, unconditionally and irrevocably guaranty to Jamiesonthe full and punctual payment and performance of all debts, liabilities andobligations of P&I under the terms of the Agreement. As mentioned previously,Mr. Italia's company is a shareholder of Global Encapsulation Inc. and identifiedhimself as a Director on the signature page of the Termination Agreement;

29. On July 10, 2006, counsel for Mr. Italia forwarded a demand letter to P&I claimingrepayment of loans in the amount of $536,347.78 with absolutely no detail as tothe basis of the claim. However, Global Encapsulation Inc. is stated to be one ofthe parties making the claim;

IMPACT TERMINATION AGREEMENT ON P&I

30. P&I is a company based on an intellectual property platform including trade-marks, copyrights, moral rights, proprietary information on formulae and the like

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and does not have any employees and does not have any inventory.Furthermore, Jamieson either knew or should have known that Mr. Italia hadinterests in a corporation that owns a large encapsulating plant with upwards oftwo hundred (200) employees, Global Encapsulation. This is reflected in severalemail exchanges between Mr. Italia, his representatives and Jamieson.Furthermore, article 13(g) of the Termination Agreement actually demonstrates aworking relationship between Jamieson and Global Encapsulation:

"13(g) Jamieson shall have the right to satisfy and discharge any amount

owing from time to time by Jamieson to Global, under any other

affangement or for any other reason whatsoever, by way of set-off

against any amount owing by Global to Jamieson, including any

amount owing to Jamieson pursuant to Global's guarantee

obligations under this Section 13. This right of set-off by Jamieson

under this paragraph (g) is in addition to any other rights and

remedies which Jamieson may have."

31. Under the original contract, as already stated, Jamieson was subject to certainrestrictions concerning the channels of trade for the products. The inventory thatwas to be bought back by P&I under the Termination Agreement was delivered toGlobal Encapsulation instead of P&I. Global Encapsulation has not seen to therespect of the clauses concerning restrictions on markets and the products arebeing sold at clearance prices and in the prohibited channels to the detriment ofthe value of the brand, the trade-marks and the intellectual property of P&I,thereby committing the illegal commercial practice of product diversion;

31a) The Snob Girls products ended up being sold at liquidation prices in numerousretail outlets and, to this date, the Plaintiff has been obliged to disburse in excessof $22,000,00 in order to purchase back some of the Snob Girls products in retailoutlets across Canada, which products were being sold at liquidation prices.

32. The Termination Agreement obliges P&I to purchase back goods it already soldto Jamieson when it has no obligation to do so. It also deprives P&I of several

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years of minimum guaranteed income and has deprived it of warehousingservices, a sales force and distribution network. Its implementation has basicallydestroyed the company.

33. Jamieson has directed the trade to make returns to P&I and has invited

customers to contact P&I for inquiries and provided the name of Mr. Petrovicmentioned above when Mr. Petrovic has absolutely no authority to bind P&I andis not an employee. In fact, Jamieson has, at all relevant times, known full wellthat Mr. Petrovic was not an employee of P&I but an employee and "right hand" ofMr. Italia;

JAMIESON FAILED TO MAKE DONALD PARIS AWARE OF THENEGOTIATIONS TO TERMINATE

34. On October 19, 2005, Kevin Edwards of Jamieson wrote an email to Mr. Petrovic

and Mr. Italia concerning the termination of the Distributor Agreement. Mr.Edwards did not forward a copy to Mr. Paris. In this email.Mr. Edwards clearlystates that he met Mr. Italia who was "Mr. Paris' partner" in an effort to reach anAgreement to allow Jamieson to withdraw as Canadian distribution partner. Thisemail demonstrates that Mr. Edwards knew very well that Mr. Paris was at veryleast a partner in the business. He had previously negotiated the originalAgreement with Mr. Paris. Failure by Jamieson to advise Mr. Paris that it requiredthe cancellation of the contract that was to provide P&I with considerable revenuebased on the marketing of products with its intellectual property demonstratesJamieson's negligence in respect of the termination of the Agreement.

35. One example of Jamieson's negligence concerns a presentation that Jamieson'sNational Account Manager, Franc;oisLavigne, requested of Mr. Paris for a lineextension for the Products at Jean Coutu. Mr. Edward's email of October 19,2005 shows that Jamieson knew Mr. Paris was to make a presentation at thehead office of Jean Coutu the next day, but still refrained from advising Mr. Parisof the termination of the Agreement or to cancel the meeting. Mr. Lavigne

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attended the meeting on October 20, 2005 with Mr. Paris knowing full well Mr.Paris was wasting his time and without advising him of the cancellation;

35a) That during said meeting, sale objective for 2005 and 2006 were discussed($300,000,00) objective for the year 2006) and discussions also revolved arounda planogramme. During all these discussions, at no time whatsoever did theDefendant feel necessary to advise the Plaintiff and Mr. Donald Paris of the factthe they were negotiating a Termination Agreement with Mr. Richard Italia;

35b) That to further demonstrate the bad faith on the part of the Defendant, an in clearcontravention to clause 2 and 2.2 of exhibit P-5, the Defendant was clearly notusing its best efforts to solicit orders of the Products and to promote, distributeand sell the Products in the Territory. It had already developed, promoted andbegan distributing its Swiss Clinic skin care line of products, acting directlyagainst the interests of the Plaintiff pursuant to exhibit P-5, the whole as morefully appears from various brochures and Press Releases filed, en liasse, insupport of these presents as exhibit P-12;

35c) That, furthermore, even after receiving notification, mises en demeure, and theinstitution of the present proceedings in the year 2006, the Defendant continuedto deal with Mr. Richard Italia and/or his related companies, demonstrating, onceagain, the bad faith on the part of the Defendant. As a result of the precedingmentioned letters and proceedings, the Defendant knew full well that not only wasMr. Richard Italia not acting on behalf of the Plaintiff, but that he was removed asa company director in the month of July 2006;

35d) After the end of Mr. Kevin Edward's employment with the Defendant, theDefendant did not even notify the Plaintiff as to who would be his replacement,who to contact within the Defendant for Snob Girls affaires, etc The Defendant

chose to ignore everything and to deal exclusively with Mr. Richard Italia.

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36. This October 19, 2005 email refers to a communication to the trade which was to

be made no earlier than December1st, 2005 in order to provide the necessarytime to draft and sign a Termination Agreement;

37. Jamieson had over three (3) months to make Mr. Paris aware of thesedevelopments or to obtain a corporate resolution but failed to do so. During thisperiod P&I obtained editorial coverage, invested in advertising, samplingprograms, e-marketing campaigns, store demonstrations and productmanufacturing. All of these activities related to Jamieson and more often than notthe Jamieson name was associated with the campaigns. Jamieson was aware ofthis work and the expenditures incurred by P&I but still did not see fit to adviseMr. Paris of the termination negotiations. Even two weeks before the signing ofthe Termination Agreement, Mr. Paris hired a promotional firm to do a massiveproduct sampling in downtown Montreal on St-Catherine Street. Jamieson wasaware of this and it was paid for by P&I;

38. Transition issues are referred to in this email and Mr. Edwards states that allcommunications to P&I should be directed to Mr. Petrovic. Mr. Edwards states:

"Don Paris may become involved, which is fine, but the point person is Alex(Sandy has his coordinates). He is Richard's RH and has been given authority tomanage the transition.";

39. Jamieson exchanged draft proposed Termination Agreements with Mr. Italia andMr. Petrovic over a three-month period. In a November 8, 2005 email.Mr.Edwards went so far as to request some form of guaranty on the payment by P&Ifor the goods which were in inventory as is exemplified by the following comment:"The concern is the usual; what if something goes wrong Le. we are left to dealwith P&I and not Richard. How do we knowwe can collect?"

39a) Notwithstanding that the previous mentioned e-mail demonstrate quite clearly thefact that the Defendant knew full well of a distinction between the Plaintiff and Mr.

Richard Italia, it nevertheless did not insist on a corporate resolution which wouldauthorize the signing of the Termination Agreement by the Plaintiff;

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40. Pursuant to this request for a guaranty, it appears that Mr. Italia offered up hiscompany, Global Encapsulation Inc., as a guarantor. During the months ofOctober, November and December, numerous emails were exchanged betweenJamieson, Petrovic and Italia concerning the details of the TerminationAgreement, the terms of payment for inventory, returns, warehousing and so on;

41. On December 9, 2005, Mr. Edwards confirmed by email that the inventory was tobe transferred to Global Encapsulation Inc. in Windsor, Ontario, out of the controlof P&I. Hundreds of thousand of dollars in inventory already purchased byJamieson and with respect to which P&I had absolutely no obligation to purchaseback was not only to be purchased back by P&I but sent to the premises of a thirdparty without any notice to Mr. Paris;

ANNOUNCEMENT TO THE TRADE

42. Once Jamieson and Mr. Italia settled on the terms of the Termination Agreement,they negotiated a trade communication. The announcement to the trade was

published in December 2005 and stated, amongst other things, that effectiveJanuary 1st2006, Jamieson will no longer represent the Snob Girls line of haircare products. It also stated that financial, logistic and product issues after thatdate will be the responsibility of P&I. The announcement was signed byAlexander Petrovic on behalf of P&I with no indication of his title;

43. In early 2006, massive returns were made to Jamieson pursuant to the notice andJamieson immediately advised P&I through Mr. Petrovic to pick up the returnsand pay for them;

44. Mr. Paris only learned of the purported Termination Agreement in March 2006when he received a fax copy of an invoice of corporate counsel Davies Wardforwarded originally to an erroneous address to the attention of an employee ofone of Mr. Italia's companies, Mr. Tafler. However, he only found out the detailswhen Jamieson commenced requesting payment for the SNOB GIRLS inventoryin the amount of $781,447.50 pursuant to an email of Jamieson through Bob Dent

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to Howard Tafler on April 24, 2006. In fact, he only received a copy of theTermination Agreement on July 12, 2006. Mr. Italia had previously denied itsexistence during a meeting of the Board of Directors on July 7, 2006 whenconfronted with the invoice for legal fees;

45. Karen Puusa who works for one of Mr. Italia's companies, Zhentarim, wrote anemail to a certain Jean-Fran90is Gagne but copied Mr. Paris on May 3, 2006wherein she confirmed her understanding to the effect that GelCell, that is GlobalEncapsulation, had indeed sent a cheque for $781,447.50 to Jamieson inpayment of the inventory. Ms. Puusa states that the cheque went out on May 3,2006;

46. This is confirmed by a further email from Deirdre Gagnon of May 2, 2006 to LucyCharlton, Global's comptroller, in which she states that she found out how thepayment was made. In the email, she states that GelCell will be payingapproximately $780,000 to Jamieson. Ms. Gagnon states that she wrote thecheque from Richard Italia's holding company 3954099 Canada Inc. and advisesLucy Charlton that the payment has to be booked as a loan received. The preciseamount was $781,447.50;

47. Numerous emails from March to date further demonstrate the discount sales of

the products being made in the market;

48. Jamieson has failed to control the use of P&I's trade-marks and intellectual

property and in acting the way it has, is jeopardising the value of P&I's intellectualproperty and ultimately the value of the company;

PLAINTIFF'S CLAIM

49. The Termination Agreement was negotiated and signed in bad faith given thatJamieson knew that Mr. Italia had no authority to terminate the Supplier -Distributor Agreement and bind P&I to repurchase inventory when it was not indefault;

-16-

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50. Jamieson is in default of its obligations under the Supplier - DistributorAgreement and as such, owes P&I lost income determined in accordance withclause 5.4 over the ten-year term of the contract, C..). The whole as more fullyaDDears from the detailed calculations annexed hereto. which have been

Gilbert Bastinas. the whole filed

as exhibit P-14;

51. Jamieson has damaged the value of P&I's intellectual property, trade-marks andcopyrights set out in the Agreement in respect of the channels of trade foreseenin the Supplier - Distributor Agreement P&I claims damages in this regard and

shall confirm the precise amount of its claim in due course;

51a) That the Plaintiff files, in support of these presents as exhibit C..) P-15. anevaluation report setting out an amount of Ll.jj2.098.702.00 as being the totalof damages to the Plaintiff's intellectual property, trademarks and copyrights asset out in the Agreement, which amount is being herewith claimed from theDefendant. which detailed reDort has been filed by the Plaintiff's charteredaccountant. Mr. Gilbert Bastings:

52. P&I claims damages for product development, research and development,promotional activities and all other expenditures made while Jamieson wasnegotiating the termination of the original Agreement, in addition to thereimbursement or payment of all claims made by Jamieson's customers inrespect of the Products and all expenses relating to returns such as shipping.This claim is U evaluated at (,..) $206.489.68. the whole as more fullv aDDearsfrom a detailed break-down (undertaking E-1m. filed herewith as exhibit P-16;

53. This Motion to Institute Proceedings is well founded in fact and in law.

WHEREFORE, PLAINTIFF PRAYS THAT THIS HONOURABLE COURT:

1. GRANT the present Motion to Institute Proceedings;

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that Jamieson \.abora\ones Ltd. IS in default of its obligationsunder the Supplier -DistributorAgreement;

that Jamieson Labora1or\es Ltd. has damaged the vattlc ofParis & Italia Inc.'$ Intellectual properly. trade-marks andCOpyrights:

.. ORS.1m Jam1eson Laboratories ltd. to pay damages presently (.. )eva'uated at {...) L.:..J..~878,S47 .6Q..w;thinterest at the legalrate fromthe data of this action.plus the add1tlona1lndemnttyf

provided for at section 1619 CCO, the 'Mterest 11selfbC&M9Interestat the legalrate pursuanttosection1620cea.

S.1'HEWHOLE with costs, includingthe cost 01experbse.

MONTREAL. February 5th, 2G06

.'8.

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SUPERIOR COURTDISTRICT OF MONTREALPROVINCE OF QUEBEC

PARIS & ITALIA INC. V. JAMIESON LABORATORIES LTD.No.: 500-17-032282-066

Court hearing date:

JANUARY 10-17,2011

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1+1 Officeof the Superintendent Bureau du surintendantof Bankruptcy Canada des faillitesCanadaAn Agency ofIndustry Canada

Un organismed'industrie Canada

District ofDivision No.Court No.Estate No.

Ontario06 - Windsor35-105330035-1053300

In the Matter of the Bankruptcyof:GLOBAL ENCAPSULATION INC.

DebtorGRANT THORNTONLIMITED

Trustee

Ordinary Administration

.Date of Bankruptcy:Meeting of Creditors:Chairman:

August 19,2008 Security: $0.00

Designated Person: Richard ItaUa

CERTIFICATE OF ASSIGNMENT -Section 57

- AMENDED-I, the undersigned,Official Receiver in and for this bankruptcydistrict, do hereby certify that:

a proposal in respect of the aforenameddebtor was filed under section 62 of the Bankruptcyand InsolvencyAct;the creditors, at a meeting held to consider the proposal, refusedto accept the proposal and the debtor isthereupon deemedto have made an assignment.

The said trustee is required:to provide to me, without delay, security in the aforementioned amount;to send to all creditors, within five days after the date of the trustee's appointment, a notice of the bankruptcy;andwhen applicable to call in the prescribed manner, a first meeting of creditors, to be held immediately followingthe meeting held to consider the proposal or at the aforementioned time and place or at any other time andplace that may be later requested by the Official Receiver.

Date: September02, 2008, 00:00E-File/DepotElectronique Official Receiver

Federal Bldg., 451 Talbot St., Rm 303, London,Ontario,Canada, N6A5C9,(519)645-4034

Canada

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CANADAPROVINCE OF QUEBECDIS11l.IC1' OF MONTREAl.

No: 500-17-045800-086500-I!>.OO'~O ..(Y:1t.f

n-C>'-2C>CR. ~.1.')Mafl. NCIJIi1,.-ftCLnl.Q;CcJuru,lltJ.j .c.~.

~" Gut~.eh'tOI'\Q..1.

SUPERIORCOURT(CIVILDIVISION)

GE CANADA EQUIPMENT FINANCING G.P., ageneralpartnership duly constituted accordingto thelaws of Quebee and having its pri"clpal place ofbusiness at 1250. Rene-Levesque blvd. Wc;st,suite1100,Montreal,province oCQuebec,H3.B4WS;Plaintiffv.

IUCHARD ITALIA. Connerly residing anddomiciled at 226, Sidney-Cunningham Street,

~ ~.1. c"" ~ Beaconsfield,Quebec, H9W 6ES and currently of~~ ) ~ ~own addrcssIn Quebec:~ ~Gt'}.Hon.U Tiaru (bJ.r\A1~.J.e~.and

3547418 CANADA INC., a le~a1 person dulyconstitutedand having its head oC'ficeand principalplace of business at 6000 Kieran Street. Villc St-Laurent,Quebec,H4S 2B5;

Defendants

aI\dTO BANK FINANCIAL GROUP (TO CANADATRUST), II legal person duly constituted and bavingone of its places of business al 265 5t-JeanBoulcvard, Palnte-Claire, Provincc of Quebec, H9R3J I;

and

TD BANK FINANCIAL GROUP (TD CANADATRUST), a legal person duly constitUted and havingone ofits places of business at 3339 Des SourcesBoulevard, Dollard-dcs-Or'meaux, Province ofQu~bec, H9B IZ8;

IInd

TD BANK FINANCIAL GROUP (Tn CANADATRUST), iI legal person duly constituted and bavingone ofits places of business al203 Hymus Boulevard,Pointe-Claire, Province of Qu~bcc, H9R IE9:.. _.. "'"'-

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-2-and

TD BANK FINANCIAL GROUP (TD CANADATRUST). a legal person duly constituted and havingone of its places of business at 3662 5t-CharlesBoulevard, Kirkland, Province of Qu6bec, H9H3C3;

Garnishecs before judgmentand

4139305 CANADA INC., a legal person dulyconstituted and having its head office and principalplace of business at 2575 Remembrance Stteet,Lachine, Province of Quebec, H8S lX4;

Garnishee before judgment and Impleaded partyand

OFFICIER DE LA PUBLICITE DES DROrrSDELA CIRCONSCRIPTION FONCIERE DEMONTREAL, actingat 2050 de BleuryStreet.RC10et 1.10,Montt~I, Province of Qu6bec.H3A2.15;

Impleadedparty

AFFIDA VIT

J, Alexandre LeBlanc, residing and domiciled for the purposes hereof at 1250, Ren6-Uvcsqueblvd. West, suite 1100, Mont.real, Quebec. H38 4W8, after having solemnly affirmed, do deposeandsay;

I. INTRODUCTION

1. I am Senior Credit Manager, Restructuring Group of OE Canado EquipmentFinancing G.P.. and as such,have a personalknowledge of the facts attested to in thepresent affidavit in support of the issuanceof a Writ of Seizure before Judgmentpendenu lite attached hereto and filed against Defendant Richard ltalla in order toseize the followingmovableand immovableproperties:. Any bank account, safe-depositbox, or asset In Mr. Richard ltalia's name

with TD Canada Trust (l'D Bank Financial Grollp) situated at 265 5t.JeanBoulevard, Pointe-Claire, Qw:!bec, H9R 3JI, and/or situated at 3339. DesSources Boulevard, Dollard-des-Onneaux, QC, H9B IZ8, andlor situated at203 Hymus Boulevard, Pointc.Claire, Qu~bec, H9R 189 and/or situated at3662 St.Charles Boulevard, Kirkland, Quebec. H9H 3

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-3-. An immovable property located at 2575 Remembrance Street, I-llchine,

Qullbec, H8S IX4 and described as Lot ONE MILLION SEVEN HUNDREDNINETY.SEVEN THOUSAND NINE HUNDRED SIXTY-ONE (I 797961)of the Cadastre of Quebec, Land Registry Office o(Monlrc:ali

Shares of any category held by Mr. RichlU'd ltalia with respect tu 4139305Canada Inc., a corporatlon constiluted under the Canada BUS/MS.fCorporatlnns Act, L.R.C. 1985, c. C-44;

.II. ~2. On or about October9. 2008,Plaintiffservedupon DefendantsRichardltalia

("Itnlia") and 3547418 Canada Inc. ("3547418") a Molion 10 InstitulC! Proceedings("Motion") claiming payment of the amount of $2,924.485.04 in capital and interestas at October 7, 2008. together with interest on the capital portion, namely$2.797,115.44 at the rate of 24% per annum as of October 7, 2008, until payment infull, as appears from the present Court,record;

3. Plaintiff claims the aforementioned amount !Tom Defendants as a result ofDefendants' pe.rsonal gulltAntees to secure two financing loans given by Plaintiff toOlobal Encapsulation Inc. ("Global"), a company incorporated under the laws of theProvince of Quc!bec, operating in Quebec at 6000 Kieran in Ville 51. Laurent andhaving 1\place of business at 1370 Argyle Road, in Windsor, Ontario, whose principalactivities were the manufacture of soft gelatine capsules for supply to.. among others,the pharmaceutical, health and beauty industries, the whole as appenrs from the Courtrecord;

4. To the best of my knowledge and accordingto his representations, the DefendantItaUnwas, at all material times,thepresidentof Globalj

5. Defendant ltalia is also the president, secretary-treasurer and majority and soleshareholder of 4139305 Canada Inc., 0 legal person duly constituted and having itshead office and principalplace of businessat 2575 RemembranceStreet, Lachine,asappears from the CIDREQand the 2008AMual Declarationof the corporation,fileden lIasse in support hereofas E"hibit R-I;

6. 4139305 Canada Inc. owns the building located at 2575 Remembrance in Lachine,valued at $535,000, as appearsfromthe Indexaux Immeubles and the Deed of Sale ofthe property filed en lIo$seInsupporthereofas Exhibit R-Z;

7. On or about May 26, 2009, after having examined a representative of Plaintiff,namely the undersigned affiant, Defendantsltalia and 3547418 .fileda Plea to thisaction. as appears from the Courtrecord;

8. On or about June 23, 2009, Me lean-Pierre Pellerin, Registrar of the Superior Courtof Quebec, Commercial Division. issued a Petition in bankruptcy against lta/la in theCourt file bearing number 500-11-036821-094, the proceedings of which are ongoingat thc present time;

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. .

-4-

9. Plaintiff respectfully submits that it has serious and compelling reasons to fear thatunless an Writ of Seizure before judgment pandentt lite is issued at the present time,the recovery of Plaintiffs claim as a result of the foregoing Is in grave and Imminentjeopardy, particularly due 10 recent facts that have been brought to Plairttiff'sattention and that shall be more fully detailed hereinbelow, and thi!l Court, in itsdiscretion, ought to authorize the issuance of such Writ, the whole for the reasonshereinafter set forth;

GROUNDS IN SUPPORT OF THE ISSUANCE OF A WRIT OF SEIZUREIU:FORE JUDGMENT PENDENTE LITE

ftalla is a sophisticated and knowledgeable businessman witb elCtensive experience incorporate nod financial mat"ter.l,having been involved in a number of companies andapparently having a degTee In law;

1J. As hereinafter described, the various statements made by Halia and the currentsituation concerning his assets and those of companies he controls or controlled whichare either bankrupt or stated by him to no longer operate, constitute additional andspecial ciroumstances and amply demonstrate that without a seizure before judgmentat this time, the recovery of Plaintiff's claim is in serious jeopardy;

III.

10.

Facts brought to the Attention of Ph,intl" bv Messrs, Svlvain LRDolnteandArthur Blumer. Trustees to the bAnkruptcies of Illuminati lIoldlnes Inc. and3954099 Canada Inc.

12. Illuminati Holdings Inc. ("illuminati") and 3954099 Canada Inc. ("3!J540!l9"),twocompanies that Italin was relatedto or was the controlling mind of, have both gonebankrupt, as shall be proven at trial;

13. The Tntstce with .respect to the bankruptcies of Illuminati and 3954099 is AberbackLapointe & Associc:!sJne., with Mr. Sylvain Lapointe in charge of the Estatej

14. f was informed by Messrs. Sylvain Lapointe and Mr. Arthur Blumer, C.A., as arepresentative of the trustee. that at a meeting held on May 14, 2009 between ltalla,Messrs. Lapointe and Blumer, Italia informed them of his personal debts and that heowed significant amounts of money to various creditors as hereinafter more fullydetailed and he added thaI he was apparently involved in divorce proceedings fromhis wife and that ''would have to live in IJ hut". He stated that he would have nochoice and would probably have to go ba.n.lc:rupt;

15. Furthermore, I was informed by Messrs. Lapointe and BlulDer that Italia informedthem ofbis personal liabilities arising from the bankruptcies of his invesunents whichhe identified as follows:

a) OST/QST owing: $400.000 with respect to Vision2, one of the numerouscompanies he controlled. and SIOO,OOOwith respect to Global;

--

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b) .$65,000 for unpaid benefits, sallll)', vacation pay and so on, to various fonneremployees of companies in which he was a director;

Messrs. Lapointe and Blumer further Informed me that ItaJia sub~cquently confirmedthese 6SUfc5, by (axes dated June 3 and June 4, 2009, enclosing an unsigned andIncomplete balance sheet with certain documents from several taxation authorities,indicating that he owed, personally, GST/QST in the amount of $302,080 in relationto Vislon2 International Inc., and $64,027 concerning employees of OlobalEncapsulation. He also furnished a document relating to Diablo Performance Inc.,another company in which he i5 Involved ond in relation to which he may oweadditional sums as OSi/QST;

I was also Infonned by Messrs. Lapointe and Blumer that ItaUa further admittedowing these sums to the governmental authorities and that he asked for a delay of 6months in order to pay what he owes;

ltalia's statements and declarations constitute an admission that he has ceased to meethis Jlabllities, and such statements also lead me, on behalf of Plaintiff. to believe thatItalia has suspended or is about to suspend payment of his debts, altogether and willtherefore be insolvent and unable to reimburse its dcbts to Plaintiff:

Moreover, 1 have learned, either with the help of Messrs. Lapointe and Blumer andthrough my own resources and invcstigations into tho affairs of ltalia and his variouscompanies, the following facts:

i. ltalia is now essentially with few if any assets of any value In Quebec. Whatappears to be the majority of his known and disclosed.assets arc located inFlorida, with a strong likelihoodthat these asscts, or some of them, are in thename ofhl~ wife or othermembersofhis family;

ii. Plaintiff has every reason to believethat ltalia's wife serveS as his prete-nominFlorida and elsewhere:(Korea)to hide assets and prevent attacluncnt thereonbycreditors. Italia's wife hos apparentlyno job and no official source of income.ltalia and his wife appear to livea lavishlife style in Florida, with a houseworthapproximately 1,8 millionS (on which the itaJillMortgage is registered) and acondo worth approximately1,4millionS.He or his wife have been photoSJ:llphcdon a yacht in Florida, appear to have used Orhave the use of several automobiles,and travelfrequentlybetweenFloridaandKorea.ltalia's wife ownsa SI7,OOOdog (a rare Korean breed)andshepracticeshorsebackriding andmay evenown.ahorse;

iii. In 2007 and 2008. Italia represented to Plaintiff that he was involved in, orcontrolled, a number of corporationsworth in excess of J5 mll/lon$. I wasinfonned by Messrs. LapointeandBlumerthat at the May 14, 2009 meetingwiththem, Italia dcclnred that all thesecompanieswere now either bankruptor of no

-

'.

J(j.

17.

18.

19.

.5.

i!irIrIi!IItIr~i.jr

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.6.'.

iv. I was infnrmed by Mr. Lapointe thai he has also asked Italia to provide him withall relevant documents and information concerning these various companies, Inorder to allow him to investigate their affairs and determine what happened tothem that would explain a los9 of 12 millionS in value in less than 2 years;

v. I was Informed by Mr. Lapointe that ttalia has failed to provide complete andveTifiable information in this regard, despite promises that he would becooperative;

vi. ltalia is, as previously explained. the controlling mind and majority shareholder of4139305 Canada Inc. which owns a building located at 2575 Remembrance inLachine, valued at $535,000. The undersigned has been informed by Mr. ArthurBlumer, that this property is for sale, as appears from the official listing for thebulidinS filed in support herewith as Exhibit R-3. halla has not included the valueof his shares In this company as an asset in the balance sheet he furnished on June3 or 4, 2009;

vII. In March 2005, I am informed by Mes.c;rs. Lapointe and Blumer that ltaliatransferred 2 millionS to the "Italia Family Trust" and dtere have also been othertransfers by ltalia of assets out of the province since 2005. More panicularly andfollowing his review of the bank statements of 3954099, Mr. Blumer found, inaddition, 11transfer of 2,040 milllon$ in April 2006 to an Dccount located inFlorida and II tmnsCer of 1,3 millionS in July 2006 to an account located InFlorida. No trace of this Family Trust has been found nor has Italia explained theconsideration for these transfers;

viii. Through my own investigations, either directly or through counsel, I have learnedthat in July 2008, Italia sold his personal residence .located at 226 Sidney-Cunningham in Beaconsfield, for approximately $690,000, aod Plain.tiff isunaWllre of what he has done with the proceeds. In the statement he furoished toMes.'IJ'S.Lapointe and Blumer on June 3 or 4, 2009, no mention is made of thishouse or of any ofthe proceeds oisale;

ix. More particularly, I have learned that the residence located at 226 Sidney.Cunningham in Beaconsfield was sold on or about July 2, 2008 to 1\certain QinWei for approximately$690,000cash..Inhis balance shcc:tproduced on June 3or4,2009 (following his May 14,2009 meeting with Messrs.. Lapointe and Blumer),no mention is made of this house or of the proceeds of sale and Plaintiff isunaware as to what mDYhave happened to these proceeds. However, even afterthe sale, there remained on the propertya registered hyPothec which ltalia hadpreviously given to securea pe~onal guaranteefor the obligations ofVislon2 andanother company. 00 or about July 25, 2008 (three weeks after the sale), acompany by the name of 9164-9715 Quebec rnc. acquired this hypothecregistered in favour of the LaurentianBank.Rjchmond ltalia. ltalia's brother,isthe director, president and secretary of this company aod in the deed ofassignment, the companyis representedby Richard [talia and the deed Is signedby him;

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.1-

20. The acts described in the preceding sub-paragraphs furnish a picture, as besl Plaintiffhos been able to stJ:ucture, of !talla's activities and asset.!, which indicates at the veryleast, a very selective disclosure on his part as rell1te~tn creditors personal to him butaL~o as relates to creditors of variou., corporations of which he is or WAStheconrrolling mind, as well as to any assets that he may possess;

21. These disclosures, albeit incomplete and omitting to disclose assets and explain whyothers are not Included, Me also very recent, ond only came to light as a result of therecent investigations into ltalia and his affairs, and more particularly, following themeeting of May 14, 2009 and the subsequent infonnation revealed to me by Messrs.Lapointe and Blumer;

22. Plaintiff was not in a position to have acted sooner, given that it was a victim ofItalia's selective and incomplete way of disclosing information, letting Plaintiffbelieve that he w8.~solvent and involved in numerous companies and activities, all thewhilc liquidating his assets in Quebec, not payinB his creditors and setting himself upto Jive a lavish life style in Floridaj

23. Due to Italia's selective and incomplete disclosure of Information relating to his assetsand affairs, Plaintiff has conducted an Equifax credit Investigation on ltalia, the repOrtof which indicated that ltalia holds 5cveral bank accounts with the TD Bank, asappears from a copy of such Equifaxreport filed in support hereof as Exhibit R-4. Iwas Infonned by Messr.J. Lapointe and Blumer that Itolia disclosed to them that heonly holds a bank account at TD Canada Trust located at 3339, Des SOUI1:CSBoulevard, in Dollard-de~-Ormeaux, H98 lZ8. However, Plaintiff has every reasonl"Obelieve that he may very well hold severa! other bank accounts with the TD Bankin the areDSsurrounding his fotmer 226 Sidney.Cunningham residence, which is whyPlaintiff is hereby attempting to seize any bank account that may be in Italla's nameand that is located at one of the TD Bank branches located in proximity of ltalis'sformer 226 Sidnoy-Cunningham resldcncei

24. In addition, Plaintiff is well-founded in seizing before judgment the shares held byDefendant ttalia In 4139305 Canada Inc., given the value that these shares represent;

25. More particularly, Plaintiff is well-founded and justified to believe that the value ofthesc is directly linked to and dependent upon the value of the building owned by4139305 Canada Inc., namely the building located at 2575 Remembrance Street, Intach!"c;

26. Therefore, Plaintiff is justified and well-founded to fear tJ,at the valuc of the shams in4139305 Canada Inc. is In jeopucly since the bUilding located at 2575 RemembranceStreet appears to be for sale, as has been previously exposed; whicb sale, ifcompleted, will result in proceeds that will be out of Plaintiffs control;

27. Based on Italla's previous actions as described herein, Plaintiff has every reason tobelieve that If the said building is sold, (talla will cause the proceeds to no longer betraccable, or leave the province and be beyond Plaintiffs control;

--

;i.!i

I

!II,

Ii,!ifiiI!iiIJI,IIII

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-8.

As a result of such sale and manoouVtCS,Italla's liharcs will b/$ronder/$d of little or novalue, thereby putting injeopardy the recovery of Plaintiffs claim;

It is therefore essential that the said proPeJ1Ybe seized and prescrvc:d so that if sold,the proceeds be :;ecured and remain in 4139305 Canada Inc. in orderthat (talln'sshares in this company retAinat least some sisniflclIlIt value;

Plaintiff is, therefore, well-founded to seize the building located at 2575RemembranceStreet, in Lachine,whichis owned by 4139305 Canada Inc., in orderto ensure that the value Ofth6 building anellor the proceeds or the sale of the buildingbe preserved until judgment is rendered in tbe present action;

IV. CONCLUSION

31 , As such, and as a result of Italia' 5 apPiU'Cntfraudulent manoeuvres, his selective andincomplete cooperation with Plaintift's and Aberback Lapointe &. Associes Inc,'srepresentati ves, the liquidation of almost all of his assets in Quebec, his departure andthe lavish lifestyle he seems to be leading in Florida whih~ alleging that he is insolventand on the verge of bankruptcy, and finally, the fact that he has put the 2575Remembrance Street building, in Lachine, up for sale, it is apparent and clear thatItalia's assets presently still located in Quebec, are in peril and arc at great risk ofbeing alienated, the proceeds of such alienations being most likely destined to betI'Iwd'erred outside of the province;

32, ltalia's behaviour, as described hereinabove, is strikingly unloyal, doubtful anduntrustwonhy and amply justifies the reasonable fear and apprehension and theconclusion that without a Seizure before judgment, the recovery of Plaintiff's claim isseriously injeopardyj

33. As sucb, Plaintiff is well-founded to believe that without the issuance oCa Writ ofSeizure before Judgment regarding what seem 10be Ualia's last remaining movllble orimmovable propertieli in thll Province OfQlI~bec, namely:

· Any blink account, sate-depositbox, or asset in Mr. Richard Italia's namewith TD Canada Trust (I'D Bank Financial Group) situated at 265 St.JeanBoulevard, l)ointc-Claire,Quebec, H9R 3JI, anellor situated at 3339. DesSources Boulevard, DoUard-des-Ormeaux, QC, H9B IZ8, anellor lituated at203 r-Iymus Boulevard, Polnte-Claire, Qul!bec, H9R 1E9 and/or situated at3662 St-Charles Boulevard, Kirkland, Qu~bec, HPH 3C3;

· An immovable property located at 2575 Remembrance Street, Lachine,Quebec, H8S IX4 and describedasLot ONE MILLION SEVENHUNDREDNINETY-SEVEN THOUSAND NINE HUNDRED SIXTY-ONE (1797 961)ofilie Cadastre oCQu6bec, Land Registry Office of Montr6al;--

II

I!

",

28.II

29.

30.

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.9-'.

. Sharesof any category held by Mr. Richard Itnlia with respect to 4IJ9305Canada Inc., a corporation constituted under the Canada BusinesJCorporation,r Act, L.R.C. 1985. c. C-44;

it Is reasonableto fear Ihat the recovery of Plaintiff', claim is in grave nnd imminentjeopardy, and without such issuance,it is more than likely that it will be impossiblefor Plaintiff to recover payment of its claim as a result of a judgment of thishonourable Court ;

34. COl\Sequentiy. Plaintiff respectfully submits that this Honourable Court shouldauthorize the issuanceof a Writ of Seizurebeforejudgment against Itlllia's movableand immovable property described hereinabove, in accordance with the Requblt!onand WritS to such effect;

35. Plaintiff hereby reserves itS rightSto seize any additional movable or immovableproperty belonging to halls and locatedwithin tbe Province of Quebec, and thatPlaintiff is not currentlyawareof butmaydiscoverin the future;

36. All tho facts stated he~in are true.

Sworn to before me at Montrealthis 14day of July 2009.

~q- C , .. ''"' 7""

missionerof oaths for the judicialDistrictofMontrc!al

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ANNEXE-BREF DE SAlSIE AVANT JUGEMENT

et4139305CANADA.INC., une personnemoraledOmentconstitueeet ayant son siege socialct saprincipaleplace d'affaires au 2575 Remembrance,Lachine,Quebec, H8S IX4;

and

OFFICIER DE LA PVBLlCrrE DES DROITS DE LA CIRCONSCRJPTION FONCIERE DEMONTREAL, agissant au 2050 de Bleury, RC 10et 1.10, Montreal, Quebec, H3A 2J5; Mis-en-cause

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I!i1iIIi

CANADAPROVINCE au QUi:BECDislrlct DE MONTREALN. 500-17-045800-006

l~J ~f oSI.;;f~

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C;:;G1ftllS :a

§<II _ "...:>:B If... g... il_ OJ-r:- f! c.0' ... . :J I:~ t6ut shllrif au hulssler de la provinee de QuebeC

. NOUS VOUS COMMANDONS 6 la requisition 4crite de la partie demanderesse De SAlSIRles biens suivants actuellemenl en la possession de la partie mise en cause 4139305 Canada inc.,donlle defendeur RICHARD ITALIA eSlle seul actionnalre:

'An Immovable property loc:ata(f al 2575 Remembrance Street, lachIne, Quabec, HaS 1><4.~ddescribed as Lol ONE MilLION SeVEN HUNDRED NINETY-SEVEN THOUSANONINEHUNDRED SIXTY ONE (1 797 961) of IheQuebec C8deslre,reglslratlon divisionofMontreal.'

COUR SUPERleURE (Chambre civile)AUNOMOUSOweRAIN

GECANADAEQUIPMENTFINANCINGG.P.une50cl6t6 en nOm collectl' dOmentc:onstltu!e en vertu des lols du Qu~bec lit ayant sa princlpaleplace d'affalr. au1250,boul. Ren~6vesquo Ouest,lulte 1100,Montr4a',Qu6bllC,H3B4W8

Partie demanderessec,

RICHARD If ALIA. anclennllmant domlll6 el rl!sldant au 226, Sidney-Cunningham,Beaconsfield, Quiibec. H9WGE6el actuellemenlsans adrlls..e connua au Quflbec el3547419 CANADA INC" une personne morale dOment c:onslltuf. al ayant sonII~ge Boclal ot prlm:lp.lo place d'affaires au 8000 KIeran, VII/II St.Laurent,Qu.boc. H4S 285 ET VOIR ANNEXe

Partie dflfenderesse

DE CONFIER II glrdo des blen's 01 effe/$ alnel salsls ~ un glrdlen solvable, JusqU'{J ee que Ie tribunaluh SlatuGsur c:ebref el, IUi' jugument rendu plllrcetle Cou; IIcetto fin. de prdloversur ceBbiensIemontaneda 10condamnatJon en principal. Inl.l'6l8 at d6pens alnsi que YOI 6mofumenl8.APFU~SQUOI, YOUSdevaz fair. rapport de yos procf/<lf/ssuivanl la 101.

NOUSCOMMANDONS,ENOUTRE,ALAPARTIESAISle (MISE-eN-CAUSE 4139305 CANADA INC,)dl comparanre en notrecour, au palals de JusliceDEMONTReALsitufl au 1 851,rue N~Dame esldans les dlxJours de la date dela signification de ce breI,pour repondre Ala demande conlenue dans ladAclarallon de Ia partie demanderssse st de fairs valoir par 6crliles mollfs de sa contestaiion.AD8=AUTpar Ia partie d6fanderesse I/eprodulra,dans ledlld61a1.un acle de campaMion sign6par IlIe.m6me ou son prooureur, un jugemenl per <l6faulpourra "re rsndu contre elle.LA PARTIE DeFENDERESSe I:T LA PARTIE SAISIEPEUVENT,dansles clnqlours de laslgnlllcation duprAsenl bref, demander 1'8nnulallonde la sel91aan raISonde I'lnsufflsanoe au de Ie lausset6 des all6gallonsde "affidavitsur Is fol duquelle bre' a 614d611vr6,

Nous evons 81gn6AMonlr~al0La lulllet 2009

MISE EN CAUSE

COP'E~

MILLER THOMS

Kathleen Bandarro

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-

, . .2009-07- 20 ~:~

..

CAl'IAUI'!..IIUTRtC1' DE HOIITR~NO.: 50D-17.045800.OW

COIJIt9UP811%WRa

Oli: CANAJ:1AEQtJlPBMBNT F.nIANC:ma G. P.PARTIS DIlllUlDDr.sS8

RICHARD I'1'ALIA3Snt18 CANN!A INC. J:'1' IlLS

PARTIS IIIJPl:llPPlSSB41)9305 CANADA INC.OJ'FICIER DE toll. PuaLlCITE DBS DROITS DEtoll. CmCONSCRInION :f'ONCIBRB Da MON'l'RBAL

PA!tnJI NfSS 8If CAusa

paga:

PR<fES-VERBAL DE SAISm IMMOBlLmRE

.ou.a1fJt1' (eJVl/A,...; J-tl'flIJ I . ayant un bureAU d'Rffaire. auSdllnt..L4urent. 8ulto 700, MoDt~al,

.,a.

(Iu'en Yertu d'un NtId.f '~'ri"UI" au ..eto du ":r6"...,, b..t ot det6eN ...:J..i2.. 'our dOC::: ~, d. 1'.." de lelU" _det.".1 " .\Ute a 1 1.810ncI'"" brot cI. .a18i. AVAlt'r f-do cattc hooOll'tOI>l.CoUll'.n da"a du ,;) 0 ;jour de d. l'an

dowc ..Ll n...t. &1. Pou:rnuito da toutea 1ft eMcuno d..die.. p8:L'Ua. IIBMIIIIDIlUliVSI

cODtn 1." l_ubl.. 40 toute. at dlClc:uD.d..41""0 puUeo PJlI'BKDf:RISsa...'O:rdoMMt do oaial. le8etl... l_b18., objOt du prj!oene brof.

30 ... 8uh 1.. d.L joull'd. JtA..Ar~1 "0 l'.n d 1111naut,

· ~ 3~.! b...roo. OXPfleftft_ne~~fl.I.? ", 1. pubUelt' de. *oltede 1. cl.een...lpti"" (ODel d . daaLt laquol ...t. 11\ftcritl'~ubl0. aa 14 at .Iou, "111 p18c4 .au. _lu de 'uoUe. 10" I_ubi..,d6c:rlt8 ..u prdAont pt'OC:~(I.verbA1et on 1a po..cn"lon cle ~ouc.. .~

cll4cuno de, parUa, 01'_11I111888 .t. .Un que U at 'lor.. ebacun. desdit...

pa..Uea Oft cau._ n'en p..'t.ndant .(!fIOranoo, un ~ldre du procb.y_rbel da

.a18i. ,ait .il/lllH~ b chaCWI. d.a "arti... awe pr',cnu.. tol II" '11 app.nUr..ul..1 rapport la' 'WI' I. bro( arl~1nal.

DIIBXONIITXOlf CAtVlSftALB

VOIR ANZIIIX8 A FA%SAHT PNlTI8 1NT8QlU\H'r8DtI IIOCUNEIrI'

FAitot ."~CUt' ow: le, 1 10. dlcrlte ou bu.e.u d. L. publielell d08 drolte

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P8'81

d 10"".1 .st .itu'

d. l' Cln dO"" IIU fteuf.

NU%SSI~-D8~TICSOff1dar du SMrifSalllnle%' Robl11.r6 Lortie

SAlllnt... ROblUClrd """'Uo. n.c., Buta.lera 6a ,u.U..e107. bOlllevllt'll Batnt-Lauront, bur.au 700, NOfttrf"l (Q\I,t>e.., H2Y2TS'I'61I!pbone. (514) 878-;UU . T'l'ooplour. IS10, IIU-U81

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,"

,/~ANNEXE A

.. «;fJO _ /1- ~04'S"'itJO - 0 If'

5'OO-I~ -oO('SfC,O -cRlf

"An Immovable property located at 2515 Remembrance Sireel, Lachine, Quebec, HSS 1X4 anddescribed as Lot ONE MILLION SEVENHUNDREDNINETY.SEVENTHOUSANDNINEHUNDRIiDSIX'N ONE(1 797981)of theQuebeccadastre,reglslraliondivisionof Montreal,"

.. ~ '0' .. ."

2009JUIL1 0~ to\l$ et chaCun de m8S hulsstersie vous \\'.I\orI5eb edcuter ii I nJ A ,.,resent brcf~ ,T&JDI~LUSIiErd

"

,"