ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST … · court file no. cv-20-00636359-00cl ontario...

Court File No. CV-20-00636359-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

COMMERCIAL LIST BETWEEN:

ROYAL BANK OF CANADA Applicant

and

AVG (OEAM) INC.

Respondent

APPLICATION UNDER SUBSECTION 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

APPLICATION RECORD

Volume 2 of 2

February 14, 2020 AIRD & BERLIS LLPBarristers & Solicitors Brookfield Place 181 Bay Street, Suite 1800 Toronto, Ontario M5J 2T9 Tel: 416.863.1500 Fax: 416.863.1515

Sanjeev P.R. Mitra (LSO # 37934U) E-mail: [email protected]

Sam Babe (LSO # 49498B) E-mail: [email protected]

Lawyers for the Applicant, Royal Bank of Canada

Court File No. CV-20-00636359-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

COMMERCIAL LIST BETWEEN:

ROYAL BANK OF CANADA Applicant

and

AVG (OEAM) INC.

Respondent

APPLICATION UNDER SUBSECTION 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

APPLICATION RECORD

INDEX

Volume 1

Tab Document

1. Notice of Application issued February 14, 2020

A. Form of Receivership Order

2. Blackline of Receivership Order against Model Receivership Order

3. Affidavit of Wajahat Mahmood, sworn February 13, 2020

A. avgautomotivegroup.com Printout

B. Corporation Profile Report

C. Credit Agreement with Amendments

D. General Security Agreement

E. Accounts Receivable Security Agreement

F. Inventory Security Agreement

G. PPSA Search Results

2

Volume 2

Tab Document

3. (cont’d) H. Somani Subordination

I. BDC Priority Agreement

J. RCAP Estoppel Letter

K. 102 BC Priority Agreement

L. Toyota Estoppel Letter

M. January 18, 2019 Breach Letter

N. First Demand and First BIA Notice

O. Standstill Agreement

P. June 20, 2019 Standstill Termination Letter

Q. Second Demand and the Second BIA Notice

R. Statement of Claim in Action of Covenants

S. Forbearance Agreement

T. Consents to Receiver

U. BDO Report

V. October 16, 2019 Forbearance Termination Letter

W. Judgment in Action on the Covenants

X. Bankruptcy Application

Y. Notice of Dispute to Bankruptcy Application

Z. Somani Estate Receivership Order

AA. BDC PPSA Notice

BB. Bankruptcy and Insolvency Record Search Results

4. BDO Canada Limited Consent to Act as Receiver

5. Service List

TAB 3(h)

SUBORDINATION AND STANDSTILL AGREEMENT

THIS AGREEMENT is made as of the 17lh day of September, 2014 (the “Agreement”),

BETWEEN:

Royal Bank of Canada (the “Lender”)

- and -

Ayaz Madat Somani (the “Subordinate Lender”)

A. WHEREAS Subordinate Lender has made a loan available to AVG (OEAM) Inc, (the “Borrower”) which is secured by the following security a general security agreement dated December 19,. 2003 and registered under the Personal Property Security Act (Ontario) (“PPSA”), as amended, as registration no. 20031219 1236 1862 8565 (reference file no, 601952076 (the loan and all existing and future indebtedness and other obligations and liabilities owing by the Borrower to the Subordinate Lender from time to time is referred to in this Agreement as the “Subordinate Indebtedness”, and the general security agreement, including all other additional or collateral security now or hereafter securing the Subordinate Indebtedness, is called the “Subordinate Security”);

B. AND WHEREAS the Borrower has entered into a loan agreement with the Lender dated August 22, 2014 (as may be amended, restated or otherwise modified from time to time, the “Loan Agreement”) under which the Lender has agreed to make available to the Borrower a revolving demand credit facility and other related credit facilities or accommodations in the aggregate principal sum of $3,250,000 on the security of a general security agreement, a security agreement (inventory) and a security agreement (accounts receivable) (collectively, the “Security Documents”) which are registered under the PPSA as registration no. 2014 1558 1862 0266 (reference file no. 699661215). All existing and future indebtedness and other obligations and liabilities owing by the Borrower to the Lender from time to time, including but not limited to all present and future indebtedness, liabilities and obligations of Borrower under the Loan Agreement, including all interest thereon, are referred to in this Agreement as, the “Prior Indebtedness”. The Security Documents, and all other additional or collateral security now or hereafter securing the Prior Indebtedness, are referred to in this Agreement collectively as, the “Prior Security”;

C. AND WHEREAS Subordinate Lender has agreed to subordinate and postpone the Subordinate Indebtedness and the Subordinate Security to and in favour of the Prior Indebtedness and the. Prior Security. Reference herein to the Subordinate Indebtedness, Subordinate Security, Prior Indebtedness and Prior Security includes all permitted renewals, extensions, amendments, modifications, and restatements thereof or thereto from time to time;

NOW THEREFORE for good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged) the parties agree as follows:

1. Covenants, Representations and Warranties of Subordinate Lender. Subordinate Lender consents to the Prior Indebtedness and the Prior Security and represents and warrants to the Lender

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that (i) the Subordinate Indebtedness and the Subordinate Security is in good standing and the Borrower is not in default thereunder, (ii) it holds no security of any kind granted by the Borrower other than the Subordinate Security, (iii) it is the sole owner of the Subordinate Indebtedness and the Subordinate Security and has full power, authority and legal right to enter into this Agreement and (iv) the total amount owing to the Subordinate Lender under the Subordinate Indebtedness, the rate of interest applicable to the Subordinate Indebtedness and the repaying terms applicable to the Subordinate Indebtedness are each, as at the date of this Agreement, as previously reported in writing by the Subordinate Lender to the Lender, Upon request by the Lender from time to time, the Subordinate Lender shall provide to the Lender copies of the Subordinate Security and/or a statement confirming the status thereof, including the amount of the Subordinate Indebtedness then outstanding, the then applicable interest rate and payment terms and particulars of all existing or alleged defaults by the Borrower in respect thereof.

2, Subordination and Postponement. Subordinate Lender hereby subordinates and postpones the Subordinate Security to the Prior Security and the Prior Indebtedness and agrees with the Lender that the Prior Security shall be a first priority lien and charge against the Property for the lull amount of the Prior Indebtedness in full priority to the Subordinate Security. The subordination and postponement of the Subordinate Security to the Prior Security and the Prior Indebtedness shall include subordination and postponement of the Subordinate Indebtedness to the extent required to make the Prior Security a first priority lien and charge against the Property for the entire amount of the Prior Indebtedness at all times. No discharge, release or waiver by the Lender of any of the Prior Security against or in respect of any part of the collateral to which the Prior Security attaches (the “Collateral”) or any person or any amendment, renewal, extension, replacement, modification, supplement or restatement of any Prior Indebtedness and/or the Prior Security shall require notice to or the consent of Subordinate Lender or otherwise affect the subordination and postponement of the Subordinate Security and the Subordinate Indebtedness hereby granted by the Subordinate Lender. The Subordinate Lender shall not amend, extend, renew, modify, replace, supplement or restate the Subordinate Indebtedness or the Subordinate Security without the prior written consent of the Lender.

3, Payments. Without in any way limiting the effect_of any separate postponement or other agreement between the Subordinate Lender and the Lender, after receiving notice of a default or a demand for payment under the Loan Agreement, Subordinate Lender agrees that it shall not accept any payment whatsoever on account of the Subordinate Indebtedness, and if any such payments are received, the payments shall be received in trust by the Subordinate Lender, and the Subordinate Lender shall immediately pay such amount to the Lender without deduction, All insurance and other proceeds relating to the Collateral shall be dealt with and applied, whether before or after any default under or in respect of the Prior Indebtedness or the Subordinate Indebtedness, in accordance with the provisions of the Prior Security notwithstanding any provision to the contrary in the Subordinate Security. The Lender and the Subordinate Lender shall provide reasonable cooperation to each other following the giving of such notice of default to ensure the provisions of this paragraph are complied with.

4, Standstill. Subordinate Lender shall not take any Enforcement Action under or in respect of the Subordinate Security or the Subordinate Indebtedness with respect to all or any part of the Collateral or against the Borrower without reasonable prior notice (which shall not be less than 120 days) to and the written consent of the Lender, which consent may be given or withheld by the Lender in its sole discretion. Subordinate Lender shall not challenge, contest or bring into question the validity, priority or perfection of the Prior Security or any Enforcement Action taken by the

Lender under or in respect of the Prior Security or Prior Indebtedness against the Borrower or against all or any part of the Collateral.

In this Section, “Enforcement Action” means enforcing any security interested granted under the Subordinate Security, exercising any of the rights or remedies of a secured party under the PPSA, appointing or obtaining the appointment of a receiver, a manager or a receiver and manager or other person having similar powers in respect of any person or property, taking possession or control of any property or undertaking, commencing, giving or making any demand for payment, any notice of intention to enforce security or any action or proceeding seeking payment or recovery of all or any part of any indebtedness or damages in lieu thereof, or accepting a transfer of any property in lieu of foreclosure, or the exercise of any other rights or remedies available to a creditor under its security or otherwise at law or in equity, including without limitation, any bankruptcy proceedings.

5, Assignment by Subordinate Lender. Subordinate Lender agrees that it shall not sell, transfer, assign or otherwise dispose of any interest in the Subordinate Indebtedness or the Subordinate Security to any person or persons (the “Assignee”) without the written consent of, the Lender, which consent may be given or withheld by the Lender in its sole discretion. Concurrently with any such permitted sale, transfer, assignment or other disposition, Subordinate Lender shall cause each Assignee to enter into a subordination and standstill agreement with the Lender on the same terms and conditions as this Agreement. The Lender may transfer or assign its interest in the Loan Agreement, the Prior Indebtedness, the Prior Security or this Agreement without restriction and

_ without prior notice to or the consent of the Subordinate Lender.

6, Further Assurances. The Subordinate Lender shall execute upon request by the Lender such further documents or instruments and take such further action as the Lender may reasonably require from time to time to cany out the intent of this Agreement, including, without limitation, authorizing the Lender to register notice of this subordination under the PPSA,

7, Notices. Any notice, demand or other communication which any party may desire or may be required to give to any other party shall be in writing and may be made or given by personal delivery, by registered mail or by facsimile transmission to the address for service of the recipient set forth below. Any demand, notice or communication given by personal delivery shall be conclusively deemed to have been given on the day of actual delivery thereof, and if given by registered mail, on the third business day following the deposit thereof in the mail, and if given by facsimile transmission, on the first business day following the transmittal thereof. The address for service for each party is as follows:

(i) if to the Lender, to:

Royal Bank of Canada 5001 Yonge Street Toronto, Ontario M2N 6P6

Attention: Owen Chiu, Senior Account Manager( Facsimile No,; (416) 512-4569

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(ii) if to the Subordinate Lender, to:

Ayaz Mandat Somani Unit 1, 605 Middlefield Road Scarborough, Ontario M1V 5B9

Facsimile No.: 416-362-8147

If any party giving any demand, notice or other communication knows or reasonably ought to know of any difficulties with the postal system that might affect delivery of mail, such demand, notice or other communication shall not be mailed, but shall be given by personal delivery or by facsimile transmission. Any party hereto may change its address for service to which notices hereunder are required to be made or given by notice to other parties in accordance herewith.

8. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein without application of any principle of conflict of laws which may result in laws other than the laws in force in such Province applying to this Agreement; and the Subordinate Lender consents to the jurisdiction of the courts of such Province and irrevocably agrees that all actions or proceedings arising out of or relating to this Agreement shall be litigated in such courts and the Subordinate Lender unconditionally accepts the non-exclusive jurisdiction of the said courts and waives any defense of forum non-conveniens, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement, provided nothing herein shall affect the right to serve process in any other manner permitted by law.

9. Successors. The acknowledgements and agreements contained in this Agreement shall extend to, be binding upon and enure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

10. Counterparts. This Agreement may be executed in several counterparts, each of which when so executed shall be deemed to be an original and which counterparts together shall constitute one and the same instrument.

(signatures appear on the following page)

IN WITNESS WHEREOF each of the parties have duly executed this Agreement underseal.

SIGNED, SEALED AND DELIVERED in the presence of:

ROYAL BA

Per:Name:Title:

Per:

RBC ROYAL BANK OWEN CHIU

Name: ^

[Signature page to the subordination and standstill agreement between Royal Bank of Canada and Ayaz Madat Somani dated the]7lh day of September, 2014]

TAB 3(i)

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PRIORITY AGREEMENT___________IQ^'

THIS AGREEMENT dated the / Q day of September, 2014,

AMONG;

BDC CAPITAL INC., a Wholly owned subsidiary of BUSINESS DEVELOPMENT BANK OF CANADA, with a business centre at 121 King Street West, Suite 1200, Toronto, Ontario M5H 3T9

("BDC")

AND:

ROYAL BANK OF CANADA with a branch office at 5001 Yonge Street, Toronto, Ontario M2N 6P6

(the “Lender")

AND:

AVG (OEM) INC., AVG (OEAM) INC., NATIONAL AUTOMOTIVE CUSTOMIZERS INC. and 1598320 ONTARIO INC., all corporations incorporated under the laws of the Province of Ontario, with their registered office at 605 Middlefleld Road, Unit 1, Toronto, Ontario M1V5B9

(collectively, the “Debtors")

WHEREAS:

A. The Debtors have granted or agreed to grant to BDC a registered security interest, in all or certain of the Debtors' present and after-acquired personal property, and/or such other security as BDC may from time to time receive from the Debtors to secure present and future debts and obligations of the Debtors to BDC (the "BDC Security”);

B. The Debtors have granted or agreed to'grant to the Lenders registered security Interest, in all or certain of the Debtors’ present and after-acquired personal property, and/or such other security as the Lender may from time to time receive from the Debtors to secure present and future debts and obligations of the Debtors to Lender (the "Lender Security")!

C. The parties hereto have agreed to enter Into this agreement In order to set out the respective priorities of the BDC Security and the Lender Security and to be applicable In respect of both present and future debts and obligations of the Debtors with BDC and the Lender;

NOW THEREFORE in consideration of the premises and other good and valuable consideration, the parties hereto covenant and agree as follows:

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ARTICLE 1 - CONSENT

1,01 BDC hereby acknowledges its consent to the creation and Issue by the Debtors to the Lender of the Lender Security and to the Incurring by the Debtors of the Indebtedness secured thereby.

1,02 The Lender hereby acknowledges Its consent to the creation and issue by the Debtors to BDC of the BDC Security and to the Incurring by the Debtors of the indebtedness secured thereby,

ARTICLE 2 ■ INTERPRETATION

2,01 The preamble hereto forms an Integral part of this Agreement.

2,02 In this Agreement, the following terms shall have the following meanings:

(a) "BDC Collateral" means all present and after-acquired Equipment of the Debtors, and the Proceeds thereof, and the Life Insurance and all Proceeds thereof;

(b) “BDC Offer” means the letter of offer dated April 22,2013 from BDC to the Borrowers, as amended by letter agreement dated August 1, 2013;

(c) ''Borrowers” means, collectively, AVG (OEM) Inc., AVG (OEAM) Inc, and National Automotive Customizers Inc,

(d) "Debtors’ Financial Statements” means, In respect of any fiscal year end, each of the Debtors' accountant prepared minimum Review Engagement financial statements and consolidated minimum Notice to Reader financial statements of all of the Debtors,

(e) “Equipment" means all equipment of the Debtors, including, without limitation, machinery, tools, fixtures, computers, furniture, furnishings, chattels, motor vehicles and other tangible personal property that is not Inventory, and all parts, components, attachments, accessories, accessions, replacements, substitutions, additions and improvements thereof or thereto, and all Proceeds thereof;

(f) '‘Inventory'' means all of the Debtors’ goods acquired or held for sale or lease or furnished or to be furnished under contracts of rental or service, raw materials, work In progress, finished goods, returned goods, repossessed goods, livestock and the young thereof after conception and crops and timber, and packaging materials, supplies and containers relating to or used or consumed in connection with any of the foregoing, and the Proceeds of each of the foregoing;

(g) “Lender Collateral" means all present and after-acquired personal property of the Debtors and the Proceeds thereof, other than Life Insurance and Equipment and the Proceeds thereof;

(h) “Lender Commitment" means the commitment letter dated August 22, 2014 from the Lender to AVG (OEAM) Inc.;

(i) “Life Insurance" means the life insurance policy or policies insuring the life of Karim Sulman and the life insurance policy or policies insuring the life of Ayaz Somanl, now or hereafter assigned to BDC, Including any replacement, revision, amendment, increase or decrease thereto and the Proceeds thereof;

(j) “PPSA" means the applicable Personal Property Security Act,

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(k) "Proceeds11 shall have the meaning ascribed to such term pursuant to the PPSA;

(l) "Secured Parties” means BDC and the Lender, and a "Secured Party" means either one of them, and each of their respective successors and permitted assigns; and

(k) "Security" means, collectively, the BDC Security and/or the Lender Security,

ARTICLE 3 - PRIORITIES

3,01 Subfect to the terms and conditions of this Agreement;

(a) The BDC Security Is hereby postponed and subordinated to the security constituted by the Lender Security with respect to the Lender Collateral, to the extent of the Debtors' Indebtedness to the Lender from time to time, together with all accrued interest thereon and all costs, charges and expenses incurred by the Lender In connection therewith; and

(b) The Lender Security Is hereby postponed and subordinated to the security constituted by the BDC Security with respect to the BDC Collateral, to the extent of the Debtors’ Indebtedness to BDC from time to time, together with all accrued Interest thereon and all costs, charges and expenses incurred by BDC in connection therewith.

The subordinations and postponements herein shall apply in all events and circumstances regardless of:

(a) the date of execution, attachment, registration or perfection of any security Interest held by BDC or the Lender, or;

(b) the date of any advance or advances made to any Borrower by BDC or the Lender; or

(c) the date of default by the Debtors under any of the BDC Security or the Lender Security or the dates of crystallization of any floating charges held by BDC or the Lender; or

(d) the date the Lender or BDG commences enforcement or realization proceedings under the Lender Security or the BDC Security, as the case may be; or

(e) any priority granted by any principle of law or any statute, including the PPSA.

Any Proceeds, Including, without limitation, any insurance proceeds received by the Debtors or by BDC or the Lender in respect of the collateral charged by the BDC Security or the Lender Security shall be dealt with according to the preceding provisions hereof as though such Proceeds were paid or payable as Proceeds of realization of the collateral for which they compensate.

If any of the BDC Security or the Lender Security Is found by a trustee In bankruptcy or a court of competent jurisdiction to be unenforceable. Invalid, unregistered or unperfected, then the foregoing provisions of this Article 3 shall not apply to such security to the extent that such security Is so found to be unenforceable, Invalid, unregistered or unperfected as against a third party unless the seoured party shall be diligently contesting such a claim before a court of competent jurisdiction,

Each of the parties hereto shall permit any of the other parties hereto and fhetr employees, agents and contractors, access at all reasonable times to any property and assets of the Debtors upon which It has a prior charge or security interest in accordance with the terms hereof and to permit such other party to view, access or remove such property and assets from the premises of

3.02

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3.03

3,04

3.05(

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the Debtors at all reasonable times without Interference, provided that such other party shall promptly repair any damage caused to the premises by the removal of any such property or assets,

3.06 With the exception of monies deposited in any accounts designated as trust accounts by the Debtors for the benefit of BDC and the proceeds of any life insurance policy assigned to BDC, BDC shall not be entitled, notwithstanding anything to the contrary In this Agreement, to make a claim against any monies which are deposited In or disbursed from any account of the Debtors maintained with the Lender, except for monies deposited therein after the time the Lender has received written notice from BDC that It Is enforcing the BDC Security against the Debtors and which are not subject to the security Interest and priority of the Lender as set out and agreed to in this Agreement,

3.07 (f any person, other than the Secured Parties, shall have a valid claim, right or Interest In or to any of the present or after-acquired personal property of the Debtors which is subject to all or any part of the Security, or the Proceeds thereof, In priority to or on a parity with one of the Secured Parties but not In priority to or on a parity with the other Secured Party, then this Agreement shall not apply so as to diminish the rights (as such rights would have been but for this Agreement) of such other Secured Party to such property or the Proceeds thereof.

3,08 Nothing In this Agreement affects the priority of any security over the Debtors' real property Interests held by BDC or the Lender, The real property Interests of the Debtors are excluded from the operation of this agreement,

3.09 This Agreement Is not intended to affect the priority of any third party claims and no such parties may benefit from anything contained herein,

3.10 Nothing in this Agreement shall affect the priority of purchase money security interests (as defined in the PPSA) properly perfected under the PPSA and hereafter acquired by BDC or the Lender in specific Equipment of the Debtors.

ARTICLE 4 - COVENANTS

4.01 The Debtors hereby confirm to and agree with BDC and the Lender that (!) so long as any of the Indebtedness or other obligations of the Debtors to BDC and the Lender remains outstanding, it shall stand possessed of their assets so charged for BDC and for the Lender in accordance with their respective Interests and priorities as herein set out, (II) none of the provisions of this Agreement create any rights In favour of the Debtors or affect the manner in which the Lender or BDC or any receiver and manager appointed by them over the property, assets and undertaking of the Debtors exercises its rights under the Lender Security and the BDC Security, and (ill) the Debtors shall promptly provide the Lender or BDC upon request with any Information which either reasonably requests about the business and affairs of the Debtors.

4,02 BDC shall not amend the principal repayment provisions contained In the BDC Offer to be more onerous to the Borrowers, without the written consent of the Lender.

4.03 Contemporaneously with or after the receipt by the Lender of the Borrowers' Financial Statements for a particular fiscal year, either the Borrowers or BDC shall prepare and deliver to the Lender a statement (the "Statement") setting out (a) the Excess Available Funds of the Borrowers (as defined in the BDC Offer) realized for the applicable fiscal year and, If applicable, the Cumulative ECFS Limit (as defined in the BDC Offer) as at the end of such fiscal year; (b) the proposed repayment of principal by the Borrowers to BDC as permitted In the BDC Offer; and (c) the calculation of the financial covenants set out In the Lender Commitment as at such fiscal year

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end of the Borrowers, both before and after any such proposed repayment of principal by the Borrowers to BDC,

4.04 As soon as practicable and In any event, within 46 days after the receipt by the Lender of the Statement, the Lender shall either (i) give notice to BDC and the Borrowers that the Lender agrees with the calculations and permitted repayment of principal set out In the Statement and consents thereto, or (II) give notice to BDC and the Borrowers that the Lender disagrees with the calculations set out In the Statement and provide the Lender's recalculation of the Excess Available Funds, financial covenants and the maximum amount of principal, If any, which may be repaid by the Borrowers to BDC In accordance with the BDC Offer. If the Borrowers and BDC do not receive notice from the Lender In accordance with paragraphs (I) or (II) hereof within 45 days after receipt by the Lender of the Statement, then the Lender shall be deemed to have given notice to BDC and the Borrowers that the Lender agrees with the calculations and permitted repayment of principal set out In the Statement and consents thereto. j

4.06 Notwithstanding the receipt by the Borrowers and BDC of notice from the Lender In accordance 'with paragraph (II) of Section 4.04 within the time stipulated therefor, BDC or the Borrowers shall be entitled to object to the recalculation by the Lender and the Borrowers shall pay to BDC the portion, If any, as the Lender determines in its recalculation Is permitted to be repaid by the Borrowers to BDC, pending resolution of the objection, If, after making commercially reasonable efforts to resolve the matter, the Lender, BDC and the Borrowers are unable to agree, any objection by BDC or the Borrowers may be submitted for review to an independent third party acceptable to the Lender, BDC and the Borrowers for an Independent review and verification. The

/ decision of the agreed upon Independent third party shall be final and binding on the Lender,BDC and the Borrowers. The fees and expenses of such third party shall be borne by the ,Borrowers, If the principal repayment Is determined to be greater than the amount set out In the Lender's notice of objection to BDC and the Borrowers, then the Borrowers shall pay such Iadditional amount to or to the order of BDC in accordance with the decision of the independent third party.

4,06 For greater certainty, if the Lender gives notice or Is deemed to have given notice to BDC and the Borrowers that the Lender agrees with the.calculations and permitted repayment of principal set out in the Statement, then the Borrowers shall repay to BDC the principal amount set out in the iStatement. j

ARTICLE 5- PERMITTED PAYMENTS !i

5.01 If, following the occurrence of any default In payment of any principal, interest dr other amounts owing by any of the Borrowers to the Lender or default In any financial ratio covenant (including margining ratios) of any of the Borrowers in favour of the Lender or any demand for .repayment being Issued by the Lender to any Borrower (a "Default") pursuant to the terms and conditions of the Lender Commitment, which Is continuing and has not been waived by the Lender, and BDC and the Borrowers have received written notice (a "Default Notice”) from the Lender demanding the commencement of a Payment Standstill (as hereinafter defined) and stating that such Default has occurred and Is continuing and containing a description of such Default in reasonable detail, then the Borrowers shall not, unless the particular Default referenced in the Default Notice has been cured (as confirmed by the Lender in writing), be entitled to make to BDC, and BDC shall not be entitled to receive from the Borrowers (other than the proceeds of any property and assets over which the BDC Security has priority over the Lender Security in accordance with Section ]3,01), any regularly scheduled payments of principal, Interest or royalties or any payment of jExcess Available Funds (as defined in the BDC Offer) (the "Payment Standstill”) until the earlier j

( of any of the following events or dates has occurred; ;

(a) the date which is ninety (90) days following the date the Default Notice was Issued; .

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(b) the Default described in the Default Notice Is cured by the Borrowers or any other person on their behalf;

(c) the Lender has taken steps to enforce the Lender Security or any part thereof;

(d) all Indebtedness of the Borrowers to the Lender under the Lender Commitment has been repaid; or

(e) any proceedings have been initiated by or against the Borrowers under the Bankruptcy and Insolvency Act (Canada), the Companies' Creditors Arrangement Act (Canada) or any similar statute or law in any jurisdiction of similar application, by the Lender or any creditor other than BDC,

5,02 The Lender and BDC acknowledge that the Lender shall not Issue a subsequent Default Notice unless the Borrowers’ default with the Lender at the time of the Issuance of the prior Default Notice was subsequently cured,

5.03 The Lender hereby confirms and agrees with BDC that the Lender may not exercise Its rights under section 6,01 such that the cumulative period of one or more Payment Standstill exceeds or will exceed one hundred and twenty (120) days In any consecutive twelve month period. For purposes of clarification, the foregoing limitation shall not restrict the Lender from Issuing letters of default to the Debtors on the occurrence of any event of default.

( 5.04 The Lender covenants and agrees to give written notice to BDC forthwith after any Default hasbeen cured.

6,06 The Lender hereby confirms and agrees with BDC that after the expiration of any Payment Standstill provided for herein BDC shall be entitled to receive and the Borrowers shall be obligated to pay to BDC all payments of arrears which would have been paid during the Payment Standstill had the Payment Standstill not been Invoked by the Lender Including Interest on such outstanding payments, provided that the payment of arrears does not create a subsequent Default, Nothing herein shall obligate the Lender to make credit facilities available to the Borrowers In an amount required to satisfy any of Its obligations to BDC,

5,06 BDC shall not be entitled to exercise any rights it may have to enforce the BDC Security during any Payment Standstill. Notwithstanding the foregoing, BDC may during a Payment Standstill (I) file a proof of claim or attend and vote at a meeting of creditors In connection with any action, suit or proceeding whether under the Bankruptcy and Insolvency Act (Canada) or otherwise, (II) take action for non-payment of the Indebtedness owing to BDC for the purposes of obtaining a monetary judgement in respect thereof, provided that no measure is taken to enforce any Judgment granted In such action, (III) take action that is required to preserve the validity, efficacy or priority of the BDC Security, (Iv) take action for conversion of any non-fixed charge to a fixed charge to the extent applicable, and/or (v) give notice of default, demand for payment or acceleration of the Indebtedness owing,

5.07 Notwithstanding the provisions of Section 5.01, the Lender may not deliver a Default Notice to implement or enforce a Payment Standstill in respect of a Default which relates to or arises from or is In connection with any amendment, restatement, modification, supplement or replacement to the Lender Commitment unless such amendment, restatement, modification, supplement or replacement has been approved in writing by BDC,

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ARTtCLE 6- GENERAL

6.01 From time to time upon request therefor BDC and the Lender may advise each other of the particulars of the indebtedness and liability of the Debtors to each other and all security held by each therefor. The Debtors hereby consent to any such exchange of Information.

6.02 BDC and the Lender each agree that It will not transfer or assign any of its security from the Debtors without first obtaining from the proposed assignee or transferee an agreement to be bound by the provisions of this Agreement and an acknowledgment that this Agreement shall apply to both financing advanced prior to and subsequent to the date of such assignment or transfer,

6.03 Prior to making any demand for payment on the Debtors or proceeding to enforce its security, BDC or the Lender, as the case may be, shall provide notice of such demand or enforcement to the other of them, provided, however, that neither shall be liable for any accidental omission to provide the said notice, and further provided that nothing In this section Is Intended to waive or relieve against the specific notice requirements set out In section 3.06 of this Agreement,

6,04 Any notice required or permitted to be given pursuant to this Agreement shall be In writing and shall be addressed and delivered to the parties hereto as follows;

for BDC; 121 King Street West, Suite 1200Toronto, Ontario M5H 3T9

Attention: Managing Director, Subordinate Financing

for the Lender; 6001 Yonge StreetToronto, Ontario M2N 6P6

Attention: Owen Chiu, Senior Account Manager

Any communication so given will be deemed to have been given and to have been received on the day of delivery if so delivered, or on the day of facsimile transmission or sending by other means of recorded electronic communication provided that such day Is a business day and the communication Is so delivered or sent prior to 4;30 p.m, (local time at the place of receipt). Otherwise, such communication will be deemed to have been given and to have been received on the following business day, Any communication sent by mall will be deemed to have been given and to have been received on the fifth business day following mailing, provided that no disruption of postal service Is in effect. The parties may from time to time change their respective addresses or facsimile numbers for notice by giving notice to the other In accordance with the provisions of this Section.

8.06 Each of the Debtors, BDC and the Lender shall do, perform, execute and deliver all acts, deeds and documents as may be necessary from time to time to give full force and effect to the Interests of this Agreement; provided however, that no consent of the Debtors shall be necessary to any amendment of the terms hereof by BDC and the Lender unless the Interests of the Debtors are directly adversely affected thereby.

6.06 This Agreement may be executed In several counterparts, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same

( Instrument and shall be effective as of the formal date hereof.

Page 7

(

6,07 This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

6,08 This Agreement shall be governed by and construed in accordance with the laws of the provinceIn which the business centre of the BDC is located as described on page 1.

6.09 The Lender or BDC may terminate this Agreement with respect to any future advances ofIndebtedness made to any of the Borrowers by the other by notice to the other in writing, such termination to be effective thirty (30) days after receipt, but any such termination shall In no manner affect or Impair any of the rights, interests or priorities created or acquired hereunder or any security Interest of any of the Lender or BDC In any of the Debtors’ assets obtained prior to the effective date of termination. Notwithstanding the foregoing, BDC hereby consents to the Borrowers incurring principal obligations to the Lender for line of credit facilities (based on regular margining formulas) of up to $3,250,000 in the aggregate.

(Signatures appear on the following two pages)

Page8

(N WITNESS WHEREOF the parties hereto have executed this Agreement under the hand(s) of their duly authorized offioer(B) on the date first above written,

l/we have the authority to bind the bank,

AVG (OEM) INO

Per;

Per;

i

I have the authority to bind the Corporation.

(

Page 9

SlyMutv Pm - BOC-RgC Priority Agraemanl

(

IN WITNESS WHEREOF the parties hereto have executed this Agreement under the hand(s) of their duly authorized officer(s) on the date first above written.

BDG CAPITAL INC.

Per;______________Name;

Per;_______________________ __ _________Name;

We have the authority to bind the Corporation.

ROYAL BANK OF CANADA

Per: ______

Name; Title: ^

Per; __ ____

Name; Title: _

l/we have the authority to bind the bank.

i


(

Pago 9

Signature Page - BDC-RBC Priority Agreement

(

AVG(OEAM) INC.

Per;

Per:I '


NATIONAL AUTOMOTIVE CUSTOMIZERS INC.

/t -


1598320 ONTARIO INC.

Per: ___________

Per:


(

Page 10

Sfanatm Pm - BDC-RHC Priority Agrooment

TAB 3(j)

RCAP- - ................................ - -------- ------------ ----------- RCAP® teasing Inc. 'LEASING 5575 North Service Road

Suite 300Burlington, ONL7L 6M1

Tel 1 866 876-3695 Fax 1 800 436-0884 www,rcapleasing.com

September 10, 2014

Royal Bank

Dear Sir/Madam,

Lease Reference No.; Customer;File No.:Registration No.;

317406 - 259021 AVG (OEAM) INC 69378152420140213103280775598

Further to your request, our financing statement as described above, perfects a security interest in the following equipment as described under ‘‘Description of Equipment on Lease” and is restricted thereto;

Description of Equipment on Lease

(1) Toshiba e-studio 4540 Colour/Black System, serial number CMF329787, (1) Automatic Document Feeder, serial number MPE312441, (1) Duplex Module (double-sided), (1) 550 Sheet Letter Drawer, (1.) 550 Legal Drawer, (1) 550 Letter R Drawer, (1) 550 Sheet Ledger- Drawer, (1) 100 Stack By Pass, (1) Printer Network PCL/PS/LFSB/Emai1/Scanner/Fax Module and all proceeds thereof,

The undersigned acknowledges and confirms that the following financing statements registered under the Personal Property Security Act (collectively, the “Registrations”) perfect a security interest only in the personal property of AVG (OEAM) INC(the “Debtor”) set out on the Description of Equipment on Lease mentioned above or •Schedule “A” attached hereto, together with all attachments, accessories and additions 1 thereto and all proceeds derived therefrom and any and all proceeds derived from such equipment, including but not limited to any and all insurance proceeds (collectively, tire “RCAP® I/easing Collateral”). The undersigned confirms that it has no security interests other than the RCAP® Leasing Collateral,

The undersigned agrees that it will not use the Registrations to perfect a security interest in any personal property of the Debtor other than the RCAP® Collateral. For greater certainty, the foregoing shall not limit the right or ability of the undersigned to enter into further agreements with the Debtor and to make additional registrations or other filings hi respect of such agreements.

Page 1/2

This security interest confirmation letter shall enure to the benefit of the addressees and their respective successors and assigns and shall be binding upon the undersigned and its successors and assigns.

We trust the foregoing is satisfactory,

Respectfully,

RCAP® Leasing Inc,

Pnge 2/2

TAB 3(k)

E'FORM 3406 (12/2014)RBCRoyal Bank

TORONTO EAST CFS SUPPLY CHAIN 111 GRANGEWAY AVE 2ND FLR SCARBOROUGH ON M1H 3E9

Date: September 11, 2015

1028312 B.C. LTD.1400 - 510 BURRARD STREET VANCOUVER BC V6C3A8

Dear Sirs:

RE: AVG (OEAM) INC. ("DEBTOR")Our Ref # 311-166-573

Royal Bank of Canada (the "Bank") is providlng/may in the future provide credit facilities and other products and services to the Debtor.

In order to induce the Bank to continue to provide/provide those credit facilities, products and services, would you please, by signing and returning to us, the enclosed duplicate copy of this letter, confirm that:

(a) Any security interest you may have, now or in the future, in any property of the Debtor, present orfuture, is hereby postponed and subordinated in all respects to the security interest of the Bank in any such property.

(b) The priority of the Bank shall apply in all events and circumstances regardless of the date of execution, attachment, registration or perfection of any security interest held by the Bank, or you, the date of any advance or advances made to the Debtor by the Bank or you, the date of any default by the Debtor under any agreement with the Bank, or you or the date of crystallization of any floating charge held from the Debtor by the Bank or you, or any priority granted by any principle of law or any statute,

(c) Any proceeds of insurance or expropriation received by the Debtor, the Bank, or you, with respect toany collateral in which we have a security interest, shall be dealt with as though such proceeds ofinsurance or expropriation were paid or payable as proceeds of realization of the collateral for which they compensate.

<t> ReQist&fed trademark of Royal Bank of Canada. RBC snd Royal Bank aro roglsfered trademarks of Royal Bank of Canada,

E-FORM 3406 II 2/2014)

(d) The Bank will have no obligation to you with respect to any monies at any time in any account of the Debtor maintained with the Bank (other than an account designated by the Debtor as a "trust" account and established for your benefit) or any monies that may be deposited in or disbursed from any such account, except for monies which are deposited after the Bank has received at its address noted above written notice from you that you are enforcing your security against the Debtor and which the Bank has determined are not subject to the security interest and priority of the Bank,

(e) The Bank may act as your agent for the purpose of making any registrations or filings the Bank considers necessary or desirable, including the registration of any Financing Change Statement at the Personal Property Registry, with respect to the subordination and postponement of your security interest contained in this letter,

Yours truly,

ROYAL BA{|< QF CANADA

Per:OWEITCHIU ACCOUNT MANAGER

I/We hereby confirm our agreement with the provisions of this letter.

Per:

1028312 B.C, LTD.

Per:

Director September 25, 2015

TAB 3(l)

()0/,U/2O14 14:37 FAX ®0001/0002

BO Micro Court, Ste S00 Merl(horr), Ontario U3R OZ0

t-OQd-S13-S940

Fax TransmittalDate September 10, 2014

To

Name: Karim SulemanCompany Name; AVG (OEAM) INCFax Number: 1-416-321-8147

From

Name: Deborah JohnstonFax-Number------ N800-b65-494-8-or-905-51-3-9-7-76-------- —-——~Phone Number; 1-800-661-3062 or 905-513-8200

Please call Immediately if dll pages are not received.

.. V ' — 1 '■Message

Client: A VG (OEAM) INC.

PPSA Waiver letter

Statement of ConfidentialityThe document^) included with this fox transmittal confain(s) information, which may he privileged and/or confidential. This Information is Intended for the addressee named on the cover sheet, If you are not the nddressee, note that any disclosure, copying, distribution and/or use of the contents oi* this faxed information Is prohibited,

09/11/2014 14:37 PAX 0 0002/0002

P.Q, Box 4060Markham, OnUrlo, L.0R 0M81-000-ZOLRXU3www,l»XMBfmartolnlB0)Vleoa,fla Lease II3-S40I336S9I

ACKNOWLEDGEMENT

FROM: TOYOTA CREDIT CANADA INC ("TCCI")

TO: ROYAL BANK OF CANADA

RE: AVG OEAM INC, (“DEBTOR”)

REGISTRATION# 20121123 10491529 7567

PILE # 683076681

The undersigned, TCCI, hereby acknowledges that the only security interest granted by the Debtors) as noted above to TCCI for the above-referenced PPSA filing is a security interest in a:

2013 LEXUS GS 350 JTHCE1BL7D5011578

and any proceeds arising therefrom (The "Collateral”).

the undersigned will not roly on the Registrations to perfect a security interest in any assets of the Debtor other than the Collateral,

Dated this 1011' dav of September. 2014TOYOTA CREDIT CANADA INC.

By! Deborah Johnston Customer Service

Breniln Yulowlcn CJnCapUitt Coi'poi'nflfJil /typ, Invethneni Controt Tel: 41(5-621-55^2,223 FAX: 4J6'621-0522 o-tnall; bvHlowlo«(g>Hftca|)it(il,oa

September 9,2014

Royal Bank of Canada

RE: National Automotive Customizers Inc, (hereafter the “Debtor”)PPSA Registration No. 20120911 1702 1462 7375 File No. 681367257 (“Current PPSA Registration(s)”)

LiftCapital Corporation will continue to hold a security interest in the. equipment listed on Schedule “A” attached and the proceeds, thereof; until such time that ail financial obligations with LiftCapital Corporation have been completed in fUU.

LiftCapital Corporation, agrees that it will only use its Current PPSA Registration(s) against the Debtor to perfect a security interest in the personal property listed on the Schedule “A” attached and the proceeds thereof and that LiftCapital Corporation, will not rely on its Current PPSA Registration(s) to create or perfect any security interest, mortgage, charge or other encumbrance on any other assets of the Debtor,

This letter shall enure to the benefit of the addressee and its respective successors and assigns and shall be binding upon the undersigned and its respective successors and assigns,

Yours truly,LiftCapital Corporation

Brenda YNpwlca AVP, Investment Control

E&OB

300 The Bast Mall Suite 401 Toronto, Ontario M9B 6B7

SCHEDULE “A'’

One (1) 2007 Toyota 7FBEU15 Lift truck n/n 17227 c/w One (1) C&D Batteiy and One (1) C&D Charger

Complete with all parts, attachments, accessories, additions, batteries, chargers, repair parts, and other equipment placed on or forming part of the goods described herein,

300 The Bast Mall Suite 401 Toronto, Ontario M9B6B7

TAB 3(m)

TAB 3(n)

".rr^ ■ L'Erxi'^

Sanjeev Mitra Direct: 416.865.3085

E-mail:[email protected]

February 20, 2019

DELIVERED BY COURIER

PERSONAL AND CONFIDENTIAL AND TO BE OPENED BY ADDRESSEE ONLY

AVG (OEAM) INC.Unit 1605 Middlefield Road Scarborough, ON M1V 5B9

Attention: Karim Suleman

Dear Sir

RE: Royal Bank of Canada (“RBC”) loans to AVG (OEAM) INC. (the “Debtor”)

We are the lawyers for RBC in connection with its lending arrangements with the Debtor.

The Debtor is indebted to RBC with respect to certain credit facilities (the “Credit Facilities”) made available by RBC to the Debtor pursuant to and under the terms of a loan agreement dated September 13, 2017 (as subsequently amended, replaced, restated or supplemented from time to time, including by the amendments dated February 14, 2018 and June 22, 2018,the “Credit Agreement”).

The following amounts are owing for principal and interest under the Credit Facilities as of February 20, 2019:

Revolving Demand Loan 07512 75219253 001 (Facility 1) $1,957,864.05

Non-Revolving Term Facility 07512 75219253 005 (Facility 3) 7,657,243.15

VISA 49,079.35

Legal Fees $13,984.14

Total $9,678,170.69

Events of default have occurred under the Credit Agreement. Without prejudice to any further remedies or rights, on behalf of RBC, we hereby make formal demand for payment of all Credit Facilities and legal fees incurred in the sum of $9,678,170.69, together with accruing interest and any and all costs and expenses (including, without limitation, legal and other professional fees) incurred by RBC (the “Indebtedness”). Interest continues to accrue on the Indebtedness at the rates established by the Credit Agreement, and any other agreement, as applicable.

Aird & Berlis LLP Brookfield Place, 181 Bay Street, Suite 1800, Toronto, Canada M5J 2T9 416.863,1500 416.863,151b airdberlls.com

mailto:[email protected]

2

The Indebtedness and the obligations under the Credit Agreement are secured by, inter alia a general security agreement granted by the Debtor which grants RBC, amongst other things, a security interest in any of and all of the Debtor’s present and after acquired personal property (the "Property”); and

If payment of the Indebtedness is not received immediately, RBC shall take whatever steps it considers necessary or appropriate to collect and recover the amounts owing to it, including, without limitation, steps to appoint an interim receiver, receiver or receiver and/or manager of the Debtor and/or the commencement of power of sale proceedings with respect to the Property, in which case RBC will also be seeking all costs incurred in so doing.

On behalf of RBC, we enclose a Notice of Intention to Enforce Security delivered pursuant to subsection 244(1) of the Bankruptcy and Insolvency Act (Canada) (the “BIA Notice ”).

RBC hereby reserves its rights to initiate proceedings within the ten (10) day period set out in the BIA Notice, if circumstances warrant such proceedings.

Please govern yourself accordingly.

Yours truly,

AIRD & BERLIS LLP

Sanjeev Mitra

SPRV/cpEnel.

cc: Client

Note: This Notice is given for precautionary purposes only and there is no acknowledgement that any person to whomthis Notice is delivered is insolvent, or that the provisions of the Bankruptcy and Insolvency Act apply to theenforcement of this security.

3

NOTICE OF INTENTION TO ENFORCE SECURITY (Bankruptcy and Insolvency Act, Subsection 244(1))

Delivered By Courier

TO: AVG (OEAM) Inc.Unit 1,605 Middlefield Road Scarborough, ON M1V 5B9

insolvent company / person

TAKE NOTICE that:

1. Royal Bank of Canada (“RBC”), a secured creditor, intends to enforce its security on the property, assets and undertakings of AVG (OEAM) Inc. (the “Debtor”), including, without limiting the generality of the foregoing, all the equipment, accounts, proceeds, books and records, inventory, leaseholds and all other personal property interests of the Debtor.

2. The security that is to be enforced is the following:

a general security agreement between the Debtor and RBC which grants RBC, amongst other things, a security interest in the undertaking of Debtor and in all of Debtor’s present and after acquired personal property (the “Security ”);

Accounts Receivable Security Agreement between the Debtor and RBC dated September 18, 2014; and,

Inventory Security Agreement between the Debtor and RBC dated September 18, 2014.

3. As at February 20, 2019, the total amount of the indebtedness secured by the Security is the sum of $9,678,170.69 in principal and interest, plus accruing interest and recovery costs of RBC (including, without limitation, RBC’s legal and other professional fees).

4. RBC will not have the right to enforce the Security until after the expiry of the ten (10) day period after this notice is sent, unless the Debtor consents to an earlier enforcement.

DATED at Toronto this 20th day of February, 2019.

ROYAL BANK OF CANADA by its lawyers, Aird & Beriis LLP

Per: _______________________Sanjeev P.R. Mitra

Brookfield Place, Suite 1800 181 Bay Street, Box 754 Toronto, ON M5J 2T9 Tel: 416-863-1500Fax: 416-863-1515

Note: This Notice is given for precautionary purposes only and there is no acknowledgement that any person to whomthis Notice is delivered is insolvent, or that the provisions of the Bankruptcy and Insolvency Act apply to theenforcement of this security.

TAB 3(o)

karim

Rectangle

TAB 3(p)

TAB 3(q)

AIRD BERLIS



July 2, 2019

DELIVERED VIA COURIER

PERSONAL AND CONFIDENTIAL AND TO BE OPENED BY ADDRESSEE ONLY

AVG (OEAM) Inc.Unit 1605 Middlefield Road Scarborough, ON M1V 5B9

Attention: Karim Suleman and Ayaz Somani

Dear SirsRE: Royal Bank of Canada (“RBC”) loans to AVG (OEAM) INC. (the “Debtor”)

As you know, we are the lawyers for RBC in connection with its lending arrangements with the Debtor.

The Debtor is indebted to RBC with respect to certain credit facilities (the “Credit Facilities”) made available by RBC to the Debtor pursuant to and under the terms of a loan agreement dated September 13, 2017 (as subsequently amended, replaced, restated or supplemented from time to time, including by the amendments dated February 14, 2018 and June 22, 2018, the “Credit Agreement”).

The following amounts are owing for principal and interest under the Credit Facilities as of July 2, 2019:

Revolving Demand Loan 07512 75219253 001 (Facility 1) $2,177,588.81

Non-Revolving Term Facility 07512 75219253 005 (Facility 3) 7,536,308.22

VISA 68,471.72

Legal Fees 30,801.99

Total $9,813,170.74

The Debtor is in default of its obligations to RBC under the Credit Agreement. RBC, through its counsel, issued a demand letter and a notice of intention to enforce security dated February 20, 2019. Further correspondence and discussions ensued between RBC and the Debtor. On April 9, 2019, RBC delivered a letter to the Debtor, which was acknowledged and agreed by the Debtor on April 12, 2019 (the “Standstill Letter”), a copy of which is enclosed. The standstill period under the Standstill Letter was through to July 31, 2019 (the “Standstill Period”).

Aird & Berlis LLP Brookfield Place, 181 Bay Street, Suite 1800, Toronto, Canada M5J 2T9 416.863.1500 416.863.1515 airdberlis.com


2

The Standstill Letter contained a number of conditions, including that:

a) the Debtor develop a plan to supplement the collateral to be provided to RBC in support of the Credit Agreement, and that documentation satisfactory to RBC to grant a first charge in the additional security be executed and delivered to RBC on or before May 30, 2019 (the “Additional Security”); and

b) the Debtor provide to RBC fiscal 2019 year-end financial statements (the “2019 Financial Statements”) prepared by its accountants, on or before June 30, 2019, along with supporting analysis.

As of the date of this letter, the Debtor has not provided the Additional Security nor the 2019 Financial Statement and accompanying analysis, each of which constitutes an "Intervening Event” under the Standstill Letter. The Standstill Period therefore has come to an immediate end. The Debtor has further failed to cure the defaults as previously communicated to you existing under the Credit Agreement

As such, RBC hereby makes formal demand for payment of $9,813,170.74 being the amount due under the Credit Agreement, together with interest and all costs and expenses (including, without limitation, legal and other professional fees) incurred by RBC (the “Indebtedness”). Payment is required to be made immediately. Interest continues to accrue on the Indebtedness.

The Indebtedness and the obligations under the Credit Agreement are secured by, inter alia a general security agreement granted by the Debtor which grants RBC, amongst other things, a security interest in any of and all of the Debtor’s present and after acquired personal property (the "Property"); and

If payment of the Indebtedness is not received immediately, RBC shall take whatever steps it considers necessary or appropriate to collect and recover the amounts owing to it, including, without limitation, steps to appoint an interim receiver, receiver or receiver and/or manager of the Debtor and/or the commencement of power of sale proceedings with respect to the Property, in which case RBC will also be seeking all costs incurred in so doing.

On behalf of RBC, we enclose a Notice of Intention to Enforce Security delivered pursuant to subsection 244(1) of the Bankruptcy and Insolvency Act (Canada) (the “BIA Notice”).

RBC hereby reserves its rights to initiate proceedings within the ten (10) day period set out in the BIA Notice, if circumstances warrant such proceedings.

Please govern yourself accordingly.

Note: This Notice is given for precautionary purposes only and there is no acknowledgement that any person to whomthis Notice is delivered is insolvent, or that the provisions of the Bankruptcy and Insolvency Act apply to the enforcementof this security.

3

SPRV/cpEnel.

cc: Client


NOTICE OF INTENTION TO ENFORCE SECURITY {Bankruptcy and Insolvency Act, Subsection 244(1))

Delivered By Courier

TO: AVG (OEAM) Inc.Unit 1,605 Middlefield Road Scarborough, ON M1V 5B9

insolvent company / person

TAKE NOTICE that:

1. Royal Bank of Canada (“RBC”), a secured creditor, intends to enforce its security on the property, assets and undertakings of AVG (OEAM) Inc. (the “Debtor”), including, without limiting the generality of the foregoing, all the equipment, accounts, proceeds, books and records, inventory, leaseholds and all other personal property interests of the Debtor.

2. The security that is to be enforced is the following:

a general security agreement between the Debtor and RBC which grants RBC, amongst other things, a security interest in the undertaking of Debtor and in all of Debtor’s present and after acquired personal property (the “Security”);

Accounts Receivable Security Agreement between the Debtor and RBC dated September 18, 2014; and,

Inventory Security Agreement between the Debtor and RBC dated September 18, 2014.

3. As at July 2, 2019, the total amount of the indebtedness secured by the Security is the sum of $9,813,170.74 in principal and interest, plus accruing interest and recovery costs of RBC (including, without limitation, RBC’s legal and other professional fees).

4. RBC will not have the right to enforce the Security until after the expiry of the ten (10) day period after this notice is sent, unless the Debtor consents to an earlier enforcement.

DATED at Toronto this 2nd day of July, 2019.

Brookfield Place, Suite 1800 181 Bay Street, Box 754Toronto, ON M5J 2T9 Tel: 416-863-1500Fax: 416-863-1515


TAB 3(r)

TAB 3(s)

TAB 3(t)

TAB 3(u)

TAB 3(v)



October 16, 2019

DELIVERED VIA EMAIL

Hooey Remus Barristers & Solicitors 210-333 Bay Street Toronto, ON M5J 2T9

Attention: W. Bruce Drake

AND TO

MacDonald Sagar Manis LLP Barristers & Solicitors 150 York Street, Suite 800 Toronto, ON M5H 3S5

Attention: Howard Manis

Dear Sirs RE: Royal Bank of Canada (“RBC”) v AVG (OEAM) INC. (the “Debtor”) et al.

As you are aware, our clients are party to a credit agreement dated September 13, 2017 (as subsequently amended, replaced, restated or supplemented from time to time, the “CreditAgreement”). Following issuance of formal demands for repayment of amounts owed under the Credit Agreement, RBC and the Debtor entered into a forbearance agreement dated August 30, 2019 (“Forbearance Agreement”) to permit the Debtor and the guarantors additional time to indefeasibly repay amounts owed to RBC.

On September 26, 2019, we wrote to Mr. Drake to advise of Intervening Events which had arisen under the Forbearance Agreement. The Debtor confirmed that it would be unable to obtain new financing within the time frames it committed to. Further, the foregoing letter outlined that the Debtor’s operating line debt was in excess of what it qualified for under the Credit Agreement. The Debtor confirmed that it did not have the capability to repay the line to the appropriate level. The Debtor requested a lengthy extension of the Forbearance Period and the bank indicated that in order to consider the Debtor’s request for an extension of the Forbearance Period, RBC would require an external review of the affairs of the Debtor.

Based on information supplied to it by the Debtor, BDO Canada Limited has now completed the review of the Debtor’s affairs and prepared a report. Your client has already been provided with a copy of the report which indicates that the Debtor and its principals have been providing falsified financial reporting to RBC for some time. Based on the falsified reporting, the Debtor was able to obtain credit from RBC which the Debtor and its principals knew or ought to have known the Debtor was not entitled to receive under the terms of the Credit Agreement. Based on

2

the now accurate information provided to our client, and confirmed by BDO, the Debtor has a substantially diminished borrowing base resulting in substantially less credit availability than is currently outstanding on the operating line of credit.

The foregoing constitutes one or more Intervening Events pursuant to the terms of the Forbearance Agreement. Please take notice that the Forbearance Period is hereby terminated under section 7.1. Subject to the execution and return of the attached letter by your clients by 12:00p.m. tomorrow, your client will have until the meeting of 1:00 p.m. on October 22, 2019 to provide a concrete plan to immediately and indefeasibly repay our client all amounts owed pursuant to the Credit Agreement and Forbearance Agreement. Absent arrangements satisfactory to RBC, our client will be taking steps to protect its interest and recover amounts owed to it.

Please also take notice that all services afforded to the Debtor with transactional credit limits have been cancelled with any electronic transfer requests now being set to fund against available balances only. Without prejudice to any rights that RBC may have, the Debtor can continue to conduct transfers on its accounts either through the branch or online provided there are sufficient cleared funds available to meet these requests.

Please note that our client is not waiving any events of default or intervening events under its agreements with the Debtor. RBC is also not waiving any rights or remedies at contract or law which are specifically reserved and which may be exercised forthwith.

3

Assuming your clients are prepared to agree to the foregoing arrangement, please deliver an executed version of this letter no later than 12:00 p.m. on October 17, 2019. Absent receipt of the foregoing, my client will be left with little option to pursue its remedies at contract and law.

Yours truly,

AIRD & BERLIS LLP

Sanj Mitra

Sanjeev Mitra

cc: Client

Acknowledged and Agreed by this day of October, 2019 AVG (OEAM) INC.

By: Name: Authorized Signatory

1598320 ONTARIO INC


4

AVG (OEM) INC.


NATIONAL AUTOMOTIVE CUSTOMIZERS INC.


AYAZ MADAT SOMANI, IN HIS CAPACITY AS EXECUTOR OF THE ESTATE NASEEM SOMANI

______________________________________WITNESS: Ayaz Somani

) )

WITNESS: ) Ayaz Somani ) )

) )

WITNESS: ) Karim Suleman ) )

37560162.2

TAB 3(w)

TAB 3(x)

Court No. 'l-0R-'Zc^4)S

ONTARIOSUPERIOR COURT OF JUSTICE

IN BANKRUPTCY AND INSOLVENCY

IN THE MATTER OF THE BANKRUPTCY OF AVG (OEAM) INC.,

of the City of Scarborough, in the Province of Ontario

APPLICATION FOR BANKRUPTCY ORDER

Royal Bank of Canada (“RBC”) hereby applies to the Court that AVG (OEAM) Inc. (the “Debtor”) be adjudged bankrupt and that a bankruptcy order be made in respect of the property of the Debtor, of the City of Scarborough, in the Province of Ontario, which most recently carried on business at 605 Middlefield Drive, Suite 1, in the City of Scarborough, in the Province of Ontario, and say:

1. THAT the said Debtor has most recently carried on business at 605 Middlefield Drive, 1, in the City of Scarborough, in the Province of Ontario, within the jurisdiction of this Court.

2. THAT the said Debtor is justly and truly indebted to RBC in the sum of $9,812,943.74 as at October 24, 2019 plus professional fees (including legal fees) and accruing interest.

3. THAT RBC holds security for the payment of part of the said sum and it estimates the value of such security at the sum of $1,000,000 as at November 6, 2019.

4. THAT the said Debtor, within the six months next preceding the date of the filing of this application, has committed the following act of bankruptcy, namely:

(a) it has ceased to meet its liabilities generally as they become due, in that its has failed to pay its obligations to the applicant, RBC when due;

(b) the Debtor has made a fraudulent gift, delivery, or transfer of the Debtor’s property or any part of it;

(c) the Debtor has made a transfer of its property or any part of it that would under the Bankruptcy and Insolvency Act be void as a fraudulent preference; and,

(d) it has assigned, removed, secreted or disposed of or has attempted or is about to assign, remove, secrete or dispose of its property with intent to defraud, defeat or delay its creditors, or any of them.

-2-

5. THAT msi Spergel inc., of the City of Toronto, in the Province of Ontario, is a person qualified to act as trustee of the property of the said Debtor, has agreed to act as such, and is acceptable to the undermentioned creditor:

CreditorRoyal Bank of Canada

Address20 King Street West 9th FloorToronto, Ontario M5H 1C4

Amount of Debt$9,812,943.74 (plus professional fees (including legal fees) and accruing interest)

- 3 -

DATED at Toronto this 8th th day of November, 2019

Signed by the applica: in the presence of:


(signature of Witness)

ISSUED at the City of Toronto, in the Province of Ontario, this____day of November,2019.

Registrar it/B^rkruptcyMaster M.V

T(\ ft

Court No.IS — |



IN THE MATTER OF THE BANKRUPTCY OF AVG (OEAM) INC.,

of the City of Scarborough, in the Province of Ontario

AFFIDAVITI, Roderick Moran, of the City of Toronto, in the Province of Ontario, MAKE

OATH AND SAY AS FOLLOWS:

1. THAT I am a Director of the Special Loans & Advisory Services Department of the applicant creditor herein, and as such have knowledge of the facts hereinafter deposed to.

2. THAT AVG (OEAM) Inc. is justly and truly indebted to Royal Bank of Canada in the sum of $9,812,943.74 as at October 24, 2019 plus professional fees (including legal fees) and accruing interest, as stated in the said application.

3. THAT the facts alleged in the said application are within my own knowledge true.

SWORN BEFORE ME at the City of Toronto, this 8th day of November, 2019

)))

) Roderick Moran)

TO: AVG (OEAM) Inc., the debtor Court No. 3 \ -I''TAKE NOTICE that a application that a bankruptcy order be made in respect of your property will be heard before the Registrar in Bankruptcy (or if unopposed, before the Registrar in Chambers), at 393 University Avenue, IqHn Floor, in the City of Toronto, on Tu<4 day, the jilt day of December, 2019 at the hour of 10:00 o’clock in the forenoon, or so soon thereafter as the application can be heard.

AND FURTHER TAKE NOTICE that if notice of cause against the application is not filed in Court and a copy thereof served on the solicitor for the applicant creditor at least two days before the hearing and if you do not appear at the hearing the Court may make a bankruptcy order on such proof of the statements in the application as the Court shall think sufficient.

DATED at Toronto this grt. day ofNovember, 2019.

TO: AVG (OEAM) Inc.Unit 1605 Middlefield Road Scarborough, ON M1V 5B9



IN THE MATTER OF THE BANKRUPTCY OF

AVG (OEAM) INC.,of the City of Scarborough, in the Province of

Ontario

APPLICATION FOR BANKRUPTCY ORDER

AIRD & BERLIS LLP

Barristers and Solicitors Suite 1800, Box 754

181 Bay Street Toronto, ON M5J 2T9

Sanjeev P.R. Mitra (LSUC #37934U) Shakaira John (LSUC 72263D)

Tel: 416.863.1500Fax: 416.863.1515

Lawyers for Royal Bank of Canada

37776241.3

TAB 3(y)

Court File No: 31-OR-208415-T

ONTARIO

SUPERIOR COURT OF JUSTICE


IN THE MATTER OF THE BANKRUPTCY OF

AVG (OEAM) INC.

OF THE CITY OF SCARBOROUGH, IN THE PROVINCE OF ONTARIO

NOTICE OF DISPUTE

TAKE NOTICE that AVG (OEAM) INC. (“AVG”) of the Province of Ontario

hereby disputes the application for a Bankruptcy Order on the following grounds:

1. That AVG has not committed the acts of bankruptcy referred to in the Bankruptcy

Application within the six months preceding the Bankruptcy Application or any

other act of bankruptcy.

2. That AVG has not ceased to meet its liabilities generally as they fall due.

3. That a bankruptcy will serve no purpose.

4. AVG denies that the Applicant is entitled to the relief sought.

December 13, 2019 MACDONALD SAGER MANIS LLP

Lawyers

150 York Street, Suite 800

Toronto, Ontario

M5H 3S5

Howard F. Manis – LSO#34366V

Tel: (416) 364-5289

Fax: (416) 364-1453

[email protected]

Lawyers for Respondent, AVG (OEAM) Inc.

TO: AIRD & BERLIS LLP Barristers and Solicitors

Suite 1800, Box 754

181 Bay Street

Toronto, Ontario

M5J 2T9

Sanjeev P. R. Mitra – LSO# 37934U

Shakaira John – LSO# 72263D

Tel: (416) 863-1500

Fax: (416) 863-1515

Lawyers for the Applicant, Royal Bank of Canada


IN THE MATTER OF THE BANKRUPTCY OF AVG (OEAM) INC., OF THE CITY OF SCARBOROUGH, IN THE

PROVINCE OF ONTARIO

Court File No: 31-OR-208415-T

ONTARIO



NOTICE OF DISPUTE

MACDONALD SAGER MANIS LLP

Lawyers

150 York Street, Suite 800

Toronto, Ontario

M5H 3S5

Howard F. Manis – LSO#34366V

Tel: (416) 364-5289

Fax: (416) 364-1453

[email protected]

Lawyers for Respondent, AVG (OEAM) Inc.


TAB 3(z)

(\03 $U

pCourt File No.CV-19-00631451-00CL

ONTARIO


(COMMERCIAL LIST)

THE HONOURABLE ) FRIDAY, THE 1 3th DAY

)

) OF DECEMBER, 2019


- and -

Applicant

AYAZ SOMANI IN HIS CAPACITY AS EXECUTOR OF THE ESTATE OF NASEEMSOMANI

ORDER(appointing Receiver)

Respondent

THIS APPLICATION made by Royal Bank of Canada (“RBC”) for an Order pursuant to

section 243(1) of the Banb-uptcy 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 Deloitte Restructuring Inc. (“Deloitte”) as receiver (in such capacity, the

"Receiver") without security, of: (i) all of the present and after acquired personal property of the

Estate of Naseem Somani (the “Somani Estate” or the “Debtor”) held at National Bank of

Canada and National Bank Financial (the “National Bank Property”); and (ii) the real property

registered in the name of the Somani Estate known municipally as 106 Angus Glen Blvd.,

Markham, Ontario (the “Real Property”), was heard this day at 330 University Avenue,

Toronto, Ontario.

ON READING the affidavit of Roderick Moran sworn November 13, 2019 and the

Exhibits thereto and on hearing the submissions of counsel for RBC, no one appearing for any

-2-

other person on the service list, although duly served as appears from the affidavit of service of

Stefanie Lagace sworn November 26, 2019 and the affidavit of service of Bradley Cook sworn

November 25, 2019 and on reading the consent of Deloitte 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, Deloitte is hereby appointed Receiver, without security, of: (i) the National Bank

Property; and (ii) the Real Property, including all proceeds thereof (the "Property").

RECEIVER’S POWERS

3. THIS COURT ORDERS that the Receiver is hereby empowered and authorized, but not

obligated, to act at once in respect of the Property and, without in any way limiting the generality

of the foregoing, the Receiver is hereby expressly empowered and authorized to do any of the

following where the Receiver considers it necessary or desirable:

(a) to take possession of and exercise control over the Property and any and

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

Property;

(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 Debtor, including the

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

-3 -

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

cease to perform any contracts of the Debtor;

(d) to engage consultants, appraisers, agents, experts, auditors, accountants,

managers, counsel and such other persons from time to time and on

whatever basis, including on a temporary basis, to assist with the exercise

of the Receiver's powers and duties, including without limitation those

conferred by this Order;

(e) to settle, extend or compromise any indebtedness owing to the Debtor;

(f) 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 Debtor, for any purpose pursuant to this Order;

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

proceedings and to defend all proceedings now pending or hereafter

instituted with respect to the Debtor, 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;

(h) to market any or all of the Property, including advertising and soliciting

offers in respect of the Property or any part or parts thereof and

negotiating such terms and conditions of sale as the Receiver in its

discretion may deem appropriate;

(i) 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 $500,000.00, provided that the aggregate consideration

for all such transactions does not exceed $2,500,000.00; and

-4-

(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, and in each case the Ontario

Bulk Sales Act shall not apply.

(j) 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;

(k) 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;

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

Property against title to any of the Property;

(m) 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

Debtor;

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

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

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

owned or leased by the Debtor; and

(o) to take any steps reasonably incidental to the exercise of these powers or

the performance of any statutory obligations.

- 5 -

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 Debtor, and without interference from any other Person.

DUTY TO PROVIDE ACCESS AND CO-OPERATION TO THE RECEIVER

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

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

acting on its instructions or behalf, and (iii) all other individuals, firms, corporations,

governmental bodies or agencies, or other entities having notice of this Order (all of the

foregoing, collectively, being "Persons" and each being a "Person") shall forthwith advise the

Receiver of the existence of any Property in such Person's possession or control, shall grant

immediate and continued access to the Property to the Receiver, and shall deliver all such

Property to the Receiver upon the Receiver's request.

5. THIS COURT ORDERS that all Persons shall forthwith advise the Receiver of the

existence of any books, documents, securities, contracts, orders, corporate and accounting

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

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

storage media containing any such information (the foregoing, collectively, the "Records") in

that Person's possession or control, and shall provide to the Receiver or permit the Receiver to

make, retain and take away copies thereof and grant to the Receiver unfettered access to and use

of accounting, computer, software and physical facilities relating thereto, provided however that

nothing in this paragraph 5 or in paragraph 6 of this Order shall require the delivery of Records,

or the granting of access to Records, which may not be disclosed or provided to the Receiver due

to the privilege attaching to solicitor-client communication or due to statutory provisions

prohibiting such disclosure.

6. THIS COURT ORDERS that if any Records are stored or otherwise contained on a

computer or other electronic system of information storage, whether by independent service

provider or otherwise, all Persons in possession or control of such Records shall forthwith give

unfettered access to the Receiver for the purpose of allowing the Receiver to recover and fully

copy all of the information contained therein whether by way of printing the information onto

-6-

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.

NO PROCEEDINGS AGAINST THE RECEIVER

7. 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 DEBTOR OR THE PROPERTY

8. THIS COURT ORDERS that no Proceeding against or in respect of the Debtor 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 Debtor or the Property are hereby stayed and suspended pending further Order of this Court.

NO EXERCISE OF RIGHTS OR REMEDIES

9. THIS COURT ORDERS that all rights and remedies against the Debtor, 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 Debtor to carry on any business

which the Debtor is not lawfully entitled to carry on, (ii) exempt the Receiver or the Debtor 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.

-7-

NO INTERFERENCE WITH THE RECEIVER

10. 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 Debtor, without written consent of the Receiver or

leave of this Court.

CONTINUATION OF SERVICES

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

Debtor 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 Debtor 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 Debtor's current

telephone numbers, facsimile numbers, internet addresses and domain names, provided in each

case that the normal prices or charges for all such goods or services received after the date of this

Order are paid by the Receiver in accordance with normal payment practices of the Debtor 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

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

payments received or collected 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.

PIPEDA

- 8 -

13. 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 Debtor, and shall return all

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

destroyed.

LIMITATION ON ENVIRONMENTAL LIABILITIES

14. THIS COURT ORDERS that nothing herein contained shall require the Receiver to

occupy or to take control, care, charge, possession or management (separately and/or

collectively, "Possession") of any of the Property that might be environmentally contaminated,

might be a pollutant or a contaminant, or might cause or contribute to a spill, discharge, release

or deposit of a substance contrary to any federal, provincial or other law respecting the

protection, conservation, enhancement, remediation or rehabilitation of the environment or

relating to the disposal of waste or other contamination including, without limitation, the

Canadian Environmental Protection Act, the Ontario Environmental Protection Act, the Ontario

Water Resources Act, or the Ontario Occupational Health and Safety Act and regulations

thereunder (the "Environmental Legislation"), provided however that nothing herein shall

exempt the Receiver from any duty to report or make disclosure imposed by applicable

Environmental Legislation. The Receiver shall not, as a result of this Order or anything done in

pursuance of the Receiver's duties and powers under this Order, be deemed to be in Possession of

any of the Property within the meaning of any Environmental Legislation, unless it is actually in

possession.

-9-

LIMITATION ON THE RECEIVER’S LIABILITY

15. 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

16. 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, but subject to sections 14.06(7),

81.4(4), and 81.6(2) of the BIA.

17. 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.

18. THIS COURT ORDERS that prior to the passing of its accounts, the Receiver shall be at

liberty from time to time to apply reasonable amounts, out of the monies in its hands, against its

fees and disbursements, including legal fees and disbursements, incurred at the standard rates

and charges of the Receiver or its counsel, and such amounts shall constitute advances against its

remuneration and disbursements when and as approved by this Court.

FUNDING OF THE RECEIVERSHIP

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

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

- 10-

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

$200,000.00 (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 to the Receiver’s Charge and the

charges as set out in sections 14.06(7), 81.4(4), and 81.6(2) of the BIA.

20. 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.

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

substantially in the form annexed as Schedule "A" hereto (the "Receiver’s Certificates") for any

amount borrowed by it pursuant to this Order.

22. THIS COURT ORDERS that the monies from time to time borrowed by the Receiver

pursuant to this Order or any further order of this Court and any and all Receiver’s Certificates

evidencing the same or any part thereof shall rank on a pari passu basis, unless otherwise agreed

to by the holders of any prior issued Receiver's Certificates.

SERVICE AND NOTICE

23. 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/sci/practice/practice-directions/toronto/e-service-

protocol/) shall be valid and effective service. Subject to Rule 17.05 this Order shall constitute

an order for substituted service pursuant to Rule 16.04 of the Rules of Civil Procedure. Subject to

Rule 3.01(d) of the Rules of Civil Procedure and paragraph 21 of the Protocol, service of

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

http://www.ontariocourts.ca/sci/practice/practice-directions/toronto/e-service-protocol/

http://www.ontariocourts.ca/sci/practice/practice-directions/toronto/e-service-protocol/

-11 -

24. 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 Debtor's creditors or other interested parties at their respective addresses as

last shown on the records of the Debtor 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

25. 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.

26. THIS COURT ORDERS that nothing in this Order shall prevent the Receiver from acting

as a trustee in bankruptcy of the Debtor.

27. 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.

28. 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.

- 12-

29. THIS COURT ORDERS that the Applicant shall have its costs of this application, up to

and including entry and service of this Order, provided for by the terms of the Applicant’s

security or, if not so provided by the Applicant's security, then on a substantial indemnity basis

to be paid by the Receiver from the Debtor's estate with such priority and at such time as this

Court may determine.

30. 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.

EffTERED AT ;INSCWT A TORONTOON/BOOK NO:LF; / DANS LE REGISTHt NU

DEC 13 2019

PER/PAR-.

DOCSTOR: 1771742\8

SCHEDULE"A"

RECEIVER CERTIFICATE

CERTIFICATE NO.______________

AMOUNT $____________________

1. THIS IS TO CERTIFY that Deloitte Restructuring Inc., the receiver (the "Receiver") of

the assets, undertakings and properties of the Estate of Naseem Somani acquired for, or used in

relation to a business carried on by the Debtor, including all proceeds thereof (collectively, the

“Property”) appointed by Order of the Ontario Superior Court of Justice (Commercial List) (the

"Court") dated the___day of ______ , 20__(the "Order") made in an action having Court file

number__-CL-_______, has received as such Receiver from the holder of this certificate (the

"Lender") the principal sum of $___________, being part of the total principal sum of

$__________ which the Receiver is authorized to borrow under and pursuant to the Order.

2. The principal sum evidenced by this certificate is payable on demand by the Lender with

interest thereon calculated and compounded [daily] [monthly not in advance on the_______day

of each month] after the date hereof at a notional rate per annum equal to the rate of_____ per

cent above the prime commercial lending rate of Bank of_________from time to time.

3. Such principal sum with interest thereon is, by the terms of the Order, together with the

principal sums and interest thereon of all other certificates issued by the Receiver pursuant to the

Order or to any further order of the Court, a charge upon the whole of the Property, in priority to

the security interests of any other person, but subject to the priority of the charges set out in the

Order and in the Bankruptcy and Insolvency Act, and the right of the Receiver to indemnify itself

out of such Property in respect of its remuneration and expenses.

4. All sums payable in respect of principal and interest under this certificate are payable at

the main office of the Lender at Toronto, Ontario.

5. Until all liability in respect of this certificate has been terminated, no certificates creating

charges ranking or purporting to rank in priority to this certificate shall be issued by the Receiver

to any person other than the holder of this certificate without the prior written consent of the

holder of this certificate.

@@g§T@R^l7fJi^i9v8-Model_Receivership_Order_(T_Reyes).doc

-2-

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_.

Deloitte Restructuring Inc., solely in its capacity as Receiver of the Property, and not in its

personal capacity

Per:Name:Title:

37829486.1

§@g§T@R^iWl7^9v8-Model_Receivership_Order_(T_Reyes).doc

ROYAlExMf^ GfirtafcNADA - and - AYAZ SOMANI IN HIS CAPACITY AS EXECUTOR OF THE ESTATE OF NASEEM SOMANI

Applicant Respondent

Court File No. CV-19-00631451 -00CL


(COMMERCIAL LIST)

Proceedings commenced at Toronto

ORDER

AIRD & BERLIS LLPBarristers and Solicitors

Brookfield Place 181 Bay Street, Suite 1800

Toronto, ON M5J 2T9

Sanj Mitra (LSO # 37934U)Tel: (416) 865-3085

Fax: (416) 863-1515

Email : [email protected]

Shakaira John (LSO # 72263D)Tel: (416) 865-4637 Fax: (416) 863-1515

Email: [email protected]


@@§§:f@R4JF74?it^9v8-ModeI_Receivership_Order_(T__Reyes), doc



TAB 3(aa)

TAB 3(bb)

2020-02-14

Bankruptcy and Insolvency Records Search (BIA) search results | Résultats de la recherche dans le Registre des dossiers de faillite et d'insolvabilité (LFI)

A search of the Office of the Superintendent of Bankruptcy records has revealed the following information, for the period 1978 to 2020-02-11, based on the search criteria above-mentioned.

Une recherche dans les dossiers du Bureau du surintendant des faillites a permis de trouver l'information suivante, pour la période allant de 1978 à 2020-02-11, selon les critères de recherchesusmentionnés.

* As declared by debtor | Tel que déclaré par le débiteur

Search Criteria | Critères de recherche : Name | Nom = AVG (OEAM) INC., Name Type | Type de nom = Business | EntrepriseReference | Référence :

BIA Estate Number | Numéro du dossier en vertu de la LFI : 31-458867BIA Estate Name | Nom du dossier en vertu de la LFI : AVG (OEAM) INC.Birth Date | Date de naissance :Province : Ontario | OntarioAddress | Adresse : OntarioEstate Type | Type de dossier : APPLICATION FOR BANKRUPTCY ORDER | REQUÊTE DE MISE EN FAILLITEDate of Proceeding | Date de la procédure : 2019-11-08Total Liabilities* | Total du passif* : $0Total Assets* | Total de l'actif* : $0First Meeting of Creditors | Première assemblée des créanciers :Discharge Status | Statut de la libération :Effective Date | Date d'entrée en vigueur :Court Number | Numéro de cour : 31-OR-208415-T

Appointed Licensed Insolvency Trustee or Administrator | Syndic autorisé en insolvabilité ouadministrateur nommé :

BDO CANADA LIMITED / BDO CANADA LIMITEE

Responsible Person | Personne responsable : NEWTON, BRADAddress | Adresse : 25 Main Street West, Suite 805, Hamilton, Ontario, Canada, L8P1H1Telephone | Téléphone : 905-524-1008Fax | Télécopieur : 905-570-0249Licensed Insolvency Trustee or Administrator's Discharge Date | Date de la libération dusyndic autorisé en insolvabilité ou de l'administrateur :

http://www.canada.ca/en/index.html

38819145.2

SERVICE LIST

TO: AIRD & BERLIS LLPBarristers and Solicitors Brookfield Place 181 Bay Street, Suite 1800 Toronto, ON M5J 2T9

Sanjeev Mitra Tel: 416-865-3085 Email: [email protected]

Sam Babe Tel: 416-865-7718 Email: [email protected]


AND TO: MACDONALD, SAGER, AND MANIS LLP Barristers and Solicitors 150 York Street, Suite 800 Toronto, ON M5H 3S5

Howard Manis Tel: (416) 364-5289 Fax: (416) 364-1453 Email: [email protected]

Lawyers for AVG (OEAM) Inc., 1598320 Ontario Inc., AVG (OEM) Inc., National Automotive Customizers Inc., Karim Suleman and Ayaz Somani

AND TO: BDO CANADA LIMITED 20 Wellington Street East, Suite 500 Toronto, ON M5E 1C5

Brad Newton Tel: 416-775-7829 Email: [email protected]

Proposed Interim Receiver and Receiver

2

AND TO: DEPARTMENT OF JUSTICE (CANADA) The Exchange Tower 3400 - 130 King Street West P.O. Box 36 Toronto, ON M5X 1K6

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

AND TO: MINISTRY OF FINANCE Legal Services Branch 777 Bay Street, 11th Floor Toronto, ON M5G 2C8

Kevin O’Hara Tel: 416-327-8463 Email: [email protected]

AND TO: BDC CAPITAL INC.1200 -121 King Street West Toronto, ON M5H 3T9

Attention: Managing Director, Subordinate Financing

AND TO: THE BANK OF NOVA SCOTIA4715 Tahoe Boulevard Mississauga, ON L4W 0B4

AND TO: 1028312 B.C. LTD.1400 - 510 Burrard Street Vancouver, BC V6C 3A8

AND TO: TOYOTA CREDIT CANADA INC. 80 Micro Court Markham, ON L3R 9Z5

AND TO: MERIDIAN ONECAP CREDIT CORP.1500 - 4710 Kingsway Burnaby, ON V5H 4M2

AND TO: WEINS CANADA INC.3120 Steeles Avenue East Markham, ON L3R 1G9

38907129.1


Applicant

and AVG (OEAM) INC.

RespondentCourt File No. CV-20-00636359-00CL


COMMERCIAL LIST PROCEEDING COMMENCED AT TORONTO

APPLICATION RECORD

Volume 2 of 2

AIRD & BERLIS LLP Barristers and Solicitors

Brookfield Place Suite 1800, Box 754

181 Bay Street Toronto, Ontario M5J 2T9

Tel: 416.863.1500 Fax: 416.865.15159

Sanjeev P.R. Mitra (LSO # 37934U) Email: [email protected]

Sam Babe (LSO # 49498B)Email: [email protected]


ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST … · court file no. cv-20-00636359-00cl ontario...

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