(COMMERCIAL LIST)
CALLIDUS CAPITAL CORPORATION
Respondents
APPLICATION UNDER Section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, and Section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43.
SUPPLEMENTARY APPLICATION RECORD
OF THE APPLICANT
CHAITONS LLP
Barristers and Solicitors 5000 Yonge Street, 10th Floor Toronto, ON M2N 7E9 Harvey G. Chaiton (LSUC #21592F) Tel: 416-218-1129 Fax: 416-218-1849 Christopher J. Staples (LSUC #31302R) Tel: 416-218-1147 Fax: 416-218-1847 Lawyers for the Applicant
1
TO: CARCAP INC. 20 West Beaver Creek Road Richmond Hill, Ontario L4B 3L6
TO: CAR EQUITY LOANS CORP. 20 West Beaver Creek Road Richmond Hill, Ontario L4B 3L6
2
(COMMERCIAL LIST)
CALLIDUS CAPITAL CORPORATION
Respondents
APPLICATION UNDER Section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, and Section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43.
INDEX
Exhibits:
B E-mail from Eric Inspektor to Ralph Goldsilver
C Engagement Letter dated November 1, 2011
D E-mail from Gordon Willis to Craig Boyer
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COMMERCIAL LIST
Respondents
APPLICATION UNDER Section 243(1) of the Bankruptcy and Insolvency Act, R.S.C 1985, c. B-3, and Section 101 of the Courts ofJustice Act, R.S.O. 1990, c. C.43.
SUPPLEMENTARY AFFIDAVIT OF SAMUEL FLEISER
I, SAMUEL FLEISER, of the Town of Markham, in the Province of Ontario, MAKE
OATH AND SAY:
1. I have read the affidavit of Eric Inspelctor sworn December 12, 2011 and swear this
affidavit in reply thereto. Capitalized terms used in this affidavit will have the same definition as
set out in my affidavit sworn December 5, 2011. Given the time available, I will respond
generally to the statements made by Mr. Inspektor. The lack of a specific response to any
statement by Mr. Inspelctor should not be taken as my agreeing with such statement.
DoC#1326448v1A
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2. Callidus rejects the assertion that there is essentially a "soft receivership" in place
currently. While an interim CEO approved by Callidus is in place, such is entirely a result of the
actions of Mr. Inspektor, specifically by (1) permitting the Borrowers to become significantly
indebted to TD; (2) for a three-week period before September 21, 2011 causing cheques for
payroll, investors payments and dealer and supplier payments to be returned NSF; (3) diverting
funds from blocked accounts established to deposit lease and loan receivables for payment to
Callidus; and (4) deliberately withholding the forgoing from Callidus;
Availability under the Credit Facility
3. With respect to paragraph 16 of Mr. Inspektor's affidavit, as explained in my previous
affidavit, the Credit Facility Agreement is in default and the right of the Borrowers to borrow
further amounts under the Credit Facility has been terminated. The Credit Facility is not a term
loan as described by Mr. 1nspektor but is a demand operating facility. Demand has been made
and payment has not been received. Any advances since demand have been made on a day-to­
day basis for the sole purpose of protecting Callidus' security.
4. With respect to paragraph 28 of Mr. 1nspektor's affidavit, I have reviewed the cash flow
statement attached as Exhibit "I" to Mr. 1nspektor's affidavit. The cash flow demonstrates that
the Borrowers are not carrying on business in the ordinary course in the sense that they are not
entering into new vehicle leases and loans and are merely winding down the existing lease and
loan portfolios. While Mr. 1nspektor is correct that the Callidus indebtedness would reduce in
this scenario in that there will be a reduction of $1.6 million in the Credit Facility, that reduction
comes at the cost of a reduction in Callidus' collateral of $2.1 million and the Credit Facility will
DoC#132644Bv1 A
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remain in an over advance position. On the basis of this calculation, even with an a reduction in
the amount of the Credit Facility, by the end of February 2012, the Borrowers' borrowing base
(presuming Callidus permits additional borrowing) still exceeds its borrowing availability by
approximately $50,000 before reserves.
5. To the issue of reserves, Mr. Inspektor takes particular issue with the inclusion of certain
reserves deducted from Credit Facility availability. He takes the position in paragraphs 38
through 41 and 45 of his affidavit that Callidus has "inappropriately inflated" the calculation of
its indebtedness by including certain ''unnecessary'' reserves and that in fact the Borrowers
should be considered to have borrowed within the margin calculations under the Credit Facility
Agreement. In particular, Mr. Inspektor objects to the inclusion of reserves for payments to Silo
investors. This objection is entirely unfounded. The Credit Facility Agreement clearly states
that availability under the Credit Facility equals the Eligible Collateral Balance less the aggregate
of agreed reserves including;
(a) reserves In respect of actual and/or potential priority claims and/or
statutory encumbrances (eg. wages under the Wage Earner Protection
Program Act, income tax deductions);
(b) reserves in respect of payments due on account of Silo-Equity Loans and
Silo-Debt Loans outstanding; and
(c) an agreed availability block of $250,000.
6. With the agreement of the Borrowers, all of these reserves have been included in the
calculation of availability under the Credit Facility since the initial advance to the Borrowers.
DoC#1326448v1A
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Attached hereto as Exhibit "A" are true copies of all weekly availability calculations prepared
by Callidus under the Credit Facility Agreement commencing the first week of September 2011.
These calculations clearly show reserves for monthly payments due to Silos, priority claims and
the availability block. The inclusion of these amounts is in no way "unilateral" as alleged by Mr.
Inspektor. Notably, despite its ability to include what reserves it considers appropriate in its sole
discretion, Callidus has not established additional reserves since discovering the problems with
the Borrowers as described in my previous affidavit. While the amounts will vary for some
reserves, the reserve categories have remained constant.
7. Specifically with respect to Silo payment reserves, Mr. Inspecktor takes issue with the
inclusion of same in the availability calculation despite interest payments to investors having
been suspended. Of course, the suspension of payments was a result of the serious breaches of
the Credit Facility Agreement by the Borrowers previously described. Regardless, payments to
investors can only be made to the extent that there is availability under the Credit Facility.
8. In any event, the removal of the Silo reserves would not create availability under the
Credit Facility (again, assuming Callidus permits additional advances) between now and the end
of available cash-flow projection period (February 2012) as reserves other than the Silo reserves
would still reduce the Eligible Collateral Balance by approximately $380,000 as of December 5,
2011, as is shown in the weekly availability calculation at Exhibit "A" hereto, leaving the
Borrowers far short of any availability under the Credit Facility.
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9. Mr. Inspektor takes the position in paragraph 30 of his affidavit that the Borrowers
weekly deficiencies shown in the cash-flow statement at Exhibit "I" have been artificially
inflated by an aggregate of $705,028 broken down into six categories of expenditures as follows:
(a) Payment to investors - $398,980. These payments represent payments
referenced in paragraphs 31 (b) and 40 of my previous affidavit, being
required payments to investors from the first advance under the Credit
Facility for which the cheques were not honoured by TD. These payments
were made at the request of the Borrowers and in particular Mr. 1nspektor.
Attached hereto as Exhibit "B" is a true copy of a series of e-mails
regarding this request for payment;
(b) Forbearance fee - $100,000. For the purposes of availability under the
Credit Facility in this amount has been specifically backed out so as not to
affect availability, as is shown in the weekly availability calculations at
Exhibit "A";
(c) Willis - $52,996. As stated previously, Mr. Willis is retained by the
Borrowers and provides a service on their behalf. While Callidus did
require that a temporary CEO be put in place, it did so to exclude Mr.
Inspektor from management and cheque-signing authority and thereby
attempt to prevent further harm to the businesses and to Callidus security
position. While Callidus suggested Mr. Willis, the Borrowers were free to
use any other person acceptable to Callidus;
(d) Callidus mandated investment adviser - $56,500. This adviser was chosen
by the Borrowers to provide financial advice and to assist with finding
new financing/investors, the apparent goal of the Borrowers as stated in
Mr. 1nspektor's affidavit;
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(e) Callidus legals - $74,771. The majority of these fees are in connection
with the Borrowers dealings with the TD situation, not in dealing with
Callidus. In any event, section 22 of the Credit Facility Agreement gives
Callidus the right to charge such fees against the Borrowers and add same
to the Credit Facility indebtedness; and
(f) Callidus accounting - $21,781. As is explained in paragraph 25 below,
this is the cost of field audits permitted and routinely done by Callidus
personnel or agents. Such is a charge to a borrower in the normal course
of Callidus' business.
10. With respect to paragraph 5 of Mr. Inspektor's affidavit, I note that Mr. Inspektor has
acknowledged that the Borrowers have a substantial debt load. I disagree though that Callidus'
actions have been "extremely aggressive". As is set out in my previous affidavit, Callidus was
forced to respond to a situation significantly different than represented and has had to move
quickly in order to protect its security. Despite the serious situation caused by the Borrowers,
Callidus did not increase its reserves, did provide additional funding for leases despite the
breaches by the Borrowers and, to date, has given the Borrowers over two months to restructure
their debt and to seek alternative financing.
11. A receivership will not "profit" Callidus as alleged by Mr. Inspektor. As a secured
creditor, Callidus is only entitled to repayment of the indebtedness owing to it by the Borrowers
under the Credit Facility Agreement. Callidus seeks a commercially reasonable sale to obtain the
best price possible for the Borrowers' businesses and assets, for the benefit of all stakeholders,
and is of a view that this is best be achieved through a court process.
DoC#1326448v1A
Statements regarding Refinancing
12. Mr. Inspektor provides valuations for the Borrowers' lease and loan portfolios, in
paragraphs 27 and 42 of his affidavit of between approximately $18.4 million and $19.5 million.
These values appear to be based on the aggregate gross value of the existing leases and loans
over their respective lives, which mature at various times over the next three years.
13. However, a valuation on this basis fails to take into account several significant factors.
At the very least the current value of the lease portfolio would be the net present value of the
future lease payment stream less the cost of finance, bad debts and the cost of administrating the
portfolio. Any purchaser or financier would require a significant discount to account for same
and for a profit.
14. The Borrowers' financial position is in fact amply stated in the balance sheet at Exhibit
"A" to Mr. Inspektor's affidavit. The balance sheet shows total assets on a consolidated basis of
$19,957,475 and total current liabilities of $20,483,316. However, I note that the assets of the
Borrowers include $6,224,283 in debt due from related parties. The intercompany debts have
little or no value as there does not appear to be any ability in the related companies to repay these
amounts. The Borrowers are clearly insolvent.
Allegation that Callidus Attempting to Mislead the Court
15. In paragraphs 32 through 37 of this affidavit, Mr. Inspektor claims that Callidus is
attempting to mislead the Court by my stating in my previous affidavit that Callidus was not
DoC#1326448v1A
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aware of the issues with TD prior to September 21 and 22, 2011. In support of the allegation,
Mr. Inspektor claims in paragraphs 34 and 35 of this affidavit that Callidus was aware of the
registration of security by TD in connection with CarCap prior to the initial advance under the
Credit Facility.
16. Firstly, I take great exception to the allegation that I am trying to mislead the Court.
repeat that Callidus was not aware of any issues with indebtedness to TD and the resulting return
of cheques prior to September 21, 2011 and was not aware of a PPSA registration by TD
concerning CarCap prior to September 23,2011.
17. In fact, I am advised by Ralph Goldsilver of MNP that on September 3, 2011, he was
advised by Mr. Inspektor of the overdraft issues with TD and that Mr. Goldsmith advised Mr.
Inspektor at that time that he had to advise Callidus of the situation without delay. Mr. Inspektor
chose not to do so for three more weeks. During that time, dealer and payroll cheques bounced
and the business was harmed by Mr. Inspektor's actions.
18. The e-mail referenced at Exhibit "J" to Mr. Inspektor's affidavit deals not with CarCap
but with another Kaptor Group company, KapCar Capital Corp. ("KapCar"). KapCar is a
guarantor of the Borrowers' indebtedness to Callidus. Callidus was advised that certain TD
security had been incorrectly registered against KapCar and Callidus was seeking confirmation
that it had priority over the TD registration. This email confirmed that.
Doc#1326448v1A
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19. I am advised by Craig Boyer and believe that at no time prior to September 1,2011 did
he have any discussion with Mr. Inspektor regarding any TD registration against CarCap.
confirm that Callidus was not aware of any such registration prior to September 23 2011.
20. In any event, the primary concern for Callidus at this time was not so much the
registration by CarCap but, as set out in my previous affidavit, the fact that the Borrowers had a
significant indebtedness to TD that had not been disclosed and that for approximately three
weeks before September 21, 2011 cheques for payroll, investor payments and dealer and supplier
payments were being returned and funds were being diverted from blocked accounts.
21. Contrary to the statement in paragraph 37 of his affidavit, Mr. lnspektor did admit that he
had failed to disclose to Callidus the TD issues at our meeting of September 28, 2011, as I
previously set out in paragraph 46 of my affidavit sworn December 5, 2011. I note in the
footnote to paragraph 37 of his affidavit that Mr. Inspektor references discussions wherein it was
contemplated that Callidus would purchase the TD indebtedness. These discussions were all
after the TD indebtedness had been finally disclosed by Mr. Inspektor. Callidus contemplated
purchasing the TD debt and security because it was concerned that TD may close the blocked
accounts established for the collection of Callidus' collateral. Callidus did not further pursue
taking over the TD position as it was not able to reach a satisfactory agreement with Mr.
Inspektor.
Other Statements by Mr. Inspektor
22. With respect to the Forbearance Agreement, the Borrowers were not required to sign it.
Cal1idus had made demand properly under the Credit Facility Agreement and was prepared to
proceed to enforce its security. A forbearance was agreed to between Callidus and the
Borrowers. A draft forbearance agreement was presented to the Borrowers with full opportunity
to obtain whatever legal advice they thought necessary. Drafts were provided to the Borrowers
and commented on.
23. With respect to paragraph 43 of Mr. Inspektor's affidavit, he is absolutely incorrect to
state that in recent months CarCap had to fight in order to get Callidus to fund leases and that
such cost CarCap significant goodwill with its dealers. In fact, the failure of CarCap to make
payments to dealers was largely the result of returned cheques by TD in the 3-week period
following September 1, 2011, when Callidus was still unaware of the Borrowers' problems. In
fact, in order to preserve relationships with dealers, Callidus actually did fund certain payments,
including approximately $1.5 million in payments to dealers since September 28, 2011, despite
there being no availability under the Credit Facility.
24. With respect to paragraph 17 of Mr. Inspektor's affidavit, Mr. Willis' engagement is with
the Borrowers. A true copy of the retainer letter between the Borrowers and Mr. Willis is
attached hereto as Exhibit "C".
25. Furthermore, Callidus did not install auditors, as is alleged by Mr. Inspektor. As is
permitted under the Credit Facility Agreement, Callidus was entitled to perform field audits in
Doc#1326448v1A
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order to monitor performance under the Credit Facility as it does with all of its asset based loans.
For the most part, the personnel used were Callidus employees and as a general matter Callidus
field audits are done every three months. However, given the serious issues that had arisen with
TD, Callidus felt it necessary to send in its audit personnel earlier.
26. With respect to paragraph 21 of Mr. Inspektor's affidavit, I do not believe that I have
misunderstood the e-mail at Exhibit "W" to my previous affidavit at all. That e-mail clearly
references "the outline of a deal that [Mr. Uster and Mr. Goldsilver] believe may work". Item 1
in the proposed deal is that "All investors are brought up-to-date to August 31, 2011 with respect
to interest. This amount should be around $250K". The only party that would be in a position to
pay this amount is Callidus. That proposed deal does not reference anywhere a new senior
lender.
27. With respect to paragraph 22 of Mr. Inspektor's affidavit, I am advised by Craig Boyer of
Callidus that in order for Callidus to consider making any payments to the tradesman that
registered a lien on the property, Callidus would require a copy of the contract with the
tradesman and the documentation to support the amount owed. I am advised by Mr. Boyer that,
despite several requests, this documentation was never provided by the Borrowers. A true copy
of and email describing Mr. Willis' unsuccessful attempts to obtain this documentation is
attached hereto as Exhibit "D".
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28. With respect to paragraph 26 of Mr. Inspektor's affidavit, Callidus has not denied Mr.
Inspektor his salary or refused to provide funding for legal fees in an effort to diminish the ability
to respond to this application. Callidus specifically agreed to pay Mr. Inspektor's salary during
the pendency of the Forbearance Agreement. With the termination of the Forbearance
Agreement, that obligation ended. With respect to legal fees, as Callidus is in an over advance
position, it has no obligation to advance same. Any funding provided is solely for necessary
expenses required for the purpose of preserving Callidus' security.
Counter-Application
29. Callidus has no confidence in the ability and integrity of senior management of the
Borrowers, in particular Mr. Inspektor and has decided to exit its lending relationship with the
Borrowers. The Borrowers have no ability to borrow under the Credit Facility and have no other
source of third-party financing available. I have seen no indication that current investors in the
Borrowers are prepared to advance funds.
30. If the Borrowers are to continue to operate during a CCAA stay, they presumably would
have to do so using lease and loan receivables forming part of Callidus' security and which are
presently subject to blocked account arrangements. Under no circumstances is Callidus prepared
to agree to this unauthorized use of its security.
31. As stated, the Borrowers have ceased carrying on business in the ordinary course and are
merely collecting lease and loan receivables. If the status quo continues, even to the end of
February 2012, the businesses of the borrowers will likely have reached the point where they
Doc#1326448v1A
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cannot be revived. Contrary to the statements made by Mr. Inspektor in paragraph 43 of his
affidavit, the Borrowers cannot simply temporarily withdraw from the market. There are other
sources of financing available to the public and to dealers. As a result, dealers will not be
significantly affected as is alleged in paragraph 49 of Mr. Inspektor's affidavit.
32. Callidus seeks to be repaid its indebtedness by the Borrowers. It will not support any
plan or arrangement that sees anything less than payment in full.
33. Callidus is willing to provide funding to a receiver for a limited time period in order to
permit a receiver to carry out a sale process. Callidus does not take the position that a sale of the
Borrowers' businesses is absolutely necessary. Should the Borrowers succeed in securing
refinancing at some point prior to the completion of a sale process and Callidus is paid in full, the
receivership can be terminated. Callidus does not have a buyer "waiting in the wings" as is
alleged in paragraph 50 of Mr. Inspektor's affidavit. The reason for an application for the
appointment of a receiver at this time is to get to a sale process underway as soon as possible so
as to realize the best price for stakeholders and before Callidus' security position deteriorates
further.
34. By correspondence dated November 24, 2011 from Callidus' counsel to the Borrowers
(Exhibit "P" to my previous affidavit), Callidus advised the Borrowers of its intention to seek the
appointment of a receiver. At no time prior to the delivery of Mr. Inspektor's affidavit on
December 12, 2011, was there any s~ated intention of the Borrowers to seek protection under the
CCAA. It is my view that the counter-application herein is nothing more than a defensive
DoC#1326448v1A
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reaction to Callidus' application for the appointment of a receiver and is not pursued in good
faith.
)
affidavit of Samuel Fleiser sworn December 13,2011
A Commis 'loner for the Taking of Affidavits
Doc#1102580v1
Availability Calcul.tlon
Eligible Collaterlll
Less: IMllglbie
2,465.693
Payroll: Employess Withholding Tax 9/05111 GL
Garnishee 9105111 GL
RRSP 9/05/11 GL
HST 9105/11 GL
WEPPA (For 40. employees) 9/05111 per salOl person
Income Tax Payable 9/05/11 GL
Other 9/05111 AP
Silos Investors wlthoutlntercredllor Agreement
Availability Block
Add: Facility Fee Remaining (Reduced by .I,668.G1- Sep ~O, Oct 31. Nov 30)
Total Collattral Availability before Loana
Total Adjusted ColI,teral Availability before Loans (Loan Limit. $15,000,000)
Less: L.oan BalanclI
Availability
Facility A (Loan Limit- $15,000,000) CAD$
Total Loan Balance (Loan Umil- $15,000,000)
The undersigned If. authorIzed .'gnlng officer. of CarCap In .. , and Cir EquIty L.oans Corp. and "pre.ent and warrant to Callidus Capital Corporation
that all of the Information contaln.d In this report I. true and correct.
Name Signature TIUe
Name Signature Title
Availability Calculation
Date: Advance/l
Eligible Collowral
Less: lnellglbl&
Payroll: Employees Withholding Tax 9/12/11 GL
Garnishee 9/12/11 GL RRSP 9112111 GL HST 9/12111 GL WSIB 9112111 GL
$2000 per employee & $3000 WEPPA (For 40 employees) 9/12111 per salee person
Ministry of Finance, etc. 9112/11 AP
Other 9/12/11
LeIS: Reserve.
Monthly Payment Due to SlIo$ Silos Investors without Intercredltor AQreement
Availability Block
Add: Facility Fee Remaining (Reduced by 41,668.67. Sep 30, Oct 31, Nov 30)
Total Collateral Availability before Loans
Total Adjusted Collataral Availability before L.oan. (l.oan LImit· $15.000,000)
Less: Loan Balances
Availability
FaciUty A (LoBn Limit" $15,000.000) CAO$
Total Loan Balance (loan Limit =$15,000,000)
The undersigned are authorized signing officers of CarCap Jnc. and Car Equity Loans Corp. and reprnvnt and warrant to CaiUdus Capital Corporation
that al/ of the Infonnetlon contained In this report Is true Ind correct.
Name Signature THle
Name Signature TItle
Availability Calculation
bm. and LOIn Portfolio IDate of report I~Sep·l1
Eligible Collateral
Les$: Ineligible
Advance Ratt) 70'A. 70%
Payroll: Employees Withholding Tax 9/19/11 GL Garnishee 9/19/1 I GL
RRSP 9/19/11 GL HST 9/19111 GL WSIB 9/19/11 GL
$2000 per employee & $3000 WEPPA (For 40 employees) 9/19/1 I per sales person
Minlslry of Finance, elc, 9/19/11 AP
Other 9119111
Silo. Investor. wlthoullntercredilor Agreemenl
AY811abfllty BIOCfI
Add; Facility Fee Remaining (Reduced by 41,666,67· Sep 30, Oct 31, Nov 30)
Total Collateral Availability befora Loans
Total Adjusted Coliater.1 AVlII.bllity before Loan, (Loan Limit. $15,000,000)
Leu: Loan Balance. Facility A (Loan Limit- $15,000,000) CAD$
Availability
Totel Loan Balance (Loan Limit =$15,000,000)
The undersigned .rv authorized Signing offle ..... of CarCap Inc. and Car Equity Loana Corp. and represent and warrentlo Caliidua Capital Corporation that.1I of the Inlonnatlon contained In this report Is true and correel
Name Signature TIUe
Name Signature Title
Date:
Advance#
26-Sep-11
CCl004
Eligible Collaterat
less: Ineligible
Silos Investors without Intercredltor Agreement
Availability Blad<
HST W51B
$2000 per employee & $3000 per sales person
AP
Amount
0
473.151 606,022
Add: Facility Fae Remaining (Reduced by 41,668.67. Sap 30, Oct 31, Nov 30) 125,000
Total Collater.' Availability before Loan. 9,477,196
Total AdJu'ted Collateral Availability before L08n& (Loan Limit .. J1G,aOO,00a) 9,477.196
Le..: Loan Balances
Availability $ 891,190
CAD$ I 8,580,0071
8,580,007
8,560.007
The undersigned are authorized signing officer. of CarCap tnc. and Car Equity Loans Corp. and ,epre ..nt and warrant to CaUldus Capital Corporation that all Of the Information contained In thl. report I. true and correct.
Name Signaturo TIUe
Name Signature TIUe
Availability Caleulatlon
Ca!Cap Inc. Caahllnd Eligible Collateral CAD $ 11,804,183 2,400.552 Less; ineligible 174.096 96,723
Total Eligible Collateral· CADS 11.630,088 2,310.829 Advance Rate 70% 70%
Gron Availability
Le••: Priority Paylbln
GiL II eelerlf.llon. As Of Baslt Payroll: Employees WithhOlding Tax 10/03/11 GL Garnishee 10103111 GL RRSP 10103/11 GL HST 10/03111 GL WSIB 10103111 GL
$2000 per employee & $3000 WEPPA (For 40 employees) 10/03111 per sales persOn
Ministry of Finance, etc, 10/03111 AP
Other 10103/11
Less: R8IeNea Monthly Payment Due to SII08 Silos Inveslors without Intercredltor Agreement
Availability Block
Add: Facility Fea R.emalnlng (Reduced by $41,666.67. Sop 30, Oct 31, Nov 30)
Total Collateral Availabll1ty before Loans
Total Adjusted Collaleral Availability before Loans (Loan Limit. $111,000,0001
Less: Loan Balanc ••
Availability
Loan Balance. Summary
Facl~ty A (LOan Urnil a $15.000,000) CADS I Total Loan Balance (Loan Limn a $15,000,000)
The undersigned ar. authorized .Ignlng offleere of CarCap Inc. and Car Equity Loans Corp, and represent and warrant to Call1du$ Capllel Corporation
that all 01 the Intonn.llon contained In this report Is true and correct.
Name Signature Title
Name Signature ntle
Availability Calculation
Lease and Loan portfOlio IDale of report 10·0ct·l1
Eligible Collateral
Less: Ineligible
AdvanC<l Rate 70% 70%
GrOtI Availability
PayrOll: Employee. Withholding Tax 10/10111 GL
Gamlshee 10110/11 OL
RRSP 10/10/11 OL
HST 10/10111 OL
WEPPA (For 40 employeeS) 10/10111 per Bales person
Ministry of Finance, etc, 10/10/11 AP Other 10/10/11
L...; R.serv•• Monthly Payment Due to Silos
Silos Investors without Intercredltor Agreement
Availabmty Block
Add: Facility Fee Rem.lnlng (R,duced by 41,686,67 • Sep 30, Oct 31, Nov 30)
Total Collat.,,1 Avall.blllty before LOins
Total Adju&ted Collateral AvaJlabll1ty before Loans (Loan Limit"' $15,000,000)
Less: Loan ealances
Availability
FacHity A (Loan Limit" $15,000,000) CADS
Total Loan Balance (Loan limit"' $15,000,000)
The undersigned art authorized Ilgnlng officers of CarCep Inc:, and Car Equity Loans Corp,and ,.pr..ent and warrant to Call1dus Capital Corporation
that all of the Information contained In this report Ie true and correct,
Name Signature Title
Name Signature Title
Total A .... llable
Availability Calculation
Oat.: Advance#
Eligible Col~teral
Lou! Priority Payables
GIL II Daacrlptlona AsOt Basi, Payroll: Employees Withholding Tax 10/11111 OL Gamlshee 10/17/11 OL RRSP 10/17/11 Gl. HST 10/17111 GL WSIB 10117111 GL
$2000 per employee & $3000 WEPPA (For 40 employees) 10117111 per sales person
Mlnlsl/y of Finance, elc. 10117111 AP
Other 10117111
SII08 Investors without Intercredltor Agreement
Availability Btoel<
Add: Facility Fee Remaining (Reduced by 41,686.87 • Sop 30, Oct 31, Nov 30)
Total CoUateral Availability before Loan.
Total Adjusted Collateral Avall.bUlty before Loana (Loan Limit. $15,000,000)
Len: LOin Balance.
Availability
Facility A (Loan Limit. $15,000,000) CAD$
Total Loan Balance (Loan Limit· $15,000.000)
The undersigned are authorized IIlgnlng offlcens of CatCap Inc. Ind Car Equity Loans Corp. and represent and warrant to CallJdulI Capital Corporation
that all of the Information contained In thl. report Is true and correct.
Name Signature TIUe
Name Signature Title
AvaliabUlly Calculation
o.u: Advance#
Eligible Collateral
Loss: Ineligible
Payroll: Employeas WithhOlding Tax 10/24111 GL Gamlshee 10124/11 GL RRSt> 10124/11 GL HST 10/24/11 GL WSIB 10124/11 GL
$2000 per employee & $3000 WEPPA (For 40 employeea) 10124111 per soles person
Minletry of Finance, etc. 10/24111 AP
Olher 10/24/11
Sliol Inveslor. without Intercredllor Agreement Availability Block
Add: Facility Fee Remaining (Reduced by 41 ,6Se.61 • Sep 3D, Oct 31, Nov 30)
Total Collateral AvaHabllity before Loana
Total Adjusted Collaural Availability before Loan. (Loan Limit- $15,000,000)
Le.,: Loan Balanc ••
Availability
1 Total Loan Balance (Loan Limit" $15,000,000)
The undersigned are authorized Ilgnlng officers of CarCap Inc. and Car Equity Loans Corp. and represent and warrant to Call1dul Capital Corporation
that all of the Information contained In this report I, true and correct.
Name Signature Title
Name Signlilture nUe
Availability Calculation
CarCap Inc. Caahland
Less: IneligIble 226,142 121,665
Advance Aale 70% 70%
Payroll: Employees Withholding Tax 10131111 GL Gamlshee 10131/11 GL RASP 10131111 GL
HST 10131/11 GL
WEPPA (For 40 employees) 10131111 per sales person
Ministry of Finance, etc, 10131/11 AP Other 10131/11
LOll: Reservll
Availability Block
Add: Facility Fee Remaining (Reduced by 41,666.67 - Sep 3D, Oct 31, Nov 30)
Add: Forbearance Fee
Tolal Adjusted Collateral Availability bllior. Loans (Loan Limit .. $15,000,000)
LIIss: Loan Balances
Availability
Facility A (Loan limit .. $15,000,000) CAO$
Tolal Loan Batance (Loan Limit" $15,000.000)
The undersigned are authorized signing omcers 01 CarCap Inc:. and Car EquIty Loans Corp, and r.present and warrant to Call1dus CapItal Corporation
that all 01 the Inlonnallon contained In this report Is true and correct.
Name Signature Title
Name Signalure Title
Availability Calculation
Lea.. and LOIIA PortfoliQ 1001. of report 07·Nov·11
Eligible Collateral
Less: Ineligible
Advance Rate 70% 70%
Lesl: Priority Payabl ••
GIL' Oeserlpllonl All Of Basl1l Payroll; Employees Withholding Tax 11107111 GL Garnishee 11107111 GL RRSP 11107/11 GL HST 11/07111 GL WSIB 11107111 GL
$2000 per employee & $3000 WEPPA (For 40 employees) 11107111 per seles person
Ministry of Finance, etc. 11107/11 AP
Other 11/0711 I
Silos Investors wlthoullntercredlto( Agreement
AvallabHity Block
Add: Facility Fa. Remaining (Reduced by '1,&66,87 - Sap 30, Oct 31, Nov 30)
Add: Forbearance F••
Totll Adjusted Collateral Availability bafore Loans (LOin limit. $15,000,000)
Less: Loan Balane ••
Availability
~oan Balances Summa", Facility A (loan Limil" $15,000,000) CAD$ j Total Loan Balance (Loan LlmK c $15,000,000)
The undersigned ar. authorized "gnlng officers of CarCap fnc. and Car Equity Loan. Corp, and represent and warrant to C.llldus Capital Corporation
that all of the Information contained In this report Is true and correct,
Name Signalure Title
Name Signature Title
Availability Calculation
Eligible Collaleral
Less: Ineligible
Payroll: Employees Withholding Tax 11/14111 GL Gami8hee 11/14/11 GL RRSP 11/14/11 GL HST 11/14/11 GL WSIB 11/14/11 GL
$2000 per employee to $3000 WEPPA (For 40 employees) 11114111 per sales person
MinistrY of Finance, etc. 11/14/1 I AP Other 11/14/11
Le..: Rue""•• Monlhly Payment Due to Silo. Silos Investors wllhoutlntercredltOf Agreement
Availability Block
Add: Facility Fee Remaining (Reduc.d by 41,666.67. Sep 30, Oct 31, Nov 30)
Add: Forbearance Fee
Total Adjusted Collat.ral Availability before Loan, (Loan Limit. $1S,OOO,OOO)
Less: LOin Bllane" Facility A (Loan Limit. $15,000,000) CADS
Availability
Total Loan Balance (Loan Limit. $15,000,000)
The undersigned are authorized signIng officel'll of CarCap Inc. and Car Equity Loans Corp, and represent and warrant to Call1dus Capital Corporation
that all of the Information contained in thlt report I. true and correct.
Neme Signature Title
Name Signa/ure Title
Availability Calculation
Lease and Loan Pgrtf9110 IDate of report 21·Nov·ll
Eligible COllateral
less: Ineligible
Advance Rate 70% 70%
G/ltl Descriptions AaOf Basi. Payroll: EmplOyees WithhOlding Ta~ 11/21/11 GL
Gaml.hee 11/21/11 Gl RRSP 11/21111 GL HST 11/21111 GL WSIB 11/21111 GL
$2000 per employee & $3000 WEPPA (For 40 employees) 11/21/11 per sales person
Ministry of Finance. eto. 11/21/11 AP
Other 11121111
Less: Re.erves
Avallabiftty Block
Add: Facility Fe. Remaining (Reduced by 41,666.87. Sep 30, Oct 31, Nov 30)
Add: Forbearance F ••
Total Adjusted Collateral Availability before L.oans (Loan Limit. $15,000,000)
Less: LOIIn Balanc••
Availability
Loan Balanen Summary
Facility A (Loan Limit- $15.000,000) CADS I Total Loan Balance (Loan Limit. $15,000.000)
Th. undersigned are authorized algntng officers of CarCap Inc. and Car Equity Loan. Corp. and represent and warrant to Call1du5 Capital Corporation
that all of the Infonnallon contained In this report Ie true and correct.
Name Signature Title
Name Signature Title
Availability CalculaUon
Eligible Collataral
Less: IneRglble
Payroll: EmplOyOOs Withholding Tax 11/28111 GL Garnishee 11/28/11 GL
RRSP 11128111 GL
HST 11128111 GL
WEPPA (For 40 employees) 11/28111 per sales person
Ministry of Finance, etc, 11128111 AP Other 11128111
Less: R..erve.
Silos Investor. wlthoullnlercredltor Agreement
Availability Block
Add: Facility Fee Remaining (R80uced by 41,666,67. Sop 3D, Oct 31, Nov 30)
Add: Forbearanee Fee
Total Adjusted Collateral Avallab111ty beforel.oana (Loan Limit. $15,000,000)
Le.s: Loan Balances Facility A (Loan LImit· $15,000,000) CAD$
Availability
Facility A (Loan LImit .. $15,000,000) CADS
Total Loan Balance (Loan Limit =$15,000,000)
The undersigned are authorized signing offiee"" of CarCap Inc, and Car Equity Loan, Corp, and repre.ent and warrant to Call1dua Capital Corporation
that all of the Information contatned In thlt report 'I true and correct.
Name Signature Title
Name Signature TUle
affidavit of Samuel Fleiser sworn December 13,2011
A Commissioner for the Taking of Affidavits
Doc#1102580v1
32
Craig l. Boyer Vice Presid'ent Callidus Capital Corporation Tel: 416 945·3052 Fax: 416941-9876 Cell: 416884·9533
CAL LID U S www.calliduscapital.ca C,l.'tl'Al ecc,o~4tlaac
Royal Trust Tower. 4320 - 77 King Street West PO Box 212.Toronio Ontario M5K 1 K2
From: Eric Inspektor (mailto:einspektor@kaptor.com] Sent: October 21, 2011 10:39 AM To: Ralph.Goldsilver@mnp.ca; Sam Fleiser Cc: Craig Boyer Subject: RE: Barkin/Green
Sorry for Ole delay... had to veriry one name ...names and amounts are:
• Dr. Samuel Barkin ... $202,625.00
• Barbara Barkin ... $50,750.00
Thanks Eric
Eric Insocktor ... The Kaptor Group 20 West Beaver Creek Road Richmond Hilt, ON VIB 316 Tel: (416) 922·2376 x224 Fax; (416) 922-6552
email: einspektor@kaptoLcom ..... - .. _........ ......._.. _--_ .. -------... --- --- .. -....---- --- _.. -- -_ .... ­
Eric. I leave this to YUlI 10 provide.
Sam, I i\ssmnc rhis means we arc OK to advise they will be paid oul'?
Ralph This email was composed on a wireless handheld device,
This email. contains contidential information intended only for the individual or entity named above, Any disseminalion or action taken in reliance on this email or attachmcnts by anyone olher than the intended recipient is strictly prohibitcd.
FrullI: "Sam Fleiser" [sneiser@calliduscapital.ca] Scnt: 10/20/20]] 06:28 PM AST To: Ralph Goldsilver Cc: "Eric Jnspektnr" <einspektnr@kaptor.com>; "Craig Boyer" <cbnyer(!:i!CallidllsCapital.ca> Suhjcct: Barkin/Cil'c(~11
Please send me the full names and exact amounts owing to Green and Barkin.
Thx.
Sam Fleiser Presioenl Callidus Capital Corporation fel: 416.840:5450 Fax. 416.941.9876
CAt liD U S Cell 4165203118 «"'" 'of '" ",.. www.calliID1.§.i<illil1al.ca
Royal Trust Tower, 4320 • TT King Street VIlest P.O Box 212,Toronto OntariO M5K 'IK2
The contents of this message may contain confidential andlor privileged information. If the reader of this message is not the intended recipient you are hereby notified that any distribution, copying, disclosure and use of. or reliance on the contents of this transmission is strictly prohibited. If you have received this message in error, please notify the sender immediately by return email.
This email and any accompanying attachmcnts contain confidential information intended only for the individual or entity named above. Any dissemination or action taken in reliance on this email or attachments by anyone other than thc intended recipient is strictly prohibited. If you believe you have received this message in error, please delete it and contact the sender by return email.
2
34
affidavit of Samuel Fleiser sworn December 13,2011
A Commissioner for the Taking of Affidavits
Doc#11 02580v 1
November 1.2011
CarCap Inc. Car Equity Loans Corp. 20 West Beaver Creek Richmond Hill. Ontario L4B 3L6
Attention: Eric Inspektor
Re: Appointment of interim Chief Restructuring Officer ("CRO")
We understand that CarGap Inc. ("CarCap") and Car Equity Loans Corp. ("Equity". together with CarCap the "Borrowers") have entered into a Forbearance Agreement with Callidus Capital Corporation (UCallidus") which requires the Borrowers to engage an interim Chief EXecutive Officer ("CEO") of the Borrowers, acceptable to Callidus. The following sets out the terms of the engagement of CRO Solutions Inc. as interim CEO of the Borrowers to assist with their operations.
All capitalized terms used and not defined herein shall have the meaning set out in the Forbearance Agreement dated October [261.2011 among, inter alia, the Borrowers and Ca/lidu$.
The Engagement
CRO Solutions Inc. is hereby engaged to conduct and control the business of the Borrowers during the term of the Forbearance Period. The services of CRO Solutions Inc. will be provided by Gordon Willis ("Willis") and such other employees of eRO Solutions Inc. as CRO Solutions Inc may determine is appropriate and the Borrowers and Callidus may agree. As CEO, Willis will have responsibility. subject to the terms hereof, for the operations of the Borrowers and shall report directly to the Board of Directors of the Borrowers (the "Soard;')
Without limiting the foregoing, the services to be provided by CRO Solutions Inc. and Willis shall include:
(i) the CEO will be responsible for overseeing the day-to-day operations of the Borrowers and will have day-to-day deCIsion making authority for al/ matters within the ordinary course of business;
(ii) the CEO shalt have the power to conduct and control the financial affairs and business operations of the Borrowers and to carryon the business of the Borrowers as the CEO deems necessary or appropriate;
Uii) the power to take such steps as in the opinion of the CEO are necessary or appropriate to maintain control over all receipts and disbursements arising out of the operations of the Borrowers. including having cheque signing authority, and to cause the Borrowers to incur and pay only thOse expenses which in the opinion of the CEO are necessary for the continued operation of the business of the Borrowers.
(iv) The power to take all steps reasonably required to ensure compliance by the Borrowers with their obligations under the Forbearance Agreement
OocIl125651'1v7
36
eRO Solutions Inc. is an independent contractor and no employee or agent of CRO Solutions Inc" including Willis, shall be or be deemed to be an employee of the Borrowers, Nothing in this Agreement is intended to create, shall be construed as creating or be deemed to create a fiduciary relationship between CRO Solutions Inc. and the Borrowers.
Confidentiality and Non Disclosure Agreement
All information disclosed to the eRO in connection with this engagement, including without limitation, any information acquired from the Borrowers employees and agents, or inspection of the Borrowers property, shall be considered Confidential Information. Co·nfidentiallnformation shall not include information which (a) is now or subsequently becomes generally known or available by publication, commercial or otherwise. through no fault of the eRO; (b) is known by the eRO at the time of the disclosure; (c) is independently developed by the eRO without the use of any Confidential Information; Cd) is information that the parties agree in writing may be disclosed by the CRO; (e) is or becomes available to the eRO on a non-confidential basis, provided that, to the eRO's knowledge the disctosure of any such information was not subject to any legal. contractual or fiduciary obligation or (f) is information that may be disclosed pursuant to applicable law after compliance with the provisions hereof.
The eRO shall keep all Confidential Information confidential and shall use the Confidential Information solely for purpose of providing the services to be furnished pursuant to this engagement. The CRO may make reasonable disclosure of Confidential Information to third parties in connection with the performance of its engagement under this Agreement, and the CRO will have the right to disclose to others in the normal course of business its involvement with the Borrowers, Any written information produced by the eRO shall be treated as Confidentfal Information, and, except as required by law, shall not be provided to any third party without the Borrowers consent.
Notwithstanding anything herein to the contrary, the eRO lsexpressly authoriZed to provide Callidus with any and all information Callidus may require to monitor the financial performance and business operations of the Borrowers, including the provision of such financial statements, cash flow statements and other reports as and when same become available or requested by Callidu$, All information and communications between the CEO and Callidus are exempt from the confidentiality and non-disclosure provisions of this agreement.
Project Time, Costs and Billings
Project costs, will be billed at the rate of $5,000 per week, plus applicable taxes, for services provided, eRO operates on a weekly billing system. Services provided to the Borrowers under this agreement will be billed to CarCap on Monday for the previous week ending on Sunday and payment is due upon receipt.
The reduced rate of $5,000 per week is predicated on the contract running for [6 months]. In the event that the contract ends sooner, there will be a one-time payment at the end of the contract to adjust the weekly rate as follows:
• If the contract ends on or before December 31,2011, the weekly rate for the time spent to date will be increased from $5,000 to $6,000, plus applicable taxes
• If the contract ends any time between January 1, 2012 and February 29, 2012, the weekly rate for the time spent to date on the contract will be increased from $5,000 to $5,750 plus appfieabte taxes
• If the contract ends on or before March 31, 2012, the weekly rate for the time spent to date will be increased from $5,000 to $5,500., plus applicable taxes
• If the contract ends any time in April 2012. the rate for time spent will not be adjusted.
Doc#125S514v2
37
Retainer
In exchange for Due on Receipt terms, eRO waives the requirement for a retainer
Reimbursement of Expenses
The Borrowers will pay reasonabte out of pocket expenses incurred by CRO in conjunction with the provision of services. Expenses will be bflled monthly.
Insurance and Indemnity
(i} Indemnity. The Borrowers hereby agree to provide eRa Solutions Inc. and Willis with an Indemnity in form and substance acceptable to the parties. Such indemnity ("Indemnity") shall be executed and delivered to CRO Solutions Inc. and Willis on the execution of this Agreement
(Ii) 0&0 Insurance. Immediately upon the execution of this Agreement, the Borrowers agree to arrange for CRO Solutions Inc. and Willis to be added as additional named insureds under its Directors and Officers insurance policy.
If you have any questions on this Engagement Letter, please contact Gordon Willis (416-801~ 1270)
\.. _ ,__,".,.,__,._____,...-~__~___........~__~_ __,.....,__,~_.'"•._____"'_,____.,!._._____".,'......~...._""~""__~._'''"__ '''',,~ ....~_'n~·.""'~" .........."~_.~,,~.... _._" __~__~,_,,._'._... ,',"..,__,~.,,~
INI>EMNITV
In connection with (he engagement ofCRO Solutions Inc. ("'CRO") pursuant to an Engagement Letter
("Agre(~ment") between CI{O and CarCnp Inc. and Car Equity Loans Corp. (ceillectively, the "Uorrowers") dated
October 20, 10 I I, the [sorrowcrs do hereby joint.!y and severally indemnify and hold harmless CRO and its
directors, officers, employees, partners and agents, including but not limited to Gordon Willis and any other IlCrson
providing services pursuant to th\." Agreement (coll(;ctivcly, the "Indemnified Parties" and individually, an
"Indemnified Party"), fhun and against any and all losses, expel1$t!S, claims, actions, damages and liabilities, joint
or several, including the aggregate amount paid in settlement of any actions, suits, proceedings, invesligations or
claims and the lees and expenses of its counsel on a substantial indemnity basis that may be incurred in advising
with respect to andlor defending any action, suit, proceeding, investigation or claim that may be made or threatened
against fUly Indemnified Party or in cnfhrcing this Indemnity (collectively, the "Claims") to which any Indemnified
Party may become subject or otherwise inv()\ved in any capacity imwtar as the Claims reltlte to, are caused by. result
from, arise out of or arc based upon, directly or indirectly, any s(:rviees pcriimned pursuant to the Agreement (the
"Engagement"), and is not caused by the gross negligence or willful misconduct of any Indemnified Party. The
Borrowers also agree that no fndemnit1cd party shall have any liabiliry (whether directly or indirectly in cont.ract or
lort or olherwise) to dIe Borrowers Of either one of rheIn or any person asserting claims on bchalfoflhe Borrowers
or either one of them or in right of the Borrowers or either one of them I(lr or in connection with the Engagement
except to the extent allY losses, e.'l.penses, daiJl)S, actions. damages or liabilities incurred by the Borrowers or dther
one of them are determined by II court ofcompetent jurisdiction in a final judgment lhat has become non-appealable
to have resulted primarily fj'orn the gross negligence or wi/Hid Inisconduel of"any Indelnnitied Party.
The Borrowers will not. without CRO's and Gordon Willis' written coosent, settle, compromise, consent to the entry
of allY judgment in or otherwise seek to terminate any action, suit, pro<:eeding, investigation or claim in respect of
which inJemnification may be sought hereunder.
Promptly after receiving notice of an action, sUit, proceeding or claim against eRO or any other IndemniHed Party
or receipt of notice of the commencement ofany investigation which is based, directly or indirectly, UpOII any matter
ill respect of which indemnil1cation may be sought from the BMrl)Wers, CRO or any such other Indemnilicd Party
will notify the Borrowers in writing of the particulars thereof. eRO and alllndemnil1ed P~lfties shall cooperate with
the Borrowers and their cot.lIlscl at the Borrowers' cost in the preparation of I.he ca.se(s) and provide all iuf()ffnation
and documents in their possession as may be reasonably required by the BO/luwers' counsel.
CRO and any other Indenmified Party may retain counsel to separately represent it. him ur her in the defence oCa
Claim, provided that. only one counsel can be retained by all ofeRO and any IndcmniHcd [>arty, which shall be at
the expcn<;c of the Borrowers on a substantial indemnity basis if (i) the Borrowers dn not promptly assume the
defence unhe Claim; or (ii) the Borrowers agree to separdle rcprescntution, or (iii) the Indenmitied Party is advised
O0C#1260612v1
39
by its, her or his counsel that there is an actual or potential conllict between the Borrowers or eidler one ofthem and
the Indemnified Party's respective interests or additional defences are available to the Ilidemnified party, which
makes representation by the same counsc I inappropriate.
Where the Indemnified Party pays or is required 10 pay any amount for which the Indemnified Party may ultimately
be entitled to claim indemnity hereunder, the Borrowers shall forthwith pay such amount (or reimburse the
Indemnified Party in respect or sudl arnount ifthc Illdemnilicd Party hHS already paid the same). The Indemnified
Party agrees that, if the Indemnified Party is not otherwise ultimately entitled to indemnity hereunder, the
Indemnified Party shall forthwith refund t.o the Borrowers any amount paid out by [he Borrowers which it would not
have otherwise paid out bllt fix the provisions of this paragraph and which the Borrowers arc not otherwise legally
obliged to payout. together with simple interest thereon at an annual rate equal 10 the prime rale of interest /i-om
time to time charged by the B~Ulk of Montreal.
Although this Indemnity shall not be interpreted iu any way to limit the ability of the Inderlluified Party to seek
indemnity under any other indemnity agreement, under rulY insurance policy (including. withotlllimitatiol1, allY
directors' and officers' illsurunce policy. if applicable), or applicable legis/alion to the fullest extenl pcrmiHed by
law, the Indemnified P-arty shall be under no obligation to do so nor sl1ll:11 the Borrowers be entitled to rights of
subrogation under any ofthc foregoing except if the Borrov.ws hl:lv(~ fully satisfied their obligations hercul1lfer and
expect IfLhe person against whom subrogation is claimed has no right over against the IndelTlllifkd Party as a result
tJlcreof.
This Indemnity shall cnure [0 the benelit of each Indenmilied Party, and sllall survive termination or the
Engagement. lInd ~hllll be binding upon the llorrowcrs and their n:spcctivc sliccessors and assigns_
This Indemnity is made pursuant to, and shall be construec/, performed and enforced in accordance with thl! laws of
(he Province of Ontario including the laws of Canada applicable therein.
The Borrowers shall be jointly and severally liable for any ohligatiol1s to indemnity Of reimbUrse the Indemnilied
Parties arising under this Indemnity. ..",-.,..",.
The obligations (lfthc Borrowers hereunder are in addition fo any Jitr61i-ities which Borrowers or either one of
tllCrn may otherwise have to CRt) or any other fndernnHicd (~.
Per: Eric Inspektor Title: I have authority (0 bind the corporation
Doc#1260012vl
;oIlLl, JOl'lOdslIl ;'!Ji] :.lod
Doc#1102580v1
42
Craig L. Boyer Vice President Callidus Capital Corporation Tel: 416945·3052 Fax 416941-9876 Cell: 416 884-9533
CAL LID U S www.calliduscapital.ca
CA~llH eOMratl~IO.
Royal Trust Tower, 4320 - 77 King Street West PO Box ?12,Toronto Ontario M5K 1K2
From: Gordon Willis [mailto:gordonwillis@sympatico.ca] Sent: November 7,20112:47 PM To: Craig Boyer Cc: Sam Fleiser; Harvey@chaitons.com Subject: DM Drywall
Craig: I have spoken with Danny of DM Drywall a couple of times and he came in to see me today. Last Thursday I asked for a copy of whatever contracts existed, but haven't received anything from Eric or from Danny, I told Danny that we needed to see the contracts to determine which contract or contracts could be used to support a lien registration. I'm not sure whether a contract even exists. Rick recalls that there was an estimate of the overall cost at the beginning but he doesn't have the contract.
Danny was adamant today that he can put a lien on the property as he is continUing to invoice for services connected with the renovations to the building. He brought a further invoice for $734.50 dated October 18, 2011 for wiring in the warehouse ceiling.
He was paid $113,035.69 on September 12, 2011, but the TD Bank reversed the payment as part of the sweep of all of the Kaptor Group accounts. Meanwhile, he had paid his subcontractors and his payments were then not honoured.
He intends to go forward with the lien process in the next day or so if we don't come back with an acceptable payment plan.
I don't think we'll see a copy of the contract (if there is one) and so the next move (or not) is ours.
ONTARIO SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
SUPPLEMENTARY APPLICATION RECORD
OF THE APPLICANTS
CHAITONS LLP Barristers And Solicitors 5000 Yonge Street, 10th Floor Toronto, ON M2N 7E9 Harvey Chaiton Tel: (416) 218-1129 Fax: (416) 218-1829 Christopher J. Staples Tel: (416) 218-1147 Fax: (416) 218-1847 Lawyers for the Applicant
44
DOCS-#1327995-v1-Backpage_-_CarCap.pdf