motion record - kpmg

BETWEEN:

Court File No. CV-18-603360-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

THE TORONTO-DOMINION BANK

Applicant

- and-

OXFORD ADV AN CED IMAGING INC.

Respondent

APPLICATION UNDER SECTION 207 OF THE BUSINESS CORPORATIONS ACT, (ONTARIO) R.S.O. 1990, c. B-16, AS AMENDED

DATED: August 23, 2019

TO: SERVICE LIST

41471894_ 1 INATDOCS

MOTION RECORD (returnable August 29, 2019)

DENTONS CANADA LLP Toronto Dominion Centre 77 King St. W., Suite 400 Toronto, Ontario M5K 0Al

Robert Kennedy (LSO # 474070) Tel: (416) 367-6756 Fax: (416) 863-4592 [email protected]

Mark Freake (LSO # 63656H) Tel: (416) 863-4456 [email protected]

Lawyers for KPMG Inc.in its capacity as Court-appointed Sales Officer


ONTARIO

BETWEEN:

SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)


- and -


Applicant

Respondent


SERVICE LIST (updated as of June 18, 2019)

TO: DENTONS CANADA LLP Toronto Dominion Centre 77 King St. W., Suite 400 Toronto, Ontario M5K 0Al

Robert Kennedy Tel: (416) 367-6756 Fax: (416) 863-4592 [email protected]

Jordan Schultz Tel: 1 (604) 691-6452 j ordan. [email protected]

Mark Freake Tel: ( 416) 863-4456 [email protected]

Lawyers for KP MG Inc. in its capacity as Court-appointed Sales Officer

36343315_7INATDOCS

AND TO:

AND TO:

AND TO:

AIRD & BERLIS LLP Brookfield Place 181 Bay Street, Suite 1800 Toronto, ON M5J 2T9

D. Robb English Tel: (416) 865-4748 Fax: (416) 863-1515 [email protected]

Kyle Plunkett Tel: (416) 865-3406 [email protected]

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Lawyers for the Applicant, The Toronto-Dominion Bank

BLAKES, CASSELS & GRAYDON LLP 199 Bay Street, Suite 4000 Commerce Court West Toronto, ON M5L 1A9

Chris Burr Tel: (416) 863-3261 Fax: ( 416) 863-2653 chris. [email protected]

Michael Stevenson Tel: (416) 863-2458 [email protected]

Lawyers for Oxford Advanced Imaging Inc.

STEVENSON WHELTON BARRISTERS 15 Toronto Street, Suite 200 Toronto, ON MSC 2E3

Richard Macklin Tel: (647) 847-3822 Fax: (416) 599-7310 [email protected]


36343315_7[NATDOCS

AND TO:

AND TO:

AND TO:

WILSON VUKELICH LLP 60 Columbia Way, 7th Floor Markham, ON L3R 0C9

Andy Ayotte Tel: (905) 944-2960 Fax: (905) 940-8785 [email protected]

Christopher Caruana Tel: (905) 944-2952 [email protected]

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Lawyers for Element Fleet Management Corp. (Formerly Element Financial Corporation)

WILSON VUKELICH LLP 60 Columbia Way, 7th Floor Markham, ON L3R 0C9

Ronald McKenna Tel: (905) 944-2400 Fax: (905) 940-8785 [email protected]


FOGLER, RUBINOFF LLP 77 King Street West Suite 3000, P.O. Box 95 TD Centre North Tower Toronto, ON M5K 1G8

Ross W. Francis Tel: ( 416) 941-8802 [email protected]

Milton Davis Tel: (416) 860-6901 [email protected]

Lawyers for Dr. Gordon Cheung, Dr. Davinder Gill, Dr. Deep Chatha

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AND TO:

AND TO:

AND TO:

KPMGINC. Bay Adelaide Centre 333 Bay Street, Suite 4600 Toronto, ON M5H 2S5

Anamika Gadia Tel: (416) 777-3842 Fax: (416)303-6231 [email protected]

Neil Blair [email protected]

Michael Levine [email protected]

Court-appointed Sales Officer

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SIEMENS HEALTHCARE LIMITED 1577 North Service Road East Oakville, ON L6H OH6

Luc Lavoie [email protected]

Darcy Osborne [email protected]

ADAIR GOLDBLATT BIEBER LLP 95 Wellington Street West, Suite 1830 Toronto, ON M5J 2N7

Simon Bieber Tel: (416) 351-2781 Fax: (647) 689-2059 [email protected]

Nathaniel Read-Ellis Tel: (416) 351 2789 [email protected]

Lawyers for Resolute Medical Corporation D. Kisselgoff Medicine Professional Corporation and A. Shuster Medicine Professional Corporation

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AND TO:

AND TO:

AND TO:

AND TO:

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MORRISON BROWN SOSNOVITCH LLP 1 Toronto Street, Suite 910 P.O Box 28 Toronto, ON MSC 2V6

Laila Parvez Tel: (416) 368-0600 [email protected]

Lawyers for 2659428 Ontario Inc.

CANADA REVENUE AGENCY c/o Department of Justice Ontario Regional Office The Exchange Tower, Box 36 130 King Street West, Suite 3400 Toronto, ON M5X 1K6

Diane Winters Tel: ( 416) 973-3172 Fax: (416) 973-0810 diane. [email protected]

MINISTRY OF FINANCE (ONT ARIO) LEGAL SERVICES BRANCH 11-777 Bay Street Toronto, ON MSG 2C8

Kevin J. O'Hara Tel: (416) 327-8463 Fax: (416)325-1460 [email protected]

MINISTRY OF THE ATTORNEY GENERAL on behalf of the MINISTRY OF HEALTH AND LONG-TERM CARE McMurtry-Scott Building 720 Bay Street, 11th Floor Toronto, ON M7 A 2S9

Whitney Smith Tel: (416) 327-8610 [email protected]

Ananthan Sinnadurai [email protected]

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AND TO:

AND TO:

AND TO:

AND TO:

AND TO:

AND TO:

AND TO:

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2481668 ONTARIO INC. 1100 Memorial A venue, Suite 324 Thunder Bay, ON P7B 4A3

Dr. Jae K. Kim dr. j [email protected]

2481669 ONTARIO LTD. 10 Kings bridge Garden Circle, Unit 100 Mississauga, ON L5R 3K6

Dr. Gordon Cheung [email protected]

D GILL HOLDING INC. 13 5 5 Outram A venue LaSalle, ON N9J 0B2

Dr. Davinder Gill [email protected]

2464192 ONTARIO INC. 79 Dawlish A venue Toronto, ON M4N 1H2

Dr. Deep Chatha [email protected]

A SHUSTER MEDICINE PROFESSIONAL CORPORATION 201 Kusznier Crescent Thunder Bay, ON P7B 6K4

Dr. Anatoly Shuster [email protected]

D. KISSELGOFF MEDICINE PROFESSIONAL CORPORATION 350 Summerhill Drive Thunder Bay, ON P7B 7B9

Dr. Dmitry David Kisselgoff [email protected]

RESOLUTE MEDICAL CORPORATION 25 Sheppard Avenue West, Suite 1100 Toronto, ON M2N 6S6

Dr. Vladislav Miropolsky vrniropol@yahoo. corn

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AND TO:

AND TO:

AND TO:

AND TO:

AND TO:

AND TO:

AND TO:

2487507 ONTARIO INC. 50 Claxton Blvd. Toronto, ON M6C 1L8

Eldar Lev-Ary [email protected]

1054020 B.C. LTD. 130-400 Burrard Street Vancouver, BC V6C 3A6

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Dr. Harjinder John Singh Bining hj [email protected]

BY THE ESTATE OF MICHAEL ROHRER Denise Rohrer, Executrix 223 Kensington Blvd. Tecumseh, ON N8N 2K8

J. Mark Skipper [email protected]

PETER GEORGE 160 Mill Street Puce BX86 Emeryville, ON NOR 1 CO

[email protected]

VINCENZO NIGRO 6 Well wood A venue Toronto, ON M6C 1G9

[email protected]

DR. JAE K. KIM 1100 Memorial Avenue, Suite 324 Thunder Bay, ON P7B 4A3

[email protected]

DR. GORDON CHEUNG 100-10 Kings bridge Garden Circle Mississauga, ON L5R 3K6

[email protected]

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AND TO: DR. DEEP S. CHATHA 239-4936 Yonge Street Toronto, ON M2N 6S3

[email protected]

AND TO: DR. DA VINDER GILL 48 Mulgrave Street Brampton, ON L6P 3H3

[email protected]

36343315_7INATDOCS

Email List

[email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]

36343315_7[NATDOCS

INDEX

Document Tab

Notice of Motion dated August 23, 2019 1

Fourth Report of the Sales Officer dated August 23, 2019 2

Appendix "A": First Report (without appendices) A

Appendix "B": Approval and Vesting Order B

Appendix "C": Second Report (without appendices) C

Appendix "D": Third Report (without appendices) D

Appendix "E": First Distribution Order E

Draft Order 3




(COMMERCIAL LIST)

BETWEEN:


Applicant

- and-


Respondent


NOTICE OF MOTION (returnable August 29, 2019)

KPMG Inc. ("KPMG"), in its capacity as the Court-appointed sales officer (the "Sales

Officer") to carry out a process for the sale of the assets and business of Oxford Advanced

Imaging Inc. ("OAI"), will make a motion to a judge presiding over the Ontario Superior Court

of Justice (Commercial List) (the "Court") on August 29, 2019, at 10:00 a.m., or as soon after

that time as the motion may be heard, at 330 University Avenue, Toronto, Ontario.

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

THE MOTION IS FOR:

1. An Order (the "Claims Procedure Order"), substantially in form attached hereto as

TAB 3 of the Motion Record, for the following relief:


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

the Fourth Report of KPMG, in its capacity as Sales Officer, dated August 23,

2019 (the "Fourth Report") so that this Motion is properly returnable on August

29, 2019, and dispensing with further service thereof;

(b) approving and authorizing the Claims Procedure (as defined herein) and

authorizing, directing and empowering the Sales Officer to administer the Claims

Procedure in accordance with the terms of the Claims Procedure Order;

(c) approving the activities of the Sales Officer as set out in the Fourth Report; and

( d) such further and other grounds as counsel may advise and this Honourable Court

may permit;

THE GROUNDS FOR THE MOTION ARE:

1. On application by TD Bank, KPMG was appointed as Sales Officer of OAI by order of

the Court made August 29, 2018 (the "Appointment Order");

2. On November 20, 2018, the Court granted an Approval and Vesting Order (the

"Approval and Vesting Order") which approved, among other things, the asset

purchase agreement dated October 25, 2018, as amended (the "Amended Asset

Purchase Agreement") between the Sales Officer and 2659428 Ontario Inc. (the

"Purchaser"), and the transaction as set out therein (the "Transaction");

3. The Transaction closed on May 30, 2019. The Sales Officer filed the Sales Officer's

Certificate pursuant to the Amended Asset Purchase Agreement and the Approval and

Vesting Order on May 31, 2019, confirming that the Transaction has closed and the Sales

Officer has received the purchase price in accordance with the Amended Asset Purchase

Agreement consisting of $26,250,000 for the purchase of the Property and $18,108.05

representing certain security deposits previously paid by OAI in respect of commercial

leases that were reimbursed by the Purchaser (collectively, the "Sale Proceeds");

4. On June 18, 2019, the Sales Officer obtained an Order (the "First Distribution Order"),

among other things, authorizing and approving the Sales Officer to make a distribution

41519785_ 1 INA TDOCS

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from the proceeds of the closing of the Transaction to TD Bank and ECN Financial Inc.

("ECN") in full and final satisfaction of the indebtedness owing by OAI to each of TD

Bank and ECN and to KPMG Corporate Finance Inc. and Blake, Cassels & Graydon LLP

for the fees and disbursements incurred by OAI prior to the making of the Appointment

Order;

5. Following the distributions made pursuant to the First Distribution Order, there remains a

surplus in the Sale Proceeds (the "Remaining Proceeds");

6. Pursuant to paragraphs 16 and 17 of the Appointment Order, all proceedings, rights and

remedies against OAI were stayed and suspended except with the written consent of the

Sales Officer or leave of the Court (the "Stay");

7. The Sales Officer is aware of certain persons asserting a claim against OAI or an interest

in the Remaining Funds, and believes that there may be other creditors of which it is not

presently aware, each of which has been affected by the Stay;

8. The Sales Officer is of the view that there are three options for dealing with the

Remaining Funds and the claims of all creditors against OAI or relating to the Remaining

Funds:

(a) pay the Remaining Funds into Court without any prior determination of claims;

(b) pay the Remaining Funds to OAI without any prior determination of claims; or

( c) authorize and direct the Sales Officer to administer a claims procedure with

enhanced powers to determine and settle all claims against OAI and/or in respect

of the Remaining Funds, subject to Court supervision and approval (the "Claims

Procedure"). Under this option, the Sales Officer would continue to hold the

Remaining Funds pending further Order of the Court;

9. Having considered and canvassed each of these options with OAI's stakeholders, the

Sales Officer is of the view that the Claims Procedure is the option most likely to result in

a fair, timely and transparent resolution of all Claims against OAI and in respect of the

Remaining Funds;


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10. The Claims Procedure will provide the benefit of having an impartial Court-appointed

officer determine and settle claims affected by the Stay, subject to Court supervision and

approval;

11. The Sales Officer is already familiar with OAI's books and records and is able to

administer the Claims Procedure on an expedited basis;

12. The Sales Officer is of the view that it is just, appropriate and in the best interests of OAI

and its stakeholders to establish the Claims Procedure on the terms set out in the Claims

Procedure order;

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

permit.

THE FOLLOWING DOCUMENTARY EVIDENCE WILL BE USED AT THE

HEARING OF THE MOTION:

1. The Fourth Report of the Sales Officer; and

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

permit.

DATED: August 23, 2019

TO: SERVICE LIST

41519785_ 1 \NATDOCS


Robert Kennedy (LSO # 474070) Tel: (416) 367-6756 Fax: ( 416) 863-4592 [email protected]



4


Applicant

41519785_ 1 iNATDOCS

- and-

Court File No: CV-18-603360-00CL


Res.12_ondent


(COMMERCIAL LIST)

PROCEEDING COMMENCED AT TORONTO

NOTICE OF MOTION (returnable August 29, 2019)




Lawyers for KP MG Inc. in its capacity as Courtappointed Sales Officer

0,



(COMMERCIAL LIST)

IN THE MATTER OF THE WINDING UP OF OXFORD ADV AN CED IMAGING INC.

APPLICATION UNDER SECTION 207 OF THE BUSINESS CORPORATIONS ACT, R.S.O. 1990, c. B.16

FOURTH REPORT OF KPMG INC. in its capacity as SALES OFFICER OF OXFORD ADV AN CED IMAGING INC.

August 23, 2019

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TABLE OF CONTENTS

I. INTRODUCTION AND SUMMARY OF PROCEEDINGS ................................ 4

II. PURPOSE OF THIS FOURTH REPORT ...................................................... 5

III. UPDATE ON FIRST DISTRIBUTION AND POST-CLOSING MATTERS ............. 6

IV. CLAIMS PROCEDURE ORDER ................................................................ 7

V. CONCLUSION ..................................................................................... 12

41470170_3INATDOCS

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LIST OF APPENDICES

Appendix A- First Report (without appendices)

Appendix B - Approval and Vesting Order

Appendix C- Second Report (without appendices)

Appendix D -Third Report (without appendices)

Appendix E- First Distribution Order

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I. INTRODUCTION AND SUMMARY OF PROCEEDINGS

1. The Toronto-Dominion Bank ("TD Bank") filed an application (the "Application") before

the Ontario Superior Court of Justice (Commercial List) (the "Court") for interim relief

pursuant to sections 207 and 209 of the Business Corporations Act, (Ontario) for among

other things, an order for the sale of the assets and business of Oxford Advanced Imaging

Inc. ("OAI") and for the appointment of KPMG Inc. ("KPMG") as sales officer of OAI

(the "Sales Officer").

2. The Application was heard on August 29, 2018 and KPMG was appointed Sales Officer

pursuant to an Order (the "Appointment Order") which, among other things, authorized

and directed the Sales Officer carry out a process (the "Sales Process") for the sale of the

assets and business of OAI (the "Property").

3. The Property consisted of all the assets, undertakings and properties acquired for, or used

in relation to, OAI's diagnostic imaging clinics. The operations of OAI consisted of two

clinics, one is located in Mississauga, Ontario and the other one is located in Ajax, Ontario.

4. The Sales Officer issued its first report to the Court on November 12, 2018 (the "First

Report"). A copy of the First Report (without appendices) is attached as Appendix "A"

herein. As detailed in the First Report, the Sales Officer brought a motion returnable on

November 20, 2018 seeking an Approval and Vesting Order (the "Approval and Vesting

Order") approving: (a) the sale transaction (the "Transaction") contemplated by an asset

purchase agreement between the Sales Officer and 2659428 Ontario Inc. (the

"Purchaser") dated October 25, 2018 (the "Asset Purchase Agreement"), as amended by

an amending agreement dated November 19, 2018 (the "First Amendment") and a second

amending agreement dated April 23, 2019 (the "Second Amendment", and together with

the Purchase Agreement and First Amendment, the "Amended Asset Purchase

Agreement") and vesting in the Purchaser, OAI's right, title and interest in and to the

assets described in the Amended Asset Purchase Agreement; and (b) the Sales Officer's

activities as set forth in the First Report.

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5. On November 20, 2018, the Court granted the Approval and Vesting Order. A copy of the

Approval and Vesting Order is attached as Appendix "B" herein.

6. The Sales Officer issued its second report to the Court on April 26, 2019 (the "Second

Report"). A copy of the Second Report (without appendices) is attached as Appendix

"C" herein. As detailed in the Second Report, the Sales Officer brought a motion

returnable on May 2, 2019 seeking an Order approving: (a) the Second Amendment, and

(b) approving the activities of the Sales Officer as set out in the Second Report and

approving the fees and disbursements of the Sales Officer and the Sales Officer's legal

counsel, Dentons Canada LLP ("Dentons"), for the period up to January 30, 2019.

7. The Sales Officer issued its third report to the Court on June 12, 2019 (the "Third

Report"). A copy of the Third Report (without appendices) is attached as Appendix "D"

herein. As detailed in the Third Report, the Transaction closed on May 30, 2019 and the

Sales Officer brought a motion returnable on June 18, 2019 seeking an Order (the "First

Distribution Order"): (a) updating the Court with respect to the closing of the

Transaction; (b) authorizing and approving the Sales Officer to make a distribution from

the proceeds of the closing of the Transaction to TD Bank and ECN Financial Inc. ("ECN")

in full and final satisfaction of the indebtedness owing by OAI to each of TD Bank and

ECN and to KPMG Corporate Finance Inc. ("KPMG CF") and Blake, Cassels & Graydon

LLP ("Blakes") for the fees and disbursements incurred by OAI prior to the making of the

Appointment Order; and ( c) approving the activities of the Sales Officer as set out in the

Third Report and approving the fees and disbursements of the Sales Officer and Dentons

for the period of February 1, 2019 to May 31, 2019.

8. On June 18, 2019, the Court granted the First Distribution Order. A copy of the First

Distribution Order is attached as Appendix "E" herein.

II. PURPOSE OF THIS FOURTH REPORT

9. The purpose of the Sales Officer's fourth report to the Court dated August 23, 2019 (the

"Fourth Report") is to:

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(a) update this Honourable Court with respect to the status of distributions made

pursuant to the First Distribution Order;

(b) update this Honourable Court with respect to status of certain post-closing matters

in respect of the conclusion of the Transaction;

( c) provide this Honourable Court with the necessary information to support an Order

(the "Claims Procedure Order"):

(i) approving the activities of the Sales Officer as set out in the Fourth Report;

(ii) approving and authorizing the Claims Procedure (as defined herein); and

(iii) authorizing, directing and empowering the Sales Officer to administer the

Claims Procedure in accordance with the terms of the Claims Procedure

Order.

10. Unless otherwise stated, all monetary amounts contained herein are expressed in Canadian

dollars.

11. The information contained in this Fourth Report has been obtained from the books and

records and other information of OAI. The accuracy and completeness of the financial

information contained herein has not been audited or otherwise verified by the Sales

Officer, and the Sales Officer does not express an opinion or provide any other form of

assurance with respect to the information presented herein or relied upon by the Sales

Officer in preparing this Fourth Report.

12. Future oriented financial information reported or relied on in preparing this Fourth Report

is based on OAI management's assumptions regarding future events; actual results may

vary from forecast and such variations may be material.

III. UPDATE ON FIRST DISTRIBUTION AND POST-CLOSING MATTERS

13. Since the granting of the First Distribution Order, the Sales Officer has:

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(a) made a distribution to TD Bank in the amount of $9,252,708.44 and to ECN in the

amount of $11,280,690.39, in accordance with the First Distribution Order;

(b) made a distribution to KPMG CF in the amount of $1,041,288.91 and Blakes in the

amount of $425,310.89, in accordance with the First Distribution Order;

( c) continued to work with the Purchaser and its counsel regarding the completion of

the transfer of certain patient data pursuant to the Amended Asset Purchase

Agreement;

(d) finalized the reconciliation of the working capital adjustment to the purchase price

as provided for in the Amended Asset Purchase Agreement. In this regard, the

Sales Officer paid an adjustment in favour of the Purchaser in the amount of

$236,505 on August 7, 2019;

(e) continued discussions with the Ontario Ministry of Health and Long Term Health

regarding any claims they may have against OAI in respect of OAI's terminated

funding agreement, or otherwise; and

(f) held discussions with OAI regarding distribution options m respect of the

Remaining Funds (as defined herein);

IV. CLAIMS PROCEDURE ORDER

14. Capitalized terms not otherwise defined in this section of the Fourth Report are defined in

the proposed Claims Procedure Order attached to the Motion Record of the Sales Officer

dated August 23, 2019 (the "Motion Record") at Tab "3".

15. As detailed in the Third Report, on May 30, 2019, the Sales Officer received the balance

of the purchase price, being $26,250,000 from the Purchaser for the purchase of the

Property, and $18,108.05 representing certain security deposits previously paid by OAI in

respect of commercial leases that were reimbursed by the Purchaser, in accordance with

the Amended Asset Purchase Agreement (collectively, the "Sale Proceeds").

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16. Following the distributions made pursuant to the First Distribution Order, as set out above,

there remains a surplus in the Sale Proceeds in the amount of approximately $2,995,488.16,

including accrued interest up to August 22, 2019 (the "Remaining Funds").

17. Pursuant to paragraphs 16 and 17 of the Appointment Order, all proceedings, rights and

remedies against OAI or affecting the Property were stayed and suspended, except with the

written consent of the Sales Officer or leave of the Court (the "Stay").

18. The Sales Officer is aware of certain persons (the "Known Creditors") asserting or having

a Claim against OAI or an interest in the Remaining Funds, and believes that there may be

other Creditors of which it is not presently aware of, each of which has been affected by

the Stay.

19. At this time, the Sales Officer is of the view that there are three options for dealing with

the Remaining Funds and the Claims of all Creditors, including Known Creditors, against

OAI or relating to the Remaining Funds:

(a) pay the Remaining Funds into Court without any prior determination of Claims

("Option A");

(b) pay the Remaining Funds to OAI without any prior determination of Claims

("Option B"); or

( c) authorize and direct the Sales Officer to administer a claims procedure to determine

and settle all Claims against OAI and/or in respect of the Remaining Funds, subject

to Court supervision and approval ("Option C" or the "Claims Procedure").

Under this option, the Sales Officer would continue to hold the Remaining Funds

pending further Order of the Court.

20. Having considered and canvassed each of these options with OAI, the Sales Officer is of

the view that Option C represents the most fair, timely and transparent process in terms of

addressing all remaining Claims against OAI and in respect of the Remaining Funds for

the following reasons:

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(a) Option A may lead to costly and drawn out litigation if the Creditors and OAI are

unable to consensually resolve the Claims. This option would likely also require

additional judicial resources in respect of the determination of unsettled Claims and

payments out of Court. Option A will also lose the benefit of the certainty created

by the proposed Claims Procedure, particularly the proposed Claims Bar Date

which will require parties to file Claims in a timely manner;

(b) Option B will place the onus on OAI to resolve all Claims against it. This option

would also require OAI to consensually resolve the Claims or have such claims

determined through litigation (following a lifting of the Stay). This option provides

less certainty as to timing and cost, particularly if formal litigation is required and

provides less certainty as to the resolution of Claims that were affected by the Stay

imposed by these proceedings. The Sales Officer also has concerns that the

shareholder disagreements which precipitated the Appointment Order1 may

resurface if the Remaining Funds are paid directly to OAI and under the dominion

of one shareholder or shareholder group to the detriment of other equity interests;

and

( c) Option C provides the benefit of having an impartial Court-appointed officer

determine and settle all Claims affected by the Stay, subject to Court supervision

and approval. The Sales Officer is already familiar with OAI's books and records

and is able to administer the Claims Procedure on an expedited basis.

21. The Claims Procedure will not address or determine any claims by current or former

shareholders of OAI as against OAI, or any competing claims to equity among OAI' s

current or former shareholders. In this regard, the Sales Officer proposes that the claims

of current and former shareholders of OAI be deemed Excluded Claims under the Claims

Procedure Order.

1 As set out in the affidavit of Maurice Moffett sworn August 17, 2018 in support of the Appointment Order.

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Summary of Claims Procedure

22. The Sales Officer proposes a dual-process claims procedure that would entail delivering a

Claim Statement to Known Creditors while simultaneously publishing a general call for

Claims to other potential Creditors.

23. With respect to the Known Creditors, the Sales Officer will:

(a) determine the Claims of Known Creditors based on the books and records of OAI.

In this regard, the Sales Officer has reviewed OAI's accounts payable list and

believes that it is a reasonable summary of OAI's unsecured creditors; and

(b) send the Claims Document Package to each Known Creditor, which will include a

Claim Statement setting out the amount of such Creditor's Claim. If the Creditor

agrees with the Sales Officer's assessment, it need not take any further action. If

the Creditor disagrees with the Sales Officer's assessment it must file a Notice of

Dispute to the Sales Officer prior to the Claims Bar Date.

24. With respect to all other Creditors, the Sales Officer will:

(a) publish the Notice to Creditors in a national newspaper and post a copy of the

Notice to Creditors on its website. The Notice to Creditors will invite Creditors to

submit a Proof of Claim to the Sales Office prior to the Claims Bar Date.

25. The Claims Bar Date will be October 15, 2019 for all Creditors, including Known

Creditors.

26. As soon as practicable following the Claims Bar Date, the Sales Officer will review all

Notices of Dispute and Proofs of Claim and may:

(a) request additional information from a Creditor or from OAI;

(b) request that a Creditor file a revised Proof of Claim or Notice of Dispute;

( c) attempt to resolve and settle any issue arising in respect of a Proof of Claim or

Notice of Dispute;

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(d) accept (in whole or in part) the amount of any Claim and notify the Creditor in

writing; and/or

(e) revise or disallow (in whole or in part) the amount of any Claim by delivering a

Notice of Revision or Disallowance to such Creditor.

27. If a Creditor intends to dispute their Claim as set out in a Notice of Revision or

Disallowance, the Creditor must:

(a) notify the Sales Officer in writing of the Objection within fifteen (15) days of

receipt of the Notice of Revision or Disallowance; and

(b) file a Notice of Motion with this Honourable Court for the determination of the

Claim in dispute, with a copy to be sent to the Sales Officer immediately after filing,

which Notice of Motion is to be:

(i) supported by a sworn affidavit setting out the Creditor's basis for disputing

the Notice of Revision or Disallowance; and

(ii) returnable within thirty (30) day of the date on which the Sales Officer

received the Objection.

28. If a Creditor fails to deliver the Objection and/or the Notice of Motion in accordance with

the Claims Procedure Order, the Claim will be deemed accepted at the amount set forth in

the Notice of Revision or Disallowance and the Creditor will:

(a) where the entire Claim is disallowed:

(i) not be entitled to receive any distribution in these proceedings; and

(ii) be forever barred from making or enforcing such Claim against OAI;

(b) where the Claim has been revised:

(i) only be entitled to receive a distribution in an amount proportional to the

revised amount; and

41470170_3INATDOCS

16

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(c) be forever barred from making or enforcing any Claim against OAI greater than the

revised amount and the amount of the Claim reduced by the revision will be forever

extinguished.

29. The proposed timeframe for administering the Claims Procedure is summarized as follows:

PROCESS DATE

Sales Officer to Mail Claims Document Not later than five (5) Business Days following Package to Known Creditors the granting of the Claims Procedure Order

Sales Officer to Publish Notice to Creditors in Not later than ten (10) Business Days Newspaper following the granting of the Claims Procedure

Order

Sales Officer to Post Claims Procedure Order, Not later than five (5) Business Days following Motion Record and Claims Package on Sale's the granting of the Claims Procedure Order Officer's Website

Claims Bar Date October 15, 2019

Sales Officer to Deliver Notice of Revision or As soon as practicable following review of Disallowance Proof of Claim or Notice of Dispute, as

applicable

Creditor to Deliver Objection to Sales Officer Within 15 calendar days following receipt by the Creditor of the Notice of Revision or Disallowance

Creditor to Deliver Notice of Motion in respect Returnable within 30 calendar days following of an Objection receipt by the Creditor of the Notice of

Revision or Disallowance, subject to the Court's availability

V. CONCLUSION

30. The Sales Officer submits this Fourth Report to the Court in support of the Sales Officer's

Motion for the relief as set out in the Motion Record and recommends that the Court grant

the Order substantially in the form contained at Tab 3 of the Motion Record approving:

(a) the Claims Procedure; and

41470170_3INATDOCS

17

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(b) the activities of the Sales Officer set out in the Fourth Report.

All of which is respectfully submitted at Toronto, Ontario this 23rd day of August, 2019.

KPMG Inc., in its capacity as Court Appointed Sales Officer of Oxford Advanced Imaging Inc. and not in its personal capacity

Per: lJ(( {tfJ,i{ /<JV /!w(uz_: Anamika Gadia Senior Vice President

41470170_3INATDOCS ·

18

Court File No. CV·18-603360-00CL


(COMMERCIAL LIST)


APPLICATION UNDER SECTION 207 OF THE BUSINESS CORPORATIONS ACT, R.S.O. 1990, c, B,16

FIRST REPORT OF KPMG INC. in its capacity as SALES OFFICER OF OXFORD ADV AN CED IMAGING INC.

November 12, 2018

19

20

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TABLE OF CONTENTS

I, INTRODUCTION .............................................................................................................. 4

II. PURPOSE OF THIS FIRST REPORT .................................................. , ........................ 4

III. OUTCOME OF THE SALE PROCESS .......... , .............................................................. 5 Prior Marketing Efforts ............................................................................................ , ........... 5 Details Relating to the Sale Process ........ , ............................................................................ 5 The Successful Bid ................... ,, .. , ............... ,, .............................. ,,.,, ........ ,,,., .. , ......... , ........ 9 Sales Officer's View of the Sales Process and the Asset Purchase Agreement ................ 12 Sealing Order .,,,,, ................ ,, ................... ,., .. , ..... , ......... , .. ,, ........... ,., ............................. ,,., .. 13 Discussions with the MoH-Transfer of the IHF Licences .............................................. .13

IV. THE SALES OFFICER'S OTHER ACTIVITIES ....................................................... 14

V. CONCLUSION ................................................................................................................ 15

• 3 ~

LIST OF APPENDICES

Appendix A - Moffett Affidavit

Appendix B - Sale Process Order

Appendix C - Bidding Procedures Letter

Appendix D - Redacted Asset Purchase Agreement between the Purchaser and the Sales Officer

21

-4-

J. INTRODUCTION



pursuant to sections 207 and 209 of the Business Corporations Act, (Ontario) for, among


Inc. ("OAI") and for the appointment of KPMG Inc. ("KPMG") as Sales Officer (as

defined below). A copy of the affidavit (without exhibits) of Maurice Moffett of TD Bank

sworn August 17, 2018 in support of the Application (the "Moffett Affidavit") is attached

as Appendix "A" herein, the Sales Officer's First Report to the Court dated November 12,

2018 (the "First Report").

2. The Application was heard on August 29, 2018 and on the same date, the Court granted an

Order (the "Sale Process Order") which, among other things, appointed KPMG as the

sales officer (the "Sales Officer") to carry out a process (the "Sale Process") for the sale

of the assets and business of OAI (the "Property"). A copy of the Sale Process Order is

attached as Appendix "B" herein.

3. The Property consists of all the assets, undertakings and properties acquired for, or used in

relation to OAI's diagnostic imaging clinics. The operations of OAI consist of two clinics,

one is located in Mississauga, Ontario and the other one is located in Ajax, Ontario.

4. Capitalized terms not defined herein shall have the meanings set out in the Sale Process

Order.

II. PURPOSE OF TIDS FIRST REPORT

5. The purpose of this First Report is to:

a, Update this Honourable Court with respect to the outcome of the Sale Process;

b. Provide this Honourable Court with the necessary information to support the granting

of an Approval and Vesting Order (the ''Approval and Vesting Order") approving

the sale transaction (the "Transaction") contemplated by an asset purchase agreement

between the Sales Officer and 2659428 Ontario Inc. o/a Greater Niagara Medical

Imaging (the "Purchaser") dated October 25, 2018 (the ''Asset Purchase

22

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assets described in the Asset Purchase Agreement (the HPurchased Assets"); and

c. Update this Honourable Court with respect to the other activities of the Sales Officer

and request approval of the Sales Officer's activities as set forth in this First Report.


dollars.

7. The information contained in this First Report has been obtained from the books and





Officer in preparing this First Report.

III. OUTCOME OF THE SALE PROCESS

Prior Marketing Efforts

8. Prior to the Sales Officer's appointment, OAI undertook a sale and marketing process for

the Property, with the assistance ofKPMG Corporate Finance Inc. ("KPMG CF").

9. As part of the prior marketing process, KPMG CF prepared marketing materials including

a comprehensive list of potential interested parties, a teaser letter, a confidential

information memorandum and an electronic data room, in consultation with OAI (the "Pre

Appointmen t Sale Process").

10. Details regarding the Pre-Appointment Sale Process are set out in the Moffett Affidavit.

As set out in that affidavit, KPMG CF implemented a robust sale process; however, the

Pre-Appointment Sale Process failed to complete a transaction for the sale of the Property.

Details Relating to the Sale Process

11. The Sale Process Order empowered and authorized the Sales Officer to:

a. Market any or all of the Property including soliciting offers in respect of the Property

or any part or parts thereof and negotiating such terms and conditions of sale as the

Sales Officer in its sole discretion may deem appropriate;

23

- 6 -

b. Enter into one or more sales agreements on behalf of OAI for all or any part of the

Property, subject to Court approval; and

c. Apply for any vesting order or other orders necessary to convey the Property or any

part of parts thereof to a purchaser or purchasers thereof, free and clear of any liens or

encumbrances affecting such Property.

12. The Sale Process Order authorized and directed the Sales Officer to carry out a Sale Process

for the Property in accordance with the steps and timelines set forth in Schedule "A" to the

Sale Process Order. The Sale Process contemplated the following initial steps and

timelines, subject to any variation by the Sales Officer with the written approval of TD

Bank and ECN Financial Inc. ("ECN"):

a. Preparation of marketing materials - I week from the date of the Sale Process Order;

b. Marketing-3 weeks from the date of the Sale Process Order;

c. Deadline for receipt of offers - 4 to S weeks from the date of the Sale Process Order;

d. Review and negotiation of offers-6 to 7 weeks from the date of the Sale Process Order;

e. Chose successful bidder- 6 to 8 weeks from the date of the Sale Process Order; and

f. Motion to approve sale - as soon as possible following selection of the successful

bidder.

No party appeared in Court to object to the Sale Process.

13. Following the granting of the Sales Process Order, the Sales Officer immediately

commenced its efforts to implement the Sale Process. The Sales Officer reviewed and

updated the list of potential interested strategic and financial parties that had been prepared

by KPMG CF as part of the Pre-Appointment Sale Process and sought the input of TD

Bank, ECN and the shareholders of OAI (the "Shareholders") on additional parties that

should be approached.

14. The Sales Officer prepared an outreach email which included an overview of the Sale

Process and the Property (the "Sales Teaser"), and attached a form of Non-Disclosure

Agreement (the "NDA") to be executed by parties interested in participating in the Sale

Process.

24

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15. The Sales Officer also worked to update the confidential information memorandum (the

"CIM") and the previously developed electronic data room (the "Data Room)l) with

updated financial and other information.

16. The Sales Officer's counsel, Dentons Canada LLP (HDentons"), prepared a template asset

purchase agreement, which was included in the Data Room.

17. Beginning on September 7, 2018, the Sales Officer sent out the Sales Teaser and NDA to

approximately I 69 parties by email. The Sales Officer also published an advertisement in

the Globe and Mail regarding the Sale Process.

18. 68 parties expressed an interest in participating in the Sale Process and provided the Sales

Officer with an executed NDA. The interested parties that executed an NDA and who the

Sales Officer determined had a reasonable prospect of completing a transaction were

deemed a qualified bidder (a "Qualified Bidder"), All 68 parties were deemed to be

Qualified Bidders and the Qualified Bidders were provided with the CIM and a letter (the

''Bidding Procedures Letter") acknowledging receipt of the executed NDA and setting

out the timing and procedures for conducting due diligence and submitting a final binding

bid (a "Bid"). Qualified Bidders were granted access to the Data Room, upon request. A

copy of the Bidding Procedures Letter is attached as Appendix "C" herein.

19. The Bidding Procedures Letter established a deadline for receipt of Bids on or before 5:00

pm (Eastern Time) on October 15 1 2018 (the "Bid Deadline").

20. The Bidding Procedures Letter set out the requirements for submission of a Bid. A Bid

had to be delivered prior to the Bid bead line and had to include, amongst other things, the

following:

a. A blackline asset purchase agreement, without conceptual comments, against the

template asset purchase agreement provided in the Data Room;

b. An irrevocable offer letter that addresses and confonns to the guidelines set out in

Appendix 2 of the Bidding Procedures Letter;

c. · Confirmation, including supporting documents satisfactory to the Sales Officer, of a

financial commitment for all required funding or financing;

25

• 8 -

d. The Application for Consent to Transfer a Licence (a form produced by the Ministry

of Health and Long-Term Care (the ''MoH")) with Part II of the form duly completed

in its entirety and executed by the Qualified Bidder for each of the Independent Health

Facilities Licences (the "IHF Licences").

e. The Bid must be accompanied by a refundable deposit (the "Deposit11) in the form of a

wire transfer, payable to the Sales Officer, in trust, in an amount equal to 10% of the

total consideration in the Bid;

f. No conditions based upon:

L the outcome of unperformed due diligence by the Qualified Bidder;

ii. obtaining financing; and/or

iii. any other approvals including regulatory approvals, other than approvals

required from the MoH; and

g. Evidence of authorization and approval from the Qualified Bidder1s board of directors

(or comparable governing body).

The Bidding Procedures Letter indicates that the Sales Officer may waive compliance with

any one or more of the requirements set out above.

21. The Sales Officer received seven Bids by the Bid Deadline (collectively, the "Bids"). Five

of these Bids included an asset purchase agreement, in a form consistent with the template

asset purchase agreement, and satisfied some or all of the bid requirements set out in the

Bidding Procedures Letter. Two Bids were in the form of a letter with an indication of

interest and did not include an asset purchase agreement or any of the other requirements.

A summary of the Bids will be provided to the Court as Confidential Appendix "1" (the

"Bid Summary").

22. Following the Bid Deadline, the Sales Officer and Dentons reviewed and evaluated the

Bids. In reviewing the Bids, the Sales Officer considered a number of factors including,

compliance with the Bidding Procedures Letter, the financial and contractual terms of the

Bid and the certainty of consummating the proposed transaction including the likelihood

of obtaining consent from the MoH to transfer the IHF Licences.

26

- 9 -

23. On or about October 25, 2018, following the review of the Bids and negotiations with the

leading Qualified Bidder, the Saies Officer seiected a winning bid (the "Successful Bid").

The Successful Bid was detennined to be the Bid submitted by the Purchaser (the

"Successful Bidder"). The Successful Bid was the only Bid that complied with all of the

requirements set out in the Bidding Procedures Letter.

24. After selection of the Successful Bid, the Sales Officer notified the other Qualified Bidders

that they were not the Successful Bidder and requested wire transfer instructions to return

the Deposits provided by those Qualified Bidders. Upon receipt of the wire transfer

instructions, the Sales Officer returned the Deposits of Qualified Bidders that were not

selected as the Successful Bidder.

The Successful Bid

25. Capitalized terms not defined in this section of the First Report shall have the meaning

ascribed to them in the Asset Purchase Agreement.

26. The Sales Officer and the Purchaser finalized the terms of the Successful Bid and executed

the Asset Purchase Agreement on October 25, 2018. A copy of the Asset Purchase

Agreement redacted to remove commercially sensitive terms is attached as Appendix "D"

herein. An unredacted copy of the Asset Purchase Agreement is Confidential Appendix

"2", which will be filed with the Court separately.

27. The shareholders of the Purchaser are Dr. Keyur Shah ("Shah") and Dr. Nirav Patel

("Patel"). Shah and Patel are the sole shareholders, directors and managing principals of

GNMI Inc. GNMI Inc. or its related entities hold 16 IHF licences and operate eleven IHF

diagnostic imaging clinics in good standing throughout Ontario and have successfully

acquired other clinics and obtained consent from the MoH for the related IHF license

transfers. Shah and Patel are both licenced in the area of diagnostic radiology and have the

necessary qualifications for computed tomography (CT) and magnetic resonance imaging

(MRI).

28. The principal terms of the Asset Purchase Agreement are set out below, however, an

interested person should review the Asset Purchase Agreement in its entirety. The

27

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Purchaser will acquire on an "as is, where is basis", the following assets related to the

Business:

a. All diagnostic medical equipment and other tangible property;

b. All medical supplies;

c. All Accounts Receivables;

d, The IHF Licenses;

e. The Premises Leases;

f. The Assigned Contracts;

g. The goodwill of the Business;

h. All pre-paid expenses and deposits related to the Purchased Assets (other than deposits

paid to suppliers of OAI);

i. The Software; and

j. The Books and Records.

29. The Excluded Assets are as follows:

a, Cash and cash equivalents;

b. Any rights of OAI to tax refunds or credits;

c. The Excluded Contracts:

d. The shares and other interests or capital of OAI;

e, The tax records and insurance policies of OAI;

f. Any claim of OAI to reimbursement under any insurance policy:

g. Books and Records not pertaining to the Purchased Assets;

h, Any funds or deposits held by suppliers or any other person on behalf of OAI;

i. The Licensed software;

j. The Business Name; and

k. All amounts owing from related parties to OAI.

28

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30. Assumed Liabilities are as follows:

a. All Liabilities relating to Employees;

b. Current Liabilities;

c. All Liabilities arising from or in connection with the Assigned Contracts, including any

Cure Costs;

d. All Liabilities arising from any tax, levy, penalty or cost that the Purchaser is

responsible for pursuant to the Asset Purchase Agreement; and

e. All Liabilities relating to or arising from the Purchased Assets under Environmental

Laws.

31. The Purchase Price is being satisfied by the Purchaser as follows:

a. Payment of a Deposit in the amount of 10% of the Base Purchase Price which has been

paid to the Sales Officer and is being held by the Sales Officer in accordance with the

Bidding Procedures Letter;

b. Payment of the remainder of the Base Purchase Price (representing 90% of the Base

Purchase Price) by wire transfer at the Time of Closing of immediately available funds

to an account specified by the Sales Officer;

c. By the Purchaser assuming the Assumed Liabilities; and

d. Payment of any Working Capital Adjustment required pursuant to section 2.05 of the

Asset Purchase Agreement.

32. With respect to the Employees of OAI, the Purchaser will, among other things:

a. Prior to the Closing Date, offer to employ all of the Employees who are employed by

OAI in the Business, on substantially the same terms and conditions of employment as

are in effect on the date of the Asset Purchase Agreement; and

b. Effective the opening of business on the Closing Date, assume responsibility, statutory

and otherwise, for the rights, obligations and Liabilities relating to or arising out of the

employment of the Employees and will recognize all past service of the Employees

with OAI for all purposes.

29

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33. The Asset Purchase Agreement contemplates a Closing Date that is the earlier of:

a. Five Business Days following the date of the receipt of an Unconditional Consent by

the Purchaser;

b. Five Business Days following the waiver of the conditions pursuant to section 5.03 of

the Asset Purchase Agreement; and

c. Thirty Business Days following the date of receipt of a Conditional Consent by the

Purchaser; or

d. Such other date as may be agreed to between the parties,

Sales Officer's View of the Sales Process and the Asset Purchase Agreement

34. The Sales Officer is of the view that the Sale Process was conducted in a commercially

reasonable manner and that the market was extensively canvassed where competitors,

investors and industry participants were solicited.

35. There was significant interest expressed in acquiring the Property, as evidenced by the

number ofNDAs signed, and Bids submitted pursuant to the Sale Process (as outlined in

the confidential Bid Summary).

36. All reasonable requests for information and meetings with respect to the Sale Process were

satisfied.

37, The Asset Purchase Agreement and the purchase price contained therein represents the

highest and best offer for the Property.

38. · The Sales Officer is of the view that the Transaction is beneficial to OAI's stakeholders as

a whole, as it maximizes value for the Property.

39. Based on the foregoing, the Sales Officer recommends to the Court that the Approval and

Vesting Order should be granted for the following reasons:

a. The Sales Officer is of the view thatthe Transaction represents the highest recovery for

the stakeholders as a whole;

b,' The Purchaser currently operates in the diagnostic imaging clinic industry and has the

reputation to support a transfer of the !HF Licenses by the MoH;

30

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c. TD Bank and ECN were consulted and kept apprised of the Sale Process and TD Bank

supports the Transaction; and

d. It is a condition to the closing of the Transaction that the Approval and Vesting Order

be granted.

Sealing Order

40. As set out in the Moffett Affidavit, the financial difficulty of OAI was caused in part by

irreconcilable conflicts among the Shareholders. Given this background, and to prevent

those conflicts from influencing or impeding the Sales Process, none of the Shareholders

were provided with any confidential bidding information throughout the Sales Process.

This was also required in the event that any one or more Shareholder was to participate in

the Sale Process, in any capacity. In that regard, the Sales Officer enquired with the

Shareholders whether they would be participating in the Sale Process and the Sales Officer

did not receive any formal response to its enquiry.

41. The Sales Officer is seeking the approval of the Transaction and the Asset Purchase

Agreement. In the event that the Court does not grant the Approval and Vesting Order or

the Transaction does not close, the Sales Officer is of the view that efforts to re-market the

Property or continue with the Sales Process would be impaired if the Bid Summary or the

commercially sensitive terms of the Asset Purchase Agreement are made public, or

disclosed to the Shareholders, at this time. Accordingly, the Sales Officer is of the view

that it is appropriate for the Bid Summary and the Asset Purchase Agreement to remain

confidential until such time as the Transaction closes.

42. The Sales Officer requests an order sealing the Bid Summary and the unredacted Asset

Purchase Agreement.

Discussions with the MoH - Transfer of the IHF Licences

43. The Sale Process Order empowered and authorized the Sales Officer to engage with,·meet

and communicate and consult with representatives of the MoH, independently from OAI

and other affected parties, with respect to all matters concerning or relating to the IHF

Licences. Following its appointment, the Sales Officer and Dentons contacted

31

- 14 •

representatives of the MoH to discuss the Sale Process and related matters. Since that time,

the Sales Officer and Dentorts have had a number of telephone calls and email

correspondence with representatives of the MoH.

44. Following receipt of the Bids, the Sales Officer and Dentons had a call with representatives

of the MoH regarding the next steps in the process for obtaining consent from the MoH for

the transfer of the IHF Licences. The MoH advised on that call that the Sales Officer and

the Purchaser could submit the Application for Consent to Transfer a Licence prior to

obtaining the Approval and Vesting Order. Accordingly, the Sales Officer prepared the

required application materials and submitted those to the MoH on October 29, 2018.

lV. SALES OFFICER'S OTHER ACTIVITIES

-45. In addition to implementing the Sales Process, the Sale Process Order empowered and

authorized the Sales Officer to review and monitor the cash receipts and disbursements of

OAI.

46. Following its appointment, the Sales Officer established a protocol with OAI for the review

of receipts and disbursements on a weekly basis. On a weekly basis, OAI provides the

Sales Officer with a list of proposed disbursements and related supporting documentation

for the Sales Officer's review prior to those disbursements being issued. OAI also provides

the Sales Officer with the details of the actual receipts an~ disbursements for ~he prior

week.

47. All disbursements made by OAI since the Sales Officer's appointment have been in

compliance with the terms of the Sale Process Order including paragraph 22 of the Sale

Process Order which prohibits OAI from making any payments on account of shareholder

loans or advance loans to any of the Shareholders, any corporation or entity associated with

any of the Shareholders, or any related third parties until such time as the indebtedness of

OAI to ID Bank and to ECN have been paid in full. The only payments made to

Shareholders since the Sales Officer's appointment relate to fees payable to the

Shareholders for professional services rendered in accordance with usual and customary

rates and terrris which is specifically provided for in paragraph 22 of the Sale Process Order,

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48. The Sales Officer has been providing weekly updates to TD Bank and ECN on matters

relating to the Sale Process and to the projected and actual cash flows ofOAI. In addition,

the Sales Officer has provided certain infonnation to the Shareholders, as deemed

appropriate by the Sales Officer, in relation to the status of the Sale Process.

V. CONCLUSION

49. The Sales Officer submits this First Report to the Court in support of the Sales Officer's


the Approval and Vesting Order substantially in the form contained at Tab 3 of the Motion

Record approving the Transaction contemplated by the Asset Purchase Agreement and

vesting in the Purchaser OAI's right, title and interest in and to the Purchased Assets.

All of which is respectfully submitted at Toronto, Ontario this 12th day of November, 2018.


Per: Anamika Gadia Senior Vice-President

33

THE TORONTO-DOMINION BANK - and-

Applicant



Respondent


(COMMERCIAL LIS1)


FIRST REPORT OF KPMG INC. IN ITS CAP A CITY AS SALES OFFICER OF OXFORD ADV AN CED

IMAGING INC.

DENTONSCANADALLP 77 King Street West, Suite 400 Toronto-Dominion Centre Toronto, ON M5K 0Al

Robert J. Kennedy (LSO # 474070) Tel: (416) 367-6756 Fax: (416)863-4592 [email protected]

Jordan Schultz (LSBC # 508066) Tel: 1 (604) 691-6452 [email protected]

Lawyers for KP MG Inc., in its capacity as Courtappointed Sales Officer

u) ~

THE HONOURABLE MR.

JUSTICE HAINEY

BETWEEN:



(COMMERCIAL LIST)

)

)

)

TUESDAY, THE 20th

DAY OF NOVEMBER, 2018


Applicant

- and-


Respondent


APPROVAL AND VESTING ORDER

THIS MOTION, made by KPMG Inc., in its capacity as Court appointed sales officer

(the "Sales Officer"), for an order approving the sale transaction (the "Transaction")

contemplated by an asset purchase agreement (the "Asset Purchase Agreement") between the

Sales Officer and 2659428 Ontario Inc. (the "Purchaser") dated October 25, 2018, and vesting

in the Purchaser all of Oxford Advanced Imaging Inc. 's ("OAI) right, title, benefit and interest in

and to the purchased assets described in the Asset Purchase Agreement (the "Purchased

Assets"), was heard this day at 330 University Avenue, Toronto, Ontario.

36363794_8INA TDOCS

35

- 2 -

ON READING the First Report of the Sales Officer dated November 12, 2018 (the

"First Report"), and on hearing the submissions of counsel for the Sales Officer, the

Respondent, the Purchaser, and any such other counsel as were present, no one appearing for any

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

Amanda Campbell sworn November 12, 2018, filed:

1. THIS COURT ORDERS that capitalized terms used and not otherwise defined herein,

shall have the meanings ascribed to them in the Asset Purchase Agreement.

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

and the execution of the Asset Purchase Agreement by the Sales Officer is hereby authorized and

approved, with such minor amendments as the Sales Officer may deem necessary. The Sales

Officer is hereby authorized and directed to take such additional steps and execute such

additional documents as may be necessary or desirable for the completion of the Transaction and

for the conveyance of the Purchased Assets to the Purchaser.

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

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

Officer's Certificate"), all of OAI's right, title, benefit and interest in and to the Purchased

Assets described in the Asset Purchase Agreement shall vest absolutely in the Purchaser, free

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

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

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

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

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

encumbrances or charges created by the Order of Madam Justice Conway dated August 29,

2018; (ii) all charges, security interests or claims evidenced by registrations pursuant to the

Personal Property Security Act (Ontario) or any other personal property registry system,

including those Claims listed on Schedule B hereto (all of which are collectively referred to as

the "Encumbrances", which term shall not include the permitted encumbrances listed on

Schedule C) and, for greater certainty, this Court orders that all of the Encumbrances affecting

or relating to the Purchased Assets are hereby expunged and discharged as against the Purchased

Assets.

36363794_81 NATDOCS

36

- 3 -

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

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

of the Purchased Assets, and that from and after the delivery of the Sales Officer's Certificate all

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

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

sale, as if the Purchased Assets had not been sold and remained in the possession or control of

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

5. THIS COURT authorizes and directs the Sales Officer and/ or its solicitors or its agents

to file one or more financing change statements to amend and / or discharge the PPSA

registrations set forth in Schedule B, as may be required.

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

Information Protection and Electronic Documents Act, the Sales Officer is authorized and

permitted to disclose and transfer to the Purchaser all human resources and payroll information

in OAI's records pertaining to OAI's past and current employees. The Purchaser shall maintain

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

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

information by OAI.

7. THIS COURT ORDERS that, notwithstanding:

(a) the pendency of these proceedings;

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

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

order issued pursuant to any such applications; and

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

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

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

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

assignment, :fraudulent conveyance, transfer at undervalue, or other reviewable transaction under

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

36363794_8jNA TDOCS

37

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

applicable federal or provincial legislation.

8. TIDS 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 Sales Officer 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 Sales Officer, as an officer of

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

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

SEALING

9. THIS COURT ORDERS that Confidential Appendix "1" and Confidential Appendix

"2" to the First Report, shall be sealed, kept confidential and not form part of the public record,

but shall be placed separate and apart from all other contents of the Court file, in a sealed

envelope attached to a notice that sets out the title of these proceedings and a statement that the

contents are subject to a sealing order up and until the earlier of the filing of the Sales Officer's

Certificate, or upon further order of the Court.

APPROVAL OF ACTIVITIES

10. THIS COURT ORDERS that the activities of the Sales Officer, as set out in the First

Report, are hereby approved.

36363794_8iNA TDOCS

ENTERED AT i INSCRIT A TORONTO ON/BOOK N-0: LE I DANS LE REGISTAE NO:

NOV 2 0 2018

PER I PAR: f Y'1

38

SCHEDULE "A" Form of Sales Officer's Certificate



(COMMERCIAL LIST)

THE HONOURABLE JUSTICE ) )

DAY, THE[_] DAY OF [_], 2018

BETWEEN:


Applicant

and

OXFORD ADVANCED IMAGING INC.

Respondent

APPLICATION UNDER SECTION 207 OF THE BUSINESS CORPORATIONS ACT, (ONTARIO) R.S.O.1990, c. B-16, AS AMENDED

SALES OFFICER'S CERTIFICATE

RECITALS

A. Pursuant to an Order of the Honourable Madrun Justice Conway of the Ontario Superior

Court of Justice (the "Court") dated August 29, 2018, KPMG Inc. was appointed as sales officer

(the "Sales Officer") of the assets, undertakings and properties of Oxford Advanced Imaging

Inc. ("OAI").

B. Pursuant to an Order of the Court dated November 20, 2018, the Court approved the

agreement of purchase and sale made as of October 25, 2018 (the "Asset Purchase

Agreement") between the Sales Officer and 2659428 Ontario Inc. (the "Purchaser"), and

provided for the vesting in the Purchaser of all of OAI's right, title and interest in and to the

36363794_BINA TDOCS

39

-2-

Purchased Assets, which vesting is to be effective with respect to the Purchased Assets upon the

delivery by the Sales Officer to the Purchaser of a certificate confirming: (i) the payment by the

Purchaser of the Purchase Price for the Purchased Assets, (ii) that the conditions to closing as set

out in the Asset Purchase Agreement have been satisfied or waived by the Sales Officer and the

Purchaser, and (iii) the Transaction has been completed to the satisfaction of the Sales Officer.

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

the Asset Purchase Agreement.

THE SALES OFFICER CERTIFIES the following:

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

Purchased Assets payable on the Closing Date pursuant to the Asset Purchase Agreement;

2. The conditions to closing as set out in the Asset Purchase Agreement have been satisfied

or waived by the Sales Officer and the Purchaser, respectively; and

3. The Transaction has been completed to the satisfaction of the Sales Officer.

THIS CERTIFICATE was delivered by the Sales Officer at ___ [TIME] on __ _

[DATE].

36363794_81 NATDOCS

KPMG Inc., in its capacity as Court appointed Sales Officer, and not in its personal capacity

Per: Name: Title:

40

SCHEDULE "B" PPSA Registrations

Personal Property Security Act (Ontario) financing statement registrations:

(a) File Number 708223428 (The Toronto-Dominion Bank);

(b) File Number 708897141 (Element Financial Corporation);

(c) File Number 709149492 (Element Financial Corporation);

(d) File Number 709340265 (The Toronto-Dominion Bank);

(e) File Number 709340283 (The Toronto-Dominion Bank);

(f) File Number 709340301 (The Toronto-Dominion Bank);

36363794_8jNATDOCS

41

Nil

36363 794 _B[ NATDOCS

SCHEDULE "C" Permitted Encumbrances

42


Applicant

36363794_8JNATDOCS



Respondent


(COMMERCIAL LIST)


APPROVAL AND VESTING ORDER

DENTONS CANADA LLP 77 King Street West, Suite 400 Toronto-Dominion Centre Toronto, ON MSK OAl

Robert J. Kennedy (LSO # 474070) Tel: (416) 367-6756 Fax: (416) 863-4592 [email protected]


Lawyers for KP MG Inc., in its capacity as Courtappointed Sales Officer

~ w



(COMMERCIAL LIST)


APPLICATION UNDER SECTION 207 OF THE BUSINESS CORPORATIONS ACT, R.S.O. 1990, c. B.16

SECOND REPORT OF KPMG INC. in its capacity as SALES OFFICER OF OXFORD ADV AN CED IMAGING INC.

April 26, 2019

39097202_6[NATDOCS

44

- 2 -45

TABLE OF CONTENTS

I. INTRODUCTION AND SUMMARY OF PROCEEDINGS ......................................... 4

II. PURPOSE OF THIS SECOND REPORT ...................................................................... 5

III. UPDATE ON THE STATUS OF THE TRANSACTION ............................................. 5 License Transfer Approval Process ..................................................................................... 6 Pre-Closing and Transition Matters ..................................................................................... 6

IV. AMENDMENTS TO THE ASSET PURCHASE AGREEMENT ................................ 7

V. SALES OFFICER'S OTHER ACTIVITIES .................................................................. 7

VI. APPROVAL OF PROFESSIONAL FEES ...................................................................... 8

VII. CONCLUSION .................................................................................................................. 9

39097202_6INA TDOCS

- 3 -

LIST OF APPENDICES

Appendix A- First Report (without appendices)

Appendix B - Redacted Asset Purchase Agreement

Appendix C - Approval and Vesting Order

Appendix D - Second Amending Agreement

Appendix E-Fee Affidavit of Anamika Gadia ofKPMG sworn April 24, 2019

Appendix F -Fee Affidavit of Robert Kennedy ofDentons sworn April 26, 2019

39097202_6INA TDOCS

46

- 4 -

INTRODUCTION AND SUMMARY OF PROCEEDINGS





Inc. ("OAI") and for the appointment of KPMG Inc. ("KPMG") as Sales Officer (as

defined below).

2. The Application was heard on August 29, 2018 and on the same date, the Court granted an

order (the "Sales Process Order") which, among other things, appointed KPMG as the

sales officer (the "Sales Officer") to carry out a process (the "Sales Process") for the sale

of the assets and business of OAI (the "Property").

3. The Property consists of all the assets, undertakings and properties acquired for, or used in

relation to, OAI's diagnostic imaging clinics. The operations of OAI consist of two clinics,

one is located fn Mississauga, Ontario and the other one is located in Ajax, Ontario.


Report"). A copy of the First Report is attached as Appendix "A" herein (without

appendices). As detailed in the First Report, the Sales Officer brought a motion returnable

on November 20, 2018 seeking an Approval and Vesting Order (the "Approval and

Vesting Order") approving: (a) the sale transaction (the "Transaction") contemplated by

an asset purchase agreement between the Sales Officer and 2659428 Ontario Inc. o/a

Greater Niagara Medical Imaging (the "Purchaser") dated October 25, 2018, as amended

by an amendment agreement dated November 19, 2018 (collectively, the "Asset Purchase


assets described in the Asset Purchase Agreement; and (b) the Sales Officer's activities as

set forth in the First Report. A copy of the redacted Asset Purchase Agreement is attached

as Appendix "B" herein.


Approval and Vesting Order is attached as Appendix "C" herein.

39097202_6!NATDOCS

47

- 5 -

PURPOSE OF THIS SECOND REPORT

6. The purpose of the Sales Officer's second report dated April 26, 2019 (the "Second

Report") is to:

(a) update this Honourable Court with respect to the status of the Transaction and the

Application for Consent to Transfer a License to be obtained from the Ministry of

Health and Long-Term Care (the "MoH") with respect to OAI's Independent

Health Facility Licences (the "IHF Licenses");

(b) provide this Honourable Court with the details of certain amendments to the Asset

Purchase Agreement (the "Second Amendment");

( c) provide this Honourable Court with the necessary information to support an Order:

(i) approving and authorizing the Second Amendment; and

(ii) approving the activities of the Sales Officer as set out in the Second Report,

and approving the fees and disbursements of the Sales Officer and the Sales

Officer's legal counsel, Dentons Canada LLP ("Dentons"), for the period

up to January 30, 2019.


dollars.

8. The information contained in this Second Report has been obtained from the books and





Officer in preparing this Second Report.

39097202_6INA TDOCS

48

- 6 -

UPDATE ON THE STATUS OF THE TRANSACTION

9. Since the granting of the Approval and Vesting Order, the Sales Officer has been working

diligently with the Purchaser, the MoH and OAI to close the Transaction. Specifically, the

Sales Officer has been: (a) working with the MoH and the Purchaser through the IHF

License transfer approval process; and (b) working with the Purchaser and OAI through

certain pre-closing and transition matters.

License Transfer Approval Process

10. On November 21, 2018, the Sales Officer received correspondence from the MoH advising

that the Director of Independent Health Facilities had granted a conditional consent (the

"Conditional Consent") to the transfer of OAI's IHF Licences to the Purchaser. The

consent was conditional on: (a) the Purchaser entering into a new funding agreement with

the MoH (the "New Funding Agreement"); (b) the wind-up of OAI's existing funding

agreement (the "Old Funding Agreement"); arid (c) certain other administrative matters

consisting of the submission of registration packages in respect of each IHF License and

payment of the associated registration fee.

11. Shortly after the Conditional Consent was delivered to the Purchaser:

(a) the Purchaser submitted the required registration packages and paid the associated

registration fees to the MoH; and

(b) the Sales Officer commenced regular discussions with the MoH regarding the status

of the license transfer process and in particular, the MoH's timing in delivering the

New Funding Agreement to the Purchaser. In the course of those discussions, the

MoH advised that they were unable to provide any specific timeline with respect to

the delivery of the New Funding Agreement, only that the New Funding Agreement

was going through the MoH's internal review and approval process.

39097202_6jNATDOCS

49

- 7 -

12. On January 28, 2019, the MoH advised the Sales Officer that they had received an internal

approval on the draft form of the New Funding Agreement but were still awaiting a further

internal approval to allow for the delivery of the initial draft of the New Funding

Agreement to the Purchaser for review and comments.

13. On March 18, 2019, the MoH advised the Sales Officer that they had obtained the necessary

approvals to release the draft of the New Funding Agreement to the Purchaser and since

that time, the Purchaser and the MoH have had various discussions regarding the terms of

the New Funding Agreement.

14. The Purchaser has now advised the Sales Officer that the Purchaser and MoH have settled

and finalized the form of the New Funding Agreement.

15. The Sales Officer and MoH are currently addressing the wind-up process for the Old

Funding Agreement. The Sales Officer anticipates finalizing any steps required to wind

up the Old Funding Agreement in the near future.

Pre-Closing and Transition Matters

16. The Sales Officer and its counsel have been working with the Purchaser and its counsel

through the various pre-closing and transition matters, including the assignments of leases

and contracts and the transfer of certain patient data that is required to occur prior to closing

pursuant to the IHF regulations. The Sales Officer continues to liaise with OAI in respect

of these matters, as required.

AMENDMENTS TO THE ASSET PURCHASE AGREEMENT

17. The Closing Date, as defined in the Asset Purchase Agreement, is:

"Closing Date" means the earlier of: (i) five (5) Business Days following the date of the receipt of an Unconditional Consent by the Purchaser, (ii) five (5) Business Days following the waiver of conditions pursuant to section 5.03 of this Agreement, and (iii) thirty (30) Business Days following the date of the receipt of a Conditional Consent by the Purchaser, or such other date as may be agreed to between the parties.

18. As a result of the Conditional Consent being delivered, the Closing Date has lapsed, subject

to the parties agreeing to a later Closing Date.

39097202_6JNATDOCS

50

- 8 -

19. The Sales Officer is of the view that the delay in completing the New Funding Agreement

has been primarily caused by the various internal approvals that were required at the MoH

and as a result, the satisfaction of the conditions contained in the Conditional Consent has

until recently been outside the Purchaser's control.

20. The Sales Officer is therefore of the view that extending the Closing Date to allow the

Transaction to close is appropriate, and still represents the highest and best recovery for

the stakeholders as a whole. Terminating the Asset Purchase Agreement would introduce

uncertainty and delay, as any new purchaser would have to go through the same lengthy

approval process with the MoH.

21. The Sales Officer and the Purchaser have entered into the Second Amendment, which

amends certain terms of the Asset Purchase Agreement. A copy of the Second Amendment

is attached as Appendix "D" to this Second Report. The key terms of the Second

Amendment are as follows:

(a) the definition of "Closing Date" is amended to mean May 30, 2019, or such other

date as may be agreed to between the parties, and certain consequential

amendments arising from that amendment;

(b) a "material breach" by the Purchaser is extended to include undertakings given by

the Purchaser to meet its privacy obligations in relation to patient data being

transferred prior to closing;

( c) the Purchaser is required to deliver an additional deposit (the "Additional

Deposit"), to be held with the initial Deposit on the same terms and conditions

applicable thereto; and

(d) the Second Amendment is conditional upon, inter alia, approval by this Honourable

Court.

22. The Sales Officer is of the view that, in the circumstances, the Transaction will close on or

before May 30, 2019. The Purchaser has also paid the Additional Deposit to the Sales

39097202_6INATDOCS

51

- 9 -

Officer pending approval of the Second Amendment, demonstrating the Purchaser's

commitment to close the Transaction.

SALES OFFICER'S OTHER ACTIVITIES

23. Pursuant to the Sales Process Order, in addition to the activities undertaken by the Sales

Officer in respect of the Transaction described herein, the Sales Officer has continued to

review and monitor the cash receipts and disbursements of OAI.

24. On a weekly basis, OAI continues to provide the Sales Officer with a list of proposed

disbursements and related supporting documentation for the Sales Officer's review prior

to those disbursements being issued. OAI also continues to provide the Sales Officer with

the details of the actual receipts and disbursements for the prior week.

25. All disbursements made by OAI since the date of the First Report have been made in

compliance with the terms of the Sale Process Order including paragraph 22 of the Sale

Process Order which prohibits OAI from making any payments on account of shareholder

loans or advance loans to any of the shareholders, any corporation or entity associated with

any of the shareholders, or any related third parties until such time as the indebtedness of

OAI to TD Bank and to ECN Financial Inc. ("ECN") have been paid in full. The only

payments made to shareholders since the date of the First Report relate to fees payable to

the shareholders for professional services rendered in accordance with the usual and

customary rates and terms which is specifically provided for in paragraph 22 of the Sale

Process Order.

26. Pursuant to paragraph 3(i) of the Sale Process Order, the Sales Officer has been providing

weekly written updates to TD Bank and ECN in respect of the status of the Sale Process

and the Transaction and the Sales Officer's monitoring of the receipts and disbursements

of OAI. The Sales Officer has also provided periodic updates to OAI's counsel on the

status of the Transaction and the related pre-closing matters.

39097202_6INATDOCS

52

- 10 -

APPROVAL OF PROFESSIONAL FEES

27. The Sales Officer and its counsel have maintained detailed records of their professional

fees and costs since the Sales Officer's appointment up to an including January 31, 2019

(the "Fee Period"), as detailed in the Fee Affidavit of Anamika Gadia of KPMG sworn

April 24, 2019 and the Fee Affidavit of Robert Kennedy ofDentons sworn April 26, 2019

(collectively, the "Fee Affidavits"). Copies of the Fee Affidavits are attached as Appendix

"E", and Appendix "F", respectively.

28. Pursuant to paragraph 26 of the Sale Process Order, the Sales Officer and its counsel, shall

be paid their reasonable fees and disbursements and shall pass their accounts before this

Court.

29. The total fees and disbursements (including Harmonized Sales Tax) of the Sales Officer

during the Fee Period amount to $516,439.57. The details of the time spent and the services

provided by the Sales Officer are more particularly described in the Fee Affidavit of

Anamika Gadia.

30. The total fees and disbursements (including Harmonized Sales Tax) of Dentons during the

Fee Period amount to $234,547.60. The details of the time spent and the services provided

by Dentons are more particularly described in the Fee Affidavit of Robert Kennedy.

31. The Sales Officer has reviewed the accounts of its counsel and believes that the accounts

of the Sales Officer and Dentons are reasonable in the circumstances and respectfully

requests that the Court approve the Sales Officer's fees and disbursements and those of its

counsel.

CONCLUSION

32. The Sales Officer submits this Second Report to the Court in support of the Sales Officer's


the Order substantially in the form contained at Tab 3 of the Motion Record approving: (a)

the Second Amendment; (b) the fees and disbursements of the Sales Officer and its counsel

39097202_6jNATDOCS

53

- 11 -

for the period up to January 31, 2019; and ( c) the activities of the Sales Officer from the

date of the First Report.

All of which is respectfully submitted at Toronto, Ontario this 26th day of April, 2019.


Per: t,2/! cu,iJ h ,/ad,!£.

Anamika Gadia Senior Vice President

39097202_6INA TDOCS

54


Applicant



Respondent


(COMMERCIAL LIST)


SECOND REPORT OF KPMG INC. IN ITS CAPACITY AS SALES OFFICER OF OXFORD

ADVANCED IMAGING INC.

DENTONS CANADA LLP 77 King Street West, Suite 400 Toronto-Dominion Centre Toronto, ON M5K 0Al

Robert J. Kennedy (LSO # 474070) Tel: (416) 367-6756 Fax: ( 416) 863-4592 [email protected]


Lawyers for KPMG Inc., in its capacity as Courtappointed Sales Officer

01 01


ONTARIO

SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

IN THE MATTER OF THE WINDING UP OF


APPLICATION UNDER SECTION 207 OF THE

BUSINESS CORPORATIONS ACT, R.S.O. 1990, c. B.16

THIRD REPORT OF KPMG INC. in its capacity as

SALES OFFICER OF OXFORD ADVANCED IMAGING INC.

June 12, 2019

56

57 - 2 -

TABLE OF CONTENTS

Page

I. INTRODUCTION AND SUMMARY OF PROCEEDINGS ........................................... 4

II. PURPOSE OF THIS THIRD REPORT ............................................................................ 5

III. UPDATE ON THE CLOSING OF THE TRANSACTION ............................................. 6

License Transfer Approval Process ............................................................................................ 7

Closing and Transition Matters .................................................................................................. 7

IV. SECURITY OPINIONS ...................................................................................................... 8

TD Bank ..................................................................................................................................... 8

ECN ............................................................................................................................................ 9

V. DISTRIBUTION TO SECURED CREDITORS .............................................................. 9

VI. FEES SUBJECT TO THE ADVISORY CHARGE AND RESIDUAL SALE PROCEEDS ........................................................................................................................ 10

VII. SALES OFFICER'S OTHER ACTIVITIES .................................................................. 11

VIII. APPROVAL OF PROFESSIONAL FEES ...................................................................... 12

IX. CONCLUSION .................................................................................................................. 13

- 3 -

LIST OF APPENDICES

Appendix A - First Report (without appendices)

Appendix B - Amended Asset Purchase Agreement

Appendix C- Approval and Vesting Order

Appendix D - Second Report (without appendices)

Appendix E - TD Bank Payout Statement

Appendix F - ECN Payout Statement

Appendix G- KPMG CF Invoice Summary

Appendix H - Blakes Invoice Summary

Appendix I- Fee Affidavit of Anamika Gadia ofKPMG sworn June 11, 2019

Appendix J - Fee Affidavit of Robert Kennedy of Dentons sworn June 11, 2019

58

----------------------------------··---. ----··· ... ·---·····-··--------·-···· -- ---~

- 4 -

I. INTRODUCTION AND SUMMARY OF PROCEEDINGS





Inc. ("OAI") and for the appointment of KPMG Inc. ("KPMG") as sales officer of OAI

(the "Sales Officer").

2. The Application was heard on August 29, 2018 and KPMG was appointed Sales Officer

pursuant to an Order (the "Appointment Order") which, among other things, authorized

and directed the Sales Officer carry out a process (the "Sales Process") for the sale of the

assets and business of OAI (the "Property").

3. The Property consisted of all the assets, undertakings and properties acquired for, or used

in relation to, OAI's diagnostic imaging clinics. The operations of OAI consisted of two

clinics, one is located in Mississauga, Ontario and the other one is located in Ajax, Ontario.


Report"). A copy of the First Report (without appendices) is attached as Appendix "A"

herein. As detailed in the First Report, the Sales Officer brought a motion returnable on

November 20, 2018 seeking an Approval and Vesting Order (the "Approval and Vesting

Order") approving: (a) the sale transaction (the "Transaction") contemplated by an asset

purchase agreement between the Sales Officer and 2659428 Ontario Inc. (the

"Purchaser") dated October 25, 2018 (the "Asset Purchase Agreement"), as amended by

an amending agreement dated November 19, 2018 (the "First Amendment") and a second

amending agreement dated April 23, 2019 (the "Second Amendment", and together with

the Purchase Agreement and First Amendment, the "Amended Asset Purchase


assets described in the Amended Asset Purchase Agreement; and (b) the Sales Officer's

activities as set forth in the First Report. A copy of the Amended Asset Purchase

Agreement is attached as Appendix "B" herein.

59

-·----------- ---------· - - . ·-· ·--·----------------·-·------------------·------··· . ---

- 5 -


Approval and Vesting Order is attached as Appendix "C" herein.

6. The Sales Officer issued its second report to the Court on April 26, 2019 (the "Second

Report"). A copy of the Second Report (without appendices) is attached as Appendix

"D" herein. As detailed in the Second Report, the Sales Officer brought a motion

returnable on May 2, 2019 seeking an Order approving: (a) the Second Amendment, and

(b) approving the activities of the Sales Officer as set out in the Second Report and

approving the fees and disbursements of the Sales Officer and the Sales Officer's legal

counsel, Dentons Canada LLP ("Den tons"), for the period up to January 30, 2019.

7. Capitalized terms not defined herein shall have the meanings set out in the Appointment

Order.

II. PURPOSE OF THIS THIRD REPORT

8. The purpose of the Sales Officer's third report dated June 12, 2019 (the "Third Report")

is to:

(a) Update the Court with respect to the closing of the Transaction;

(b) Provide the Court with the necessary information to support an Order (the "First

Distribution Order") authorizing and approving the Sales Officer to make a

distribution from the Sales Proceeds (as defined herein) as follows:

(i) A distribution by the Sales Officer to TD Bank to repay TD Bank in full and

final satisfaction of the indebtedness owing by OAI to TD Bank (the "TD

Bank Distribution"); and

(ii) A distribution by the Sales Officer to ECN Financial Inc. ("ECN") to repay

ECN in full and final satisfaction of the indebtedness owing by OAI to ECN

(the "ECN Distribution");

(c) Provide the Court with details regarding the fees and disbursements incurred by

KPMG Corporate Finance Inc. ("KPMG CF") and Blake, Cassels & Graydon LLP

60

III.

. 6.

("Blakes") prior to the granting of the Appointment Order in relation to the

previous solicitation process for the sale of the Property, which fees are secured by

the Advisory Charge; and

(d) Provide the Court with the necessary information to support an Order approving

the activities of the Sales Officer as set out in the Third Report and approving the

fees of the Sales Officer and Dentons for the period of February 1, 2019 to May 31,

2019.

9. Unless otherwise stated, all monetary amounts.contained herein are expressed in Canadian

dollars.

10. The information contained in this Third Report has been obtained from the books and





Officer in preparing this Third Report.

11. Future oriented financial information reported or relied on in preparing this Third Report

is based on OAJ management's assumptions regarding future events; actual results may

vary from forecast and such variations may be material.

12.

UPDATE ON THE CLOSING OF THE TRANSACTION

Since the date of the Second Report, the Sales Officer worked diligently with the Purchaser,

the Ministry of Health and Long-Term Care (the "MoH"), and OAI to close the

Transaction. Specifically, the Sales Officer: (a) worked with the MoH and the Purchaser

through the transfer approval process in respect of OAI's Independent Health Facility

Licences (the "IHF Licenses") and (b) worked with the Purchaser and OAI through

numerous pre-closing and transition matters. The Transaction closed on May 30, 2019.

61

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License Transfer Approval Process

13. As discussed in the Second Report, the license transfer approval process was subject to a

number of conditions including the MoH and the Purchaser entering into a new funding

agreement (the "New Funding Agreement") and termination of OAl's existing funding

agreement with the MoH (the "Old Funding Agreement"). As of the date of the Second

Report, the Sales Officer had been advised by the Purchaser that the Purchaser and MoH

had settled and finalized the form of the New Funding Agreement.

14. Following the issuance of the Second Report, the Sales Officer and its counsel continued

to hold discussions with the MoH and the Purchaser regarding the status of the New

Funding Agreement and the license transfer process. On May 14, 2019, the Sales Officer

received a letter from the MoH advising that the Old Funding Agreement would be

terminated on May 30, 2019 (the target closing date), subject to the Sales Officer waiving

the 90-day termination notice period contained in the Old Funding Agreement (the "Notice

Period").

15. The Sales Officer provided the MoH with the written waiver with respect to the Notice

Period on or about May 2 7, 2019.

16. On May 27, 2019, the MoH advised the Sales Officer that all of the conditions associated

with the license transfer process had been satisfied and that the license transfer would be

completed and effective for May 31, 2019.

17. In the same correspondence, the MoH further advised that a financial reconciliation of

funds paid to OAI in respect to the IHF Licences was being undertaken by the MoH and

would be provided to the Sales Officer following the closing of the Transaction (the "OAI

Funding Reconciliation").

Closing and Transition Matters

18. The Sales Officer and its counsel also continued working with the Purchaser and its counsel

through the various pre-closing and transition matters, including the assignments of leases

and contracts and the transfer of certain patient data that was required to occur prior to

62

-8-

closing pursuant to the IHF regulations (the "Data Migration"). The Sales Officer and its

counsel completed all of the required pre-closing and closing matters in order to close the

Transaction on May 30, 2019 (the "Closing Date").

19. The Sales Officer received the balance of the purchase price on the Closing Date. In

summary, the Sales Officer received $26,250,000 from the Purchaser for the purchase of

the Property and $18, I 08.05 representing certain security deposits previously paid by OAI

in respect of commercial leases that were reimbursed by the Purchaser, in accordance with

the Amended Asset Purchase Agreement (collectively, the "Sale Proceeds"). On May 31,

2019, the Sales Officer filed the Sales Officer's certificate with the Court.

20. Currently, the Sales Officer continues to work with the Purchaser and OAI on certain post~

closing matters, including the continued Data Migration and the reconciliation of working

capital adjustments to the purchase price as provided for in the Amended Asset Purchase

Agreement (the "Working Capital Adjustment"). The Sales Officer notes that the

purchase price (and as a result, the Sale Proceeds) held by the Sales Officer will adjust

based on the outcome of the Working Capital Adjustment.

IV. SECURITY OPINIONS

TD Bank

21. The Sales Officer obtained a security opinion from Dentons with respect to the TD Bank

security documentation (the "TD Bank Security Opinion") and, subject to the customary

qualifications and assumptions contained therein, the TD Bank Security Opinion opines

that: (a) the security held by TD Bank is valid and legally enforceable against OAI, and (b)

TD Bank has a perfected security interest in the Property.

22. Subject to the customary assumptions and qualifications contained in the TD Bank Security

Opinion, Dentons has opined that the TD Bank security documents:

(a) constitute legal, valid and binding security interests in favour of TD Bank in the

Property;

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

63

V.

ECN

-9-

(b) are sufficient to secure the payment and performance of the obligations secured

thereby; and

(c) are properly registered and perfected in the applicable jurisdiction.

23. The Sales Officer obtained a security opinion from its counsel with respect to the ECN

security documentation (the 11ECN Security Opinion") and, subject to the customary

qualifications and assumptions contained therein, the ECN Security Opinion opines that:

(i) the security held by ECN is valid and legally enforceable against OAI, and (ii) ECN has

a perfected security interest in the Property.

24. Subject to the customary assumptions and qualifications contained in the ECN Security

Opinion, Sales Officer's counsel has opined that the ECN security documents:

(a)

(b)

(c)

constitute legal, valid and binding security interests in favour of ECN in the

Property;

are sufficient to secure the payment and performance of the obligations secured

thereby; and

are properly registered and perfected in the applicable jurisdiction.

DISTRIBUTION TO SECURED CREDITORS

25. Pursuant to paragraphs 3(f) and 23 of the Appointment Order, the Sales Officer is seeking

the First Distribution Order in order to authorize and approve the TD Bank Distribution

and the ECN Distribution.

26. According to a payout statement received from TD Bank, the amount of $9,416,220.22 is

due and owing to TD Bank as of June IO, 2019, together with accruing interest and

expenses (the "TD Bank Indebtedness"). The Sales Officer notes that a further advance

to OAI from TD Bank in the amount of approximately $71,000 will occur on or about June

64

, •• -.·--··-··-···- ·---- ---·---. -·-· ---·--·---------· --~~a.o·c~~-~--~~~~-------------------~

- 10 -

14, 2019 in order to fund a final payroll to employees of OAI following the closing of the

Transaction. A copy of the TD Bank payout statement is attached as Appendix "E" herein.

27. According to a payout statement received from ECN, the amount of $11,268,000.63 is due

and owing to ECN as of June 10, 2019, together with accruing interest and expenses (the

"ECN Indebtedness"). A copy of the ECN payout statement is attached as Appendix "F"

herein.

28. There are sufficient Sale Proceeds to fund the TD Bank Distribution and ECN Distribution.

The proposed distributions will further limit interest charges accruing on the TD Bank

Indebtedness and the ECN Indebtedness.

VI. FEES SUBJECT TO THE ADVISORY CHARGE AND RESIDUAL SALE

PROCEEDS

29. Pursuant to paragraph 27 of the Appointment Order, KPMG CF and Blakes are entitled to

an Advisory Charge as security for such fees and disbursements relating to the solicitation

process for the sale of Property incurred by OAI prior to the making of the Appointment

Order. The Advisory Charge forms a third charge upon the Property and the Sale Proceeds

thereof, in priority to all security interests, trusts, liens, charges and encumbrances,

statutory or otherwise, but subsequent and subordinate to the Sale Process Borrowings

Charge, the Sales Officer's Charge and the security interests of TD Bank and ECN.

30. The fees and disbursements (including Harmonized Sales Tax) of KPMG CF and Blakes

incurred by OAI prior to the making of the Appointment Order total $1,041,288.91 (the

"KPMG CF Fees") and $446,463.92 (the "Blakes Fees"), respectively. A copy of the

KPMG CF invoice summary is attached as Appendix "G" herein. A copy of the Blakes

invoice summary is attached as Appendix "H" herein.

3 I. Pursuant to the Appointment Order and the Advisory Charge, the Sales Officer is proposing

and seeking an authorization and approval for distributions from the Sales Proceeds on

account of the KPMG CF Fees (the "KPMG CF Distribution") and Blakes Fees (the

"Blakes Distribution"), following the completion of the TD Bank Distribution and ECN

Distribution.

65

....... --------- . ------------------------------------ ------------------------- ----- . ----- --------------------------- ------- ----

- I 1 -

32. The Sales Officer is reasonably satisfied that there will remain sufficient Sale Proceeds

following the completion to the TD Bank Distribution, ECN Distribution, KPMG CF

Distribution and Blakes Distribution (collectively, the "Distributions") to support the

Sales Officer's Charge.

33. The Sales Officer is currently assessing the most effective and reasonable method with

respect to dealing with the residual Sale Proceeds following the Distributions (the

"Residual Proceeds"). As noted above, the MoH has indicated that it will be initiating the

OAI Funding Reconciliation and there may be priority claims (i.e. Canada Revenue

Agency) or other claims to the Residual Proceeds including those of OAI and its

shareholders, and the stakeholders and interested parties in the Court ordered Sales Process.

VII. SALES OFFICER'S OTHER ACTIVITIES

34. . Pursuant to the Appointment Order, in addition to the activities undertaken by the Sales

Officer in respect of the Transaction described herein, the Sales Officer has continued to

review and monitor the cash receipts and disbursements of OAI.

35. On a weekly basis, OAI continues to provide the Sales Officer with a list of proposed

disbursements and related supporting documentation for the Sales Officer's review prior

to those disbursements being issued. OAI also continues to provide the Sales Officer with

the details of the actual receipts and disbursements for the prior week.

36. All disbursements made by OAI since the date of the Second Report have been made in

compliance with the terms of the Appointment Order including paragraph 22 of the

Appointment Order which prohibits OAI from making any payments on account of

shareholder loans or advance loans to any of the shareholders, any corporation or entity

associated with any of the shareholders, or any related third parties until such time as the

indebtedness of OAI to TD Bank and to ECN have been paid in full, The only payments

made to shareholders since the date of the Second Report relate to fees payable to the

shareholders for professional services rendered in accordance with the usual and customary

rates and terms which is specifically provided for in paragraph 22 of the Appointment

Order.

66

VIII.

37. Pursuant to paragraph 3(i) of the Appointment Order, the Sales Officer has been providing

weekly written updates to TD Bank and ECN in respect of the status of the Sale Process

and the Transaction and the Sales Officer's monitoring of the receipts and disbursements

of OAI. The Sales Officer has also provided periodic updates to OAI's counsel on the

status of the Transaction and the related pre-closing matters.

38.

APPROVAL OF PROFESSIONAL FEES

The Sales Officer and its counsel have maintained detailed records of their professional

time and costs since February 1, 2019 up to an including May 31, 2019 (the "Fee Period"),

as detailed in the Fee Affidavit of Anamika Gadia of KPMG sworn June 11, 2019 and the

Fee Affidavit of Robert Kennedy of Den tons sworn June 11, 2019 ( collectively, the "Fee

Affidavits"). Copies of the Fee Affidavits are attached as Appendix "I", and Appendix

"J", respectively.

39. Pursuant to paragraph 26 of the Appointment Order, the Sales Officer and its counsel, shall

be paid their reasonable fees and disbursements and shall pass their accounts before this

Court.

40. The fees and disbursements (including Harmonized Sales Tax) of the Sales Officer during

the Fee Period total $143,424.06. The details of the time spent and the services provided

by the Sales Officer are more particularly described in the Fee Affidavit of Anamika Gadia.

41. The fees and disbursements (including Harmonized Sales Tax) ofDentons during the Fee.

Period total $181,660.57. The details of the time spent and the services provided by

Dentons are more particularly described in the Fee Affidavit of Robert Kennedy.

42. The Sales Officer has reviewed the accounts of its counsel and believes that the accounts

of the Sales Officer and Dentons are reasonable in the circumstances and respectfully

requests that the Court approve the Sales Officer's fees and disbursements and those of its

counsel.

67

IX.

43.

• 13 -

CONCLUSION

The Sales Officer submits this Third Report to the Court in support of the Sales Officer's


the following relief:

(a) An Order substantially in the form contained at Tab 3 of the Motion Record: (a)

authorizing and directing the Sales Officer to complete the TD Bank Distribution

and ECN Distribution, (b) authorizing and directing the Sales Officer to complete

the KPMG CF Distribution and Blakes Distribution pursuant to the Advisory

Charge, and (c) approving the activities of the Sales Officer as set out in the Third

Report and approving the fees of the Sales Officer and Dentons for the period

February 1, 2019 to May 31, 2019;

All of which is respectfully submitted at Toronto, Ontario this 12th day of June, 2019.

Per:


Anamika Gadia Senior Vice President

68


Applicant

- and-



Respondent


(COMMERCIAL LIST)


THIRD REPORT OF KPMG INC. in its capacity as SALES OFFICER OF OXFORD ADV AN CED

IMAGING INC.

DENTONSCANADALLP Toronto Dominion Centre 77 King St. W ., Suite 400 Toronto, Ontario M5K 0Al

Robert Kennedy (LSO # 474070) Tel: (416)367-6756 Fax: (416) 863-4592 [email protected]




0) (0

JUSTICE ( o iv w t\y

BETWEEN:



(COMMERCIAL LIST)

)

)

)


- and -

TUESDAY, THE 18th DAY

OF JUNE, 2019

Applicant


Respondent

APPLICATION UNDER SECTION 207 OF THE BUSINESS CORPORA TIO NS ACT, (ONTARIO) R.S.0.1990, c. B-16, AS AMENDED

ORDER (Distribution Order)

THIS MOTION, made by KPMG Inc. ("KPMG") in its capacity as the Court-appointed

sales officer (the "Sales Officer") appointed pursuant to the appointment order granted by the

Court on August 29, 2018 (the "Appointment Order"), for an order,

(a) approving and authorizing a distribution by the Sales Officer to The Toronto

Dominion Bank (the "TD Bank") from the sale proceeds generated from the

closing of the Court approved transaction between the Sales Officer and 2659428

Ontario Inc. pursuant to an asset purchase agreement dated October 25, 2018, as

amended (the "Sale Proceeds"), as set out in the Third Report (as defined herein);

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(b) approving and authorizing a distribution by the Sales Officer to ECN Financial

Inc. ("ECN") from the Sale Proceeds, as set out in the Third Report;

(c) approving and authorizing a distribution by the Sales Officer to KPMG Corporate

Finance Inc. ("KPMG CF") from the Sale Proceeds, on account of fees and

disbursements incurred by Oxford Advanced Imaging Inc. ("OAI") prior to the

Appointment Order, which are secured pursuant to the Advisory Charge (as

defined in the Appointment Order);

( d) approving and authorizing a distribution by the Sales Officer to Blake, Cassels &

Graydon LLP ("Blakes") from the Sale Proceeds, on account of fees and

disbursements incurred by OAI which are secured pursuant to the Advisory

Charge;

( e) approving the activities of the Sales Officer, together with the fees and

disbursements of the Sales Officer and its legal counsel, Dentons Canada LLP

("Dentons"), as set out in the Third Report of KPMG, in its capacity as Sales

Officer, dated June 12, 2019 (the Third Report"); and

(f) such further and other grounds as counsel may advise and this Honourable Court

may permit;

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

ON READING the Motion Record of the Sales Officer dated June 12, 2019 and the

Third Report, and on hearing the submissions of counsel for the Sales Officer, and any such

other counsel as were present, no one appearing for any other person on the service list, although

properly served as appears from the Affidavit of Amanda Campbell sworn June 12, 2019, filed:

SERVICE

1. THIS COURT ORDERS that the time for service of the notice of motion and the

motion record is hereby abridged and validated so that this motion is properly returnable today

and hereby dispenses with further service thereof.

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DISTRIBUTIONS

2. THIS COURT ORD:ERS that the Sales Officer is authorized and directed to make a

distribution from the Sale Proceeds in an amount sufficient to repay TD Bank in full and final

satisfaction of all amount~ owing by OAI to the TD Bank, as set out in the Third Report.

3. THIS COURT ORDERS that the Sales Officer is authorized and directed to make a

distribution from the Sale Proceeds in an amount sufficient to repay ECN in full and final

satisfaction of all amounts owing by OAI to ECN, as set out in the Third Report.


distribution from the Sale Proceeds in the amount of $1,041,288.91 to KPMG CF, representing

the fees and disbursements secured pursuant to the Advisory Charge.


distribution from the Sale Proceeds in the amount of $425,310.89 to Blakes, representing the fees

and disbursements secured pursuant to the Advisory Charge.

RECEIVER'S ACTIVITIES

6. THIS COURT ORDERS that the Third Report and the activities of the Sales Officer as

set out in the Third Report, are hereby approved

7. THIS COURT ORDERS that the fees and disbursements of the Sales Officer and

Dentons, as set out in the Third Report and the Fee Affidavit of Anamika Gadia sworn June 11,

2019 and the Fee Affidavit of Robert Kennedy sworn June 11, 2019, are hereby approved.

40177663_ 4INATDOCS

SUPERIOR COURT OF JUIT'ICE ENTERED

JV~ 1 $ ~fl1~

COUR SUPERIEURE DE JUSTICE ENTRE

72

THE TORONTO-DOJ\.1INION BANK - and-

AoQlicant

40177663_ 4jNATDOCS



Respondent


(COMMERCIAL LIST)



DENTONS CANADA LLP Toronto Dominion Centre 77 King St. W., Suite 400 Toronto, Ontario M5K OAI





-...J (,.)



(COMMERCIAL LIST)

THE HONOURABLE M~~f\M

JUSTICE C oi-JW-Ay

)

)

)

BETWEEN:


- and-

TUESDAY, THE 18th DAY

OF JUNE, 2019

Applicant


Respondent



THIS MOTION, made by KPMG Inc. ("KPMG") in its capacity as the Court-appointed

sales officer (the "Sales Officer") appointed pursuant to the appointment order granted by the

Court on August 29, 2018 (the "Appointment Order"), for an order,

(a) approving and authorizing a distribution by the Sales Officer to The Toronto

Dominion Bank (the "TD Bank") from the sale proceeds generated from the

closing of the Court approved transaction between the Sales Officer and 2659428

Ontario Inc. pursuant to an asset purchase agreement dated October 25, 2018, as

amended (the "Sale Proceeds"), as set out in the Third Report (as defined herein);

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(b) approving and authorizing a distribution by the Sales Officer to ECN Financial

Inc. ("ECN") from the Sale Proceeds, as set out in the Third Report;

(c) approving and authorizing a distribution by the Sales Officer to KPMG Corporate

Finance Inc. ("KPMG CF") from the Sale Proceeds, on account of fees and

disbursements incurred by Oxford Advanced Imaging Inc. ("OAI") prior to the

Appointment Order, which are secured pursuant to the Advisory Charge (as

defined in the Appointment Order);

( d) approving and authorizing a distribution by the Sales Officer to Blake, Cassels &

Graydon LLP ("Blakes") from the Sale Proceeds, on account of fees and

disbursements incurred by OAI which are secured pursuant to the Advisory

Charge;

(e) approving the activities of the Sales Officer, together with the fees and

disbursements of the Sales Officer and its legal counsel, Dentons Canada LLP

("Dentons"), as set out in the Third Report of KPMG, in its capacity as Sales

Officer, dated June 12, 2019 (the Third Report"); and

(f) such further and other grounds as counsel may advise and this Honourable Court

may permit;


ON READING the Motion Record of the Sales Officer dated June 12, 2019 and the

Third Report, and on hearing the submissions of counsel for the Sales Officer, and any such


properly served as appears from the Affidavit of Amanda Campbell sworn June 12, 2019, filed:

SERVICE

1. THIS COURT ORDERS that the time for service of the notice of motion and the

motion record is hereby abridged and validated so that this motion is properly returnable today

and hereby dispenses with further service thereof.

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75

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DISTRIBUTIONS


distribution from the Sale Proceeds in an amount sufficient to repay TD Bank in full and final

satisfaction of all amounts owing by OAI to the TD Bank, as set out in the Third Report.


distribution from the Sale Proceeds in an amount sufficient to repay ECN in full and final

satisfaction of all amounts owing by OAI to ECN, as set out in the Third Report.


distribution from the Sale Proceeds in the amount of $1,041,288.91 to KPMG CF, representing

the fees and disbursements secured pursuant to the Advisory Charge.


distribution from the Sale Proceeds in the amount of $425,310.89 to Blakes, representing the fees

and disbursements secured pursuant to the Advisory Charge.

RECEIVER'S ACTIVITIES

6. THIS COURT ORDERS that the Third Report and the activities of the Sales Officer as

set out in the Third Report, are hereby approved

7. THIS COURT ORDERS that the fees and disbursements of the Sales Officer and

Dentons, as set out in the Third Report and the Fee Affidavit of Anamika Gadia sworn June 11,

2019 and the Fee Affidavit of Robert Kennedy sworn June 11, 2019, are hereby approved.

40177663_ 4INATDOCS

SUPERIOR COURT OF JUSTICE ENTERED

JV~ 1 $ 201~

COUR SUPERIEURE DE JUSTIGE ENTRE

76

THE TORONTO-DO1'.1INION BANK - and-

Ao.:p_licant

40177663_ 4INATDOCS



Respondent


(COMMERCIAL LIST)



DENTONS CANADA LLP Toronto Dominion Centre 77 King St. W., Suite 400 Toronto, Ontario M5K OAl





-.....i -.....i


Applicant

41471894_1 INATDOCS

- and-



Respondent


(COMMERCIAL LIST)


FOURTH REPORT OF KPMG INC. IN ITS CAPACITY AS SALES OFFICER OF OXFORD

ADVANCE IMAGING INC.




Lawyers for KPMG Inc.in its capacity as Courtappointed Sales Officer

-...J 00

THE HONOURABLE

JUSTICE

BETWEEN:



(COMMERCIAL LIST)

)

)

)

THURSDAY, THE 29th DAY

OF AUGUST, 2019


Applicant

- and-


Respondent


CLAIMS PROCEDURE ORDER

THIS MOTION, made by KPMG Inc., in its capacity as the court-appointed sales

officer (in such capacity, the "Sales Officer") of the Respondent, Oxford Advanced Imaging Inc.

("OAI"), appointed pursuant to the appointment order granted by this Court on August 29, 2018

(the "Appointment Order"), for an order,

(a) approving the activities of the Sales Officer as set out in the Fourth Report of the

Sales Officer dated August 23, 2019 (the Fourth Report");

(b) approving and authorizing the Claims Procedure (as defined herein) and

authorizing, directing and empowering the Sales Officer to implement and carry

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out the Claims Procedure in accordance with the terms of this order (the "Claims

Procedure Order"); and

( c) such further and other grounds as counsel may advise and this Honourable Court

may permit;


ON READING the Motion Record of the Sales Officer dated August 23, 2019, including

the Fourth Report, and on hearing the submissions of counsel for the Sales Officer, and any such


properly served as appears from the Affidavit of Amanda Campbell sworn August 23, 2019,

filed:

SERVICE

1. THIS COURT ORDERS that the time for service and notice of this Motion is abridged

and validated such that this Motion is properly returnable today, without further service or notice

thereof.

SALES OFFICER'S ACTIVITIES

2. THIS COURT ORDERS that the Fourth Report and the activities described therein are

hereby approved.

INTERPRETATION

3. THIS COURT ORDERS that, for the purposes of this Claims Procedure Order, in

addition to terms defined elsewhere herein, the following terms shall have the following

meanings:

(a) "Assessments" means Claims of Her Majesty the Queen in Right of Canada or of

any Province or Territory or Municipality or any other taxation authority in any

Canadian or foreign jurisdiction, including, without limitation, amounts which

may arise or have arisen under any notice of assessment, notice of reassessment,

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notice of objection, notice of appeal, audit, investigation, demand or similar

request from any taxation authority;

(b) "Business Day" means a day, other than a Saturday or a Sunday, on which banks

are generally open for business in Toronto, Ontario;

(c) "Claim" means any right or claim of any Person against OAI, whether or not

asserted, in connection with any indebtedness, liability or obligation of any kind

of OAI, whether or not such right or claim is reduced to judgment, liquidated,

unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal,

equitable, secured, unsecured, perfected, unperfected, present, future, known,

unknown, by guarantee, by surety or otherwise, and whether or not such right is

executory or anticipatory in nature, including any Assessment and any Funding

Reconciliation Claim, and any right or ability of any Person to advance a claim

for contribution or indemnity or otherwise with respect to any matter, action,

cause or chose in action, whether existing at present or commenced in the future,

and any other claims that would be claims provable in bankruptcy had OAI made

an assignment in bankruptcy as of the date hereof (each, a "Claim", and

collectively, the "Claims");

( d) "Claim Document Package" means a document package that contains a copy of

the Instruction Letter, the Notice to Creditors, a Claim Statement and Notice of

Dispute (in respect of a Claim Document Package delivered to a Known

Creditor), and Instruction Letter and Proof of Claim (in respect of a Claim

Document Package delivered to a Creditor other than a Known Creditor), and

such other materials as the Sales Officer may consider appropriate or desirable;

( e) "Claim Statement" means a Claim Statement, substantially in the form attached

hereto as Schedule "D";

(f) "Claims Bar Date" means 5:00 p.m. on October 15, 2019, or such other date as

may be ordered by the Court;

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(g) "Claims Procedure" means the procedures set out in this Order for identifying

and determining Claims against OAI;

(h) "Court" means the Ontario Superior Court of Justice (Commercial List);

(i) "Creditor" means any Person having or asserting a Claim;

G) "Excluded Claim" means any Claim that may be asserted by a current or

previous shareholder of OAI;

(k) "Funding Reconciliation Claim" means any claim by the MoH in respect of any

funding agreement(s) entered into the between OAI and the MoH, ·or otherwise;

(1) "Instruction Letter" means the instruction letter to Creditors, substantially in the

form attached as Schedule "A" hereto, regarding completion by Creditors of the

Proof of Claim and the Notice of Dispute;

(m) "Known Claim" has the meaning set forth m paragraph 18 of this Claims

Procedure Order;

(n) "Known Creditors" means with respect to OAI:

(i) those Creditors that the books and records of OAI disclose were owed

monies by OAI, where such monies remain unpaid in full or in part as of

the date hereof;

(ii) any Person who commenced a legal proceeding against OAI in respect of

a Claim; and

(iii) any other Creditor of whom the Sales Officer has knowledge as at the date

of this Claims Procedure Order and for. whom the Sales Officer has a

current address or other contact information;

( o) "MoH" means the Ontario Ministry of Health and Long-Term Care;

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(p) "Notice of Dispute" means a notice, substantially in the form attached hereto as

Schedule "E";

(q) "Notice of Revision or Disallowance" means a notice, substantially in the form

attached hereto as Schedule "F";

(r) "Notice to Creditors" means the notice to Creditors for publication, substantially

in the form attached as Schedule "B" hereto;

(s) "Person" means, without limitation, any individual, firm, corporation, limited or

unlimited liability company, general or limited partnership, association, trust,

unincorporated organization, joint venture, government authority or any agency,

regulatory body, officer or instrumentality thereof or any other entity, wherever

situate or domiciled, and whether or not having legal status and whether acting on

their own or in a representative capacity;

(t) "Proof of Claim" means a Proof of Claim, substantially in the form attached

hereto as Schedule "C";

(u) "Proven Claim" means the amount of a Claim of a Creditor as finally determined

in accordance with this Claims Procedure Order.

GENERAL PROVISIONS

4. THIS COURT ORDERS that all references to time herein shall mean Toronto Time and

any reference to an event occurring on a Business Day shall mean prior to 5 :00 p.m. on such

Business Day unless otherwise indicated herein.

5. THIS COURT ORDERS that the Claims Procedure and the forms of Instruction Letter,

Notice to Creditors, Claim Statement, Proof of Claim, Notice of Dispute and Notice of Revision

or Disallowance are hereby approved. Notwithstanding the foregoing, the Sales Officer may,

from time to time, make non-substantive changes to the forms as the Sales Officer, in its sole

discretion, may consider necessary or desirable.

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6. THIS COURT ORDERS that the Sales Officer is hereby authorized to use reasonable

discretion as to the adequacy of compliance with respect to the manner in which forms delivered

hereunder are completed and executed, and may waive strict compliance with the requirements

of this Claims Procedure Order as to completion, execution and submission of such forms and to

request any further documentation from a Creditor that the Sales Officer may require.

7. THIS COURT ORDERS that all Claims shall be denominated in Canadian dollars. Any

Claims denominated in a foreign currency shall be converted to Canadian dollars at the Bank of

Canada daily average exchange rate on the Claims Bar Date.

8. THIS COURT ORDERS that there shall be no presumption of validity or deeming of

the amount due in respect of amounts claimed in any Assessment or Funding Reconciliation

Claim.

9. THIS COURT ORDERS that copies of all forms delivered hereunder, as applicable,

shall be maintained by the Sales Officer.

10. THIS COURT ORDERS that no Claim shall be determined, and no payment shall be

made by OAI in respect of any Claim, except in accordance with this Claims Procedure Order

and the Claims Procedure set out herein.

11. THIS COURT ORDERS that this Claims Procedure Order shall not affect Excluded

Claims.

ROLE OF THE SALES OFFICER

12. THIS COURT ORDERS that the Sales Officer, in addition to its prescribed rights,

duties, responsibilities and obligations under the Appointment Order, shall administer the Claims

Procedure provided for herein and is hereby directed and empowered to take such other actions

and fulfill such other roles as are contemplated by this Claims Procedure Order.

13. THIS COURT ORDERS that the Sales Officer shall (i) have all protections afforded to

it by the Appointment Order, the Business Corporations Act (Ontario), any Orders of the Court

in these proceedings and other applicable law in connection with its activities in respect of this

Claims Procedure Order; and (ii) incur no liability or obligation as a result of carrying out the

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provisions of this Claims Procedure Order, other than in respect of gross negligence or wilful

misconduct.

14. THIS COURT ORDERS that OAI and its employees, agents and representatives and

any other Person given notice of this Claims Procedure Order shall fully cooperate with the Sales

Officer in the exercise of its powers and the discharge of its duties and obligations under this

Claims Procedure Order.

NOTICE TO CREDITORS

15. THIS COURT ORDERS that:

(a) the Sales Officer shall, not later than five (5) Business Days following the

granting of the Claims Procedure Order, deliver on behalf of OAI to each of the

Known Creditors a copy of the Claim Document Package;

(b) the Sales Officer shall, not later than ten (10) Business Days following the

granting of the Claims Procedure Order, cause to be published the Notice to

Creditors in the The Globe and Mail (National Edition);

(c) the Sales Officer shall, not later than five (5) Business Days following the

granting of the Claims Procedure Order, post a copy of this Claims Procedure

Order, the Sales Officer's Motion Record in respect of this Claims Procedure

Order and the Claim Document Package on its website at www.kpmg.com/ca/oai;

and

( d) the Sales Officer shall deliver as soon as reasonably possible following receipt of

a request therefor, a copy of the Claim Document Package to any Person claiming

to be a Creditor and requesting such material in writing.

16. THIS COURT ORDERS that the Sales Officer shall be entitled to rely on the accuracy

and completeness of the information obtained from the books and records of OAI regarding the

Known Creditors and the review of the Proof( s) of Claim. For greater certainty, the Sales Officer

shall have no liability in respect of the information provided to it or otherwise obtained by it

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regarding the Known Creditors and shall not be required to conduct any independent inquiry

and/or investigation with respect to that information.

PROOFS OF CLAIM

17. THIS COURT ORDERS that subject to paragraphs 18 to 22 below, to be effective,

every Creditor asserting a Claim against OAI shall set out its aggregate Claim in a Proof of

Claim, including supporting documentation, and deliver that Proof of Claim to the Sales Officer

so that it is actually received by the Sales Officer by no later than the Claims Bar Date.

CLAIM STATEMENT

18. THIS COURT ORDERS that the Sales Officer may deliver a Claim Statement to a

Known Creditor by including such Claim Statement in the Claim Document Package delivered

to such Known Creditor pursuant to paragraph 15. Such Claim Statement shall be in substantially

the form attached hereto as Schedule "D" and shall specify the amount of such Known

Creditor's Claim as determined by the Sales Officer based on the books and records of OAI (the

"Known Claim").

19. THIS COURT ORDERS that any Creditor who does not dispute the amount of the

Known Claim set forth in the Claim Statement delivered to such Creditor is not required to take

any further action and the Claim of such Creditor shall, subject to paragraph 21, be deemed to be

the Known Claim.

20. THIS COURT ORDERS that any Creditor who wishes to dispute the amount of the

Known Claim set forth in the Claim Statement delivered to such Creditor or to assert an

additional Claim in relation to OAI other than the Known Claim shall be required to deliver a

Notice of Dispute to the Sales Officer so that it is actually received by the Sales Officer by no

later than the Claims Bar Date.

21. THIS COURT ORDERS that if, after the date on which a Claim Statement is initially

delivered to a Creditor, the Sales Officer determines that it is appropriate to change the amount

of the Known Claim set forth in such Claim Statement, the Sales Officer shall cause an amended

Claim Statement (an "Amended Claim Statement") to be delivered to such Creditor, which

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Amended Claim Statement and the revised Known Claim specified therein shall thereafter

supersede any previous Claim Statement delivered to such Creditor. If the Creditor wishes to

dispute the amount of the Known Claim set forth in the Amended Claim Statement, such

Creditor shall be required to deliver a Notice of Dispute so that it is actually received by the

Sales Officer on or before the Claims Bar Date.

22. THIS COURT ORDERS that any Creditor that does not deliver a Notice of Dispute in

respect of a Claim Statement or an Amended Claim Statement, if applicable, pursuant to

paragraphs 20 and 21, as applicable, shall be forever barred from disputing the amount of the

Known Claim set forth in the Claim Statement or Amended Claim Statement, as applicable, and

any Claim of a different nature or in excess of the amount specified in the Claim Statement or

Amended Claim Statement, as applicable, shall be forever barred and extinguished.

CLAIMS BARRED

23. THIS COURT ORDERS that, subject to paragraphs 18 to 22, any Person, including the

MoH, that does not deliver a Proof of Claim in respect of a Claim in the manner required by this

Claims Procedure Order such that it is actually received by the Sales Officer on or before the

Claims Bar Date:

(a) shall not be entitled to receive any distribution in respect of such Claim; and

(b) shall be forever barred from making or enforcing such Claim against OAI and

such Claim shall be hereby extinguished without any further act or notification.

SET OFF

24. THIS COURT ORDERS that nothing in this Claims Procedure Order shall affect any

right of set-off which OAI may have against any Creditor.

TRANSFER OF CLAIMS

25. THIS COURT ORDERS that if the holder of a Claim transfers or assigns the whole of

such Claim to another Person, the Sales Officer shall not be obligated to give notice or otherwise

deal with the transferee or assignee of such Claim in respect thereof unless and until written

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notice of such transfer or assignment, together with satisfactory evidence of such transfer or

assignment, has been received by Sales Officer and the Sales Officer has provided written

confirmation acknowledging the transfer or assignment of such Claim, and thereafter such

transferee or assignee shall for the purposes hereof constitute the "Creditor" in respect of such

Claim. Any such transferee or assignee of a Claim shall be bound by any notices given or steps

taken in respect of such Claim in accordance with this Claims Procedure Order prior to receiving

written confirmation by the Sales Officer acknowledging such assignment or transfer. After the

Sales Officer has delivered a written confirmation acknowledging the notice of the transfer or

assignment of a Claim, the Sales Officer shall thereafter be required only to deal with the

transferee or assignee and not the original holder of the Claim. A transferee or assignee of a

Claim takes the Claim subject to any rights of set-off to which OAI may be entitled with respect

to such Claim. For greater certainty, a transferee or assignee of a Claim is not entitled to set-off,

apply, merge, consolidate or combine any Claims assigned or transferred to it against or on

account or in reduction of any amounts owing by such Person to OAI. Reference to transfer in

this Claims Procedure Order includes a transfer or assignment whether absolute or intended as

security.

26. THIS COURT ORDERS that if a Creditor or any subsequent holder of a Claim, who in

any such case has previously been acknowledged by the Sales Officer as the holder of the Claim,

transfers or assigns the whole of such Claim to more than one Person or part of such Claim to

another Person, such transfers or assignments shall not create separate Claims and such Claims

shall continue to constitute and be dealt with as a single Claim notwithstanding such transfers or

assignments. The Sales Officer shall not, in each case, be required to recognize or acknowledge

any such transfers or assignments and shall be entitled to give notices to and to otherwise deal

with such Claim only as a whole and then only to and with the Person last holding such Claim,

provided such Creditor may, by notice in writing delivered to the Sales Officer, direct that

subsequent dealings in respect of such Claim, but only as a whole, shall be dealt with by a

specified Person and in such event, such Person shall be bound by any notices given or steps

taken in respect of such Claim with such Creditor or in accordance with the provisions of this

Claims Procedure Order.

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DETERMINATION OF CLAIMS

27. THIS COURT ORDERS that, subject to the terms of this Claims Procedure Order, the

Sales Officer shall review all Proofs of Claim and Notices of Dispute of Claim and may:

(a) request additional information from a Creditor and / or OAI to assist with such

review and assessment;

(b) request that a Creditor file a revised Proof of Claim or Notice of Dispute;

( c) attempt to resolve and settle any issue arising in a Proof of Claim, Claim

Statement, Amended Claim Statement or Notice of Dispute in respect of a Claim;

( d) accept (in whole or in part) the amount of any Claim and notify the Creditor in

writing; and

(e) revise or disallow (in whole or in part) the amount of any Claim by delivering a

Notice of Revision or Disallowance to such Creditor.

28. THIS COURT ORDERS that where a Claim has been accepted by the Sales Officer,

such Claim shall constitute a Proven Claim.

29. THIS COURT ORDERS that if a Creditor intends to dispute its Claim as set out in a

Notice of Revision or Disallowance, the Creditor shall:

(a) notify the Sales Officer of the objection in writing (setting out the grounds for the

objection) by registered mail, courier, facsimile or email (in PDF format) within

fifteen (15) days of receipt of a Notice of Revision or Disallowance (the

"Objection"); and

(b) file a notice of motion with this Court for the determination of the Claim in

dispute (the "Notice of Motion"), with a copy to be sent to the Sales Officer

immediately after filing.

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30. THIS COURT ORDERS that the Notice of Motion shall be:

(a) supported by a sworn affidavit setting out the Creditor's basis for disputing the

Notice of Revision or Disallowance; and

(b) returnable within thirty (30) days of the date on which the Sales Officer received

the Objection.

31. THIS COURT ORDERS that if a Creditor fails to deliver the Objection and/or the

Notice of Motion in accordance with paragraphs 29 and 30 herein, the Claim shall be deemed

accepted at the amount set forth in the Notice of Revision or Disallowance and the Creditor will:

(a) where the entire Claim is disallowed:

(i) not be entitled to receive any distribution in these proceedings; and

(ii) be forever barred from making or enforcing such Claim against OAI;

(b) where the Claim has been revised:

(i) only be entitled to receive a distribution in an amount proportional to the

revised amount; and

(ii) be forever barred from making or enforcing any Claim against OAI

greater than the revised amount and the amount of the Claim reduced by

the revision will be forever extinguished.

SERVICE AND NOTICE

32. THIS COURT ORDERS that the Sales Officer may, unless otherwise specified by this

Claims Procedure Order, serve and deliver or cause to be served and delivered the Claim

Document Package, any letters, notices or other documents to Creditors or any other interested

Person by forwarding true copies thereof by prepaid ordinary mail, courier, personal delivery,

facsimile transmission or email to such Persons or their counsel (including counsel of record in

any ongoing litigation) at the physical or electronic address, as applicable, last shown on the

books and records of OAI or set out in such Creditor's Proof of Claim or Notice of Dispute, if

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one has been filed. Any such service and delivery shall be deemed to have been received: (i) if

sent by ordinary mail, on the third Business Day after mailing within Canada, and the fifth

Business Day after mailing internationally; (ii) if sent by courier or personal delivery, on the next

Business Day following dispatch; and (iii) if delivered by facsimile transmission or email by

5:00 p.m. on a Business Day, on such Business Day and if delivered after 5:00 p.m. or other than

on a Business Day, on the following Business Day.

33. THIS COURT ORDERS that any notice or communication required to be provided or

delivered by a Creditor to the Sales Officer under this Claims Procedure Order shall be in writing

in substantially the form, if any, provided for in this Claims Procedure Order and will be

sufficiently given only if delivered by prepaid registered mail, courier, personal delivery or email

addressed to:

KPMG Inc., in its capacity as Sales Officer

of Oxford Advanced Imaging Inc.

Bay Adelaide Centre

333 Bay Street, Suite 4600

Toronto, ON MSH 2S5

Attention: Sven Dedic

Email: [email protected]

Any such notice or communication delivered by a Creditor shall be deemed to be received upon

actual receipt thereof before 5:00 p.m. on a Business Day or if delivered outside of normal

business hours, the next Business Day.

34. THIS COURT ORDERS that the publication of the Notice to Creditors and the mailing

of the Claim Document Packages as set out in this Claims Procedure Order shall constitute good

and sufficient notice to Creditors of the Claims Bar Date and the other deadlines and procedures

set forth herein, and that no other form of notice or service need be given or made on any Person,

and no other document or material need be served on any Person in respect of the claims

procedure described herein.

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35. THIS COURT ORDERS that in the event that this Claims Procedure Order is

subsequently amended by further Order of the Court, the Sales Officer shall serve notice of such

amendment on the Service List in these proceedings and the Sales Officer shall post such further

Order on the Sales Officer's website and such posting shall constitute adequate notice to all

Persons of such amended Claims Procedure Order.

GENERAL

36. THIS COURT ORDERS that the Sales Officer may from time to time apply to this

Court to amend, vary, supplement or replace this Claims Procedure Order or for advice and

directions concerning the discharge of their respective powers and duties under this Claims

Procedure Order or the interpretation or application of this Claims Procedure Order.

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

regulatory or administrative body having jurisdiction in Canada or outside Canada to give effect

to this Claims Procedure Order and to assist the Sales Officer and its agents in carrying out the

terms of this Claims Procedure Order. All courts, tribunals, regulatory and administrative bodies

are hereby respectfully requested to make such orders and to provide such assistance to the Sales

Officer, as an officer of this Court, as may be necessary or desirable to give effect to this Claims

Procedure Order, to grant representative status to the Sales Officer in any foreign proceeding, or

to assist the Sales Officer and its agents in carrying out the terms of this Claims Procedure Order.

38. THIS COURT ORDERS that this Claims Procedure Order and all of its provisions are

effective as of 12:01 a.m. Toronto Time on the date of this Claims Procedure Order.

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SCHEDULE "A" Instruction Letter

93

A.

INSTRUCTION LETTER FOR THE CLAIMS PROCEDURE OF OXFORD ADVANCED IMAGING INC.

CLAIMS PROCEDURE

By Order of the Ontario Superior Court of Justice (Commercial List) made August 29, 2019 (the "Claims Procedure Order"), KPMG Inc. (the "Sales Officer"), in its capacity as courtappointed sales officer of Oxford Advanced Imaging Inc. (the "Company"), has been authorized to conduct a claims procedure (the "Claims Procedure") with respect to claims against the Company in accordance with the terms of the Claims Procedure Order.

Unless otherwise defined, all capitalized terms used herein shall have the meanings given to those terms in the Claims Procedure Order.

The Claims Procedure Order, the Claim Document Package, additional Proofs of Claim and related materials may be accessed from the Sales Officer's website at www.kpmg.com/ca/oai.

This letter provides instructions for responding to or completing the Proof of Claim or a Notice of Dispute. Reference should be made to the Claims Procedure Order for a complete description of the Claims Procedure.

The Claims Procedure is intended for any Person with any Claims of any kind or nature whatsoever against the Company, whether liquidated, unliquidated, contingent or otherwise. Please review the enclosed material for the complete definitions of a "Claim" to which the Claims Procedure applies.

All notices and enquiries with respect to the Claims Procedure should be addressed to:

KPMG Inc., in its capacity as Sales Officer of Oxford Advanced Imaging Inc. Bay Adelaide Centre 333 Bay Street, Suite 4600 Toronto, ON M5H 2S5

Attention: Sven Dedic Email: [email protected]

B. FOR CREDITORS WHO RECEIVE A CLAIM STATEMENT

Certain Known Creditors of the Company will receive a Claim Statement from the Sales Officer specifying the amount of such Creditor's Claim as determined by the Sales Officer based on the books and records of the Company (the "Known Claim").

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If you receive a Claim Statement and you do not dispute the amount of the Known Claim, you are not required to take any further action or to file a Proof of Claim with the Sales Officer in the Claims Procedure Order.

If you wish to dispute the amount of the Known Claim set forth in the Claim Statement or to assert an additional Claim in relation to the Applicant other than the Known Claim, you are required to deliver a Notice of Dispute to the Sales Officer so that it is received by the Sales Officer before 5:00 p.m. (Toronto Time) on October 15, 2019 (the "Claims Bar Date").

If a completed Notice of Dispute in respect of a Known Claim is not received by the Sales Officer by the Claims Bar Date, the Creditor shall be forever barred from disputing the amount of the Known Claim and any Claim of a different nature or in excess of the amount specified in the Known Claim shall be forever barred and extinguished. IF A NOTICE OF DISPUTE IS NOT RECEIVED BY THE SALES OFFICER WITHIN THE PRESCRIBED TIME PERIOD, THE CLAIM AS SET OUT IN THE CLAIM STATEMENT WILL BE DEEMED TO BE THE CLAIM OF THE CREDITOR AND WILL BE FINAL AND BINDING ON THE CREDITOR FOR ALL PURPOSES.

Where a Creditor sends a Notice of Dispute to the Sales Officer, the Sales Officer will review the Notice of Dispute and, as soon as reasonably practicable, provide to the Creditor a response in writing by registered mail, courier service, facsimile or email as to whether the Claim set out in the Notice of Dispute is accepted, disputed in whole, or disputed in part. Where the Claim is disputed in whole or in part, the Sales Officer will issue a Notice of Revision or Disallowance indicating the reasons for the dispute.

The Claims Procedure Order further provides that where a Creditor objects to a Notice of Revision or Disallowance, the Creditor must notify the Sales Officer of the objection in writing by registered mail, courier service, facsimile or email within fifteen (15) days of receipt of the Notice of Revision or Disallowance. The Sales Officer's contact information is below:



The Creditor shall immediately thereafter serve on the Sales Officer, a Notice of Motion, filed at the Court and made returnable within thirty (30) days after the Creditor gave its notice of objection, for the determination of the claim in dispute. The Notice of Motion is to be supported by a sworn affidavit setting out the reasons for the dispute.

C. FOR CREDITORS SUBMITTING A PROOF OF CLAIM

Unless you are a Known Creditor, if you believe that you have a Claim against the Company, you must file a Proof of Claim with the Sales Officer.

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All Proofs of Claim must be received by the Sales Officer by the Claims Bar Date.

PROOFS OF CLAIM MUST BE RECEIVED BY THE CLAIMS BAR DATE OR THE APPLICABLE CLAIM WILL BE FOREVER BARRED AND EXTINGUISHED. If you are required to file a Proof of Claim pursuant to the Claims Procedure but do not file a Proof of Claim in respect of a Claim by the Claims Bar Date you shall not be entitled to participate in any distribution in respect of such Claim.

Additional Proof of Claim forms can be obtained by contacting the Sales Officer at the telephone numbers and address indicated above and providing particulars as to your name, address and facsimile number or email mail address. Additional Proofs of Claim and related materials may be accessed from the Sales Officer's web site at www.kpmg.com/ca/oai.

Where a Creditor sends a Proof of Claim, the Sales Officer will review the Proof of Claim and, as soon as reasonably practicable, provide to the Creditor a response in writing by registered mail, courier service, facsimile or email as to whether the Claim set out in the Proof of Claim is accepted, disputed in whole, or disputed in part. Where the Claim is disputed in whole or in part, the Sales Officer will issue a Notice of Revision or Disallowance indicating the reasons for the dispute.

The Claims Procedure Order further provides that where a Creditor objects to a Notice of Revision or Disallowance, the Creditor must notify the Sales Officer of the objection in writing by registered mail, courier service, facsimile or email within fifteen (15) days of receipt of the Notice of Revision or Disallowance. The Sales Officer's contact information is below:

KPMG Inc., in its capacity as Sales Officer of Oxford Advanced Imaging Inc. Bay Adelaide Centre 333 Bay Street, Suite 4600 Toronto, ON MSH 2S5


The Creditor shall immediately thereafter serve on the Sales Officer, a Notice of Motion, filed at the Court and made returnable within thirty (30) days after the Creditor gave its notice of objection, for the determination of the claim in dispute. The Notice of Motion is to be supported by a sworn affidavit setting out the reasons for the dispute.

DATED at Toronto, Ontario this __ day of _____ , 2019.

KPMG Inc;, in its capacity as Sales Officer of Oxford Advanced Imaging Inc.

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SCHEDULE "B" Notice to Creditors

97

Notice to Creditors

RE: Notice of Call for Claims, Claims Procedure and Claims Bar Date

NOTICE IS HEREBY GIVEN THAT, by Order of the Ontario Superior Court of Justice (Commercial List) made August 29, 2019 (the "Claims Procedure Order"), KPMG Inc., in its capacity as court-appointed sales officer (the "Sales Officer") of Oxford Advanced Imaging Inc. (the "Company"), has been authorized to conduct a claims procedure with respect to claims against the Company in accordance with the terms of the Claims Procedure Order.

All persons, save and except for Known Creditors (as defined below), wishing to assert a Claim against the Company must file a Proof of Claim with the Sales Officer. THE CLAIMS BAR DATE is 5:00 p.m. (Toronto Time) on October 15, 2019. Proofs of Claim must be filed with the Sales Officer on or before the Claims Bar Date.

PROOFS OF CLAIM MUST BE RECEIVED BY THE SALES OFFICER BY THE CLAIMS BAR DATE OR THE CLAIM WILL BE FOREVER BARRED AND EXTINGUISHED. If you are required to file a Proof of Claim pursuant to the Claims Procedure but do not file a Proof of Claim in respect of a Claim by the Claims Bar Date, you shall not be entitled to participate in any distribution in respect of any such Claim.

Creditors that have already been identified by the Sales Officer and have received a Claim Statement from the Sales Officer ("Known Creditors") need not submit a Proof of Claim. Instructions regarding the Claims of Known Creditors are enclosed with the Claim Statement delivered to each Known Creditor.

The Claims Procedure Order, the Claim Document Package, additional Proofs of Claim and related materials, including the Sales Officer's contact information, may be accessed from the Sales Officer's website at www.kpmg.com/ca/oai, or by emailing the Sales Officer at [email protected].

DATED at Toronto, Ontario this __ day of _____ , 2019.

KPMG Inc., in its capacity as Sales Officer of Oxford Advanced Imaging Inc.

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99

SCHEDULE "C" Proof of Claim Against Oxford Advanced Imaging Inc.

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PROOF OF CLAIM AGAINST OXFORD ADV AN CED IMAGING INC. (hereinafter referred to as the "Company")

Please read the enclosed Instruction Letter carefully prior to completing this Proof of Claim. Defined terms not defined within this Proof of Claim form shall have the meaning ascribed thereto in the Claims Procedure Order dated August 29, 2019.

A. Particulars of Creditor

1. Full Legal Name of Creditor: __________ (the "Creditor") (Full legal name should be the name of the original Creditor, regardless of whether an assignment of a Claim has been made.)

2. Full Mailing Address of the Creditor (the original Creditor, not the Assignee):

3. Telephone Number:

Facsimile Number: -------------------------Attention (Contact Person): _____________________ _

4. Has the Claim been sold, transferred or assigned by the Creditor to another party?

Yes: [_]

No: [_]

B. Particulars of Assignee(s) (If any):

1. Full Legal Name of Assignee(s): ___________ (If a portion of the Claim has been assigned, insert full legal name of assignee(s) of the Claim. If there is more than one assignee, please attach a separate sheet with the required information.)

2. Full Mailing Address of Assignee(s): _________________ _

3. Telephone Number of Assignee(s):

4. Facsimile Number of Assignee(s):

5. Attention (Contact Person):

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C. Proof of Claim:

I, _______________ (name of individual Creditor or Representative of

Corporate Creditor), of (City, Province or State) do hereby certify:

(a) that I

[_] am the Creditor; OR

[_] am _________________ (state position or title) of (name of Corporate Creditor)

(b) that I have knowledge of all the circumstances connected with the Claim referred to below;

( c) the Creditor asserts its Claim against the Company;

(d) The amount of the Creditor's Claim is

$ ______ _

D. Particulars of Claim:

Other than as already set out herein, the particulars of the Claim is attached.

(Provide full particulars of the Claim and supporting documentation, including amount, description of transaction(s) or agreement(s) giving rise to the Claim, name of any guarantor(s) which has guaranteed the Claim, particulars and copies of any security and amount of Claim allocated thereto, date and number of all invoices, particulars of all credits, discounts, etc. claimed)

E. Filing of Claims:

The Sales Officer must receive this Proof of Claim before 5 :00 p.m. (Toronto Time) on October 15, 2019 (the "Claims Bar Date").

FAILURE TO FILE YOUR PROOF OF CLAIM ON OR BEFORE THE CLAIMS BAR DATE WILL RESULT IN YOUR CLAIM BEING BARRED AND EXTINGUISHED FOREVER, AND YOU WILL BE PROHIBITED FROM MAKING OR ENFORCING A CLAIM AGAINST THE COMPANY IN RESPECT OF SUCH CLAIM.

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This Proof of Claim must be delivered to the Sales Officer by registered mail, personal delivery, email (in PDF format), courier or facsimile at the following addresses:

The Sales Officer:



DATE:

Witness Signature

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Per:

Name:

Title:

NAME OF CREDITOR:

(Please Print)

102

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SCHEDULE "D" Claim Statement

103

CLAIM STATEMENT

Oxford Advanced Imaging Inc. (the "Company")

Claim Reference Number: [Insert Claim Reference Number]

To: [Insert Name of Known Creditor] (the

"Creditor")

[Insert Address of Known Creditor]

This Claim Statement is delivered to the Creditor, as a Known Creditor of Oxford Advanced Imaging Inc. (the "Company"), pursuant to the Order of the Ontario Superior Court of Justice (Commercial List) dated August 29, 2019 (the "Claims Procedure Order"). Pursuant to the Claims Procedure Order, the Court-appointed Sales Officer of the Company, the KPMG Inc. (the "Sales Officer"), has been directed to assist the Company in conducting a claims procedure with respect to claims against the Company in accordance with the terms of the Claims Procedure Order. Unless otherwise defined, all capitalized terms used herein have the meanings given to those terms in the Claims Procedure Order.

According to the books, records and other relevant information in the possession of the Company, the Claim of the Creditor is set out in the table below (the "Known Claim"):

Amount of Claim

[Insert amount of Claim]

Amount is in Canadian dollars [ or foreign currency]. Claims in a currency other than Canadian dollars will be converted to Canadian dollars at the Bank of Canada daily average exchange rate for the Claims Bar Date (as defined below).

If the Known Claim listed herein accurately reflects the Claim that the Creditor has in respect of the Company, you are not required to take any further action or to file a Proof of Claim with the Sales Officer in the Claims Procedure Order.

If the Creditor wishes to dispute the amount of the Known Claim or to assert an additional Claim in relation to the Applicant other than the Known Claim, the Creditor must complete the enclosed Notice of Dispute and deliver it to the Sales Officer such that it is received by the Sales Officer by no later than 5:00 p.m. (Toronto time) on October 15, 2019 (the "Claims Bar Date").

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If a completed Notice of Dispute in respect of the Known Claim is not received by the Sales Officer by the Claims Bar Date, the Creditor shall be forever barred from disputing the amount of the Known Claim and any Claim of a different nature or in excess of the amount specified in the Known Claim shall be forever barred and extinguished. IF A NOTICE OF DISPUTE IS NOT RECEIVED BY THE SALES OFFICER WITHIN THE PRESCRIBED TIME PERIOD, THE CLAIM AS SET OUT IN THE CLAIM STATEMENT WILL BE DEEMED TO BE THE CLAIM OF THE CREDITOR AND WILL BE FINAL AND BINDING ON THE CREDITOR FOR ALL PURPOSES.

Creditors requiring further information or Claim documentation, or who wish to submit a Notice of Dispute, may contact the Sales Officer at the following address:



Dated at ______ this ____ day of _____ , 2019.

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SCHEDULE "E" Notice of Dispute

106

NOTICE OF DISPUTE


Capitalized terms not defined herein have the meanings given to them in the Order of the Ontario Superior Court of Justice dated August 29, 2019 (the "Claims Procedure Order") or the Claim Statement.

I. PARTICULARS OF CREDITOR

Claim Reference Number: [Insert Claim Reference Number listed on Claim Statement] (the "Claim Statement").

Full Legal Name of Creditor

Full Mailing Address of Creditor

Telephone Number:

Email Address

Attention (Contact Person)

Have you acquired this Claim by assignment?

Yes: D No: D (if yes, attach documents evidencing assignment)

If Yes, Full Legal Name of Original Creditor( s):

II. DISPUTE OF CLAIM SET OUT IN CLAIM STATEMENT

The Creditor hereby disputes the amount of the Known Claim set out in the Claim Statement and asserts the Claim(s) as set out in the following table:

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Amount of Claim

Claim [Insert amount of Asserted by Claim] Creditor

III. REASONS FOR DISPUTE

Provide full particulars below as to the basis for the Creditor's dispute of the Known Claim as set out in the Claim Statement and provide supporting documentation. This includes, without limitation, amounts, description of transaction(s) or agreement(s) giving rise to the Claim, the date and number of all invoices and supporting documentation, and particulars of all credits, discounts, rebates and similar items claimed. The particulars provided must support the value of the Claim as stated by the Creditor in the table above.

Dated at ____ this ____ day of _______ , 2019

DATE: NAME OF CREDITOR:

Witness Signature

Per:

Name:

Title:

(Please Print)

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This Notice of Dispute MUST be delivered to the Sales Officer at the below address such that it is received by the Sales Officer by no later than 5:00 p.m. (Toronto time) on October 15, 2019 (the "Claims Bar Date"):



If a completed Notice of Dispute in respect of the Known Claim is not received by the Sales Officer by the Claims Bar Date, the Creditor shall be forever barred from disputing the amount of the Known Claim and any Claim of a different nature or in excess of the amount specified in the Known Claim shall be forever barred and extinguished. IF A NOTICE OF DISPUTE IS NOT RECEIVED BY THE SALES OFFICER WITHIN THE PRESCRIBED TIME PERIOD, THE CLAIM AS SET OUT IN THE CLAIM STATEMENT WILL BE DEEMED TO BE THE CLAIM OF THE CREDITOR AND WILL BE FINAL AND BINDING ON THE CREDITOR FOR ALL PURPOSES.

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110

SCHEDULE "F"

Notice of Revision or Disallowance

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NOTICE OF REVISION OR DISALLOW ANCE


TO: _______ (the "Creditor")

DATE:

KPMG Inc., in its capacity as court-appointed sales officer (the "Sales Officer") of the Company, has reviewed the Proof of Claim [or Notice of Dispute] in respect of the above-named Creditor, and has assessed the Proof of Claim [ or Notice of Dispute] in accordance with the order of the Ontario Superior Court of Justice (Commercial List) (the "Court") issued on August 29, 2019 (the "Claims Procedure Order").

All capitalized terms not defined herein have the meaning given to them in the Claims Procedure Order.

The Sales Officer has reviewed your Proof of Claim [ or Notice of Dispute] in accordance with the Claims Procedure Order, and the Sales Officer has revised or disallowed your Proof of Claim [or Notice of Dispute], for the following reason(s):

Subject to further dispute by you in accordance with the Claims Procedure Order, your Proof of Claim will be allowed as follows:

Name of Creditor Claim Amount Revised Amount per Proof of of Claim Claim [ or Claim Statement]

$ $

IF YOU WISH TO DISPUTE THE REVISION OR DISALLOWANCE OF YOUR CLAIM AS SET FORTH HEREIN YOU MUST TAKE THE STEPS OUTLINED BELOW

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The Claims Procedure Order provides that if you disagree with the revision or disallowance of your claim as set forth herein, you must:

1. notify the Sales Officer of the objection in writing (setting out the grounds for the objection) by registered mail, courier, facsimile or email (in PDF format) within fifteen (15) days of receipt of the Notice of Revision or Disallowance (the "Objection"); and

2. file a notice of motion with the Court, with copies to be sent to the Sales Officer immediately after filing, with such motion to be:

1. supported by a sworn affidavit setting out the basis for disputing this Notice of Revision or Disallowance; and

11. made returnable within thirty (30) calendar days of the date on which the Sales Officer receives your Objection.

If you do not dispute the revision or disallowance of your Proof of Claim [ or Notice of Dispute] in accordance with the above instructions and the Claims Procedure Order, the amount of your Claim will deemed to be accepted, and the Claim shall be determined to be as set out in this Notice of Revision or Disallowance.

If you have any questions or concerns regarding the above claims procedure, please contact the Sales Officer directly.

DATED the __ day of ______ , 2019

KPMG Inc., in its capacity as Sales Officer of Oxford Advanced Imaging Inc.

Per: -----------

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Applicant

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Res1?_ondent


(COMMERCIAL LIST)


CLAIMS PROCEDURE ORDER

DENTONSCANADALLP 77 King Street West, Suite 400 Toronto-Dominion Centre Toronto, ON M5K 0Al

Robert J. Kennedy (LSO #474070) Tel: (416) 367-6756 Fax: (416) 863-4592 [email protected]

Mark A. Freake (LSO #63656H) Tel: (416) 863-4456 [email protected]


~

~

(.,.)


Applicant

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--~---- Respondent


(COMMERCIAL LIST)

PROCEEDING COMMENCED AT TORONTO ---

MOTION RECORD (returnable August 29, 2019)


Robert Kennedy (LSO # 474070) Tel: (416) 367-6756 Fax: ( 416) 863-4592 [email protected]


Lawyers for KPMG Inc.in its capacity as Courtappointed Sales Qf/icer