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Court File No. CV-20-00638503-00CL
ONTARIO SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF PURE GLOBAL CANNABIS INC.,
PURESINSE INC., 237A ADVANCE INC., 237B ADVANCE INC., SPRQ HEALTH GROUP CORP., AND THE GREAT
CANADIAN HEMP COMPANY LTD.
(collectively, the “Applicants” and each an “Applicant)
RESPONDING MOTION RECORD OF MMCAP INTERNATIONAL INC. SPC, QUINSAM CAPITAL CORP.,
CARRERA CAPITAL, and PLAZACORP (returnable April 23, 2020)
April 22, 2020 McMILLAN LLP Brookfield Place 181 Bay St, Suite 4400 Toronto ON M5J 2T3 Jeffrey Levine LSUC#: 55582H [email protected] Tel: (416) 865.7791 Fax: (416) 865.7048 Lawyers for the Respondents, MMCAP International Inc. SPC, Quinsam Capital Corp., Carrera Capital and Plazacorp
TO: SERVICE LIST
INDEX
Tab Page
1 Notice of Motion – Lift Stay etc. 1
2 (Unissued) Notice of Application in Ontario Superior Court of Justice (Commercial List) – 205709 Ontario Inc. et al. v. Pure Global Cannabis Inc., et al. dated April 23, 2020
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3 Draft Receivership Order - Ontario Superior Court of Justice (Commercial List) – 205709 Ontario Inc. et al. v. Pure Global Cannabis Inc., et al.
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4 Blackline to the Model Receivership Order - Ontario Superior Court of Justice (Commercial List) – 205709 Ontario Inc. et al. v. Pure Global Cannabis Inc., et al.
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5 Consent of the Proposed Receiver, A. Farber & Partners Inc. 62
LEGAL_33139794.2
Court File No. CV-20-00638503-00CL
ONTARIO SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF PURE GLOBAL CANNABIS INC.,
PURESINSE INC., 237A ADVANCE INC., 237B ADVANCE INC., SPRQ HEALTH GROUP CORP., AND THE GREAT
CANADIAN HEMP COMPANY LTD.
(collectively, the “Applicants” and each an “Applicant”)
NOTICE OF MOTION (Returnable April 23, 2020)
The Respondent, Cancor Debt Agency Inc., will make a motion on Thursday,
April, 23, 2020, at 2:00 p.m., or as soon thereafter as the motion can be heard, before
The Honourable Mr. Justice Hainey at 330 University Avenue, 8th Floor, Toronto,
Ontario M5G 1R7 by teleconference.
PROPOSED METHOD OF HEARING: The motion is to be heard orally.
THE MOTION IS FOR:
(a) An order lifting the stay of proceedings in respect of the Applicants to
permit certain of its secured creditors to:
(i) Serve on the Applicants notices of intention to enforce security,
with service deemed effective March 19, 2020; and
(ii) apply for the appointment of a receiver over certain of the assets
and undertakings of the Applicants; and
(b) Such further and other relief as counsel may request and this court deems
just.
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THE GROUNDS FOR THE MOTION ARE:
(a) The Applicants obtained an Order (the “Initial Order”) from this court
granting relief under the Companies’ Creditors Arrangement Act
providing for, among other things, a stay of proceedings and approval of
a DIP facility and charge up to a maximum amount of $700,000 on
March 19, 2020;
(b) Following the comeback hearing on April 3, 2020, the Initial Order was
amended to provide for an extension of the stay to and including May 15,
2020 and an increase of $300,000 to the DIP facility and charge (the
“Amendment”);
(c) The Amendment was to provide time and funding for the Applicants to
dispose of their cannabis stock lawfully. At the comeback hearing, this
Court denied the Applicants’ request for a $1,000,000 to the DIP facility
and charge so that the Applicants could proceed with a license-preserving
going concern plan;
(d) In the past two and a half weeks, the Applicants have arranged an
appointment with a cannabis-destruction service provider to have its
cannabis stock destroyed on May 15, 2020. They have also had
discussions with Health Canada and certain creditors about disposing of
its cannabis;
(e) Going forward, the Applicants plan to complete the cannabis destruction
and cease operations as soon as possible thereafter;
(f) Despite the Applicants’ limited activities, restructuring costs through to
the end of the requested stay period are anticipated to be 92% of the
restructuring costs forecasted at the outset of this CCAA proceeding. At
the outset, however, the Applicants’ contemplated continuing operations
and running a SISP;
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(g) The restructuring costs incurred and projected are adding no value to the
estate;
(h) The restructuring costs incurred and projected are unnecessary given the
Applicants’ plan;
(i) The restructuring costs are seriously prejudicing rights of the Debenture
Holders and the mortgagee of 237B Advance Boulevard; and
(j) Such further and other grounds as counsel may advise and this court may
accept.
THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing
of the motion:
(a) The affidavit of Scott Langille sworn April 21, 2020;
(b) The Second Report of the Monitor dated April 21, 2020;
(c) Such further and other documentary evidence as counsel may file and this
court may accept.
April 22, 2020 CHAITONS LLP 10-5000 Yonge Street Toronto, Canada M2N 7E9 Harvey Chaiton LS# 21592
Email: [email protected] Tel: 416-218-1129/ Fax: 416-218-1849
Lawyers for Cancor Debt Agency Inc.
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TO: THE SERVICE LIST
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LEGAL_33139794.2
IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF PURE GLOBAL CANNABIS INC., PURESINSE INC., 237A ADVANCE INC., 237B ADVANCE INC., SPRQ HEALTH GROUP CORP., and THE GREAT CANADIAN HEMP COMPANY LTD.
Court File No. CV-20-00638503-00CL
ONTARIO SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
Proceeding commenced at TORONTO
NOTICE OF MOTION
CHAITONS LLP 10-5000 Yonge Street Toronto, Canada M2N 7E9 Harvey Chaiton LS# 21592 Email: [email protected] Tel: 416-218-1129/ Fax: 416-218-1849 Lawyers for Cancor Debt Agency Inc.
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Doc#4740991v2 LEGAL_33146435.1
Court File No.
ONTARIO SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
BETWEEN:
Applicants
2056709 ONTARIO INC., KOZO HOLDINGS INC., CANCOR DEBT AGENCY INC.
- and -
PURE GLOBAL CANNABIS INC., PURESINSE INC., 237A ADVANCE INC., 237B ADVANCE
INC., SPRQ HEALTH GROUP, and THE GREAT CANADIAN HEMP COMPANY LTD.
Respondents
APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c.B-3, AS AMENDED, AND SECTION 101 OF THE COURTS OF JUSTICE ACT, R.S.O. 1990, c.C.43, AS AMENDED
NOTICE OF APPLICATION
TO THE RESPONDENT(S):
A LEGAL PROCEEDING HAS BEEN COMMENCED by the Applicants. The Claim made by the Applicant appears on the following pages.
THIS APPLICATION will come on for a hearing on Friday, March 27, 2020, at 10:00 a.m., or as soon thereafter as the application can be heard, before The Honourable Mr. JusticeHainey at 330 University Avenue, 8th Floor, Toronto, Ontario M5G 1R7 by teleconference.
IF YOU WISH TO OPPOSE THIS APPLICATION, to receive notice of any step in the application or to be served with any documents in the application you or an Ontario lawyer acting for you must forthwith prepare a notice of appearance in Form 38A prescribed by the Rules of Civil Procedure, serve it on the Applicant’s lawyer or, where the Applicant does not have a lawyer, serve it on the Applicant, and file it, with proof of service, in this court office, and you or your lawyer must appear at the hearing.
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IF YOU WISH TO PRESENT AFFIDAVIT OR OTHER DOCUMENTARY EVIDENCE TO THE COURT OR TO EXAMINE OR CROSS-EXAMINE WITNESSES ON THE APPLICATION, you or your lawyer must, in addition to serving your notice of appearance, serve a copy of the evidence on the Applicant’s lawyer or, where the Applicant does not have a lawyer, serve it on the Applicant, and file it, with proof of service, in the court office where the application is to be heard as soon as possible, but at least four days before the hearing.
IF YOU FAIL TO APPEAR AT THE HEARING, JUDGMENT MAY BE GIVEN IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO OPPOSE THIS APPLICATION BUT ARE UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL LEGAL AID OFFICE.
Date: April 23, 2020 Issued by:___________________________ Local Registrar
Address of Court Office: 330 University Avenue Toronto, Ontario M5G 1T3
TO: SERVICE LIST
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APPLICATION
1. The Applicants make an application for:
(a) an order validating service of this Notice of Application and the Application Record
in the manner effected, abridging the time for service thereof, and dispensing with
service thereof on any party other than the parties served such that this application
is properly returnable on the date that it is heard;
(b) an order, substantially in the form included in the Application Record, appointing
A. Farber & Partners Inc. (“Farber”) as receiver (“Receiver”) of all property,
assets and undertakings of the Respondents acquired for, or used in relation to
businesses carried on by the Respondents, including the real property of 237A
Advance Inc. (“237A Advance”) and 237B Advance Inc. (“237B Advance”), as
described in Schedule “A”, including all proceeds therefrom pursuant to Section
243 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the “BIA”), and
Section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”);
(c) if necessary, an order granting leave to the Applicants to deliver demands and
notices of intention to enforce their respective security under section 244 of the
BIA;
(d) such further and other relief as this Honourable Court may deem just.
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2. The grounds for the application are:
Overview
(a) The Respondent, Pure Global Cannabis Inc. (“Pure Global”) is a publicly traded
company incorporated pursuant to the laws of British Columbia. Pure Global,
together with its subsidiaries (collectively, the “Pure Global Group”) is engaged
in the production and sale of cannabis products in Canada. The other Respondents
are wholly owned subsidiaries of Pure Global.
(b) Pure Global Group’s business operations do not currently generate any revenue.
(c) Pure Global Group’s assets are primarily comprised of the properties owned by
237A Advance and 237B Advance. The 237A Real Property has undergone initial
demolition to convert it from a banquet facility to a production and warehouse
facility but the construction and demolition has ceased since September 2019. The
237B Real Property is where the production and warehouse facilities are currently
located.
(d) Both the 237A and 237B Real Properties are subject to mortgages which are in
default.
(e) In addition, 237A Advance delivered to the Applicant, 2056709 Ontario Inc.
(“205”) a General Security Agreement and General Assignment of Rents each
dated July 19, 2018.
(f) Pure Global issued up to $10,000,000 of secured convertible debentures to certain
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debenture holders pursuant to which Cancor Debt Agency Inc. (“Cancor”) acts as
collateral agent for the debenture holders (“Debentures”).
(g) The Debentures are secured by the following: (i) a General Security Agreement
from Pure Global in favour of Cancor, creating a security interest in all present and
after-acquired property of Pure Global, (ii) a guarantee from PureSinse Inc.
(“PureSinse”) in favour of Cancor, and (iii) a General Security Agreement from
PureSinse in favour of Cancor, creating a security interest in all present and after-
acquired property of PureSinse.
Default
(h) In December of 2019, the Pure Global Group’s liquidity situation caused it to miss
a payment that was due under the Debentures. In and around that time, the
Respondents entered into negotiations with Cancor to renegotiate the terms of the
Debentures and an Amendment was executed, moving the payment due date to
February 28, 2020. However, the Respondents failed to make the payment.
(i) As a result, a notice of default was delivered to Pure Global.
Default on Mortgages
(j) The 237A Real Property is also subject to a mortgage/charge in the approximate
amount of $2.99 million in favour of 205. 237A Advance has defaulted on a one-
time balloon payment due on October 19, 2019 and interest payments due under
the mortgage. The outstanding balance of the indebtedness owing as of March 12,
2020 is approximately $3.1 million. On March 12, 2020, 205 delivered a notice of
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intention to enforce pursuant to section 244 of the BIA.
(k) The 237B Real Property is subject to two mortgages in the amount of
approximately $2 million in favour of Kozo Holdings Inc. and $250,000 in favour
of Hadis Kozo. The outstanding balance on the first mortgage as of February 24,
2020 is approximately $2,265,591. This property is also subject to a construction
lien in the amount of $73,060 in favour of City Electric Supply Corporation.
Unsecured Obligations of Pure Global Group
(l) As at March 1, 2020, PureSinse owed approximately $1 million in unpaid source
deductions.
(m) PureSinse and SPRQ Health Group (“SPRQ”) also owe approximately $500,000
in accrued unpaid wages.
(n) As of March 1, 2020, PureSinse owed approximately $17,000 to the Canada
Revenue Agency in unremitted excise taxes.
Contingent Obligations of Pure Global Group
(o) On March 10, 2020, Pure Global received a notice from the Ministry of Labour (the
“MOL”) of two complaints by employees of SPRQ in relation to unpaid wages and
vacation pay in the approximate amount of $14,000.
(p) On March 11, 2020, Pure Global received four additional complaints from MOL in
relation to complaints made by four employees of PureSinse in relation to unpaid
wages, vacation pay and termination pay in the approximate amount of $106,000.
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Creditor Protection
(q) On March 19, 2020, the Respondents obtained protection from its creditors under
the Companies’ Creditors Arrangement Act (“CCAA”) pursuant to an initial order
of Justice Hainey (the “Initial Order”), which included the approval of a debtor-
in-possession loan and court order charges priming the Applicants’ security.
(r) The Applicants opposed the granting of the initial order under the CCAA and do
not support the Respondent’s CCAA proceeding.
Appointment of Receiver
(s) It is in the best interests of the Applicants and the Respondents’ creditors generally
that a Receiver be appointed to realize on certain of the Respondents’ property and
assets, including the 237A Real Property and the 237B Real Property, for the
benefit of all of the Respondents’ stakeholders.
(t) It is just and convenient in the circumstances to appoint a Receiver.
(u) The Applicants propose that Farber be appointed as receiver. Farber has agreed to accept
the appointment.
Other Grounds
(v) Section 101 of the CJA, as amended, and Section 243 of the BIA.
(w) Rules 1.04(1), 1.05, 2.01, 2.03, 3.02 and 38 of the Rules of Civil Procedure.
(x) Such further and other grounds as counsel may advise and this Honourable Court
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permits.
3. The following documentary evidence will be used at the hearing of the application:
(a) Affidavit of Narinder Pal Anand sworn March 18, 2020 and the exhibits thereto;
(b) Affidavit of Philip Gross sworn March 23, 2020 and the exhibits thereto; and
(c) Such further and other evidence as counsel may advise and this Honourable Court
permits.
Date: April 23, 2020 CHAITONS LLP 5000 Yonge Street, 10th Floor Toronto, Ontario M2N 7E9
Harvey Chaiton (LSO #21592F) Tel: (416) 218-1129Fax: (416) 218-1849Email: [email protected]
Saneea Tanvir (LSO #77838T) Tel: (416) 218-1128Fax: (416) 218-1853Email: [email protected]
Lawyers for the Applicant, Cancor Debt Agency Inc.
CASSELS BROCK & BLACKWELL LLP Suite 211, Scotia Plaza, 40 King Street W., Toronto, Ontario M5H 3C2
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Monique Sassi (LSO #63638L) Tel: (416) 860-6886Fax: (416) 640-3005Email: [email protected]
Jane Dietrich (LSO #49302U) Tel: (416) 860-5223Fax: (416) 640-3144Email: [email protected]
Lawyers for the Applicant, 2056709 Ontario Inc.
KEYSER MASON BALL, LLP Suite 900, 3 Robert Speck Parkway Mississauga, Ontario L4Z 2G5
Jennifer Labrecque (LSO #50221W) Tel: (905) 276-0404 Email: [email protected]
Wojtek Jaskiewicz (LSO #49809L) Tel: (905) 276-0424 Fax: (905) 276-2298 Email: [email protected]
Lawyers for the Applicant, Kozo Holdings Inc.
MCMILLAN LLP Brookfield Place, Suite 4400, 181 Bay Street Toronto, Ontario M5J 2T3
Adam Maerov (LSO #48560H) Tel: (403) 215-2752 Fax: (403) 531-4720 Email: [email protected]
Jeffrey Levine (LSO #55582H) Tel: (416) 865-7791 Email: [email protected]
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Lawyers for certain debenture holders
SCHEDULE “A”
REAL PROPERTY
• PCL D-20, SEC M269 ; PT BLK D, PL M269 , PART 1 & 2 , 43R20236 , S/T A RIGHT AS IN LT335783; S/T DP2708; T/W PT BLK D, PL M269, PT 3, 43R20236 AS IN LT1503956 ; BRAMPTON (“237A Real Property”)
• PCL D-32, SEC M269 ; FIRSTLY ; PT BLK D, PL M269 , PART 3 , 43R20236 , ; SECONDLY ; PT BLK D, PL M269 , PART 4 , 43R20236 ; T/W PT 2, 43R20236 AS IN LT1503956; S/T PT 3, 43R20236 IN FAVOUR OF PTS 1 & 2, 43R20236 AS IN LT1503956; S/T DP2708 ;; CITY OF BRAMPTON (“237B Real Property”)
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2056706 ONTARIO INC., KOZO HOLDINGS INC., CANCOR DEBT AGENCY INC.
-and- PURE GLOBAL CANNABIS INC., PURESINSE INC., 237A ADVANCE INC., 237B ADVANCE INC., SPRQ HEALTH
GROUP, and THE GREAT CANADIAN HEMP COMPANY, LTD. Applicants Respondents
Court File No.
ONTARIO
SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)
NOTICE OF APPLICATION
CHAITONS LLP 5000 Yonge Street, 10th Floor, Toronto, Ontario M2N 7E9 Harvey Chaiton (LSO #21592F) Tel: 416-218-1129/ Fax: 416-218-1849/ [email protected] Lawyers for Cancor Debt Agency Inc. CASSELS BROCK & BLACKWELL LLP 2100 Scotia Plaza, 40 King Street West, Toronto, ON M5H 3C2 Jane O. Dietrich (LSO# 49302U)/ Monique Sassi (LSO #63638L) Tel:416.860.5223/ Fax:416.640.3144/ [email protected]; [email protected] Lawyers for 2056706 Ontario Inc. KEYSER MASON BALL, LLP Suite 900, 3 Robert Speck Parkway, Mississauga, Ontario L4Z 2G5 Wojtek Jaskiewicz (LSO #49809L) Tel: 905.276.0424/ Fax: 905.276.2298/ [email protected] Lawyer for Kozo Holdings Inc. MCMILLAN LLP Brookfield Place, Suite 4400, 181 Bay Street, Toronto, ON, M5J 2T3 Adam Maerov (LSO #48560H)/ Jeffrey Levine (LSO# 55582H) Tel: 403.215.2752/Fax: 403.531.4720/ [email protected]; [email protected] Lawyer for certain Debenture holders
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Court File No.
ONTARIO SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
THE HONOURABLE MR. JUSTICE HAINEY
) ) )
, THE
DAY OF APRIL, 2020
2056709 ONTARIO INC., KOZO HOLDINGS INC., CANCOR DEBT AGENCY INC.
Applicants - and -
PURE GLOBAL CANNABIS INC., PURESINSE INC., 237A ADVANCE INC., 237B ADVANCE
INC., SPRQ HEALTH GROUP, and THE GREAT CANADIAN HEMP COMPANY, LTD.
Respondents
APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT,
R.S.C. 1985, C. B-3, AS AMENDED AND SECTION 101 OF THE COURTS OF JUSTICE ACT, R.S.O. 1990, C. C.43, AS AMENDED
ORDER (appointing Receiver)
THIS JOINT APPLICATION made by the Applicants for an Order pursuant to section
243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the “BIA”) and
section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended (the “CJA”)
appointing A. Farber & Partners Inc (“Farber”) as receiver and manager (in such capacities, the
“Receiver”) without security, of certain of the assets, undertakings and properties of the
Respondents acquired for, or used in relation to a businesses carried on by the Respondents,
as described below, was heard by teleconference this day at 330 University Avenue, Toronto,
Ontario.
ON READING the affidavits of Narinder Pal Anand sworn March 18, 2020, affidavit of
Philip Gross sworn March 23, 2020, and the Exhibits thereto, the Confidential Responding
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Motion Record of Kozo Holdings Inc. dated March 30 2020 (the “Confidential Motion Record”), the Application Record of the Respondents dated March 18, 2020, the Supplemental
Application Record dated March 19, 2020, and on hearing the submissions of counsel for the
Applicants, counsel for the Respondents and no one appearing although duly, and on reading
the consent of Farber to act as the Receiver,
SERVICE
1. THIS COURT ORDERS that the time for service of the Notice of Application and the
Application is hereby abridged and validated so that this application is properly returnable today
and hereby dispenses with further service thereof.
EXCLUSION OF CANNABIS ASSETS AND OPERATIONS
2. THIS COURT ORDERS that the Receiver shall not take possession of any asset of the
Respondents for which any permit or licence issued in accordance, or in connection, with the
following legislation:
(a) Excise Act, 2001, S.C. 2002, c. 22;
(b) Cannabis Act, S.C. 2018, c C. 16;
(c) Cannabis Control Act, 2017, S.O., 2017, c. 26;
(d) Ontario Cannabis Retail Corporation Act, 2017, S.O. 2017, c. 26; or
(e) Cannabis License Act, 2018, S.O. 2018, c. 12,
and any regulations issued in connection therewith (the “Controlled Substances Legislation”)
is required (the “Excluded Assets”).
3. THIS COURT DECLARES that the Receiver has no authority over the undertakings of
the Respondents insofar as they concern the Excluded Assets (the “Excluded Undertakings”).
4. THIS COURT ORDERS that the Receiver shall not manage, operate or carry on the
business of the Respondents insofar as the business concerns the Excluded Assets or
Excluded Undertakings (such business, the “Excluded Business”).
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5. THIS COURT ORDERS that the Excluded Assets shall remain in the possession of the
Respondents who shall continue to have authority over the Excluded Undertakings and
manage, operate and carry on the Excluded Business for the sole purpose of disposing of the
Excluded Assets as soon as practicable, but in accordance with applicable Controlled
Substances Legislation.
APPOINTMENT
6. THIS COURT ORDERS that pursuant to section 243(1) of the BIA and section 101 of
the CJA, Farber is hereby appointed Receiver, without security, of all of the assets,
undertakings and properties including the 237A Real Property and the 237B Real Property as
listed and defined in Schedule “A” hereto (collectively, the “Real Property”) of the
Respondents acquired for, or used in relation to a business carried on by the Respondents,
including all proceeds thereof, but not the Excluded Assets or Excluded Undertakings
(collectively, the “Property”).
RECEIVER’S POWERS
7. THIS COURT ORDERS that the Receiver is hereby empowered and authorized, but not
obligated, to act at once in respect of the Property and, without in any way limiting the generality
of the foregoing, the Receiver is hereby expressly empowered and authorized to do any of the
following where the Receiver considers it necessary or desirable:
(a) to take possession of and exercise control over the Property and any and
all proceeds, receipts and disbursements arising out of or from the
Property;
(b) to receive, preserve, and protect the Property, or any part or parts
thereof, including, but not limited to, the changing of locks and security
codes, the relocating of Property to safeguard it, the engaging of
independent security personnel, the taking of physical inventories of the
Property and the placement of such insurance coverage as may be
necessary or desirable;
(c) to the extent permitted by this Order, to manage, operate, and carry on
the business of the Respondents, including the powers to enter into any
agreements, incur any obligations in the ordinary course of business
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other than the Excluded Business, cease to carry on all or any part of the
business, or cease to perform any contracts of the Respondents;
(d) to engage consultants, appraisers, agents, experts, auditors,
accountants, managers, counsel and such other persons from time to
time and on whatever basis, including on a temporary basis, to assist with
the exercise of the Receiver's powers and duties, including without
limitation those conferred by this Order;
(e) to receive, and collect all monies and accounts now owed or hereafter
owing to the Respondents and to exercise all remedies of the
Respondents in collecting such monies, including, without limitation, to
enforce any security held by the Respondents, including without limitation
to apply for any tax refund owing;
(f) to settle, extend or compromise any indebtedness owing to the
Respondents;
(g) to execute, assign, issue and endorse documents of whatever nature in
respect of any of the Property, whether in the Receiver's name or in the
name and on behalf of the Respondents, for any purpose pursuant to this
Order;
(h) to initiate, prosecute and continue the prosecution of any and all
proceedings and to defend all proceedings now pending or hereafter
instituted with respect to the Respondents, the Property or the Receiver,
and to settle or compromise any such proceedings. The authority hereby
conveyed shall extend to such appeals or applications for judicial review
in respect of any order or judgment pronounced in any such proceeding;
(i) to market any or all of the Property of the Respondent 237A Advance
Inc., including without limitation the 237A Real Property (the “237A Property”), individually or together, including advertising and soliciting
offers in respect of the 237A Property or any part(s) thereof, and
negotiate such terms and conditions of sale as the Receiver, in
consultation with the Applicants, may deem appropriate;
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(j) to market any or all of the Property of the Respondent 237B Advance Inc.
including without limitation the 237B Real Property (the “237B Property”),
individually or together, including advertising and soliciting offers in
respect of the 237B Property or any part(s) thereof, and negotiate such
terms and conditions of sale as the Receiver in consultation with the
Applicants, may deem appropriate
(k) to market any or all of the Property of the Respondents other than 237B
Advance Inc. and 237A Advance Inc. (the “Other Property”), individually
or together, including advertising and soliciting offers in respect of the
Other Property or any part(s) thereof, and negotiate such terms and
conditions of sale as the Receiver in consultation with the Applicants may
deem appropriate;
(l) to sell, convey, transfer, lease or assign the Property or any part or parts
thereof out of the ordinary course of business,
(1) without the approval of this Court in respect of any transaction not exceeding $500,000, provided that the aggregate consideration for all such transactions does not exceed $2,000,000; and
(2) with the approval of this Court in respect of any transaction in which the purchase price or the aggregate purchase price exceeds the applicable amount set out in the preceding clause;
(3) and in each such case notice under subsection 63(4) of the Ontario Personal Property Security Act, or section 31 of the Ontario Mortgages Act, as the case may be, shall not be required.
(m) to apply for any vesting order or other orders necessary to convey the
Property or any part or parts thereof to a purchaser or purchasers thereof,
free and clear of any liens or encumbrances affecting such Property;
(n) to report to, meet with and discuss with such affected Persons (as defined
below) as the Receiver deems appropriate on all matters relating to the
Property and the receivership, and to share information, subject to such
terms as to confidentiality as the Receiver deems advisable;
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(o) to register a copy of this Order and any other Orders in respect of the
Property against title to any of the Property;
(p) to take steps and actions necessary to maintain the 237A Property
including arranging for any repairs and maintenance as necessary, with
the consent of 2056709 Ontario Inc.;
(q) to take steps and actions necessary to maintain the 237B Property
including arranging for any repairs and maintenance as necessary, with
the consent of Kozo Holdings Inc.;
(r) to secure the Property to protect it from vandalism, theft and damage;
(s) to facilitate and assist in obtaining approvals or permissions as may be
required by any governmental authority, including but not limited to any
such approvals or permissions required under the Controlled Substances
Legislation, for and on behalf of and, if thought desirable by the Receiver,
in the name of the Respondents, and to meet with and discuss with such
governmental authority and execute any agreements required in
connection with or as a result of such discussion including to act as the
agent of the Respondents as may be necessary or applicable to facilitate
the disposal of the Excluded Assets;
(t) to file an assignment in bankruptcy in respect of all or any of the
Respondents pursuant to the provisions of the BIA without further order of
the Court;
(u) to enter into agreements with any trustee in bankruptcy appointed in
respect of the Respondents;
(v) to exercise any shareholder, partnership, joint venture or other rights
which the Respondents may have and that is consistent with this Order;
and
(w) to take any steps reasonably incidental to the exercise of these powers or
the performance of any statutory obligations.
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and in each case where the Receiver takes any such actions or steps, it shall be exclusively
authorized and empowered to do so, to the exclusion of all other Persons (as defined below),
including the Respondents, and without interference from any other Person.
8. THIS COURT ORDERS that, for greater certainty, nothing herein contained shall require
the Receiver to take Possession of any substances subject to the Controlled Substances
Legislation and the Receiver shall not, as a result of this Order or anything done in pursuance of
the Receiver's duties and powers under this Order, be deemed to be in Possession of any of the
Property within the meaning of any Controlled Substances Legislation.
DUTY TO PROVIDE ACCESS AND CO-OPERATION TO THE RECEIVER
9. THIS COURT ORDERS that (i) the Respondents, (ii) all of its current and former
directors, officers, employees, agents, accountants, legal counsel and shareholders, and all
other persons acting on its instructions or behalf, and (iii) all other individuals, firms,
corporations, governmental bodies or agencies, or other entities having notice of this Order (all
of the foregoing, collectively, being “Persons” and each being a “Person”) shall forthwith advise
the Receiver of the existence of any Property in such Person's possession or control, shall grant
immediate and continued access to the Property to the Receiver, and shall deliver all such
Property to the Receiver upon the Receiver's request.
10. THIS COURT ORDERS that all Persons shall forthwith advise the Receiver of the
existence of any books, documents, securities, contracts, orders, corporate and accounting
records, and any other papers, records and information of any kind related to the business or
affairs of the Respondents, and any computer programs, computer tapes, computer disks, or
other data storage media containing any such information (the foregoing, collectively, the
“Records”) in that Person's possession or control, and shall provide to the Receiver or permit
the Receiver to make, retain and take away copies thereof and grant to the Receiver unfettered
access to and use of accounting, computer, software and physical facilities relating thereto,
provided however that nothing in this paragraph 9 or in paragraph 10 of this Order shall require
the delivery of Records, or the granting of access to Records, which may not be disclosed or
provided to the Receiver due to the privilege attaching to solicitor-client communication or due
to statutory provisions prohibiting such disclosure.
11. THIS COURT ORDERS that if any Records are stored or otherwise contained on a
computer or other electronic system of information storage, whether by independent service
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provider or otherwise, all Persons in possession or control of such Records shall forthwith give
unfettered access to the Receiver for the purpose of allowing the Receiver to recover and fully
copy all of the information contained therein whether by way of printing the information onto
paper or making copies of computer disks or such other manner of retrieving and copying the
information as the Receiver in its discretion deems expedient, and shall not alter, erase or
destroy any Records without the prior written consent of the Receiver. Further, for the purposes
of this paragraph, all Persons shall provide the Receiver with all such assistance in gaining
immediate access to the information in the Records as the Receiver may in its discretion require
including providing the Receiver with instructions on the use of any computer or other system
and providing the Receiver with any and all access codes, account names and account
numbers that may be required to gain access to the information.
12. THIS COURT ORDERS that the Receiver shall provide each of the relevant landlords
with notice of the Receiver’s intention to remove any fixtures from any leased premises at least
seven (7) days prior to the date of the intended removal. The relevant landlord shall be entitled
to have a representative present in the leased premises to observe such removal and, if the
landlord disputes the Receiver’s entitlement to remove any such fixture under the provisions of
the lease, such fixture shall remain on the premises and shall be dealt with as agreed between
any applicable secured creditors, such landlord and the Receiver, or by further Order of this
Court upon application by the Receiver on at least two (2) days notice to such landlord and any
such secured creditors.
NO PROCEEDINGS AGAINST THE RECEIVER
13. THIS COURT ORDERS that no proceeding or enforcement process in any court or
tribunal (each, a “Proceeding”), shall be commenced or continued against the Receiver except
with the written consent of the Receiver or with leave of this Court.
NO PROCEEDINGS AGAINST THE RESPONDENTS OR THE PROPERTY
14. THIS COURT ORDERS that no Proceeding against or in respect of the Respondents or
the Property and the Excluded Assets shall be commenced or continued except with the written
consent of the Receiver or with leave of this Court and any and all Proceedings currently under
way against or in respect of the Respondents or the Property or the Excluded Assets are hereby
stayed and suspended pending further Order of this Court.
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NO EXERCISE OF RIGHTS OR REMEDIES
15. THIS COURT ORDERS that all rights and remedies against the Respondents, the
Receiver, or affecting the Property or Excluded Assets, are hereby stayed and suspended
except with the written consent of the Receiver or leave of this Court, provided however that this
stay and suspension does not apply in respect of any “eligible financial contract” as defined in
the BIA, and further provided that nothing in this paragraph shall (i) empower the Receiver or
the Respondents to carry on any business which the Respondents is not lawfully entitled to
carry on, (ii) exempt the Receiver or the Respondents from compliance with statutory or
regulatory provisions relating to health, safety or the environment, (iii) prevent the filing of any
registration to preserve or perfect a security interest, or (iv) prevent the registration of a claim for
lien.
NO INTERFERENCE WITH THE RECEIVER
16. THIS COURT ORDERS that no Person shall discontinue, fail to honour, alter, interfere
with, repudiate, terminate or cease to perform any right, renewal right, contract, agreement,
licence or permit in favour of or held by the Respondents other than with respect to the
Excluded Assets, Excluded Undertakings or Excluded Business, without written consent of the
Receiver or leave of this Court.
CONTINUATION OF SERVICES
17. THIS COURT ORDERS that all Persons having oral or written agreements with the
Respondents or statutory or regulatory mandates for the supply of goods and/or services,
including without limitation, all computer software, communication and other data services,
centralized banking services, payroll services, insurance, transportation services, utility or other
services to the Respondents are hereby restrained until further Order of this Court from
discontinuing, altering, interfering with or terminating the supply of such goods or services as
may be required by the Receiver, and that the Receiver shall be entitled to the continued use of
the Respondents' current telephone numbers, facsimile numbers, internet addresses and
domain names, provided in each case that the normal prices or charges for all such goods or
services received after the date of this Order are paid by the Receiver in accordance with
normal payment practices of the Respondents or such other practices as may be agreed upon
by the supplier or service provider and the Receiver, or as may be ordered by this Court.
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RECEIVER TO HOLD FUNDS
18. THIS COURT ORDERS that all funds, monies, cheques, instruments, and other forms of
payments received or collected by the Receiver from and after the making of this Order from
any source whatsoever, including without limitation the sale of all or any of the Property and the
collection of any accounts receivable in whole or in part, whether in existence on the date of this
Order or hereafter coming into existence, shall be deposited into one or more new accounts to
be opened by the Receiver (the “Post Receivership Accounts”) in accordance with
paragraphs 24 and 25 below, and the monies standing to the credit of such Post Receivership
Accounts from time to time, net of any disbursements provided for herein, shall be held by the
Receiver to be paid in accordance with the terms of this Order or any further Order of this Court.
EMPLOYEES
19. THIS COURT ORDERS that all employees of the Respondents shall remain employees
of the Respondents until such time as the Receiver, on the Respondents’ behalf, terminates the
employment of such employees. The employment of any and all employees of the
Respondents so terminated shall be deemed terminated immediately prior to the granting of this
Order. The Receiver shall be authorized to engage any individuals or former employees of the
Respondents in writing on a task and term basis as required. The Receiver shall not be liable
for any employee-related liabilities, including any successor employer liabilities as provided for
in section 14.06(1.2) of the BIA, other than such amounts as the Receiver may specifically
agree in writing to pay, or in respect of its obligations under sections 81.4(5) or 81.6(3) of the
BIA or under the Wage Earner Protection Program Act.
PIPEDA
20. THIS COURT ORDERS that, pursuant to clause 7(3)(c) of the Canada Personal
Information Protection and Electronic Documents Act, the Receiver shall disclose personal
information of identifiable individuals to prospective purchasers or bidders for the Property and
to their advisors, but only to the extent desirable or required to negotiate and attempt to
complete one or more sales of the Property (each, a “Sale”). Each prospective purchaser or
bidder to whom such personal information is disclosed shall maintain and protect the privacy of
such information and limit the use of such information to its evaluation of the Sale, and if it does
not complete a Sale, shall return all such information to the Receiver, or in the alternative
destroy all such information. The purchaser of any Property shall be entitled to continue to use
the personal information provided to it, and related to the Property purchased, in a manner
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which is in all material respects identical to the prior use of such information by the
Respondents, and shall return all other personal information to the Receiver, or ensure that all
other personal information is destroyed.
LIMITATION ON ENVIRONMENTAL LIABILITIES
21. THIS COURT ORDERS that nothing herein contained shall require the Receiver to
occupy or to take control, care, charge, possession or management (separately and/or
collectively, “Possession”) of any of the Property that might be environmentally contaminated,
might be a pollutant or a contaminant, or might cause or contribute to a spill, discharge, release
or deposit of a substance contrary to any federal, provincial or other law respecting the
protection, conservation, enhancement, remediation or rehabilitation of the environment or
relating to the disposal of waste or other contamination including, without limitation, the
Canadian Environmental Protection Act, the Ontario Environmental Protection Act, the Ontario
Water Resources Act, or the Ontario Occupational Health and Safety Act and regulations
thereunder (the “Environmental Legislation”), provided however that nothing herein shall
exempt the Receiver from any duty to report or make disclosure imposed by applicable
Environmental Legislation. The Receiver shall not, as a result of this Order or anything done in
pursuance of the Receiver's duties and powers under this Order, be deemed to be in
Possession of any of the Property within the meaning of any Environmental Legislation, unless it
is actually in possession.
LIMITATION ON THE RECEIVER’S LIABILITY
22. THIS COURT ORDERS that the Receiver shall incur no liability or obligation as a result
of its appointment or the carrying out the provisions of this Order, save and except for any gross
negligence or wilful misconduct on its part, or in respect of its obligations under sections 81.4(5)
or 81.6(3) of the BIA or under the Wage Earner Protection Program Act. Nothing in this Order
shall derogate from the protections afforded the Receiver by section 14.06 of the BIA or by any
other applicable legislation.
RECEIVER'S ACCOUNTS
23. THIS COURT ORDERS that the Receiver and counsel to the Receiver shall be paid
their reasonable fees and disbursements, in each case at their standard rates and charges
unless otherwise ordered by the Court on the passing of accounts, and that the Receiver and
counsel to the Receiver shall be entitled to and are hereby granted a charge (the “Receiver's
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Charge”) on the Property, as security for such fees and disbursements, both before and after
the making of this Order in respect of these proceedings, and that subject to the priorities as set
out in paragraph 35 hereof, the Receiver's Charge shall form a first charge on the Property, in
priority to all other security interests, trusts, liens, charges and encumbrances, statutory or
otherwise, in favour of any Person, but subject to the CCAA Charges (as defined below) and
sections 14.06(7), 81.4(4), and 81.6(2) of the BIA.
24. THIS COURT ORDERS that the Receiver and its counsel shall separately record their
respective fees and disbursements specifically incurred in connection with the 237A Property
(the “237A Fees”), the 237B Property (the “237B Fees”) and with all remaining Property (the
“Other Fees”).
25. THIS COURT ORDERS that general fees and disbursements of the Receiver which
cannot be specifically recorded as 237A Fees, 237B Fees or Other Fees or which are incurred
generally in connection with all of the Property (the “General Fees”), shall be allocated between
the 237A Property, the 237B Property and the other Property as agreed to between the
Applicants or as may be ordered by this Court.
26. THIS COURT ORDERS that the Receiver and its legal counsel shall pass its accounts
from time to time, and for this purpose the accounts of the Receiver and its legal counsel are
hereby referred to a judge of the Commercial List of the Ontario Superior Court of Justice.
27. THIS COURT ORDERS subject to paragraphs 24 and 25 hereto, that prior to the
passing of its accounts, the Receiver shall be at liberty from time to time to apply reasonable
amounts, out of the monies in its hands, against its fees and disbursements, including legal fees
and disbursements, incurred at the standard rates and charges of the Receiver or its counsel,
and such amounts shall constitute advances against its remuneration and disbursements when
and as approved by this Court.
FUNDING OF THE RECEIVERSHIP
28. THIS COURT ORDERS that the Receiver be at liberty and it is hereby empowered to
borrow by way of a revolving credit or otherwise, such monies from time to time as it may
consider necessary or desirable, provided that the outstanding principal amount does not
exceed $ (or such greater amount as this Court may by further Order authorize), at any time,
at such rate or rates of interest as it deems advisable for such period or periods of time as it
28
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may arrange, for the purpose of funding the exercise of the powers and duties conferred upon
the Receiver by this Order, including interim expenditures. Subject to the priorities as set out in
paragraph 31 hereof the whole of the Property shall be and is hereby charged by way of a fixed
and specific charge (the “Receiver's Borrowings Charge”) as security for the payment of the
monies borrowed, together with interest and charges thereon, in priority to all security interests,
trusts, liens, charges and encumbrances, statutory or otherwise, in favour of any Person, but
subordinate in priority to the Receiver’s Charge, the CCAA Charges (as defined below) and the
charges as set out in sections 14.06(7), 81.4(4), and 81.6(2) of the BIA.
29. THIS COURT ORDERS that neither the Receiver's Borrowings Charge nor any other
security granted by the Receiver in connection with its borrowings under this Order shall be
enforced without leave of this Court.
30. THIS COURT ORDERS that the Receiver is at liberty and authorized to issue certificates
substantially in the form annexed as Schedule “B” hereto (the “Receiver’s Certificates”) for
any amount borrowed by it pursuant to this Order.
31. THIS COURT ORDERS that the Receiver and its counsel shall separately record their
borrowings specifically incurred in connection with the 237A Property (the “237A Borrowings”),
the 237B Property (the “237B Borrowings”) and with all remaining Property (the “Other Borrowings”).
32. THIS COURT ORDERS that general borrowings of the Receiver which cannot be
specifically recorded as 237A Borrowings, 237B Borrowings or Other Borrowings and which are
borrowed generally in connection with all of the Property (the “General Borrowings”), shall be
allocated between the 237A Property, the 237B Property and the other Property as agreed to
between the Applicants or as may be ordered by this Court.
33. THIS COURT ORDERS that subject to the priorities as set out in paragraph 34 hereof,
the monies from time to time borrowed by the Receiver pursuant to this Order or any further
order of this Court and any and all Receiver’s Certificates evidencing the same or any part
thereof shall rank on a pari passu basis, unless otherwise agreed to by the holders of any prior
issued Receiver's Certificates.
34. THIS COURT ORDERS that nothing in this Order shall prevent the Receiver from acting
as a trustee in bankruptcy of any of the Respondents.
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PRIORITY OF RECEIVER’S CHARGE AND RECEIVER’S BORROWINGS CHARGE
35. THIS COURT ORDERS that notwithstanding any other provision of this order the
Receiver’s Charge and the Receiver’s Borrowings Charge shall have the following priority:
(a) With respect to the 237A Property, only the portion of the Receiver’s Charge and
Receiver’s Borrowing Charge that secure the 237A Fees, the 237A Borrowings and the
amount of the General Fees and General Borrowings allocated to the 237A Property
pursuant to paragraphs 20 and 27 hereof shall have priority over the security held by
2056709 Ontario Inc.
(b) With respect to the 237B Property, only the portion of the Receiver’s Charge and
Receiver’s Borrowing Charge that secure the 237B Fees, the 237B Borrowings and the
amount of the General Fees and General Borrowings allocated to the 237B Property
pursuant to paragraphs 20 and 27 hereof shall have priority over the security held by
Kozo Holdings Inc.
CCAA ORDER CHARGES
36. THIS COURT ORDERS that the Administration Charge and the DIP Lender’s Charge
each as defined in the initial order of the Court dated March 20, 2020 granted under the
Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (collectively the “CCAA Charges”) shall only secure amounts or liabilities incurred up to the date of this Order.
SERVICE AND NOTICE
37. THIS COURT ORDERS that the E-Service Protocol of the Commercial List (the
“Protocol”) is approved and adopted by reference herein and, in this proceeding, the service of
documents made in accordance with the Protocol (which can be found on the Commercial List
website at http://www.ontariocourts.ca/scj/practice/practice-directions/toronto/e-service-
protocol/) shall be valid and effective service. Subject to Rule 17.05 this Order shall constitute
an order for substituted service pursuant to Rule 16.04 of the Rules of Civil Procedure. Subject
to Rule 3.01(d) of the Rules of Civil Procedure and paragraph 21 of the Protocol, service of
documents in accordance with the Protocol will be effective on transmission. This Court further
orders that a Case Website shall be established in accordance with the Protocol with the
following URL: https://farbergroup.com/engagements/pure-global-cannabis-inc/
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38. THIS COURT ORDERS that if the service or distribution of documents in accordance
with the Protocol is not practicable, the Receiver is at liberty to serve or distribute this Order,
any other materials and orders in these proceedings, any notices or other correspondence, by
forwarding true copies thereof by prepaid ordinary mail, courier, personal delivery or facsimile
transmission to the Respondents’ creditors or other interested parties at their respective
addresses as last shown on the records of the Respondents and that any such service or
distribution by courier, personal delivery or facsimile transmission shall be deemed to be
received on the next business day following the date of forwarding thereof, or if sent by ordinary
mail, on the third business day after mailing.
GENERAL
39. THIS COURT ORDERS that the Receiver may from time to time apply to this Court for
advice and directions in the discharge of its powers and duties hereunder.
40. THIS COURT ORDERS that nothing in this Order shall prevent the Receiver from acting
as a trustee in bankruptcy of the Respondents.
41. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,
regulatory or administrative body having jurisdiction in Canada or in the United States to give
effect to this Order and to assist the Receiver and its agents in carrying out the terms of this
Order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully
requested to make such orders and to provide such assistance to the Receiver, as an officer of
this Court, as may be necessary or desirable to give effect to this Order or to assist the Receiver
and its agents in carrying out the terms of this Order.
42. THIS COURT ORDERS that the Receiver be at liberty and is hereby authorized and
empowered to apply to any court, tribunal, regulatory or administrative body, wherever located,
for the recognition of this Order and for assistance in carrying out the terms of this Order, and
that the Receiver is authorized and empowered to act as a representative in respect of the
within proceedings for the purpose of having these proceedings recognized in a jurisdiction
outside Canada.
43. THIS COURT ORDERS that the Applicants shall have their costs of this application, up
to and including entry and service of this Order, provided for by the terms of the Applicant’s
security or, if not so provided by the Applicant's security, then on a substantial indemnity basis
31
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to be paid by the Receiver from the Respondents' estate with such priority and at such time as
this Court may determine.
44. THIS COURT ORDERS that any interested party may apply to this Court to vary or
amend this Order on not less than seven (7) days' notice to the Receiver and to any other party
likely to be affected by the order sought or upon such other notice, if any, as this Court may
order.
________________________________________
32
SCHEDULE “A”
REAL PROPERTY
• PCL D-20, SEC M269 ; PT BLK D, PL M269 , PART 1 & 2 , 43R20236 , S/T A RIGHT AS IN LT335783; S/T DP2708; T/W PT BLK D, PL M269, PT 3, 43R20236 AS IN LT1503956 ; BRAMPTON (“237A Real Property”)
• PCL D-32, SEC M269 ; FIRSTLY ; PT BLK D, PL M269 , PART 3 , 43R20236 , ; SECONDLY ; PT BLK D, PL M269 , PART 4 , 43R20236 ; T/W PT 2, 43R20236 AS IN LT1503956; S/T PT 3, 43R20236 IN FAVOUR OF PTS 1 & 2, 43R20236 AS IN LT1503956; S/T DP2708 ;; CITY OF BRAMPTON (“237B Real Property”)
33
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SCHEDULE “B”
RECEIVER CERTIFICATE
CERTIFICATE NO. ______________
AMOUNT $_____________________
PROPERTY: _______________________
1. THIS IS TO CERTIFY that A. Farber & Partners Inc., the receiver (the “Receiver”) of the
assets, undertakings and properties of Pure Global Cannabis Inc., Puresinse Inc., 237A
Advance Inc., 237B Advance Inc., SPRQ Health Group, and The Great Canadian Hemp
Company, Ltd. (the “Respondents”) acquired for, or used in relation to a business carried on by
the Respondents, including all proceeds thereof (collectively, the “Property”) appointed by
Order of the Ontario Superior Court of Justice (Commercial List) (the “Court”) dated the ___ day
of ______, 20__ (the “Order”) made in an action having Court file number __-CL-_______, has
received as such Receiver from the holder of this certificate (the “Lender”) the principal sum of
$___________, being part of the total principal sum of $___________ which the Receiver is
authorized to borrow under and pursuant to the Order.
2. The principal sum evidenced by this certificate is payable on demand by the Lender with
interest thereon calculated and compounded [daily][monthly not in advance on the _______ day
of each month] after the date hereof at a notional rate per annum equal to the rate of ______
per cent above the prime commercial lending rate of Bank of _________ from time to time.
3. Such principal sum with interest thereon is, by the terms of the Order, together with the
principal sums and interest thereon of all other certificates issued by the Receiver pursuant to
the Order or to any further order of the Court, a charge upon the whole of the Property, in
priority to the security interests of any other person, but subject to the priority of the charges set
out in the Order and in the Bankruptcy and Insolvency Act, and the right of the Receiver to
indemnify itself out of such Property in respect of its remuneration and expenses.
4. All sums payable in respect of principal and interest under this certificate are payable at
the main office of the Lender at Toronto, Ontario.
5. Until all liability in respect of this certificate has been terminated, no certificates creating
charges ranking or purporting to rank in priority to this certificate shall be issued by the Receiver
34
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to any person other than the holder of this certificate without the prior written consent of the
holder of this certificate.
6. The charge securing this certificate shall operate so as to permit the Receiver to deal
with the Property as authorized by the Order and as authorized by any further or other order of
the Court.
7. The Receiver does not undertake, and it is not under any personal liability, to pay any
sum in respect of which it may issue certificates under the terms of the Order.
DATED the _____ day of ______________, 20__.
A. Farber & Partners Inc., solely in its capacity as Receiver of the Property, and not in its personal capacity
Per: Name: Title:
35
Court File No.
2056709 ONTARIO INC., KOZO HOLDINGS INC., CANCOR DEBT AGENCY INC.
v PURE GLOBAL CANNABIS INC., PURESINSE INC., 237A ADVANCE INC., 237B ADVANCE INC., SPRQ HEALTH GROUP, and THE GREAT CANADIAN HEMP COMPANY, LTD.
Applicants
Respondents
ONTARIO SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
Proceeding commenced at Toronto
RECEIVERSHIP ORDER
CASSELS BROCK & BLACKWELL LLP 2100 Scotia Plaza, 40 King Street West, Toronto, ON M5H 3C2 Jane O. Dietrich LSO# 49302U/ Monique Sassi LSO #63638L Tel:416.860.5223/ Fax:416.640.3144/ [email protected]; [email protected] Lawyers for 2056709 Ontario Inc. in respect of 237B Advance Inc. KEYSER MASON BALL, LLP Suite 900, 3 Robert Speck Parkway, Mississauga, Ontario L4Z 2G5 Wojtek Jaskiewicz LSO #49809L Tel: 905.276.0424/ Fax: 905.276.2298/ [email protected] Lawyer for Kozo Holdings Inc. in respect to 237B Advance Inc CHAITONS LLP 5000 Yonge Street, 10th Floor, Toronto, Canada. M2N 7E9 Harvey Chaiton LSO 21592 Tel: 416-218-1129/ Fax: 416-218-1849/ [email protected] Lawyers for Cancor Debt Agency Inc.
36
1 The Model Order Subcommittee notes that a receivership proceeding may be commenced by action or by application. This model order is drafted on the basis that the receivership proceeding is commenced by way of an action.
Revised: January 21, 2014s.243(1) BIA (National Receiver) and s. 101 CJA (Ontario) Receiver
Court File No.
ONTARIOSUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
THE HONOURABLE MR.
JUSTICE HAINEY
)
)
)
WEEKDAY, THE #
DAY OF MONTHAPRIL, 20YR2020
DOCSTOR: 1771742\9DOCSTOR: 1771742\9
PLAINTIFF1
Plaintiff
2056709 ONTARIO INC., KOZO HOLDINGS INC., CANCOR DEBT AGENCY INC.
Applicants- and -
DEFENDANT
Defendant
PURE GLOBAL CANNABIS INC., PURESINSE INC., 237A ADVANCE INC., 237B ADVANCE
INC., SPRQ HEALTH GROUP, and THE GREAT CANADIAN HEMP COMPANY, LTD.
Respondents
APPLICATION UNDERSUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT,
R.S.C. 1985, C. B-3, AS AMENDED AND SECTION 101 OF THECOURTS OF JUSTICE ACT, R.S.O. 1990, C. C.43, AS AMENDED
ORDER(appointing Receiver)
37
- 2 -
DOCSTOR: 1771742\9DOCSTOR: 1771742\9
2 Section 243(1) of the BIA provides that the Court may appoint a receiver "on application by a secured creditor".3 If service is effected in a manner other than as authorized by the Ontario Rules of Civil Procedure, an order
validating irregular service is required pursuant to Rule 16.08 of the Rules of Civil Procedure and may be granted in appropriate circumstances.
THIS MOTIONJOINT APPLICATION made by the Plaintiff2Applicants for an Order
pursuant to section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as
amended (the "“BIA"”) and section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as
amended (the "“CJA"”) appointing [RECEIVER'S NAME]A. Farber & Partners Inc (“Farber”)
as receiver [and manager] (in such capacities, the "“Receiver"”) without security, of allcertain
of the assets, undertakings and properties of [DEBTOR'S NAME] (the "Debtor")Respondents
acquired for, or used in relation to a businessbusinesses carried on by the DebtorRespondents,
as described below, was heard by teleconference this day at 330 University Avenue, Toronto,
Ontario.
ON READING the affidavits of Narinder Pal Anand sworn March 18, 2020, affidavit of
[NAME] sworn [DATE]Philip Gross sworn March 23, 2020, and the Exhibits thereto, the
Confidential Responding Motion Record of Kozo Holdings Inc. dated March 30 2020 (the
“Confidential Motion Record”), the Application Record of the Respondents dated March 18,
2020, the Supplemental Application Record dated March 19, 2020, and on hearing the
submissions of counsel for [NAMES],the Applicants, counsel for the Respondents and no one
appearing for [NAME] although duly served as appears from the affidavit of service of [NAME]
sworn [DATE], and on reading the consent of [RECEIVER'S NAME]Farber to act as the
Receiver,
SERVICE
THIS COURT ORDERS that the time for service of the Notice of MotionApplication and1.
the MotionApplication is hereby abridged and validated3 so that this motionapplication is
properly returnable today and hereby dispenses with further service thereof.
EXCLUSION OF CANNABIS ASSETS AND OPERATIONS
THIS COURT ORDERS that the Receiver shall not take possession of any asset of the 2.
Respondents for which any permit or licence issued in accordance, or in connection, with the
following legislation:
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Excise Act, 2001, S.C. 2002, c. 22;(a)
Cannabis Act, S.C. 2018, c C. 16;(b)
Cannabis Control Act, 2017, S.O., 2017, c. 26;(c)
Ontario Cannabis Retail Corporation Act, 2017, S.O. 2017, c. 26; or(d)
Cannabis License Act, 2018, S.O. 2018, c. 12,(e)
and any regulations issued in connection therewith (the “Controlled Substances Legislation”)
is required (the “Excluded Assets”).
THIS COURT DECLARES that the Receiver has no authority over the undertakings of 3.
the Respondents insofar as they concern the Excluded Assets (the “Excluded Undertakings”).
THIS COURT ORDERS that the Receiver shall not manage, operate or carry on the 4.
business of the Respondents insofar as the business concerns the Excluded Assets or
Excluded Undertakings (such business, the “Excluded Business”).
THIS COURT ORDERS that the Excluded Assets shall remain in the possession of the 5.
Respondents who shall continue to have authority over the Excluded Undertakings and
manage, operate and carry on the Excluded Business for the sole purpose of disposing of the
Excluded Assets as soon as practicable, but in accordance with applicable Controlled
Substances Legislation.
APPOINTMENT
2. THIS COURT ORDERS that pursuant to section 243(1) of the BIA and section 101 of6.
the CJA, [RECEIVER'S NAME]Farber is hereby appointed Receiver, without security, of all of
the assets, undertakings and properties of the Debtorincluding the 237A Real Property and the
237B Real Property as listed and defined in Schedule “A” hereto (collectively, the “Real
Property”) of the Respondents acquired for, or used in relation to a business carried on by the
DebtorRespondents, including all proceeds thereof (the ", but not the Excluded Assets or
Excluded Undertakings (collectively, the “Property"”).
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RECEIVER’S POWERS
3. THIS COURT ORDERS that the Receiver is hereby empowered and authorized, but7.
not obligated, to act at once in respect of the Property and, without in any way limiting the
generality of the foregoing, the Receiver is hereby expressly empowered and authorized to do
any of the following where the Receiver considers it necessary or desirable:
to take possession of and exercise control over the Property and any and(a)
all proceeds, receipts and disbursements arising out of or from the
Property;
to receive, preserve, and protect the Property, or any part or parts(b)
thereof, including, but not limited to, the changing of locks and security
codes, the relocating of Property to safeguard it, the engaging of
independent security personnel, the taking of physical inventories of the
Property and the placement of such insurance coverage as may be
necessary or desirable;
to the extent permitted by this Order, to manage, operate, and carry on(c)
the business of the DebtorRespondents, including the powers to enter
into any agreements, incur any obligations in the ordinary course of
business other than the Excluded Business, cease to carry on all or any
part of the business, or cease to perform any contracts of the
DebtorRespondents;
to engage consultants, appraisers, agents, experts, auditors,(d)
accountants, managers, counsel and such other persons from time to
time and on whatever basis, including on a temporary basis, to assist with
the exercise of the Receiver's powers and duties, including without
limitation those conferred by this Order;
(e) to purchase or lease such machinery, equipment, inventories, supplies,
premises or other assets to continue the business of the Debtor or any part
or parts thereof;
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4 This model order does not include specific authority permitting the Receiver to either file an assignment in bankruptcy on behalf of the Debtor, or to consent to the making of a bankruptcy order against the Debtor. A bankruptcy may have the effect of altering the priorities among creditors, and therefore the specific authority of the Court should be sought if the Receiver wishes to take one of these steps.
(f) to receive, and collect all monies and accounts now owed or hereafter(e)
owing to the DebtorRespondents and to exercise all remedies of the
DebtorRespondents in collecting such monies, including, without
limitation, to enforce any security held by the DebtorRespondents,
including without limitation to apply for any tax refund owing;
(g) to settle, extend or compromise any indebtedness owing to the(f)
DebtorRespondents;
(h) to execute, assign, issue and endorse documents of whatever nature(g)
in respect of any of the Property, whether in the Receiver's name or in the
name and on behalf of the DebtorRespondents, for any purpose pursuant
to this Order;
(i) to initiate, prosecute and continue the prosecution of any and all(h)
proceedings and to defend all proceedings now pending or hereafter
instituted with respect to the DebtorRespondents, the Property or the
Receiver, and to settle or compromise any such proceedings.4 The
authority hereby conveyed shall extend to such appeals or applications
for judicial review in respect of any order or judgment pronounced in any
such proceeding;
(j) to market any or all of the Property of the Respondent 237A Advance (i)
Inc., including without limitation the 237A Real Property (the “237A
Property”), individually or together, including advertising and soliciting
offers in respect of the 237A Property or any part or parts(s) thereof, and
negotiatingnegotiate such terms and conditions of sale as the Receiver in
its discretion, in consultation with the Applicants, may deem appropriate;
to market any or all of the Property of the Respondent 237B Advance Inc. (j)
including without limitation the 237B Real Property (the “237B Property”),
individually or together, including advertising and soliciting offers in
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5 If the Receiver will be dealing with assets in other provinces, consider adding references to applicable statutes in other provinces. If this is done, those statutes must be reviewed to ensure that the Receiver is exempt from or can be exempted from such notice periods, and further that the Ontario Court has the jurisdiction to grant such an exemption.
respect of the 237B Property or any part(s) thereof, and negotiate such
terms and conditions of sale as the Receiver in consultation with the
Applicants, may deem appropriate
to market any or all of the Property of the Respondents other than 237B (k)
Advance Inc. and 237A Advance Inc. (the “Other Property”), individually
or together, including advertising and soliciting offers in respect of the
Other Property or any part(s) thereof, and negotiate such terms and
conditions of sale as the Receiver in consultation with the Applicants may
deem appropriate;
(k) to sell, convey, transfer, lease or assign the Property or any part or(l)
parts thereof out of the ordinary course of business,
(i) without the approval of this Court in respect of any(1)transaction not exceeding $________,500,000, providedthat the aggregate consideration for all such transactionsdoes not exceed $__________2,000,000; and
(ii) with the approval of this Court in respect of any(2)transaction in which the purchase price or the aggregatepurchase price exceeds the applicable amount set out inthe preceding clause;
and in each such case notice under subsection 63(4) of(3)the Ontario Personal Property Security Act, [or section 31of the Ontario Mortgages Act, as the case may be,]5 shallnot be required, and in each case the Ontario Bulk Sales Act shall not apply.
(l) to apply for any vesting order or other orders necessary to convey the(m)
Property or any part or parts thereof to a purchaser or purchasers thereof,
free and clear of any liens or encumbrances affecting such Property;
(m) to report to, meet with and discuss with such affected Persons (as(n)
defined below) as the Receiver deems appropriate on all matters relating
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to the Property and the receivership, and to share information, subject to
such terms as to confidentiality as the Receiver deems advisable;
(n) to register a copy of this Order and any other Orders in respect of the(o)
Property against title to any of the Property;
(o) to apply for any permits, licences,take steps and actions necessary to (p)
maintain the 237A Property including arranging for any repairs and
maintenance as necessary, with the consent of 2056709 Ontario Inc.;
to take steps and actions necessary to maintain the 237B Property (q)
including arranging for any repairs and maintenance as necessary, with
the consent of Kozo Holdings Inc.;
to secure the Property to protect it from vandalism, theft and damage;(r)
to facilitate and assist in obtaining approvals or permissions as may be(s)
required by any governmental authority and any renewals thereof,
including but not limited to any such approvals or permissions required
under the Controlled Substances Legislation, for and on behalf of and, if
thought desirable by the Receiver, in the name of the
DebtorRespondents, and to meet with and discuss with such
governmental authority and execute any agreements required in
connection with or as a result of such discussion including to act as the
agent of the Respondents as may be necessary or applicable to facilitate
the disposal of the Excluded Assets;
to file an assignment in bankruptcy in respect of all or any of the (t)
Respondents pursuant to the provisions of the BIA without further order of
the Court;
(p) to enter into agreements with any trustee in bankruptcy appointed in(u)
respect of the Debtor, including, without limiting the generality of the
foregoing, the ability to enter into occupation agreements for any property
owned or leased by the DebtorRespondents;
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(q) to exercise any shareholder, partnership, joint venture or other rights(v)
which the DebtorRespondents may have and that is consistent with this
Order; and
(r) to take any steps reasonably incidental to the exercise of these(w)
powers or the performance of any statutory obligations.
and in each case where the Receiver takes any such actions or steps, it shall be exclusively
authorized and empowered to do so, to the exclusion of all other Persons (as defined below),
including the DebtorRespondents, and without interference from any other Person.
THIS COURT ORDERS that, for greater certainty, nothing herein contained shall require 8.
the Receiver to take Possession of any substances subject to the Controlled Substances
Legislation and the Receiver shall not, as a result of this Order or anything done in pursuance of
the Receiver's duties and powers under this Order, be deemed to be in Possession of any of the
Property within the meaning of any Controlled Substances Legislation.
DUTY TO PROVIDE ACCESS AND CO-OPERATION TO THE RECEIVER
4. THIS COURT ORDERS that (i) the DebtorRespondents, (ii) all of its current and9.
former directors, officers, employees, agents, accountants, legal counsel and shareholders, and
all other persons acting on its instructions or behalf, and (iii) all other individuals, firms,
corporations, governmental bodies or agencies, or other entities having notice of this Order (all
of the foregoing, collectively, being "“Persons"” and each being a "“Person"”) shall forthwith
advise the Receiver of the existence of any Property in such Person's possession or control,
shall grant immediate and continued access to the Property to the Receiver, and shall deliver all
such Property to the Receiver upon the Receiver's request.
5. THIS COURT ORDERS that all Persons shall forthwith advise the Receiver of the10.
existence of any books, documents, securities, contracts, orders, corporate and accounting
records, and any other papers, records and information of any kind related to the business or
affairs of the DebtorRespondents, and any computer programs, computer tapes, computer
disks, or other data storage media containing any such information (the foregoing, collectively,
the "“Records"”) in that Person's possession or control, and shall provide to the Receiver or
permit the Receiver to make, retain and take away copies thereof and grant to the Receiver
unfettered access to and use of accounting, computer, software and physical facilities relating
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thereto, provided however that nothing in this paragraph 59 or in paragraph 610 of this Order
shall require the delivery of Records, or the granting of access to Records, which may not be
disclosed or provided to the Receiver due to the privilege attaching to solicitor-client
communication or due to statutory provisions prohibiting such disclosure.
6. THIS COURT ORDERS that if any Records are stored or otherwise contained on a11.
computer or other electronic system of information storage, whether by independent service
provider or otherwise, all Persons in possession or control of such Records shall forthwith give
unfettered access to the Receiver for the purpose of allowing the Receiver to recover and fully
copy all of the information contained therein whether by way of printing the information onto
paper or making copies of computer disks or such other manner of retrieving and copying the
information as the Receiver in its discretion deems expedient, and shall not alter, erase or
destroy any Records without the prior written consent of the Receiver. Further, for the purposes
of this paragraph, all Persons shall provide the Receiver with all such assistance in gaining
immediate access to the information in the Records as the Receiver may in its discretion require
including providing the Receiver with instructions on the use of any computer or other system
and providing the Receiver with any and all access codes, account names and account
numbers that may be required to gain access to the information.
7. THIS COURT ORDERS that the Receiver shall provide each of the relevant landlords12.
with notice of the Receiver’s intention to remove any fixtures from any leased premises at least
seven (7) days prior to the date of the intended removal. The relevant landlord shall be entitled
to have a representative present in the leased premises to observe such removal and, if the
landlord disputes the Receiver’s entitlement to remove any such fixture under the provisions of
the lease, such fixture shall remain on the premises and shall be dealt with as agreed between
any applicable secured creditors, such landlord and the Receiver, or by further Order of this
Court upon application by the Receiver on at least two (2) days notice to such landlord and any
such secured creditors.
NO PROCEEDINGS AGAINST THE RECEIVER
8. THIS COURT ORDERS that no proceeding or enforcement process in any court or13.
tribunal (each, a "“Proceeding"”), shall be commenced or continued against the Receiver
except with the written consent of the Receiver or with leave of this Court.
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NO PROCEEDINGS AGAINST THE DEBTORRESPONDENTS OR THE PROPERTY
9. THIS COURT ORDERS that no Proceeding against or in respect of the14.
DebtorRespondents or the Property and the Excluded Assets shall be commenced or continued
except with the written consent of the Receiver or with leave of this Court and any and all
Proceedings currently under way against or in respect of the DebtorRespondents or the
Property or the Excluded Assets are hereby stayed and suspended pending further Order of this
Court.
NO EXERCISE OF RIGHTS OR REMEDIES
10. THIS COURT ORDERS that all rights and remedies against the DebtorRespondents,15.
the Receiver, or affecting the Property or Excluded Assets, are hereby stayed and suspended
except with the written consent of the Receiver or leave of this Court, provided however that this
stay and suspension does not apply in respect of any "“eligible financial contract"” as defined in
the BIA, and further provided that nothing in this paragraph shall (i) empower the Receiver or
the DebtorRespondents to carry on any business which the DebtorRespondents is not lawfully
entitled to carry on, (ii) exempt the Receiver or the DebtorRespondents from compliance with
statutory or regulatory provisions relating to health, safety or the environment, (iii) prevent the
filing of any registration to preserve or perfect a security interest, or (iv) prevent the registration
of a claim for lien.
NO INTERFERENCE WITH THE RECEIVER
11. THIS COURT ORDERS that no Person shall discontinue, fail to honour, alter,16.
interfere with, repudiate, terminate or cease to perform any right, renewal right, contract,
agreement, licence or permit in favour of or held by the DebtorRespondents other than with
respect to the Excluded Assets, Excluded Undertakings or Excluded Business, without written
consent of the Receiver or leave of this Court.
CONTINUATION OF SERVICES
12. THIS COURT ORDERS that all Persons having oral or written agreements with the17.
DebtorRespondents or statutory or regulatory mandates for the supply of goods and/or services,
including without limitation, all computer software, communication and other data services,
centralized banking services, payroll services, insurance, transportation services, utility or other
services to the DebtorRespondents are hereby restrained until further Order of this Court from
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discontinuing, altering, interfering with or terminating the supply of such goods or services as
may be required by the Receiver, and that the Receiver shall be entitled to the continued use of
the Debtor'sRespondents' current telephone numbers, facsimile numbers, internet addresses
and domain names, provided in each case that the normal prices or charges for all such goods
or services received after the date of this Order are paid by the Receiver in accordance with
normal payment practices of the DebtorRespondents or such other practices as may be agreed
upon by the supplier or service provider and the Receiver, or as may be ordered by this Court.
RECEIVER TO HOLD FUNDS
13. THIS COURT ORDERS that all funds, monies, cheques, instruments, and other18.
forms of payments received or collected by the Receiver from and after the making of this Order
from any source whatsoever, including without limitation the sale of all or any of the Property
and the collection of any accounts receivable in whole or in part, whether in existence on the
date of this Order or hereafter coming into existence, shall be deposited into one or more new
accounts to be opened by the Receiver (the "“Post Receivership Accounts")”) in accordance
with paragraphs 24 and 25 below, and the monies standing to the credit of such Post
Receivership Accounts from time to time, net of any disbursements provided for herein, shall be
held by the Receiver to be paid in accordance with the terms of this Order or any further Order
of this Court.
EMPLOYEES
14. THIS COURT ORDERS that all employees of the DebtorRespondents shall remain19.
the employees of the DebtorRespondents until such time as the Receiver, on the
Debtor'sRespondents’ behalf, may terminateterminates the employment of such employees.
The employment of any and all employees of the Respondents so terminated shall be deemed
terminated immediately prior to the granting of this Order. The Receiver shall be authorized to
engage any individuals or former employees of the Respondents in writing on a task and term
basis as required. The Receiver shall not be liable for any employee-related liabilities, including
any successor employer liabilities as provided for in section 14.06(1.2) of the BIA, other than
such amounts as the Receiver may specifically agree in writing to pay, or in respect of its
obligations under sections 81.4(5) or 81.6(3) of the BIA or under the Wage Earner Protection
Program Act.
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PIPEDA
15. THIS COURT ORDERS that, pursuant to clause 7(3)(c) of the Canada Personal20.
Information Protection and Electronic Documents Act, the Receiver shall disclose personal
information of identifiable individuals to prospective purchasers or bidders for the Property and
to their advisors, but only to the extent desirable or required to negotiate and attempt to
complete one or more sales of the Property (each, a "“Sale"”). Each prospective purchaser or
bidder to whom such personal information is disclosed shall maintain and protect the privacy of
such information and limit the use of such information to its evaluation of the Sale, and if it does
not complete a Sale, shall return all such information to the Receiver, or in the alternative
destroy all such information. The purchaser of any Property shall be entitled to continue to use
the personal information provided to it, and related to the Property purchased, in a manner
which is in all material respects identical to the prior use of such information by the
DebtorRespondents, and shall return all other personal information to the Receiver, or ensure
that all other personal information is destroyed.
LIMITATION ON ENVIRONMENTAL LIABILITIES
16. THIS COURT ORDERS that nothing herein contained shall require the Receiver to21.
occupy or to take control, care, charge, possession or management (separately and/or
collectively, "“Possession"”) of any of the Property that might be environmentally
contaminated, might be a pollutant or a contaminant, or might cause or contribute to a spill,
discharge, release or deposit of a substance contrary to any federal, provincial or other law
respecting the protection, conservation, enhancement, remediation or rehabilitation of the
environment or relating to the disposal of waste or other contamination including, without
limitation, the Canadian Environmental Protection Act, the Ontario Environmental Protection
Act, the Ontario Water Resources Act, or the Ontario Occupational Health and Safety Act and
regulations thereunder (the "“Environmental Legislation"”), provided however that nothing
herein shall exempt the Receiver from any duty to report or make disclosure imposed by
applicable Environmental Legislation. The Receiver shall not, as a result of this Order or
anything done in pursuance of the Receiver's duties and powers under this Order, be deemed
to be in Possession of any of the Property within the meaning of any Environmental Legislation,
unless it is actually in possession.
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6 Note that subsection 243(6) of the BIA provides that the Court may not make such an order "unless it is satisfied that the secured creditors who would be materially affected by the order were given reasonable notice and an opportunity to make representations".
LIMITATION ON THE RECEIVER’S LIABILITY
17. THIS COURT ORDERS that the Receiver shall incur no liability or obligation as a22.
result of its appointment or the carrying out the provisions of this Order, save and except for any
gross negligence or wilful misconduct on its part, or in respect of its obligations under sections
81.4(5) or 81.6(3) of the BIA or under the Wage Earner Protection Program Act. Nothing in this
Order shall derogate from the protections afforded the Receiver by section 14.06 of the BIA or
by any other applicable legislation.
RECEIVER'S ACCOUNTS
18. THIS COURT ORDERS that the Receiver and counsel to the Receiver shall be paid23.
their reasonable fees and disbursements, in each case at their standard rates and charges
unless otherwise ordered by the Court on the passing of accounts, and that the Receiver and
counsel to the Receiver shall be entitled to and are hereby granted a charge (the "“Receiver's
Charge"”) on the Property, as security for such fees and disbursements, both before and after
the making of this Order in respect of these proceedings, and that subject to the priorities as set
out in paragraph 35 hereof, the Receiver's Charge shall form a first charge on the Property, in
priority to all other security interests, trusts, liens, charges and encumbrances, statutory or
otherwise, in favour of any Person, but subject to the CCAA Charges (as defined below) and
sections 14.06(7), 81.4(4), and 81.6(2) of the BIA.6
THIS COURT ORDERS that the Receiver and its counsel shall separately record their 24.
respective fees and disbursements specifically incurred in connection with the 237A Property
(the “237A Fees”), the 237B Property (the “237B Fees”) and with all remaining Property (the
“Other Fees”).
THIS COURT ORDERS that general fees and disbursements of the Receiver which 25.
cannot be specifically recorded as 237A Fees, 237B Fees or Other Fees or which are incurred
generally in connection with all of the Property (the “General Fees”), shall be allocated between
the 237A Property, the 237B Property and the other Property as agreed to between the
Applicants or as may be ordered by this Court.
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19. THIS COURT ORDERS that the Receiver and its legal counsel shall pass its26.
accounts from time to time, and for this purpose the accounts of the Receiver and its legal
counsel are hereby referred to a judge of the Commercial List of the Ontario Superior Court of
Justice.
20. THIS COURT ORDERS subject to paragraphs 24 and 25 hereto, that prior to the27.
passing of its accounts, the Receiver shall be at liberty from time to time to apply reasonable
amounts, out of the monies in its hands, against its fees and disbursements, including legal fees
and disbursements, incurred at the standard rates and charges of the Receiver or its counsel,
and such amounts shall constitute advances against its remuneration and disbursements when
and as approved by this Court.
FUNDING OF THE RECEIVERSHIP
21. THIS COURT ORDERS that the Receiver be at liberty and it is hereby empowered to28.
borrow by way of a revolving credit or otherwise, such monies from time to time as it may
consider necessary or desirable, provided that the outstanding principal amount does not
exceed $_________ (or such greater amount as this Court may by further Order authorize), at
any time, at such rate or rates of interest as it deems advisable for such period or periods of
time as it may arrange, for the purpose of funding the exercise of the powers and duties
conferred upon the Receiver by this Order, including interim expenditures. TheSubject to the
priorities as set out in paragraph 31 hereof the whole of the Property shall be and is hereby
charged by way of a fixed and specific charge (the "“Receiver's Borrowings Charge"”) as
security for the payment of the monies borrowed, together with interest and charges thereon, in
priority to all security interests, trusts, liens, charges and encumbrances, statutory or otherwise,
in favour of any Person, but subordinate in priority to the Receiver’s Charge, the CCAA Charges
(as defined below) and the charges as set out in sections 14.06(7), 81.4(4), and 81.6(2) of the
BIA.
22. THIS COURT ORDERS that neither the Receiver's Borrowings Charge nor any other29.
security granted by the Receiver in connection with its borrowings under this Order shall be
enforced without leave of this Court.
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23. THIS COURT ORDERS that the Receiver is at liberty and authorized to issue30.
certificates substantially in the form annexed as Schedule "A"“B” hereto (the "“Receiver’s
Certificates"”) for any amount borrowed by it pursuant to this Order.
24. THIS COURT ORDERS that the Receiver and its counsel shall separately record 31.
their borrowings specifically incurred in connection with the 237A Property (the “237A
Borrowings”), the 237B Property (the “237B Borrowings”) and with all remaining Property (the
“Other Borrowings”).
THIS COURT ORDERS that general borrowings of the Receiver which cannot be 32.
specifically recorded as 237A Borrowings, 237B Borrowings or Other Borrowings and which are
borrowed generally in connection with all of the Property (the “General Borrowings”), shall be
allocated between the 237A Property, the 237B Property and the other Property as agreed to
between the Applicants or as may be ordered by this Court.
THIS COURT ORDERS that subject to the priorities as set out in paragraph 34 hereof,33.
the monies from time to time borrowed by the Receiver pursuant to this Order or any further
order of this Court and any and all Receiver’s Certificates evidencing the same or any part
thereof shall rank on a pari passu basis, unless otherwise agreed to by the holders of any prior
issued Receiver's Certificates.
THIS COURT ORDERS that nothing in this Order shall prevent the Receiver from acting 34.
as a trustee in bankruptcy of any of the Respondents.
PRIORITY OF RECEIVER’S CHARGE AND RECEIVER’S BORROWINGS CHARGE
THIS COURT ORDERS that notwithstanding any other provision of this order the 35.
Receiver’s Charge and the Receiver’s Borrowings Charge shall have the following priority:
(a) With respect to the 237A Property, only the portion of the Receiver’s Charge and
Receiver’s Borrowing Charge that secure the 237A Fees, the 237A Borrowings and the
amount of the General Fees and General Borrowings allocated to the 237A Property
pursuant to paragraphs 20 and 27 hereof shall have priority over the security held by
2056709 Ontario Inc.
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(b) With respect to the 237B Property, only the portion of the Receiver’s Charge and
Receiver’s Borrowing Charge that secure the 237B Fees, the 237B Borrowings and the
amount of the General Fees and General Borrowings allocated to the 237B Property
pursuant to paragraphs 20 and 27 hereof shall have priority over the security held by
Kozo Holdings Inc.
CCAA ORDER CHARGES
THIS COURT ORDERS that the Administration Charge and the DIP Lender’s Charge 36.
each as defined in the initial order of the Court dated March 20, 2020 granted under the
Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (collectively the “CCAA
Charges”) shall only secure amounts or liabilities incurred up to the date of this Order.
SERVICE AND NOTICE
25. THIS COURT ORDERS that the E-Service Protocol of the Commercial List (the37.
“Protocol”) is approved and adopted by reference herein and, in this proceeding, the service of
documents made in accordance with the Protocol (which can be found on the Commercial List
website at
http://www.ontariocourts.ca/scj/practice/practice-directions/toronto/e-service-protocol/) shall be
valid and effective service. Subject to Rule 17.05 this Order shall constitute an order for
substituted service pursuant to Rule 16.04 of the Rules of Civil Procedure. Subject to Rule
3.01(d) of the Rules of Civil Procedure and paragraph 21 of the Protocol, service of documents
in accordance with the Protocol will be effective on transmission. This Court further orders that
a Case Website shall be established in accordance with the Protocol with the following URL:
‘<@>’.https://farbergroup.com/engagements/pure-global-cannabis-inc/
26. THIS COURT ORDERS that if the service or distribution of documents in accordance38.
with the Protocol is not practicable, the Receiver is at liberty to serve or distribute this Order,
any other materials and orders in these proceedings, any notices or other correspondence, by
forwarding true copies thereof by prepaid ordinary mail, courier, personal delivery or facsimile
transmission to the Debtor'sRespondents’ creditors or other interested parties at their respective
addresses as last shown on the records of the DebtorRespondents and that any such service or
distribution by courier, personal delivery or facsimile transmission shall be deemed to be
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received on the next business day following the date of forwarding thereof, or if sent by ordinary
mail, on the third business day after mailing.
GENERAL
27. THIS COURT ORDERS that the Receiver may from time to time apply to this Court39.
for advice and directions in the discharge of its powers and duties hereunder.
28. THIS COURT ORDERS that nothing in this Order shall prevent the Receiver from40.
acting as a trustee in bankruptcy of the DebtorRespondents.
29. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,41.
regulatory or administrative body having jurisdiction in Canada or in the United States to give
effect to this Order and to assist the Receiver and its agents in carrying out the terms of this
Order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully
requested to make such orders and to provide such assistance to the Receiver, as an officer of
this Court, as may be necessary or desirable to give effect to this Order or to assist the Receiver
and its agents in carrying out the terms of this Order.
30. THIS COURT ORDERS that the Receiver be at liberty and is hereby authorized and42.
empowered to apply to any court, tribunal, regulatory or administrative body, wherever located,
for the recognition of this Order and for assistance in carrying out the terms of this Order, and
that the Receiver is authorized and empowered to act as a representative in respect of the
within proceedings for the purpose of having these proceedings recognized in a jurisdiction
outside Canada.
31. THIS COURT ORDERS that the PlaintiffApplicants shall have itstheir costs of this43.
motionapplication, up to and including entry and service of this Order, provided for by the terms
of the PlaintiffApplicant’s security or, if not so provided by the PlaintiffApplicant's security, then
on a substantial indemnity basis to be paid by the Receiver from the Debtor'sRespondents'
estate with such priority and at such time as this Court may determine.
32. THIS COURT ORDERS that any interested party may apply to this Court to vary or44.
amend this Order on not less than seven (7) days' notice to the Receiver and to any other party
likely to be affected by the order sought or upon such other notice, if any, as this Court may
order.
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________________________________________
54
DOCSTOR: 1771742\8
DOCSTOR-#1771742-v8-Model_Receivership_Order_(T__Reyes).docDOCSTOR: 1771742\9DOCSTOR: 1771742\9
SCHEDULE "“A"”
REAL PROPERTY
PCL D-20, SEC M269 ; PT BLK D, PL M269 , PART 1 & 2 , 43R20236 , S/T A RIGHT AS IN LT335783; S/T DP2708; T/W PT BLK D, PL M269, PT 3, 43R20236 AS IN LT1503956 ; BRAMPTON (“237A Real Property”)
PCL D-32, SEC M269 ; FIRSTLY ; PT BLK D, PL M269 , PART 3 , 43R20236 , ; SECONDLY ; PT BLK D, PL M269 , PART 4 , 43R20236 ; T/W PT 2, 43R20236 AS IN LT1503956; S/T PT 3, 43R20236 IN FAVOUR OF PTS 1 & 2, 43R20236 AS IN LT1503956; S/T DP2708 ;; CITY OF BRAMPTON (“237B Real Property”)
55
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DOCSTOR-#1771742-v8-Model_Receivership_Order_(T__Reyes).doc
SCHEDULE “B”
RECEIVER CERTIFICATE
CERTIFICATE NO. ______________
AMOUNT $_____________________
PROPERTY: _______________________
THIS IS TO CERTIFY that [RECEIVER'S NAME]A. Farber & Partners Inc., the receiver1.
(the "“Receiver"”) of the assets, undertakings and properties [DEBTOR'S NAME]of Pure
Global Cannabis Inc., Puresinse Inc., 237A Advance Inc., 237B Advance Inc., SPRQ Health
Group, and The Great Canadian Hemp Company, Ltd. (the “Respondents”) acquired for, or
used in relation to a business carried on by the DebtorRespondents, including all proceeds
thereof (collectively, the “Property”) appointed by Order of the Ontario Superior Court of Justice
(Commercial List) (the "“Court"”) dated the ___ day of ______, 20__ (the "“Order"”) made in
an action having Court file number __-CL-_______, has received as such Receiver from the
holder of this certificate (the "“Lender"”) the principal sum of $___________, being part of the
total principal sum of $___________ which the Receiver is authorized to borrow under and
pursuant to the Order.
The principal sum evidenced by this certificate is payable on demand by the Lender with2.
interest thereon calculated and compounded [daily][monthly not in advance on the _______ day
of each month] after the date hereof at a notional rate per annum equal to the rate of ______
per cent above the prime commercial lending rate of Bank of _________ from time to time.
Such principal sum with interest thereon is, by the terms of the Order, together with the3.
principal sums and interest thereon of all other certificates issued by the Receiver pursuant to
the Order or to any further order of the Court, a charge upon the whole of the Property, in
priority to the security interests of any other person, but subject to the priority of the charges set
out in the Order and in the Bankruptcy and Insolvency Act, and the right of the Receiver to
indemnify itself out of such Property in respect of its remuneration and expenses.
All sums payable in respect of principal and interest under this certificate are payable at4.
the main office of the Lender at Toronto, Ontario.
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DOCSTOR: 1771742\9DOCSTOR: 1771742\9
Until all liability in respect of this certificate has been terminated, no certificates creating5.
charges ranking or purporting to rank in priority to this certificate shall be issued by the Receiver
to any person other than the holder of this certificate without the prior written consent of the
holder of this certificate.
The charge securing this certificate shall operate so as to permit the Receiver to deal6.
with the Property as authorized by the Order and as authorized by any further or other order of
the Court.
The Receiver does not undertake, and it is not under any personal liability, to pay any7.
sum in respect of which it may issue certificates under the terms of the Order.
DATED the _____ day of ______________, 20__.
[RECEIVER'S NAME]A. Farber & Partners Inc., solely in its capacity as Receiver of the Property, and not in itspersonal capacity
Per:
Name:
DOCSTOR-#1771742-v8-Model_Receivership_Order_(T__Reyes).doc
Title:
57
Court File No.
ONTARIOSUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
Proceeding commenced at Toronto
RECEIVERSHIP ORDER
CASSELS BROCK & BLACKWELL LLP2100 Scotia Plaza, 40 King Street West, Toronto, ON M5H 3C2Jane O. Dietrich LSO# 49302U/ Monique Sassi LSO #63638LTel:416.860.5223/ Fax:416.640.3144/ [email protected]; [email protected] for 2056709 Ontario Inc. in respect of 237B Advance Inc.
KEYSER MASON BALL, LLPSuite 900, 3 Robert Speck Parkway, Mississauga, Ontario L4Z 2G5Wojtek Jaskiewicz LSO #49809LTel: 905.276.0424/ Fax: 905.276.2298/ [email protected] for Kozo Holdings Inc. in respect to 237B Advance Inc
CHAITONS LLP5000 Yonge Street, 10th Floor, Toronto, Canada. M2N 7E9Harvey Chaiton LSO 21592Tel: 416-218-1129/ Fax: 416-218-1849/ [email protected] for Cancor Debt Agency Inc.
2056709 ONTARIO INC., KOZO HOLDINGS INC., CANCOR DEBT AGENCY INC.
v PURE GLOBAL CANNABIS INC., PURESINSE INC., 237A ADVANCE INC., 237B ADVANCE INC., SPRQ HEALTH GROUP, and THE GREAT CANADIAN HEMP COMPANY, LTD.
Applicants Respondents
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IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF PURE GLOBAL CANNABIS INC., PURESINSE INC., 237A ADVANCE INC., 237B ADVANCE INC., SPRQ HEALTH GROUP CORP., and THE GREAT CANADIAN HEMP COMPANY LTD.
Court File No. CV-20-00638503-00CL
ONTARIO SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
Proceeding commenced at TORONTO
RESPONDING MOTION RECORD OF MMCAP INTERNATIONAL INC. SPC,
QUINSAM CAPITAL CORP., CARRERA CAPITAL and PLAZACORP
(returnable April 23, 2020)
McMILLAN LLP Brookfield Place 181 Bay St, Suite 4400 Toronto ON M5J 2T3
Jeffrey Levine LSUC#: 55582H [email protected] Tel: (416) 865.7791 Fax: (416) 865.7048 Lawyers for the Respondents, MMCAP International Inc. SPC, Quinsam Capital Corp., Carrera Capital and Plazacorp