ONTARIO SUPERIOR COURT OF JUSTICE …...Court File No. CV-20-00638503-00CL ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT

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



COMMERCIAL LIST


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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mailto:[email protected]

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TO: THE SERVICE LIST

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LEGAL_33139794.2


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.



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.


(COMMERCIAL LIST)

BETWEEN:

Applicants

2056709 ONTARIO INC., KOZO HOLDINGS INC., CANCOR DEBT AGENCY INC.

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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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-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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tel:416.860.5223/






Court File No.


(COMMERCIAL LIST)

THE HONOURABLE MR. JUSTICE HAINEY

) ) )

, THE

DAY OF APRIL, 2020


Applicants - and -


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


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.

22

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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

23

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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.

24

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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

26

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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

27

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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


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/

30

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

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

https://farbergroup.com/?post_type=insolvency&p=18704&preview=true

- 15 -

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.


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


(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

tel:416.860.5223/





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


Applicants- and -

DEFENDANT

Defendant


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:

38

- 3 -

DOCSTOR: 1771742\9DOCSTOR: 1771742\9

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)


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


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


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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DOCSTOR: 1771742\9DOCSTOR: 1771742\9

________________________________________

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\9DOCSTOR: 1771742\9

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.


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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- 2 -59

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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.



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