Ontario Superior Court of Justice Commercial List

Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

BETWEEN:

DBDC SPADINA LTD., AND THOSE CORPORATIONS LISTED ON SCHEDULE A HERETO

Applicants and

NORMA WALTON,RONAULD WALTON and THE ROSE & THISTLE GROUP LTD., AND THOSE CORPORATIONS LISTED ON SCHEDULE B HERETO Respondents and

THOSE CORPORATIONS LISTED ON SCHEDULE C HERETO,TO BE BOUND BY THE RESULT

APPLICATION AND MOTION RECORD OF THE APPLICANTS

October 1, 2013 LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLP Barristers Suite 2600 130 Adelaide Street West Toronto ON M5H 3P5

Peter H. Griffin (19527Q) Tel: (416) 865-2921 Fax: (416) 865-3558 Email: [email protected] Shara N. Roy (49950H) Tel: (416) 865-2942 Fax: (416) 865-3973 Email: [email protected]

Lawyers for the Applicants -2-

TO: SCHIBLE LAW Suite 2200 181 University Avenue Toronto, ON M5H 3M7

Guillermo Schible

Tel: (416) 601-6813 Fax: (416) 352-5454

Lawyers for the Defendants Index INDEX

Tab Page No.

1 Notice of Application dated October 1, 2013 1 to 15

2 Notice of Motion dated October 1, 2013 16 to 25

3 Affidavit of James Reitan sworn October 1, 2013 26 to 297

4 Affidavit of Dr. Stanley Bernstein sworn October 1, 2013 298 to 303

5 Affidavit of Harlan Schonfeld sworn October 1, 2013 304 to 321

6 Affidavit of Christopher Hunter sworn October 1, 2013 322 to 380 Tab 1 0 0 1 Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

BETWEEN:

DBDC SPADINA LTD., and THOSE CORPORATIONS LISTED ON SCHEDULE A HERETO Applicants

and

NORMA WALTON,RONAULD WALTON,THE ROSE & THISTLE GROUP LTD. and EGLINTON CASTLE INC.

Respondents

and

THOSE CORPORATIONS LISTED ON SCHEDULE B HERETO,TO BE BOUND BY THE RESULT

NOTICE OF APPLICATION

TO THE RESPONDENTS

A LEGAL PROCEEDING HAS BEEN COMMENCED by the Applicant. The Claim made by the Applicant appears on the following page.

THIS APPLICATION will come on for a hearing on a date to be set by a judge of the Superior Court of Justice presiding at the court house, 393 University Ave, 10th Floor, Toronto, ON, M5G 1E6.

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 ofCivil 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. -2- 0 2

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 Issued by Local Registrar

Address of 393 University Ave, 10th Floor court office: Toronto, ON, MSG 1E6

TO: SCHIBLE LAW Suite 2200 181 University Avenue Toronto, ON M5H 3M7

Guillermo Schible Tel: (416)601-6813 Fax: (416) 352-5454

Lawyers for the Respondents -3- 0 0 3

APPLICATION

1. The Applicants, DBDC Spadina Ltd., and those Corporations listed on Schedule A hereto, make an Application for:

(a) A mandatory Order restraining the Respondents Norma Walton, Ronauld Walton,

The Rose & Thistle Group Ltd.("Rose & Thistle") and Eglinton Castle Inc. from,

or from causing, any dealings with the underlying real estate properties ("the

Properties") held by the Schedule B Corporations, such that no transactions out of

the ordinary course or in excess of $50,000 be authorized without the agreement of

the Applicants or a further Order of this Honourable Court;

(b) A mandatory Order restraining the Respondents from further encumbering any of

the properties without written consent of the Applicants or further Order of this

Honourable Court;

Business Corporations Act, R.S.O. 1980, c.B.16, as amended (the "OBCA") upon

the basis that the business and affairs of the corporations listed on Schedule B

("Schedule B Corporations") have been carried on or conducted in a manner that is

oppressive, is unfairly prejudicial to and unfairly disregards the interests of the

Applicants in the Schedule B Corporations;

(d) An Order that the Respondents forthwith provide full and unrestricted access to the

Inspector of: 004 -4-

(i) All records respecting each of the Properties (as defined below) and the

Schedule B Corporations and Eglinton Castle Inc.;

(ii) The accounting, banking and other records of Rose & Thistle, so as to

reflect all dealings by which monies owned or attributable to the Properties,

the Schedule B Corporations or the Applicant Corporations;

(e) An Order authorizing the Inspector to enter the premises of Rose & Thistle at 32

Hazelton Avenue, Toronto, Ontario M5R 2E2, in order to obtain all relevant

information and to examine any records, including accounting and bank records

and any other records, therein and to make copies of all such documents for the

purposes of the investigation;

(f) An Order requiring the Respondents, and any of them, to produce all records

respecting the acquisition, purchase, financing, management, development and

operation of the Properties to the Inspector;

(g) An Order requiring that all lawyers acting on the purchase and financing of the

Properties for any of the Respondents and the Schedule B Companies make

available all requested documents to the Inspector without assertion of privilege,

and in particular, without limiting the generality of the foregoing, the law firm of

Devry Smith Frank LLP in respect of the mortgages on 1450 Don Mills Road and

1500 Don Mills Road;

(h) An Order requiring the Respondents to pay the costs of the investigation;

(i) An Order granting all necessary directions to the Inspector; -5- 005

(j) An Order that the Inspector provide an interim report to this Honourable Court on

or before October 15, 2013;

(k) The costs of this application and inspection; and

(1) Such further and other relief as to this Honourable Court may seem just.

2. The grounds for the Application are:

PARTIES

(a) The Applicants, DBDC Spadina Ltd., and those Corporations listed on Schedule A

hereto, are all corporations incorporated pursuant to the laws of Ontario. They are

beneficially owned by Dr. Stanley Bernstein;

(b) Norma Walton is a lawyer and a member ofthe Law Society of Upper Canada. She

is a co-founder, along with her husband Ronauld Walton, of The Rose & Thistle

Group Ltd. ("Rose & Thistle") and President of its subsidiary, Rose & Thistle

Properties. Ms. Walton is a principal of Walton Advocates, an in-house law firm

and trade mark agent that provides litigation, corporate and real estate legal

services to the Rose & Thistle group of companies. She has faced two disciplinary

hearings before the Law Society of Upper Canada related to her financial dealings

with clients;

He is a co-founder, along with his wife Non la Walton, of Rose & Thistle and

President of its subsidiary, Rose & Thistle Properties. Walton is a principal of

Walton Advocates, an in-house law firm and trade mark agent that provides -6- - 0 06

litigation, corporate and real estate legal services to the Rose & Thistle group of

companies;

(d) Rose & Thistle is a holding company incorporated pursuant to the laws of Ontario.

It and its various subsidiaries are engaged inter alia in real estate development,

management and construction;

(e) Eglinton Castle Inc. is a corporation incorporated pursuant to the laws of Ontario.

It is owned, to the knowledge of the Applicants, by Norman Walton and Ronauld

Walton;

(f) The Corporations listed on Schedule B hereto, are all corporations incorporated

pursuant to the laws of Ontario. They are owned 50% by Dr. Bernstein (or one of

the Corporations listed on Schedule A hereto) and 50% by Norman Walton and

Ronauld Walton (or Eglinton Castle Inc.). They were incorporated for the purpose

of purchasing commercial real estate properties jointly between Dr. Bernstein and

the Waltons;

THE INVESTMENTS

(g) Beginning in 2008, Dr. Bernstein acted as the lender/mortgager of several

commercial real estate properties owned by the Respondents Norma Walton and

Ronauld Walton either through their company Rose & Thistle or through other

corporations of which they are the beneficial owners;

(h) Following several financings, Dr. Bernstein and the Waltons agreed to invest

jointly in various commercial real estate projects; -7- 0 0 7

(i) To date, Dr. Bernstien has invested approximately $110 million into 31 projects;

(j) Dr. Bernstein and The Waltons entered into separate agreements for each project

which provided as follows:

(i) A new company would be incorporated for each project (the "Owner

Company");

(ii) Dr. Bernstein (through a company incorporated for this purpose) would

hold 50% of the shares of the Owner Company;

(iii) The Waltons (either directly or through a company incorporated for this

purpose) would hold the other 50% of the shares of the Owner Company;

(iv) Each of Dr. Bernstein and The Waltons would contribute an equal amount

of equity to the Project;

(v) The Waltons would manage, supervise and complete the Project for an

additional fee;

(vi) The Waltons also agreed to be responsible for the finances, bookkeeping,

accounting and filing of tax returns, among other things, of the Owner

Company;

(vii) The Owner Company was to have a separate bank account;

(viii) Dr. Bernstein would not be required to play an active role in completing the

Project, but his approval would be required for: -8- 0 0 13

(1) Any decisions concerning the selling or refinancing of the Property;

(2) Any decisions concerning the increase in the total amount of equity

required to complete Project; and

(3) Any cheque or transfer over $50,000.

(ix) The Waltons agreed to provide Dr. Bernstein with:

(1) Ongoing reports on at least a monthly basis detailing all items

related to the Properties;

(2) Copies of invoices for work completed the Projects monthly;

(3) Bank statements monthly; and

(4) Listing of all cheques monthly;

(x) The agreements provided generally that Dr. Bernstein and Norma Walton

were to be the sole directors of the Joint Venture Company.

(k) A review in June 2013 of Dr. Bernstein's equity investments in the Projects

revealed that:

(i) The Waltons were not making their portion of the equity investments into

the Properties;

(ii) The Waltons appeared to be taking on third party investors in the Projects; -9- n 9

(iii) The Waltons were engaged in significant related party transactions in

respect of Projects;

(iv) Dr. Bernstein's approval was not being sought for any the matters set out in

subparagraph (j)(viii) above; and

(v) Dr. Bernstein was not receiving any of the required reporting, as set out in

paragraph subparagraph (j)(ix) above; and

(vi) As a result of the Waltons not making their portion of the equity

investments in the Properties, many of Dr. Bernstein's content, to interest

bearing shzreholder loans.

(1) Dr. Bernstein caused a letter to be sent to Ms. Walton on June 13, 2013 setting out

these concerns;

(m) Following an unresponsive letter from Ms. Walton, further requests were made, but

not responded to or only partially responded to;

(n) Dr. Bernstein caused title searches to be run on all the Properties. Those title

searches revealed that additional mortgages totally $6 million had been placed on

two Properties without Dr. Berstein's knowledge or consent. Ms. Walton had

failed to provide sufficient further information regarding the mortgages, including

the loan documentation and information about the whereabouts of the funds.

(o) Ms. Walton has stated that she will provide information regarding the mortgages

only in the context of a without prejudice mediation; -10- 0 1 '1

(p) On September 17, 2013, Peter Griffin, counsel for Dr. Bernstein, DBDC Spadina

Ltd. and the corporations listed on Schedule A to the Notice of Application, sent a

letter to Ms. Walton requesting further information regarding the Projects. Among

other things, he requested information regarding two additional mortgages of

approximately $3 million each had been taken out on 1450 Don Mills Rd. and 1500

Don Mills Rd., without Dr. Bernstein's knowledge or approval. Mr. Griffin also

requested access to the information The Waltons are contractually obliged to

provide to Dr. Bernstein;

(q) On September 20, 2013, Jim Reitan, Director of Accounting and Finance at Dr.

Bernstein Diet and Health Clinics, attended at the offices of Rose & Thistle, along

with Harlan Schonfeld and Jim Merryweather of Schonfeld Inc. Schonfeld Inc.

was appointed by Dr. Bernstein to conduct an [independent] review of the various

Joint Venture Projects in which Dr. Bernstein has an interest. Among the matters

Schonfeld Inc. was tasked with reviewing were the two $3 million mortgages on

1450 Don Mills Rd. and 1500 Don Mills Rd.;

(r) Ms. Walton sent various correspondence purporting to out her explanation for the

additional mortgages. That correspondence does not respond fully or satisfactorily

to the information requested;

(s) Mr. Reitan and Mr. Schonfeld have been unable to find any record of the $6 million

in mortgage proceeds in the respective companies' accounts and do not know

where the mortgage proceeds are; -11- 0 1 1

(t) Ms. Walton has to date provided information on 16 of 31 Projects in which Dr.

Bernstein has an interest. That information is not complete and what information

has been provided raises further concerns about the financing and management and

fees charged to the Properties, among other things;

(u) Ms. Walton has advised that she requires several more weeks to provide the

information requested by Dr. Bernstein on the balance of the 16 Projects;

(v) Such further and other grounds as the lawyers may advise.

3. The following documentary evidence will be used at the hearing of the Application:

(w) Affidavit of Dr. Stanley Bernstein sworn October 1, 2013;

(x) Affidavit of James Reitan sworn October 1, 2013;

(y) Affidavit of Harlan Schonfeld, CA, CIRP sworn October 1, 2013, including the

consent of Schonfeld Inc. to act as Inspector; and

(z) Such further and other material as the lawyers may advise and this Honourable

Court may permit. -12-

October 1, 2013 LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLP Barristers Suite 2600 130 Adelaide Street West Toronto ON M5H 3P5

Peter H. Griffin (19527Q) Tel: (416) 865-2921 Fax: (416) 865-3558 Email: [email protected] Shara N. Roy (49950H) Tel: (416) 865-2942 Fax: (416) 865-3973 Email: [email protected]

Lawyers for the Applicants

r DBDC SPADINA LTD., and those corporations listed on Schedule A -and- NORMA WALTON et al. hereto Plaintiffs Defendants Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

PROCEEDING COMMENCED AT TORONTO

NOTICE OF APPLICATION

LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLP Barristers Suite 2600 130 Adelaide Street West Toronto ON M5H 3P5

Peter H. Griffin (19527Q) Tel: (416) 865-2921 Fax: (416) 865-3558 Email: [email protected] Shara N. Roy(49950H) Tel: (416) 865-2942 Fax (416)865-3973 Email: [email protected]

Lawyers for the Plaintiffs

kri Tab A 01 4 SCHEDULE "A" COMPANIES

1. Dr. Bernstein Diet Clinics Ltd. 2. 2272551 Ontario Limited 3. DBDC Investments Atlantic Ltd. 4. DBDC Investment Pape Ltd. 5. DBDC Investments Highway 7 Ltd. 6. DBDC Investments Trent Ltd. 7. DBDC Investments St. Clair Ltd. 8. DBDC Investments Tisdale Ltd. 9. DBDC Investments Leslie Ltd. 10. DBDC Investments Lesliebrook Ltd. 11. DBDC Fraser Properties Ltd. 12. DBDC Fraser Lands Ltd. 13. DBDC Queen's Corner Inc. 14. DBDC Queen's Plate Holdings Inc. 15. DBDC Dupont Developments Ltd. 16. DBDC Red Door Developments Inc. 17. DBDC Red Door Lands Inc. 18. DBDC Global Mills Ltd. 19. DBDC Donalda Developments Ltd. 20. DBDC Salmon River Properties Ltd. 21. DBDC Cityview Industrial Ltd. 22. DBDC Weston Lands Ltd. 23. DBDC Double Rose Developments Ltd. 24. DBDC Skyway_ Holdings Ltd. 25. DBDC West Mall Holdings Ltd. 26. DBDC Royal Gate Holdings Ltd. 27. DBDC Dewhurst Developments Ltd. 28. DBDC Eddystone Place Ltd. 29. DBDC Richmond Row Holdings Ltd. Tab B 0 5.

SCHEDULE "B" COMPANIES

1. Twin Dragons Corporation 2. Bannockburn Lands Inc. / Skyline - 1185 Eglinton Avenue Inc. 3. Wynford Professional Centre Ltd. 4. Liberty Village Properties Inc. 5. Liberty Village Lands Inc. 6. Riverdale Mansion Ltd. 7. Royal Agincourt Corp. 8. Hidden Gem Development Inc. 9. Ascalon Lands Ltd. 10. Tisdale Mews Inc. 11. Lesliebrook Holdings Ltd. 12. Lesliebrook Lands Ltd. 13. Fraser Properties Corp. 14. Fraser Lands Ltd. 15. Queen's Corner Corp. 16. Northern Dancer Lands Ltd. 17. Dupont Developments Ltd. 18. Red Door Developments Inc. and Red Door Lands Ltd. 19. Global Mills Inc. 20. Donalda Developments Ltd. 21. Salmon River Properties Ltd. 22. Cityview Industrial Ltd. 23. Weston Lands Ltd. 24. Double Rose Developments Ltd. 25. Skyway Holdings Ltd. 26. West Mall Holdings Ltd. 27. Royal Gate Holdings Ltd. 28. Dewhurst Developments Ltd. 29. Eddystone Place Inc. 30. Richmond Row Holdings Ltd. Tab 2 0 I 6

Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

BETWEEN:

DBDC SPADINA LTD., AND THOSE CORPORATIONS LISTED ON SCHEDULE A HERETO Applicants

and

NORMA WALTON,RONAULD WALTON,THE ROSE & THISTLE GROUP LTD. and EGLINTON CASTLE INC.

Respondents

and

THOSE CORPORATIONS LISTED ON SCHEDULE C HERETO,TO BE BOUND BY THE RESULT

NOTICE OF MOTION

The Applicants will make a Motion to a Judge of the Commercial List at 330 University

Avenue, Toronto on Friday, October 5, 2013 at 10:00 am.

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

THE MOTION IS FOR:

1. The Applicants, DBDC Spadina Ltd., and those Corporations listed on Schedule A hereto, make a Motion for: -2- I 7

(a) A mandatory Order restraining the Respondents Norma Walton, Ronauld Walton,

The Rose & Thistle Group Ltd.("Rose & Thistle") and Eglinton Castle Inc. from,

or from causing, any dealings with the underlying real estate properties ("the

Properties") held by the Schedule B Corporations, such that no transactions out of

the ordinary course or in excess of $50,000 be authorized without the agreement of

the Applicants or a further Order of this Honourable Court;

(b) A mandatory Order restraining the Respondents from further encumbering any of

the properties without written consent of the Applicants or further Order of this

Honourable Court;

Business Corporations Act, R.S .0. 1980, c.B.16, as amended (the "OBCA") upon

the basis that the business and affairs of the corporations listed on Schedule B

("Schedule B Corporations") have been carried on or conducted in a manner that is

oppressive, is unfairly prejudicial to and unfairly disregards the interests of the

Applicants in the Schedule B Corporations;

(d) An Order that the Respondents forthwith provide full and unrestricted access to the

Inspector of:

(i) A11 records respecting each of the Properties (as defined below) and the

Schedule B Corporations and Eglinton Castle Inc.; 8 -3-

(ii) The accounting, banking and other records of Rose & Thistle, so as to

reflect all dealings by which monies owned or attributable to the Properties,

the Schedule B Corporations or the Applicant Corporations;

(e) An Order authorizing the Inspector to enter the premises of Rose & Thistle at 32

Hazelton Avenue, Toronto, Ontario M5R 2E2, in order to obtain all relevant

information and to examine any records, including accounting and bank records

and any other records, therein and to make copies of all such documents for the

purposes of the investigation;

(f) An Order requiring the Respondents, and any of them, to produce all records

respecting the acquisition, purchase, financing, management, development and

operation of the Properties to the Inspector;

g) An Order requiring that all lawyers acting on the purchase and financing of the

Properties for any of the Respondents and the Schedule B Companies make

available all requested documents to the Inspector without assertion of privilege,

and in particular, without limiting the generality of the foregoing, the law firm of

Devry Smith Frank LLP in respect of the mortgages on 1450 Don Mills Road and

1500 Don Mills Road;

(h) An Order requiring the Respondents to pay the costs of the investigation;

(i) An Order granting all necessary directions to the Inspector;

An Order that the Inspector provide an interim report to this Honourable Court on

or before October 15, 2013; -4- n 1 9.

(k) The costs of this application and inspection; and

(1) Such further and other relief as to this Honourable Court may seem just.

THE GROUNDS FOR THE MOTION ARE:

(a) Beginning in 2008, Dr. Bernstein acted as the lender/mortgager of several

commercial real estate properties owned by the Respondents Norma Walton and

Ronauld Walton either through their company Rose & Thistle or through other

corporations of which they are the beneficial owners;

(b) Following several financings, Dr. Bernstein and the Waltons agreed to invest

jointly in various commercial real estate projects;

(d) Dr. Bernstein and The Waltons entered into separate agreements for each project

which provided as follows:

(i) A new company would be incorporated for each project (the "Owner

Company");

(ii) Dr. Bernstein (through a company incorporated for this purpose) would

hold 50% of the shares of the Owner Company;

(iii) The Waltons (either directly or through a company incorporated for this

purpose) would hold the other 50% of the shares of the Owner Company; n -5-

(iv) Each of Dr. Bernstein and The Waltons would contribute an equal amount

of equity to the Project;

(v) The Waltons would manage, supervise and complete the Project for an

additional fee;

(vi) The Waltons also agreed to be responsible for the finances, bookkeeping,

accounting and filing of tax returns, among other things, of the Owner

Company;

(vii) The Owner Company was to have a separate bank account;

(viii) Dr. Bernstein would not be required to play an active role in completing the

Project, but his approval would be required for:

(1) Any decisions concerning the selling or refinancing of the Property;

(2) Any decisions concerning the increase in the total amount of equity

required to complete Project; and

(3) Any cheque or transfer over $50,000.

(ix)- The Waltons agreed to provide Dr. Bernstein with:

(1) Ongoing reports on at least a monthly basis detailing all items

related to the Properties;

(2) Copies of invoices for work completed the Projects monthly;

(3) Bank statements monthly; and -6- 0' 1

(4) Listing of all cheques monthly;

(x) The agreements provided generally that Dr. Bernstein and Norma Walton

were to be the sole directors of the Joint Venture Company.

(e) A review in June 2013 of Dr. Bernstein's equity investments in the Projects

revealed that:

(i) The Waltons were not making their portion of the equity investments into

the Properties;

(ii) The Waltons appeared to be taking on third party investors in the Projects;

(iii) The Waltons were engaged in significant related party transactions in

respect of Projects;

(iv) Dr. Bernstein's approval was not being sought for any the matters set out in

subparagraph (d)(viii) above; and

(v) Dr. Bernstein was not receiving any of the required reporting, as set out in

paragraph subparagraph (d)(ix) above; and

..(vi)_ As a result of the Waltons not making their portion of the equity

investments in the Properties, many of Dr. Bernstein's content, to interest

bearing shareholder loans.

(f) Dr. Bernstein caused a letter to be sent to Ms. Walton on June 13, 2013 setting out

these concerns; -7- 0 2 2

(g) Following an unresponsive letter from Ms. Walton, further requests were made, but

not responded to or only partially responded to;

(h) Dr. Bernstein caused title searches to be run on all the Properties. Those title

searches revealed that additional mortgages totally $6 million had been placed on

two Properties, without Dr. Bernstein's knowledge or consent. Ms. Walton had

failed to provide sufficient further information regarding the mortgages, including

the loan documentation and information about the whereabouts of the funds.

(i) Ms. Walton has stated that she will provide information regarding the mortgages

only in the context of a without prejudice mediation;

(j) On September 17, 2013, Peter Griffin, counsel for Dr. Bernstein, DBDC Spadina

Ltd. and the corporations listed on Schedule A to the Notice of Application, sent a

letter to Ms. Walton requesting further information regarding the Projects. Among

other things, he requested information regarding two additional mortgages of

approximately $3 million each had been taken out on 1450 Don Mills Rd. and 1500

Don Mills Rd., without Dr. Bernstein's knowledge or approval. Mr. Griffin also

requested access to the information The Waltons are contractually obliged to

provide to Dr. Bernstein;

(k) On September 20, 2013, Jim Reitan, Director of Accounting and Finance at Dr.

Bernstein Diet and Health Clinics, attended at the offices of Rose & Thistle, along

with Harlan Schonfeld and Jim Merryweather of Schonfeld Inc. Schonfeld Inc.

was appointed by Dr. Bernstein to conduct an [independent] review of the various

Joint Venture Projects in which Dr. Bernstein has an interest. Among the matters -8- 0 2 3

Schonfeld Inc. was tasked with reviewing were the two $3 million mortgages on

1450 Don Mills Rd. and 1500 Don Mills Rd.;

(1) Ms. Walton sent various correspondence purporting to out her explanation for the

additional mortgages. That correspondence does not respond fully or satisfactorily

to the information requested;

(m) Mr. Reitan and Mr. Schonfeld have been unable to find any record of the $6 million

in mortgage proceeds in the respective companies' accounts and do not know

where the mortgage proceeds are;

(n) Ms. Walton has to date provided information on 16 of 31 Projects in which Dr.

Bernstein has an interest. That information is not complete and what information

has been provided raises further concerns about the financing and management and

fees charged to the Properties, among other things;

(o) Ms. Walton has advised that she requires several more weeks to provide the

information requested by Dr. Bernstein on the balance of the 16 Projects;

(p) Such further and other grounds as the lawyers may advise.

THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing ofthe Motion:

(a) Affidavit of Dr. Stanley Bernstein sworn October 1, 2013;

(b) Affidavit of James Reitan sworn October 1, 2013; -9- 0

consent of Schonfeld Inc. to act as Inspector; and

(d) Such further and other material as the lawyers may advise and this Honourable

Court may permit.

October 1, 2013 LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLP Barristers Suite 2600 130 Adelaide Street West Toronto ON M5H 3P5

Peter H. Griffin (19527Q) Tel: (416) 865-2921 Fax: (416) 865-3558 Email: [email protected] Shara N. Roy (49950H) Tel: (416) 865-2942 Fax: (416) 865-3973 Email: [email protected]

Lawyers for the Applicants

TO: SCHIBLE LAW Suite 2200 181 University Avenue Toronto, ON M5H 3M7

Guillermo Schible Tel: (416) 601-6813 Fax: (416) 352-5454

Lawyers for the Respondents DBDC SPADINA LTD., and those corliprations listed on Schedule A -and- NORMA WALTON et al. hereto Plaintiffs Defendants Court File No.

ONTARIO SUPERIOR COURT OF.JUSTICE COMMERCIAL LIST

PROCEEDING COMMENCED AT TORONTO

NOTICE OF MOTION

LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLP Barristers Suite 2600 130 Adelaide Street West Toronto ON M5H 3P5

Peter H. Griffin (19527Q) Tel: (416)865-2921 Fax: (416) 865-3558 Email: [email protected] Shara N. Roy (49950H) Tel: (416)865-2942 Fax (416) 865-3973 Email: [email protected]

Lawyers for the Plaintiffs

CD Tab 3 026 Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

BETWEEN:

DBDC SPADINA LTD., AND THOSE CORPORATIONS LISTED ON SCHEDULE A HERETO Applicants

and

NORMA WALTON,RONAULD WALTON,THE ROSE & THISTLE GROUP LTD. and EGLINTON CASTLE INC.

Respondents

and

THOSE CORPORATIONS LISTED ON SCHEDULE B HERETO,TO BE BOUND BY THE RESULT

AFFIDAVIT OF JAMES REITAN

I, JAMES REITAN, in the City of Woodbridge, in the Province of Ontario,

MAKE OATH AND SWEAR:

-I-. I am the Director of Accounting and Finance at Dr. Bernstein-Diet and Health Clinics.

Dr. Stanley Bernstein is the beneficial holder and directing mind of DBDC Spadina Ltd. and the corporations listed on Schedule A to the Notice of Application. As part of my duties at Dr.

Bernstein Diet and Health Clinics, I am responsible for reviewing the financial affairs of those companies. As such, I have knowledge of the matters contained herein. Where matters are 2 2 sworn to by way of information and belief, I have stated the source of that information and verily believe it to be true and accurate.

2. Beginning in 2008, Dr. Bernstein acted as the lender/mortgager of several commercial real estate properties owned by the Respondents Norma Walton and Ronauld Walton either through their company the Respondent The Rose & Thistle Group Ltd ("Rose & Thistle") or through other corporations of which they are the beneficial owners.

3. Following several financings, Dr. Bernstein and the Waltons agreed to invest jointly in various commercial real estate projects. To date, Dr. Bernstein has invested approximately $110

million into 31 projects. The Waltons had at a point in time invested a total of $2,500,803, based on the records available to me. It appears however that the equity investment is generally recaptured by the Waltons by intercompany invoicing, as detailed below, such that only

$351,400 of the capital investment remains in the Projects.

4. Dr. Bernstein and the Waltons entered into separate agreements for each project (the

"Project") in respect of one or more properties (the "Properties"), which agreements provided as

follows:

(a) A new company would be incorporated for each project (the "Owner Company");

(b) Dr. Bernstein (through a company incorporated for this purpose) would hold 50%

of the shares of the Owner Company;

would hold the other 50% of the shares of the Owner Company; 3 2 8

(d) Each of Dr. Bernstein and the Waltons would contribute an equal amount of

equity to the Project;

(e) The Waltons would manage, supervise and complete the Project for an\ additional

fee;

(f) The Waltons also agreed to be responsible for the finances, bookkeeping,

accounting and filing of tax returns, among other things, of the Owner Company;

(g) The Owner Company was to have a separate bank account;

(h) Dr. Bernstein would not be required to play an active role in completing the

Project, but his approval would be required for:

(i) Any decisions concerning the selling or refinancing of the Property;

(ii) Any decisions concerning the increase in the total amount of equity

required to complete the Project; and

(iii) Any cheque or transfer over $50,000.

(i) The Waltons agreed to provide Dr. Bernstein with:

(i) Ongoing reports on at least a monthly basis detailing all items related to

the Property;

(ii) Copies of invoices for work completed the Project monthly;

(iii) Bank statements monthly; and 2s -4

(iv) Listing of all cheques monthly;

(j) Upon sale of the Property, Dr. Bernstein and the Waltons would receive back

their capital contribution plus a division of profits; and

(k) The agreements generally provided that Dr. Bernstein and Norma Walton were to

be the sole directors of the Owner Company.

5. These agreements were entered into in several forms. Attached hereto as Exhibit "A" are copies of a sample of the executed agreements between Dr. Bernstein and the Waltons. Each of the Projects has an agreement in one of these forms.

6. On June 7, 2013, following a review of Dr. Bernstein's equity investments, I wrote to

Norma Walton to set out certain questions and concerns. Attached hereto as Exhibit "B" is a copy of the letter and email I sent to Norma Walton on June 7, 2013.

7. Of particular concern, it appeared from my review that:

(a) The Waltons were not making their portion of the equity investments into the

Properties;

(b) The Waltons appeared to be taking on third party investors in the Projects;

the Projects;

(d) Dr. Bemstein's approval was not being sought for any the matters set out in

subparagraph 4(h) above; and n 5 11 ti

(e) Dr. Bernstein was not receiving any of the required reporting, as set out in

subparagraph 4(i) above.

8. As a result of the Waltons not making their portion of the equity investments into the

Properties, many of Dr. Bernstein's equity investments were converted with Dr. Bernstein's consent to shareholder loans, bearing interest.

9. Ms. Walton responded to my letter with a four-page response, detailing over the first two pages Rose & Thistle's reputation and work, rather than responding to the information requests.

Attached hereto as Exhibit "C" is a copy of Ms. Walton's response, dated June 13, 2013. I continued to follow-up with Ms. Walton, but received little in the way of additional information.

In early September 2013, she refused to continue to deal with me.

10. As part of my further work, I had searches run on the title of all Properties in which Dr.

Bernstein has an interest. As a result of these property searches, I learned for the first time that additional mortgages were placed on 1450 Don Mills Road and 1500 Don Mills Road on July 31,

2013 and August 1, 2013 respectively. I am informed by Dr. Bernstein that he had no knowledge of and did not approve these mortgages, as contractually required. Attached as

Exhibits "D" and "E" hereto are copies of those property searches for 1450 Don Mills Road and

1500 Don Mills Road, respectively.

11. In late August 2013, I observed an entry in the general ledger for Global Mills Inc., the

Owner Company in respect of 1450 Don Mills. It appeared that the mortgage payment for

August had not gone to the mortgagor, Trez Capital, but to Rose & Thistle. I inquired of Ms.

Walton and her staff and was told that Rose & Thistle would have made the payment on behalf of Global Mills Inc. to Trez Capital. I requested documentation to support the payment, but was a 8 '°► : reporting letter from the lawyers involved. She stated that she would only provide further information regarding the two mortgages during a without prejudice mediation process. I have been unable to find any record of the $6 million in mortgage proceeds in the respective companies' accounts and do not know where the mortgage proceeds are.

19. Ms. Walton has provided to date some infolination on 16 of 31 Owner Companies in which Dr. Bernstein has an interest. That information is not complete. The outstanding requests include:

(a) access to the bank accounts for all ownership companies;

(b) invoices for amounts paid out of the ownership companies; and

20. Ms. Walton has also advised that she requires several more weeks to provide the information requested by Dr. Bernstein on the balance of the 15 Owner Companies.

21. It appears to me that Ms. Walton and her staff are compiling or preparing accounting information at Rose & Thistle as they go, including recent invoices for project management, development, maintenance and consulting services.

22. Ms. Walton has refused to provide direct access to the books and records requested.

Instead, she has provided numerous explanations for why she or her staff must review or "clean- up" the records prior to them being shown to me or to Mr. Schonfeld. She has also not provided the information promised on time. Attached hereto as Exhibit "I" is correspondence between 9 0 3 4

Ms. Walton and Mr. Schonfeld, on which I was copied, where Ms. Walton is not prepared or is unable to provide the information requested at the date and time promised.

23. The information that has been provided to date is not entirely complete and raises the following additional concerns:

(a) It appears that there has been extensive co-mingling of the Owner Company's

funds with, and into the bank accounts of, Rose & Thistle;

(b) Rose & Thistle has rendered significant invoices to the Owned Companies and

received payment or characterized as intercompany amounts owing for services it

has not performed:

(i) The Owner Company, Riverdale Mansion Ltd. ("Riverdale") purchased

450 Pape Avenue for $1,700,000 plus fees;

(ii) Dr. Bernstein provided an equity investment of $470k and a mortgage was

placed on the Property in the amount of $1,300,000, for a total of

$1,770,000;

(iii) Following the initial purchase, two funds transfers were made from

Riverdale to Rose & Thistle through the intercompany account in -the

amounts of $41,350 and $6,050. These two transfers were in excess of the

amounts in Riverdale cash account, following payment of third party fees,

and brought the balance to a negative $1,000; - 10 -

(iv) Construction funding advances were made on a mortgage held by 368230

Ontario Limited (a corporation owned beneficially by Dr. Bernstein).

Upon each advance, a fund transfer was made to Rose & Thistle in an

amount very close to the funding. Total construction funding was in the

amount of $1.64 million, bringing the total mortgage to $3 million;

(v) The intercompany balance between Riverdale and Rose & Thistle

increased through 2011 culminating in receipt of invoices for over $1

million from Rose & Thistle on December 31, 2011, thereby reducing the

intercompany balance to $0. I have made inquiries of Ms. Walton since

September 20, 2013 (on or around which time I discovered these

transactions). She informed me that the invoices included charges for

future services, for which permitting has not even been obtained. It is my

understanding that these services, for which invoices were rendered two

years ago, have yet to be performed. Dr. Bernstein was neither informed

of nor approved the intercompany amounts or the invoices;

(vi) The Riverdale / Rose & Thistle intercompany has accumulated further

since 2011 and currently stands at $488,000 due to Rose & Thistle; and

(vii) Attached as Exhibit "r is an analysis I have prepared of these

transactions;

31, 2011 general ledger reflected equity contributions by the Waltons as follows: Bannockburn Lands Inc $ 73,717 Wynford Professional Centre Ltd 0 Twin Dragons Corporation 350,000 Liberty Village Lands Inc. 0 Liberty Village Properties Inc. 839,266 Riverdale Mansion Ltd. 250,021 Royal Agincourt Corp. 987,800 Total $2,500,803

The Waltons have reversed $2,150,000 of these contributions. Attached as

Exhibit "K" are copies of a sample ofjournal entries documenting the transfers.

(d) Rose & Thistle has regularly invoiced the Owner Companies for monthly

management fees in excess of the number of months for which services have been

provided (for example, invoicing for January — June as 7 months other than 6

months). Attached as Exhibit "L" are copies of invoices showing this over-

billing;

(e) Mortgage payments are being made to Rose & Thistle by the Owner Companies,

rather than to the named mortgagee, with no confirmation of payment to the

mortgagor by Rose & Thistle. Attached as Exhibit "M" is a copy of Global Mills

Inc.'s bank statement, with my notations, showing the mortgage payment to a

Rose & Thistle bank account; and

(f) The Owned Properties have been charged significant interest and penalties in

respect of late payment of amounts owing to, among others, City of Toronto,

Toronto Hydro and Enbridge Inc., totalling $308,400. - 12 -

24. I swear this affidavit in support of an Application and Motion seeking to have Schonfeld

Inc. appointed as inspector of the Projects and the records of Rose & Thistle dealing with the

Properties, Projects and Owner Companies, among other relief.

SWORN before me at the City of Toronto, in the Province of Ontario, this 1st day of October, 2013.

A Commissioner for taking affidavits Shara N. Roy DBDC SPADINA LTD., et al -and- NORMA WALTON et al. Applicants Respondents Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

PROCEEDING COMMENCED AT TORONTO

AFFIDAVIT OF JAMES REITAN

LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLP Barristers Suite 2600 130 Adelaide Street West Toronto ON M5H 3P5

Peter H. Griffin(19527Q) Tel: (416) 865-2921 Fax: (416) 865-3558 Email: [email protected] Shara N. Roy (49950H) Tel: (416) 865-2942 Fax (416) 865-3973 Email: [email protected]

Lawyers for the Plaintiff Tab A 0 19

This is Exhibit "A" referred to in the Affidavit of James Reitan sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits '4 i^ AGREEMENT

Between:

Dr. Bernstein Diet Clinics Ltd. "Bernstein"

- and -

Ron and Norma Walton "Walton"

- and -

Twin Dragons Corporation the "Company"

WHEREAS Bernstein and Walton intend to purchase 241 Spadina Avenue, Toronto, Ontario (the "Property") on or about October 14, 2010 and put ownership of the Property in the Company's name;

AND WHEREAS Bernstein and Walton, or whomever Bernstein and Walton may direct, will each hold 1,120,500 shares in the Company;

AND WHEREAS Bernstein and Walton will each provide the sum of $1,120,500 to The Company for the purposes of purchasing, renovating, leasing and refinancing the Property (the "Project");

AND WHEREAS Walton will manage and supervise the Project and ensure it is completed according to the proposal attached as Exhibit"A" to this Agreement;

THEREFORE the parties agree as follows:

1. Walton has contracted to purchase the Property and the purchase is scheduled to close on October 14, 2010.

2. Walton has commenced pre-planning for the property renovations, to begin immediately after closing.

3. Walton intends to purchase, renovate, lease and refinance the Property between now and September 30, 2013 in accordance with Exhibit "A". 041

4. Bernstein wishes to own 50% of the shares in the Company in exchange for providing 50% of the equity required to complete the Project. The Company will issue sufficient shares such that Bernstein has 1,120,500 and Walton has 1,120,500 voting shares of the same class.

5. The ownership of the Company will be as follows: a. 50% to Bernstein; and b. 50% to Ron and Norma Walton as they may direct or alternatively to be held by a completely Walton-owned and controlled company.

6. Walton will be managing, supervising and completing the Project in accordance with the attached Exhibit "A".

7. Walton has already provided $300,000 as a deposit to purchase the Property. Bernstein will provide to the Company the sum of $1,120,500 on or before October 14, 2010. Walton will provide a further $820,500 to the Company in a timely manner as required as the Project is completed.

8. Walton and Bernstein will each provide 50% of whatever additional capital over and above the $1,120,500 each that is required to complete the Project, if any, in a timely manner.

9. In addition to managing, supervising and completing the Project, Walton will be responsible for renovation of the Property, hiring of all trades, payment of all trades, advertising for tenants, hiring designers and architects and engineers to complete the project, finance, bookkeeping, office administration, accounting, information technology provision, filing tax returns for the Company, and fulfilling all active roles required to complete the Project in accordance with Exhibit "A".

10. Bernstein will not be required to play an active role in completing the Project. Notwithstanding that, any decisions concerning refinancing or selling the Property will require his approval; any decisions requiring an increase in the total amount of equity required to complete the Project will require his approval; and any significant decisions that vary from the Project plan described in Exhibit "A" will require his approval.

. Waltonwill-provide-ta-Bernsteinthe- costeonsultant's-initial report analyzing the_ Project budget and timelines as soon as received by Walton but no later than October 10, 2010. Walton will subsequently provide a written report to Bernstein each month detailing the following: a. the cost consultant's report for that month indicating progress to date and cost to complete with copies of invoices for work completed; b. the bank statement for that month; and n A

c. if the bank statement does not have a copy of cancelled cheques, then Walton will also provide a complete listing of all cheques written, including payees, dates and amounts. At Bernstein's request, Walton will provide whatever other back-up information he requests.

12. Once the Project is substantially completed to the point that a refinancing can be arranged, Bernstein may in its sole discretion opt to be paid out his capital plus profits in exchange for surrender of his shares in the Company. If Bernstein so opts, Walton would retain the property. The value of the property will be determined by taking the net income for the Property once it is fully leased and applying a capitalization rate of 7.5% to that net income, resulting in an end value for the Property once completed. If the end value obtained based on that process results in a value that one of the parties believes is not reasonably indicative of the actual value, then the parties will discuss and attempt to agree upon a value for such purchase and sale and failing such agreement, submit to mediation as set out in the within agreement. In accordance with the provisions of the within paragraph, payment to Bernstein shall be made immediately upon the completion of the refinancing of the Project.

13. The Board of Directors of the Company will be composed of two directors, being Bernstein and Norma Walton. The only shares to be issued in the Company will be as set out above, and neither party may transfer his or her shares to another party without the consent of all the other parties, which consent may be unreasonably withheld. If Bernstein opts to be paid out of the Project and thus surrenders his share certificate, he will concurrently resign from the Board of Directors and Norma Walton and the Company will accept such resignation. At such time Bernstein shall be released of all obligations and liability related to the Company and the Project and the Property.

14. Walton will provide a statutory declaration confirming the current status of the Company and that it is free and clear of all liabilities and obligations whatsoever and shall provide an Indemnity relating thereto to Bernstein prior to October 15, 2010. The Company will only be used to purchase, renovate, lease and refinance 241 Spadina Avenue, Toronto, Ontario or such other matters solely relating to the Project and the Property.

15_If the_ parties disagree_on. how_ to_ manage,,supervise_and,__complete.__the_ Projest in accordance with Exhibit "A" and cannot reach agreement amongst themselves, each of them undertakes to attend a minimum of four hours of mediation in pursuit of reaching an agreement. After mediation, if there are any remaining issues to be determined, those issues in dispute shall be determined by a single arbitrator in as cost-effective a manner as possible, with no right of appeal. All costs of such mediation and/or arbitration will be borne equally by Bernstein and Walton. 04 .7-

16. The above represents all deal terms between the parties. \ -Vk Dated at Toronto, Ontario this .61 day of SEPTEMBER 2010

Dr. Bernstein Diet Clinics Ltd. Twin Dragon orporation Per A.S.O. Per A.S.O.

Ron Walton ROSE and THIsTLE CiROUP LFD.

30 Hazelton Avenue, Toronto, Ontario, M5R 2E2,(416) 489-9790 Fax: (416)489-9973

Investment Opportunity 241 Spadina Avenue THE ROSE AND THISTLE GROUP LTD. September 16, 20.I.0 0 4 5

Table of Contents

SECTION A: 1. The Opportunity 3 2. The Investment Particulars 4 SECTION B: 1. The Property 5 2. The Plan 8 3. The Financial Projections 10 SECTION C: Investing in Toronto 12 SECTION D: The Rose and Thistle Group Ltd 15 1. Rose and Thistle Experience 15 2. Historic Return on Investment 24 3. Mission Statement 24 4. Investment Criteria and Strategy 25 5. Our Services 26 6., Our Management Team ...28 SECTION E: The Financial Projections 31 1. Assumptions 31 2. Return on Investment 32 3. Risks 32 SECTION F: Tables 34 a. Table 1: Capital Costs and Structure 34 b. Table 2: Projected Income Statement 35 c. Table 3: Projected Property Value 35 d. Table 4: Projected Profit and Investor Return 36 e. Table 5: Sensitivity Analysis 37

2 0 4 6 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 „

SECTION A:

1. THE OPPORTUNITY

The opportunity is to purchase 50% of the equity in Twin Dragons Corporation, a Rose and Thistle company that was formed to own 241 Spadina Avenue. 241 Spadina is a five storey heritage building originally built in 1910 for The Consolidated Plate Glass Company of Toronto. Situated between Dundas and Queen in the south end of Toronto's Chinatown, it comprises 42,000 square feet including basement and each floor is approximately 7,000 square feet. It has frontage on Spadina of 50 feet and is 140 feet in depth, backing onto a municipal laneway.

Rose and Thistle has been pursuing the acquisition of this property for the past five months. Initially there were ten bidders for this building and the building to the north, both being offered under power of sale through a Chinese bank. After much persistence, we convinced the vendor bank to sell 241 Spadina to us at very close to the original price we offered. It is a perfect project for Rose and Thistle's skill set, and is almost identical in project scope to 86 Parliament at Adelaide. 86 Parliament, known as The Old Telegram Building, is a 20,000 square foot heritage building that we successfully renovated between July 1, 2009 and June 30, 2010 and that is now fully leased.

We project the investment will earn a straight-line return of 99% within three years, resulting in a 25.8% compounded annual return. The plan is to complete our pre- construction planning between now and October 17, then to begin demolition followed by a gut renovation of the entire building. Once we have a floor to show to prospective tenants, we will advertise the space for lease and will build out the space for the tenants we attract, to their specifications. The project will end once the building is fully renovated and leased and we have refinanced and paid you out your capital plus profits. We anticipate this will occur within three years.

Unlike investments in stocks and bonds, carefully selected and well-located income properties have value secured by physical assets. Commercial buildings are also not

T subject to the wide fluctuations common to stock markets and when properly managed provide reliable, above average returns on investment.

Building detail

3 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 r n 4 7

2. THE INVESTMENT PARTICULARS

The details of the opportunity are as follows:

What: Common shares in Twin Dragons Corporation

Investment Amount: $1,120,500

Commencement date: Before September 30, 2010

Capital appreciation and return: Common shareholders will receive back their capital and profits in proportion to their ownership

Term: 36 months to September 30, 2013

The total capital is $8.541 million, being $6.3 million from mortgage, and the balance of $2,241,000 from equity shareholders. The capital structure is as follows:

Tetalta,ktat'ttequireii 8-,541;00.0

Mortgage: 73,.76% BAt% 6,306,000 Dr. -EletraAtein: 13:12% •$ 1,120500 RomandtiOrrna Alkialton: 13.1" .$ 1,1 213;50.44

The building as it should look once we are completed renovations THE ROSE AND THISTLE GROUP LTD. September 16, 2010 _

SECTION B:

1. THE PROPERTY

241 Spadina Avenue is located at the south end of Chinatown. Chinatown is changing rapidly, with many of the Chinese that traditionally lived and worked there moving to Markham and the Pacific Mall area. As a result, the Chinese markets and stores are slowly being replaced with upscale coffee shops and funky office users. A perfect example is directly north of 241 Spadina. Whereas for the past ten years there has been a sprawling Chinese grocery store in that building, encroaching onto the frontage of 241 Spadina and spilling onto the sidewalk with their wares, that grocery store's lease has been terminated and the new owners are in the midst of renovations to that space. It is likely the new tenant will not be Chinese.

View from the roof looking east at the OCAD building

,01 !nmin.:Fri%.5555

View from the roof looking south to the lake

5 9 THE ROSE AND THISTLE GROUP LTD. September 16, 2017

View from the rooftop to the east looking onto the rooftops of the houses adjacent the laneway

Viewfrom the rooftop looking north up Spadina Avenue

The property was previously a hotel which was shut down by the city because the property is not zoned for a hotel. The property is zoned for commercial and residential use. Our plan is to make it 100% commercial on floors two to five, and retail at ground level and lower level.

6 THE ROSE AND THISTLE GROUP LTD. September 16, 2010

Built in 1910 and substantially renovated in 1982, the property was built for the Consolidated Plate Glass Company of Toronto. It has intricate detailing on the exterior facade in front, including flowers and coats of arms. It has the potential to be an absolutely stunning building once cleaned up. The interior will offer tenants "loft" space with exposed brick and character in contrast to the more traditional office buildings on offer.

The building is vacant save for the bank who owned the property through power of sale occupying the retail level. They have leased their space for $50 per square foot gross, resulting in net rent of $36 per square foot.

The bank's retailfrontage on Spadina

4+,

How the building should look once renovated and restored

7 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 0 5 1 2. THE PLAN

The plan, given Rose and Thistle's experience with similar buildings in its portfolio, is to gut renovate the property, taking it down to its shell, replacing all the systems with new, replacing or renovating and retrofitting the two elevators, one passenger and one freight, then building spaces out to suit the tenants we attract. Once that is completed, we will refinance the property and pay out your capital and profits and Rose and Thistle will keep the building as an income property. The following steps will be implemented to achieve this objective:

1. Have already begun pre-construction planning:

a. engaged our architect and engineers to begin preparing drawings;

b. apply for building permits;

c. arrange for our trades to provide quotes for the work required.

Timeline: 2 months to October 17, 2010

2. As of October 18, roll out construction as follows:

a. begin demolition;

b. assess elevator and prepare drawings for retrofit or new;

c. begin rough-ins for new HVAC, plumbing, electrical and fire sprinkler systems;

d. replace roof, windows, skylights;

e. install steel and repair/sand blast brick where required;

f. install drywall, paint and flooring; and

g. create show suite to begin leasing process.

Estimated timeline: 12 months to October 18, 2011

3. Advertise for lease and as tenants contract with us, build out their spaces;

Estimated timeline: 12 months to October 18, 2012

4. Refinance and pay out capital and profits to investors.

Estimated timeline: Immediately thereafter

CONTINGENCY: 10 months

Total project timeline: 36 months including contingency

8 0 5 2 THE ROSE AND THISTLE GROUP LTD. September 16, 2010

Fifth floor with 17foot ceilings and skylights from roof

First floor with mezzanine, with 20 foot ceilings once mezzanine is removed

Secondfloor with 15foot ceilings, which will be incredibly bright once opened up to the light from the large windows in front and back and along the side

9 THE ROSE AND THISTLE GROUP LTD. September 16, 2616

Back of building as it currently looks, with freight elevator to be retrofitted on the bottom left hand side

South corner of building with neighbour to south set back, giving good exposure for our building

11 THE ROSE AND THISTLE GROUP LTD. September 16,2Q10 054

SECTION C:

INVESTING IN TORONTO A continental gateway and a crossroads for the world, Toronto is Canada's business capital. It ranks alongside economic powerhouses such as New York, Boston and Chicago. Toronto is annually rated as the most multi-cultural city in the world by the United Nations. Canada accepts approximately 300,000 new immigrants every year, and 43% of all immigrants to Canada settle in the Greater Toronto Area. This results in an annual population increase of more than 100,000 people. As a result, the demand for both residential and commercial real estate is strong and demographic trends strongly suggest that such demand will remain robust.

•

Toronto boasts a stable economic and political climate. Toronto commercial real estate has attracted worldwide investors, particularly from the United States, Great Britain, Israel and Germany. It has one of the five most diversified economies of any city-region in North America, and consistently ranks with Boston and Chicago as one of the best business cities in North America.

Population L. With 2.7 million residents, Toronto is the 5th largest city in North America. One-quarter of Canada's population is located within 160 km (100 mi.) of the city and more than 60% of the population of the USA is within a 90-minute flight.

12 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 0 5 5 Economy The City of Toronto's economy comprises 11% of Canada's GDP, with Toronto's GDP topping $140 billion in 2009. Toronto-based businesses export over $70 billion in goods and services to every corner of the globe with retail sales of $47 billion annually.

Capital Five of Canada's six largest banks have their headquarters in Toronto, near the country's busiest stock exchange. Toronto is North America's third largest financial services centre and 75% of Canada's foreign banks and 65% of the country's pension fund companies are located here.

Competitive Toronto has an excellent reputation as one of North America's leading economies while at the same time delivering overall business cost savings of 6.5% over large U.S. cities and 12.2% when compared to Asian and European centres.

Toronto's more than 76,000 businesses-ehoose-from a large,highly - skilled, multilingual workforce of 1.4 million people - one-sixth of the country's labour force. More than 800,000 workers have university or college training and 58% have earned a post-secondary degree, diploma or certificate. Residents speak more than 135 languages and dialects.

13 THE ROSE AND THISTLE GROUP LTD. September 16, 2010

Education Toronto's impressive range of post-secondary educational facilities includes three universities and five colleges offering training in virtually every discipline and skill. Toronto leads the country in the number of post-secondary schools and graduates, with more than 15,000 medical/biotech researchers, two top-ranked MBA schools and excellent programs in engineering, computer sciences and multi-media.

Location Some 180 million customers and suppliers are within a one-day's drive from Toronto. Toronto's Pearson International Airport is within easy reach of the city's central business district and provides flights to over 300 destinations in 54 countries through 64 carriers.

Connections Toronto boasts an expansive local network of consultants, professional firms and specialty suppliers. The business services cluster is among North America's largest and growing. Toronto is home to 9 of Canada's 10 largest law practices, 9 of the top 10 accounting firms and all 10 top human resources and benefits firms.

Transportation With four major highways, multi-modal railway facilities, a Great Lakes port and an international airport handling over 30 million passengers and 350,000 tons of cargo annually, Toronto is a true North American gateway.

Transit Toronto's public transit system is the second largest in North America and has the highest per capita ridership rate on the continent. More than 2,400 subway vehicles, buses and streetcars make it easy for more than 1.4 million business riders to travel throughout the city daily.

14 THE ROSE AND THISTLE GROUP LTD, September 16, 2010-- 0 5 7

SECTION D:

THE ROSE AND THISTLE GROUP LTD.

A. EXPERIENCE

Over the past nine years, The Rose and Thistle Group has owned, managed and developed a total of $80 million worth of properties, of which $45 million remain under management and development.

Rose and Thistle is seeking out properties similar to the properties with which it has had success in the past. Since 2001, Rose and Thistle has owned, managed and developed the following properties, thirteen of which it continues to own and two of which it has under contract to purchase.

Our heritage commercial buildings:

30 Hazelton Avenue

A heritage building in Yorkville with high-end luxury office and retail tenancies

Head office of The Rose and Thistle Group Ltd.

Severed one lot into two and renovated the heritage designated building into four luxury suites

30A Hazelton Avenue

A commercial building in Yorkville with high-end luxury-office-tenancies-

Severed one lot into two and renovated the building into four luxury suites

15 THE ROSE AND THISTLE GROUP LTD. September 16, 2014- n r:

65 Front Street East

A heritage corner building in Old Town built in the mid-1800s that has loft commercial office space

Renovated this heritage listed commercial loft building; improved the tenant mix, reduced costs, and increased profitability. Obtained approval to add a fourth storey to the building

86 Parliament Street

The Old Telegram Building

A heritage corner building built in 1887 that used to house The Toronto Telegram, located in Cabbagetown, with retail and commercial space.

Gutted and renovated the property. Opened Urban Amish Interiors Furniture Gallery on floors one and two, and leased floors three and four to Sun Edison.

252 Carlton / 478 Parliament

A heritage corner building in Cabbagetown that has retail and commercial space.

Home to Ginger and Johnny G's restaurants

Currently gutting and renovating the second and third floors to house two new full floor tenants in September 2010.

16 THE ROSE AND THISTLE GROUP LTD. September 16, 20T0 0 5 9

110 Lombard Street

The Old Firehall

Toronto's first fire hall, built in 1886. The former home of Second City which launched the careers of Dan Ackroyd, John Candy, Mike Myers, Gilda Radner, Martin Short, etc.

Currently leased to Gilda's Club

66 Gerrard Street East

Toronto's original apothecary, built in the 1880s, this beautiful building kitty corner Ryerson is currently under renovation by us to accommodate Starbucks as our anchor corner retail tenant. We are also installing an elevator and renovating the building generally while accommodating our existing tenants.

-24 Cecil-Street

A stunning corner property south of the University of Toronto that we have under contract to purchase and renovate

17 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 06 0 Our commercial buildings:

185 Davenport Road

Fully converted an office building into five mixed use residential and commercial condominium suites and sold them.

355 Eglinton Avenue East

Commercial building, renovated for re-sale.

1246 Yonge Street

Commercial building converted to condominiums

Converted this office building into 28 mixed use condominiums, plus expanded the underground parking garage and then sold all 28 units.

18 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 061 17 Yorkville Avenue

Converted this office building into six mixed use luxury condominiums then sold all six units

10-12 Bruce Park

Mixed-use building

Entered into an agreement to purchase this building then sold that right to another purchaser for a profit.

19 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 06

Our residential apartment buildings:

19 Tennis Crescent dio An 8-plex in Riverdale

Renovated five of the suites and significantly increased annual revenues when they were released. Are renovating other suites as they become available

646 Broadview Avenue

A 13-plex in Riverdale

Fully converted a

heritage-designated mansion into

thirteen residential rental units.

648 Broadview Avenue:

A 1 0-plex in Riverdale

Renovated five of the suites and significantly increased annual revenues when they were re-leased. Are renovating other suites as they become available

20 THE ROSE AND THISTLE GROUP LTD. September 16, 2010

Our infill residential housing:

Bought a vacant 1.5 acre parcel of land in North York; are completing all steps required to permit the construction of 40 townhouses which we will then build.

Bought a vacant 2/3 acre lot and completed all planning and development steps required to obtain approval to build 17 luxury townhouses on the site, then constructed and sold all seventeen to individual purchasers

346 Jarvis 6 luxury townhouses

Bought six partially completed townhouses and completed all planning and development steps required to sever and construct for sale; two remaining for sale THE ROSE AND THISTLE GROUP LTD. September 16, 2010

232-234 Galloway Road

Bought vacant land and are building sixteen townhouses for sale.

247 and 251 Ranee Avenue 7 luxury townhouses

Bought a vacant 2/3 acre lot and obtained approval to build seven houses on the site before selling the site to Toronto Community Housing Corporation.

14 and 16 Montcrest Blvd.

2 luxury detached houses

Severed off two lots from our 646 Broadview property, and built two luxury detached houses and sold both. They have phenomenal views of the Toronto skyline, being just north of Riverdale park.

22 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 0 6 5 :3 10-12 Market Street

Redevelopment site

Obtained approval to build a 10-storey luxury residential and retail condominium building on the site of the original Toronto fish market, a heritage site, before selling this site to another developer

9 Post Road

Infill housing site

Severed one lot into two and obtained approval and a building permit to construct a luxury mansion in the Bridle Path neighbourhood in Toronto, before selling the site to a builder. Note: photo is of the house we had approved. Builder built his own style.

2 Park Lane

Infill housing site

Severed one lot into two and renovated the house on the property before selling the site to a builder. Note: photo is of the house we had approved. Builder built his own style.

Mixed use houses

Renovated two houses for profitable resale

23 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 066

2. HISTORIC RETURN ON INVESTMENT

Since 2001, the Rose and Thistle Group Ltd. has achieved impressive compounded annual returns.

Average Return by property* Property Conipounded annual return Timetin r 17 properties in.Toronto 26_20% 7 years '4'-ttftA:k'fticf;.Ot,Ott Oi,..eNV:Otttrrt#A3;t0 70'.”% co0.6grided,40,1

The properties are listed from our highest compounded annual return to our lowest. We have thus far never lost money on a project.

Property Compounded annual return Timeline 10-12 Bruce Park 786.00°/0 2 months 19 Tennis Crescent: 104.00% 6 months 118 and 120 Isabella: 84_75% 1 year 1S5 Davenport Road 36:36% 6 years 30A Hazekon Avenue: 33.51% 7 years 646 Broadview Avenue: 26,48% 4 years 30 Hazelton Avenue: 25.16% 7 years 65 Front Street East: 21.90% 2 years 355 Eglinton Avenue East: 18.00% 9 months 12=16 lenge Street 16_87% 3 years •17 York-vile Avenue 13.60% 3 years 247 and 251 Ranee. _Avenue: 1€}.00°% 5 years 14 and 16 Montcrest Blvd.: 8.00% 4.5 years 9 Post Road: 7.00% 3 years 2 Park Lane: 7.00% 3 years 3771 & 3775 St Clair Ave: E. 4.50% 5 years 10-12 Market Street 2.11% 2 years 3. MISSION STATEMENT

The mission of Rose and Thistle Investments is to identify, acquire, manage and develop under-utilized commercial, residential and mixed-use buildings and vacant land that have the potential, when the requisite amount of time, skill and capital are applied, to achieve an above average return and provide our tenants and purchasers with homes or offices of which they are proud.

24 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 97L

4. INVESTMENT CRITERIA AND STRATEGY

Rose and Thistle reviews potential acquisitions using an investment criteria which focuses primarily on return on equity, security of cash flow, potential for capital appreciation and the potential to increase value by more efficient management, including accessing capital for expansion and development.

We are "sticking to our knitting" by seeking opportunities similar to the properties with which we have had success in the past, namely the following three types of investments:

1. Medium-size commercial and mixed-use buildings that are well-located and well built where there is the possibility to:

a. sever off a portion of the land for redevelopment or to create multiple parcels where there is currently one;

b. subdivide the building into condominiums;

c. add onto or renovate the existing building; and/or

d. change the tenant mix and create operating efficiencies;

2. Medium-size apartment buildings that are well-located and well-built where there is the potential to:

a. sever off a portion of the land for redevelopment;

b. add onto the existing building; and/or

c. update the suites, improve the building, and thus change the tenant mix and increase rents; and

3. Medium size residential housing and development sites where the land is well- located.

We are prudent investors who apply rigorous criteria when evaluating each potential real estate opportunity.

25 6 THE ROSE AND THISTLE GROUP LTD, September 16, 2010

ii. Construction and development • Project management of re-developments, renovations and new developments for residential, commercial, and retail properties in urban and suburban markets • Expertise in planning, obtaining zoning approvals, construction management, and operation start-up • Experience working with government and regulatory agencies, business community leaders and investors to enhance project success • Tarion-registered new home builder

iii. Property management • Operations and management of multi-unit small to medium commercial, residential and retail properties • Short-term and long-term strategy to maximize return on investment • Tenant relationship management through ongoing communications and reporting • Tenant retention strategy and effectiveness measurement • Administration of leases to optimize results • Market research for competitive pricing and positioning • Maintenance and management of the property • Twenty four hour on-call emergency repair • Rent collection and lease enforcement • On-site staffing, if needed, according to owner approved budget • Maintenance and capital improvement planning • Regular property inspections

26 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 0 9 iv. Leasing Services • Obtaining tenants • In-house leasing team with extensive industry contacts • Advertising vacancies • Negotiating new and renewal leases • Marketing strategy to promote properties to prospective tenants and brokers through our network of contacts, Web sites, printed media and other channels of communication v. Legal and Accounting Support • Drafting and filing legal documents • Litigation • The conversion of commercial rental units to commercial and/or residential condominium properties and the implementation of condominiurn sales programs • Zoning, by-law and legislative compliance • Severance and variance applications • Representation at municipal zoning, fire, building and by-law hearings • Insurance management and advice on appropriate coverage • Centralized accounting and finance functions, including financial statements and audit, accounts receivable, accounts payable, payroll, cash and tax management • Weekly, monthly or quarterly occupancy and collection reporting • Weekly, monthly or quarterly financial report • Annual budget preparation • Unit turnover costs • Capital expenditures • Operating and labour costs • Revenue • Partnership distributions as directed

27 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 070

6. MANAGEMENT TEAM

Norma Walton, B.A., J.D., M.B.A.

Norma is a co-founder of The Rose and Thistle Group Ltd. She has considerable experience in all aspects of residential and commercial real estate, including acquisition, development, property management and financing.

Norma has a Bachelors Degree in French, a Bachelor of Laws Degree and an executive Master of Business Administration Degree all from the University of Western Ontario. She is a member in good standing of the Law Society of Upper Canada and is a licensed mortgage broker in the Province of Ontario. She is a published author and a sought after speaker having given in excess of two hundred speeches and has appeared on both television and radio.

Ronauld G. Walton, CPIM, J.D., LL.M., M.B.A.

Ron is a co-founder of The Rose and Thistle Group Ltd. He has a Bachelor of Laws Degree from the University of Western Ontario, a Master of Intellectual Property Laws Degree from York University, a Master of Business Administration Degree from the University of Liverpool, a Diploma in Marketing Management from Centennial College and is Certified in Production and Inventory Management by the American Production and Inventory Control Society.

Ron is a member of the Institute of Corporate Directors and the Law Society of Upper Canada. Ron is a registered trade-mark agent with the Government of Canada and a licensed mortgage broker in the Province of Ontario. He has been nominated for the Premiers Award given by Province of Ontario for social and economic contributions.

Carlos Carreiro, Director of Construction and Maintenance

Carlos has an extensive twenty-year background in real estate. He has been a real estate agent, a land developer, and a residential and commercial property renovator and builder. He is adept at interior design and renovation having studied architectural technology at Ryerson. He has an extensive network of industry contacts to call upon as the need arises. He is an exceptional manager of both construction sites and commercial buildings.

28 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 071

Chief Financial Officer --- Mario R. Bucci, B.BM., C.M.A.

Mario provides leadership and co-ordination in the administrative, accounting and budgeting efforts of The Rose and Thistle Group. He creates and evaluates the financial programs and supporting information and control systems of the company in order to preserve company assets and report accurate and timely financial results.

Mario has over 25 years experience in finance. He has a Bachelor of Business Management Degree from Ryerson University and is a member of the Certified Management Accountants of Ontario.

Vice President of Operations -- Steve Williams

Steve has more than a decade of both project management and overall management experience. He is responsible for ensuring that cost effective operations and infrastructure are in place to support all of The Rose and Thistle's active real estate projects and oversees the operational budget for each project. He contracts and coordinates outside contractors to resolve operating difficulties and ensure project deadlines are completed on time. Steve has also been the Director of Production for our subsidiary company, Corporate Communications Interactive Inc, since 2002.

;1 John Geikins, C.M.A., Senior Accounting Manager

John manages Rose and Thistle's finance staff and oversees the maintenance and accuracy of all financial records for The Rose and Thistle Group Ltd. and related companies. He has an Accounting and Finance Diploma from Seneca College and is a Certified Management Accountant with over twenty five years experience in accounting and income tax compliance. Prior to, joining the Rose and Thistle Group, John was in upper management discharging considerable financial responsibility with one of Canada's largest corporations.

John Rawlings, Vice President of Operations

John, an engineer by training, had thirty years experience with the Ford Motor- Company in_a_vatiety of_manage.mentpositions—He_ha.s_ been on contract to The Rose and Thistle Group Ltd. for ten years. John has supervised seventeen hundred individuals including architects, engineers, electricians, plumbers, contractors and maintenance and repair workers. While on contract to Ford, John's most recent responsibilities included being in charge of the construction of two twenty million dollar facilities and a one hundred and fifty million dollar plant expansion at the Ford facilities in Oakville and St. Thomas. He has a vast array of cost consultants, appraisers, construction and maintenance personnel upon whom he can call.

29 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 072

a, Property and Leasing Manager --- Samantha Slemko, B.GS

Samantha joined us in 2006 as a project manager for our subsidiary company, CCI. In that capacity she managed some of CCI's largest technology projects and was responsible for meeting client goals, deadlines and budgets. She currently oversees the rental of all Rose and Thistle properties, tenant relations, lease negotiations, building repair and maintenance all with the goal of increasing asset value.

Samantha comes from a project management background in health information. She has a diploma in Heath Information Technology as well as a Bachelors Degree in General Studies from the University of North Dakota.

Jackie McKinlay, Associate

Jackie has over a decade of real estate law experience and is the hub through which all of our residential and commercial real estate deals flow. She co-ordinates condominium registration documents, real estate financings, interacts with lawyers, clients, architects, surveyors, conveyancers and City personnel, she coordinates the preparation and receipt of R plans, site plans, surveys and landscape surveys and all of the real estate acquisitions, sales and re-financings. Jackie is a graduate of The Ontario Law Clerks Association and is a registered mortgage agent.

Tom Trldja, B.A. in Law,F.Inst.L.C.O., Associate

Tom obtained his Law Degree from the University of Belgrade in 1987 after which he practiced law in Belgrade for several years. Subsequently he graduated on the President's Honour List from the Legal Assistant Program at Seneca College of Applied Arts and Technology in 1999. Through his legal training and practical experience Tom has been in the legal field for more than twenty one years. He has played a key role in multi-million dollar mergers and acquisitions, a variety of complex contract negotiations and all aspects of corporate law. He is also skilled in real estate development law and real estate financing. He is a member of the Institute of Law Clerks of Ontario.

Senior Accountant Kendra Henry-Curtis

Kendra studied accounting, information systems and computer programming and is an honours graduate of Centennial College with an Accountant/Programmer Analyst diploma. At present, she is completing the Certified General Accountant program and will soon have her CGA designation. She assists in the maintenance and preparation of financial records and statements.

30 THE ROSE AND THISTLE GROUP LTD. September 16, 2010

SECTION E: THE FINANCIAL PROJECTIONS ASSUMPTIONS The financial assumptions used to generate the closing costs, renovation costs, projected rent roll and building valuation were specifically designed to be conservative in their estimates to mitigate identified potential risks. The key assumptions are as follows:

Closing Rose and Thistle has vast experience in estimating closing Costs costs. The largest component is the Ontario land transfer tax and the Toronto land transfer tax, which together total approximately 3% of the purchase price. The second largest is the fee of2% of face value for arranging a mortgage to cover acquisition and construction. Renovation Rose and Thistle has just completed the gut renovation of 86 Costs Parliament and is renovating 66 Gerrard and 252 Carlton now hence has current information and great proxies for determining what 241 Spadina will cost. Projected Rose and Thistle estimates that the operating costs for the Rent Roll property, called Additional Rent Expenses, will be approximately $14 per square foot at most, making the assumption that the property taxes will be too high initially and will have to be reduced via assessment. For net rents, Rose and Thistle is using its recent experience at 86 Parliament, 252 Carlton and 66 Gerrard to estimate rents. They recognize that for some tenants there will be a "Chinatown" discount from the rents that would otherwise be achieved. Mitigating that discount is the roof height of the first, second and fifth floors of the building. Rose and Thistle is prepared to wait for the right tenant paying market rent. Rose and Thistle has been advised that market rent for the area is between $30 and $35 gross for office space ($16 to $21 net) and $40 to $55 for retail space ($26 to $41 net). Given the height of the first, second and fifth floors, _Rose_and_Thistle feels_the projected_rental receipts are accurate. Building Toronto's heritage-style commercial buildings have valuation capitalization rates ranging from 5% to 9%. Rose and Thistle is using 7.5% for this property, being a realistic capitalization rate given the location and nature of the property. That capitalization rate will be applied to the net income to determine property value upon completion of renovations and leasing.

31 THE ROSE AND THISTLE GROUP LTD. September 16, 2010

RETURN ON INVESTMENT Using the above assumptions, the following pre-tax returns have been calculated:

Compounded annual return 25.8% Straight-line return 99%

RISKS Inherent with any investment there are associated risks. Rose and Thistle through their industry experience is aware of and has taken appropriate measures to mitigate the risk exposure to the investor. However, it is essential the investor be aware of some of the key risks involved in the project and more importantly, how these risks have been considered by Rose and Thistle.

Risk Discussion Market condition for commercial - Rose and Thistle cannot control the tenants economic environment in Toronto. We are encouraged by the net migration of approximately 100,000 people a year to the area, which historically has kept real estate vibrant over the past two decades. Nonetheless, there is a supply of commercial office product coming to market over the next two years that will potentially increase vacancy rates - Rose and Thistle recognizes that Toronto's expenses and particularly its commercial taxes are far higher than those in the 905 belt. Nonetheless, there are numerous companies that choose Toronto for their office location. Rose and Thistle is confident, given its experience with its seven other Heritage buildings, that heritage buildings when renovated properly are extremely popular with a certain type of tenant, and those tenants are loyal and prepared to pay fair rent and enter into long-term leases for "loft" style space.

32 075 THE ROSE AND THISTLE GROUP LTD. September 16, 2010 -

Interest Rate Increases - Rose and Thistle has locked in the rates for the mortgage and construction loan for a 24 month term General Investment Risk - A11 investments with the exception of sovereign bonds of major industrial nations (eg. US treasury bills, Canada savings bonds) carry with them inherent risk. There are no guarantees in life. The best one can do, as Rose and Thistle believes it has, is to acquire desirable assets, at a reasonable price at a favourable time. Investors in this real estate transaction must be aware that it is riskier than acquiring savings bonds. Investors must be comfortable that the return is not guaranteed, unlike the return of such a bond.

33 THE ROSE AND THISTLE GROUP LTD. September 16, 2010

SECTION F: TABLES TABLE 1: CAPITAL COSTS AND STRUCTURE , 241 Spaj$la • •••:•••••• 4.40.1v4E0- ,01Pg. 6. 1Ptirchase Costs Purchase Price 4.500,000. : Mortgpge fee 126000', ,. .. Lender's legal fee 15 . ,000:., . - ' • ' Ontario Land Transfer Tax 67.5001 IVIkinicipal La:nd Transfer Tax 67,500 Other fees and disbursements 16, 000 . ___ _...... forappraisal, reliance letters for. . .environmental ...._ . reports, municipal ' enquiries and fees, etc.

;;Pratinigiffifiriftai.. .

.Renovation Costs • Drywall • • -c_10„000 Floorin.g 1$ 250,000 , Fire, sprinklers i§ 200,000 ; Elevators • L- ?00,909 • Demolition and disppsal $ 160,000 Plumbing $ 200,000 ! HVAC 1$ 200,000 : Electrical l 200,000 Paint $ 100,000 Steel $ 100,000 Roofing_ $ 100,000 Brick • 5 100,0:00 Windows ; $ 100,000 . Miscellaneous $ 100,000 Project management. fes 259,000 1:PS.r.Mat$9;IONW". • :•:0; ;2;5•000 ••.

:Professional Fees Architectural plans S 50,000 r Elvin eerina fees • $ 40,CO0: ! Interior deslgp fees • $ 20,000 I CostConstiltant. ; $ 20,000 Survsycirs fees 10,000 Permit fees $ 20,0.00 L . 1151.4114.N.K04.004•Pti ;

Carrying Costs • . .. .

Property tax • 300,000 Interest on mortgage $ 750,000 Insurance .._ $ 100,000 • Less Rent from bank $ (110,000.1 TotalcCa. dyikjtoSte..- '''MQ:46;0100. riacioota(134-0,4,6a. .1 •:At ..A14(lo

roaqqoge: .7530% 8.43% $ 6.,300,0.90- Dr. E3d-rri4tein: 413:12% $ 100:.;090 ROn..,:a.wit-JciritoMditori: •Lt.-45,-121{4, $: 1;1A.-40.0k

34 THE ROSE AND THISTLE GROUP LTD. September 16, 2010'-

TABLE 2: PROJECTED INCOME STATEMENT

TABLE 3: PROJECTED BUILDING VALUATION Projettett Net Ititotrie

Expected net revenues:

Basement, $t2 net p.s.f. (no additional rent) $72,000 Retail tevel, $35 net p.s.f. $246.000 Second, fittlrfloor (premium flows), $20 net now Third and fourth ffoors, $15 net pa.f. $210.000

Projected .net income $OU° THE ROSE AND THISTLE GROUP LTD. September 16, 20111

TABLE 4: PROJECTED PROFIT AND PROJECTED INVESTOR RETURN

Anticipated Profit

Building Value: S 10,760,000

Less Project Cost: 8,541,000

Projected Profit: 2,219,000

36 079 THE ROSE AND THISTLE GROUP LTD. September 16, 201'0

TABLE 5: SENSITIVITY ANALYSIS

0 iy

AGREEMENT Between:

Dr. Bernstein Diet Clinics Ltd. "Bernstein"

- and -

Ron and Norma Walton "Walton"

- and -

Skyline — 1185 Eglinton Avenue Inc. the "Company"

WHEREAS Bernstein and Walton intend to purchase 1185 Eglinton Avenue East, Toronto, Ontario (the "Property") on or about December 17, 2010 and put ownership of the Property in the Company's name;

AND WHEREAS Bernstein and Walton, or whomever Bernstein and Walton may direct, will each hold 2,501,900 shares in the Company;

AND WHEREAS Bernstein and Walton will each provide the sum of $2,501,900 to the Company for the purposes of demolishing the existing building on the Property and development-approving the Property for a residential condominium and stacked townhome development (the "Project");

AND WHEREAS Walton will manage and supervise the Project and ensure it is completed according to the proposal attached as Exhibit"A" to this Agreement;

THEREFORE the parties agree as follows:

1. Walton has contracted to purchase the Property and the purchase is scheduled to close on December 17, 2010.

2. Walton has commenced development approvals for the residential re-development plans for the Property.

3. Walton has engaged a consultant to prepare demolition specifications for the demolition of the building on the Property so that demolition job can be tendered through the Commercial News. 4. Walton has obtained an offer from Great Gulf Homes to partner with Walton and Bernstein in the development of the Property into approximately 110 townhomes and 400,000 of residential condominiums and Walton is expecting to receive an offer from Empire Communities to either purchase the Property or partner with Walton and Bernstein to develop the Property.

5. Walton intends to complete development approvals between now and November 15, 2012 in accordance with Exhibit "A".

6. Bernstein wishes to own 50% of the shares in the Company in exchange for providing 50% of the equity required to complete the Project. The Company will issue sufficient shares such that Bernstein has 2,501,900 and Walton has 2,501,900 voting shares of the same class.

7. The ownership of the Company will be as follows: a. 50% to Bernstein; and b. 50% to Ron and Norma Walton as they may direct between each other or alternatively to be held by a completely Walton-owned and controlled company, provided that all covenants and agreements of Walton herein shall continue in full force and effect.

8. Walton will be managing, supervising and completing the Project in accordance with the attached Exhibit "A".

9. Walton and Bernstein have each provided /12 of the $300,000 deposit to purchase the Property.

10. The balance of equity in the amount of $2,351,900 each will be paid as follows: a. Bernstein will provide to the Company the sum of $1,750,000 on or before December 17, 2010; b. Walton will provide the sum of $1,750,000 to the Company in a timely manner as required as the Project is completed; c. If and when the vendor take back mortgage of $500,000 is required to be paid back prior to the completion of the Project, both Bernstein and Walton will provide a further $250,000 each as required to pay out the vendor take back mortgage; d. If and when the land transfer tax is required to be paid, Bernstein and Wilton will each contribute—the—sum of whatever amount equals 50% of the total amount due; and e. Bernstein and Walton will provide the remaining sum of $224,400 in a timely manner as required.

11. Walton and Bernstein will each provide 50% of whatever additional capital over and above the $2,501,900 each that is required to complete the Project, if any, in a timely manner. 082

12. In addition to managing, supervising and completing the Project, Walton will be responsible for supervising the demolition of the building on the Property, hiring of all consultants, designers, architects and engineers to complete the Project, finance, bookkeeping, office administration, accounting, information technology provision, filing tax returns for the Company, and fulfilling all active roles required to complete the Project in accordance with Exhibit A.

13. Bernstein will not be required to play an active role in completing the Project. Notwithstanding that, any decisions concerning partnering with a developer, the type of development, the selling or the refinancing of the Property will require his approval; any decisions requiring an increase in the total amount of equity required to complete the Project will require his approval; and any significant decisions that vary from the Project plan described in Exhibit "A" will require his approval.

1.4. Walton will provide to Bernstein ongoing reports at minimum monthly detailing all items related to the Property including the progress in moving the development approvals forward and any interest being obtained from developers to purchase the Property or partner with Bernstein and Walton to develop the Property.

15. Walton will provide a written report to Bernstein each month detailing the following: a. copies of invoices for work completed; b. the bank statement for that month; and c. if the bank statement does not have a copy of cancelled cheques, then Walton will also provide a complete listing of all cheques written, including payees, dates and amounts. At Bernstein's request, Walton will provide whatever other back-up information he requests. Any cheque or transfer over $50,000 will require Bernstein's signature or written approval before being processed.

16. Once the Project is substantially completed to the point that all of the Property has been sold, both parties will be paid out their capital plus profits and Walton will retain the Company for potential future use.

17. The Board of Directors of the Company will be composed of two directors, being Bernstein and Norma Walton. The only share to be-issued-hr the-Company-will be as set out above, and neither party may transfer his or her shares to another party without the consent of all the other parties, which consent may be unreasonably withheld. Once Bernstein has been paid out his capital and profits from the Project, he will surrender his share certificate, he will concurrently resign from the Board of Directors and Norma Walton and the Company will accept such resignation. At such time Bernstein shall be released of all obligations and liability related to the Company and shall be indemnified by Walton with respect to all liabilities, claims and obligations whatsoever of the Company up to the date at which Bernstein has been paid out his capital and profits from the Project.

18. Walton will obtain from Gil Blutricht as officer of Skyline a statutory declaration confirming the current status of the Company and that it is free and clear of all liabilities and obligations whatsoever and Gil Blutricht as officer of Skyline shall provide an Indemnity relating thereto to both Walton and Bernstein to or before December 17, 2010. The Company will only be used to purchase, development approve and sell 1185 Eglinton Avenue East, Toronto, Ontario or such other matters solely relating to the Project and the Property.

19. If the parties disagree on how to manage, supervise and complete the Project in accordance with Exhibit "A" and cannot reach agreement amongst themselves, each of them undertakes to attend a minimum of four hours of mediation in pursuit of reaching an agreement. After mediation, if there are any remaining issues to be determined, those issues in dispute shall be determined by a single arbitrator in as cost-effective a manner as possible, with no right of appeal. All costs of such mediation and/or arbitration will be borne equally by Bernstein and Walton.

20. Notwithstanding that Bernstein and Walton do not yet have the authority to execute the within agreement on behalf of the Company prior to the completion of the Purchase of the Property, all of the parties hereby acknowledge, agree and confirm that this Agreement shall be a valid and binding Agreement upon execution by Bernstein and Walton.

21. The above represents all deal terms between the parties.

Dated at Toronto, Ontario this 'l 2) day of DECEMB, R 2010 011.11,11

Dr. Bernstein Diet Clinics Ltd. Skyline 1185 Egli ton Avenue Inc. Per A.S.O. Per A.S.O.

Ron Walton ii rti 4•

THE ROSE and THISTLE GROUP LTD.

30 Hazelton Avenue, Toronto, Ontario, M5R 2E2,(416) 489-9790 Fax: (416)489-9973

Investment Opportunity 1185 Eglinton Ave. E. December 7, 2010 0 P r

THE ROSE AND THISTLE GROUP LTD, December 7, 2010

Table of Contents

SECTION A: 1. The Opportunity 3 2. The Investment Particulars 7 SECTION B: 1. The Property 7 2. The Plan 11 3. The Financial Projections 12 SECTION C: Investing in Toronto 13 SECTION D: The Rose and Thistle Group Ltd 16 1. Rose and Thistle Experience 16 2. Historic Return on Investment 25 3. Mission Statement 25 4. Investment Criteria and Strategy 26 5. Our Services 27 6. Our Management Team 29 SECTION E: The Financial Projections 32 1. Assumptions 32 2. Return on Investment 32 3. Risks 33 SECTION F: Tables 34 a. Table 1: Capital Costs and Structure 34 b. Table 2: Projected Property Value-- “.-35 c. Table 3: Projected Profit, Investor Return and Formula for Determining Profit Distribution 36 d. Table 4: Sensitivity Analysis 37 0186

THE ROSE AND THISTLE GROUP LTD. December 7, 2010

SECTION A:

1. THE OPPORTUNITY

The opportunity is to purchase 50% of the equity in Skyline - 1185 Eglinton Avenue Inc., a soon-to-be Rose and Thistle company that owns 1185 Eglinton Avenue East. 1185 Eglinton is a 2.83 acre parcel of land at the southeast corner of Don Mills and Eglinton currently containing a nine storey office building and both surface and underground parking.

Skyline currently owns the property and they need to sell it because their capital is required for three other properties with which they are involved. The office building is currently vacant and it costs them $1.5 million a year to carry. 1185 Eglinton was first listed for sale in 2008. It was successively tied up by five different groups between early 2008 and when we tied it up, at prices ranging from $13.5 million to $10 million. A11 of those groups wanted to demolish the office building and build residential condominiums. The city at that time was not prepared to agree to that proposal hence none of those five deals came to fruition.

We have now purchased the property for $8.5 million, a far better price than we could have obtained in 2008. Further, we are the beneficiaries of the two and a half year planning process already undergone by Skyline and all five groups who had the site under contract. Although the city was not originally agreeable to a residential redevelopment on this site, now they are fully supportive and anxious to see it happen.

Hence our plan is to demolish the office building in the spring of 2011 and complete the development approvals for two condominium towers, a joint mid-rise podium and adjacent townhouses so we can sell the site to a condominium developer. We anticipate an investment of $2.5 million prior to November 15, 2010 would generate significant profits within two years.

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3 087

THE ROSE AND THISTLE GROUP LTD. December 7, 2010

The Office Building

The nine storey office building was custom built in 1973 for Nestle Canada as their head office. It is 145,000 square feet of rentable area over ten floors including the lower level, and it has one level of underground parking that can accommodate 56 cars. Over-engineered, the building is a fortress and structurally could support double the storeys it currently has. We anticipate it will cost approximately $5.36 per square foot to demolish. We intend to demolish it soon after taking ownership of the site as the cost to maintain it is approximately $1.5 million annually.

4 088

THE ROSE AND THISTLE GROUP LTD. December 7, 2010

The Development Site

tljra- t, Page + Steele Architects have designed two stunning condominium towers to occupy the site, along with a mid-rise building and townhouses. The prior owners of 1185 Eglinton had already applied for approval of one condominium tower while retaining the office building. The original proposal was not agreeable to the city, but our revised proposal incorporating two condominium towers on a shared mid-rise podium with townhouses on site is agreeable to them. Development approvals for the site will take approximately eighteen to thirty months to obtain, but once the city confirms in writing they are agreeable, we can move to sell the site to a condominium developer who will finalize number and size of suites once they own the site and prior to final approvals. Alternatively we may partner with a developer to develop the site, which would extend the life of the project to

approximately five years but would contemplate significant profit sharing upon project cash out.

5 0 8 9

THE ROSE AND THISTLE GROUP LTD. December 7, 2010

Summary

Rose and Thistle anticipates securing full development approval for the condominium site by November 2012. Rose and Thistle expects to list the site for sale in March of 2012 and have the purchaser close the purchase by November 2012. We have already made contact and have secured the interest of both Great Gulf Homes and Empire Communities, and both companies have expressed interest in partnering with us on the site or purchasing the site conditional on development approvals and for a certain purchase price per square foot of saleable area. We are confident the city will approve a minimum of 4 times site coverage, being a total of 490,000 square feet, and anticipate the approval will actually be for 4.5 times site coverage or 550,000 square feet. Best case would be 5 times site coverage or 615,000 square feet.

In speaking with both developers and realtors who sell this sort of product, the minimum price that is obtained for development-approved sites is $30 per buildable square foot. In addition, the townhouses are worth more per buildable square foot because they are less expensive to build yet the end value is higher. To be conservative, we have valued the entire site at $30 per buildable square foot.

If we do not partner with a developer up front and look to sell after we obtain our approvals, we will create a website with all of our due diligence material and provide the market six weeks to digest that information before the bid date for offers. We will price it at minimum $30 per buildable foot and see if we manage to extract more than that depending on interest from the development community.

The project will end once the development site is sold and we have repaid capital and profits. We anticipate this will occur within two years of November 15, 2010.

Unlike investments in stocks and bonds, carefully selected and well-located properties have real value. When real property is purchased for the right price and properly managed, it provides reliable, above average returns on investment. In addition, given Toronto's growth each year by approximately 100,000 new immigrants, the need for new housing is ongoing. Condominium developers are hence always looking for new development sites, and our site provides significant scale to attract those large and medium-sized condominium developers. 0 90

THE ROSE AND THISTLE GROUP LTD. December 7, 2010

2. THE INVESTMENT PARTICULARS

The details of the opportunity are as follows:

What: Common shares in Skyline — 1185 Eglinton Avenue Inc., the company that owns 1185 Eglinton Avenue East

Amount available: $2,501,900

Commencement date: Deposit of $150,000 in November 2010; balance on or prior to December 17, 2010

Capital appreciation and return: Principal will be repaid then profits split equally

Term: 24 months to November 15, 2012

The total capital is $13.2 million, being $8.2 million from mortgage and $5 million in equity, of which Rose and Thistle will purchase $2.5 million, leaving $2.5 million available for purchase. The capital structure is as follows:

.:$ ONO* WARINUOINiff ANtifik.40"

SECTION B:

1. THE PROPERTY

1185 Eglinton Avenue East is located in Don Mills. Don Mills has been the recipient of a lot of financial investment recently:

* Cadillac Fairview has spent many hundreds of millions designing and building the Shops of Don Mills at Don Mills and Lawrence, a new concept outdoor mall with high end retailers and restaurants. Phase I is complete, and they are now pre-selling suites—in—Phase—HT being—six—new— condominium buildings and one retrofit of an existing building that will surround the Shops of Don Mills in the next few years with residences. The condominium suites are being pre-sold for $500 per square foot.

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

* The Aga Khan Foundation is spending $200 million to create an Ismaili Cultural Center, Museum and park between Wynford and Eglinton Avenue. Construction is underway. This will transform the area adjacent to the Don Valley Parkway at Eglinton and provide investment in the surrounding area by groups wishing to associate themselves with the Aga Khan.

* The former Inn on the Park site at Leslie and Eglinton now houses Toyota on the Park and Lexus on the Park, along with shops, services and an adult lifestyle retirement residence, with everything on the comer being new.

* Tridel is almost completely sold out of their Accolade condominiums between Eglinton and Wynford east of the Don Valley Parkway. The few remaining suites are selling for between $375 and $450 per square foot.

8 THE ROSE AND THISTLE GROUP LTD. December 7, 2010

* The 56 acre Celestica site is under contract of sale, with the new owners likely looking to rezone the site to create retail and residential developments

The LRT is proposing to make both Eglinton and Don Mills major arteries in their new Transit City plan, with the Eglinton LRT slated to be completed in 2016. There would be a stop right in front of 1185 Eglinton Avenue East. The Eglinton LRT would link Kennedy Station in the east with Pearson Airport and the Mississauga Transitway in the west. The turnaround for the LRT is planned for the northeast corner of Eglinton and Don Mills,just south of the Superstore site.

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

* Build Toronto owns the site immediately north of 1185 Eglinton Avenue, which is currently being used for surface parking but will no doubt be developed in the next decade.

* Loblaws Superstore replaced the Imperial Oil building a few years ago with a busy plaza with a Loblaws, LCBO,pharmacy, bank and ancillary retailers.

* The Ontario Science Center has been a fixture on the south west corner of Don Mills and Eglinton for more than 40 years.

A11 of the above will increase the appeal of 1185 Eglinton Avenue.

10 THE ROSE AND THISTLE GROUP LTD. December 7, 2010

2. THE PLAN

The plan is two fold:

1. Demolish the office building currently on site; and

2. Complete development approvals for the residential condominium development so we can sell the site to a developer.

The following steps will be implemented to achieve this objective:

1. Have already begun pre-construction planning:

a. For the condominium development, we have:

i. Engaged our architect, planners and lawyers to revise the proposed development to address the city's concerns;

ii. Met with the city planners to obtain their approval, following which we'll submit the revised package for submission, and met with the city councillor for the area and secured his support; and

iii. Spoken with real estate professionals and developers and attracted one offer of partnership from a developer for the site.

b. For the office, we:

i. Have engaged demolition companies to prepare estimates for demolition; and

ii. Have engaged salvage experts to determine what can be salvaged for monies in the existing building.

Timeline: Now to December 17, 2010

2. Once we own the property, we will demolish the office building and complete the development approvals for the site, detailed as follows:

a. For the office building, salvage what is of value and demolish; and

b. For the development site:

i. Submit our revised plan for siteplan and rezoning approvals; and

ii. Shepherd that plan through the city process.

Estimated timeline: 18 to 30 months, between May 15, 2012 to May 15, 2013

3. Sell to a condominium developer and pay out capital and profits to investors.

Total project timeline: 18 to 30 months, between May 15, 2012 and May 15, 2013.

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

3. FINANCIAL PROJECTIONS

The property was purchased for $8.5 million. With closing costs it will have a cost base of $8.95 million. The hard construction costs will run $850,000 for demolition. The condominium development process will cost $1.76 million for consultant's fees and city fees to develop-approve the site. Carrying costs will cost another $1.65 million. Hence the total project cost will be $13.2 million.

Rose and Thistle anticipates that within 24 months, being November 15, 2012, the site will be sold for a minimum of $15.75 million, creating profits in excess of $2.65 million.

Hence it is projected that an investment of $2,500,000 on November 15, 2010 would provide a total return of more than $1,250,000 within 24 months. This 53% straight line projected return equates to a 23% compounded annual return. We refer you to the Financial Projections section of this proposal for expenditure, revenue and profit details.

Office building to be demolished Development site to be sold

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

SECTION C:

Population With 2.7 million residents, Toronto is the 5th largest city in North America. One-quarter of Canada's population is located within 160 km (100 mi.) of the city and more than 60% of the population of the USA is within a 90-minute flight.

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

Economy The City of Toronto's economy comprises 11% of Canada's GDP, with Toronto's GDP topping $140 billion in 2009. Toronto-based businesses export over $70 billion in goods and services to every corner of the globe with retail sales of $47 billion annually.

Workforce

Toronto's more than 76,000 businesses choose from a large, highly 'lled, multilinguaLworkforce of 1.4 million people - one-sixth of the country's labour force. More than 800,000 workers have university or college training and 58% have earned a post-secondary degree, diploma or certificate. Residents speak more than 135 languages and dialects.

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

Location Some 180 million customers and suppliers are within a one-day's drive from Toronto, Toronto' s Pearson International Airport is within easy reach of the city's central business district and provides flights to over 300 destinations in 54 countries through 64 carriers.

Transit Toronto's public transit system is the second largest in North—America—and—has the highest per capita ridership rate on the continent. More than 2,400 subway vehicles, buses and streetcars make it easy for more than 1.4 million business riders to travel throughout the city daily.

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

SECTION D:

THE ROSE AND THISTLE GROUP LTD.

A. EXPERIENCE

Over the past nine years, The Rose and Thistle Group has owned, managed and developed a total of $85 million worth of properties, of which $50 million remain under management and development.

Our heritage commercial buildings:

30 Hazelton Avenue

A heritage building in Yorkville with high-end luxury office and retail tenancies

Head office of The Rose and Thistle Group Ltd.

Severed one lot into two and renovated the heritage designated building into four luxury suites

30A Hazelton Avenue

A commercial building in Yorkville with high-end luxury office tenancies

Severed one lot into two and renovated the building into four luxury suites 1 0 0

THE ROSE AND TH(SILE .G.ROUP LTD December 7, 2010 m••

;65 Front Street East

heritage corner building in Old "Town built in the mid-1800s that as loft commercial office space

Renovated this heritage listed :commercial loft building; improved the tenant mix, educed costs, and increased ratability. Obtained approval o add a fourth storey to the uilding

86 Parliament Street

The Old Telegram Building

A heritage corner building built in 1887 that used to house The Toronto Telegram, located in Cabbagetown, with retail and commercial space.

Gutted and renovated the property. Opened Urban Amish Interiors Furniture Gallery on floors one and two, and leased floors three and four to Sun Edison.

252 Carlton / 478 Parliament

A heritage corner building in Cabbagetown that has retail and commercial space.

Home to Ginger and Johnny G's restaurants

Currently gutting and renovating the second and third floors to house two new full floor tenants in September 201.0.

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THE ROSE AND THISTLE GROUP LTD, December 7, 2010

110 Lombard Street

The Old Firehall

Toronto's first fire hall, built in 1886. The former home of Second City which launched the careers of Dan Ackroyd, John Candy, Mike Myers, Gilda Radner, Martin Short, etc.

Currently leased to Gilda's Club

66 Gerrard Street East

24 Cecil Street

A stunning corner property soutb of the University of Toronto that we have under contract to purchase and renovate

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THE ROSE AND THISTLE GROUP LTD, December 7, 2010

241 Spadina Avenue

We have recently purchased this beautiful heritage building, originally built in 1910 for The Consolidated Plate Glass Company of Toronto. We will be extensively renovating it and leasing it to commercial tenants over the next three years.

Our commercial buildin2s:

185 Davenport Road

Fully converted an office building into five mixed use residential and commercial condominium suites and sold them.

355 Eglinton Avenue East

Commercial building, renovated for re-sale.

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

1246 Yonge Street

Commercial building converted to condominiums

Converted this office building into 28 mixed use condominiums, plus expanded the underground parking garage and then sold all 28 units.

17 Yorkville Avenue

Commercial building converted to condominiums

Converted this office building into six mixed use luxury condominiums then sold all six units

10-12-Bruce Park

Mixed-use building

Entered into an agreement to purchase this building then sold that right to another purchaser for a profit.

20 THE ROSE AND THISTLE GROUP LTD. December 7, 2010

Our residential apartment buildings:

19 Tennis Crescent

An 8-plex in Riverdale

Renovated five of the suites and significantly increased annual revenues when they were released. Are renovating other suites as they become available

646 Broadview Avenue

A 13-plex in Riverdale

Fully converted a

heritage-designated mansion into

thirteen residential rental units.

648 Broadview Avenue:

A 10-plex in Riverdale

Renovated five of the suites —and significantly increased annual revenues when they were re-leased. Are renovating other suites as they become available

21 THE ROSE AND THISTLE GROUP LTD. December 7, 2010

Our infill residential housing:

78 Tisdale

Bought a vacant 1.5 acre parcel of land in North York; are completing all steps required to permit the construction of 40 townhouses which we will then build.

3771 and 3775 St. Clair Ave. E. 17 luxury townhouses

346 Jarvis 6 luxury townhouses

Bought six partially completed townhouses and completed all planning and development steps required to sever and construct for sale; two remaining for sale

22 THE ROSE AND THISTLE GROUP LTD. December 7, 2010

232-234 Galloway Road

Bought vacant land and are building sixteen townhouses for sale.

247 and 251 Ranee Avenue 7 luxury townhouses

Bought a vacant 2/3 acre lot and obtained approval to build seven houses on the site before selling the site to Toronto Community Housing Corporation.

14 and 16 Montcrest Blvd.

2 luxury detached houses

Severed off two lots from our 646 Broadview property, and built two luxury detached houses and sold both. They have phenomenal views of the Toronto skyline, being just north of Riverdale park.

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

10-12 Market Street

Redevelopment site

9 Post Road

1nfill housing site

Severed one lot into two and obtained approval and a building permit to construct a luxury mansion in the Bridle Path neighbourhood in Toronto, before selling the site to a builder

2 Park Lane

Infill housing site

Severed one lot into two and renovated the house on the property before selling the site to a builder

118 and 120 Isabella

Mixed use houses

Renovated two houses for profitable resale

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THE ROSE AND THISTLE GROUP LTD. December 7,2010

2. HISTORIC RETURN ON INVESTMENT

Since 2001, the Rose and Thistle Group Ltd. has achieved impressive compounded annual returns.

The properties are listed from our highest compounded annual return to our lowest. We have thus far never lost money on a project.

3. MISSION STATEMENT

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

4. INVESTMENT CRITERIA AND STRATEGY

We are "sticking to our knitting" by seeking opportunities similar to the properties with which we have had success in the past, namely the following three types of investments:

1. Medium-size commercial and mixed-use buildings that are well-located and well built where there is the possibility to:

a. sever off a portion of the land for redevelopment or to create multiple parcels where there is currently one;

b. subdivide the building into condominiums;

c. add onto or renovate the existing building; and/or

d. change the tenant mix and create operating efficiencies;

2. Medium-size apartment buildings that are well-located and well-built where there is the potential to:

a. sever off a portion of the land for redevelopment;

b. add onto the existing building; and/or

c. update the suites, improve the building, and thus change the tenant mix and increase rents; and

3. Medium size residential housing and development sites where the land is well- located.

We are prudent investors who apply rigorous criteria when evaluating each potential real estate opportunity.

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THE ROSE AND THISTLE GROUP LTD, December 7, 2010

5. SERVICES i. Real estate acquisition, disposition and financing • Acquisition and syndication of residential, commercial, and retail real estate • Assistance with property ownership transition that capitalizes on value created • Research, investment analysis, due diligence, market and value assessment • Financing and re-financing • Access to capital through our network of contacts ii. Construction and development • Project management of re-developments, renovations and new developments for residential, commercial, and retail properties in urban and suburban markets • Expertise in planning, obtaining zoning approvals, construction management, and operation start-up • Experience working with government and regulatory agencies, business community leaders and investors to enhance project success • Tarion-registered new home builder

27 THE ROSE AND THISTLE GROUP LTD. December 7, 2010 iv. Leasing Services • Obtaining tenants • hi-house leasing team with extensive industry contacts • Advertising vacancies • Negotiating new and renewal leases • Marketing strategy to promote properties to prospective tenants and brokers through our network of contacts, Web sites, printed media and other channels of communication v. Legal and Accounting Support • Drafting and filing legal documents • Litigation • The conversion of commercial rental units to commercial and/or residential condominium properties and the implementation of condominium sales programs • Zoning, by-law and legislative compliance • Severance and variance applications • Representation at municipal zoning, fire, building and by-law hearings • Insurance management and advice on appropriate coverage • Centralized accounting and finance functions, including financial statements and audit, accounts receivable, accounts payable, payroll, cash and tax management • Weekly, monthly or quarterly occupancy and collection reporting • Weekly, monthly or quarterly financial report • Annual budget preparation • Unit turnover costs • Capital expenditures • Operating and labour costs • Revenue • Partnership distributions as directed

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

6. MANAGEMENT TEAM

Norma Walton, B.A., J.D., M.B.A.

Ronauld G. Walton, CPIM, J.D., LL.M., M.B.A.

Ron is a co-founder of The Rose and Thistle Group Ltd. He has a Bachelor of Laws Degree from the University of Western Ontario, a Master of Intellectual Property Laws Degree from York University, a Master of Business Administration Degree from the -University of Liverpool, a Diploma in Marketing Management from Centennial College and is Certified in Production and Inventory Management by the American Production and Inventory Control Society.

Carlos Carreiro, Director of Construction and Maintenance

Carlos has an extensive twenty-year background in real estate. He—has been—a—real—estate agent, a land—developer-,--and residential and commercial property renovator and builder. He is adept at interior design and renovation having studied architectural technology at Ryerson. He has an extensive network of industry contacts to call upon as the need arises. He is an exceptional manager of both construction sites and commercial buildings.

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

Chief Financial Officer --- Mario R. Bucci, B.BM., C.M.A.

Mario has over 25 years experience in finance. He has a Bachelor of Business Management Degree from Ryerson University and is a member of the Certified Management Accountants of Ontario.

Vice President of Operations -- Steve Williams

John Geikins, C.M.A., Senior Accounting Manager

John manages Rose and Thistle's finance staff and oversees the maintenance and accuracy of all financial records for The Rose and Thistle Group Ltd. and related companies. He has an Accounting and Finance Diploma from Seneca College and is a Certified Management Accountant with over twenty five years experience in accounting and income tax compliance. Prior to joining the Rose and Thistle Group, John was in upper management discharging considerable financial responsibility with one of Canada's largest corporations.

John Rawlings, Vice President of Operations

John, an engineer by training, had thirty years experience with the Ford Motor Company in a variety of management positions. He has been on contract to The Rose and Thistle Group Ltd. for ten years. John has supervised seventeen hundred individuals including architects, engineers, electricians, plumbers, contractors and maintenance and repair workers. While on contract to Ford, John's most recent responsibilities included being in charge of the construction of two twenty million dollar facilities and a one hundred and fifty million dollar plant expansion at the Ford facilities in Oakville and St. Thomas. He has a vast array of cost consultants, appraisers, construction and maintenance personnel upon whom he can call.

30 THE ROSE AND THISTLE GROUP LTD. December 7, 2010

Property and Leasing Manager --- Samantha Slemko, B.GS

A Jackie McKinlay, Associate

Tom Trklja, B.A. in Law,F.Inst.L.C.O., Associate

Tom obtained his Law Degree from the University of Belgrade in 1987 after which he practiced law in Belgrade for several years. Subsequently he graduated on the President's Honour List from the Legal Assistant Program at Seneca College of Applied Arts and Technology in 1999. Through his legal training and practical experience Tom has been in the legal field for more than twenty three years. He has played a key role in multi-million dollar mergers and acquisitions, a variety of complex contract negotiations and all aspects of corporate law. He is also skilled in real estate development law and real estate financing. He is a member of the Institute of Law Clerks of Ontario.

Senior Accountant Kendra Henry-Curtis

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

RETURN ON INVESTMENT Using the above assumptions, the following pre-tax returns have been calculated:

Compounded annual return 23% Straight-line return 53%

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

Risk Discussion Market condition for condominium - Rose and Thistle cannot control the developers economic environment in Toronto. We are encouraged by the net migration of approximately 100,000 people a year to the area, which historically has kept real estate vibrant over the past two decades. Nonetheless, there is a continual supply of residential condominium product coming to market and prices for buildable density may vary significantly year over year depending on interest rates and demand. Rose and Thistle is thus using the minimum price of $30 per buildable foot given this reality.

Interest Rate Increases - Rose and Thistle will lock in the rates for the mortgage and construction loan for the 24 month term General Investment Risk - All investments with the exception of sovereign bonds of major industrial nations (eg. US treasury bills, Canada savings bonds) carry with them inherent risk. There are no guarantees in life. The best one can do, as Rose and Thistle believes it hasTis-to-a-equire desirabte--asse-tsTat a reasonable price at a favourable time. Investors in this real estate transaction must be aware that it is riskier than acquiring savings bonds. Investors must be comfortable that the return is not guaranteed, unlike the return of such a bond.

33 THE ROSE AND THISTLE GROUP LTD. December 7, 2010

SECTION F: TABLES TABLE 1: CAPITAL COSTS AND STRUCTURE

4 1• $Lig 11 • . - 1 ri .. '1) ' E - itzi .1'1: .'''' Purchase _ ... Cosfs Pyrchase Price __..._._._8.500,000 .__ . ____ _ Mortgage fee 164,000 ...Lender's _ ...... lecgfee 15,000 Ontario Land Transfer Tax 127,500 Municipal Land Transfer Tax 127.500 Other fees and disbursements,_ _ 15 000_ for appraisal, rehance letters for envirenmental repons, mtmici I enquines and fees. etc. R .7r-'74*-73,1-arA; A N :)fflafibi njedeffleil,V„MEtee' frnäle".;. ,,,7k•,; •. . .►ziffare

Demolition of 1185 Eglinton Ave. E. Dennofition 777,200 Conshuction Management Fee: 77,720 $ 854,920

Development of wo condominium towers an site: Arehheure! piens_ 500,000 Engineering-fees r$ 150,000 Interior design fees 150,000 Cost consuttantfees __100,000 6inveyor's fies 100000 developmentfees 600,000 Project Management Fee: 160.000 $ 1760,000 trze.- .42tim„„ . -.„-tw-,.2- el, .....Arrezi: i ...::- ? ,›TsiiMee»,, ' :.. • letimeammeeemi. .v.emneztee':'zmtz' '• - ,.. .,

Carryirffl Coats Proparty tax 300,000 Interest an mod_gee 1,339,880 Ins urance $ - __.,..... egagogema .,,.. geei .. , denke..z. , •--eee eia „ ‘,1 ,--,T,; • ,* k •Ii . ,, t -, 2 4,, iL .7- , t 1 .„-r, , ` = . --r) •,t• , :e `ei e,:., t. •• • A4ret I

34 THE ROSE AND THISTLE GROUP LTD. December 7, 2010

TABLE 2: PROJECTED SITE VALUATION

35 THE ROSE AND THISTLE GROUP LTD. December 7, 2010

TABLE 3: PROJECTED PROFIT AND INVESTOR RETURN

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THE ROSE AND THISTLE GROUP LTD. December 7, 2010

TABLE 4: SENSITIVITY ANALYSIS

• $.e.traiffiFily Analysis :VARIABLE-Si. r" • • TileySajecf is;• sold brie year ItIOr atarkariticipatW • . co::' proje4 cost ; •-•"113,673,740, • • .•'•;•1 14.035

•:e5. 61-'}ed' .soL„.;taJelropOrTI..4;13, ::1sp,,,aecre as prpi6ert c to: :2 .$.3;42015, . : e*gitiOrpiriitir.r00;appayiiiii;;Iiitatilkifilqs o craeiniaCtat4:5:titt0a cargo e.•0Criodcittraairo • ' . „$14,022900 alt40

*JOs appias* at tzmes cayaiagtittepd of 4.5 tiitai.s caiitlage V Iefttre cciaci,ornrtiorn: • ,•$4,323,760 - ••• ‘Thetonstructron,Cost4-are 20Sklagt1 tbatimprapated !Iroject $13,726;70, $2,130;6'31.:

The ceeetifleTieiC4ste",0•040%100#1*#ticiP,eCt: • -;00".

"ij pnc.t. is $35444agd of3p par sqaare. Voiuo • 4113;,1.6,3M7•5.. fit beborrtee;-•- -$6,2p3,07-4 • • $40,,instea0:000!square-faqt Valqp efFTeel9e1Flelei sitG; "" $21,0341106: .:y Profir,becorns: , 4,4, • • • • suiOno Rosearrit ThIp4ia4pliable.to provide sormItivity:analysis agrittrilarefiA0ntiiitrOt.itCOrries. R00;401-tristle ba6,eria,AlteatiOve*s:sumptiope,'are the roost . iki "tr7.;,14:tatiorali to this • • .•

1 2 1

AGREEMENT Between: A new company to be incorporated "Bernstein"

- and -

Ron and Norma Walton "Walton"

- and -

Riverdale Mansion Ltd. the "Company"

WHEREAS Bernstein and Walton intend to purchase 450 Pape Avenue, Toronto, Ontario (the "Property") on or about July 4, 2011 and put ownership of the Property in the Company's name;

AND WHEREAS Bernstein and Walton, or whomever Bernstein and Walton may direct in accordance with the provisions of paragraph 5 herein, will each hold 470,473 shares in the Company;

AND WHEREAS Bernstein and Walton will each provide the sum of $470,473 to the Company for the purposes of purchasing the property, renovating the mansion, constructing the townhouses, and obtaining city approvals to sever and sell off the mansion and the townhouses to separate purchasers (the "Project");

AND WHEREAS Walton will manage and supervise the Project and ensure it is completed according to the excel spreadsheet attached as Exhibit "A" to this Agreement;

THEREFORE the parties agree as follows:

1. Walton has contracted to purchase the Property and the purchase is scheduled to close on-July-4;2911.

2. Walton has commenced discussions with the city and the councilor to obtain their approval for the plan for the property; with trades to complete construction of the townhouses; with trades to complete the renovations on the mansion; and with planning and other consultants to arrange to sever off and sell the different components to separate purchasers. 1 2 r;)

3. Walton intends to renovate and sell the mansion and convert the newer section of the building into six separate townhouses, each with condominium title, to be sold to six separate purchasers between now and June 30, 2013 in accordance with Exhibit "A".

4. Bernstein wishes to own 50% of the shares in the Company in exchange for providing 50% of the equity required to complete the Project. The Company will issue sufficient shares such that Bernstein has 470,473 and Walton has 470,473 voting shares of the same class.

5. The ownership of the Company will be as follows: a. 50% to Bernstein; and b. 50% to Ron and Norma Walton as they may direct between each other or alternatively to be held by a completely Walton-owned and controlled company, provided that all covenants and agreements of Walton herein shall continue in full force and effect and such company executes an agreement to be bound by the provisions of the within Agreement.

6. Walton will be managing, supervising and completing the Project in accordance with the attached Exhibit "A".

7. Walton has provided the $75,000 deposit to purchase the Property, which amount will form part of Walton's equity contributions.

8. The balance of equity in the amount of $865,946 will be paid as follows: a. Bernstein will provide to the Company the sum of $470,473 on or before July 4, 2011; and b. Walton will provide the sum of $395,473 to the Company in a timely manner as required as the Project is completed.

9. Walton and Bernstein will each provide 50% of whatever additional capital over and above the $470,473 each that is required to complete the Project, if any, in a timely manner.

10. In addition to managing, supervising and completing the Project, Walton will be responsible for supervising the renovations of the building on the Property, hiring of all consultants, designers, architects and engineers to complete the Project, finanee;bookkeeping,--office-administration, accounting, in-formation technology provision, filing tax returns for the Company, and fulfilling all active roles required to complete the Project in accordance with Exhibit "A".

11. Bernstein will not be required to play an active role in completing the Project. Notwithstanding that, any decisions concerning the selling or the refinancing of the Property will require his approval; any decisions requiring an increase in the total amount of equity required to complete the Project will require his approval; 12

and any significant decisions that vary from the Project plan described in Exhibit "A" will require his approval.

12. Walton will provide to Bernstein ongoing reports at minimum monthly detailing all items related to the Property including the progress in moving the plan forward.

13. Walton will provide a written report to Bernstein each month detailing the following: a. copies of invoices for work completed; b. the bank statement for that month; and c. if the bank statement does not have a copy of cancelled cheques, then Walton will also provide a complete listing of all cheques written, including payees, dates and amounts. At Bernstein's request, Walton will provide whatever other back-up information he requests. Any cheque or transfer over $50,000 will require Bernstein's signature or written approval before being processed.

14. Once the Project is substantially completed to the point that all of the Property has been sold, both parties will be paid out their capital plus profits and Walton will retain the Company for potential future use.

15. The Board of Directors of the Company will be composed of two directors, being Bernstein and Norma Walton. The only shares to be issued in the Company will be as set out above, and neither party may transfer his or her shares to another party without the consent of all the other parties, which consent may be unreasonably withheld. Bernstein shall have the option of being paid out his share of capital and profits from the Project and once he has been paid out in full, he will surrender his share certificate, he will concurrently resign from the Board of Directors and Norma Walton and the Company will accept such resignation. At such time Bernstein shall be released of all obligations and liability related to the Company and shall be indemnified by Walton with respect to all liabilities, claims and obligations whatsoever of the Company up to the date at which Bernstein has been paid out his capital and profits from the Project.

16. The Company will only be used to purchase, renovate and construct, and sell the property at 450 Pape Avenue, Toronto, Ontario or such other matters solely relating-to-the-Project-and--the Property

17. If the parties disagree on how to manage, supervise and complete the Project in accordance with Exhibit "A" and cannot reach agreement amongst themselves, each of them undertakes to attend a minimum of four hours of mediation in pursuit of reaching an agreement. After mediation, if there are any remaining issues to be determined, those issues in dispute shall be determined by a single arbitrator in as cost-effective a manner as possible, with no right of appeal. All costs of such mediation and/or arbitration will be borne equally by Bernstein and Walton.

18. Notwithstanding anything to the contrary contained in the within Agreement, in consideration of the sum of $10.00 and other good and valuable consideration paid to Walton and the Company (the receipt and sufficiency of which is hereby acknowledged), Walton and the Company hereby acknowledge, agree and confirm that Bernstein shall not be liable, responsible for or obligated with respect to any amounts or extent whatsoever with respect to the compliance, performance or observance of any terms or provisions with respect to any Charges / Mortgage of Land (and any agreements or documentation given as additional security therefor) registered against title to the Property or any part thereof in favour of 368230 Ontario Limited including, without limiting the generality of the foregoing, the payment of any principal, interest, costs or any other monies thereunder and Walton and the Company hereby further agree and covenant to indemnify and save Bernstein harmless with respect to any losses, damages or costs suffered or incurred by Bernstein with respect to such Charge / Mortgage of Land.

19. The above represents all deal terms between the parties.

Dated at Toronto, Ontario this LI day of JUNE 2011

Bernstein company to be incorporated Per A.S.O. AGREEMENT Between: DBDC Global Mills Ltd. "Bernstein"

- and -

Ron and Norma Walton "Walton"

- and -

Global Mills Inc. the "Company"

WHEREAS Bernstein and Walton intend to purchase 1450 Don Mills Road, Toronto, Ontario (the "Property") on or about October 12, 2012 and put ownership of the Property in the Company's name;

AND WHEREAS Bernstein and Walton, or whomever Bernstein and Walton may direct in accordance with the provisions of paragraph 5 herein, will each hold 6,510,313 shares in the Company;

AND WHEREAS Bernstein and Walton will each provide the sum of $6,510,313 to the Company for the purposes of purchasing, renovating and build out space for tenants (the "Project");

AND WHEREAS Walton will manage and supervise the Project and ensure it is completed according to the excel spreadsheet attached as Exhibit "A" to this Agreement;

THEREFORE the parties agree as follows:

1. Walton has contracted to purchase the Property and the purchase is scheduled to close on October 12, 2012.

2. Walton has commenced discussions with the city to obtain their approval for the plan for the property; with trades to complete the renovations.

3. Walton intends to renovate and improve the building in accordance with Exhibit “A”. k 1 (1. 1 i f.

4. Bernstein wishes to own 50% of the shares in the Company in exchange for providing 50% of the equity required to complete the Project. The Company will issue sufficient shares such that Bernstein has 6,510,313 and Walton has 6,510,313 voting shares of the same class.

5. The ownership of the Company will be as follows: a. 50% to Bernstein; and b. 50% to Ron and Noma Walton as they may direct between each other or alternatively to be held by a completely Walton-owned and controlled company, provided that all covenants and agreements of Walton herein shall continue in full force and effect and such company executes an agreement to be bound by the provisions of the within Agreement.

6. Walton will be managing, supervising and completing the Project in accordance with the attached Exhibit A.

7. Each party has provided the sum of $982,500 towards deposits and due diligence expenses, which amounts will form part of each party's equity contributions.

8. The balance of equity in the amount of $11,055,626 will be paid as follows: a. Bernstein will provide to the Company the sum of $5,527,813 on or before October 12, 2012; and b. Walton will provide the sum of $5,527,813 to the Company in a timely manner as required as the Project is completed.

9. Walton and Bernstein will each provide 50% of whatever additional capital over and above the $6,510,313 each that is required to complete the Project, if any, in a timely manner.

10. In addition to managing, supervising and completing the Project, Walton will be responsible for supervising the tenancy of the building, hiring of all consultants, designers, architects and engineers to complete the Project, finance, bookkeeping, office administration, accounting, information technology provision, filing tax returns for the Company, and fulfilling all active roles required to complete the Project in accordance with Exhibit A.

11. Bernstein will not be required to play an active role in completing the Project. Notwithstanding-that, any-decisions coneerning-the-selling-or-the -refinancing of the Property will require his approval; any decisions requiring an increase in the total amount of equity required to complete the Project will require his approval; and any significant decisions that vary from the Project plan described in Exhibit "A" will require his approval.

12. Walton will provide to Bernstein ongoing reports at minimum monthly detailing all items related to the Property including the progress in moving the plan forward. 13. Walton will provide a written report to Bernstein each month detailing the following: a. copies of invoices for work completed; b. the bank statement for that month; and c. if the bank statement does not have a copy of cancelled cheques, then Walton will also provide a complete listing of all cheques written, including payees, dates and amounts. At Bernstein's request, Walton will provide whatever other back-up information he requests. Any cheque or transfer over $50,000 will require Bernstein's signature or written approval before being processed.

16. The Company will only be used to purchase, renovate and sell the property at 1450 Don Mills Road, Toronto, Ontario or such other matters solely relating to the Project and the Property.

17. If the parties disagree on how to manage, supervise and complete the Project in accordance with Exhibit "A" and cannot reach agreement amongst themselves, each of them undertakes to attend a minimum of four hours of mediation in pursuit of reaching an agreement. After mediation, if there are any remaining issues to be determined, those issues in dispute shall be determined by a single arbitrator-irras cost-effective a manner as-possible;-with-no-right--o# appeal—All costs of such mediation and/or arbitration will be borne equally by Bernstein and Walton. 2

18. The above represents all deal terms between the parties.

Dated at Toronto, Ontario this

DBDC Global Mills Ltd. Per A.S.O.

Ron Walton Norma Walton Anticipated Profit

Building Value: $ 35,538,462

Plus payment from Lib rty Group for right of way to access Don Mills Road $ 2,000,000

Less Project Cost: $ 31,020,625

Projected Profit: $ 6,517,837 fr 0

1450 Don Mills Road CAPITAL REQUIRED

Purchase Costs Purchase Price 24,000,000 Mortgage fee 270,000 Lender's legal fee 30,000 Ontario Land Transfer Tax 420,000 Municipal Land Transfer Tax 420,000 Other fees and disbursements 50,000 for appraisal, reliance letters for environmental reports, municipal enquiries and fees, etc.

Total Purchase Price $ 25,190,000

New tenant improvement costs Assume $25 PSF x 165,000 SF $ 4,125,000 Project management fee 412,500

Total Tenant Improvement Costs: $ 4,537,500

Tenant Rent, months 1 to 18 Net Rent $ (3,316,875) Mortgage carrying costs $ 2,380,000

Carrying Costs, months 19 to 30 Property tax 310,000 Interest on mortgage $ 1,530,000 Utilities and maintenance 330,000 Insurance 60,000

Total Net Carrying Costs: $ 1,293,125

Total Capital Required $ 31,020,625

Mortgage, Trez Capital: 58.03% 8.50% $ 18,000,000 Dr. Bernstein: 20.99% $ 6,510,313 Ron and Norma Walton: 20.99% $ 6,510,313 Projected Net Income

Expected net revenues:

New tenant, 165,000 SF x $14 net $2,310,000 Parking included $0

Projected net income: $2,310,000

, PrOjected Building Value

6.5% capitalization rate: $30,530,462 Projected investor Return Formula for Profit Division

Dr. Bernstein's investment: $6,510,312.50 Ron and Norma Walton's invest ent: $6,510,312.50

Refinance date On or before April 30, 2015

Projected profits: $6,517,836.54

Refinance property once fully tenanted:

First mortgage of 75% of end val e: $26,653,846.15 Plus proceeds of sale from right f way $2,000,000.00 Less Trez mortgage: $18,000,000.00

Total monies available: $10,653,846.15

TO partially reimburse Bernstein capital: $5,326,923.08 To partially reimburse Walton capital: $5,326,923.08

Capital remaining invested as eq ity in property after refinancing:

Bernstein: $1,183,389.42 VValtons: $1,183,389.42

Percentage total return on invest ent from •October 12, 2012 to. April 30, 2015: Dr. Bernstein: 50.06% Ron and Norma Walton: 50:06% •

TOtal investment period; 30 months

An 'nvestMent of $100,000 on tober 12, 2012 is projected to be worth $150,060 on April 30, 2015

("Pi) 1 3 3

AGREEMENT Between: DBDC Donalda Developments Ltd. "Bernstein"

- and -

Ron and Norma Walton "Walton"

- and -

Donalda Developments Ltd. the "Company"

WHEREAS Bernstein and Walton intend to purchase 1500 Don Mills Road, Toronto, Ontario (the "Property") on or about October 9, 2012 and put ownership of the Property in the Company's name;

AND WHEREAS Bernstein and Walton, or whomever Bernstein and Walton may direct in accordance with the provisions of paragraph 5 herein, will each hold 11,211,954 shares in the Company;

AND WHEREAS Bernstein and Walton will each provide the sum of $11,211,954 to the Company for the purposes of purchasing, renovating and build out space for tenants (the "Project");

AND WHEREAS Walton will manage and supervise the Project and ensure it is completed according to the excel spreadsheet attached as Exhibit "A" to this Agreement;

THEREFORE the parties agree as follows:

1. Walton has contracted to purchase the Property and the purchase is scheduled to close on October 9, 2012.

2. Walton has met with neighbours and consultants with the objective of rezoning the property from Employment Zone to Mixed Use to facilitate increased density on the site over time.

3. Walton intends to renovate and improve the building and the site in accordance with Exhibit A. 1 3 4

4. Bernstein wishes to own 50% of the shares in the Company in exchange for providing 50% of the equity required to complete the Project. The Company will issue sufficient shares such that Bernstein has 11,211,954 and Walton has 11,211,954 voting shares of the same class.

6. Walton will be managing, supervising and completing the Project in accordance with the attached Exhibit A.

7. Each party has provided the sum of $1,926,000 towards the deposits and due diligence expenses required, which amounts will form part of each of their equity contributions.

8. The balance of equity in the amount of $18,571,908 will be paid as follows: a. Bernstein will provide to the Company the sum of $9,285,954 on or before October 9, 2012; and b. Walton will provide the sum of $9,285,954 to the Company in a timely manner as required as the Project is completed.

9. Walton and Bernstein will each provide 50% of whatever additional capital over and above the $11,211,954 each that is required to complete the Project, if any, in a timely manner.

11 liernsteirequired to play an active role in completin• the Pro'ect. Notwithstanding that, any decisions concerning the selling or the refinancing of the Property will require his approval; any decisions requiring an increase in the total amount of equity required to complete the Project will require his approval; and any significant decisions that vary from the Project plan described in Exhibit "A" will require his approval. 3 5

12. Walton will provide to Bernstein ongoing reports at minimum monthly detailing all items related to the Property including the progress in moving the plan forward.

16. The Company will only be used to purchase, renovate and sell the property at 1500 Don Mills Road, Toronto, Ontario or such other matters solely relating to the Project and the Property.

17. If the parties disagree on how to manage, supervise and complete the Project in accordance-with-Exhibit "A" and-cannot-reach agreement-amongst-themselves, each of them undertakes to attend a minimum of four hours of mediation in pursuit of reaching an agreement. After mediation, if there are any remaining issues to be determined, those issues in dispute shall be determined by a single arbitrator in as cost-effective a manner as possible, with no right of appeal. All costs of such mediation and/or arbitration will be borne equally by Bernstein and Walton. 3 6

18. The above represents all deal terms between the parties.

Dated at Toronto, Ontario this k"---Y ay of SEPTEMBER 2012

DBDC Dona da Developfnents Ltd. Donalda De ments Ltd. Per A.S.O. Per A.S.O.

Ron Walton Anticipated Profit

Building Value: $ 56,923,077

Plus payment from developer for part of land ($30 per buildable foot x 500,000 SF) $ 15,000,000

Less Project Cost: $ 56,823,908

Projected Profit: $ 15,099,169 1 C,

1500 Don Mills Road CAPITAL REQUIRED

Purchase Costs Purchase Price 43,000,000 Mortgage fee 602,000 Lenders legal fee 40,000 Ontario Land Transfer Tax 0 Municipal Land Transfer Tax 0 Other fees and disbursements 60,000 for appraisal, reliance letters for environmental reports, municipal enquiries and fees, etc.

Total Purchase Price $ 43,702,000

Capital improvements to building years 1 to 4 Assume $20 PSF x 235,000 SF $ 4,700,000 Parking garage construction $ 6,000,000 Project management fee $ 1,070,000

Total Capital Improvement Costs: $ 11,770,000

Development Approval Costs Change zoning from employment lands to mixed use Planning reports, consultants fees, lobbying costs Severance and sale of part of land to developer $ 1,500,000

Total Development Approval Costs $ 1,500,000

Tenant Rent Receipts Net Rent $ (2,761,328) First mortgage carrying costs $ 2,204,736 Second mortgage carrying costs 408,500

Total Net Carrying Costs: $ (148,092)

Total Capital Required $ 56,823,908

Mortgage, OTERA 52.97% 5.50% $ 30,100,000 McWELAD 77.57°0 -T50% 4,300;000-- Dr. Bernstein: 19.73% $ 11,211,954 Ron and Norma Walton: 19.73% $ 11,211,954 Projected Net Income

Expected net revenues:

Contracted rental revenues in year 4 $3,350,000 Parking revenues $350,000

Projected net income: $3,700,000

Projected Building VOlue

6.5% capitalization rate: '::;$5.6,:323,077 Projected Investor Return Formula for Profit Division

Dr. Bemstein's investment: $11,211,954.00 Ron and Norma Walton's invest ent: $11,211,954.00

Sale of part of property: On or before October 30, 2016

Projected profits: $15,099,168.92

Refinance property once severe portion sold:

First mortgage of 75% of end val $42,6.92,307.69 Plus proceeds of sale from severance $15,000,000.00 $57,692,307.69

Less OTERA mortgage: $30,100,000:00 Less ELAD mortgage: $4,300,000.00 $34,400,000.00

Total monies available: $23,292,307.69

To fully reimburse Bernstein cap tal: $11,211,954.00 To fully reimburse Walton capita: $11;211,954.00

Surplus cash after refinancing:a d sale: $868,3.99.69

Bernstein;I: $434,199.85 WeltOns: $434,199.85

Value of equity remaining in pro ertY after refinanping,;On sale:

Bernstein: $7,115,384.62 Waltons: $7,115,384.62

Percentage total return on inves meat from October 12, 20.12 to October 31, 2016: Dr. Bernstein: • 67:34% Ron and Norma Walton: 67.34%

Total investment period: 4 years

An investment of $100,000 on October 12, 2012 is projected to be worth $167,340 on October 31, 2016 'A. AGREEMENT Between: DBDC Richmond Row Holdings Ltd. "Bernstein"

- and -

Ron and Norma Walton "Walton"

- and -

Richmond Row Holdings Ltd. the "Company"

WHEREAS Bernstein and Walton intend to purchase 620-624 Richmond Street West /165 Bathurst Street, Toronto, Ontario (the "Property") on or about June 27, 2013 and put ownership of the Property in the Company's name;

AND WHEREAS Bernstein and Walton, or whoever Bernstein and Walton may direct will each hold 100 shares in the Company;

AND WHEREAS Bernstein and Walton will each provide the sum of $5,820,388 to the Company for the purposes of purchasing, renovating, leasing and then refinancing the property (the "Project");

AND WHEREAS Walton will manage and supervise the Project and ensure it is completed according to the excel spreadsheet attached as Exhibit "A" to this Agreement;

THEREFORE the parties agree as follows:

1. Walton has contracted to purchase the Property and the purchase is scheduled to close on June 27, 2013.

2. Walton has commenced pre-planning for the securing of new retail tenants; the securing of commercial tenants; the renovation of the common areas and creation of a model suite to attract those commercial tenants; vacating of the live-work eirants, renovation-of-the-proper-ty--to-Aesign--build4or-the-new-eommcrcial and retail tenants; followed by refinancing of the property once the new tenants are in occupancy.

3. Walton intends to purchase, renovate, lease and refinance the Property in accordance with Exhibit"A".

( L1.

4. Walton anticipates that each party will need to provide the sum of $5,820388 in shareholders loans to the Company to complete the project. Shareholders loans will attract interest of 10% compounded monthly. Shareholders loans will be paid back at the time of project refinancing, sale or completion, before any profits arc distributed.

5. Bernstein wishes to own 50% of the shares in the Company in exchange for providing 50% of thCequity and his portion of the shareholder's loan required to complete .the Project. The Company will issue .sufficient shares such that Bernstein has 100 and Walton has 1.00 voting shares of the same class, and Bernstein and Walton will each pay $100 for those 100 shares.

6. The ownership of the Company will be as follows: a. 50% to Bernstein; and b. 50% to Ron and Norma Walton as they may direct between each other or alternatively to be held by a completely Walton-owned and controlled company, provided that all covenants and agreements of Walton herein shall continue in full force and effect and such company executes an agreement to be bound by the provisions of the within Agreement.

7. Walton will be managing, supervising and completing the Project in accordance with the attached Exhibit "A".

8. Bernstein has provided the sum of $650,000 cover the deposit costs, mortgage fees, and due diligence expenses to purchase the Property. This amount is a shareholders loan. Bernstein will provide on June 27, 2013 the sum of $3,200,000 as a further shareholders loan, w loan will also attract interest of 10% calculated sew-aanually, Ma

9. Bernstein will provide the remaining sum of $1,970,388 as a shareholders loan once a commercial tenant has been secured or once the building renovations begin.

10. Walton will provide the sum of $5,820,388 in shareholders loans thereafter as the project requires.

11. Walton and Bernstein will each provide 50% of whatever additional shareholder loans over and above the $5,820,388 each that is required to complete the Project, if any, in a timely manner.

12. In addition to-managing, supeivising and completing-the-Projea,-Widton-will-be responsible for supervising the renovations of the building on the Property, hiring of all consultants, designers, architects and engineers to complete the Project, finance, bookkeeping, office administration, accounting, information technology provision, filing tax returns for the Company, and fulfilling all active roles required to complete the Project in accordance with Exhibit -A-. 13. Bernstein will not be required to play an active role in completing the Project. Notwithstanding that, any decisions concerning the selling or the refinancing of the Property will require his approval; any decisions requiring an increase in the total amount of equity required to complete the Project will require his approval; and any significant decisions that vary from the Project plan described in Exhibit "A" will require his approval.

14. Walton will provide to Bernstein ongoing reports at minimum monthly detailing all items related to the Property including the progress in moving the plan forward.

16. Once the Project is substantially completed to the point that all of the Property has been leased and refinanced andlor sold, both parties will be paid out their shareholders loan capital plus interest then profits will be distributed in accordance with ownership. Once the property is sold, Walton will retain the Company for potential future use.

17. The Board of Directors of the Company will be composed of two directors, being Bernstein and Norma Walton, provided that initially the two directors will be Norma and Ron Walton until the financing is in place and the purchase has closed. The only shares to be issued in the Company will be as set out above, and neither party may transfer his or her shares to another party without the consent of all the other parties, which consent may be unreasonably withheld. Bernstein shall have the option of being paid out his share of capital and profits from the Project and once he has been paid out in full, he will surrender his share certificate, he will concurrently resign from the Board of Directors and Norma Walton and the Company will accept such resignation. At such tirne Bernstein shall be released of all obligations and liability related to the Company and shall be indemnified by Waltuil with—respect—to all liabilities, clairns—and—oblirotiert, whatsoever of the Company up to the date at which Bernstein has been paid out his capital and profits from the Project. 14E

18. The Company will only be used to purchase, renovate, lease and refinance the property at 620-624 Richmond Street West /165 Bathurst Street, Toronto, Ontario or such other matters solely relating to the Project and the Property.

19. if the parties disagree on how to manage, supervise and complete the Project in accordance with Exhibit "A" and cannot reach agreement amongst themselves, each of them undertakes to attend a minimum of four hours of mediation in pursuit of reaching an .agreement. After mediation, if there are any remaining issues to be determined, those issues in dispute shall be determined by a single arbitrator in as cost-effective a manner as possible, with no right of appeal. All costs of such mediation andior arbitration will be borne equally by 'Bernstein and Walton:,

20. The above represents all deal terms between the parties.

Dated at Toronto, Ontario thiS 1-1 day of JUNE 2013

DBDC Richmond Row I- oldings Ltd. Rich mill-ROW-If:Min& Ltd,.. Per A.S.O. Per A.S.O.

Ron Walton Noixha Warta— Anticipated Profit

Building Value: $ 27,838,333

Kess Project Cost: $ 22,515,776

Projected Profit: $ 5,322,557 1 17

620 Richmond Street West / 165 Bathurst Street CAPITAL REQUIRED

Purchase Costs Purchase Price 14,500,000 Mortgage fee 30,000 Broker's fee 120,000 Lender's legal fee 25,000 Ontario Land Transfer Tax 253,750 Municipal Land Transfer Tax 253,750 Other fees and disbursements 25,000 for appraisal, reliance letters for environmental reports, municipal enquiries and fees, etc.

Total Purchase Price $ 15,207,500

Renovation Costs 60,000 SF @ $100 PSF to design build $ 6,000,000 Project management fee 600,000 Total Renovation Costs: $ 6,600,000

Professional Fees Architectural plans 80,000 Engineering fees 35,000 Interior design fees 15,000 Surveyor's fees 15,000 Permit fees 20,000 Total Professional Fees: 165,000

Carrying Costs Annual rent for two years $ (1,350,000) Interest on first mortgage for three years 752,076 Interest on second mortgage for three years 466,200 Utilities and maintenance for three years 630,000 Insurance for three years 45,000

Total Carrying Costs: 543,276

Total Capital Required $ 22,515,776

First Mortgage - First National: 19.54% 2.97% $ 4,400,000 Second Mortgage - VTB 28.76% 4.00% $ 6,475,000 Dr. Bernstein: 25.85% $ 5,820,388 Ron and Norma Walton: 25.85% $ 5,820,388 Projected Net Income

Expected net revenues:

Retail level - 11,580 SF @ $35 NE $405,300 Second to sixth floors - 10,000 SF er floor @ $25 NET $1,250,000 Bell Mobility lease for antenna on r of $15,000

Projected net income: $1,670,300

Projected Building Value

6% capitalization rate: $27,838,333 Projected Income and Expense Statement

Revenues:

Total Revenues: $2,286,100

Expenses before interest payment

Property taxes: $299,356 Utilities: $120,000 Property management fees: $91,444 Repairs and maintenance: $90,000 Insurance: $15,000

Total Expenses before interest payments: $615,800

Net Income before interest: $1,670,300

\ID Projected Investor Return Formula for Profit Division

Dr. Bernstein's investment: $5,820,388.00 Ron and Norma Walton's investme t: $5,820,388.00

Cash out date: On or before June 17, 2016

Projected profits: $5,322,557.33

Refinance property once commerci Ily tenanted:

First mortgage of 75% of end value $20,878,750.00 Less First National mortgage: $4,400,000.00 Less VTB mortgage: $6,785,800.00

Total monies available: $9,692,950.00

To partially reimburse Bernstein capital: $4,846,475.00 To partially reimburse Walton capit.61: $4,846,475.00

Capital remaining invested as equi in property after refinancing:

Bernstein: $973,913.00 Waltons: $973,913.00

Percentage total return on investm nt from June 17, 2013 to June 17, 2016: Dr. Bernstein: 45.72% Ron and Norma Walton: 45.72%

Total investment period: 3 years

An investment of $100,000 on Jun 17, 2013 is projected to be worth $145,720 on June 17, 2016

c-) Tab B This is Exhibit "B" referred to in the Affidavit of James Reitan sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits ~f L ., Lorna Groves

From: Jim Reitan Sent: Friday, June 07, 2013 12:04 PM To: Norma Walton Cc: Mario Bucci; Dr. Stanley Bernstein Subject: RE: Meeting Attachments: Bernstein-Walton Review Letter 2011 130607.pdf

It was my intention to deliver this information in person so that we could walk through our concerns and recommendations in an interactive format. Being we are unable to organize a meeting until next Friday, we thought it best to make you aware of our concerns in writing.

Please review the letter and join us in setting resolution of the issues raised herein the highest priority so that we insure a suitable approach for all going forward. l am confident that sorting this out now by leveraging our strengths will reap long term benefits for both parties.

We look forward to hearing from you.

Best regards, Jim

Jim Reitan Director of Accounting & Finance Dr. Bernstein Diet & Health Clinics 21 Kern Rd., Toronto, ON, M3B 1S9 ph: 416-447-3438 ext. 228 fax: 416-44'7-0750 email: jimAdrbdiet.com.

"Be like a knight and do it right!"

Mike the Knight

The information contained in this e-mail and any attachments is intended only for the personal and confidential use ofthe designated recipients named herein. lithe reader of this message is not the intended recipient or an agent responsible for delivering it to the intended recipient, you are hereby notified that you have received this documentation and its attachments in error, and that any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify the sender and return and delete the original message immediately.

From: Jim Reitan Sent: Thursday, June 06, 2013 2:38 PM To:'Norma Walton' Cc: Mario Bucci; Dr. Stanley Bernstein Subject: RE: Meeting

Hi Norma,

Hope all is well. l can understand the challenges your new "employee" brings. We understood you would be in the office tomorrow catching up. 11 1 7 Unfortunately, it is important for us to get together without delay so that we can discuss our concerns ancrbring forward resolutions which will enable us all to continue in a positive manner. I can tell you, in such cases sooner is always better than later.

We would like you to find a way to accommodate our meeting tomorrow. We surely can come to your offices. Please call my cell phone at 416-845-8603.

Best regards, Jim

Ji.n Reitan Director of Accounting & Finance Dr. Bernstein Diet & Health Clinics 21 Kern Rd., Toronto, ON, M3B 1S9 ph: 416-447-3438 ext. 228 fax: 416-447-0750 email: jimdrbdiet.com

"Be like a knight and do it right!"

Mike the Knight

The information contained in this e-mail and any attachments is intended only for the personal and confidential use of the designated recipients named herein. If the reader of this message is not the intended recipient or an agent responsible for delivering it to the intended recipient, you are hereby notified that you have received this documentation and its attachments in error, and that any revievv, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify the sender and return and delete the original message immediately.

From: Norma Walton [mailto:[email protected]] Sent: Thursday, June 06, 2013 1:33 PM To: Dr. Stanley Bernstein; Jim Reitan Cc: Mario Bucci; Katie Brooks Subject: Meeting

Dear Stan and Jim,

l cannot meet tomorrow unfortunately as l don't have child care in the office tomorrow. I am available between 10:30 am and 1:30 pm next Friday if that suits? Let me know.

Thanks, Norma

2 1 5 4

June 7, 2013

Norma Walton The Rose and Thistle Group LTD. 30 Hazelton Avenue Toronto, ON M5R 2E2

RE: Bernstein/Walton Projects

Norma:

Dr. Bernstein (Bernstein) requested l undertake a review of the activities of equity investments (the "Projects") that are owned jointly with Norman and Ron Walton ("Walton"). The Projects are owned and operated by numerous corporations that are each jointly owned by Bernstein and Walton. My review was limited to the Projects up to December 31, 2011, the latest date for which financial records for the Projects have been made available to me by Walton. This is a compilation of findings, conclusions, and recommendations resulting from that review.

Bernstein has relied on Walton's knowledge and representations of the Projects when considering investment terms. There is a general understanding that the Bernstein investments are secured by sound assets that will in time be sold at a profit. This review focused on the various agreements (the "Agreements") and historical information for 2011 financial statement purposes. There has been no attempt to confirm market values or anticipated revenues, nor did l undertake an audit of the Projects, both of which would have been outside the scope of my review. Nevertheless, l believe my review indicates significant cause for concern and action on Bernstein's part to protect his investments, which at the time of this letter, total approximately $110 million on a cash basis.

Summary The following is a summary of conclusions:

1) Walton is not making her own equity investments in the Projects in equal proportion to Bernstein despite an u erstanding_that4he_was_to_do_scL__ 2) Walton is taking on third party investors, which is expressly prohibited in the Agreements. 3) Walton has significant related party transactions with the Projects, the magnitude of which Bernstein had not been made aware of. 4) Project expenditures have not been presented for approval by Bernstein, as required in the Agreements. 5) Lack of reporting has limited the ability to assess historical information in an effort to improve our understanding of same and affect Project outcomes. 6) Project properties were sold without the required pay down of associated mortgages.

21 Kern Rd, Toronto, ON M3B 1S9 (416) 447-3438 Fax (416) 447-0750 I r ..) Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 Page 2

There is interrelated support for this in the following areas: 1) Equity 2) Mortgages 3) Fees 4) Business Plan 5) Reporting & Control

It is my recommendation that: 1) Walton responds to the satisfaction of Bernstein to concerns herein. 2) Equity and mortgage deficiencies are rectified. 3) Responsibility for Financial and Corporation Administration for the projects is moved to Bernstein. 4) Projects are jointly managed by Walton and Bernstein, with Bernstein approval required at any and all steps and for all expenditures.

The next several pages are GENERAL INDICATIONS, DETAILED FINDINGS, and CONCLUSIONS for each area. The last page herein contains detailed RECOMMENDATIONS.

Resolution of the issues and implementation of the recommendations is my highest priority. Please contact me immediately so that we can move forward in an expeditious manner.

Very truly,

James O. Reitan

Director of Accounting and Finance 1 5 6

Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 Page 3

1) Equity a. General Indications: I. At December 31, 2011, the equity investment split was 79% Bernstein and 21% Walton. Equity Company Bernstein Walton Grand Total 1185 Eglinton Bannockburn Lands Inc_ 2,225000 73,717 2,298,717 18 Wynford Wynford Professional Centre Ltd. 1,034,830 0 1,034,830 241 Spadina Twin Dragons Corporation 1.120,500 350,000 1,470,500 32 Atlantic Liberty Village Lands Inc. 396,736 0 396,736 Liberty Village Properties Ltd. 1,851,434 839.2118 2..690,700 450 Pape Riverdale Mansion Ltd. 470,473 250,021 720,494 577015780 Hwy 7 West Royal Agincourt corp 2,257,500 987,800 3245:300 Grand Total 9.356.473 2.500.803 11.857.276 b. Detailed Findings — It should be noted that the findings are as based on the Projects' records. If deposit for purchase of property or equity contributions have in some way been made outside Project records, and is not reflected in the Project general ledger, it will not be taken into account in these comments. I am unaware of any such deposits or contributions. i. 18 Wynford; Wynford Professional Centre Ltd.("Wynford") The agreement calls for equity contributions from the partners as follows: 7. Walton and Bernstein have each provided '4 of the $450,000 deposit to purchase the Property.

8. The balance of equity in the amount of $4,659,180 each will be paid as follows: a. Bernstein will provide to the Company the sum of $1,700,000 on or before February 3, 2011; b. Walton provide the sum of $1,700,000 to the Company in a timely manner as required aseWroject is 9kitnigleted; and fffeuitmaining sum of $1,259,180 in a c. Bernstein and Walton./N will provia) timely manner as required. Equity contributions to February 4, 2011 were as follows: Bernstein Walton Deposit 11/10/10 $225,000 Bernstein due 2/3/11; Walton due on a timely basis 02/03/11 1,700,000 Remaining sum due from each partner at 50% 02/04/11 300,000 Total Equity Investment 52,225,000 $0 Walton has not made the equity contributions as required. Bernstein is into the third level offunding with no equity investment by Walton. •r •.) I Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 Page 4

11. 241 Spadina; Twin Dragons Corporation The agreement calls for equity contributions from the partners as follow:

\Valtor, prkirrivei as if Elizposil. pdfclias;,, tti:11 tù 11.1;i: Company ill:, ber.)ri.; ()ctilixit 14, 201 I:. 'Nation provide Ire: s?.(1,';Orii in in a iLr 11 lŠLl1! .S rcgitir-Lid aall roject is torripIch.s.i.

Wiiiien '.'. ‚.,;(oh provte.0 Ezipital tnìi ir>1i;.. in a abive (IWO!. mi.:win:El ILI COMO lttCiu Projcet. mannr. As of December 31, 2011,equity contributions are as follows: Beraistein Walton

Gideon &Irene Levytarn OS/01/10 50,033 Ange Boudie 09130/10 50,000 Initial Deposit 10/15/10 1,120,50-0 Thresa &Joe Mamma 10/27/10 100,000 Eiuncen Coopland 10/2.9/10 150.000 1,120,500 350,000 The equity applied to Walton was received from third parties after execution of the agreement. In one instance the memo on the cheque states: -6;1-atm/ My/7*m

• 911,4 1185 Eglinton; Bannockburn Lands, Inc./Skyline The agreement calls for equity contributions from the partners as follows: 9. Waltion and proviricri nt ì i L iIJU j,4pkisiL pi4;;;IL.iL.,c Prirper:V.

cip;ii) to :tic anlovzrzt r..f Licintirein -Ain iCk. te tite. I:11 I S 1 !.(1.1,. 1...kLt:1131M-C .111 pro% id, tt i1.75(1.i104) zt mzumr! zhc Pirojr-ict s compitiico; C. If and wilain itic! 1,1ke bad,. ;nor ,i1 S:'1U,INK) ix-Av.-44Ni paid prir,r onnpictit,i1 !ht. b.'>',13 iÀLItl'il ,'.ill pre,irk further $2,;(1,(Xl(.) ra..h iccittlicci [0 pay out thc. vendor ;alit hack rt. IT and ;rflien die land transfer UPC it 1511;1.41i 'Bertairein rind Walton cacti contribute the., strut 1fr.1 WhaleeCi iinntunt equal, sie the; fr'IA the: And e. WaTion v l lorocirk 'he •it22.1.-1111.1 m (bull :11.1:v1r, 1.• fettUlf“! As of December 31, 2011, equity contributions are as follows: Bernstein Vi.iialto

Deposit 11:7;1/21 5i1E-Dr-Da3 1a4a installment 12/17/2:)17.) Deposit 12/31/2.0.10 563.804 13.b in.stailmerrt 09/33/231 1 325,cc.3 Depo.sit 12/3112:A1 12.i.914 573,719 Walton has not completed the equity deposit as required by the agreement. Bernstein is into the third level offunding with no equity investment by Walton. Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 Pa'4e E g

IV. 32 Atlantic; Liberty Village Lands Inc & Liberty Village Properties Inc. The agreement calls for equity contributions from the partners as follows:

7. Walton originally provided the original deposit and Bernstein has reimbursed Walton such that each party has now provided V2 of the S300,000 deposit to purchase the Property, which amount will [Orin part of the equity contributions.

R. The balance of equity in the amount of S4,196,3401.vill be paid as -follows: a. Bernstein will provide to the Company the sum of fa.098,170 on or belbre August 29, 20l 1 ; and h, Walton will provide the sum or S2,098,)70 to the Company in a timely manner as required as the Project is completed.

- As of December 31, 2011, equity contributions are as follows: Bernstein Walton Deposit 01/01/2010 5100 Deposit 11/1012010 150000.00 Due 8329111 08/2212011 246,736.00 Due 8/29/11 08322/2011 1,851.434,00 Deposit & due on timely basis 12/3132011 839;165.69 52-240.170 5839 966 Walton has not completed the equity deposit as required by the agreement on a timely basis.

V. 450 Pape; Riverdale Mansion Ltd. The agreement calls for equity contributions from the partners as follows: '7. Walton has provided the 575,000 deposit. to purchase the Property, which amount wilt .form part of Walton's equity contributions.

8. The balance of equity in the amount of$865,946 will be paid as follows: a. Bernstein will provide to the Company the sum of $470,473 on or before July 4.2011; and b. Walton will provide the sum of 5395,473 to the Company in a timuiy manner as required as the Project is cornplcted. As of December 31, 2011, equity contributions are as follows: Bernstein VValton installment C•2127/2011 5473,473 Deo os if/11m ely insta ant 12.13132011 5.26" v21 Walton has not completed the equity deposit as required by the agreement on a timely basis. I 5 9

Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 Page 6

Vi. 5770/5780 Hwy 7 West; Royal Agincourt Corp. The agreement calls for equity contributions from the partners as follows:

7 ‘Valte.f! 311:i 114.111:fitC11: ..%11C;7 lulitl S475,1)1.al towards ilto depo$it atto due dilitteme itefns.

8.. x.lia'Acet and nen:stein have or will pay tts s: a. Ftermitein provided to the Company the punt. or 51,782.51151 (”1 Dezember 5, 2011: an,,: b. Walton pnwide the au:: $1,782,500 u timely manner a.3 required ns the Projec: compiewtd,

Vvaiwn w.1(113ernstein each provide 5(1% of tttatevef additional. captiat und above the S2,237,5(10 cach drat required to cot:spiel:: the Project. ilzirty, in a timely marncr.

Equity ownership is limited to Bernstein & Walton.

The tnit:ersn'.p of the r:ontpany will he as follows: a. 50'1i, to Bernstein: Ltid b. M'!/, 10 Ron anti Nevin:t Walton as they may direct but veen each other or ailernati%ely to h.:: held by a uoinptetely Walton-owned ttnd czonholie.,1 company, p:ovidetl that a":1 cavenants ar.cl ttre.reernents fg" Walton herein shall c.orninue in Vail force Lauf erfout sitch company exe.:cutes an agreettien, to hr. brtunii 'rly the proviiiiInc o1-the willtitt Agreement.

As of December 31, 2011, equity contributions are as follows:

Bernstein Walton Deposit 11/25/11 5475,030 Funds due 12115111 12/05!11 1.732,530 Preferred Snares? 1537544 Ontario me (Ansari) 12131/11 130,000 1738371 Ontario Inc. 12131/11 130,000 Barbara hlaglie 12131/11 100,000 Cary Silber 12/31111 53,400 Grace and Ken Bugg 12/31111 100.000 Joel& Renee Schachter 12/31111 175.000 John Rocha and Michele Peng 12r31;11 51803 Ormsby Investment Limited 12;31111 100.000 Stockton & Bush P.1.1.1. Inc 12‘31111 100,000 Vane Please 12/31111 100,000 :32,257,E00 s,-27100

Waltaies •!laity appears to e fundedliya_rd parties_and_appeartratemadeofter BernsteirA_deposit___ and 8.a. installment

C. Conclusions i. Walton has not made deposit equity contributions as required by the Agreements. Walton has not made progress equity contributions as required by the Agreements to be made in a timely manner. iii. Walton appears to be funding equity requirements using third party investments directly into the projects in violation of the Agreements. iV. The lack of balance between shareholders of funds invested is significant and consistent throughout the group companies. 1 6 0

Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 Page 7

2) Mortgages a. General Indications i. A sale occurred without mortgage pay off. b. Detailed Findings i. 18 Wynford; Wynford Professional Centre Ltd. The mortgage for this property was held by 368230 Ontario Ltd (a Bernstein controlled company). A sale in the amount of $3,100,000 for a number of suites was closed in 2011. The mortgage agreement for this property states the following: SALE BY CBARGOR: In the event of the Chargor(s) selling, conveying, transferring or entering into any agreement of sale or transfer of the title of the said lands, or if the Chargor is a corporation, the sale, transfer or assignment of any shares of the corporation, to any purchaser, grantee, transferee, or assignee, all monies hereby secured, together with all accrued interest and prepayment penalty set out above, shall forthwith become due and payable, at the option of the CL rgee(s). The mortgage became due and payable as a result of the sale. Equity was returned to Bernstein and credited against Walton's receivable rather than paid down against the mortgage. This is a violation of the mortgage terms. c. Conclusion i. Mortgage terms are not being followed. Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 Page 8

3) Fees a. General Indications i. Services for build out and management charges are provided by Walton. The build out charges are billed by type of expense with the exception of Wynford, which was a square foot charge for the project. Charges by company and type are as follows: Liberty Wynford Bannockburn Village Riverdale Twin Dragons Professiona Row Labels .. Lands Properties Mansion Corporation l Centre Grand Total Actual-Sq. Ft. Labour 3,550.000 3.550,000 Management Fees 355.000 355,000 Actual-Breakdown Labour 537.000 220,777 103,131 860,908 Doors 12,321 12,321 Painting 1.500 1,500 Demolition 350,000 350.000 Electrical 208,500 208.500 Elevator 102,500 102,500 Fire System 262,500 262,500 Flooring 77,500 77,500 Framing 310,000 125,390 435,390 HVAC 198,000 198,000 Plumbing 167,500 167,500 Roofing 97,500 38.500 136,000 Windows instaliation 159,000 159,000 Advertising and Promotion 800 800 Brickwork 34.500 34,500 Management Fees 9,177 91,500 114.632 115,000 330,310 Landscaping 7,702 7.702 Materials 275.846 275.846 Professional Fees:Architectural 295,000 295,000 Professional Fees',ConsultinaFees 90,300 71,000 2.500 163.800 Grand Total 99,477 2,561,500 1,184,147 220,631 3,918,821 7,984,576

b. Detailed Findings i. 18 Wynford; Wynford Professional Centre Ltd. Fees charged by Walton to the partnership during the period were: Cost of Sale-ON Lung Capitalized Total Plan Build out $313,821 $3,250,000 $3,563,821 $2,525,000

Management 30,000 325,000 355,000 252,500 $343,821 $3,575,000 $3,918,821 $2,777,500

Management fees are billed to the partnership at 10% of build out. Although the build outfee is at $50/sf appears reasonable, there are several issues here: Was the arrangement of Walton providing these services approved by Bernstein as required by the Agreements? What exactly is the role of Walton's company in providing these services? Who is performing the work, Walton, or sub-contractors? Are there third party invoices supporting these charges? What is the method of invoicing, i.e.: cost plus, per sf based on market rates? Why did management charges increase automatically with the cost of build out? C. Conclusions i. Significant related party transactions are occurring without proper approval. Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 plg692

4) Business Plan a. General Indications Differences between the Business Plans as set forth in the Agreements and the actual results are not explained but they appear to indicate that the original budgets were inflated to maximize Bernstein's investment and eliminate a need for equal investments by Walton. b. Detailed Findings i. 18 Wynford; Wynford Professional Centre Ltd. The Business Plan summarizes anticipated profits as follows: Anticipated Profit

Value of 18 Wynford: 1:9;04,370

Less Project Cost: $ 14,709,180

Projected Profit: 5. The Business Plan details show the following capital requirements: Purchase $9,045,000 Renovation net cost Tenant improvements/inducements/allowances 2,777,500 Total capital required $11,822,500 Less: Projected operating income Net capital - $10,926,469 The partner equity investment requirements appear to be based on: Project Costs $14„709,180 Less: Existing mortgage 9,600,000 Partner Equity Investment RequirementTotal $5„109,180 Partner Equity Investment RequirementSplit $2,554,590 The Project costs ($14,709,180) are significantly in excess of the Total Capital Required ($11,822,500). Based on the method ofshareholder accounting, the excessive Project cost projection in the plan ($2,886,680) results in Share Subscription Receivable (unfunded equity investment)from Walton ($2,554,590). Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 Page 10

ii. 241 Spadina; Twin Dragons Corporation The following are results through 12/31/11 compared to plan capital requirements: Actual Plan Purchase $4,722,128 $4,791,000 Professional fees inc 160,000 Renovation costs 2,713,989 2,550,000 Carrying costs 1,040,000 Total capital required $7,436,117 $8,541,000 The partner equity investment requirements appear to be based on: Project Costs $8,541,000 Less: Mortgage 6,300,000 Partner Equity Investment Requirement Total $2,241,000 Partner Equity Investment Requirement Split 51,120,500 The Total Capital Required ($8,541,000) appears to be excessive in as much as Walton has contributed $350,000 through the end of 2012. 1185 Eglinton; Bannockburn Lanks, Inc./Skyline The following are results through 12/31/11 compared to plan capital requirements: Actual Plan Purchase 1,833,355 $8,949,000 Demolition Inc. 854,920 Development Inc. 1,760,000 Carrying costs Inc. 1,639,880 Total capital required 511,833,355 $13,203,800 The partner equity investment requirements appear to be based on: Project Costs 513,203,800 Less: Mortgage 8,200,000 Partner Equity Investment Requirement Total $5,003,800 Partner Equity investment Requirement .Split $2,501,900 The Total Capital Required ($13,203,800) appears to be exaggerated in as much as Walton has contributed $73,717 through the end of 2012. ji

Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 Page 11

iy. 32 Atlantic; Liberty Village Lands Inc & Liberty Village Properties Inc. The Business Plan details show the following capital requirements: Actual Plan Purchase $12,350,596 $9,038,500 Professional Fees inc 515,000 Development inc 4,500,000 Carrying costs inc 1,742,840 Total capital required 512,350,596 $15,796,340 The partner equity investment requirements appear to be based on: Project Costs $15,796,340 Less: Mortgage 11,300,000 Partner Equity investment Requirement Total $4,496,340 Partner Equity Investment Requirement Split $2,246,170 The Total Capital Required ($15,796,340) appears to be exaggerated in cis much as Walton has contributed $839,266 through the end of 2012. V. 5770/5780 Hwy 7 West; Royal Agincourt Corp. The Business Plan details show the following capital requirements: Actual Plan Purchase 514,983,000 $14,974,500 Professional fees inc. 575,202 Tenant fixtures inc. 440,000 Carrying casts 1/1/12 to 4/30/12 125,298 Total Capital Required 514,983,000 $16,115,000 The partner equity investment requirements appear to be based on: Project Costs $16,115,000 Less: Existing mortgage 11,600,000 Partner Equity Investment Requirement Total 54,515,000 Partner Equity Investment Requirement Split 52,257,500 The Total Capital Required ($16,115,000) appears to be exaggerated in as much as Walton has contributed $1,127,800 through the end of 2012(assuming you accept "Preferred Share" contributions to be Walton's. C. Conclusions i. There is an appearance of effort to manipulate the equity requirements and business plan representations in the agreements such that Walton capital requirements are minimized. This may be a reason the difference between the business plans and the actual results have not been explained. 1 6 5 Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 Page 12

5) Reporting & Control a. General Indications i. Reporting is not being performed on a timely basis. ii. Bank reconciliations are not being performed on a timely basis. iii. Approvals are not being performed. b. Detailed Findings I. The following clause is generally stated in each company's agreement.

13. viValtun will pro -:eport I QIIC1 th;; tb:low in g; eopie.A L invoic4A for work completed; tlic luink Ft:net:1m; 1:01: that :mmtiv, and if' the. hank !statement Liot.?s not have a eop> of carmelled e:iseques, then 1,,Qatton ni.50 provide a complcu• listinE, of ell cheques written, in:udi:Lc; paye%•:s, dates and unto Lung. At Bernstein's rt:quest, Walton wit! provick: whim:1:er other 1-mck-up informatinn h: rcr;test3. .Arty chequis or transfer over 55110011 win requIre Bear,leirs.'s sir Mx; csr writtifn 41pr:real hefbre being. processed. There has been no reporting or approvals as required by this clause. ii. 241 Spadina; Twin Dragons Corporation. v. and Accounting Support • Drafting and filing legal documents • Litigation The conversion of commercial rental units to commercial and/or residential condominium properties and the implementation ofcondominium sales programs • Zoning, by-law and legislative compliance • Severance and variance applications • Representation at municipal zoning, fire, building and by-law hearings • mama=• Insurance managetrient and advice on appropriate covarape • Centralized accounting, and finance functions, including financial statements and audit, accounts receivable, accounts payable, payroll, cash and tax .management • Weekly, monthly or quarterly occupancy and collection reporting • Weekly, monthly or quarterly financial report • Annual budget ,preparation • Unit turnover costs

• Capital expenditures Operatino lah ngt • Revenue nnM.NEWSill'... 71;faillti-ffaleSlarAri.77: LI. ZaY.W.7:LaliiCitn7. ANIWittatIMIIMIESidgekt..tait • Partnership distributions as directed

. With the exception of late, notice to reader Balance Sheets and Statement of Operations, there has been no reporting of the above after what were initially requests, which progressed to demandsfor same. C. Conclusions i. Lack of reporting and control has resulted in unauthorized payments and no ability to assess historical information in an effort to improve our understanding of and have effect on Project outcomes. 5 Bernstein/Walton Projects Review Letter Year Ended December 31, 2011 Page 13

Recommendations The following recommendations should be put into effect immediately. 1) Walton must provide response through clarification and if appropriate, actions to these concerns: a. Clarification of the status of these outside investors. b. Correction of mortgages. c. Rectification of equity in the projects to reflect actual equity invested. d. All related party transactions are documented and approved in advance. 2) Leverage the strengths of investors by dividing responsibilities. a. Walton retain responsibility for: i. Business development ii. Project administration iii. Property administration b. Bernstein takes control of: i. Corporate Books ii. Accounting iii. Finance administration 1. Cheques signed by Dr Bernstein or Warren Bernstein iv. Legal affairs 3) Walton makes recommendations, Bernstein retains authority to act. 4) Reporting requirements previously imposed on Walton will be imposed on both Walton and Bernstein. 5) The terms of agreements should be modified to reflect the above. Tab C 1 6 7

This is Exhibit "C" referred to in the Affidavit of James Reitan sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits k Lorna Groves

From: Norma Walton Sent: Thursday, June 13, 2013 2:43 PM To: Jim Reitan Cc: Dr. Stanley Bernstein; Warren Bernstein; Mario Bucci Subject: Response to May 7th letter Attachments: walton response to bernstein.pdf

Dear Jim, th Attached is our response to your May 7 letter. See you and Warren tomorrow at 10:30 am.

Regards, Norma

Norma Walton B.A., J.D., M.B.A. THE ROSE AND THISTLE GROUP LTD. 30 Hazelton Avenue Toronto, Ontario, Canada M5R 2E2 Tel: (416) 489-9790 Ext. 103 Fax:(416) 489-9973

www.roseandthistlegroup.com

The Rose and Thistle Group Ltd. is a privately held asset management company that is the parent company of Rose and Thistle Properties, Rose and Thistle Construction, Rose and Thistle Homes, Rose and Thistle Media, Plexor Plastics Corp., Handy Home Products Inc., Palmer Productions Inc., Corporate Communications Interactive Inc., Urban Amish Interiors Inc., Loft Raum Inc. and is affiliated with the law firm of Walton Advocates. ROSE and THisTLE GROUP LTD LAND tnd INVESTMENTS

June 13, 2013

Mr. Jim Reitan Director of Accounting and Finance Dr. Bernstein Diet and Health Clinics 21 Kern Road Toronto, ON M3B 1S9

Dear Jim,

Re: Joint Bernstein-Walton Portfolio

In reviewing your 13 page litany of complaints provided to us on Friday, June 7, it struck me that you do not appreciate the role we play in this partnership. Your comment that Dr. Bernstein has cause for concern and action on his part to protect his investment is wholly offensive. We own 57 properties in Toronto, of which 32 are jointly owned with Dr. Bernstein. We have approximately 50 full-time staff and another 25 to 40 subcontractors and trades on regular pay to complete the joint project mandates for these projects. We spend every hour of every weekday of every week of every month of every year ensuring that the portfolio is performing at or above pro forma. We challenge you to point to any investment or business in Toronto or Canada or the world for that matter that has returned the 30% plus ROE that this portfolio has thus far returned with its completed projects. Furthermore, those returns are accelerating as evidenced by how our 1 Royal. Gate project is tracking. That investment by Dr. Bernstein of $5 million is tracking to be worth double that inside of twelve months from date of investment. How can you beat that, and how can you complain about our performance given those realities?

The joint portfolio is worth in excess of $330 million and a number of projects are poised to cash out with stellar returns above the 30% threshold in the next twelve months. Within that context, I would suggest that the issues you raise, even if they were accurate which they largely are not, are minor in nature. Dr. Bernstein has been well served to date by this partnership as have we. We have done an outstanding job of performing our role within this partnership, with the only area where improvement is needed being the area of financial reporting. For you to focus solely on that area without any acknowledgement or appreciation of how phenomenally well we have managed the joint portfolio is blinkered in the extreme.

Ay, n 'Ant>, 2. 2 ...In I 7 0

We are known in the city of Toronto as proven money makers in real estate. The Rose and Thistle Group have a reputation for delivering the best returns in the business over the past three years. We are the envy of the real estate street and as a result we have a queue of investors looking to partner with us to make them money in real estate like we have with Dr. Bernstein. We have declined to engage them because we understand and appreciate Dr. Bernstein's role within our partnership and are loyal to him as a result. We expect the same from him, otherwise this partnership is not going to thrive going forward. We have performed exceptionally well and it would be a tragedy if the tenor and tone taken in your correspondence ruins what should continue to provide outsized returns going forward, particularly given how well it has done to date and the momentum it currently enjoys.

Within the partnership we provide the following services: 1. We find the properties; 2. We negotiate the agreements of purchase and sale; 3. We arrange financing; 4. We personally guarantee financing as required and protect Dr. Bernstein from exposure in this regard; 5. We prepare the project plan; 6. We deal with lawyers to close the purchase; 7. We implement the project plan, which may include: a. Engaging architects, engineers, interior designers, surveyors, cost consultants, planners, and various other consultants; b. Obtaining rezoning, severance, condominium registration, and building permits as required; c. Performing ourselves or supervising construction and renovation of the properties in question; d. Negotiating prices and contracts with and paying all employees and trades engaged in fulfilling the project plan; e. Engaging the city of Toronto for all municipal approvals required, including attending numerous meetings with the city politicians and staff to ensure our project plans are approved; f. Creating marketing material and sales material to attract tenants and purchasers to our projects; g. Meeting with real estate brokers to negotiate deals with prospective tenants and purchasers; h. Fulfillin all conditions to close those deals• i. Arranging refinancing of the properties once the project plan is implemented; j. Repaying debt and equity upon project completion; 8. Managing and maintaining the property going forward; 9. Performing all administration, financial and accounting services required by the joint portfolio; 10. Reporting to Dr. Bernstein on a daily, weekly and monthly basis as to the status of all investments; and 11. Any and everything else required to ensure the portfolio thrives. We are not prepared to change the contract terms to cede control of accounting and finance as you have suggested. We are prepared, as we've already indicated, to provide you and Anjela and anyone else you wish unfettered access to the accounting records and books related to our joint portfolio as they are updated and checked for accuracy so you can report to Dr. Bernstein as frequently as desired how the portfolio is doing. In that vein, we are looking to change the corporate structure of the joint portfolio to make this task easier and also purchase software to make reporting on a current basis easier.

You have raised a number of allegations, some of which are accurate and some of which are not. Let me address those: 1. We share funds across the joint portfolio to smooth out cash flow. That is in keeping with the joint objective of creating one financial vehicle, whether a private REIT or some other entity, to permit the most efficient tax planning to occur and to simplify and streamline our portfolio's operations to everyone's benefit. In that vein, we are focused on completing our 2012 financial statements and then meeting with your accountant and ours along with legal tax experts to ensure this structure functions effectively. Despite the sharing of funds, we account for each property separately so property performance can be assessed accurately for each joint investment; 2. Dr. Bernstein is contractually obligated to provide his cash first, with our cash to be provided as the project requires. Hence your comment that as of December 31, 2011 we have not put in as much cash as Dr. Bernstein is accurate. That is in keeping with the arrangement we've negotiated. Undoubtedly those numbers will become closer to even in 2012 and beyond because we began to invest together in 2010 and most of our projects have 30 to 36 month timelines. Eglinton is a good example of this. We invest $150,000 per month to carry Eglinton pending our successfully completing rezoning and sale of that property. Dr. Bernstein has no further obligation to invest in Eglinton so his equity will not increase, whereas ours increases every month; 3. Your comment that we inflate our project pro formas to extract maximum money from Dr. Bernstein up front and thus reduce our financial obligation is both offensive and completely uninformed. You have neither the real estate expertise nor property experience that we have. You have no basis for your views other than your comment that we have beat our pro formas in some of our projects. First of all, all of those projects are not yet completed and secondly, if that is the case, that event should be celebrated, not criticized. We prepare project pro formas at the time we negotiate to purchase the properties. We use our vast real estate expertise to as accurately as possible prepare the pro forma. We never want to have to come back to Dr. Bernstein to increase his equity beyond what we initially forecast, and we take that responsibility very seriously. The fact that unlike most pro formas, we have been able to better some of ours in reality is a fabulous track record and shows our ability to outperform our own expectations. Please don't criticize us in areas where we have far more experience than you and you are merely postulating a premise that is wholly inaccurate and frankly quite offensive; 4. We do not have outside investors in the properties we jointly own with Dr. Bernstein. As Mario explained, before Dr. Bernstein became a 50% owner of Spadina and Highway 7, we had attracted investment from third parties. The moment he became an investor, we shifted all of those responsibilities over to The Rose and Thistle Group Ltd. and that is where they currently remain. We would not dilute ownership in a project with Dr. Bernstein. 5. Your comment about Wynford's mortgage not being properly discharged in the OLA transaction has been explained to you. I don't know if Dr. Bernstein ever signed the Acknowledgements to Discharge, but I am certain that we advised him of our intention to discharge his mortgages and divide the $3.1 million as equity reimbursement instead of mortgage pay-down and he agreed. We have subsequently refinanced that property and fully paid out Dr. Bernstein for this loan, so I am not sure why you continue to harp on this issue. Further, we now run all such transactions through Devry Smith so that they can fully protect Dr. Bernstein's interests and fully report to him on those transactions, so if this ever was an issue, it has been resolved going forward; 6. Your comment about us using The Rose and Thistle Group Ltd. to provide services to our joint portfolio is 100% accurate and fully disclosed and expected. We are able to perform construction and renovation at wholesale prices. Even after we add a project management fee, we are far under market for these services, to the significant benefit of the joint properties and the pro formas. Further, we always pay to Dr. Bernstein at least fair market value for his mortgage services, being 8% interest on first mortgages with a 2% fee, and 1% on second mortgage with a 2% fee. Hence both The Rose and Thistle Group Ltd. and 3658230 Ontario Limited benefit from the joint portfolio, which is as it should be. 7. We are fully on board with providing Anjela access to the full joint portfolio as evidenced by our actions to date, and in fact we have her doing a lot more than just reviewing. In fact, she is now booking purchases, reconciling property tax, and obtaining access to more and more of the joint portfolio as the books and records are updated.

The only area where we have not been able to comply with our contractual obligations to Dr. Bernstein relates to the provision of accounting records on a monthly basis and the expense approvals set out in the earlier agreements. We are working to rectify this by providing the access he desires and by amending the terms of the agreements to reflect . . • • • • a I 9 m. changed the wording of that clause in the Dewhurst and Eddystone agreements to better reflect the financial reporting access and expense oversight that was in reality occurring. We are open to your comments on our proposed changes to those clauses, but the original clauses in the agreements are not feasible now given the size of the portfolio.

*,4 1 7 3

We thoroughly enjoy being in business with Dr. Bernstein. Together we have had very good fortune in business thus far, and the momentum appears to be only accelerating. We have appreciated your involvement with our business thus far and look forward to together making our financial reporting systems better going forward. We are happy to respond to your queries and questions on an ongoing basis so you and Dr. Bernstein has an accurate an understanding as possible about our joint portfolio. We keep Dr. Bernstein apprised of all goings on with the portfolio on a daily, weekly and monthly basis and we are confident with your and Anjela's involvement, his understanding will only improve and become more fulsome as he layers in detailed financial knowledge of what is happening on the ground.

We would like to hit $1 billion in joint properties together over the next five years. If that is to occur, each of us needs to respect and appreciate what the other brings to the partnership. We are hopeful that is Dr. Bernstein's desire as well, and if so look forward to many more years of successful partnership and collaboration to mutual benefit.

Yours truly, THE ROSE AND THISTLE GROUP

Norma Walton Tab D I 7

This is Exhibit "D" referred to in the Affidavit of James Reitan sworn before me this 1st day of October, 2013

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CORPORATION PROFILE REPORT

Ontasio Corp Number Corpoeation Name Incorporation Date

2336130 GLOBAL rylILLS INC. 2012/07120

JUtiSdiekel

ONTARIO

Corporation Type Corporation Statua Former Juriscliction

ONTARIO BUSINESS CORP. ACTIVE NOT APPLICABLE

Regiatared Office Address Date Ama!gamated Amalgamation Md.

NOT APPLICABLE NOT APPLICABLE 30 HAZEL ON AVENUE New Amal. Number Notice Date

TORONTO NOT APPLICABLE NOT APPLICABLE 01\FrARio CANADA M5R 2E2 Letter Date

Arldreee NOT APPLICABLE

RovIval Date. Continuation Date 30 HAZELTON AVENUE NOT APPLICABLE NOT AF-1PLICABLE

TORONTO Traneferred Out Date Cano-Ail:motive Date ONTARIO CANADA M5R 2E2 NOT APPLICABLE. NOT APPLICABLE

EP Licence Ef£,Date EP Licence Terin.Date NOT APPLICABLE NOT APPLICAF.31..E.

?`lunger of Directera Date Commencer? Data Caasect Minimum MCadentiill in Ontario In Ontario 00001 00015 NOT APPLICABLE NOT APPLICABLE Activity Claasitication NOT AVAILAB LE Request 1D: 015622693 Prtwince of Oritario Date Report Pn-giuced: 201a,68/14 Transaetion tr..). 51796565 Ministry of Grrvernment Sen/iCeS Tirne Report Produced: 16:25:22 Page: 2

CORPORATION PROFILE REPORT ()Mario Corp Number Corporation Nal-W

2336130 GLOBAL MILLS

Corporate Nat3re3-6story Effective Date

GLOBAL MUS INC. 2012108/08

POST magurg• INC. 2012107120

Current ausiness Narne(s) Exist: NO

Expired Business Nerne(e) Exist: NO

Administrator: Name (tridividtial I Corporation) Address

RONAULD 30 HAZELTON AVENUE WALTON TORONTO ONTARIC) CANADA MSR 2E2

Date Ltegan First Director

2012107/20 NOT APPLICABLE

Designetion Meer Type Resident Canadian

DIRECTOR IN301S3.73d

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LRÇ)5 80 Transfer Registered as AT3150321 on 202 10 '12 at 1.122 The appficerqs) hereby applies bitta Land Registrar. tryyy rani rjd Page 1 of 3

FiTtFe7-

Pilti 10117 - 0593 LT interest/Estate Fee Simp!e Description PT LT 10 CON 3 P'S TWP OrtORK AS IN I0395910; Sir Kti3a0043;TORONTO (N YORK). CITY OF TORONTO Adthatts 1450 DON MiLLS ROAD TORONTO ra;775:! colt:ice:ration 324,000,000 00

Tri:Infere-f4)

l'he trim:lb:ode) hereby transfers the lai'rd to the transforee(s).

1,113!?19 POSTME01A NEMNORK INC. AddeOSZ fOr SSIVitte 1450 Corr Milk§ ROW.. ibror.tc, ON N139 3R5

1, Doug Lamb, Executive VP and C1'0, and Jeffrey Haar, Executive VP, Legal & Genere.i Counsel, have the authority to hind the cssrporadon. This document 15 nol authorized under Power of Attorney by this party.

Name GLOBAL MiLLS. /NC. Arida:SS for Service Cif) Thfl Rose end Thistle Group Ltd. 30 Hazetton AVCRite.,'fbronic, ON MBR 2E2

STATEMENT O'T1íí TRA.NSFEROR (5)• The trenafercats) verifies that to the heed of tho transferor's knowledge and belief, this transfer doeo not contravene the Planning Act, STATEMENT OF THE SOLICITOR FOR THE TRANSFEROR (Li): ! have f.r.xp!ain•7,1 the effect the Planning Act to the transfercrie) and I have made Inouiries of the transfercr(s'j to dete!' mme. that thie transfer does not crintravenr.i that Act end based or, the inform supplied by trio vansferpr(s), to the besc rel rrrylirlOWledgs iSf/CI belief, this tranefer does not contravene that Act. I am an soh in good standing. STATEMENT OF THE SOIJOITOF?. FOR THE,TRANSFEREE (3): I have itweetigated the title to this land and to abutting lend whom relevant end I ani setIsfied that the title records reveal no contravention as set cut in the Planning Act. and to the best of rny knowledge arid belief this transfer does not contravene the Pianning Act. t act ineleciendemiy of the sol!citor for the tronsfe.rorfs) and am an Ontario solicitor in g000 standing.

Jordan Matthew Louis I.3aperia Bay Adelaide Centre 333 Bay acting fcrr Signed 2012 10 12 Street Suite 3400 Transfer:tins) Toronto M51-I 237 415192211 Fax 41897912.34 I em the solicitor for the transterorf,$) and I a. m not ons and the earns as the solicitor for the transferee(s). I have trot authority to or arts re,',kg thf,do4;:jt:1(§llt errn'rr hehaii cf the Transfercr(s). John Todd Ho!uree 100.-95 3arcer Greene. Rd. acting for Signed 2012 10 '12 Thronto Trarisferee

Submitted By 2012 10 12 DEVRY: FRANK 100-95 Berber Greene Rd, Toronto mac 3E9 d; 0 r ; ü

LRO !I 80 Transfer Reeisterad as ATS160321 on 2012 10 12 er. 1,1:22 The ...›.(.1...Ifeent(e) harte eonlles ff.:the Land Regieeer yyyy rprri dd Nee 2 of 3

Te: 4164491400 Fax 4164497071

[Feterfaxes/Paymene

Stetutory Reisestion Pea $60.00 Proterclai Land Ttanster Tax 6356,475.00 Mcmicipar Land Teer Tax $357,72.5_00 ?buil Peid 716,260.w

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7bn:derer Clint File Nurnber 1203:2 TR 145e DC)N MIL.U3(TMMISNC) Transferes Clint Nureber.- DSF, O. LEES,..1):32 i t

P ROVi N CAL AND MUNICiPAL LAND TRANSFER TAX STATEMENTS In the matter of the convuye.nce of: 10117 - 0692 Pr LT 10 CON 3 EYS TWP OF YORK AS IN T-5305970; NY380043: TORONli)(N YORK), CITY OF TO.RONTO BY: POS'EMEDIA NETWORK INC. TO: GLOBAL MILLS INC. NORMA WALTON i am (a)A person in trust tor whom the land are:eyed in the stgwe-desrxibea conveyance is beano conveyed: (b)A trustee named in the above-described conveyance to whom the land in tieing conveyed; 0(c) A transferee named in the eorwe-dettcribed conveyance; 0(d)The eutlavized agent or 5olicstor acting in this transaction for described in paragraph(s)(.) above. (e)The President, Vice-Presideni, Mariage. Secretary, Director, or Treasumr authorized to act for GLOBAL. MILLS INC. described in paragraph(s)(C) above. 0(f) .4 transferee described in paragraph() and am rneking these 8totements on my own behalf and on borne of who Is my spouse described in peragraoh(,) end as such, I have; peritenai knowledge of the :Teets herein deposed 2. I have read and considered the detiP'rtion of ".srigle Newly residence' set out in subsection (1) of toe Att. The land being convoyed herein'

dons not onlain a single ferniiy -.dence ar contains more than two single family residences. 7i. The total consideration for this transaction is allocated as follows: (a) Monies paid or to he paid in :eel; 24.000,000,00 (b) Mortgages (I) assumed (show principal and interest to be credited against purchase price) 0.00 (ii) Gwen Book to Vendor 0.00 (c)Property transferred inn exchange (detail below) 0.00 (d)Fair market value of the land(s) 0.00 (e)Liens, legacies. annuities and maintenance changes to which transfer is subject 0.00 0; Other valuable consideration subleot to land transfer tax (detail below; 0.00 (0)Value of land, building, fixtutas and noodwill to land transfer :as (tetal of(a) to (0) 24.000,000.00 (h)VALUE. OF ALL CHATTELS -items of tangible personal property 0.00 (i) Other considerations for transaction not included in (g) or (f) above 0.00 Total comsideration 24,000,000.00 11)- PROPERTY information Record A. histurs of instrument Transfer 11-10 $30 Registration No. Ar 3160321 Date: 2012/10112 E. Property(s): PIN 10117 -- 050 Address 1450 DON MiLLS ROAD Assessment 1906102 - '18001800 TOR'ONro Roll No

C.Addnaas For Service: olo The Rose and ThisSe Group lAd. 30 Headier, Avenue, Toronto; ON IvISR 202

El.(9 Last Conveyence(s): PIN )0117 Oä93 Registration No. NY:380043 (ii) Legal Description for Property Conveyed: tame as in knut conveyance? Yes FA No Not known L. IL Tax Statements Prepared By: John lbdd Holmes Serber Greene Rd. Toronto M3C SE.9 004 C:ilE DEN oluo2o: p>j tuue.uo .19q3e9 go-001. "iNVd:1i.;.1iNS ifg paw(wipes

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?ZV!. 01. EI•OZ ta) ?ZeOgMI:e P*042,159e esetliAteffeeigliZ 09 4. °ei This ia e Schedule attached to a Charge/Mortgage: between GLOBAL MILLS INC.(the "Clangor") and COT UTSIIARE TRusT compANy OP CANADA (the "Chargee) as guaranteed by Norma Walton and Ronan.ld Waltott(collectively, the "Covenantors") relating to 1450 Don Road, Toronto, Ontario (the "Premises";

NON-MEE.

The Chargor and the Covenantors by way of P. separate Guarantee and Postponement of Claim, hereby acknowledge. the terms, conditioris, obligations, liabilities, warranties and repnisentations contained in the Conunituotrat 'Atter iasued by "I'REZ CAPTTAI, LIJ.n.0PARTNERSHIP CAI behalf tlf the Charger!, faltered into with the Chargen and the Covenrintor.s dated September 21, 2012, as may be amended from tictjç.ot ro time (hereirsofter referred to as the "Mortgage. Commitment") shall not tnerge on the closing and rekOstration :re delivery of the mortg,age loan aeranity, including, but not limited to the Charge or. the P.tetnises, but shall remain ha fall force and effect, notwithstanding the delwery and registration of the said security

In the event of any inconsistency or conflict between any of the provisions of the Mortgage Cominnment and any of the provisions of the Charge., the provisions of the Mortgage Commitment shall prevail.

INTEREST RATE

Interest fahhil be charged at the greater of 8.50u.4 per anraum (the "Minitnann Rate") and a variable rate per nurn (ara either case both before and after mannity, default and judgment) equal to the rate established by IISBC Bank Canada ("TISBC") from tine to time SS HSBC's prime lending .rate for Canadian dams loans (`Trisne Rate") plus Eve and s. half per cent (5.50%) oei the outstanding balance of the principal SUM owassg front time to time for. the first 18 months of the Term and 25.0%t per aninn, thereafter. interest lse calculated daily- and compounded and payable monthly. Overdue interest shall briar interest at the same rate as principal.

Such intetest rate shall be set with respect to amounts advanced on t1ae. day of each advance and thereafter monthly on the first clay of each month. Interest shall be calculated daily on the day balance outstanding from time to time, before as well as after maturity, default or judgment, float: the date of each advaraerc. Such Interest Rate shall be cietemained upon the basis of a three hundred and sixty-six (366) day yeat, shall he calculated iaa accordance with the Chargee's USUSi practice (as; times and methods of calculation) and shall be adjusted automatically without notice to the Clangoe

interest rates specified are nominal SIMUS1 rates. The effective annual_ rate in any CASE: Will vary with payrnent frequency. Alt interest payable hereunder bears interest as welt after as before maturity, default and judgment .with Interest can overdue: interest at. the applicable rate payable herentitier. Ail intetest payable hereunder bears interest from -the date of advance of any portion or the loan to the Charger's whediex or not such advance of the loan is released to the Chargor or the Chatgor's solicitor.

atl other reDpec;, intrest shall be paid ha accoildancr: rhe pewifiier.$1 of the MoKgage

• ••

INANCIALMA.TEMENTS

The a:argot shell provide die (largo; within 120 days after the end of each fiscal yen of the (largo:, or more often .if requested by the C:harg,ee, a detailed financial statement of the Chargor including a ,;eparate Income and expense t.tar.ecaaaorst for the Premises, an operating statement and updated rent tall containing relevant lease terms for the Premises, all satisfactory tr, the Chargee ira form and COMCM. Thac fulnickdi Stfttrme:or. is to be prepared lay ara accountit licensed under the Prrbfir..4rearratirig Ad.

The Chaxgor authorizes the Chargee to obtain such additional financial information as the Chargee. may re:CIUU:t. o

RENEMALQ1)110E

The Chargor shall have the option to renew the loan fOr an additional seven (7) months (the Renewal Term"), commencing on the fifth day of the 196 month of the Loan Term, subject to those terms as pro-nded for in :I.., Mortgage Commitment.

Interest. for the Renewal. Tenn shall be criarged at the greater of 8.50% per annum and a variable rate per minim equal to I-ISBC's Prime Rate plus 5.50% on the constar.ding balance of the principal sum owing from time to time foe the first 6 months of the Renewal Tem.:, and 25% per antrum thereafter.'

PREPAYMENT

The Chargon when not in default, may at any time, after a minimum of 1722,500.00 interest has hi earned by the Chargee and paid to the Chargee and after the provision of no less than 30 days written notice, which notice must contain evidence .satisfactory to the Chargee, of the source of funds to be used for tepayment and must ceAltaill a date certain for Stie repayment("Date Certain"), repay the whole of the obligations hereby secured here-under to the Date Certain. Should the repayment he delayed past the Dare Certain, a new minimum 30 day written notice must he provided as set out herein If prepayment occurs prior to the Date Certain, interest must be paid to Data Certain. The Date Certain must be a business day that banks in the Province of British Columbia are open for business. PARDÅLDISCIiiigfag

In accordance with ate provisions of the Mortgage Com. tninnent, no partial discharges arc permitted.

The Premises may ha subdivided or condominiurnized only with the prior written consent of the Lender, which consent may he withheld by the lender in its sole, unfettered and absolute discretion.

Insurance shall be pm:v.:tied so the Chargee in accordance with the provisions of Paragraph 16 of Star:date; Charge Terms 200033 and in accordance with the provisions of the Mortgage Commitment and thrill be subject to the. review and approval of the Insurance Consultant of the Chargee as contemplated in the Mortgage Commitment.

DUE ON SALE

Section 14 of Standard Charge Terms No. 200033 is hereby deleted and replaced with the following:

(a) "The Chargor covenants and agrees with the Charger that, in the event of the Chargos selling, conveying, transferring or entering into an agreement for sate or transfer of tide of the Premises hereby mortgaged to a purchaser ot transferee not approved, in writim1, by the Chargee, which approval shall not unreasonably be withheld, all monies hereby secured with accrued interest thereon shall at the option of the Charger: forthwith become due and payable."

"The Chargor Acknowledges and snes that in the event there is any transfer or sak: ni the shams of or reconsunrung of the Chargor wiee would result In a change or voting control or beneficial ownership thereof, such change shall be .subject to the Chargee's prior written consent."

PROPERTY MANAGEMENT

Chargor shall maintain at all times a property numagee for the Premises satisfactory to the Charger and on terms satisfactory to the Chargee A change in the property manager without the Chargee's appr.,,-.3; shall constitute an Even of Default as defined in the Mortgage Corrimienerse.

FWERSITIP

.Ar the option of the Charger, it shall constitute a default hereunder if the Charps or the Covenantors shall become insolvent or be the subject f any bankruptcy, arrangement with creditors, proposal, amalgamation or any transaction or series of transactions which results in a 9 is

change in control of the. Cliorgor:, re-organization, car any liquidatitm, windirag-up, dissolution, or reeeiveraltip or without the Chargee'a consent, seeks continuation under the laws of any other jurisdiction. In the event of a default by the Chargor under this Charge, or if the Chargor. or the Coveno.ntors weiks relief under the Copppanie Cresliieu Arpelgeosvat Ad or either debtor relief legislation, the ChatgOX Will, if requested by rhe C'hargee establish a seporate project bank account for tile Premises.

Provided and without .in fury way limiting oraything herein contained,in die event that: (a) The Chew:. nrikes default in the payment of air; principal ox interest or any other hionies required to he paid by the Cborgor heretmder; Cr) The Chargor fails to observe or perform any other covenant or agreetnent harm contained; Charge (C) Any tepreacirtation at warranty. made herein by the Chatgoz lo at any LitYle while this is outstanding not Mile;

Any construction lice is registered against any part of the Premises and is not removed within thirty-five days;

(e) An order is made or a resolution passed for the winding up of the. Chargor, nr if o petition. is filed .for the winding up of the Clangor.; fl) The Chargor becomes insolvent or makes an unauthorized essignmatt or bull( sale of the Citarg-or's asaeto or if a bankruptcy petition, is filed or presented against. the C.hargor;

(g) Any proceedings :with respect to the Chargor are: cornmenesxi under. The Compaeis! CretRefei .rig. easpwase (h) An execution, sequeotration, extent or ony other pxocess of any court becomes enforceable against the Chargor or if a distress or analogous process is levied upon the Premises or any pose- thereof, provided such rix.eution, sequestration, extent, process of court, distress or analogous process is rot in good faith being disputed by the Clunwar;

The Cleargor shall permit any $12.11 whiele has been admitted as due by the. Chargor or is nor disputed to be due by the Chtu-gor and which forms, or is capable of'being made, a ehar.ge upon any of the Preatises in priority to or ranking equally with the charge of this Charge to be or ranana unpaid; (.0 .Any charge or encumbrance created or issued by the Chargor having the nature of a fixed ancilor floating charge shall become enforceable, whether retaking ise priority to, or pad possn with this Charge; or,

(k) The Chstrgor ceases or threatens to cease to carry on its biriinvis or if the Chargor commits rir threetetts to commit arty act of bankruptcy;

then, and in any such event, this Charge shall, at the opnon of the CherLee, be deemed to be in default.

Provided that, and notwithstending ..enything herein contained, it is ageeed that at. any rime arid from time to time when this Charge shall be in dement, :and wheeler or not the principal has been accelerated, the Chargee may, with or without entry into poaresaron of the Prerxxises ox any part thereof, and whether or not there },as been such entry, by writing, under its hand or at its option by application to E. court sef competent u scliction, for and dus.ing the period of reach default, appoint a receive:err:onager (the "Receiver") of the Premises or any poet rhereof arid of the rents ond profits thereof, or of only the rents and. profits thereof, and with or .with our security, and may from time to time ley sitr,ilar writing 11:1130Ve any Receiver and appoint another and that, in making arty ouch appointment or removal, the (hangs(: shall be deemed co be acting as the agent or attorney for the Chargor. Upon the appointment of a receiver, the iieliowing provisions sholl apply: (20 A stair:tory deeleranon of the Char ere as to delimit under this Charge shall be conclusive evidence theteof for the purpose of the oppoisitsnent of such Reeeiver;

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3D:311F01.1 01043 30 4101304ST JO 11115,41 545WiffeOld 11135 raastp art ruTep trans usapin „uopnas sup In surest:toad For the pisrposes of theli.lortgai?,e Commitment, a Hazardous Substance includes but is not limited to colitorninams, pollutants; dangetous substances, gasoline, oil, liquid ,wastes, industrial wastes; wlioie liquid wastes., 1.01Ch2 trehtftfleefi, 110:eftt80:13 wastes, hazardous matediCis and hazardous substances as defined in or pursuant to any applicable F!.nvirontnental Laws. Purl:heir the Chargor haAl indersinify and save leteraleiis the Charger from any loss o_ liability whatsoever arising from any violin-ion whatsoever of arty regulation, ordinance, incipient., appraisal rst decision in connection with hazardous risks or envitor..mentat risks.

Chsegor awe:waits that it will:

pernerly forthwtth, at its own expense, ;my environment darnage that may occur or be ciiscovereci on the Peerreises in the future;

(n) comply with and morntor, On a reticular basis, its compliimoex and the complisince of any trams% subtenant, ass: re,:. or other occupant of the Petunises with all Requirements of Environmental Law; iiiij notify the Chargee promptly of any event or occurrersce that has given, or is likely to give, rise to a report, order, inquiry Or investigation relating to a matter that may have an ;ids-e ine effect on the firkancial position of the Chen:got or the Premises ear any sedan, suit or proezeding agains3. the Chargor or otbas having an interest in the Premises relating to, or a violation of, the .Requitements of Environmental leave, including are rele.ase, spill, emission, leaking„ pumping, injection, deposit, disposal, discharge, dispersal, leachnig or migration of Hazardous Substances into, on en: uncles. the Premises, air and surface and ground water, and will also notify the Chargee promptly of any such 2bovn-meritiortext information of sielich the Chargot has or receives knowledge relating to lands adjacent to the Premises;

(iv) not lease or consent to any sub-lease or assignment of any part of the Premises to a tenant, tiLlb-rellan or assignee W110 may engage in, nor permit any tenant, subtenant, assignee or occupant of the Premises to engage in, a business involving the generation of environmental contamination or the storing, handling, processing,, manufaettuang or disposing of Hazsedons Substances in, on, under or from the Premises save arid except in accordance with the Requirements of Environmental Lave and any lease, sub-lease., or assignment of any part of the. Premises shall preserve. as against any lessee, sub-lessee or assignee s J of the rightS of the C.:bargee herein;

save and except foe those Hazardous Substances which are present on, in or wader the Premises in accordance with Requirements of Environmental Law and which have been disclosed to the Chargee in writing xernove, in accordance with all P.equirements of Environmental 1—aw, any Hineadous Substances from the Presnises forthwith ispon their discovery and advise the Chargee fortiratith in writing of the procedures taken;

(vi) I:sr:wide to the Chance upon request such information, certificates, or statutory declarations as to compliance with the provisions hereof and all Requirement Envii-ordnental Law and conduct such e.twironmetual audits or :site assessments as may be reasonably necessary to ensure compliance with the Requiremans of Eatvironmenital Law, anti provide to the Chargee copies of any r:rreir011rnentrd, soils, sa.fiity or health reports or suidie.s in of the Premises that it receives or possesses tirrig to LitZicf; and (vii) parnit the Chatgee ts..1 conduct inspections arid apptkiP-ats of all or 'Any of ;:ecor.ds., business and property relating to the Premises at my time and fron-1 time to tirrxe to monitor compliance with the Requirements of En vitoturiental Law.

The Chargor and the Cawertantors further cove.aant that they will be liable .for and fully indemnify the. Clargee for any and all costs, expenses, damages or liabilities (including leivi fees on a solicitor and his own client }saris and any envir.onnuirital renuirlia don costs incurred by the Chsrgee) directly or indirectly arising out of or attnbutable to tine non-compliance of the Chargor or its tenants, eraployees, or ag,ents with the Requiturnents of Environmental Law and all such costs, expenses, damage; or liabilities shall be secured hereby, and all such liability and indemnity shall survive the repayment of the indebtedness secured hereby, foreclosure upon. the Charge, andlor any other extinguiehment of the obligations of the Chargor and tile Covnnantors Under the Cigage and sm- other ris.ereise by the Chargee of any remedies available to it against the Chargor or Covenantors. 4 9 5

.11.124.5

The Chargat hail provide such additional security, infor.rtiatiot-i, ciocurnentatiort sad aSiitilarICAIS zzz rix: be .retitiired front ritne to time by the rget tinting the currency of this Charge to detettnine. ROA tr establish And preserve, irt ail respects, the priority of this Charge and aIì advarsass made hereunder over any rights °f)len claimants pursuant to the provisions of the Conshweljass 1.44.* Ait If the Charger: Makes Irty paysnent, in connection with the determination, evutblishmtrit or preservation of its priority, whether suds payment is trade to a lien claimant or other per5.ton claiming an interest in. the Premises or is paid Loh.; court, then the amount or atilOtititS so paid and idi costs, charges and expenses incurred in crnmection thtiewitli 0.10. he forthwith payable to the Chargor by the Chargor and shall be a charge on the Press...saes and shall be added to the debt hereby secured and shall bear. intereat at the applicable rate and, in default of payment, the powers of aide and other remedies hereunder tray be exercised. it is fitrther agreed that the Clargee shall net lsecome a mortgagee ir; possession by ktla:$011 only of exercising any of the rights givera to it under this paragraph or in Maicing any payment to preserve, protect or secuns the Premises.

EXPR.C3PRIATif.)N in the event the whale or any part of the Pr.:teases is ex,propriated, the Chargor agrees all proceeds received from, any such expropriation shall be paid dir.ectly co the Char.gee priovided that upon the payment of all amounts secured by this Charge, the Charger: shall have no further clams tr.; any suels proceeds.

ADDIn()1.FINCIT'c

"The Chargor shall :sok from. and after the data of the .registration of this Charge, fUrther rnurtgage, charge or otherwise encunflorz the 'Premises without the prior written consent of the Charf,ree. Failts.r.c ro comply with this provision shall at the option of the Chargee constitute an event cif default under the within. Chargn If the Chargor defaults in the parnent of any instal:met5t of ptirscipal or interest payable under any subsequent Chargt/Mor.tgage or other encumbrance affecting the: Premises, whether the Chargee has consented thervito or not, or in the observance or performance of any of the agreerowts, terms or prON'ifiG8 or any such Charge/Mortgyige or other eracuazsixaxzee, then at the option of the Charf„,tee, the entire principal secured unde,r this Charge, together with all accrued and unpaid interest, Shall become due and payable m. the option of the Chatgee and the Cita:tee shah be entitled to exercise all of its rights and ranedies hereunder.

4.DDTION.A.L S.F.CURITY

The Chargor acknowledges re General Assignment of Rents end General Security Agreement (collectively the ".Arlditiorial Security') are being given as further security to this; Charge, which Additional Security is. being granted by the Chargor tr; the Chargee and any default under the Additic•nal Security shall constitute default under this Charge and any default ;MAW thiR ChiiNzr shall ctn.:suture default under the Additional Security and at the option of the Clnugee require the entire principal secured utstler this Charge; together with all termed and unpaid interest to become due and payable. Payment under the Additional Security shall consume payment under this Charge and payment or: account of this Charge shall constitute payment under the Additional Security.

Ts is agreed the Chargee's rights hereunder shah in no way merge or be affected by any proceedings under the Additiongl Security and the Chargee Ebdi nor be required to take iice Chargee inay take . . pror.eectingi under Aids . sa,aa,pelEl . .orc. t IA! • .o. tJ,,x Charge, and converaely, no proceeding:: under this Charge shah in any way affect the rights of doe Chatgee under ;ascii Additional. Security and the Charger: shall not be required to mate proceedings umier this Charge befor.e proceeding under the Additional Security or any part thereof.

tipon request from the Charge.e, the Chargor ag..PPP forthwith upon delivery frorn tirne to time of any chattels sr; .whish it has Sin ownership interest (including replactosenn; thereof) relating to the Pr.ensises, it shall promptly notify the. Charge; and its stsliciters, of well delivery and shall forthwith supply Charger: wids ail serial numbers and a descripthon of such chattels for the purposes of the afotementioned Gerieritt Security ,Aginetrient, which description shall include make and model. The C.bargor Ends= agree5 to provide written evIdenee of proof of purchase of the chattels, free of erscurntirances, and of insurance of same, both in the form and content satisfactory to die Chargee.

.UNDFATA15.1.Ngft

lee the event the Cisargor defaults With ro-14)C47t to any undertakings delivered to the Cbargre its considezatior. of the advance of funds under this Charge, or with respect to any a:wine:it cont-iiirtaxl hs the. KeP3Xfi and provisions contained io this Charge or the Additional Security, such default be ati event of default under this Charge.

C.}4ARGOR

The Chargor and the C:.ovimentors covenant and agrze with the Chargor. that It wiJJ not dansfer, encumber, hypothecate os. dispose of Any of the sha.rsss in the Clargor cc persons 0.1: entities other than the Covenantors without the ptior written consent of the. Charge; such COnfien:. ;AO& r.cs hs unreasonably withheld. Ir. the event tile approval erred consent of the Charge.e is not fir.st obtained with respect to the foregoing, it is agreed all monies sect:red hereunder with accrued itu-erest the shall, ar the option of the Chargee, fOrthwith become due and payable and the Chargee shall heave the right and option to exercise all irs lights and ix:riled:es hereunder..

PLACE OP PAYMENTS

All payments under this CharKe shall be paid to the Chargee care of Trtsz Capital Limited Partnership at its offices in Vancouver, British Columbia herein described or as it or its agents may otherwise dietx:t, before (J( pin. on. any payment date. "Ilar parties agree any payment received after J :it p.sn. shall be deemed to have been made on the banking day newt fiillowing. 1,10:11.CE

Any notice, direction Cr other imitnitnent repured or permitted to be lijiven under the firovisions of this Chnrge shall be in writing and may be given by delivering same or mailing same or sending same by telegram, telex, telecornmotheation, facsimile or other similar form of communication, in each case addressed to die Chargee ear.e ef Tree Capital limited Partnership. Suite 3 550, 115i6 'West Georgia Street, Vancouver:, BC 176E, 4E6, and to the Chargot at the address as sat :Alt herein. Any notice, direction or Instrument aforesaid, shall if delivwed, be demote: to lave been given or made on the date it we& so delivered; if sent by prepaid registered mail, be deemed to have heen given or made efic fifth clay following the Lift,/ on.'which is. vivss so mailed; and if sent by telegram, telex, telecomrnuniontion„ facsimile or other similar fOrn: of communication, be deemed to have been given or made on the day it was so sent Any party may give written notice of change of address its the same illAntlet, in which event any such notice shall thereafter be given to it as above provided nt such changed address. In the event of interiuption, for any reason, in one or. rnore of the forms of communications listed above, du: pasties shall use a form which is not so inte.crupted with the intent that the form of corseranucarion used give: the addressee timely notice of the COMMUniCadOn.

cROSSI:?rEATJLT

In addition to ths see granted hmeunde.e, this Charge is given as further collateral security to charges registered or to be registered, or security granted., in favour tif the Chargee against tither lands and premis6s Lsy the Chargore or Covenantor (the "Other Security"). Default hereunder shall construte default under die Other Security and default under any or all of the Other Security shall constitute default hereunder.

STANDARD("MARGE TERMS

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reporn from the appropriate credit reporting, agencies and relying on these reports when making decisions regarding advatw-s under this it-ian.

• PREPAYMENT

The Clung:it, svhan not M default, may at any time, after a unninium of $945,000.00 interest has been earned by the Chargee and paid to the. Charge..: rind after the provision of no lass than 30 days written notice, winch notice roust contain evidence satiafsictory to the Chance, of the source of hands to be used for repsyment and must contain a date certain for the repayment ("Date Certain"), repay the whole ni the obligations hereby secured hereunder to the Dare Certain. Should the repayment be delayed past the Date t:::ettain, a new minimum 30 day written notice must be provided as set out herein. If prepayment occurs prior to the Date Crutam, interest roust be paid to Date Certain. The Date Certain must be a budness day that banks in the Province of British Columbia are open for business.

minALDIscHARGEs

In accordance with the provisions of the Mortgage Comm.innent, no partial discharges are lac:mined.

The Premises may be subdivided or condominiurni2ed only with the tirior written consent of the Lender, which consent may be withheld by the lender in in sole, unfettered and absolute disicretion.

INSMANCE

Insurance shall be provided to the Chargee sn accordance with the provisions of Paragraph 16 of Standard Charge Terms 200033 and in accordance with the provisions of the Mortgage Commitment and shall be subject to the reviesp and approval of the insurance Coosultssnt of the Charger as contemplated in the Mortgage Commitment.

Section 14 of Standard Charge Terms No. 200033 is hereby deleted and replaced with the following:

"The Chargor covenants arid agrees with the Charger: that in the event of the Chargor selling, conveying, transferring or enterang into an agreement for sale or transfer of title of the Premises hereby mortgaged to a purchaser or transferee not approved, in writing, by the Chargee, which approval shall not unreasonably' be hheld, all monies hereby secured with accrued interest thereon shall at the option of the Chimp:cc forth nth become due and payable."

(b) "The Chargor Acknowledges and agrees that in the event tiltic is any transfer or salt of the shares of or reconstuuting of the Charger which would result in a change of voting control or boljarl -ial ownership thereof, such change shall he subject to the Chargees prior. written consent." ERDEEKTYMANAGEMENT

The Chargor shall maintain at all. titora a proprftty manager in, the: Premises aatisfacrovy to the ar-8 t-ti•is satisfactory to the Char8ee. A change in the i3roperty manager:.,--ithout the Charwe's approval :than conAitu Le all V;fSA of Dklfauli.- an ficrived in ilas M,"vg;ige- Ccnnmitraen

.t.C,E.WERS1417

At- the option of the Chargee, it shall constitute a default hereunder if the Chargor or the Covenantors shall become insolvent or be the subject of any bankruptcy, artangement with creditors, proposal, amalgamation or any transaction or series of transactions which results in a change in control of the Chargor, re-tnanization, or any liquidation, winding-up, dissolution, or receivership or without the Charger's consent, seeks continuation under the laws of any other hundictum. In the event of a default by the Chargor under this Charge, or if the Chargor or the Covenantors seeks relief under the Compards.;" Ordirars .AltifSgMaNi AO' or other debtor relief legislation, the Chargor will, if requested by he Charges establish a separate project bank account for the Premises

Provided ate) without in any -way limiting anything herein contained, in the event that; 20 1

The Chargor xi-sakes detatii r. in the phyffiellt of any principal or irrravest or any ocher monies resulted to be paid by t.he Chargor hereunder;

'The Chargor fails to f_thatUVE: or perform any other cctveriant or agreement herein contained;

Any representation ot warranry Made herein by the Chargor is at arty time while this Charge is outstanding not true;

Any construction lien is Ingisttied against any part tq' the Premises and is sscrt removed within thirty-five days;

An order Is made or a tesolutirm passed ror the winding up of the Chargor; or if a petitton ss filed for the winding up of the Chargor

'The Chargor becomes insolvent or naakes ars unwathori2ed ;snap-intent irr btlik. Sale of the ....largest's assets or if a bankruptcy petition is filed or pf.eaflIZeti against the. Chargor;

Any ?toe:endings with respect to the Charges?. are Callilffier.Ceti under Tiz Compiniv Cndiffes Artrossonsmi..Art,

(h) An execution, sequestradon, extent or :my other process of any tionr.t becomes eadOrceable against the Chetgor or if a distress or analogous process is levied upon the Premises or any part thereof; provided. such execution, ser4uestration, extent, process of court, distress crr analogous process is rtf3C in good faith being disputed by the Chargor;

The Chargor shall permit ashy sum. which has been admitted as due by ;he Chargor or is WA. disputer' to be dare by the Chargor and which forms, or Is capable of being merle, a charge upon any of tbf: Ptetnises in priority to or ranking equally with ;he charge of this Charge to be rrr retnaht unpaid;

Any e.harger rar encumbraneet created or issued by the Chargers having the nature of a fixed and/or floating charge shall become enforceable, wire:eller ranking in priority to, or pa.ri pa$51.1 With thif, Clifif.g,fr, or,

The C.bargor. ceases or threatens to cease to catty on its business or if the Chargor commits or threatens to commit any act of bankruptcy's then, and in any such event, this Charge shall., at the option of the Cha..-g-te, be deemed to be in default.

P.Covicied that, and notwithstanding anything herein contained, it is agreed that at any trite and front tune to lime when this Charge shall be in default, and whether. Of not the principal has been accelerated, the Charger: may, with or without entry intr.r possession eat the Premises or any part thereof, and whether or not there: inn been such entry, by writing under its hand or at its option by application to a court of competent lunscticdon, for and during the period of such de,fault, appoint a receiver-rnanag,er (the "Receiver") of the Premises ox any past thereof and of the rents and profits thereof, or of only the rents and profits thereof, and with or without security, and stay from time to time try similar writing rernove any Receiver and appoint another and that, in making stny such appointment or removal, the Chargee shall be dee/tied to bo acting as the agent or attorney lot- thr f..'.-t1 vtr.g provituttts Kd

(a) It slut:v.01T declaration of rhe Charre as to defaolt under this Charge shall be conclusive eviderace thereof for the purpose of rite appo:trittnern of such Recervert

(b) Every such Recereet shall be the agent ot attorney of the: Chargor, whose appointment is irtevocablr by the Chargor, rot the collection of all rents or otter money receivable in respect of ;he Premises or any part thereof, and the Chargor covenarsts and agrees to co• operate with and assist the .receiver and exeintte such documentation rsr the receiver shall reasonably require,in order to effect the aforesaid purposes;

(ct Chargee Linty from time ro tare in writing fax rite remuneration of the Receiver;

'The Receiver shall so Far as concerns responsibility for the Receiver's acts or mirk:stow; be deemed the agent or attorney of the Chargor arid in to twent the agent of the Chargee; lapsai :Tons :tt:co annuorsoz ay pros a;icti.UqD æ4 Aler11074U patrp Apraf: :to auate,ipsaesta 'atranunsossn D:qs •-llunsax pnuatazuorituro Ann lanputox(flsaslasaxd ay ooda ;atria Arun (sauoli'n a:a:roads:As nx! ao) auliangp ay lumflazt-g ay Jo tkrpun Asti,A to Ottibm. stluipipAq ptm sogrjojci 2tti 3.:4AdsuT cn s:pgrirzeid: top fg..14'111 ga,Bra ';.2:22-113r4:3toç A.MSO:VVIYnO;.:p

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1.Joaxorp 1:rntl Aug xo 'nosluzaxd 4o kianz•as

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asaessrritint, investigation or SiVit',y, xtx tile case may be, with ink:rest at the mon:gage rate, shill be payable by the Chargor for.thwith and shall be a charge upors the Premises. Ihe exercise of any of rite powers enumerated io this clause shall not deem the C.hatgee or it:. re:slier:dye agents to be in pOStq:SSiOrt, trillnagenlellt Or control Of the PreiniSeS 221(.1

In eons:des:anon of the advance of futiels by the Chargee„ the Chargot and the Covenantors hereby agree that, in addition to any 1i-511:airy irnposed on the Chargor and the Covenants tinder any itionarrient evidencing or seeming the loan indebtedness, the Chargor arid the C.-tat:en:1=ms shall be jointly and SnWfnkily kit any and all Of the costa, expenses, damages CZ liabilities Of rhe i:s elstectors and officers (meindusg without balmMors, all reasonable legal fees) directly or indirectly arising out of or attributable to the use, generation, ay....get, release, threatened release, discharg-e, dtspoaal or presence on, under or about the Premises of any hazardous ot noxious atbseinces and such liability shall sunive foreclosure of the security for the, loan and any other existing obligations. of the Chargor and the Covenantors to the chArgec its. respect of tilt bars and any other exercise by the Charge?. of any remedies; available to them for arty default under the Charge. lit these provisions, "llequireartersts of Enviniamental Law" means all Le.quirements of the to:ninon lays or of statutes, regulations, by-laws, ordinances, treaties, judgement; and decrees, arid (whether ox not they have rite force of law) rules, i:ides, !raids:lines, ordera, approvals., notices, perrnir.s, directives and the like, of Rny federal, territorial, provincial, regional, s s.n.txl ot local regulatory or administradve a;,,iency, board or governmenwl autho.rity relating to environmental or health or fire or safety matiers, tat any of than and t1-,e Premises arsd the. activities: carried out thereon whether in the past, present or the ibutre) including, but :vat limited to, all such tequilements relating try (l) rite protection, preservation or rernediation of the reanarall environment (the air, hind, surface wittc; or r.otilidwatet); (ii) the generation, handling, treatrnettit, storak,m, transportation or disposal of or other desihs with aolid, gaseous or liquid waste; and (iii) substances or Criktdmions that ate prohibited, controlled or otherwise regulated or are otherwise haaardous ira fam (collectively "Hazardous Substar.ces") such as con=linants, pollutants, toxic, dangerous or hazardous fAllmrStItteS, rcasric, tiSnigerOtilt or hazardous sv,aterials, designated substances, contirilled producrs, including waliout. limitation, wastes, subject. wastes, urea fornialtlehyde foam type of insulation, asbestos or Afil:4AfOs-conts.ining rnateiials, polychlorinated biphenyis ("NM's') or PCB contaminated iluids or eximptnent, explosives, l'aditni,Ctive StabStlatleS, petiolein.11 2n3.1 ass:Altai-Ltd products, underground storage tanks or surface impotindmenta and (iv) die stecunng, protectior., preservation and Leanedia dem of health, fire andlot safety concerns. (a) 1"ne Chassgor, to the bear of ira knowledge arid bailed on the environmental assessment resort provided to the Chatgce as of the date hereof, warrants and represents Ihkt:

111:: Premises have never. been used as a land fill site. Or In store ilazardous Stli-gitTenC.eS either above or below ground: Les storage tanks or otherwise;

(ii ALl l-farardcAis Substances used in connection with the business conducted ors the Premises has at 211 times been rece.lvtici, handled, used, stored, treated, shipped and disposed :,f in strict compliance with all Environtriental

No iiazardous Stibstimetes have been released into the environment ce: deposited, diacharged, placed or disposed of At., On Or near ;he Prtrnisc:; as a result of the conduct of the business on the Premises; ;intri

I‘io rim:ices of any violation of any mattets referred to above telating to the 13Letysis;es or its use have been received by the Chargor and there are no direr:done., writs, unctions, orders or Mrigeiretrits tr,f,tatieling, no law suits, claims, proceedings, or investigations being instituted or filed.

iaor the purpose:a of the Mortgage COninliCalent, xs .1.710./.ardrst.t!, Substance includes 1-Alt is. .not limited to contaminants, pollutants, dangerous ,substances, gasoline, od, liquid wastes, industrial wuttei, whoie. liquid wastes, toxic substances, hazardous wastes, hazardous: us:aerials and hazardous substances as defined in oa putstamt to arty applicable Environmental Laws. Further :die ChaLgter shall indemnify and save hartr2ess the t....hargee- from any loss or liability whatsoever inising from any violation whatsaisrver of any law, tegulatim, ordinance:, judgment., appraisal or deci.sion in connection with hazardoua risks ox environmesiral risks.

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IRO # 80 Notice Of Assignment Of Rente-Oeneral Registered as AT:13616U on 2013 07 31 at 00:44 The en,oficent(s) hereby applies bathe Land Registrar. yyyy rem dd Page 1 of S ...... Proporiles . PIN 10117 0693 LT Descriprinn PT LT 10 COI+, 3 EYS TWP OF YORK AS INTE395970: SIY380043; TORONTO(N 'YORK). CITY QF TORONTO Address 1450 DON MILLS ROAD TORONTO

Ap(Plicent(s)

The essignor(s) hereby assigns their Interest in the rents (lithe ariove described land.The notice, is barieti on or aitecte a valid and existing estate, right, Interest or equity in land.

Name GLOBAL MILLS INC. deffela Service 3(1 Hazelten Avenue Toronto, Ontario M5R 2E2

;, Norma Wass". President, have ?he authority to bind the corporation. Tois document Is nor authorized under Power of Attorney by tree party.

Lairty To(s) Capacity Share Name COMOUTERSHARE TRUST COMPANY OF CANADA Ackireey tor Service 100 univereity Avenue, WI Floor Toronto, Ontario MOi 2Y1

Statements

he apoloant applies for rfie entry of a notice of general arieignment of rents. This notice may be deleted by the Lard Registrar when the registered instrument Af.:33i3,10 regietered on 2013/07,^31 to which this notice relates is deleted Schedule: See Schedules

Signed By . Roman Michael Yeroslaw Pekaruk 2 Queen Street East Suite 1500 acting for &glad 2013 07 31 Toronto Applicant(b) MSC 355 Tel 416-593-122! Fax 416-593-5437 have the authority to sign and register the documeoton tlehall of parties to the document. Romen Michael Yernalew Pokaruk 2 Queen St:eat East Suite 1500 acting for Pally To Signed 201:3 07 31 Toronto (5) fv15O 3G5 Tel 41f3-593-1221 Faux 416-593-5431 I have the authority to sign and register the document or, hohulf of all parties to the document.

Submitted By rs',.ANEY MCMURTRY 1..LP 2 Queen !.'Itreet F,st She 15.:00 2013 c:q 31 Toronto MSC 3G5 Tel 416-693-1221 Fax 416-593-5437

Fees/tmes,Oclyrrient

Siaftriory Regiz.vatron Fee $80.00 RAI Reid n0 00 0 8

# 80 Neig» Of Assignment Of Refeks-Gtereraf Registered as AT3364528 an 201307 31 at (19:44 applicert(s) hereby applies to the Leere RefistfeK yyyy mm dd Fem 2 of 5

fite Number

Party Client F Number: 0392".28906

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manhge3. so appointed and the ersiployees, stonteira or agents. of such. receiver Of receivernnanager.

5. fn. the event of tiefaith under the Chaege or herein, the .Assignee rimy, at its Opt1‘.1O, take and assume the nsetragernent„ operation anti maintenance of the Lands and perform all acts necessary and proper wlth te3p0.0: tO slich mansgerriern.: operation and maintmance and exiiend surir sums out of the income of the Lands as may be needed in connection therewith, i5.1 313C1.1 111211.cief and to the same extent 55 AS3ig110t, including the right to effect new I..eases, renew existing Leases OK Make COnCeSSiOtif: tO tenants and the .Assignor .betehy releases claims against the Assignee arising out of such management, ope—oation and maintenance, save and except the liability of the..Assignee to account.

6. Ihe Assignor represents and warrants to, and owe,nants and agrees with, the Assignee that:

all Leases are valid, enforceable and in fall fence and effect;

the Assignor ben not done and will rat do or omit to do any act having the effect of terrainating, cancelling or accepting surrender of arty of the lataises, or of 'N.-abr:1.1g,. releasing, reducing or abating any rights or remedies of the Assignor, or obligations of any other party thereunder r srs connee.tion therewith without the prior written consent of the Assignee;

(c) none of such rights, remedies and obligadons are or wl be arlected by any other: ar;eernetit, &WV:Merit or understanding or by any reduction, abatement, defence, set- off ear cnnaterclairre

(d) none of the I.eases or the Assignors rights thereunder (includitig the right to receive die Rentals) have born or will be amended, assigned, eneturalieved, discounted or anticipated, except as ...autently disclosed by the records of the Lanai Regisay Office, and same shall not be, except with tilt": ptig:st written Cc.IOSerit of the Assignee;

f,e) none of the .Rentals have been Of will be paid prior to the due date fear payment thereof etat as provided in the Leases;

.01 the Assignor will obstree and perform all edits obligations under the ia.sases; there has beesi no default under siny of the Leases by any of the parties the of winch the Assignor has notice;

(h). there is no outstanding dispute wider any of the Leases by any of the parties thereto; said, (i) neither the Assignor nor any previous owner of the Lands has executed a prior assignment of the Leases or the Rentals ex—lit as aural* disclnsed by the recorthi of the Land Registry Office.

The Assignor hereby covenants and warrants- that a further assignment of Leases or Rentals shall not be granted unless the Assignor provides the Assignee with acs acknowledgement Eon; any subsequent creditoc that this Assignment shall have rci:•:o.9.5, over any atlas. b. Nothing herein contained shall have the effect of making the Assignee responsible for the collecrion of Rentsls or any pert thereof, or for the performance of any of the obligations or conditions under. or in respect of the Leases or any of therr. to be observed and performed by. the. Assignor, or to take any action or enforce any ormady against any person w.tit respect to arty breach of any of the I.414et5, and that the Assignee shall r.ot by virtue of this A ssignrriem: or Its receipt of the Rentals Or any pail therrec.)f, become or be deemed a mortgagee in possession. The Assignee shall Ise hable to account far only such rflOrliek 55 shall kcnially come isacusts. hanck, less proper coll,,tion charger:, provided that saint monitf; may be applied on account of any indebtedness of the Assignor: to the .essssgriee.

9. iise Assignor shall be entitled to and receive the. Rentals as they become rime under the i.eases unless and until default occurs under the C:herge or herein and the .Assignee gives notice to any tenant, user; occupier; liriensee or other party entitled to occupation or isse of any part of the iiands under any of the Leases requiring that the Rentals he paid to the 2 1 1

Assignee, but nothing iii this section 9 shall permit or _amathori7e the Assignor to collect any of the Rentals poor to their due date.

10 None of the rights or rerneelles of the Assignee under the Charge shall be delayed or in any way preindiced by this Assignment. Notwithstanding any .vatiation of the berrna of the Charge or arty extension of dame fat payment of the monies secured by the Charge or any put thereof or any release of part or parrs of the prernisea or. any collateral security, the Leases and the Rentals hereby aseigned Alai] ccantinue as collateral security until all monies liecured by the Charge have beers paid in fall.

FtSVC as otherwise agreed between the parties in writing, and save as hereinafter set not, the As.signrsient and the Charge collectively constitute the entire agreement between the parties as regards the assignment of Leases and Rentals and the tights and liabilities of the parties and there are no other repreaentations, collateral agreementa Os. conditions in respect of the Leases or Rentals. This Assignment is in addition to and not in subathution for any other agreement between the parties including, without limiting the generality of the foregoing, any agreement cteatmg a security isateteat in the Leaats or Rentals and whether heretofore or hereinafter inside, and the terarsa of such agreement or agreements shall be deemed to he continued unless expressly provided so the contatty an writing and signed by the parties.

12. Any notice required by or given under at in connecdon with this Assignment may be effectively given if it. is in written form end Oven in the same manner and extent as provided far in the Charge,

13. If any term of this Aangennert or the application to army person ox circtimatance shall to any extern be invalid or unenforceable, the remainder of this Assignment or the application of such term to persons ox' circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term of tins Assignment shall be separately valid and enforceable to the fullest extent permitted by law.

14. Any receiver ox receaverannumger appals:bed out of this Assignment or by any Court shall be deemed to be an agent or agents of the Assignor and the Asaignor shall be solely responsible. for his or it or their acts and fat his or its or their remuneration and expanses and the Assignee shall not he in any way responsibk foci: any misconduct or negligence on the part of stay such receiver or receivenmanaga,

it; the event that all amounts receivable under the Charge are remived isa full, the Assignor 313,01 be entitled, at its sale expense to receive a Mscharge of this Assignment

16. A discharge of the Charge shall operate as a reassignment to the Assignor of the rentals and leases referred to herein.

17. This Assignment shall be interpteted in accordance with the laws of the Province of Ontario.

18. This Assignment arid everything contained herein shall extend to and bind and may be taken advantage of by the respective heirs, executora, administrators, successors and assigns, as the ease may he, of each and every of the parties hereto and where there is snore than one Assignor or there is a female party or a. corporation, the provisions hereof hall be read with all grananatical changes thereby rendered necessary and 'rikere they. is laIrdf.t than d.sargiiut .3o,sr a..J ,ts-

19. Provided (1) (I) an Event s:f Default has not 0~m:red, or. if occurred is enn langer corninating, and (ii) the Assignor tarmpiler with the requirements of the first mortgagee, then the Assignor sassy, without the Assignee's concern, from time to time (i) agree to amend the existing leases so long as such amendments are commercially reasonable, and do not release such tenants or reduce such tenants' _rental obligations under the lease except in the ordinary course of its business acting as would a prudent landlord, and agree to lease prentifses isa the Pro)ect, acting as a pendent landkad, to replacement ce.nant(s) at fair market terms. ~ti

.„ , iit, 21"/.

LRO # 80 Charge/Mortgage Reglatered as A73364527 art 2013 07 31 at 09:44 'rhe applicent.fs) hereby applies to tns Lsnd Registrsr. yyyy rnrrt dd Page 1 t.r 10

PIN 10117 - 0593 LT tmerast/Estate Fea Stimple Deur:prior? PT 1f 10 CON 3 EYS TWP OF YORK AS iN TB395970; srf NY380043; TORONTO(N YORK), CITY OF TORONTO Arirtress 1450 DON MiLLS ROAD TORONTO eN7g7,17.7— The chargrx(s) havhy charges 11-:e land to e Chargee(s).1- ':.11a11.pr(e) ackrwmEedges Plo recsiet or the charge and Ene standard charge terms, ii ant'_

Neme MILLS ENC. Address lor Sterwis 30 Hazoiton Avenue 'torent°, Coterie. M5R 202

Norma Weltoo, P,ezeident. have the euthoMy to bind the corporedon. This document is not autherized under Power of Altorney by the party.

Chargee(s) (.;:,wacity Share

Name COMPUTERSHARE IRUST COMPANY OF CANADA Address Or Service 100 Univessity Avenue, 9th Fioor Toronto, Ontano mg I 2Y1 Leen No. 11C4/13

Provisions

.Prtnpat 321,000,000.00 Curtemy CON Ce/Marion Peried See Sehedoe Satanse Doe Date 2014i0S/06 Interest Rata See Scheduie Psyrnems interest Adjust4ten1 Date 2013 08 05 %ment bete 5P1montbiy Psyment Date 2013 05 05 Last Rtyment Dato 2014 03 05 Standard Crine Terms 200033 Insurance Amant fuli ineo:;eule vaiee atnitenrce Norma Waiten and Ronauld ~ton

Additiornil Provi;ions;

Sec Schedules

Signed

Roin en M iche `r Peka ruk 2 Ocean Street East Sufte 1500 aoting for Chntr,or Signed 2015 07 31 Toronto M5C 3.950 1M •it16-593-1221 Fax 416-593-5437 I gaye the etsgletizy to st:: end rrigister the dcahaent on babel( at the Chargar(s).

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reports from the appropriate credit reporting agencies and relying On these reports when making decisions regarding advances under tins loan

PREPAYMENT

The Chargor, when not in detierk, may at any- dote, after a minimum of $945,000.00 interest haS been earned by the Charger: and paid to die Chargee and after the provision of no less than 30 days vnitren notice, which notice roust contain evidence satisfactory to the Chargee,r..if the source of fiends to be used for repayment and roust contain a date certain for the repayment ("Date Certain"), repay the whole of the ob4ations hereby secured hereunder to the Date Certain. Should the repayment be delayed past the Date Certain, a new minimum 30 day written notice must be provided as set out herein. If prepayment occurs prior to the Date Certain, interest must be paid to Date Certain. The Date Certain must be a business day that banks in the Province of British Columbia are open for business.

VIRTTAI,Id'SCI-IA CAS

In at:con:inns:cf. with the provisions of the MOrTage Commitment, no partial discharges ate permitted.

The .Prernise.s may be subdivided or condominiumiatid only with the prior written consent of the Lender., which consent may be withheld by the lender in its sole, ntriettered and absolute discretion.

INSURANCE, insurance shall be provided to thc Charge:: in accordance with the provisions of Paragraph 16 of Standard Charge Tern-is 20003.3 and in accordance with the provisions of the Mortgage Commitment and shall be subject to the nreiew and approval of the insurance Consultant of the Chargee as contemplated in the Mortgage Corruninniair pliE ON SALE

Section 14 of Standard Charge Terms No. 200033 is hereby deleted and replaced with the following:

(a) "Ent Chargor covenants and agrees with the Charger that in the event of the augur selling, conveying, transferring ox entering into an ardternent for sale or transfer of title of the Premises hereby mortgaged to a purchaser or transferee not approved, in writing, by the Chargee, which approval shall not unreasonably be withheld, a monies hereby secured with accrued interest thereon shall at the option of the Chargee forthwith become due and payable

0=9 "The Chargor Acknowledges and agrees that in the event there is any transfer or sale of the shares of or. reconstituting of the Chargor which would result in a change of voting control or beneficial ownership thereof, such change shall be subject ro the Charge:es prior written consent."

PROPERTY MAN:MEW:Tr

The aratgoc shail maintain at all drnes a properly manager for the Premises satisfactory to the: 0.-rarp..ee and on terms satisfactor) to the Chargee. A cthane in the nroperty manager without the Chargcea approvat sl-A constitute an Sii-i'.ven ,;.CDefault- at &Fined in the Mortgage Commitment.

RECEIVERSHIP

At the option of the Charger:, it shall constitute a default hereunder if the Chargor or. the Covenant= shall become insolvent or be the sub;ect of any bankruptcy, arrangement with creditors, proposal, amalgamation on: any transaction or series of Transactions which results in a change in control of the Chargor, re•organization, or any liquidation, winding-up, dissolution, or receivership or without the Charger's consent, seeks continuation under the laws of any other jurisdicdon. In the event of a default by the Chargor under this Charge, or if the Charger or the Covenantors seeks relief under the Compattitte Creaktdirs .Ama,rweat Ad or other debtor relief legislation, the Chargor well, if requested by the Chargee establish a separate proi-• • bank account foe. the. Pretnifita.

Provided and without in any way luniturg anything herein contained,in the event dust: 21 6

The Chatgor makes clei45tilt in the pa.yment of any wk.-it- al or. interest 05 any other mosnes requited to be paid by the Chargor hereunder;

The Chargor fails to observe or perform achy other covenant Or agreement herein contained;

Any represents dors or. warranty made herein by the Chagos- is at any time while this Charge is outsrandim.3 not mitt;

!..d) Any construction hen is registered against any part of the PranitSC5 aryl is slot removed within äÿ-five days;

.An order is made o:: a resolution passed for the winding up of Lbe Charge.4 or if a petition is filed for the iding up of the (largos.;

Cfsargor becomes insolvent or makes an unauthonzed assignment or bulk sale of the Chatgor's assets Or if zz banktispiry petition is filed or: presented against die Chergor;

Any proceedings -with respect to the Cluagor are mmtneneed tinder The Coyststite iiers Artere,geresetAA

(h) Ars execution, secinest.ration, extent or any other process of any court becomes enfOreeable against tile Chargor or if a distress or analogous process is levied upon the Premises or arty part thereof, provided such execution, sequestvation, extent., process of court, disur.ss or analogous process ir not in good faith being disputed by the Chargcsr,

The (largos shall permit any stets what has been admitted as due by the Chargor or is oot thsputed to be due by the Clangor and which forms, or is capable of being made, a charge upon arty of the Premiseia its prieuiry to or' ,linking enmity with the charge cd. this Charge to be or remain unpaid; t,t1 Any charge or ent.undstance created cir issued by the Cbatgot braving the nature of a fixed andfor floating charge shall becorne enforceable, winither ranking in priority to, or pad passu with this Clarg.,e; or, dr)Ihe Cbargcsr ceases or threatens ro cease to oaery ors its businese or tf the Chatgor ctornrnits Or threatens to comrnit any act ofttankruptcy; then, and in any such event, this Charge shall, at the option of the Charge; be deemed tr.% be in detfault.

Provided that, and notwithstanding anything herein contained, it is agreed that at any time and from time to tune when this Chttge shall be in default, and whether ot not the principal has betas accelerated, the Chargee may, with or without entry into possession of the. Ptemittes or any past thereof, and whether or not there has beers such entry, by writing under its hand or at its option by applicadon to a court of competent lurisdiction, for Ana during the period of such de.fault, appoint a receiver-manager ;the "Receiver") of rise Premises or any part thereof and of the rents and profits there.ol; or of only the rents, and profits thereof, and with or without sects:iv, and sway from titrie to time by similar writing remove any Receives: and aprstsint another and that, its making any such eppointmery or resnovai, the Chkr.:,,e4f: shail lie deemed to he ACCing SS the agent or attorney for the L of 4

(A) It statutory declaration of the Chargee as to default under this Charge shail he conclusive evidence thereof for the purpose of the appointtnent of such Receiver.; f.b) Every such Receiver shall be the agent ot attorney of the Chargor, whose appointment is inevrscable by the Chargor, for the collet:don of sal rerti2i or other money receivable respect of the Prernises or any part thereof, and the Chrugra covenants and agrees to co. operate with and assist the receiver and execute such documentation as the receiver shall reasonably require,In Ol'aar to effect the aforesaid purposes; t:e) The Charged may from time to tin's" ir, writing fix the remuneration of the Receiver;

(d) The Receiver sìsall :so far as concerns responsibdity for the RatielVat'S aCtS ox OrniSSiOnS be tivnned the agent ot attorney of the Chargor and ixì no event the agent of the Cbargee; 217

(c) The 2ppr3.4.1t/IleX:t of the P..ticei vex by the. Cl atgee shall tint incur or create any liability on the psue. of the Chargee to the Receiver in any resp.ect, and such appointrrient or any-thing which may be clone by the Retteiver or the removal of the Receiver or the termination of die reeeivership shall not have dui etc'eet of constituting the Charges a mortgagee in possession in respect of the Preinise.s or any part thereof;

Cf.) The Receiver shall have ,tower to ext=cise any of the powers or discredons of the Chas:gee hereunder, and z1-3ay rent or license fox use any parr of die Prernises which may bet:cane vacant for such term and subject to such provisitms as the R.C.CCIVet illay deem advisable or expedient, And r doing so the Receiver. shall Act as the. arfo.tuey tir agent of the Chargor end shall have the authority to execute under seal arty lease in the mane of and on behalf the Clangor, and the Cher.gor undertakes tr, ratify And (nritir.th whatever. the 'Receiver they do in connection with the Premises;

ihs Receiver shall have power to construct or complete. any unfinished construcdon upon the Premises so that the Premises and the buildings thereon so completed shall hr. A cornolete steucture; fls) iate Receiver shall have power to manage, Operate, amend, repair., alter. 0.;: !ff.:tend tilt: Premises or arty part thereof as it dens expedient in the name of the (.::hatgor and to carry on or curvier in carrying on all or any part of the business of the ChAegor-,

flits Receiver tray borrow or raise money on the r-echrity of rill or any part of die Premises in pnonty to CAC ranking equal with cx subordinate to the charge of thus Charge for such purpreei as :ray be appietved by the Changer;

The Receiver sleall not be liable to the Chatwar to aer.ount fbx money or darnages °thee than the money at:nutty received by the Receiver in respect of die Premises or any part thereof, :Ind out of such thontiy- so received t.he Receiver shall, subject to other written directions: from die Chargee, pay eat retake reasonable reserves for payment in the folic:wing trues:

the Receiver's remuneration and disbursements;

all obligations iricutreci by the Receiver m connection with the manage:hem, incluttrig leasing and lic.ensing, operation, Amendment, repair, alteration or extensiorx of the Premises ox any part there.of, and in borrowing or raising rnoney ois the security of the Premises,ox Any parr thereof:

(111) interest, principal end other money which may &ore. time to titre be or become charged upon tire Premises in priority to this Charge, and all tales, inAueariet Feminism and every other proper expenditure made or incurred by the Receiver ire r.e.el...ect. of the Premises or any putt thereof;

(iv) to the. Charger: all amounts due under this Charge and to the ex-tent eiected by the Chargee, amounts to become due herctundet for no more than two (2).triontler; fy) and thercetfter any surplus remaining in the hands of the Receiver shall be payable to the Chsxgor.

notice in wiiting under its hand to the Chargor and to the Receiver; anti

tr. Save as to sorplus money payable to the Chatgar, the. Chargor reltiases and clisc;harges the Chat-gee and. the Receiver from every claim of every nature, whether in damages or otherwise, arising by reason of anything done by the Chargee or the Receiver uride,r die provisions; of this section, unless such claim be the direct aud proximate result of diehonesty ox gixo.s neglect.

The Chsigee or agent of the (1:target: may, at any urr,e, befbre and after default, arid for any purpose deemed necessary by the Chargee, enter upon the Pr.e.thises inspeet the Premises and buildings thereon. Without in any way limiting the generality of the fbregoing, the Chargee (or its respective agents) !ray enter upon the PreriliSCS coriduet tiny 0.11Vit.011111fffitztl testing, site assesarne.nt, hive:4,41,n or study deemed necessary by the Chargee and the reasonable cost such netting, '.111A%t 11S114 S317Z13:14.0:7 30RIBLID

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and other remedies hereunder may be exercietici. It is ihoher agreed that the Climes. shall not become a mortgagee In possesidon by reason only of faatising any of th'c rights given ;xi it under this paragraph or in irsakini!, any payment. to pi-e.g.:rye, protect ot. MUM. the Premises. .EXP.MIEEL6.11ON

In the event the whole or any part of the Premises ca expropriated, the Chiargor agrees all proceeds received front any such expropriation shall be peed directly to the Chargee t....rovided that upon the payment of all amounts secured by this Charge, the Cliatgee shalt have no further claim to 2t.ty sod: proceeds. 4.11121.11KINAL.FLNAZig,_INTEi.

The Chatgor shall not, ream and after. the shim o.f the: registration of this Charge, further niortgage, charge or otherwise encumber the Premises without the prior written consent of the Chargee. Failure to cost:ply with this proviaion shall at the option of the Charges:: consttute an event of Fault under the within Charge. If the: (:hargor defaults in the payment of any instalment of principal *r interest payable under any subsequent Charge/Mortgage or other encumbrance sificnog the Premises; whether die. Charges: has e.onseasted thereto or not, or in the observance ar performance of any of the agreements, terms or. provisos of any such Charge/Mortgage or other encumbrance, then at the option of the. Chingee, the entire principal secured unde.r this Charge, together with all accautel arid unpaid intes.est, shall become due an parable at the. option of the Chargee and the Chargee shall be entitled to exercise all of its rights and remedies hereunder.

ADDITIONAL SECURITY

The Charvi: ssçledza General Assignment of Rents and General Security .Agreximent (collectively the "Additional Security") are being gsveri as further isecunty to this Charge, which Additional Security is being gninted by 24301: to the C:hargee and any default under the Additional Secsarity shall constitute default under this Charge and any default under this Charge shall constitute default under the Additonal Sectsr.ity and at the option of the Chargee require the entre secured under this Chargce toge.ther with all accrued and unpaid interest to become due and payable. Pay.rnent underr. tile Additional Se—srity shall cons:Mute payment made: this Charge and payment on account of this Charge shall corvititute payinemt under the .Additional Security.

It is agreed the Chazgee's rights hereunder shall in no way inerge or. be affected by any proceeding-F.. the Charger: tnay take under. the .Adelitional Security ariel the Chargee shall not he required to rake proceedings under such .A.tirlitional Security or iiny part thereof before proceeding under this (Marge and ccuriersely, no s' 's under this Charge shall in any way affect the rights of the Chargee under such Addi dorsal Se.-usity and the Cbargee shall not be required to take proceedings under. this Charge before procee.ding wider the Additional Security or any part thereof.

I..lpon request &can the Charges:, the Cliat.gru agrees forthwith upon delivery from time to time of any chattels in which it haii ari ownership interest (including replace:merits tini.reoi) relating to the Premises, it shall promptly notify rìae Chargee, and its solicitors, of such delivery anti shall forthwith supply the Chargee with all serial zrambers and a description of soch chattels for the purposes of the aforementioned General Security Agreement, wthiehi ciescdption shall include make and model. 1.12e Chargor furtlner agrees to provide written evidence of proof of purchase: of the chattels, free of encumbrances, and of insurance i-sf scent, bo!-.11 zn thcì fc•rx:,- ;inc.{ oantmt ;:atisfactory to ihc: CLzp,ce.

UND.F.RTARINGS

in the event the Charwar defaults; .i.vith respect to arty undertahings delivered to the C.lautrie isa consideration of dati advance of fonds under :his Charge or with respect to any covenant conwined in the terms and provisions crav,ineti in this Charge or the .Additional Security, such default wiii be an event of default under this Charge.

QTARGO.R.STri'A.P.17:1-I(11.,1)11RS

'The Cigargeg ;mei the, Covet:an r.or.s covenant and agree with the C.:bargee that it will not transfer, es:cumber, hypothecate or dispose of any of the shares is the Chargor to persons or entities other than the Covenantors without the prim sirritten consent of the Chargee, such consent not ìc. be tinreasor.ahly withheld. the event the api?roval and content of the Chargee csz not that obtained with respect to the foregoing, it is fteteed all monies lieelifed here.tinakir with accused interest thereon 0 0 1 Z. t

shalt, a: the ice-5 of the Cgr: ff.%r IWIth become the and payable and the Cliazgee shall have the right and option to exercise all its rights anti estreeclies here:tinder.

PI.ACI:;OR PAN-NIEVES

Ail payments under dais Charge shall be paid to the Charget at its offices in Vancouver, rinds!) Columbia herein described or as it or its agents may othemse direct, before 1:00 p.m Pacific Standard Time on a business date. The parries agree any payment. received after 1:00 p.m. shall be deemed to have been Ingfk on the leinking day next following.

NUTICE

))'.y notice, direction Or CAllerr inatr.nrcWnt rf:qtlinfi Of peg:MAMA tO bf: given under the provisions of this Charge shall be ix: writing and may be g.ivert by delivering same otitis:Th.(1g SUM: Or sending same by telegram, telex; telecommunication, facsimile or other similar form of communialtion, in each case addressed to the Ctiargee c/ti Tree (.:apital Limited Partnership, Suite 1550, 1155 West Georgia Street, Vancouver, BC V6E '4E6, atiti to the Chug-or at the atichesa as set 012 t herein. Any notice, direction or instniment aforesaid, shall if delivered, be deerried to have beet: givoi or made on the date it ',eat: so delivered; if sent by ptepaid registered rnail, be deemed to have been giver or made the fifth •:lay followinF?, the day on which it Was cao mailed; and if sent by telegrsur.i, telex, telecommunication, facsimilr or othec sisrtilar fonrc of corerriunicatimi, be deemed to have been given Or made on the day it was so sent. A.ny party may give written ntetic:e of change of address in the same manner, in Which event any such notice shall thereafter be given to it. as above provided at such changed Address. In r.he eveht of int.erniption, fOr Any reason, in one or more of the forms of cornninnica dons Jived above, the patties shall use a fCAM W1,4,11 is not sc.) jfIrerrnprexi with the intent that the form of communication used -will give the addressee timely notice of the communication.

CROSS DEFAtER.T

In addition r.o thr securit7 granted hereunder, this Charge is even as further collateral security to charges registered or to be- registered, or security granted or to be granted, it; favour of the Charg,ee against other lands and premises of the Chargor or Covenantors (die "Other Security"). Default hereunder shill constitute default under the Other Security And default under Any or all of the ()ther Security shall constitute deflatit hereunder.

STANDARD.CHARGE TERMS

In the event of' any discrepancy between the provisions contained ixa this Schedule and the provisions contained in Standard Charge 'Eexeris -No. 200033, .the provisions of this Schedule shall prevail. •

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NEMESES= T.E. SUIS EADESETT.. KOTEt AKERMIIING DWPERTIES :MOULD 82 IWESTIOATED TO ASCERTAIN DESCRIPTIVE /NCONSISTMICIES, ir ANY, NITS DEiCRIDTION NOTE, ENEDED MRAT YOUR PRINTR:UT STATES 'ME TOTAL NWSSR OF PAGES AND TEAT .C(P :RAVE KezzD umn ALL UE. PARsTal. PGAREVINTSLi POE. PEOPERTE TPENTIPIET LANM PRNZ 7 OF D P'->Ontario" Qutaild EEGIETRN PESSARRO VOE Pleggie01 OFFICE f64 10111-0E37 t ON 2013/05;14 AT 13:55:08 SOESECT TO RESEEVATIONE 1M MEN GRANT

0222/ E2G. INSTRITEENT Ts:PE ADDRIEST PARTIES PROM PARTIES TO CHU)

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'AT:1822852 2011/11/18 CEARDS MIPLETELY DELETED EL-AO ;1500 DCG, V1LLSJ LIKUD FIRM CAPITAL maxi,..w.;- , ZUNI) IPC.

AT2572085 2411/11/1S NO 1426GN NM37: .310 COMPLETELY I.EM .** I EL-AD t1500 DON (IMS) LXMIT22 FIRM: CAPITAL MORTGAO.5 FUND 1SO, RR4ANNS. ATi:87155

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A73036551 2012/02ION NCE ASSGN RENT GUN -*. COMPLETELY DELETED EL-AD .11E00 DOR MILLS) LIMITED PYRE CAP/TAL M0RT0A,3- FUND INC: RE:MARKS: A2309iSSC.

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2012/12/12 NC/SICE OP LEASE $2 EL-ED (1500 DON MILLS? LIMITED nall CANADA

2012/12/12 NOTICE OF LEAER EL-AD (1500 DOE M12-L6 L14XTE2' EGTENANS, BENSON 2PeLULN /75O.

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... ORiSZ WES. NEM. DATE IRETREMENT TYPE ANOV7;T PART/ES 1SON PARTIES TO .:RED

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AT31S.4190 221211T112 DIACE OE CHARME 4.. COMPLETELY DELETED PIER CAPITAL NONATIWOR FUM! INc. Jro- AT3296..4

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A.TAT$271,.. -auniosaal .i-fmAnc,a 83,002.200 EL-Ab 3440 DON RILLS) LIMITED RINDFOR PRIVATE CAP1Al. TNC, C

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NOTE, ADJOINING PRCPERTIES SROULD 22 ImvavrIcxTre TO ASCERTAIN DESCRIPTIVE INCAMISTENCIES, IP ANY, WITH DESCRIPTION REPRESENEDT i,.'R TR'S PROPERTY. :Awn; Ek.eveZ *MAT SOUP PRINTOUT STATS8 THE TOTAL 'RER OP PhGEE rou THAT NOV NAYS PICKED THAR ALL. ON. •en luv mem eaXr,T4 lehee' aex. zeml uwee: ae ipmem Ivue,, , euvArz lAWATe4 untu g4nWol 'xzeeaeee STN.T. w), asz=smeumu muenessa NIXM 'AM 'ARIDWZ3TSACZeI sAtlexeresc AIIMUSDre C. CMUDTZMAU ela enh-sns 8?Tlene. DNYNTIM

erzyyeue '09eier'$.)Pikeet •.".",K3 T. uyAred aasesemil ;.sTan XCC UY-.12 ZXT eorrfml DSG':

(7,1,7iD 1NOU'd BETMVZ acTXM IHMIUMBI =yr 'sun 'azu ilUUD

vaeD xmce2 ugoLueAlume tü:i5.1'T 1Y 9TPiei.0i. A9 c.e9e-zuex eee WTrieg.: 2,»2 azer,:nA Äexaxema opeluo teree egaieggeWei:eiligglea enauzac'i MMILOW WVNIAMErEM >mulme 'reznea Request ID: 015622672 Province of Ontario Date Report Pioduced: 2013108/14 Transaction ID: 51796480 Mil:Clain,' of Goveinrrie.nt Services Time Repon Produced: 16:21:27 Category ID: UNIE Page: 1

CORPORATION PROFILE REPORT

Ontario Corp Number CcaporatIon Nome Incorporation Date

2117410 EL-AD (1500 DON MILLS) LIMITED 2006/10/27

Jurisdiction

ONTARIO

Corporation Type Corporation 5tattas Fortner Jurisdiction

ONTARIO BUSINESS CORP, ACTIVE NOT APPLICABLE

Registered Office Address Date Amalgamated Amalgamation Ind.

NOT APPLICABLE NOT APPLICABLE 30 HAZELTON AVENUE New AMA. Number Notice Date

TORONTO NOT APPLICABLE NOT APPLICABLE ONTARIO CANADA M5R 2E2 Letter Date

Mailing Address NOT APPLICABLE

Revival Cate. Continuation Date 30 HAZELTON AVENUE NOT APPLICABLE NOT APPLICABLE

TORONTO Transferred Out Date Cancel/Inactive Date ONTARIO CANADA M5R 2E2 NOT APPLICABLE NOT APPLICABLE

EP Licence Eff.Date EP Licence Term.Date NOT APPLICABLE NOT APPLICABLE

Number of Directors Date Commenced Date Ceased Minimum Maximum in Oratorio in Ontario 00001 00010 NOT APPLICABLE NOT APPLICABLE Activity Classification

NOT AVAILABLE 2 34

Rogues? ID: 015822672 Province of Ontario Date Report Produced: 2013108/14 Transaction ID: 61796480 Ministry of Government Services Time Report Produced: 16:21:27 Category ID: LIVE Page: 2

CORPORATION PROFILE REPORT Ontario Corp Number Corporation N8r11

2117410 EL-AD (1500 DON MILLS) LIMITED

Corporate Name History Effective Date

EL-AD (1500 DON MILLS) LIMfTED 2006/10/27

Current Business Narneis) Exist: NO

Expired E3Sirtess Nome(s) Exiat: NO

Administrator: Name (individual 1Corporation) Address NORMA 30 HAZELTON AVENUE WALTON TORONTO ONTARIO CANADA M5R 2E2

Date Began First Director 2012/12/11 NOT APPLION3LE

Designation Officer Type Resident Canadian

DIRECTOR Request ID: 015622672 Province of Ontario Date Report Pioduced: 2013/08/14 Transaction ID: 51796480 Is,/fintstry of Government Services Time Report Produced: 16:21:27 Category ID; UN/E Page: 3

CORPORATION PROFILE REPORT Ontario Corp Number Corporation Name

2117410 EL-AD (1500 DON MILLS) LIMITED

Administrator; Name (Individual 1 Corporation) Address

NORMA 30 HAZELTON AVENUE WALTON TORONTO ONTARIO CANADA M5R 2E2

Date Began First Director

2012/12111 NOT APPLICABLE

Designation Officer Type Resident Canadian

OFFICER PRE.:SIDENT

Administrator: Name (individual f Corporation) Address

NORMA 30 HAZELTON AVENUE WALTON TORONTO ONTARIO CANADA M5R

Date Began First Director

2012/12111 NOT APPLICABLE

Decignation MficerType. Rngideni. Canadian

OFFICER SECRETARY Request D16622672 Province of Ontario Date Report Produced: 2013/08/14 Transactim ID: 61196460 Ministry ot Gc!vemmerit Services Time Report Produced 16:21:27 Category ID: UN/s. Page: 4

CORPORATION PROFILE REPORT Ontario Corp Number Corporatien Name

2117410 EL-AD (1500 DON MILLS) LIMITED

Admintstrator. Name (indivictuai i Corporation) Actdrese NORMA 30 HAZELTON AVENUE WALTON TORONTO OWARIO CANADA M5R 2E2

Date Regan Pleat Director

2012112111 NOT APPLICABLE

Designation Officer Type Resident Canadian OFFICER, TREASURER

Administrator; Name (Individual / Corporation) Address RONAULD 30 HAZELTON AVENUE WALTON TORONTO ONTARIO CANADA M5R 2E2

Date Began First Director

2012112111 NOT APPLICABLE

Desioeatt,,o Typrn, Cartadiaq DIRECTOR 7. 7

Request IG: 015622672 Prewimp of Ontario Date Report Produced: 2013108114 Trnnsaction ID: 51795480 Ministry of Government Servire Time Report Produced: 16:21:27 Category Ir.) UNE P3ge: 5

CORPORATION PROFILE REPORT

Ontario Corp Number Corporation Nome

2117410 EL-AD (1500 DON MILLS) LIMITED

Last Document Recorded Act/Cede Description Form Date

CIA - CHANGE NOTICE 2012112114 (ELECTRONIC FILING)

THIS REPORT SETS OUT THE MOST RECENT INFORMATION FILED BY THE CORPORATION ON OR At- 101 JUNE 27, -ISW,AND RECORDED IN THE ONTARIO BUSINESS INFORMATION SYSTEM AS AT THE DATE AND TIME OF PRINTING. ALL PERSONS WHO ARE RECORDED AS CURRENT DIRECTORS OR OFFICERS ARE INCLUDED IN THE LIST OF ADMINISTRATORS. ADDITIONAL HISTORICAL INFORMATION MAY Ex1sT ON MICROFICHE,

'flbe issuance of this report NI electroNc form a autho?ized by me ministry et Government Services. RE.,quet1 ID: 015675339 Province of Ontario Date Report Produced: 2013/09103 Transaction ID: 51953431 Iviinistry of f...;overnrriart Seivices Time Report Produced: 12:48:51 Category ID: UNIE Page: 1

CORPORATION PROFILE REPORT

Ontario Corp Number Corporation Name Incorporation Date

244279 DONALDA INVESTMENTS LIMITED 1971/06/14

Jurisdiction

ONTARIO

Corporation Type Corporation Status Former Jurisdiction

ONTARIO BUSINESS CORP. CANC. BY C.T. NOT AVAILABLE

Registered Office Address Date Amalgamated Amalgamation Ind.

NOT APPLICABLE NOT APPLICABLE

NOT AVAILABLE New Arnett. Number Notice Date

NOT APPLICABLE: NOT APPLICABLE'

Letter Date

Mailing Address Nor APPLICABLE

NOT AVAILABLE Revival Date Continuation Date

NOT APPLICABLE NOT AVAILABLE

Transferred Out Date Cancei/Inactive Date

NOT APPLICABLE 1988/12/05

NOT APPLICABLE NOT APPLICABLE

Number of Directors Date Commenced Date Ceased Minimum Maximum in Ontario in Ontario

UNKNOWN UNKNOWN NOT APPLICABLE NM APPLICABLE Activity Classification

NOT AVAILABLE Requetit ID: 015675339 Province of Ontario Date Report Produced: 2013109iO3 Transaction iD: r31953431 Ministry0 Government Services Time Report Produond:12:46:51 Category UWE Page: 2

CORPORATION PROFILE REPORT Orii0r10 Corp Number Corporation Name

244279 DONALDA INVE:;::i"FME:NTS- LIMITED

Corporate Name History Effective Date

I: DNA INVESTmE:NTs- t.imi TED 1971/06114

Current Bustriess Name(s) Exist: NO

Expired Business Name(s) Exist: NO t..ast Document Recorded AcVCoda Description Form Date

CPCV CORPORATE CONVERSION-ADD ADD I 992/06/27

TRES REPORT sETs OUT THE MosT RECENT INFORMATION FILED BY THE CORPORATION ON OR AFTER JUNE 2T, 1994 AND RECORDED IN THE ONTAREO BUSINESS INFORMATION SYSTEM AS AT THE DATE AND TIME OF PRINTING. ALL PERSOIsIS I,VHO ARE RECORDED AS CURRENT DIRECTORS OR OFFICERS ARE INCLUDED EN TIE LIST OF ADMINISTRATORS. ADDITIONAL HISTORICAL INFORMATION rMY EXIST ON MICROFICHE.

The 15.sivance of this report io electrorris form is authorizer by thc.-; R•Aioistry of Government Tab F t-

This is Exhibit "F" referred to in the Affidavit of James Reitan sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits 2 4 130 Adelaide St W 416-865'9500 Suite z600 F 416-865-9010 Toronto, ON Canada M5H 3355

September 17, 2013 Peter Griffin Direct line: 416-865-2921 Direct fax: 416 -865-3558 Email: [email protected]

13Y COURIER PERSONAL AND CONFIDENTIAL

Norma Walton The Rose and Thistle Group Ltd. 30 I-lazelton Avenue Toronto, ON M5R 2E2 RE: Bernstein I Walton Joint Venture Projects

Dear Ms. Walton:

We have been retained by Dr. Stanley Bernstein in connection with various joint venture real estate projects, in which you and/or Ron 'Walton and 368230 Ontario Ltd. {a company owned by Dr. Bernstein) are partners.

Dr. Bernstein remains concerned about the issues about: which he recently became aware and which were communicated to you by way of letter dated June 7, 2013 from Sim Reitan. Dr. Bernstein does not make any allegations of wrongdoing, but needs to better understand his investment in the various joint ventures.

To that end, Dr. Bernstein requires confirmation by noon on Thursday, September 19, 2013 that he will be permitted access to the books and records of the various joint venture projects and any The Rose and Thistle Group Ltd.'s books and records related thereto beginning at 9arn on Friday, September 20, 2013. This includes but .is not: limited to the reporting you are contractually required to provide to Dr. Bernstein:

a) Accounting documents, including an accounting of the amounts invested by- 368230 Ontario Ltd. and by you and/or -Ron Walton; b) Bank statements; c) Cancelled cheques or details of cheques written or amounts withdrawn, including details of payees, dates and amounts; d) Copies of invoices for work completed in respect of the properties, including as rendered by The Rose and Thistle Group 'Ltd. or any other company related to you (and/or Ron Walton); e) Lending and mortgage documents; and

•" 7 • Norma Walton September 17, 2013 Page 2

) A detailed report on the status of each property, including; revenuesrevenues earned from rents and other sources.

Dr. Bernstein also requires further documents and information to satisfy him as to:

a) The status of other potential investors in the joint venture projects and an explanation for why cheques were written to them from one or more of the joint venture accounts; and b) The additional mortgages registered by you on title of the properties at 1450 Don Mills Rd. and 1500 Don Mills Rd., and the use of those proceeds, including by whom they were obtained and for what purpose.

Once Dr. Bernstein has received this information and had a chance to review it, certain changes will. need to be made to make the operation of the various joint ventures more transparent and provide proper access to Dr, _Bernstein.

If the documents and information requested are not provided to Dr. Bernstein within the time specified, a third party appointed by Dr. Bernstein will (by court order if required) be engaged to review the status of the joint venture projects, obtain the information sought and impose proper reporting and corporate governance. 1. trust that will not be necessary.

i Yours,`truly,ly,

Peter ..G,:_r,iffi- ,,.77:„...,

PHGISNR •('

cc. Dr. Stanley Bernstein Warren Bernstein Daniel Bernstein aim Reitan Shara. Roy

243 Shara N. Roy

From: Guillermo Schible Sent: Thursday, September 19, 2013 11:51 AM To: Peter Griffin Subject: Dr. Bernstein and Walton

Dear Mr. Griffin:

I act for Norma Walton and Ron Walton. I have your letter dated September 17, 2013.

I understand that Ms. Walton, especially, and a team of accountants, have been working hard to address your client's stated concerns. I also understand that these concerns arose only in the last few months of a three-year business relationship in which your client, expressly, did not want to play an active role.

I understand that your client now has an accountant working full-time at my clients' premises and that your client now has a fulsome up-to-date glimpse into the operations of 16 of 34 properties. I understand that your client has been told that a fulsome up-to-date glimpse into the operations of the remaining 18 properties will be possible by the second week of October, that is, in virtually no time at all, considering the circumstances.

The issue of access to bank accounts is more difficult. I understand that Ron and Norma Walton own 21 properties in which your client does not have any interest. I have not been able to, in the last 36 hours, delve into what difficulties, if any, this may present.

I further understand that your client and mine entered into an arms-length investment relationship (and not a partnership) that contractually requires mediation and arbitration. If your client would like to mediate at this time, please advise. Otherwise, I understand that Ms. Walton has never objected to meeting with your client and is willing to do so now, although your client's accountant is abrasive at times.

My sense of the situation so far is this; and again, I have only had 36 hours. My clients for the last three years have been focused on making money for themselves and for your client, and your client is not, at this time, complaining about the results. At the same time that we discuss what level of involvement your client now wishes to have, we need to discuss whether this relationship should continue. It seems that the relationship could come to an amicable end, if that is what the parties wish. One cannot make money and count it at the same time.

I am hoping to meet with Ms. Walton next week, after which I will be able to speak a bit more intelligently about this matter. In the meantime, Ms. Walton and a number of accountants will continue working diligently to address your client's concerns.

Yours truly,

Guillermo Schible,

SZh ible [email protected] 181 University Avenue, Suite 2200 Toronto, Ontario M5H 3M7 Direct: 416.601.6813 Fax: 416.352.5454

1 wop.melaiqmps

130 Adelaide St W T 416-865-900 2 4 5 Suite z600 F 416-865-901Q Toronto, ON Canada msx 3Ps

September 19, 2013 Peter Griffin Direct line: 416-865-2921 Direct fax: 416 -865-3558 Email: [email protected] BY EMAIL

Guillermo Schible 181 University Avenue, Suite 2200 Toronto, ON M51-I 3Iv17 RE: Bernstein / Walton Joint Venture Projects

Dear Mr. Schible:

Thank you for your email this morning. While we do not agree with a number the assertions contained therein, we can agree that the agreements between 368230 Ontario Ltd. and Norma and/or Ron Walton permit Stanley Bernstein access to the joint venture companies' books and records.

To that end, Dr. Bernstein has engaged Schonfeld Inc, to conduct such a review. Harlan Schonfeld and Jim Merryweather along with Jim Reitan will attend at the offices of The Rose and Thistle Group tomorrow morning at 9am to commence that review.

Ms. Walton may and should continue her work to answer the specific inquiries that have been made of her.

At this stage, the mediation and arbitration clause of the contracts is not engaged. Dr. Bernstein simply seeks the access contractually available to him.

Your ry t uly,

Peter Griffin-

cc. Norma Walton Or. Stanley Bernstein Warren Bernstein Danict Bernstein Jim Reitan Shara Roy

Shara N. Roy

From: Guillermo Schible Sent: Thursday, September 19, 2Q13 7:24 PM To: Shara N. Roy Cc: Peter Griffin Subject: Re: Bernstein / Walton Properties

Dear Ms. Roy,

There is no "joint venture", as referred to in Mr. Griffin's letter of today, the books and records to which your client has access.

The three individuals referred to in your letter may attend tomorrow and they will have access to the same information that your client's fourth accountant has had access to already, in relation to the 16 properties referred to in my email today.

Yours truly,

Guillermo Schible Schible Law

Sent from my BlackBerry 10 smartphone on the Rogers network. From: Shara N. Roy Sent: Thursday, September 1.9, 2013 4:59 PM To: Guillermo Schible Cc: Peter Griffin; Norma Walton Subject: Bernstein / Walton Properties

Please see attached.

Shara N. Roy T 416-865-2942 F 416-865-3973 sroyAlitigate.com Lenczner Slaght 13OAdelaideSt W Suite 2600 Toronto, ON Canada M5H 3P5 www.litigate.com

This e-mail may contain legally privileged or confidential information. This message is intended only for the recipient(s) named in the message. If you are not an intended recipient and this e-mail was received in error, please notify us by reply e-mail and delete the original message immediately. Thank you. Lenczner Slaght Royce Smith Griffin LLP. k 2 4. 7 Lenczner i3o Adelaide St W T 416-865-95o0 — Suite 2600 F .416-865-9010 Slaght Toronto, ON www.litigate.com Canada msH 3P5

September 25, 2013 Peter Griffin Direct line! 416-865-2921 Direct fax: 416-865-3558 Email: [email protected]

SENT BY EMAIL

Guillermo Schible Schible Law Suite 2200 181 University Avenue Toronto, ON M51-I 3M7

Dear Mr. Schible:

RE: Dr. Stanley Bernstein and Norma Walton et al Our File No.: 44696

I am writing further to our correspondence of last week and the attendances at your clients' premises by Mr. Schonfeld and his team.

From their attendance and review of the material that has been made available to them, the following is becoming apparent:

1. They are not receiving timely access to all of the material that they should have, most especially records which reflect the full dealings with the properties and realization of revenue and income;

Your clients have co-mingled funds from the properties with the accounts of Rose & Thistle Group Ltd., something which they had no authority to do;

3. Substantial amounts had been charged to the properties, including most recently, for various fees both well in excess of justifiable amounts and in excess of the $50,000 thee-shold requiring_co-signing by Dr. Bernstein;

4. The properties have been encumbered or further encumbered without Dr. Bernstein's approval, which is required;

5. We have yet to receive an answer to the question of where the proceeds of the $6 Million of additional mortgaging on 1450 and 1500 Don Mills Road went;

6. Your clients have extracted $2.2 Million in return of amounts paid by them as deposits on various of the purchases and those monies seem to have travelled to Rose & Thistle. Where are those monies?;

BARRISTERS LENGZIVER SLAGHT ROYCE SMITH GRIFFIN LLP Guillermo Schible Page 2

7. Your clients have failed to make the equity contributions that the various agreements call for; and

8. The purchase of 165 Bathurst Street and 624 Richmond Street appear to be stock purchases rather than asset purchases, unbeknownst to our clients.

We are at the point where the disclosure which has been made is dismaying to our client and the extent and timing of disclosure unsatisfactory.

We are proposing a meeting on Friday morning with Mr. Schonfeld, yourself and your clients and ourselves and our clients to see if we can, as a last ditch effort, come to an agreement as to providing a full disclosure, failing which we are going to be forced to take other steps.

Could you please get back to me in confirmation of this meeting at your clients' premises as soon as possible?

In the interim, we note the request with respect to the new mortgage proposed for 140/150 Queen's Plate. Dr. Bernstein is prepared to consider the remortgaging of this property after:

1 Your clients' full equity contribution is made; and

2. The $482,000 in fees charged against this non-revenue producing property are returned.

The property can then be mortgaged on a basis which reflects the proper performance of your clients' obligations.

Lastly, please confirm that no further payments or transactions are to be made by your clients for amounts in excess of $50,000 without our clients' specific written consent, that no further co- mingling of property funds shall occur and that each property (jv) account will reflect the revenue and expenses relative to those properties only.

I look forward to hearing from you.

Yours verv/ILIN— /

Cc: Shara Roy

249 Shara N. Roy

From: Guillermo Schible Sent: Thursday, September 26, 2013 12:08 PM To: Peter Griffin Cc: Shara N. Roy Subject: RE: Dr Stanley Bernstein and Norma Walton et al

Dear Mr. Griffin:

A meeting tomorrow is impossible. Not only have l not met with my clients yet, whom as you know have been busy responding to your client's four accountants now, but also, the issues raised in your letter make clear that your client is not just looking for information. Information he has, and he keeps getting.

Your client is already dismayed and unsatisfied, so there is little point sitting down together without a mediator. My clients disagree with the assertions- and suggestions your client's representatives are making. A third party's assistance is necessary to determine how to divide the properties in question.

Subject to conflict check clearance, my clients propose that we mediate with Gary M. Caplan, Leslie Dizgun, or Larry Banack. Please get back to me in this regard.

Yours truly,

Guillermo Schible Schible Law

From: Janet Larocque [mailtoaarocque(alitigate.com] On Behalf Of Peter Griffin Sent: September 25, 2013 3:48 PM To: Guillermo Schible ([email protected]) Cc: Shara N. Roy Subject: Dr Stanley Bernstein and Norma Walton et al

Please see attached correspondence.

__Janettarocque Assistant to Peter Griffin T 416-865-9500 Ext. 227 F 416-865-3558 jlarocque litigate.com Lenczner Slaght 130 Adelaide St W Suite 2600 Toronto, ON Canada M5H 3P5 www.litiYate.com

1 This e-mail may contain legally privileged or confidential information. This message is intended only for the recipient(s) named in the message. If you aren't an intend )ti recipient and this e-mail was received in error, please notify us by reply e-mail and delete the original message immediately. Thank you. Lenczner Slaght Royce Smith Griffin LLP.

Lenczner 13o Adelaide Sr W T 416-8 65 - 95 0 Suite z600 F 416-865-9010 Slaght Toronto, ON www,litigate.com Canada mpt 3P5

September 26, 2013 Peter Griffin Direct line; 416-865-2921 Direct fax: 416-865-3558 [email protected]

SENT BY EMAIL

Guillermo Schible Schible Law Suite 2200 181 University Avenue Toronto, ON M5.H 3M7

Dear Mr, Schible:

RE: Dr. Stanley Bernstein and Norma Walton et al Our File No.: 44696

Thank you for your email.

Even if our clients were prepared at this point to see that a mediation could be constructive, nothing can be done in that context without proper and adequate disclosure and forthright answers to the fundamental questions that we have asked repeatedly and for which no answer has been provided.

Mr. Schonfeld and Mr. Reitan will meet with your client tomorrow. Please recommend to her that she come forward with immediate answers to the fundamental questions which have been repeatedly asked and an acceptable schedule for the provision of the balance of the information which we have requested.

Failing that, and knowing that there is nothing in the various agreements that militates otherwise, we will be before a Commercial List judge at 9:30 on Monday morning to set a schedule for the relief which we are seeking.

BARRISTERS LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLP Guillermo Schible Page 2

You are welcome to attend then or we will let you know what schedule we achieve.

You:rs very truly, " I

• ‘. ? " Peter Griffin ki .•

PHG/jl

Cc: Shara Roy

253 Shara N. Roy

From: Guillermo Schible Sent: Friday, September 27, 2013 10:46 AM To: Peter Griffin Cc: Shara N. Roy Subject: RE: Dr Stanley Bernstein and Norma Walton et al

Dear Mr. Griffin,

As you know, my clients' position is that our clients are bound re: (private) arbitration preceded by (privileged) mediation. So please provide me with the courtesy of a heads up with respect to what material you intend to file with the court. My clients are concerned not to decrease what the properties in question might obtain in an open market.

If you are, at this time, only requesting a scheduling appointment (and filing no material), l should see that 9:30am request form and sign it as well.

I am prepared to attend court, expressly without prejudice to my clients' position above; that is, only to submit that, what should be scheduled first, if anything is scheduled at all, is a motion to send this matter to arbitration preceded by mediation.

I confirm that I have already indicated in writing that my clients wish to start that process and even proposed three individuals to you.

Yours truly,

Guillermo Schible Schible Law

From: Janet Larocque [mailto:[email protected]] On Behalf Of Peter Griffin Sent: September 26, 2013 3:41 PM To: Guillermo Schible Cc: Shara N. Roy Subject: RE: Dr Stanley Bernstein and Norma Walton et al

Please see attached correspondence.

From: Guillermo Schible [mailto:[email protected]] Sent: Thursday, September 26, 2013 12:08 PM To: Peter Griffin Cc: Shara N. Roy Subject: RE: Dr Stanley Bernstein and Norma Walton et al

Dear Mr. Griffin:

A meeting tomorrow is impossible. Not only have I not met with my clients yet, whom as you know have been busy responding to your client's four accountants now, but also, the issues raised in your letter make clear that your client is not just looking for information. Information he has, and he keeps getting. 1 25 4. Your client is already dismayed and unsatisfied, so there is little point sitting down together without a mediator. My clients disagree with the assertions and suggestions your client's representatives are making. A third party's assistance is necessary to determine how to divide the properties in question.

Subject to conflict check clearance, my clients propose that we mediate with Gary M. Caplan, Leslie Dizgun, or Larry Banack. Please get back to me in this regard.

Yours truly,

Guillermo Schible Schible Law

From: Janet Larocque [mailto:[email protected]] On Behalf Of Peter Griffin Sent: September 25, 2013 3:48 PM To: Guillermo Schible (quillermoPschiblelaw.com) Cc: Shara N. Roy Subject: Dr Stanley Bernstein and Norma Walton et al

Please see attached correspondence.

Janet Larocque Assistant to Peter Griffin T 416-865-9500 Ext. 227 F 416-865-3558 [email protected] Lenczner Slaght 130 Adelaide St W Suite 2600 Toronto, ON Canada M5H 3P5 www.litigate.com

Shara N. Roy

From: Janet Larocque on behalf of Peter Griffin Sent: Friday, September 27, 2013 12:03 PM To: Guillermo Schible ([email protected]) Cc: Shara N. Roy Subject: Dr Stanley Bernstein and Norma Walton et al Attachments: Document.pdf

Importance: High

Thank you for your email of earlier this morning.

Here is the Request Form for scheduling of the inspectorship motion.

I do not believe that we have the type of disagreement reflected in the form of agreements prepared by your clients and accordingly the mediation and arbitration provisions in my view are likely not applicable.

In any event, they do not deal with the type of relief we are dealing with here.

As you can see, I am only dealing with scheduling at the moment and from a point of view of the issue you have identified you are of course free to argue it when we get to the motion.

Please sign and return.

Peter Griffin.

Janet Larocque Assistant to Peter Griffin T 416-865-9500 Ext. 227 F 416-865-3558 jlarocquelitigate.com

Lenczner Slaght 130 Adelaide St W Suite 2600 Toronto, ON Canada M51-I 3P5 www.litigate.com

Commercial List File Number: [Not yet commenced] Civil File Number: [Not yet commenced]

Date: September 27, 2013

SUPERIOR COURT OF JUSTICE - COMMERCIAL LIST 9:30 A.M. HEARING REQUEST FORM

A PLEASE NOTE: The 9:30 hearing procedure is only for "ex parte, urgent, scheduling and consent matters which take no longer than 10 minutes"(Practice Direction,(2002), 57 O.R.(3 rd)97; paragraph 25). This restriction will be enforced. This matter is (tick one or more); [ ]ex parte [X] urgent [X] scheduling I ]consent [ ]other (explain) B Short Title of Proceeding: DBDC Investment Spadina Ltd. et al v. Norman Walton, Ronald Walton and Rose & Thistle Group Ltd. et al C Date(s) Requested: September 30, 2013 at 9:30 a.m.

D The following is a brief description of the matter to be considered at the 9:30 appointment: Scheduling of a motion to appoint an inspector. E The following materials will be necessary for the matter to be considered. (it is the responsibility of counsel to confirm that the proper materials are available for the Court.)

F Is.any Judge seized of these matters or any judicial conflicts •No

COUNSEL FOR APPLICANT/?4 OyING'PARTY COUNSELSFOR OTHER PARTY Party 7Plaintiffs •• rty . Defendants . [-Counsellir ri..- toune0" , .... Peter 11.-61ffin Guillermo Schible PRINT AND SIG-140R-INI- IAL PRINT AND SIGN OR INITIAL Address LENCZNER SLAGHT ROYCE Address . Schible Law Suite 2200 SMITH GRIFFIN LLP 181 University Avenue Barristers Toronto, ON M5H 3M7 Suite 2600 130 Adelaide Street West •. Toronto ON M511 3P5 Phone (416) 865-9500 Phone.- : (416)601-6813 Fax I (416)865-9010 __ Fax . , (416) 352-5.154 r - • E-Mail —1-2griffin@l itigate.com E-Mai1 .. • guillerrno®schiblelaw.com (IP MORE THAN 2 PARTIES INVOLVED, ADD ADDITIONAL. SIGNATURES AND PAR'nouLARs ON REVERSE OR SEPARATE PAGE) • To be submitted to: Commercial List Office, 330 University Ave,7 '1 Floor Canada Life Building, Toronto Ontario Fax to:(416) 327-6228 You may also convert to PDF and email to [email protected] Endorsement/Disposition ijj See attached Yellow Endorsement Form.

Commercial Form A Tab G This is Exhibit "G" referred to in the Affidavit of James Reitan sworn before me this lst day of October, 2013 From: Norma Walton [[email protected]] Sent: September-20-13 9:32 PM To: Dr. Stanley Bernstein Subject: 1450 and 1500 Don Mills second mortgages

Dear Stan,

Harlan asked me today why I put the mortgages on 1450 and 1500 Don Mills.

You'll recall that back in July you told me you wanted to extract a minimum of $2 million from the joint portfolio or from mortgage payback to purchase a home for your son in New York. You asked me to keep that information confidential, which I have. You indicated you absolutely needed the money by July 31st. At that time, I put the wheels in motion on the two mortgages to ensure we had money available to provide to you so you would not lose the house. I had both on the go as I was not sure which one would pan out.

As it turned out, St. Clair closed before 1450 and 1500 and when that money was paid back to you, you indicated you were fine. Almost immediately thereafter both 1450 and 1500 did come through. Right around the same time, Jim became increasingly aggressive in his tone and disrespectful in his emails, copying your entire family, so I decided to sit on the money for a few weeks to see how the situation unfolded. We still have the money and I advised you of the mortgages last Friday night in my update regarding 1450 and 1500.

Once your accountants complete the review and once you determine your intentions with the joint portfolio going forward, we can then determine together whether to pay that money to you as pay-down of part of your equity in each project; whether to pay you part and keep part in the projects; whether to pay the mortgages off; or whether to invest all the

1 9 5 9 money into the projects. In the meantime, Rose and Thistle is covering the interest carry on the monies while we awgf the results of your review.

I did not disclose the above to Harlan because I was not sure how much of the above you wanted me to discuss.

Regards, Norma

2 ~, 26 0

From: Dr. Stanley Bernstein Sent: Monday, September 23, 2013 6:54 AM To: normaPwaltonadvocates.com Cc: Jim Reitan Subject: Re: Harlan

Dear Norma,

I have delegated full investigative authority to Harlan and to his team and to Jim and there are no issues of confidentiality.

Thanks, Stan

1 Tab H 261

This is Exhibit "H" referred to in the Affidavit of James Reitan sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits 2.

Forwarded message From: Norma Walton Date: Fri, Sep 27, 2013 at 2:39 PM Subject: RE: Deliverables To: Harlan Schonfeld Cc: Jim Reitan

Dear Harlan,

You asked that l not lecture you yet you feel free to lecture me. My email was neutral; yours was not. l thought we had a veTy-Givit-m-e-eting-an-d-fail-to-see-h ow-your-email-below permits a level of-mutual respect going forward as -we-s -your -we ------request for documents.

As agreed, we will also provide the mortgage documents for 1450 and 1500 mortgages by end of day Monday. As discussed, l don't yet have the reporting letters so cannot provide what l don't have. I will follow up with Devry Smith to ask them to prepare them and upon receipt will give you a copy. As to the funds, you saw my note below regarding our intentions with the money, and Dr. Bernstein received the revised pro formas at the time we advised of the existence of the mortgages showing that each project is going to need significantly more money than anticipated, but with a corresponding profit that will be significantly larger than originally expected.

1 Regards, 2 3

Norma

From: Harlan Schonfeld [mailto:Illarlan©schonfeldinc.com Sent: Friday, September 27, 2013 2:09 PM To: Norma Walton Cc: Jim Reitan Subject: Re: Deliverables

Norma —

Thank you for your note following our meeting.

The one thing that you did not address in your note was what you told us about the $6 Million in further mortgaging or the reporting letter. You told us that you would provide the mortgage documents by the end of Monday, but refused to provide evidence of the existence of the $6 Million or the reporting letters. You told us that the funds are in the control of you and Ronauld and that you are holding them pending what you understand is a mediation to take place. You told us that as part of the mediation you would provide evidence.

That is wholly unsatisfactory. We need to know where the money is, that it exists, who is holding it and a proper accounting, including documentation of what supports it.

&Harlan Schonfeld, CPA, CA CIRP SCHONFELD INC. Receivers + Trustees 438 University Avenue, 21st Floor Toronto, ON M5G 2K8 Tel 416.862.7785 Cell 416.254.1992 Fax 416.862.2136

Experience acquired. Experience applied.

This email may contain confidential information and no rights to privilege have been waived. If you are not the intended recipient, please notify us immediately. Thank you.

On Fri, Sep 27, 2013 at 12:26 PM, Norma Walton wrote:

Dear Harlan and Jim,

2 n 2( 4 As discussed this morning during our meeting, I confirm the following:

1. Trudy will deliver the leases on a memory stick end of day Monday for your review. She has already delivered the rent roll in both PDF and excel format ;

2. We will deliver access to Dewhurst, Dupont, Eddystone and Heward by end of day Monday, updated to that date. You already have access to 16 properties so that will bring you up to 20;

3. We will provide access to the remaining 14 properties updated to present day over the next three weeks as they are updated;

4. We are meeting with Meridian upon Mario's return October 8th to arrange with them to separate out the entities we own with Dr. Bernstein from our other entities. Hence we anticipate we'll have the ability to provide him with access to the bank accounts online as of October 15th;

5. As it concerns the new 1450 Don Mills mortgage, we anticipate we will need that money and more to complete the project. In the meantime, though, our original intent was to pay it out to Dr. Bernstein as temporary return of capital, subject to understanding his plans with regard to 1450 Don Mills and whether he wishes to remain invested in that project or to exit that project;

6. As it concerns the new 1500 Don Mills mortgage, we anticipate that project is going to require far more money that just the additional $3 million so we plan to discharge that mortgage. It was obtained as a fail safe if the 1450 mortgage had not come through to ensure we had money to provide to Dr. Bernstein. First, though, we would like to determine if Dr. Bernstein wishes to remain invested in that property because if he wishes to exit, the $3 million can be part of that payment. If he wishes to stay invested, we'll discuss with him the options for raising the money needed going forward;

7. You have requested the following information:

a. All bank account statements for each of the properties we own with Dr. Bernstein;

b. All invoices for each of the properties we own with Dr. Bernstein; and

c. All Rose and Thistle invoices with details and back up.

I will arrange for Sarita to pull the bank statements for the properties starting this afternoon. Once those are provided, I'll have her move to providing invoices, then Rose and Thistle invoices with back up.

8. I will arrange for you to begin touring all 33 properties (we sold 1131) in the month of October with our building operators.

Let me know if I have missed anything I agre to provide.

Regards,

Norma

3 Tab I This is Exhibit "I" referred to in the Affidavit of James Reitan sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits 266 Shara N. Roy

From: [email protected] Sent: Tuesday, October 01, 2013 7:42 AM To: Shara N. Roy Subject: Fw: Bank statements

Sent wirelessly from my BlackBerry device on the Bell network. Envoyé sans fil par mon tenninal mobile BlackBerry sur le réseau de Bell.

From: Nonna Walton Date: Mon, 30 Sep 2013 20:49:22 +0000 To: harlanaschonfeldinc.com Cc: Jim Reitan Subject: RE: Bank statements

It may be your day's end but is not,yet ours. Kendra will unlock access to the four entities when she leaves; Trudy will leave the memory stick in the downstairs boardroom when she leaves; I will leave copies of the mortgage documents in the downstairs boardroom when I leave; and Sarita will continue scanning and sending you bank statements this week.

Regards, Norma

From: [email protected] [mailto:[email protected]] Sent: Monday, September 30, 2013 4:46 PM To: Norma Walton Cc: Jim Reitan Subject: Re: Bank statements

Norma:

Days end is upon us. I am downstairs.

Might I have today's promised materials?

Should I come to your office to get them?

Sent wirelessly from my BlackBerry device onthe Bell-network. Envoyé sans fil par mon terminal mobile BlackBerry sur le réseau de Bell.

From: Norma Walton Date: Mon, 30 Sep 2013 18:01:41 +0000 To: Harlan Schonfeld Cc: Jim Reitan Subject: RE: Bank statements

Dear Harlan,

Yes

Trudy is working on providing you with all leases as agreed. 1 Tom and l will chase down and send the mortgage documents for 1450 and 1500 before day's end. 2 t'S 7

Sarita is scanning all bank statements first then will roll to invoices.

Kendra and l are updating the four entities with a view to providing access.

Regards, Norma

From: Harlan Schonfeld [mailto:[email protected]] Sent: Monday, September 30, 2013 1:57 PM To: Norma Walton Cc: Jim Reitan Subject: Re: Bank statements

Norma:

And I expect to receive today mortgage documents for the 2 Don Mills properties (1450 and 1500) that relate to $6 million in increased mortgages; and copies of all of the property leases.

You also said you would let us know (within 2 hours) about us getting access to the files for supporting documents and provide 4 more entities records.

&Harlan. Schonfeld, CPA, CA CI.R.P SCHONFELD INC. Receivers + Trustees 438 University Avenue, 21st Floor Toronto, ON .M.5G 21.'8 Tel 416.862.7785 Cell 416.254.1992 Fax 416.862.2136

Experience acquired. Experience applied.

This email may contain confidential information and no rights to privilege have been waived. if you are not the intended recipient, please notify us immediately. Thank you.

On Mon, Sep 30, 2013 at 12:56 PM,Norma Walton wrote:

Dear Jim and Harlan,

You had requested bank statements on Friday. Sarita provided you with Global Mills bank statements on Friday afternoon and will provide the remainder of statements this week.

2 (2 6 8

Regards,

Norma Tab J 26 9

This is Exhibit "J" referred to in the Affidavit of James Reitan sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits Account Trans e Type Entered/Las2Modified Last rnodified by Date Noor Adj Name Memo Split Arnount Balance trans

10100. Bank 106 •Deposit 07/0312022 1027:117 Kendm 27.lim-11 ' Deposft DOW investments Pape Ltd. 470,473.W • 469,933.98 1 470,473.00 1 Common Shares 106 Dept,* 07/03/2012 102797 Kendra27-lun-11 0380 368230000000 Umited Bepaal 10100• Bank • -470,47320 377,143_23 1 10100-Rank 99 Transfer. 10/03/201131726 Marlea . 304*-11 Funds Transfer ' 26200 -I/C Payable- Rose and nis* . 41,350.00 Funds Transfer 10100• Bank 42,350.00 9,688.45 -1 26200 4/C Pagabie - Rose and Thistie 99 Tnonsfer 10/03/2011131726 Marise 30.1un-11 • 850,000.00 1 15200• Bulkfings and kaproverrients 286 Genet& lawaai 03/16/201717:1043 Kendra 301w-11 106111 - 1 6 Te record prirchmef 450 pape Ave. -SPAT•. 850,000.00 850,000.00 1 15600 • L,..ƒ 286 Genera,lournol 03/16/2012 172023 Kendra 30-Jan-11 J06/11 - 1 6 Til record purehose 01450 Pope Ave. Building 850,00000 1 Advance Oepasit 286 Genera,barn«, . 03/16/2022:172053 Kendra - 30..lon-11 106/11 -1 6 To record purchau 0(450 Pope Ave. Building 400,000.00 .324,500.00 Mortgage Payable 286 Genera.I jour., ' 03/16/2612 1720:53 Kenden• r 30-lun-11 . 106/11 - 1 a To racend pwchase 01450 Pope Ave. Bulldin -1,30000000 -1,300,000.00 1 10100.Bonk • 100 Tralafrr - 10/03/2011 132922 . Marine 4-.14.11 Funds Transfer . 26200 • 11CPoyable - Re* and nis* -6,050.00 .1,33222 .1 2. 10100• Bank 59 Deposlt 03/23/201216:16:48 Temp 3-Alig-11 • Cleposat 368230 Ontado Ltd • 250,000.00 245,830.77 Mortgage Payable 59 *poolt • 03/23/2012162648 Temp 3-Aug-21 0582 368230 Ontarle Lienited Constmellon Wim*. 10100 - Bank -250,00020 -1,550,00020 2 2 10100. Bank - 104 Tmn*r -10/03/2011 132023 Marisa - 5-Aug-11 Funds Transfer 26200•I/C Payable - Rose end Thistle -246,550.00 4,06224 246,55000 241,78045 2 26200 •1/C Payable -RoseRose and Thistle - 104 Tnmsfer 10/03/201113:20:33 Marisa - 5-Aug-11 Funds Transfer 10100• Bank 304,341.93 3 10200 . Flank 80 Deposit 07/03/2012I2:1232i ~dm 9-Sep-11 *po* - 313,958.80 4,86000020 3 Mangage Payable 80. Oepoilé - 07/0312012 12:1222 Ken** • 9rSip-11 was 360230 Dotada Limited Omstraal°n advance 10100 • Bank -315,000.W Work In Progress .80 Deposle 07/0312012122252 Kendra • 9-Sep-11 0405 4cA3h0 Ontarfo OrWted Construct!. astrante 10100 - Bonk . 1,04120 28,233.85 .3 26200• I1C Pogo*- Rom andTh fe -313,900.00 -9,555.07 3 10100 - Bank 249 • Transfer . 03/16/2012I 122058 Kendra - 9.64P-12 Funds Transfer 33,900.00 537,538.45 3 26200• kTransfer tPayable- Rose and Mistte 249 03/16/2( 122028 Kendra ' . '94.1741 Funds Transfer 10100 • Bank 103,36039 4 10100• Bank 107 Oeposit - ' 07/03/20121213:14 Kendm 4-Oct-11 . • Depot!! 223,45220 -2,090,000.00 4 Mortgage Payable 107 Oeposit 07/03/2022122324 Kendes' 4-000-11 0412 368230 Ontarto *Wed Mortgage advance 10100• 8ank -225,00020 4 Werk In Pmgress 107 Oeposit • 07103/2072 122324 ,Kendo 4-04-11 0412 368230 Ontario Omhad Mortgage achiance 10200. Bank 1,548.00 44,315.85 . . : -212,700.00 -9,33061 4 10100• Bank ' 252 Transfer ' • : 03110012122014 Rand* • 4-Oct-11 Funds Transfer 26200• 1/C Payable Rode and 016081e 735,288.45 4 26200• 1/ C Payabk - RoSe and Thistre 252 Transfer' • i 03/16/20112122424 Kendm ' 44ét:31 Funds Transfer 10100. Bonk , , 212,700.00 5 10100• Bank 148 *park ' . 03/23/2011 162648 Temp . 10-Nov-11 *po* -SPLIT- 364,33334 • 336,43522 -2,457,500.00 5 Mortgage Payable 148 Oeposit • 03/23/201216:16:48 Temp 16-Nov-11 0451 368230 Ontruk limit«, Mortgage advanee 10100- Bank- -367,500.00 62,01631 5 • Work Ln Pirogrea 148 Deposit : 03/231201216:36-•48 Temp - 10-Nov-11 0451, 368230 Ontaria llmited Manga* advance 10100 • Bank . ,. 3,166.46 -27,86428 5 20100 - Bonk 257'Transfer' 03/1612032122022 rand,. . 10-Non-II Funds Transfer 26200• I/CPayable- •Rcae eind Thistle -364,300.00 364,30020 3,080938.45 - 5 26200• I/C Payable - Rose and Thistle 257 Transfer - , • 03/16/203212:3022 ~dir - 10Nov-11 Funds Transfer 10100 - Bonk 44857.03 6 10100• Bonk 263 Transfer 03/16/2012123254 Ken*, • " ' 20-Dre-11 Funds Transfer • 26200 • i/C Payabfe - Rose and ThIs* -37,90040 4075,88045 6 26200- L/C Payable- Rose and Thlstle 263 Tran4er -03/16/2012123234 Kendra • 20-0.041 • Funds Transfer 10100 • Bank 37,900.00 Imoo - Bank , - *Kaft , 39,926.00 -2,931.03 6 280 *po* - 03/23/2012 162648 Temp • : 20-Dec-11 . . Mortgage Payable 280 Deposlt 03/23/201216:1648 Temp 20-0e441 0483 368230 Chitario Ungted Mort**.achlance 10100 - Bank 45,000.00 ‘2,502,50000 6 Werk in Program 280 Bepaalt 03/23/207216:36:48 Temp 20-Dec-11 0483' - . 368230 Ontaria Liailted• Mortgage adwino; 10100.Bank . 5,07420 • 81,624.31 6 -2,56250040 7 Mortgage Pagobie 603 Genera!»urmt 08121/20.13162126 Mario(A dminj . 140042 191112• 23 -6 363230 Ontorio *Wed 2% mortgage placementfee on 53,000,800 Wis a 2011 entry) , Omme.Charges -60,000.00 60,504.95 7 Work in Progress 603 Genera.,lournal 08/2I/2013162126 Mario(Admi n) 1.1an-12 101112. 23 6 368230 Ontario Llmited 2%- mortgage pkicementfee on $3,000,000(slb a2011 enerY) 08,2V Ontaria Ltd 69,000.00 10100• Bank ' 279 *pos* ' 08/21/20..2315:32:48 Mario(Adam) 27-Feb-12 • Deposlt , -SPLIT- 48,407.18 47,890.59 : 8 Manga*. Payable 279 rietmat 08/21/20¡315:3248 Mario(Adam) 27-Feb-12 0523 .368230 Ontoria Om*ri Mortgage =Name 10100 • Bonk -57,50020 -2,620,000.00 8 129,785.13 Work In Progreas 279 Oeposit • 08/21/201315132:48 Mario(Admin) 27-Feb-12 0523 368230 Catarlo Liallted Mortgage advance • : 10100 • Bank 909222 8 10100- Bank 328 Transfer 04/26/201211:43:32 Kendra 27-Feb-12. • Funds Transfer • 26200•!/0 Payable - Rose ond Mis*. -68,400.00 -509.41 8 -303,420.55 8 26200.11C Pagable - Rose and Thistle 328 Transfer 04/26/201211:43:12 Kendra . 27-Feb-12 . Funds Tronsfer 10100 • Bank 4840020 10100• Bank . 516 Deposit 04111/2013I6,01:19 .nom. 18-Mar-13 *poolt '• • 368230 ontorh; Ltd 275,000.00 269,15233 9 Al.umg.Payadie - 516 *Bobt • 04/11/20131621119 Norma 18-Mar-13 769 • 368230 Ontodo *Wed Mort** Advance 10100• Bank - -275,000.00 -2,895,00000 9 unao• Boek 519 Transfer . 04/22/201310:36:37 Norma : 28-Mar-13 Funds Transfer • 26200 •I/C Payoble .• Rom and Thistle -275,000.00 -5,847.67 9 9 26200.11C Payable-Rose and Thbile 519 Transfer 04/22/201310:26:37 Norma . -18-Mor-13 Funds Transfer , 10200 - Bank 275,000.00 426,770.55 10100 - &ank 515 *paait . . 07/12/201310:46:44 Ani* 8-Apr-23 Deposit 368230()Mario Ltd 103,90000 99,470.86 10 Mortgage Payable 515 DeposIt 07/1212013104644 Anfela • '8-Apr-I3 777 '368230 Ontarto limited Mortgage advonce 10100 - Bank -3,000,000.00 10 -2,934.74 .20 - 10100 - Bank 558 Transfer : 06/12/20131531:45 Norma 8.Ape:13 funds Transfer ' • 26200 - I/C Payable - Rose and Ti** : -103,450.00 103,450.00 -342,32025 10 26200• i/CPcryobk - Rose and Thistle 558 Transfer 06/12/201315:3145 Norma 8-Apr-13 Funds Transfer 10100.Bank ,

10100 - Bank 93 Transfer 10/03/201.1 13:15:30 Mansa 26-Apr-11 Funds Transfer 26200 - I/C Payable - Rose and Thistle 100.00 100.00 10100 • Bank 267 Cheque 03/16/2012 13:30:43 Kendra 30-Apr-11 Service Charge 60400- Bank Service Charges -2.33 97.67 10100. Bank 270 Bill Port-Cheque 03/16/2012 13:46:35 Kendra 26-May-11 1 Mepte Printing - Accounts Payable -145.21 47.54 10100- Bank 94 Transfer 10/03/2011 13:15:52 Marisa 27-May-11 Funds Transfer 26200 • IX Payable - Rose and Thistle 150.00 102.46 10100. Bank 268 Cheque 03/16/20,1213:31:19 Kendra 31-May-11 Service Charge 604C0• Bank Service Charges -13.25 89.21 10100 • Bank 7 Bill Pmt -Cheque 06/02/2011 14:21:57 Kendra 2-1un-11 2 'reeuw«, City of Toronto Re. Taxes 20000- Accounts Payable -65.00 24.21 10100 • Bank 8 Bill Port -Cheque 06/02/2011 14:21:57 Kendra 2-Jun-113 Tremmer, City of Toronto Re. Building Department Cornpliance Accounts Payahle -125.66 -101.45 • Amounts Payable -64.57 -166.02 10100' Bank 9 Bill Pmt-Cheque 06/02/2011 14:21:58 Kendra 2-Jun-114 Treasurer, City of Toronto Re. Fire Prevention 20000. Accounts Payable -191.02 10100 • Bank 10 Bill Pmt-Cheque 06/02/20h 14:21:58 Kendra 2-Jun-115 Treasurer, City of Toronto Re. Water Accounts Easernents/ROWs, etc... • Accounts Payable 9000 -251.02 10100 • Bank 11 Bill Pmt-Cheque 06/02/201114:21:58 Kendra 2-Jun-11 6 Treasurer, City of Toronto Re. Technical Services re. 1I 20000 • Accounts Payable -311.02 10100 • Bank 12 Bill Pmt -Cheque 06/02/20 14:21:59 Kendra 2-Jun-117 Treasurer, City of Toronto Re. Heritage and Preservation Services 26200• VC Payable- Rose and Thistle 400.00 88.98 10100 • Bank 95 Transfer 10/03/20h 13:16:07 Marisa 2-Jun-11 Funds Transfer • Accounts Payable -2,500.00 -2,411.02 10100. Bank 14 Bill Pmt-Cheque 06/07/2011 11:58:36 John 7-Jun-118 McKenzie Ray Heron & Edwardh • I/C Payable- Rose and Thistle 2,500.00 10100 • Bank 96 Transfer 10/03/20h 13:16:17 Mari. 7-Jun-11 Funds Transfer 26200 • Accou nts Payable -100.00 -11.02 10100 • Bank 16 Bill Pmt-Cheque 06/14/20119:46:43 Kendra 14-Jun-119 Treasurer, City of Toronto 20000 29200 • I/C Payable -Rose and Thistle 100.00 10100 • Flank 97 Transfer 10/03/2011 13:16:26 Marisa 14-Jun-11 Funds Transfer 20000 • Accounts Payable -628.00 -539.02 10100 • Bank 18 Bill Pint -Cheque 06/20/201110:19:37 Marisa 20-Jun-1110 Shayla Brudner Title Services Inc. DBDC Investments Pape Ltd. 470,423.00 4E44333.31 1 70100• Bonk 106 Deposit 07/O3/20101037:07 Kendra 27-Jun-11 Deposit 26200 • I/C Payable- Rose and Thistle -50,000m 419913.98 10100 • Bank 98 Transfer 10/03/2011 13:17:13 Marisa 28-Jun-11 Funds Transfer 20000. Accounts Payable 4,440.75 418,493.23 10100' Bank 36 Bill Pmt-Cheque 03/20/201216:52:08 Temp 30-Jun-1119 Jedd Jones Architect Ltd. 11-080 VC Payable- Rose and Thistle -41,350.00 377,143.23 1 10100• Bank 99 Transfer 10/03/201113:1726 Marisa 30-Jan-11 Funds Transfer 26200• 60400 • Bank Service Charges -15.25 377,127.98 10100. Bank 271 Cheque 03/16/201213:47:33 Kendra 30-Jun-11 Service Charge 20000 • Accounts Payable -325,000.00 52,127.98 10100 - Bank 30 Bill Pmt-Cheque 07/04/2011 11:13:38 Kendra 4-Jul-11 16 Fraser Milner Casgrain in trust 20000. Amounts Payable -47,410.00 4,717.98 10100. Bank 32 Bill Pmt -Cheque 07/04/201111:31:28 Kendra 4-Jul-11 17 Walton Advocates VC Payable • Rose and thistle -1,332.02 1 10100• Bank 100 Transfer 10/03/201113:1922 Marisa 441411 , • Funds Transfer 26200• . Accounts Payable -7,153.00 -8,485.02 10100 • Bank 34 Bill Pmt-Cheque 07/05/2011 15:42:50 John 5-Jul-11 18 11/(MB HUB International Urni• Premium Financing Down Payment - Riverdale Mansion Ltd. 20000 26200 -I/C Payable -Rose and Thistle 7,150.00 -1,335.02 10100 • Bank 101 Transfer 10/03/201113:19:37 Marisa 6-Jul-11 Funds Transfer 20000- Accounts Payable -733.61 -2,068.63 10100. Bank 38 Bill Pmt-Cheque 07/14/201112:27:40 Marisa 14-Jul-1120 Enbridge 26200 • I/C Payable -Rose and Thistle 750.00 -1,318.63 10100 • Bank 102 Transfer 10/03/201113:19:55 Marisa 22-Jul-11 Funds Transfer 20000 • Amounts Payable -2,765.00 -4,083.63 10100 - Bank 44 Bill Pmt-Cheque 07/27/2011 17:22:47 Marisa 27-Jul-11 21 McKenzie Ray Heron & Edwardh 60400' Bank Service Charges -26.95 .4.110.58 10100' Bank 273 Cheque 03/16/2012 15:32:59 Kendra 31-Jul-11 Service Charge 20000. Accounts Payable -12,658.65 -16,769.23 10100 • Bank 24 Bill Pmt-Cheque 03/23/201216:16:48 Temp 1-Aug-11 11 368230 Ontario Limited I/C Payable- Rose and Thistle 12,600.00 3,169.23 10100 - Bank 103 Transfer 10/03/2011 13:20:11 Marisa 2-Aug-11 Funds Transier 26200 - 368230 Ontario Ltd 250,020.80 245,330.77 2 10100• Bank 59 Deposit 03/23/20216:1648 Temp 3-Aug-11 Deposit ' 20000. Accounts Payable -3,363.61 242,467.16 10100 - Bank 56 Bill Pmt-Cheque 08/18/2011 14:55:16 Kendra 4-Aug-11 Debit HKMB HUB International Limi. Premium Financing Down Payment - Riverdale Mansion Ltd. 26200• i/C Payable - Rose and Thistle -246,560.00 4032.84 2 10100• Donk 104 Transfer 10/03/2011 13:20:33 Marisa 5•408-11 Funds Transfer 20000 • Accounts Payable -215.21 3,298.05 10100 • Bank 50 Bill Pmt-Cheque 08/16/201114:55:02 Marisa 16-Aug-11 22 Enbridge 20000. Accounts Payable -5,267.03 10100 • Bank 51 Bill Pmt-Cheque 03/21/2012 9:29:24 Temp 16-Aug-11 23 Optimum Waste & Recycling Systems 20000 - Accounts Payable -70.00 -5,337.03 10100 • Bank 52 Bill Pmt-Cheque 08/16/2011 14:55:03 Marisa 16-Aug-1124 The Salvation Army 20000 • Accounts Payable -975.14 -6,312.17 10100' Bank 53 Bill Pmt-Cheque 03/21/2012 9:29:24 Temp 16-Aug-11 25 Optimum Waste & Recycling Systems Accounts Payable 352.00 -6,764.17 10100 • Bank 54 Bill Pmt-Cheque 03/21/2012 9:29:24 Temp 16-Aug-11 26 Optimum Waste & Recycling Systems 20000 • Payable- Rose and Thistle 25000 -9514.17 10100 • Bank 105 Transfer 10/03/201113:20:45 Marisa 19-Aug-11 Funds Transfer 26200 • I/C Accounts Payable 0.00 3,514.17 10100 • Bank 64 Bill Pmt-Cheque 03/29/20}211:40:48 Tempt 25-Aug-11 27 Bill Greer VOID: As pe• Mario 20000 • Accounts Payable -357.36 3,871.53 10100- Bank 65 Bill Pmt-Cheque 03/21/2012 9:29:24 Temp 25-Aug-1128 Optimum Waste & Recycling Systems 20000 • -1,049.18 4,920.71 10100. Bank 66 Bill Pmt-Cheque 03/21/20129:29:24 Temp 25-Aug-1129 Optimum Waste & Recycling Systems 20000. Accounts Payable • Bank Service Charges -12.55 -7,933.26 10100. Bank 274 Cheque 03/16/26}215:37:01 Kendra 31-Aug-11 Service Charge 60400 1 44,53400 -22,467.26 10100. Bank 25 Bill Pmt-Cheque 03/23/22 16:16:48 Temp 1-Sep-11 12 368230 Ontario Limited WOW . Accounts Payable I/C Payable- Rose and Thisde 14,550.00 -7,917.26 10100 • Bank 247 Transfer 03/16/201212:20:17 Kendra 1-Sep-11 Funds Transfer 26200 • Accounts Payable 0.00 -7,917.26 10100 • Sank 74 Bill Pmt-Cheque 03/29/2012 11:56:43 Tempt 2-Sep-11 30 Don Lea Lumber Ltd VOID: As per Mario 20000 • -357.36 -8,274.62 10100. Bank 75 Bill Pint -Cheque 03/21/20129:29:24 Temp 2-Sep-1131 Optimum Waste & Recycling Systems 20000 • Accounts Payable -277.75 3,552.37 10100 • Bank 76 Bill Pmt-Cheque 09/02/2011 16:32:12 Marisa 2-Sep-11 32 Stephenson's Rental Services 20000 • Accounts Payable Payable -70.00 -8,622.37 10100 • Bank 77 Bill Pmt-Cheque 09/02/2011 16:32:13 Marisa 2-Sep-11 33 The Salvation Army Accounts -809.36 -9,431.73 10100 • Bank 78 811IPmt -Cheque 03/21/20129:2924 Temp 2-Sep-11 34 Optimum Waste &RecydIng Systems 20000 • Accounts Payable -171.53 -9,603.26 10100 • Bank 79 Bill Pmt -Cheque 09/02/201116:3214 Marisa 2-Sep-1135 Stephenson's Rental Services 20000 • Accounts Payable -3,363.61 -12.966.82 10100 • Bank 57 Bill Pmt-Cheque 08/18/201114:5533 Kendra 4-Sep9.1 Debit HKMB HUB IMernatIonal Lira Premium Financing Down Payment- Riverdale Mansion Ltd. 20000 • Accounts Payable Thistle 3,35000 -9,616.87 10100- Bank 248 Transfer 03/16/2012 12:20:29 Kendra 6-Sep-11 Funds Transfer 26200•I/CPayable - Rose and 313,958.80 • 304,341.91 3 10100• Bonk SO Deposit 07/03/203212:1232 Kendra 9-Sep-11 Deposit -SPLIT- Payable- Rost and Thi.le 113,900.00 -9868.07 3 10100• Bank 249 Transfer 03/16/2012 12:20:56 Kendra 9-Sep-II Fonds Transfer 26200 • lir Accounts Payable 0.03 -9,558.07 10100 • Bank 87 Bill Pmt-Cheque 12/27/2011 16:01:54 Marisa 23-Sep-11 36 Enbridge VOID: 20000 - 20000 • Amounts Payable -1.788.39 -11.34646 10100 - Bank 88 Bill Pmt-Cheque 09/23/201116:37:36 Marisa 23-Sep-11 37 Stephenson's Rental Services -295.00 -11,64146 10100 - Bank 89 Bill Pmt-Cheque 09/23/201116:37:36 Marisa 23-Sep-11 38 The Salvation Army =CO- Amounts Payable -4,463.42 -16,104.88 10100 - Bank 90 Bill Pmt-Cheque 03/21/201213:42:11 Temp 23-Sep-1139 Toronto Hydro Electric System Limited 20000 • Accounts Payable Payable -70.00 -16,174.88 10100 • Bank 91 Bill Pmt -Cheque 09/23/201116:3738 Marisa 23-Sep-1140 The Salvation Army 20000. Accounts Payable 914.97 -17,08995 10100 • Bank 92 Bill Pmt -Cheque 03/21/201213:4211 Temp 23-Sep-11 41 Toronto Hydro Electric System Limited 20000 • Accounts Payable-Rose and Thistle 400.00 -16,689.85 10100 - Bank 250 Transfer 03/16/2912 12:21:13 Kendra 30-Sep-11 Funds Transfer 26200 • VC -54.15 -16,744.00 10100 • Bank 275 Cheque 03/16/2012 15:38:13 Kendra 30-Sep-11 Service Charge 60400 • Bank Service Charges -14,534.00 -31,278.00 10100' Bank 26 Bill Pmt-Cheque 03/23/201216:16:48 Temp 1-Oct-11 13 368230 Ontario Limited 20000. Accounts Payable Rose 14,550.00 -16,728.00 10100 - Bank 251 Transfer 03/16/201212:2351 Kendra 3-Oct-11 Funds Transfer 26203 - I/C Payable- and Thistle -20.091.61 10100 - Bank 58 Bill Pmt -Cheque 08/18/2021 14:55:45 Kendra 4-Oct-11 Debit HKMB HUB International Limited 20000 • Accounts Payable -3,363.61 723,452.00 203,360.39 4 10100 • Bank 107 Deposit 0703/2018 12:1314 Kendra 4-Oct-11 Deposit -SPLIT- and Thistle -212,700.80 -9,339.61 4 10100 • Bank 257 Transfer 03/16/2012122414 Kendra 4-Oct-31 Funds Transfer 262001/8Payable -Rose -15,239.61 10100 - Bank 276 Transfer 03/16/20 2 15:5609 Kendra 6-Oct-11 Funds Transfer 26200 - I/C Payable- Rose and Thistle -5,900.00 Thistle 7,300.00 -7,939.61 10100' Bank 253 Transfer 03/16/20'21228:45 Kendra 13-Oct-11 Funds Transfer 26200.1/C Payable- Rose and -451.77 -8,391.38 10100 • Bank 109 Bill Pmt-Cheque 03/21/20:213.02:11 Temp 18-0d-11 42 Toronto Hydro Electric Systen Account 4500768010 20000 • Accounts Payable -7,941.38 10100 • Bank 254 Transfer 03/16/20" 212:28:58 Kendra 19-Oct-11 Funds Transfer 26200 .1./C Payable - Rose and Thistle 450.00 -1664.50 -9,805.88 10100 - Bank 121 Bill Pmt -Cheque 03/20/20'216:52:08 Temp 25-Oct-1143 Jedd Jones Architect Ltd. 20003• Accounts Payable -11,756.15 10100 - Bank 122 Bill Pmt-Cheque 03/21/1129:29:24 Temp 25-00.411 55 Optimum Waste & Recycling Systems • Accounts Payable -1,950.27 -13,186.49 10100 • Bank 123 BM Pmt-Cheque 03/21/20129:29:24 Temp 25-Oct-1156 Optimum Waste & Recycling Systems 20000 • Accounts Payable -1.430.34 -2587.29 25,773.78 10100 • Bank 124 Bill Pan -Cheque 11/01/201118:10:08 Mario (Admin) 25-Oct-1150 Stephenson's Rental Services 20000 • Accounts Payable -357.36 -16,131.3.4 10100 • Bank 129 Bill Pmt-Cheque 03/21/2012 9:29:24 Temp 26-Oc611 53 Optimum Waste & Recycling Systems 20000 • Aaounts Payable -1,027.15 -17,15829 10100 • Bank 130 Bill Pmt -Cheque 03/21/23129:29:24 Temp 26-Oct-11 49 Optimum Waste & Recycling Systems 20000. Accounts Payable -686.13 -17,844.42 10100 • Bank 131 Bill Pmt-Cheque 11/01/201118:10:09 Mario (Admin) 26-Oct-11 51 Stephenson's Rental Services 20000 • Accounts Payable -2.260.00 -20,104.42 10100•Bank 138 Bill Pmt-Cheque 11/01/201118:01:17 Mario (Admin) 274Dcb11 44 Chem / Phar Solutions Inc Accounts Payable -4,520.00 -24,624.42 10100 • Bank 139 Bill Pmt-Cheque 11/01/2011 18:01:17 Mario (Admin) 27-Oct-1145 Chem / Phar Solutions Inc. Accounts Payable 4,661.25 -29,285.67 10100 • Bank 140 Bill Pmt-Cheque 03/20/202216:52:08 Temp 27-Oct-11 46 Jedd Jones Architect Ltd. 20000 • Accounts Payable -357.36 -29,643.03 10100 • Bank 141 Bill Pmt -Cheque 03/21/20129:29:24 Temp 27-Oct-1154 Optimum Waste & Recycling Systems 20000 • Accounts Payable -231.65 -29674.68 10100 • Bank 142 Bill Pmt-Cheque 11/01/201118:01:18 Mario (Admin) 27-Oct-11 47 Scarboro Steel Works Limited 20000 • Accounts Payable I -29,999.57 10100 • Bank 143 Bill Pmt-Cheque 11/01/201 18:10:09 Mario (Admin) 27-Oct-11 52 Stephenson's Rental Services 20000 - Accounts Payable -124.89 -70.00 -30,069.57 10100 • Bank 145 Bill Pmt-Cheque 11/01/202118:01:19 Mario (Admin) 28-Oct-11 48 The Salvation Army 2010 • Accounts Payable -24.45 10100' Bank 277 Cheque 03/16/22 15:57:05 Kendra 31-Oct-11 Service Charge 60400 • Bank Service Charges ,094.02 -44,628.02 10100 • Bank 27 Bill Pmt-Cheque 03/23/201216:16:48I Temp 1-Nov-11 14 368230 Ontario Limited 1000 • Accounts Payable -14,534.00 -30,078.02 10100. Bank 255 Transfer 03/16/2012 12:29:43 Kendra 1-Nov-11 Funds Transfer 26200 i I/C Payable- Rose and Thistle 14,550.00 -30.148.02 10100 • Bank 147 Bill Pmt-Cheque 11/02/2011 13:26:28 Mario (Admin) 2-Nov-1357 The Salvation Army 20000 • Accounts Payable Thistle 2,250.00 -27,898.02 10100 • Bank 256 Transfer 03/16/2012 12:30:08 Kendra 7-Nov-11 Funds Transfer 26200 • I/C Payable - Rose and 364,333.54 336,4x557 5 10100• Bank 148 Deposit 03/7-5/2012 1616:46 Temp 10-Nov-11 Deposit Potable-Rose and Thistle ,.384,300.00 -27,86448 5 10100• Bonk 257 Transfer 03/16/2.212:3012 Kendra 10-Nov-11. Funds Transfer 26200.2/8 -565.00 28,42948 10100 • Bank 150 Bill Pmt -Cheque 03/20/201216:52:08 Temp 17-Nov-1158 Jedd Jones Architect Ltd. 81124 20000 - Accounts Payable 500.00 -27.929.48 101C0 • Bank 258 Transfer 03/16/2012 12:30:53 Kendra 18-Nov-11 Funds Transfer 26200. I/C Payable- Rose and Thistle -27,529.48 10100 • Bank 259 Transfer 03/16/201212:31:03 Kendra 25-Nov-11 Funds Transfer 26200 • I/C Payable - Rose and Thistle 40000 -27,544.83 10100 • Bank 278 Cheque 03/16/2012 15:59:00 Kendra 30-Nov-11 Service Charge 60400 • Bank Service Charges -15.35 -42,078.83 10100 • Bank 28 Bill Pmt-Cheque 03/23/201216:16:46 Temp 1-Dec-11 15 368230 Ontario Limited 20000 • Accounts Payable -14,534.00 Thistle 14,550.00 -27,528.83 10100 • Bank 260 Transfer 03/16/2012 12:31:36 Kendra 1-Dec-11 Funds Transfer 26200 • I/C Payable - Rose and -1,638.50 -29,167.33 10100' Bank 155 Bill Pmt-Cheque 12/02/201114:15:49 Marisa 2-000-1159 REA Sign Group 1000 • Accounts Payable Payable -169.50 -29,336.83 10100 • Bank 157 Bill Pmt-Cheque 12/02/20}114:38:09 Marisa 2-Dec-11 60 REA Sign Group 2=0• Accounts 1 10100 • Bank 261 Transfer 03/16/20 12:31:51 Kendra 5-Dec-11 Funds Transfer 26200 • I/C Payable - Rose and Thistle 26,950.00 -2,386.83 10100 • Bank 159 Bill Pmt-Cheque 03/21/2052 13:42:11 Temp 6-Dec-11 61 Toronto Hydro Electric System Limited 20800 • Accounts Payable -555,20 -2.942.03 -2,392.03 10100 • Bank 262 Transfer 03/16/2052 12:31:59 Kendra 6-Dec-11 Funds Transfer 26200' I/C Payable- Rose and Thistle 550.00 10100 • Bank 163 Bill Pmt-Cheque 03/20/2012 16:52:08 Temp 8-Dec-11 64 Jedd Jones Architect Ltd. 20000 • Accounts Payable -565.00 -2,957.03 .37,900.00 -40,8571:13 10100• Bonk 263 Transfer 03/16/2012 12:32:34 Kendra 20-Dee-11 . .Funds Transfer. 26200 • VC Payable-Rosa and Thistle -2,000.1 -42,857.03 10100 • Bank 264 Transfer 03/16/2012 12:32:41 Kendra 20-Dec-11 Funds Transfer 26200-I/C Payable - Rose and Thistle 10200• Bank 280 Deposit 03/23/20i2 1616:40 Thrall 20-0.-11 Deposit -SPLIT- 39,926.00 -2,931.03 6 10100 • Bank 160 Bill Pmt-Cheque 12/09/2011 12:10:37 Marisa 21-Dec-11 62 Chem /Phar Solutions Inc 20000. Accounts Payable -6,780.00 -9,711.03 10100 • Bank 265 Transfer 03/16/201212:33:57 Kendra 21-Dec-11 Funds Transfer 26200 - VC Payable- Rose and Thistle -4,300.00 -14,011.03 10100 - Bank 266 Transfer 03/16/201212:34:26 Kendra 28-1c-11 Funds Transfer 26200 - VC Payable- Rose and Thistle -2,030.00 -16,011.03 -16,027.73 10100• Bank 281 Cheque 03/16/201216:07:11 Kendra 31-Dee-11 Service Charge 60400• Bank Service Charges -16.70 5,282.90 10100 • Bank 393 General Journal 07/03/2012 15:3748 Kendra 31-Dec-11 112/11-4 Accounts Payable To record cheques that have not deared the bank as of Dec 31,2011 20000 • Accounts Payable 21,310.63 10100 • Bank 394 General Journal 07/03/201215:38:19 Kendra 1-Jan-12 112/11 - 511 Accounts Payable To record cheques that have not cleared the bank as of Dec 31,2011 20000 • Accounts Payable -21.310.63 -16,027.73 10100 • Bank 168 BM Pmt-Cheque 01/03/2012 9:33:56 Marisa 2-Jan-12 Enbridge VOID: W/R 7973898 • Accounts Payable 0.00 -16,027.73 -30,561.73 10100 • Bank 171 Bill Prnt -Cheque 03/23/201216:16148 Temp 2-Jan-1268 368230 Ontario Limited - Accounts Payable -14,534.00 10100 • Bank 174 BRI Pmt-Cheque 01/03/201213:29:29 Marisa 2-Jan-1269 Ministry of Finance(ON) Application for Absolute Tile 218:00. Accounts Payable -70.00 -30631.73 -32,897.37 10100 • Bank 173 Bill Pint -Cheque 01/03/23129:37:51 Marisa 3-Jan-12 66 Enbridge 20000. Accounts Payable -2,26564 -39,790.37 10100 • Bank 161 Bill Pmt -Cheque 12/09/2011 12:12:29 Marisa 5-Jan-1263 Chem / Phar Solutions Inc. • Accounts Payable -6.893.00 -25,312.00 -65,102.37 10100- Bank 166 Bill Prnt -Cheque 12/29/20 1 14:00:48 Marisa 5-Jan-1265 JB Home Improvement and II, Roofing repairs-450 Pape Av 20000. Accounts Payable 14,603.00 -50,502.37 1011 i Bank 282 Transfer 03/16/20 2 16:07:51 Kendra 5-Jan-12 Funds Transfer 26200 • VC Payable- Rose and Thistle 1,297.63 10100 • Bank 283 Transfer 03/16/20 2 16:0800 Kendra 5-Jan-12 Funds Transfer 26200 • VC Payable- Rose and Thistle 51,80000 10100 • Bank 191 Bill Pmt.Cheque 01/13/201211:43:31 Marisa 13-Jan-12 73 HKMB HUB International Lin' Down Payment 20000 • Accounts Payable ,044.00 -6,746.37 10100 • Bank 284 Transfer 03/16/201216:08:10 Kendra 16-Jan-12 Funds Transfer 26200 • I/C Payable-Rose and Thistle 8,05000 1,303.63

10100 • Bank 285 Cheque 03/16/201216:09:37 Kendra 31-Jan-12 Service Charge 60400 • Bank Service Charges -12.95 1,290.68 10100 Bank 206 BM Pint -Cheque 03/23/201216:16:48 Temp 1-Feb-12 74 368230 Ontario Limited 450 Pape 20000 • Accounts Payable 44,534.00 -13,243.32 10100 • Bank 210 BIII Pmt -Cheque 02401/2012 16705:57 Mario (Admin) 1-Feb-1275 Stephenson's Rental Semites 20000 - Accounts Payable -2,567.13 -15,810.45 10100. Bank 211 Bill Pmt-Cheque 02/01/20L 17:34:40 Mario (Admin) 1-Feb-12 76 Stephenson's Rental Services Rentals 20000 - Accounts Payable -171.53 -15,981.98 10100 Bank 322 Transfer 04/26/20$211:40:07 Kendra 1-Feb-12 Funds Transfer 26200. I/C Payable - Rose and Thistle 13,600.00 -2,381.98 11 10100 • Bank 323 Transfer 04/26/2012 11:40:14 Kendra 2-Feb-12 Funds Transfer 26200 • 1/C Payable- Rose and Thistle 2,700.00 318.02 10100. Bank 216 Bill Pmt -Cheque 02/03/20!2 12:21:42 Marisa 3-Feb-12 77 Stephenson's Rental Services Invoice# 008188332 20000 • Accounts Payable -98.76 219.26 10100 • Bank 217 1331Prnt -Cheque 02/03/20 212:25:04 Marisa 3-Feb-12 78 Stephenson's Rental Services Inv #0018191182 20000' Accounts Payable -228.71 -9.45 10100. Bank 218 13.111Pmt -Cheque 02/03/20L 12:2517 Marisa 3-Feb-12 79 Stephenson's Rental SenAces Invoice 008191514 20000' Accounts Payable -114.36 -123.81 10100' Bank 219 Bill Pmt-Cheque 02/03/20L 12:2725 Marisa 3-Feb-12 80 Stephenson's Rental Services Rentals 20000 - Accounts Payable -457.42 -581.23 10100 • Bank 220 Bill Pmt -Cheque 02/03/201212:28:46 Marisa 3-Feb-1281 Stephenson's Rental Services 20000. Accounts Payable -171.53 -752.76 10100. Bank 2.21 Bill Pmt -Cheque 02/03/201212:29:34 Marisa 3-Feb-12 82 Stephenson's Rental Services Invoicelt 008192930 20000 • Accounts Payable -228.71 -981.47 10100 • Bank 222 Bill Pmt-Cheque 02/03/2012 12:30:50 Marisa 3-Feb-1283 Stephenson's Rental Services ['Acker 008193100 20000 - Accounts Payable -114.36 4,095.83

10100 • Bank 223 13111 Pmt -Cheque 02/03/2012 12:31:29 Marisa 3-Feb-1284 Stephenson's Rental Services Invoker 008193099 20000 • Accounts Payable -457.42 -1,553.25 10100 • Bank 330 Bill Pmt -Cheque 04/26/201212:09:18 Kendra 4-Feb-12 Debit HKMB HUB International Lira Pre-authorized payment to Mellon Bank (CAFO) 20000' Accounts Payable -4,719.88 -6,273.13

10100 • Bank 187 Bill Pmt-Cheque 03/20/201216:52:08 Temp 5-Feb-12 72 Jedd Jones Architect Ltd. 1124 450 Pape Avenue 20000 • Accounts Payable -3,055.08 -9,328.21 10100 • Bank 189 Bill Prnt•Cheque 04/26/2012 12:13:22 Kendra 5-Feb-1274 Jedd Jones Architect Ltd. VOID: 1117 College Street 20000' Accounts Payable 0.00 -9,328.21 10100 • Bank 324 Transfer 04/26/2012 11:40:20 Kendra 6-Feb-12 Funds Transfer 26200 - I/C Payable- Rose and Thistle 9,650.00 321.79 10100 • Bank 227 Bill Pmt-Cheque 02/10/2012 10:58:21 Marisa 10-Feb-12 86 The Salvation Army 20000' Accounts Payable -365.00 -43.21

10100 • Bank 325 Transfer 04/26/20211:40:29 Kendra 13-Feb-12 Funds Transfer 26200' I/C Payable-Rose and Thistle 400.00 356.79 10100 • Bank 228 NI Prnt -Cheque 05/15/201213:57:58 Hilda 14Feb-12 87 Jackie Mckinlay Reimbursement for postage expense 20000- Accounts Payable -32.61 324.18 1I 10100' Bank 230 Bill Pmt-Cheque 02/15/21:.2 10:49:42 Marisa 15-Feb-1288 Land Survey Group Part of loss 7 & 8 Registered Plan 587-E 20000 • Accounts Payable -1,840.77 -1,516.59 10100 • Bank 326 Transfer 04/26/20211:40:38 Kendra 21-Feb-12 Funds Transfer 26200 •1/C Payable- Rose and Thistle Lamm 333.41 10100 - Bank 327 Transfer 04/26/201211:40:46 Kendra 23-Feb-12 Funds Transfer 26200 • I/C Payable- Rose and Thistle -850.00 -516.59 10100 Bunk 279 Deposit 08/21/20131552:48 Mark: grid IN 27-Feb-12 Deposft 59111-- 48,407.18 47,89059 8 10100• Bank 328 Transfer 04/26/20131:43:12 Kendra 27-Feb-12 Funds Transfer 26200• I/C Payable- Rose and Thistle -48,400.00 -509.41 8 -216.96 -726.37 10100 • Bank 234 Bill Pmt -Cheque 02/28/20i2 16:10:13 Marisa 28-Feb-12 89 Stephenson's Rental Services I nvoice# 008191509 20000. Accounts Payable 10100' Bank 333 Cheque 04/26/201212:17:18 Kendra 29-Feb-12 Service Charge 60400. Bank Service Charges -12.20 -738.57 10100. Bank 362 Bill Pint -Cheque 06/05/201216:12:28 Temp 29-Feb-12112 Jedd Jones Architect Ltd. 20000 • Accounts Payable -923.75 -1,162.32 10100. Bank 237 Bill Pmt-Cheque 03/23/201216:16:48 Temp 1-Mar-12 90 368230 Ontario Limited 20090 • Accounts Payable -14,534.00 -15,696.32 10100 • Bank 310 Transfer 04/11/2012 11:40:23 Norma 1-Mar-12 Funds Transfer 26200 • 1/C Payable- Rose and Thistle 14,500.00 -1,196.32 10100 • !Sank 311 Transfer 04/11/2012 11:40:41 Norma 2-Mar-12 Funds Transfer 26200 • I/C Payable- Rose and Thistle 4,95000 3,753.68 10100 - Bank 331 0311 Pmt-Cheque 04/26/2012 12:10:47 Kendra 4-Mar-12 Debit HKMB HUB International Lim( Pre-authorised payment to Mellon Bank (CAFO) 20000 • Accounts Payable 4,719.88 -966.20 10100 Bank 226 Bill Pmt-Cheque 03/21/2012 9:29:24 Temp 5-Mar-1285 Optimum Waste & Recycling 5 Invoice #40837 ' 20000' Accounts Payable -1,771.23 10100' Bank 238 Bill Pmt-Cheque 03/05/201210:47:06 Marisa 5-Mar-1291 Geo-Logic Inc. Invoice# 27186 - services rendered up to Sept. 30, 2011 20000' Accounts Payable -3,579.28 -5,350.51 10100. Bank 312 Transfer 04/11/2012 11:40:56 Norma 5-Mar-12 Funds Transfer 26200' I/C Payable- Rose and Thisbe 1,400.00 -3,950.51 10100 • Bank 240 Bill Pmt-Cheque 05/17/20}216:48:231 Kendra 8-Mar-1292 Treasurer, City of Toronto VOID:450 Pape Severance and Manor Variance applications Fee 20000 • Accounts Payable 0.00 -3,950.51

10100 • Bank 313 Transfer 04/11/201211:43:36 Norma 3Mar-12 Funds Transfer 26200 • I/C Payable- Rose and Thistle 5,000.00 1,049.49 10100 Bank 314 Transfer 04/11/201211:43:59 Norma 12-Mar-12 Funds Transfer 26200 - I/C Payable- Rose and Thistle 3,550.00 4,599.49 10100 - Bank 246 Bill Pmt-Cheque 03/15/2012 13:25:53 Marisa 15-Mar-12 93 Stephenson's Rental Services Invoices 008192640,008193465 and 008194188 20000 • Accounts Payable -646.36 1953.13 10100 • Bank 272 Bill Pmt-Cheque 03/21/2012 9:29:24 Temp 16-Mar-1294 Optimum Waste & Recycling Systems 20000 • Accounts Payable -2,226.88 1,726.25 10100 Bank 315 Transfer 04/11/2012 11:44:21 Norma 26-Mar-12 Funds Transfer 26200 • 1/C Payable- Pose and Thistle 2,900.00 4,62625 10100- Bank 291 631 Pmt-Cheque 03/27/201213:12:54 Hilda 27-Mar-1295 William N. Greer Invoice# 1 Revised - Consulting fees 20000 • Accounts Payable -347.50 4,278.75

10100' Bank 334 Cheque 04/26/2012 12:18:27 Kendra 31-Mar-12 Service Charge 60400' Bank Service Charges -9.95 4,268.80 10100' Bank 292 Bill Pmt-Cheque 03/28/2012 9:50:37 Kendra 1-Apr-12 96 368230 Ontario Limited 20000. Accounts Payable 44,534.00 -10,265.20 10100' Bank 349 Transfer 05/22/2012 11:42:02 Norma 2-Apr-12 Funds Transfer 26200. VC Payable - Rose and Thistle 14,500.00 4,234.80 10100 - Bank 350 Transfer 05/22/201211:42:47 Norma 3-Apr-12 Funds Transfer 26200 • VC Payable• Rose and Thistle 650.00 4,884.80 10100' Bank 332 Bill Pmt-Cheque 04/26/201212:11:06 Kendra 4-Apr-12 Debit HKMB HUB International Limi. Pre-authorized payment to Mellon Bank (CAFO) 20000. Accounts Payable .4,729.88 164.92 10100. Bank 351 Transfer 05/22/201211:43:06 Norma 4-Apr-12 Funds Transfer 26200 • 1/C Payable - Rose and Thistle 4,750.00 4,914.92 10100' Bank 179 Bill Pmt -Cheque 01/20/201216:32:08 Temp 5-Apr-12 70 Jedd Jones Architect Ltd. 20000 • Accounts Payable -2,65225 2,263.67 10100' Bank 180 Bill Pmt -Cheque 03/20/201216:52,08 Temp 5-Apr-1271 Jedd Jones Architect Ltd. VOID: 20000 • Accounts Payable 0.00 2,263.67

10100 • Bank 352 Transfer 211%3:25 Norma 5-Apr-12 Funds Transfer 26200 • 1/C Payable-Rase and Thistle 2,650.00 4,913.67 10100• Bank 353 Transfer 11543:55 Norma 11-Apr-12 Funds Transfer 26200• I/C Payable-Rose and Thistle -700.00 4,213.67 10100. Bank 354 Transfer A4:28 Norma 13-Apr-12 Funds Transfer 26200' I/C Payable- Rose and Thistle 50.00 4,263.67 10100 • Bank 317 Bill Pmt -Cheque 04/1 2 1323:26 Hilda 17-Apr-12 105 Optimum Waste &Reeyding .1 Invoicelt 42953 20000 • Accounts Payable -635.81 3,627.85 10100 • Bank 355 Transfer 05/22,/201211:44%11 Norma 18-Apr-12 Funds Transfer 26200 • VC Payable- Rose and Thistle 650.00 4,277.86 10100 - Bank 542 Cheque 05/27/2013 10:1206 Norma 30-Apr-12 Service Charge 604C0 • Bank Service Charges -9.95 4.267.91 10100 • Bank 543 Cheque 05/27/2013 10:21:22 Norma 30-Apr-12 Service Charge 60400 • Bank Service Charges 4262.91 10100 • Bank 302 Bill Pmt-Cheque 04/09/2012 11:23:32 Kendra 1-May-12 97 368230 Ontario Limited 20000' Accounts Payable •14,534.00 -10,271.09 10100 • Bank 335 Bill Pmt -Cheque 05/01/2012 1007:21 Hilda 1-May-12 106 Shayla Brudner 'Bile Services I Invoice# 57596 20000 • Accounts Payable -84.75 -10,355.84 10100 -Bank 455 Transfer 01/28/2013 9:56:48 Norma 1-May-12 Funds Transfer 26200 • I/C Payable - Rose and Thistle 14,550.00 4,194.16 10100. Bank 337 Bill Pmt -Cheque 05/03/2012 13:20:24 Hilda 3-May-12 107 Optimum Waste & Recyding ; Invoice #43622 20000 • Accounts Payable -631.40 3,562.76

10100 • Bank 456 Transfer 01/28/2013 9:57:11 Norma 4-May-12 Funds Transfer 26200. I/C Payable - Rose and Thistle 700.00 4,262.76 10100 • Bank 339 Bill Pmt-Cheque 05/27/2013 10:52:51 Norma 7-May-12 108 Minister of Finance VOID:Cheque never cashed 20000 • Accounts Payable OAO 4,262.76 10100 • Bank 457 Transfer 01/28/2013 9:57:23 Norma 9-May-12 Funds Transfer 26200. I/C Payable - Rose and Thistle 400.00 4,662.76 10100 • Bank 340 Bin Prnt -Cheque 05/15/2+13:57:58 Hilda 11-May-12 109 Jackie Mekinlay Reimbursement for postage expense 20000 Accounts Payable -10.51 4,652.23

10100-Bank 458 Transfer 01/28/2013 9:57:50 Norma 17-May-12 Funds Transfer 26200 I/C Payable-Rose and Thistle -5,000.00 -347.75 10100 • Bank 356 BM Pmt -Cheque 05/24/201216:44:43 Hilda 24-May-12 110 Stephenson's Rental Services 20000 • Accounts Payable -3,409.43 -3,757.18 10100 • Bank 357 sm Prnt -Cheque 05/24/201216:49:16 Hilda 24-May-12 111 Stephenson's Rental Services 20000 • Accounts Payable -1,501.32 -5,258.50 10100 • Bank 364 Bill Pmt-Cheque 06/11/2022 14:39:31 Temp 31-May-12 113 Jeddlones Architect Ltd. VOID: Wrong Cheque Date 20000 -Accounts Payable 0.00 -5,258.50 10100 • Bank 303 Bill Pmt-Cheque 04/09/2012 1123:33 Kendra 1-Jun-12 98 368230 Ontario Limited 20000 • Accounts Payable -14,534.00 -19,792.50 10100• Bank 459 Transfer 01/28/2013 9:58:39 Norma 1-Jun-12 Funds Transfer 26200 I/C Payable- Rose and Thistle 19,750.00 -42.50 10100 • Bank 460 Transfer 01/28/2313 9:59:05 Norma 6-Jun-12 Funds Transfer 26200 • I/C Payable- Rose and Thistle 200.00 157.50 10100 • Bank 370 Bill Pmt -Cheque 06/18/2012 16:26:57 Temp 18-Jun-12 115 Treasurer, City of Toronto 190408416003700000004 20000 • Accounts Payable -19,822.30 -19,664.80 10103• Bank 371 0111 Pmt -Cheque 06/20/201213:2038 Temp 20-Jun-12 116 Optimum Waste & Recycling Systems 20000 • Accounts Payable -1,149.98 -20,814.78 10100 • Bank 461 Transfer 01/28/201310:00:12 Norma 25-Jun-12 Funds Transfer 26200 • I/C Payable - Rose and Thistle 20,950.00 135.22 10100 • Blank 545 Cheque 05/27/201310:37:09 Norma 30-Jun-12 Service Charge 60400 • Bank Service Charges -5.00 130.22 10100 • Bank 304 Bill Pmt -Cheque 04/09/2012 11:23:33 Kendra 1-301-12 99 368230 Ontario Limited 20030 Accounts Payable -14,534.00 -14,403.78 10100 • Bank 397 Bill Pmt -Cheque 07/03/2012 16:22:57 Temp2 3-.1u1-12 117 Jedd Jones Architect Ltd. Invoiceft 12-028 20000. Accounts Payable -2,330.63 -16,734A1 10100 • Bank 462 Transfer 01/28/201310:00:35 Norma 3-701-12 Funds Transfer 26200. I/C Payable - Rose and Thistle 14,500.00 -2,234.41 10100 • Bank 401 Bill Pmt -Cheque 07/05/201216:53:52 Hilda 5-101-12 118 HKMB HUB International Limi' Invoice# 375989 20000 . Accounts Payable -1,599.48 -3,833.89 10100 • Bank 463 Transfer 01/26/201310:01:01 Norma 5-Jul-12 Funds Transfer 26200 • I/C Payable - Rose and Thistle 2,35000 -1,083.89 I 10100 • Bank 464 Transfer 01/28/203 10:01:13 Norma 6-101-12 Funds Transfer 26200 • I/C Payable - Rose and Thistle 1,60100 116.11 10100 • Bank 546 Cheque 05/27/2013 10:43:41 Norma 31-301-12 Service Charge 60400 • Bank Service Charges -5.00 111.11

10100. Bank 305 Bill Pmt-Cheque 04/09/2012 11:23:33 Kendra 1-Aug-12 100 368230 Ontario Limited 20000 • Accounts Payable -14,534.00 -14,422.89 10100 • Bank 465 Transfer 01/28/2013 10:04:25 Norma 1-Aug-12 Funds Transfer 26200. I/C Payable - Rose and Thistle 14,550.00 127.11 10100 • Bank 413 Bill Pmt-Cheque 07/31/2012 14:36:17 Hilda 5-Aug-12 119 Optimum Waste & Recycling t Invoice #44045 20000. Accounts Payable -636.69 506.58 10100 • Bank 414 Bill Pmt -Cheque 08/03/2012 12:46:04 Hilda 5-Aug-12 120 Jedd Jones Architect Ltd. Invoice# 12-042 20000 Accounts Payable -1,045.25 -1,554.83 10100 Bank 415 Bill Pmt-Cheque 08/03/2012 12:51:53 Hilda 5-Aug-12 121 Stephenson's Rental Services Invoice# 008197198 20000. Accounts Payable -21.02 -1,575.85 10100 • Bank 466 Transfer 01/28/201310:04:41 Norma 7-A06-12 Funds Transfer 26200 I/C Payable- Rose and Thistle 1,000.00 -575.85 10100 Bank 467 Transfer 01/28/201310:04:55 Norma 8-Aug-12 Funds Transfer 76200• I/C Payable -Rose and Thistle 650.00 74.15 10100 • Bank 421 Bill Pmt-Cheque 08/23/2012 16:27:08 Hilda 23-Aug-12 124 Stephenson's Rental Services 20000 Amounts Payable -717.86 -643.71 10100 Bank 468 Transfer 01/28/201310:05:14 Norma 30-Aug-12 Funds Transfer 26200. I/C Payable - Rose and Thistle 700,00 56.29 10100 • Bank 547 Cheque 05/27/2013 10:45:39 Norma 31-Aug-12 Service Charge 60400 • Bank Service Charges SAO 51.29 10100 • Bank 306 Bill Pmt-Cheque 04/09/2012 11:23:34 Kendra 1-Sep-12 101 368230 Ontario Limited 20000 • Accounts Payable -14,534.00 -14,482.71 10100 • Bank 423 Cheque 08/21/2013 17:22:51 Mario (Adrnin) 4-Sep-12 125 HKMB HUB International Limited -SPLIT- -8,588.16 -23,070.87

10100 • Bank 469 Transfer 01/28/20/3 10:0639 Norma 4-Sep-12 Funds Transfer 26200 • I/C Payable- Rose and Thistle 33,850.00 10,779.13 10100 • Bank 365 Bill Pmt -Cheque 06/11/2012 14:40:30 Temp 5-Sep-12 114 Jedd Jones Architect Ltd. 20000. Accounts Payable -752.75 10,016.38 10100 • Bank 416 Bill Pmt -Cheque 08/10/20/2 15:20:34 Temp2 5-Sep-12 122 Adam J. Brown Professional Corporation 20030. Accounts Payable -9,875.07 141.31 10100 Bank 470 Transfer 01/28/2013 10:06:29 Norma 5-Sep-12 Funds Transfer 26200. I/C Payable - Rose and Thistle -18,450.00 -18,308.69 10100 • Bank 471 Transfer 01/28/201310:07:03 Norma 7-Sep-12 Funds Transfer 26200 I/C Payable - Rose and Thistle 18,450.00 141.31 10100 • Bank 548 Cheque 05/27/2013 10:46:52 Norma 30-Sep-12 Service Charge 60400 Bank Service Charges -5.00 136.31 10100 Bank 307 Bill Pmt-Cheque 04/09/21211:23:34 Kendra 1-Oct-12 102 368230 Ontario Limited 20000 • Accounts Payable -14,534.00 -14,397.69 10100 • Bank 472 Transfer 01/28/2013 10:07:22 Norma 1-Oct-12 Funds Transfer 26200 • I/C Payable- Rose and Thistle 14,550.00 152.31 101130. Bank 419 Bill Pmt -Cheque 08/17/201211:01:19 Temp2 5-Oct-12 123 Jedd Jones Architect Ltd. 20000 • Accounts Payable -1,412.50 -1,260.19 10100' Bank 433 Bill Pmt -Cheque 10/11/201215:59:33 Temp2 5-Oct-12 126 Adam J. Brown Professional& invoice/ 13526 20030 • Accounts Payable -1,354.87 -2,615.06 10100 • Bank 434 Bill Prnt -Cheque 10/11/201215:59:34 Temp2 5-Oct-12 127 Hilditch Architect 20000 Accounts Payable -1,785.00 .4,400.06 10100 - Bank 435 BM Prnt -Cheque 11/27/2012 14:42:13 Temp2 5-Oct-12 128 HKMB HUB International Limi' VOID: Returned cheque, new payment and billing terms 20000 • Accounts Payable 0.00 -4,400.06 10100 • Bank 436 Bill Pnit -Cheque 10/11/2012 15:59:36 Temp2 5-Oct-12 129 Land Survey Group 20000' Accounts Payable -1.228.31 .6,628.37 10100 • Bank 438 Bill Pmt -Cheque 10/11/2012 15:59:37 Temp2 5-Oct-12 131 Scott Morris Architects Inc. 20000• Accounts Payable -1.276-71 -6,907.08 10100. Bank 473 Transfer 01/28/2013 10:07:36 Norma 5-Oct-12 Funds Transfer 26200• 1/C Payable - Rose and Thistle 1,400.00 -5,507.08 10100 • Bank 440 Bill Pmt -Cheque 10/19/2012 11:36:51 Temp2 19-Oct-12 132 Hilditch Architect Balance from Invoice 12-1209-01 20000 • Accounts Payable -2,17100 -7,677.08 10100 • Bank 549 Cheque 05/27/2013 10:48:16 Norma 31-Oct-12 Service Charge 60400 • Bank Service Charges 36.0 -7,682.08

10100 • Bank 308 Bill Pmt -Cheque 04/09/2012 11:23:34 Kendra 1-Nov-12 103 368230 Ontario Limited 20000 • Accounts Payable -14,534,00 -22,216.08 10100 • Bank 474 Transfer 01/28/20]310:09:42 Norma 141 ov-12 Funds Transfer 26200 • I/C Payable - Rose and Thistle 26,100.00 3,883.92 10103• Bank 437 Bill Pmt -Cheque 10/29/2012 9:48:33 Temp2 5-Nov-12 130 Optimum Waste & Recycling Systems 20000' Accounts Payable -2,193.38 1,690.54 10100 • Bank 446 Bill Pmt-Cheque 11/27/20 2 15:01:03 Tempt 27-Nov-12133 Bousfields Inc. • Accounts Payable -762.75 927.79 10100 • Bank 447 Bill Pmt-Cheque 11/27/20 2 14:41:35 Temp2 27-Nov-12 HKMB HUB International limi• VOID:Invoiceit 377358- payment tb confirmed • Accounts Payable 0.00 927.79 10100 • Bank 475 Transfer 01/28/2013 10:09:58 Norma 28-Nov-12 Funds Transfer • I/C Payable- Rose and Thistle -850.00 77.79 10100 • Bank 449 Bill Pmt-Cheque 11/30/201212:17:37 Temp2 30-Nov-12134 Treasurer, City of Toronto VOID: error in printing 20000 • Accounts Payable 0.00 77.79 10100 • Bank 550 Cheque 05/27/2013 10:49:44 Norma 30-Nov-12 Service Charge 60400. Bank Service Charges 300 72.79 10100 • Bank 309 Bill Pmt-Cheque 04/09/201211:23:35 Kendra 1-Dec-12 104 368230 Ontario Limited 20000 • Accounts Payable -14,534.00 -14,461.21 10100 - Bank 451 Cheque 12/03/20129:49:57 Temp2 1-Dec-12136 368230 Ontario Limited Building Facility Interest: February 27, 2012 - December 1, 2012 Mortgage 38112.84 -52,574.05 10100 • Bank 476 Transfer 01/28/2013 10:10:24 Norma 3-Dec-12 Funds Transfer 26200•1/C Payable- Rose and Thistle 52,650.00 75.95 10100 • Bank 538 Deposit 08/21/2013 17:28:52 Mario (Adrian) 12-Dec-12 Deposit 63310• General Liability Insurance 210.24 286.19 10100 • Bank 477 Transfer 01/28/201310:10:38 Norma 14-Dec-12 Funds Transfer 26200 • 1/C Payable-Rose and Thistle -200.00 86.19 10100. Bank 450 Bill Pmt-Cheque 11/30/2012 12:18:26 Temp2 21-Dec-12 135 Treasurer,(My of Toronto 20060 • Accounts Payable -38,999.16 -38,912.97 10100 • Bank 478 Transfer 01/28/201310:11:00 Norma 21-Dec-12 Funds Transfer 26200.1/C Payable-Rose and Thistle 38,950.00 37.03 10100 • Bank 544 General Journal 05/27/201310:29:11 Norma 31-000-12 112/12 - 16 O To reverse void cheque 46 never cleared Application fee 60.00 97.03 10100. Bank 551 Cheque 05/27/2013 10:53:05 Norma 31-100-12 Service Charge 60400. Bank Service Charges -5.00 92.03 10100 - Bank 453 Cheque 12/28/2012 16:54:18 Temp2 1-Jan-13 counter 1 368230 Ontario Limited mortgage and equity Mortgage -14,534.00 -14041.97 10100 • Bank 491 Transfer 02/25/201311:06:55 Norma 2-Jan-13 Funds Transfer 26200-1/C Payable- Rose and Thistle 14,55000 108.03 10100 • Bank 492 Transfer 02/25/2013 11:07:10 Norma 4-Jan-13 Funds Transfer 26200 • I/C Payable-Rose and Thistle 4,200.00 4,308.03 10100 • Bank 454 Cheque 01/04/2013 10:54:55 Temp2 5-Jan-13 137 368230 Ontario Limited Additional Interest Mortgage -4,200.00 10803 10100 • Bank 566 Cheque 07/12/201310:40:19 Anjela 31-Jan-13 Service Charge 60400 • Bank Service Charges -5.00 103.03 10100 • Bank 487 Cheque 01/31/201313:12:46 Temp 5-Feb-13148 368230 Ontario Limited Mortgage Interest 2013 Mortgage 48,734.60 48,630.97 10100. Bank 508 Transfer 03/26/2013 16:50:32 Norma 5-Feb-13 Funds Transfer 26200 • I/C Payable-Rose and Thistle 18,750.00 119.03 10100 • Bank 567 Cheque 07/12/201310:41:09 Anjela 28-Feb-13 Service Charge 60400 • Bank Service Charges -500 114.03 10100 • Bank 518 Transfer 04/22/2013 10:26:23 Norma 4-Mar-13 Funds Transfer 26200. I/C Payable-Rose and Thistle 18,750.00 18,864.03

10100. Bank 493 Cheque 07J28/201312:31:48 Hilda 5-Mar-13149 368230 Ontario Limited Mortgage Interest 2013 Mortgage 48,734.00 130.03 10100 - Bank 482 Bill Pmt-Cheque 03/19/201314:38:06 Temp2 18-Mar-13150 BTY Group 20000 • Accounts Payable -1,695.00 -1,564.97 10100 • Bank 483 Bill Pmt -Cheque 03/19/201314:38r07 Temp2 1&Mar-13 151 Geoff Crewe - Chartered Accountant 20000 • Accounts Payable -1,356.00 -2,920.97 10100 • Bank 484 Bill Pmt-Cheque 03/19/201314:38:07 Temp2 18-Mar-13 152 JEI Home Improvement and Rooting 20000 • Accounts Payable 203.40 -3,124.37 10100 • Bank 485 Rill Pmt-Cheque 03/19/201314:38:08 Temp2 18-Mar-13 153 Nexus Protective Services Ltd. 20000 • Accounts Payable -1,723.25 -4,847.62 10100 • Bank 505 Rill Pmt-Cheque 03/19/201314:38:08 Temp2 18-Mar-13 154 Maple Printing 20001 • Accounts Payable -124.30 -4,971.92 10100. Bank 506 Bill Pmt-Cheque 03/19/201314:38:09 Temp2 18-Mar-13 155 Nexus Protective Services Ltd. 20000 - Accounts Payable -875.75 3.847.67 1 /0100 • Bonk 516 Deposit 04/11/208 16:5189 Norma 18-64ar-13 Deposit 368230 Ontario Ltd • 275,000.00 269,152.33 9 10100. Bank 519 Transfer 04/22/201310:26:37 Norma 18-Mar-13 Funds Transfer 26200-(/C Payable - Rose and Thistle -275,000.00 -5,847.67 9 10100' Bank 520 Transfer 04/22/2013 10:27:02 Norma 20-Mar-13 Funds Transfer 26200 - I/C Payable- Rose and Thistle 300.00 -5,547,67 10100. Bank 568 Cheque 07/12/201310:46:59 Anjela 31-Mar-13 Service Charge 60400 • Bank Service Charges 3.00 3,552.67 10100• Bank 555 Transfer 06/12/201315:31:10 Norma 2-Apr-13 Funds Transfer 26200 • I/C Payable - Rose and Thistle 21,700.00 16,147.33 10100 • Bank 556 Transfer 06/12/2013 15:31:23 Norma 3-Apr-13 Funds Transfer 26200 • I/C Payable- Rose and Thistle -700.00 15,447.33 10100• Bank 557 Transfer 06/12/2013 15:31:34 Norma 4-Apr-13 Funds Transfer 26200 •I/C Payable- Rose and Thistle -1,700.00 13,747.33 10100 • Bank 509 Cheque 03/27/2013 15:14:28 Temp2 5-Apr-13 158 368230 Ontario Limited -SPLIT- -19,276.47 -5,529.14 10100. flank 515 Deposit 07/12/20J8 10:46:44 Anfela 8-Apr-13 Depealt 368230 Ontario Ltd 105,000.00 99,47026 10 10100. Bank 540 Deposit 08/15/201311:18:59 Anjela 8-Apr-13 Deposit 20000 • Accounts Payable 1,044.40 100,515.26 10100 r Bank 558 Danger 06/12/201$1531:45 Hanna 8-Apr-13 • Funds Transfer 2620e •1/CPayabk - Rase and Thistle -103,450.00 -4934.74 10 10100 • Bank 512 Bill Pmt-Cheque 04/09/201315:12:57 Temp2 9-Apr-13 159 Adam J. Brown Professional Corporation 20000 • Accounts Payable -3,215.08 -6,149.82 10100 • Bank 513 Bill Pmt -Cheque 04/09/201315:12:57 Temp2 9-Apr-13 160 Nexus Protective Services Ltd. 20000 • Accounts Payable -875.75 -7,025.57 10100 • Bank 514 Bill Pmt -Cheque 04/09/2013 15:12:58 Temp2 9-Apr-13161 UniStar Stone & Construction 2C000 • Accounts Payable -532.50 -7,558.07 10100 • Bank 541 Deposit 05/23/2013 15:16:22 Norma 10-Apr-13 Deposit Hydro 2,642.49 -4,915.58 10100 • Bank 559 Transfer 06/12/2013 15:31:55 Norma 10-Apr-13 Funds Transfer 26200.1/C Payable- Rose and Thistle -2,100.110 -7,015.58 10100 • Bank 560 Transfer 06/12/2013 15:32:27 Norma 17-Apr-13 Funds Transfer 26200 • I/C Payable- Rose and Thistle 1,700.00 -5,315.58 10100 • Bank 569 Cheque 07/12/201310:48:57 Anjela 30-Apr-13 Service Charge 60400 • Bank Service Charges -6.75 -5.322.33 10100 • Bank 570 Transfer 07/12/201310:50:52 Anjela 2-May-13 Funds Transfer 26200.1/C Payable- Rose and Thistle 20,760.00 15,377.67 10100 - Bank 504 Bill Pmt-Cheque 03/19/2013 14:38:10 Temp2 5-May-13156 Jedd Jones Architect Ltd 20000 • Accounts Payable 706.25 14,671.42 10100 • Bank 522 Cheque 04/29/2013 14:26:25 Tammy 5-May-13162 368230 Ontario Limited Mortgage -20,000.00 -5,328.58 10100 • Bank 539 Deposit 05/23/2013 15:06:55 Norma 6-May-13 Deposit Hydro 154.81 3.173.77 10100 • Bank 571 Cheque 07/12/201310:50:56 Anjela 31-May-13 Service Charge 60400 • Bank Service Charges 3.00 3,1713.77 10100 • Bank 503 Bill Pmt -Cheque 03/19/2013 14:38:10 Temp2 5-Jun-13157 Jedd Jones Architect Ltd. 20000 - Accounts Payable -847.50 4,026.27 10100 • Bank 523 Cheque 04/29/2013 14:26:38 Tammy 5-Jun-13 163 368230 Ontario Limited Mortgage .00 -26,026.27 10100 • Bank 532 5111Pra -Cheque 05/09/20139:50:59 Temp2 5-Jun-13170 Jedd Jones Architect Ltd. 20000 • Amounts Payable -6,820.80 -32,847.07 10100 - Bank 572 Transfer 07/15/2013 10:32:49 Anjela 5-Jun-13 Funds Transfer 26200 • I/C Payable- Rose and Thistle 27,500.00 -5,347.07 10100 • Bank 573 Cheque 07/15/201310:33:10 Anjela 30-Jun-13 Service Charge 60400• Bank Service Charges -5.00 -5,352.07 10100 • Bank 5918i11 Pmt-Cheque 08/15/20 3 12:06A8 Ankle 2-M1-13 Debit Toronto Hydro EfectrIc System Limited 20000 - Accounts Payable -98.37 3,450.44 10100 - Bank 576 Transfer 08/09/2013 12:01:26 Anjela 3-Jul-13 Funds Transfer 26200 • I/C Payable -Rose and Thistle 20,500.00 15,049.56

10100 • Bank 524 Cheque 04/29/2013 14:26:51 Tammy 5-Jul-13 164 368230 Ontario Limited Mortgage -20,000.00 -4.950.44 10100, Bank 564 Bill Pmt -Cheque 07/05/2013 16:05:09 Tammy 5-Jul-13 172 Jedd Jones Architect Ltd. 20000 • Accounts Payable -4,633.00 -9,583.44 10100 • Bank 577 Transfer 08/09/201312:01:38 Anjela 5-1u1-13 Funds Transfer 26200 • I/C Payable - Rose and Thistle 4,200.00 -5,383.44 10100- Bank 578 Transfer 08/09/201312:04:10 Anjela 10-Jul-13 Funds Transfer 26200 • I/C Payable - Rose and Thistle -4,000.00 -9,383.44 10100 • Bank 579 Transfer 08/09/2013 12:02:15 Anjela 10-Jul-13 Funds Transfer 26200 • I/C Payable- Rose end Thistle 4,000.00 -5,383.44 10100 • Bank 580 Transfer 08/09/20312:04:32 Anjela 15-Jul-13 Funds Transfer 26200 • I/C Payable. Rose and Thistle 00 -10,033.44 10100' Bank 581 Transfer 08/09/201312:04:48 Anjela 22-Jul-13 Funds Transfer 26200 • I/C Payable - Rose and Thistle 4,650.00 -5,383.44 10100 - Bank 592 Cheque 08/15/201312:11:38 Anjela 31-Jul-13 Service Charge 60403, Bank Service Charges -10.01 -5,393.45

10100 • Bank 593 Bill Pmt -Cheque 08/15/20312:19:16 Anjela 1-Aug-13 Debit Toronto Hydro Electric Systen acc # 700680000 meter 10768767 20000. Accounts Payable -37.56 -5,431.01 10100 • Bank 631 Transfer 09/17/201316:28:08 Anjela 1-Aug-13 Funds Transfer 26200' I/C Payable- Rose and Thistle 38,550.00 33,118.99 10100 • Bank 525 Cheque 04/29/20 3 14:27:01 Tammy 5-Aug-13 165 368230 Ontario Limited Mortgage -20,000.00 13,118.99 10100 • Bank 534 Bill Pmt-Cheque 05/17/20 3 14:09:33 Temp2 5-Aug-13 171 Jedd Jones Architect Ltd. 20000 • Accounts Payable -17,515.15 -4,395.16 10100 • Bank 575 Bill Pmt-Cheque 07/25/2013 10:13:13 Jack 5-Aug-13 173 HKMB HUB International Limi. Invoice# 398743 20000 • Accounts Payable -5,356.28 10100 • Bank 632 Cheque 09/17/201316:28:13 Anjela 31-Aug-13 Service Charge 60400 • Bank Service Charges -5.00 -5,361.28 10100 • Bank 526 Cheque 04/29/20314:27:14 Tammy 5-Sep-13 166 368230 Ontario Limited Mortgage -25,361.28 10100 - Rank 585 Bill Pmt-Cheque 08/12/20312:36:44 Temp2 5-Sep-13174 Jedd Jones Architect Ltd. 20000 - Accounts Payable -2,401.25 -27,762.53

10100 - Bank 620 Bill Pmt-Cheque 09/16/201316:15:11 Tammy 16-Sep-13178 Adam J. Brown Professional Corporation 20000 , Accounts Payable .452.00 -28,214.53 10100 - Bank 621 Bill Pmt -Cheque 09/16/2013 16:15:12 Tammy 16-Sep-13179 Bousfields Inc. 20000 • Accounts Payable -466.13 -28,680.66 10100 • Bank 622 Bill Pmt-Cheque 09/16/2013 16:15:12 Tammy 16-Sep-13180 HKMB HUB International Limited 20000 , Accounts Payable -3,247.56 -31,928.22 10100. Bank 623 Bill Pmt-Cheque 09/16/201316:15:13 Tammy 16-Sep-13 181 Krause Edwards Insurance Brc policy #bndr130614-450 Pape 20000, Accounts Payable 4,858.00 -36,786.22 10100, Bank 624 Bill Pmt-Cheque 09/16/201316:15:14 Tammy 16-Sep-13 182 Nexus Protective Services Ltd. 20000 • Accounts Payable .4,068.00 -40,854.22 10100 • Bank 625 Bill Pmt-Cheque 09/16/2013 16:15:14 Tammy 16-Sep-13 183 OHE Consultants 20000 • Accounts Payable -8,638.85 -49,493.07 10100 • Bank 526 Bill Pmt-Cheque 09/16/201316:15:15 Tammy 16-Sep-13 184 Optimum Waste & Recyding 5 Invoice #55513 20000 • Accounts Payable -647.26 -50,140.33 10100, Bank 527 Bill Pmt-Cheque 09/16/201316:15:16 Tammy 16-Sep-13185 SandBox Design Management Inc. 20000 • Accounts Payable -11,162.07 -61,302.40 10100 - Bank 628 Bill Pmt-Cheque 09/16/2013 16:15:16 Tammy 16-Sep-13186 UniStar Stone & Construction 20000 • Accounts Payable -1,186.50 -62,488.90 10100' Bank 527 Cheque 04/29/201314:22:25 Tammy 5-Oct-13 368230 Ontario Limited VOID: dupicate Mortgage 0.00 -62,488.90 10100' Bank 529 Cheque 04/29/201314:27:26 Tammy 5-Oct-13167 368230 Ontario Limited Mortgage -20,000.00 -82,488.90 10100 • Bank 586 Bill Pmt -Cheque 08/12/20312:36:45 Tempt 5-Oct-13175 ledd Jones Architect Ltd. 20000' Accounts Payable -565.00 -83,053.90 10100. Bank 528 Cheque 04/29/207314:27:43 Tammy 5-Nov-13168 368230 Ontario Limited Mortgage -20,03000 -103,053.90 10100. Bank 587 Bill Pmt -Cheque 08/12/201312:36:45 Temp2 5-Nov-13176 ledd Jones Architect Ltd. 20000 • Accounts Payable 4,152.75 -107,206.65 10100 - Bank 530 Cheque 04/29/20 3 14:27:56 Tammy 5-Dec-13 169 368230 Ontario Limited Mortgage -20,000.00 -127,206.65 10100 • Bank 619 Bill Pmt-Cheque 09/16/20 3 16:13:30 Tammy 5-Dec-13177 Jedd Jones Architect Ltd. 20000 • Accounts Payable -423.75 -127,630.40

26200, I/C Payable- Rose and Thistle 376 Credit 06/29/2012 16:36:45 Kendra 10-Mar-11 8636 CB Richard Ellis Ltd. in trust 20000 • Accounts Payable -75,000.00 -75,000.00 26200 • I/C Payable - Rose and Thistle 385 Credit 07/03/2012 11:41:21 Kendra 30-Mar-11 8677 National Mailbox 20000. Accounts Payable -189.05 -75,189.05 26200 ,I/C Payable - Rose and Thistle 378 Credit 06/29/201216:38:21 Kendra 19-Apr-118774 Minister of Finance 20000' Accounts Payable -360.00 -75,549.05 26200.1/C Payable- Rose and Thistle 380 Credit 06/29/201216:39:55 Kendra 19-Apr-118773 William N. Greer 20000 • Accounts Payable -76,04905 26200' I/C Payable-Rose and Thistle 93 Transfer 10/03/2011 13:15:30 Marisa 26-Apr-11 Funds Transfer 10100' Bank -100.00 -76,149.05

26200• I/C Payable -Rose and Thistle 388 Credit 07/03/20I 211:49:09 Kendra 9-May-118842 Samantha Slemko 20000, Accounts Payable -12.50 -76,161.55 26200' I/C Payable- Rose and Thistle 386 Credit 07/03/201211:43:56 Kendra 13-May-118864 William Holman 20000 • Accounts Payable -2,350.00 -78,511.55 26200 • I/C Payable- Rose and Thistle 94 Transfer 10/03/2011 13:15:52 Marisa 27-May-11 Funds Transfer 10100' Bank -150.00 -78,661.55 26200• I/C Payable - Rose and Thistle 95 Transfer 10/03/20.113:16:07 Marisa 2-Jun-11 Funds Transfer 10100' Bank -400.00 49,061.55 26200. I/C Payable- Rose and Thisbe 56 Transfer 10/03/20.113:16:17 Marisa 7-Jun-11 Funds Transfer 10100, Bank -2,500.00 -81,561.55 26200 • I/C Payable - Rose and Thistle 97 Transfer 10/03/201113:16:26 Marisa 14-Jun-11 Funds Transfer 10100, Bank -100.00 41,661.55

26200 • I/C Payable- Rose and Thistle 98 Transfer 10/03/2011 13:17:13 Marisa 28-tun-11 Funds Transfer 10100 • Bank 50000.00 -31,661.55 26200.1/CPayable • Rose and mar. 99 Transfer 10/03/201413:I7:26 Marisa 30.1an-11 Funds Transfer • 10100 • Bank , 41,350.00 9,64145 26200, I/C Payable- Rose and Thistle 100 Transfer 10/03/20i1 13:19:22 Marisa 4-101-11 Funds Transfer 10100 • Bank 6,050.00 15,738.45 26200 - I/C Payable - Rose and Thistle 101 Transfer 10/03/20 1 13:19:37 Marisa 6-101-11 Funds Transfer 10100 • Bank -7,150.00 8,588.45 26200 • I/C Payable - Rose and Thistle 102 Transfer 10/03/203113:19:55 Marisa 22-101-11 Funds Transfer 10100 • Bank -750.00 7,838.45 26200. I/C Payable- Rose and Thistle 103 Transfer 10/03/2011 13:20:11 Marisa 2-Aug-11 Funds Transfer 10100' Bank -12,600.00 -4,761.55 26200• i/C Payable- Rose and Thistle 104 Transfer 10/03/2011 13:20:33 Marisa 5-Aug-11 Funds Transfer 10100 • Bank • 246,550.00 241,78115 2 26200. I/C Payable- Rose and Thistle 105 Transfer 10/03/201113:20:45 Marisa 19-Aug-11 Funds Transfer 10100 • Bank -250.00 241,538.45 26200 • I/C Payable- Rose and Thistle 247 Transfer 03/16/201212:20:17 Kendra 1-Sep-11 Funds Transfer 10100 • Bank -14,550.00 226,98845 26200 • I/C Payable- Rose and Thistle 248 Transfer 03/16/201`212:20:29 Kendra 6-Sep-11 Funds Transfer 10100' Bank -3,350.00 223,638.45 26200• 1/CPayabk • Rase and Thistle 249 Transfer 03/16/201212:2058 Kendra 9-Sop-11 Funds Transfor 10100.Bank 313,900.00 537,538.46 26200 • I/C Payable - Rose and Thistle 250 Transfer 03/16/2012 12:21:13 Kendra 30-Sep-11 Funds Transfer 10100, Bank -400.00 537,13845 26200. I/C Payable- Rose and Thistle 251 Transfer 03/16/2012 12:23:51 Kendra 3-Oct-11 FundeTransfer 10100 • Bank -14,550.00 522,588.45 26200• I/C Payable • Rose and Thistle 252 Transfer 03/16/201212:24:14 Kendra •.4 -Oct-11 . Funds Transfer 10100 • Bonk 212,700.00 235,281145 26200.1/0 Payable• Rose and Thistle 276 Transfer 03/16/293215:56:09 Kendra 6-Oct-11 Funds Transfer 10100. Bank 5,900.00 741,188.45 26200 • I/C Payable- Rose and Thistle 253 Transfer 03/16/2911 2 12:28:45 Kendra 13-Oct-11 Funds Transfer 10100 • Bank -7,300.00 733,888.45 26200 • 1/C Payable - Rose and Thistle 254 Transfer 03/16/212 12:28:58 Kendra 19-Oct-11 Funds Transfer 10100• Bank 450.00 733,438.45 26200 •1/C Payable - Rose and Thisbe 255 Transfer 03/16/1121 2:29:43 Kendra 1-905-11 Funds Transfer 10100. Bank -14,550.00 718,888.45 26200 • I/C Payable - Rose and Thistle 256 Transfer 03/16/112 12:30:08 Kendra 7-Nov-11 Funds Transfer 10100' Bank .2,250.00 716,638.45 26200• I/C Payable-Rase and Thistle 257 Transfer 53/I6/261212:30:22 Kendra 10•Na5-11 Funds Transfer 10100 • Bank 364,300.00 1,060,938.45 5 26200. I/C Payable- Rose and Thistle 258 Transfer 03/16/2012 12:30:53 Kendra 18-Nov-11 Funds Transfer 1010. Bank -500.00 1,080,438.45 26200.1/C Payable - Rose and Thistle 259 Transfer 03/16/291212:31:03 Kendra 25-Nov-11 Funds Transfer 10100 • Bank 1,080,038.45 26200 • I/C Payable - Rose and Thistle 260 Transfer 05/16/2912 12:31:36 Kendra 1-Dec-11 Funds Transfer 10100 , Bank 44,550.00 1,065,488.45 26200 • I/C Payable- Rose and Thistle 261 Transfer 03/16/212 12:31:51 Kendra 5-Dec-11 Funds Transfer 10100 • Bank -26,950.00 1,038,538.45 26200 • I/C Payable - Rose and Thistle 262 Transfer 03/16/2912 12:31:59 Kendra 6-Dec-11 Funds Transfer 10100. Bank -550.00 1,037,988.45

26200• VC Payable-Rose and Thistle 263 Transfer 03116120f24 32:32:3 Kendra 20-Dec-11 Funds Transfer 10100 • Bank 37,900.00 1,075,888.45 6 26200, I/C Payable - Rose and Thistle 264 Transfer 03/16/12 12:32:4 Kendra 20-Dec-11 Funds Transfer 101130. Bank 2,000.00 1,077,888.45 26200 • I/C Payable-Rose and Thistle 265 Transfer 03/16/2911212:33:57 Kendra 21-Dec-11 Funds Transfer 10100 - Bank 4,300.00 1,082,188.45 26200 • I/C Payable - Rose and Thistle 266 Transfer 03/16/291212:34:26 Kendra 28-Dec-11 Funds Transfer 1011. Bank 2.00040 1,084588.45 I/C Rec. - Rose and Thistle 396 General Journal 07/03/2912 15:47:34 Kendra 31-Dec-11 112/11 - 6 Reclassify 1/C balance 26200.1/C Payable - Rose and Thistle 1,084,188.45

I/C R..- Rose and Thistle 406 General Journal 07/17/112 13:09:14 Mario (Admin) 31-Dec-11 112/11 - 10 6 The Rose and Thistle Group Lt To consolidate 1/C balance 20000. Accounts Payable -19,416.43

I/C Rec.• Rose and Thistle 407 General Journal 07/17/2 12 13:12:37 Mario (Admin) 31•Dec-11 112/11 - 11 6 Rose And Thistle Construction To reclass l/C to The Rose And Thistle Group 20000 • Attounts Payable -23,740.72 VC Rec.- Rase and Thistle 408 General Journal 07/17/2012 13:14:36 Mario (Admin) 31-Dec-11 112/11 - 12 6 Walton Advocates To reclass l/C to The Rose And Thistle Group 20000 • Accounts Payable -26.85 I/C Rec. - Rose and Thistle 409 General Journal 09/12/201216:12:22 Mario (Admin) 31-Dec-11 112/11-13 6 The Rose and Thistle Group Lt Reclass to accounts payable-The Rose And Thistle Group 20000 • accounts Payable 4,041,004.45

26200 • I/C Payable- Rose and Thistle 396 General Journal 07/03/201215:47:34 Kendra 31-000-11 112/11 - 6 Reclassify I/C balance 1/C Rec.. Rose and Thistle -1,084,188.45 0.00 26200 • I/C Payable- Rose and Thistle 602 General Journal 08/21/201316:01:35 Mario (Admin) 1-Jan-12 101/12 - 22 6 Ron Walton To partially reverse JE 112/11-13 Share Subscription Receivable -250,020.55 -250,020.55 26200. I/C Payable - Rose and Thistle 282 Transfer 03/16/201216:07:51 Kendra 5-Jan-12 Funds Transfer 10100 • Bank -14,600.00 -264,620.55 26200 • l/C Payable- Rose and Thistle 283 Transfer 03/16/2012 16:08:00 Kendra 5-Jan-12 Funds Transfer 10100• Bank -51,800.00 -316,420.55 26200 • I/C Payable- Rose and Thistle 284 Transfer 03/16/201216:08:10 Kendra 16-Jan-12 Funds Transfer 10100 • Bank -8,050.00 .324,470.55 26200 •I/C Payable - Rose and Thistle 322 Transfer 04/26/2012 11:40:07 Kendra 1-Feb-12 Funds Transfer 10100 - Bank 43,600.00 •336,070.55

26200. I/C Payable - Rose and Thistle 323 Transfer 04/26/2012 11:40:14 Kendra 2-Feb-12 Funds Transfer 10100 • Bank -2,700.00 -340,770.55 26200. I/C Payable - Rose and Thistle 324 Transfer 04/26/2012 11:40:20 Kendra 6-Feb-12 Funds Transfer 10100 • Bank -9,650.00 -350,420.55

26200 • 1/C Payable - Rose and Thistle 325 Transfer 04/26/10.2 11:40:29 Kendra 13-Feb-12 Funds Transfer 10100. Bank 400.00 -350,820.55 26200 -1/C Payable - Rose and Thistle 326 Transfer 04/26/2 211:40:38 Kendra 21-Feb-12 Funds Transfer 10100 • Bank 4,550.00 ,352,670.55

26200 • I/C Payable - Rose and Thistle 327 Transfer 04/26/2 2 11:40:46 Kendra 23-Feb-12 Funds Transfer 10100 • Bank 850.00 -351,810.55 26200• VC Payable-Rose and Thistk 328 Transfer. 04/26/201211:43:12 Kendra 27-Feb-12 Funds Transfer 30100• flank 48,400.00 403,42115S . 8 26200.I/C Payable - Rose and Thistle 310 Transfer 04/11/20124 11: 0:23 Norma 1-Mar-12 Funds Transfer 10100. Bank -14,500.00 -317,920.55 26200.1/C Paya ble - Rose and Thistle 311 Transfer 04/11/2012 11:40:41 Norma 2-Mar-12 Funds Transfer 10100 • Bank 4,950.00 .322,870.55 26200 - I/C Payable - Rose and Thistle 312 Transfer 04/2112 211:40:56 Norma 5-Mar-12 Funds Transfer 10100 • Bank -1,4410.110 .324,270.55 26200 • I/C Payable - Rose and Thistle 313 Transfer 04/11/2 211:43:36 Norma 9-Mar-12 Funds Transfer 10100 • Bank -5,000.00 .329,270.55 26200 • I/C Payable - Rose and Thistle 314 Transfer 04/11/20 211:43:59 Norma 12-Mar-12 Funds Transfer 10100. Bank -3,550.00 -332,820.55 26200• I/C Payable- Rose and Thistle 315 Transfer 04/11/201211:44:21 Norma 26-Mar-12 Funds Transfer 10100- Bank -2,900.00 -335,720.55 26200• VC Payable- Rose and Thistle 349 Transfer 05/22/2012 11:42:02 Norma 2-Apr-12 Funds Transfer 1011. Bank -14,500.00 -350,220.55 26200• VC Payable- Rose end Thistle 350 Transfer 05/22/242 11:42:47 Norma 3-Apr-12 Funds Transfer 10100' Bank -650.00 .350,870.55 26200- VC Payable-Rose and Thistle 351 Transfer 05/22/20,1211:43:06 Norma 4-Apr-12 Funds Transfer 10100' Bank .4,750.00 -355,620.55

26200 - I/C Payable - Rose and Thistle 352 Transfer 05/22/2012 11:43:25 Norma 5-Apr-12 Funds Transfer 10100' Bank -2,650.00 -358,270.55 26200 • I/C Payable - Rose and Thistle 353 Transfer 05/22/21.2 11:43:55 Norma 11-Apr-12 Funds Transfer 10100' Bank -357,570.55 26200 • I/C Payable - Rose and Thistle 354 Transfer 05/22/20 2 11:44:28 Norma 13-Apr-12 Funds Transfer 10100. Bank -50.00 -357,62055

26200. 1/C Payable - Rose and Thistle 355 Transfer 05/22/20 211:44:41 Norma 18-Apr-12 Funds Transfer 10100 • Bank -650.00 -358,270.55 26200' I/C Payable - Rose and Thistle 455 Transfer 01/28/2 13 9:56:48 Norma 1-May-12 Funds Transfer 10100' Bank -14,550.03 -372,820.55 26200. I/C Payable - Rose and Thistle 456 Transfer 01/28/20139:57:11 Norma 4-May-12 Funds Transfer 10100. Bank -70193 -373,520.55 26200 .1/C Payable - Rose and Thistle 457 Transfer 01/28/21313 9:57:23 Norma 9-May-12 Funds Transfer 10100 • Bank -400.00 -373.920.55 26200 .1/C Payable - Rose and Thistle 458 Transfer 01/28/2613 9:57:50 Norma 17-May-12 Funds Transfer 10100. Bank 5,000.00 -368,920-55 26200 -1/C Payable - Rose and Thistle 459 Transfer 01/28/20139:58:39 Norma 1-Jun-12 Funds Transfer 10100 • Bank -19,750.00 -388,670.55 26200 • I/C Payable - Rose and Thistle 460 Transfer 01/28/20139:59:05 Norma 6-Jun-12 Funds Transfer 10100 • Bank -200.00 .388,870.55 26200, I/C Payable - Rose and Thistle 461 Transfer 01/28/201310:00:12 Norma 25-Jun-12 Funds Transfer 10100. Bank -20,950.03 409,820.55 26200 • I/C Payable - Rose and Thistle 462 Transfer 01/28/201310:00:35 Norma 34 u1-12 Funds Transfer 10100 . Bank -14500.00 424,320.55 26200. I/C Payable - Rose and Thistle 463 Transfer 01/28/201310:01:01 Norma 5-Jul-12 Funds Transfer 10100- Bank -2,350.00 -426,670.55 26290. I/C Payable - Rose and Thistle 464 Transfer 01/28/201310:01:13 Norma 6-1u1-12 Funds Transfer 10100 - Bank -1,600.00 428,270.55 26200. I/C Payable - Rose and Thistle 465 Transfer 01/28/21.3 10:04:23 Norma 1-Aug-12 Funds Transfer 10100 • Bank 44,55003 -442,520.55 26200.1/C Payable - Rose and Thistle 466 Transfer 01/28/2013 10:04:41 Norma 7-Aug-12 Funds Transfer 10100 • Bank 4,000.00 -443,830.55 26200. I/C Payable - Rose and Thistle 467 Transfer 01/28/201310:04:35 Norma 8-Aug-12 Funds Transfer 10100 • Bank -444,47055 26200. I/C Payable - Rose and Thistle 468 Transfer 01/28/20 3 10:05:14 Norma 30-Aug-12 Funds Transfer 10100. Bank 445570.55 26200. VC Payable- Rase and Thistle 469 Transfer 01/28/201310:05:39 Norma 4-Sep-12 Funds Transfer 10100• Bank -33,850.00 -479,020.55 26200 • I/C Payable Rose and Thistle 470 Transfer 01/28/201310:06:29 Norma 5-Sep-12 Funds Transfer 10100 • Bank 18,450.00 -460,570.55 I 26200 • I/C Payable - Rose and Thistle 471 Transfer 01/28/203 10:07:03 Norma 7-Sep-12 Funds Transfer 10100 • Bank -18,450.00 479,020.55 26200 • I/C Payable - Rose and Thistle 472 Transfer 01/28/2013 10:07:22 Norma 1-Oct-12 Funds Transfer 10100 • Bank -14,550.00 -493,570.55 26200 • I/C Payable - Rose end Thistle 473 Transfer 01/28/201310:07:36 Norma 5-Oct-12 Funds Transfer 10100 • Bank -1,400.00 -494,970.55

26200 • I/C Payable - Rose and Thistle 474 Transfer 01/28/2013 10:09:42 Norma 1-Nov-12 Funds Transfer 10100 • Bank -26,10000 -522,070.55 26200 - I/C Payable - Rose and Thistle 475 Transfer 01/28/201310:09:58 Norma 28-Nov-12 Funds Transfer 10100 • Bank 850.00 -520,220.55 26200 . I/C Payable-Rose and Thistle 476 Transfer 01/28/2013 10:10:24 Norma 3-Dec-12 Funds Transfer 10100, Bank -52,650.00 -572,870.55 26200 I/C Payable - Rose and Thistle 477 Transfer 01/28/2013 10:10:38 Norma 14-Dec-12 Funds Transfer 10100 • Bank 200.00 -572,670.55 26200 I/C Payable - Rose and Thistle 478 Transfer 01/28/201310:11:00 Norma 21-Dec-12 Funds Transfer 10100. Bank -38,950.00 -611,620.55 26200 • I/C Payable - Rose and Thistle 607 General Journal 08/23/20r 10:27:34 Kendra 31-0ec-12 112/12 - 25 6 The Rose and Thistle Group Lt Reclassify to l/C 20000 • Accounts Payable .900.00 -645,52035 26200 • I/C Payable - Rose and Thistle 491 Transfer 02/25/2013 11:06:55 Norma 2-Jan-13 Funds Transfer 10100• Bank -14,550.00 -660,070.55 26200. I/C Payable - Rose and Thistle 492 Transfer 02/25/201.3 11:07:10 Norma 4-Jan-13 Funds Transfer 10100• Bank -4,200.00 -664,270.55 26200 I/C Payable - Rose and Thistle 508 Transfer 03/26/20 3 16:50:32 Norma 5-Feb-13 Funds Transfer 10100• Bank -18,750.00 -683,020.55 26200 . I/C Payable - Rose and Thistle 518 Transfer 04/22/20 310:26:23 Norma 4-Mar-13 Funds Transfer 10100 . Bank -18,750.00 -701,770.55 26200• 1/CPayabk Rose and TIMM. 519 Transfer 04/22/20 10026,37 Norma 18-Mar-13 Funds Transfer 10100 • Bank 275,000.00 .424770.55 9 26200. I/C Payable - Rose and Thistle 520 Transfer 04/22/20 310:27:02 Norma 20-Mar-13 Funds Transfer loloo - Bank -300.00 427,070.55 26200 • VC Payable - Rose and Thistle 555 Transfer 06/12/201315:31:10 Norma 2-Apr-13 Funds Transfer 10100 • Bank -21,700.00 -448,770.55 I 26200 • I/C Payable - Rose and Thistle 556 Transfer 06/12/203 1531:25 Norma 3-Apr-13 Funds Transfer 10100 • Bank 700.00 -448,070.55 26200. I/C Payable - Rose and Thistle 557 Transfer 06/12/20f 3 15:31:34 Norma 4-Apr-13 Funds Transfer 10100 Bank 1,700.00 -446,370.55 26200• 1/8 Payable - Rose,and Thlslie 558 Transfer 06/12/24k3 15131:45 Norma 8-Apr-13 Funds Transfer 10100 • Bonk 103,450.00 442.92055 10 26200 • I/C Payable - Rose and Thistle 559 Transfer 06/12/201315:31:55 Norma 10-Apr-13 Funds Transfer 10100 Bank 2,100.00 -340,820.55

26200. I/C Payable - Rose and Thistle 560 Transfer 06/12/201315:32:27 Norma 17-Apr-13 Funds Transfer 10100 Bank -1,700.00 -342,520.55 26200. I/C Payable - Rose and Thistle 570 Transfer 07/12/2013 10:50:52 Anjela 2-May-13 Funds Transfer 10100 • Bank -20,700.03 -363,220.55 26200 • I/C Payable-Rose and Thistle 572 Transfer 07/15/2013 10:32:49 Anjela 5-Jun-13 Funds Transfer 10100 • Bank -27,500.03 -390,720.55 26200. I/C Payable - Rose and Thistle 576 Transfer 08/09/2013 12:01:26 Anjela 3-Jul-13 Funds Transfer 10100 Bank -20,500.00 -411,220.55 26200. I/C Payable - Rose and Thistle 577 Transfer 08/09/2013 12:01:38 Anjela 5401-13 Funds Transfer 10100. Bank -4,200.00 415,420.55 26200. I/C Payable - Rose and Thistle 578 Transfer 08/09/2023 12:04:10 Anjela 10-1u1-13 Funds Transfer 10100 • Bank 4,000.00 411,420.55 26200. I/C Payable Rose and Thistle 579 Transfer 08/09/20 3 12:02:15 Anjela 10-Jul-13 Funds Transfer 10100. Bank 4,030.00 -415,420.55 26200 • I/C Payable - Rose and Thistle 580 Transfer 06/09/20 3 12:04:32 Anjela 15-Jul-13 Funds Transfer 10100 Bank 4,65000 -410,770.55 26200. I/C Payable - Rose and Thistle 581 Transfer 08/09/20 3 12:04:48 Anjela 22-Jul-13 Funds Transfer 10100 • Bank 4,650.00 -415,420.55 26200 • I/C Payable - Rose and Thistle 631 Transfer 09/17/20 3 16:28:08 Anjela 1-Aug-13 Funds Transfer 10100 • Bank -38,550.00 453,970.55

26200. I/C Payable - Rose and Thistle 608 General Journal Of1/23/20 310:28:27 Kendra 15-Aug-13 108/13 - 26 O The Rose and Thistle Group Lt Reclassify to l/C 20000 - Accounts Payable -33,900.00 -487,870.55 Tab K 2 9

This is Exhibit "K" referred to in the Affidavit of James Reitan sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits 215 PM Riverdale Mansion Ltd

09/03/13 Transaction Journal All Transactions

Trans P Type Entered/Last Modified Last modified by Date Num Name Memo Account Class Debit Credit

602 General Journal 08/21/2013 16:01:35 Mario (Admin) 1/1/2012 J01/... Ron Walton To partially reverse JE J12/11-13 Share Subscriple... 125,010.55 Norma Walton To partially reverse JE J12/11.13 Share Subscriptio... 125,010.00 Ron Walton To partially reverse JE J12/11-13 26200 , 1/0 Papa... 250,020.55 250,020.55 250.020.55

TOTAL 250,020.55 250,020.55

Page 1 2:16 PM Riverdale Mansion Ltd

09/03/13 Transaction Journal

All Transactions

Trans s Type Date Num Name Memo Account Class Debit Credit

409 General Journal 12/31/2011 J12/11 - 13 The Rose and Thistle Group Ltd. Reclass to accounts payable - The Rose And Thist... 20000 • Accounts ... 1,291,025.00 The Rose and Thistle Group Ltd. Reclass to accounts payable - The Rose And Mist... I/C Rec. Rose an... 1,041,004.45 Ron Walton Reclass to accounts payable - The Rose And Thiet... Share Subscription... 125,010.55 Norma Walton Recline to accounts payable The Rose And Thist... Share Subscription... 125,010.00 1,291,025.00 1,291,025.00

TOTAL 1,291,025,00 1,291,025.00

Page 1 ~;. 3:26 PM Liberty Village Properties Ltd

09/03/13 Transaction Journal

AN Transactions

Trans Type ErderecVlast Mortified Last mougflad lay Date Nun Name Memo Mooted Debit credo

1517 General Journal 08/20/201310:40:37 Mario (Acinin) 111/2012 J09112 - 2R lhe Rose and ibis% Grou... Reveres of GJE J00/12 29 — To net agelnst beNnee due on Decanter 31. 2011 ... 20000 Accounts P... 827.014.69 The Rosa end MINN Gaon.. To net earalnal balance due on Decanter 91, 2011 Invoice Shwa Subscription ... 827,814.831 827,814.69 827.814.69

TOTAL 827.814.69 827,814.69

Page 1 r, 3:27 PM Liberty Village Properties Ltd o 09/03/13 Transaction Journal All Transactions

Trans # Type Date Num Name Memo Account Debit Credit

775 General Journal 12/31/2011 J12/11 - 19 The Rose and Thistle To net against balance due on December 31, 2011 invoice 20000 • Accounts Pa... 827,814.69 The Rose and Thistle ... To net against balance due on December 31, 2011 invoice Share Subscription R... 827,814.69 827,814.69 827,814.69

TOTAL 827,914,69 827,814.69

Page 1 01*;* 1:16 PM Royal Agincourt Corp 2 r,c• 4 09/03/13 Transaction Journal All Transactions

Trans ft Type Entered/Last Modified Lard modified by Date Num Name Memo AceouM Class Oda Credit

1150 General Journal 00/23/20131417:58 Mario (Adnin) 1/1/2012 .I01/12-57 To adjust common shares per new agreemeot Share Sulwerlption Ra. 907,700.00 To adult common shares per newagraerneN 26200 VC Payable • 987,700.I0 067,700.00 987,70100

TOTAL 907,700.0 907,700.00

Page 1 2 8 1:25 PM Royal Agincourt Corp

09/03/13 Transaction Journal

All Transactions

Trans # Type Date Num Name Memo Account Ctass Debit Credit

384 General Journal 12/31/2011 J12/11- 31 To record Pref share liability assumption by The Rose An.. 1607544 Ontario Inc. (Ansarl) 100,000.00 To record Pref share liability assumption by The Rose An.. 1788371 Ontario Inc. 100,000.00 To record Pref share liability assumption by The Rose M.. Barbara Naglie 100,000.00 To record Pref share liability assurrption by The Rose An.. Gary Silber 50,000.00 To record Pref share liability assurrption by The Rose An.. Grace and Ken Bugg 100,000.00 To record Pref share liability assurnption by The Rose An.. Joel & Renee Schachter 175,000.00 To record Pref share liability assumption by The Rose An.. John Rocha and Michele Peng 62,800.00 To record Pref share liability assurnption by The Rose An.. Orrnsby Investment Limited 100,000.00 To record Pref share liability assumptIon by The Rose An.. Stockton & Bush P.M.I. Inc 100,000.00 To record Pref share liability assumption by The Rose An.. Vane Plesse 100,000.00 To record Pref share liability assumption by The Rose Am. Share Subscription Receivable 987,800.00 987,800.00 987,800.00

TOTAL 987,800.00 987,800.00

Page 1 Royal Agincourt Corp 1:12 PM Transaction Journal 09/03/2013 All Transactions Trans # Type Entered/Last Modified Last modified by Date Account Class Debit Credit Num Name Memo ,-,.,.,....=.. 1,150 General Journal 08/23/2013 14:17:58 Mario (Admin) 01/01/2012 J01/12-57 To adjust common shares per new agree Share Subscription Receivable 987,700.00 To adjust common shares per new agree 26200 • I/C Payable - Rose and Thistle 987,700.00 987,700.00 987,700.00

TOTAL 987,700.00 987,700.00 r Tab L This is Exhibit "L" referred to in the Affidavit of James Reitan sworn before me this 1St day of October, 2013

A Commissioner for Taking Affidavits The Rose and Thistle Group Limited Invoice 30 Hazelton Avenue Date Invoice # Toronto, Ontario M5R 2E2 8/15/2013 162

Invoice To

Royal Agincourt Corp 30 HazeIton Ave Toronto, ON M5R 2E2

P.O. No. Terms Project

Qty Description Rate Amount

Property management and maintenance services from Jan to Aug 15, 20I3(4% of 33,008.33 33,008.33 gross revenues) Property management and maintenance services from Jan to Aug 15, 2013 ($10,000 85,000.00 85,000.00 per month)

Sales Tax Summary HST on [email protected]% 15,341.08 Total Tax 15,341.08

Total $133,349.41

GST/HST No. 884533001 THE ROSE andTHIST E GROUP LTD LAND and INVESTMENTS

August 15, 2013

To: Royal Agincourt Corp.

Re: Property management and maintenance services 5770 and 5780 Highway 7 West, Vaughan, Ontario

Fee: For services provided from January to August 15, 20 3 Property management services(4% of gross revenue ) $33,008.33 Property maintenance services ($10,000 per month) $85,000.00

TOTAL: $118,008.33 HST: $15,341.08 TOTAL: $133,349.42

30 Haselton Avenue ter; 416.489. rmo Toronto. ON (5R 2E2 tax: 416 469 9973 www.roseandthistle.ca lab-Arose dthistie.ca

9 0

The.Rase and Thistle Group Limited Invoice

30 Hazehon Avenue Date Invoice # Toronto, Ontario M5R 2E2 8/15/2013 170

invoice To

Liberty Village Properties Ltd. 30 Hazelton Ave. Toronto, ON M512 2E2

P.O. No. Terms Project

Qty Description Rate Amount

Property management services from Jan 1 to Aug 15, 2013 45,800.83 45,800.83 Property maintenance services from Jan 1 to Aug 15, 2013 85,000.00 85,000.00

Sales Tax Summary LIST on [email protected]% 17,004 11 Total Tax 17,004 11

Total $147,804.94

GS-171-1ST No. 884533001 ~:

'~': 29 1

THE ROSE anc1THISTLE GROUP LTD .-.•....-. •.-• LAND and INVESTMENTS

August 15, 2013

To: Liberty Village Properties Inc.

Re: Property management and maintenance services 32 Atlantic Avenue, Toronto, Ontario

Fee: For services provided from January 1 to August 15, ?,013 Property management services(4% of gross revenues) $45,800.83 Property maintenance services ($10,000 per month) $85,000.00

$130,800.83 HST: $17,004.11 TOTAL: $147,804.94

30 Haze1ton Avenue tel: 416.489. wwTowrozontsoe, fax: 416 489. 973 aCniqd 1.115tRI:c6a2 infafrosemFdthislte.ca •• ••1%'3 • , •• ,e • Ao• • • .*••*.. "4- ' •-% ' • ' "'AA' IA,...... OrreZ, (7)0 The Rose and Thistle Group Limited Invoice HazeIton Avenue 30 Date Invoice # Toronto, Ontario Ivi5R 2E2 9/15/2013 183

Invoice To

LesIiebrook Holdings Ltd. 30 HazeIton Ave. Toronto, ON Cv15R 2E2

P.O. No. Terms Project

Qty Description Rate Amount

Property Management Fees - Jan to Sept 15, 2013 25,005.52 25,005.52 Property Maintenance Fees - Jan to Sept 15, 2013 80;750.00 80,750.00

Sales Tax Summary HSTon Sales®13.0% 13,748.22 Total Tax 13,748.22

Total $119,503.74

GST/HST No. 884533001 293 (1-7i7iv-\

717.[ROSE mini-H.57.E GROUP 1.n)

LAND and INVP:SPAPNTS

September 15, 2013

To: Lesliebrook Holdings Ltd.

Re: Property management and maintenance services 1131A Leslie Street, Toronto, Ontario

Fee: For services provided from January to September 15, 2013 Property management services(4% of gross revenues) $25,005.52 Property maintenance services ($8,500 per month) $80,750.00

TOTAL: $105,755.52 HST: $13,748.22 TOTAL: $119,503.74

Hav*itan .Wan;:: 101- th 4(Ck.17 4}4 :Voltam V..A1 ? an 414 4;19 4471 t14*1re CAS h15610 ea :1110PMST•tlilithiqflr f!%2 m The Rose and Thistle Group Limited Invoice 30 Hazelton Avenue Date Invoice # Toronto, Ontario M5R 2E2 8/15/2013 165

Invoice To

Donalda Developments Inc. 30 Hazelton Ave. Toronto, ON M5R 2E2

P.O. No. Terms Project

Qty Description Rate Amount

Property management services from Dec 2012 to Aug 15, 2013(4% of gross 190,000.00 190,000.00 revenues) Property maintenance services from Dec 2012 to Aug 15, 2013 ($25,000 per month) 237,500.00 237,500.00

Sales Tax Summary HST on [email protected]% 55,575.00 Total Tax 55,575.00

Total $483,075.00

GST/HST No. 884533001 0010 295 Ve0 THE ROSE andTHIST E GROUP LW LAND and INVESTMENTS

August 15, 2013

To: Donalda Developments Inc.

Re: Property management and maintenance services 1500 Don Mills Road, Toronto, Ontario

Fee: For services provided from December 2012 to Augus 15, 2013 Property management services(4% of gross revenues $190,000.00 Property maintenance set-vices ($25,000 per month) $237,500.00

TOTAL: $427,500.00 HST: $55,575.00 TOTAL: $483,075.00

30 Haze1ton Avenue tel: 416.489 790 Toronto, ON M5R 2E2 fax: 416 489 9973 www.roseandthistle.ca info@rosea dthistle.ca Tab M 296

This is Exhibit"M" referred to in the Affidavit of James Reitan sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits January 2013 — Preauthorized payment made to Trez Capital

Wi•se0.7 Branch Suilx ry Meridian rm aribi Mss Happiness is parking your RSP 4.15.3g8.54P1 before March lst and taking advantage of our great rates! 'Visit rrieridiancu.ca for details.

Us; am gl Statement Period Ending: janitary 31, 2013 Account Nuntber. 9095200 NUrnber at Cheques: 2 C I bba I 1111 s in:. 30 HozniWn Ave cnnntb 0 MR ZL?

Deposit Mown%

Chequing 0 - Global Mills In;,. Data Account Activity Withdrawals I -Deposits 431E Hance 31.00C-2012 Balance Ferward 127,624.47 07-Jan-2013 Pre Ai.lnnrired *sem -127 500.00 124A7 'r E2 CAPITA,. 4,^ICA Ansf 17117A Al February 2013 — Preauthorized payment made to Trez Capital .05-Feb,261 3 Pre-Auleorizcif f,t 0905 -127.500 00 106.08 METZ CAPITAL March 2013 — Preauthorized payment made to Trez Capital - - „ 06.m a.r.2013 p re-A.4.43011i F2C1 if 9305 121.00.00 1161 5 TREZ CAPITAL KAI 414.4 "1011t April 2013 — Preauthorized payment made to Trez Capital 0.5Aor-2013 p,e.Authcrized A 4905 -127.500.00 113.64 TRU'CAPfTAL nett A" 1 nwl rrA May 2013 — Preauthorized payment made to Trez Capital ae-may-2al t Pre-Autberiztd* 9E:6 -1.27.500.00 0.861.62 TRF. CAPITAL .1nrs nA7 June 2013 — Preauthorized payment made to Trez Capital

05-Juri,2013 Pre-Auliturized *90015 -127.50000 7 102 51 TRE7,7. CAPITAL nn anq Cr July 2013 — Preauthorized payment made to Trez Capital

OS-Jul-2013 Pl u-AulltOrlzert ,t1 9305 -117,500.00 -12o:070.000D -IRE? CAPITAL LP August 01 — rans er out to 731 9571—w—vilesy cWcr(R&T account)

Meridian Transaction History Member Number: 9695206 Amount: Chaquing 0 Current Balance: S232.13

Date Description Amount Balance

Aug 20, 2013 Transfer In From 7670017 wellesy maxi $400.00 $232,13

Aug 07. 2013 Transfer Out to 7311954 welleey Ghee 4127,500.00 $132,1 Other Reference if 0943285.00 Tab 4 2 o 8 Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

BETWEEN:

DBDC SPADINA LTD., AND THOSE CORPORATIONS LISTED ON SCHEDULE A HERETO

Applicants

and

NORMA WALTON,RONAULD WALTON,THE ROSE & THISTLE GROUP LTD. and EGLINTON CASTLE INC.

Respondents

and

THOSE CORPORATIONS LISTED ON SCHEDULE B HERETO,TO BE BOUND BY THE RESULT

AFFIDAVIT OF DR. STANLEY K. BERNSTEIN

I, Dr. Stanley K. Bernstein, of the City of Toronto, in the Province of Ontario, MAKE

OATH AND SAY:

1. I am a medical doctor and the founder and principal of Dr. Bernstein Diet and Health

Clinics. I am also the beneficial owner of DBDC Spadina Ltd. and the corporations listed on

Schedule A to the Notice of Application, and, as such, have knowledge of the matters contained in this affidavit. Where matters are sworn to by way of information and belief, I have stated the source of that information and verily believe it to be true. e)() r, -2- et:

2. I first became acquainted with Norman Walton and Ronauld Walton in 2008 when I was approached to act (through one of my companies) as mortgagor for a commercial real estate property in Toronto owned by the Waltons and another investor.

3. I completed several loan transactions where the Waltons borrowed funds as mortgagors of commercial real estate properties in Toronto.

4. In 2010, Ms. Walton approached me to participate in a real estate purchase with her and

Mr. Walton as an investor, rather than a lender. On September 24, 2010, we entered into an agreement to purchase together a property at 241 Spadina Avenue. Attached as Exhibit"A" to the affidavit of James Reitan sworn October 1, 2013 is a copy of that agreement.

5. I advanced a total of $1,120,500 in equity to the Project through my holding company

DBDC Investment Spadina Ltd. The Waltons advanced a total of $350,000 in equity. Mortgages for $6,660,000 and $1,090,045 were placed on the Property, respectively. The budgeted capital costs of the Project were to be $8,541,000.

6. As a result of the limited disclosure I have received it appears that the actual capital costs of the Project are to date $9,971,201, yielding overruns of $1,430,201. In addition, there is recorded in company accounts an intercompany amount said to be owing to The Rose & Thistle

Group LtdRose-&—Thistle") of $1,790;944.

7. As part of the agreement, I was to be consulted and my approval sought for:

(a) Any decisions concerning the selling or refinancing of the Property; -3- 300

(b) Any decisions concerning the increase in the total amount of equity

required to complete the Project; and

8. I was also to receive:

(a) Ongoing reports on at least a monthly basis detailing all items related to the

Property;

(b) Copies of invoices for work completed the Project monthly;

(d) Listing of all cheques monthly.

9. I have not received the required reporting for 241 Spadina Avenue or any other Project. I have not been asked to approve any expenditures for 241 Spadina Avenue or any other Project, although I am aware that there have been invoices and payments made in excess of$50,000. I have not received any return of capital or profits from any of my investments.

10. To date, I have invested approximately $110,000,000 into 31 Projects. Based on the limited disclosure I have received to date, I understand that the Waltons have paid very little in the way of equity into the Projects and did not in fact contribute half of the deposit amounts to secure the Properties, as contractually required. Instead of contributing equity, they have further encumbered certain of the Properties without my knowledge or consent.

11. The Projects are all governed by agreements which have the same or similar provisions to those as set out in paragraphs 6 and 7 above. -4-

12. As a result of the Waltons failing to contribute the equity required (the full extent of which

I was not aware of until recently), over the past 6 months, certain of my equity investments in the

Properties have been converted to shareholder loans, which bear interest.

13. Beginning in 2013, I became increasingly concerned about the management of the various

Projects by the Waltons and Rose & Thistle and the lack of information provided to me. I requested that Jim Reitan, Director of Accounting and Finance at Dr. Bernstein Diet and Health

Clinics, conduct a review of the information available to him in respect of the Projects. His review raised many concerns, which I share.

14. On June 7, 2013, Mr. Reitan wrote to Noima Walton to set out certain questions and concerns. Attached as Exhibit"B" to Mr. Reitan's affidavit sworn October 1, 2013 is a copy ofthe letter and email Mr. Reitan sent to Norma Walton on June 7, 2013.

15. Ms. Walton responded on June 13, 2013. A copy of her response is attached Exhibit"C" to

Mr. Reitan's affidavit sworn October 1, 2013. Her response did not, in my view, answer many of the issues raised by Mr. Reitan.

16. At my instruction, Mr. Reitan continued to follow-up with Ms. Walton, but was not provided with the information that we had requested. Mr. Reitan caused title searches to be

performed an all the Properties. At-that-time, I-learned-of two-acklitional—$-3-million mortgages placed on 1450 Don Mills Road and 1500 Don Mills Road, respectively. I was not infoimed of these mortgages by Ms. Walton, nor did Ms. Walton seek my approval, as required by our agreements. -5- 302

17. On September 20, 2013, I retained Schonfeld Inc. Trustees and Receivers to conduct a review of the books and records of the various Owner Companies, as defined in the affidavit of

James Reitan. I understand from Mr. Schonfeld and Mr. Reitan that they have been provided access to the books and records of only slightly more than half of the Owner Companies and that their review has raised further questions and requests for information which have not been responded to on a timely basis. I also understand that they have been informed that they will not have access to the books and records for all Owner Companies for several more weeks.

18. I request the appointment of Schonfeld Inc. as Inspector to investigate and determine:

(a) the whereabouts and use of the funds I have invested in these Owned Companies;

(b) the transactions that the Respondents appear to have entered into without notice to

me;

(d) the many transfers of monies to Rose & Thistle and what has happened to those

monies, all as more particularly set out in the affidavits of James Reitan and Harlan Schonfeld.

19. My correspondence and dealings with Ms. Walton have done nothing to reduce my concerns, more particularly her refusal to tell us the whereabouts ofthe $6 million of the mortgage proceeds on 1450 Don Mills Road and 1500 Don Mills Road and her advice to Messrs. Reitan and

Schonfeld that she would only tell us the whereabouts of the monies only in the context of a

without prejudice mediation. -6-

20. I swear this affidavit in support of an Application and Motion seeking to have Schonfeld

Inc. appointed as inspector of the Projects and the records of Rose & Thistle dealing with the

Properties, Projects and Owner Companies, and other relief.

SWORN BEFORE ME at on ,

} Commissioner for Taking Affidavits DR. STANLEY K. BERNSTEIN (or as may be) • s

DBDC SPADINA LTD., et al -and- NORMA WALTON et al. Applicants Respondents Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

PROCEEDING COMMENCED AT TORONTO

AFFIDAVIT OF DR. STANLEY K. BERNSTEIN

LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLP Barristers Suite 2600 130 Adelaide Street West Toronto ON M5H 3P5

Peter H. Griffin(19527Q) Tel: (416) 865-2921 Fax: (416)865-3558 Email: [email protected] Shara N. Roy(49950H) Tel: (416)865-2942 Fax (416)865-3973 Email: [email protected]

Lawyers for the Applicants Tab 5 30 4 Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

BETWEEN:

DBDC SPADINA LTD., and THOSE CORPORATIONS LISTED ON SCHEDULE A HERETO

Applicants

and

NORMA WALTON,RONAULD WALTON,THE ROSE & THISTLE GROUP LTD. and EGLINTON CASTLE INC. Respondents

and

THOSE CORPORATIONS LISTED ON SCHEDULE B HERETO,TO BE BOUND BY THE RESULT

AFFIDAVIT OF HARLAN SCHONFELD

I, Harlan Schonfeld, of the City of Toronto, in the Province of Ontario, MAKE OATH

AND SAY:

I am Chartered Professional Accountant(CF -A), a Trusteein Bankruptcy, and a Chartered

Insolvency and Restructuring Professional. I am the principal of Schonfeld Inc. Receivers +

Trustees. Attached hereto as Exhibit"N' is a copy of my curriculum vitae.

2. On September 20, 2013, I was retained by Dr. Stanley Bernstein on behalf of DBDC

Spadina Ltd. and the Corporations listed on Schedule A to the Notice of Application. Attached -2- 30 5 hereto as Exhibit "B" is a copy of my retainer letter dated September 23, 2013. As such, I have knowledge of the matters contained in this affidavit. Where matters are sworn to by way of information and belief, I have stated the source of that information and verily believe it to be true.

3. On September 20, 2013, I was tasked with gathering information related to Dr. Bernstein's investments with Norma Walton and Ronauld Walton in 31 projects (the "Projects") for 34 commercial real estate properties in Toronto (the "Properties"), as well as the companies incorporated for that purpose (the "Owner Companies"). Since September 20, 2013, along with

James Reitan of Dr. Bernstein's Health and Diet Clinics and James Merryweather of my office, I have attended regularly at the offices of the Respondent The Rose & Thistle Group Inc.("Rose &

Thistle") and have requested access to records, documents and information.

4. Attached hereto as Exhibit "C" is a copy of a chart prepared by my office of the financial

information available to date in respect of the various Projects. I believe that it is accurate.

Information in respect of 15 Projects remains outstanding. The information provided to date on

the balance of the 16 Projects is not complete.

5. By September 30, 2013, Ms. Walton promised me access to all of the leases for all of the

properties, the mortgage documents for 1450 and 1500 Don Mills Road, access to 4 more property

records, information and the roll out of all ofthe banking records for all of the properties and back

up information and support for the Rose & Thistle invoices.

6. Attached at Exhibit "D" is a copy of my email exchange with Ms. Walton at the end of day

on September 30, 2013. At 5:15pm on September 30, 2013, I was asked to leave Rose & Thistle

without receiving any of the promised information or supporting documents. -3-

7. I have reviewed the affidavit of James Reitan sworn October 1, 2013. Based on my review of the information available to me from the process set out in paragraph 2 above, I agree with the paragraphs 15, 16, 18-20 and 22.

8. Prior to this engagement, I have had no prior relationship with the Applicants, Dr.

Bernstein, DBDC Spadina Ltd. and the Corporations listed on Schedule A or with the Respondents

Norma Walton and Ronauld Walton, Rose & Thistle and Eglinton Castle Inc. I similarly had no prior relationship with the Corporations listed in Schedule B.

9. On behalf of Schonfeld Inc., I hereby consent to be appointed as Inspector for the purposes of the relief sought in the Applicants' Notice of Motion.

SWORN BEFORE ME at the City of Toronto, in the Province of Ontario on this 1St day of October, 2013.

Commissioner for Taking Affidavits (or as may be) DBDC SPADINA LTD., et al -and- NORMA WALTON et al. Applicants Respondents Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

PROCEEDING COMMENCED AT TORONTO

AFFIDAVIT OF HARLAN SCHONFELD

LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLP Barristers Suite 2600 130 Adelaide Street West Toronto ON M5H 3P5

Peter H. Griffin (19527Q) Tel: (416)865-2921 Fax: (416)865-3558 Email: [email protected] Shara N. Roy (49950H) Tel: (416)865-2942 Fax (416)865-3973 Email: [email protected]

Lawyers for the Applicants Tab A 308

This is Exhibit"N' referred to in the Affidavit of Harlan Schonfeld sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits 309

S. Harlan Schonfeld, CA, CIRP

Profile

Harlan is a Chartered Accountant and Trustee in Bankruptcy with more than 35 years of experience in delivering insolvency and advisory services and is active in many professional associations. Harlan has overseen many complex and unique assignments in Canada and abroad. Harlan's areas of specialization within insolvency, restructuring, and advisory services include; commercial bankruptcy, reorganizing proposals under the Bankruptcy and Insolvency Act, trustee services pursuant to Construction Lien Act appointments, Court and private receivership appointments, and the liquidation of companies under federal and provincial business corporation's statutes, among many others.

Areas of Expertise

• Trustee in Bankruptcy and Reorganizing Proposals under the Bankruptcy Insolvency Act • Private and Court-Appointed Receiverships • Chief Restructuring Officer • Monitoring • Business and Operating Reviews • Viability Assessment • Liquidation of companies under federal and provincial business corporations statutes

Professional Accomplishments

• Independent Manager — Matrimonial Proceedings: Acting as independent manager to be responsible for the control and management of a significant portfolio of residential real estate with existing co-owners, controlling receipts and disbursements, dealing with property managers, and other investments.

■ Court-Appointed Liquidator — Shareholder Dispute: Acting as Liquidator to take carriage of a partition and sale of real estate, deal with sale of other investment properties, distribution of proceeds among shareholders in a tax effective manner, deal with amalgamation of corporate entities, ongoing reporting and management of the assets.

■ Independent Manager— Residential Developer— Shareholder Dispute: Acting as independent-manager in a shareholder dispute-to a group of companies involved in residential construction and development in GTA, including overseeing all aspects of the operation to complete the construction and sale of over 200 homes in three subdivisions, managing customer service, complete obligations under various subdivision agreements, manage bank financing, relationship and letters of credit, including dealing with municipalities, engineers and contractors to successfully complete the projects. This assignment also included the valuation and division of investment assets among the shareholders. 3 1(

management, under Court Order to complete ▪ York Mills Centre, North York: Project construction to base building and tenant inducements ($44- million in construction costs). Negotiated operating agreements regarding public transit facilities located with 500,000 sq. ft. office/retail building. Successfully negotiated the opening of transit facilities previously unopened in the absence of significant agreements between the City of Toronto, TTC and former owners; allowed buses to operate and concluded agreements allowing for shared facilities, entrance and easement and land adjustments. Negotiated and settled significant claims from lease terminations and pursued litigation regarding damage claims from a repudiated lease.

Served as; Agent, Receiver, Court-Appointed Receiver, Trustee in Bankruptcy, and Chief Restructuring Officer • Restructured the management and recovery processes for companies in the following sectors; Banking and finance, Construction, Manufacturing, Consumer Products, Technology, and Retail • Conducted limited and company-wide business reviews for lenders and investors in numerous industries, including; Manufacturing, Consumer Products, Engineering, Construction, Technology, and Entertainment • Performed forensic accounting reviews and prepared detailed reports relating to potentially fraudulent transactions • Monitored and advised under the Companies' Creditors Arrangement Act • Conducted a loan portfolio review and financial position review on 11 Indonesian banks and assisted in the restructuring process of Bank Indonesia by performing due diligence • Acted as trustee in proposals under the Bankruptcy and Insolvency Act • Negotiated and successfully closed agreements for the sale of company assets under Court supervision • Assisted in the orderly closure and restructuring of 22 finance companies in Thailand. This included; loan portfolio review, asset classification, and financial position reviews. • Recommended and implemented a realization strategy for a Bank which included; ongoing reports to the Bank, security and preservation recommendations, monitoring the development status and issues of various assets • Resolved significant claims from lease terminations and pursued litigation regarding damage claims from a repudiated lease • Advised a Canadian chartered Bank regarding the valuation of land held for development. This included; acquiring information regarding the assets, analyzing the economics of each asset, and identifying potential realization strategies with respect to the Bank's security in consultation with Bank staff and former property owners • Conducted security assessments and viability studies in the High Tech sector on behalf of Banks • Acted as Receiver forasoftwaredevelopment company, which included; the valuation-of intellectual software and recoveries of Scientific Research and Development Tax Credits • procedures and determining restructuring and recapitalization alternatives for the institutions • Coordinated the availability and provision of Ontario's New Homes Warranty Program for all purchasers • Negotiated between the City of Toronto, the TTC, and former owners for the successful opening of Public Transit facilities • Performed monitoring duties on behalf of; secured creditors, government agencies, and other parties pursuant to specific agreements Tab B 311

This is Exhibit "B" referred to in the Affidavit of Harlan Schonfeld sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits September 23, 2013

Dr. S. K. Bernstein, MD 368230 Ontario Ltd. 21 Kern Road Toronto, ON M3B 1S9

Dear Dr. Bernstein:

Re: 368230 ONTARIO LTD and Norma and Ron Walton and various joint venture

Thank you for the opportunity to offer our firm's services for the purpose of investigating and reporting to you the financial positions and affairs of various real estate joint ventures you have with Norma and Ron Walton.

Our firm

Schonfeld Inc., Receivers + Trustees is an independent professional service firm formed over 14 years ago. The professional team has deep and wide experience in serving parties in private and court proceedings to achieve solution based outcomes in an efficient and cost effective manner. We have extensive experience in acting as monitor, receiver, interim receiver, and liquidator in numerous shareholder and family disputes, family law matrimonial proceedings and other high conflict engagements.

Our people

Harlan Schonfeld is a chartered professional accountant and trustee in bankruptcy with over 35 years experience in court mandated and private engagements. His work experience covers the corporate and commercial landscape in Canada, with significant experience in real estate construction, development and management.

James Merryweather is a CGA. He has significant experience working in monitoring engagements for financial institutions and strong accounting and financial reporting skills. He has, over the past 11 years, worked on a variety of court and private engagements across various industries.

Our understanding of the engagement

368230 Ontario Ltd has signed and entered into about 31 agreements that cover about 34 properties with Norma and Ron Walton. The total amount invested by you is approximately $110 million. You have recently become concerned about the relationship, equity investments perhaps not be made, possible other 3rd party investors, significant related party transactions, unapproved project expenses, lack of reporting, property sales without payment of mortgages, among other things.

Te1.418.882.7785 Fax.418.862.2136 infuCoschonfeldinc.com 438 University Avenue, 21st Flour, Toronto, Ontario Canada MSG 2K8 31 J

The current engagement will be to review the books and records of the various joint venture projects and any Rose and Thistle Group Ltd's books and records related to the joint ventures and report our findings to you.

Our review will include, and not to be limited to,

Accounting documents including an accounting of the amounts invested by 368230 Ontario Ltd. and by Norma and Ron Walton;

Bank statements;

Cancelled cheques and details of cheques written or amounts withdrawn;

Copies of all invoices for work completed in respect of the properties, including those of Rose and Thistle Group Ltd. or any other company related to Norma and Ron Walton;

Lending and mortgage documents;

Rent rolls for each property detailing the rental revenues and other revenues earned;

And any other material or documents deemed relevant.

Our ability to carry out the terms of this engagement will depend on the level of cooperation and access to the records, the property, premises, books, records and financial documents of the joint venture, by Rose and Thistle Group Ltd. Arrangements have been made for access to begin on Friday September 20, 2013.

High conflict engagements

Schonfeld Inc has significant experience working in high conflict engagements, both as a court appointed officer, and under private contract. Some examples of these engagements include:

A Shareholder dispute, arbitration, wind down and dissolution:

A highly successful real estate development company became incapacitated by family disputes upon the transition of ownership to the second generation.

To preserve and protect the business the parties agreed to engage Schonfeld Inc. by private contract to take control of-the company's day-to-day operations. We efficiently wound- down business operations (including closing several hundred agreements of purchase and sale) in an effort to maximize the company's value for the benefit of the shareholders.

We were able to return significant funds to the family members, who eventually successfully mediated their dispute.

Alleged Misappropriation of Funds

A Mareva injunction and an Anton Piller order were made following a belief that an employee has defrauded a major Canadian company of over $10 million dollars through a phony billing scheme. 3'14

Schonfeld Inc. was appointed by the court as monitor over the suspect's assets with power to control receipts and disbursement, investigate and identify assets, investigate the financial position of the monitored parties and report to the court.

Schonfeld Inc. was able to identify assets, including real estate in United States, and Canada, investment portfolios, machinery and equipment, vehicles, a cottage and recreational vehicles. Within 4 months, the engagement was converted to a receivership proceeding with enhanced powers to liquidate assets, subject to further court approval.

Marriage Breakdown

Schonfeld Inc. was called during the dissolution of a 25 year marriage. Substantial wealth was concentrated in the family business, 100% owned by one spouse. The other spouse managed the businesses, was a non shareholder and needed to be replaced.

Schonfeld Inc. was hired as manager of the family business by private contract. The engagement allowed the parties to mediate their separation and dissolve the marriage. Schonfeld Inc. played a key role in the mediation, which culminated in a settlement. The engagement continues today, long after the dispute has been resolved, as the sole shareholder has no interest in the day-to-day running of the business.

Our costs

Our fees are based on the applicable hourly rates of the professional staff member working on the engagement, plus out of pocket disbursements (legal fees) and H.S.T.

The principal staff dedicated to this engagement will include S. Harlan Schonfeld CPA, CA-CIRP, and James Merryweather, CGA. The hourly rates applicable to these professionals are $550 and $400 per hour respectively. We will bill our services on a monthly basis.

Upon acceptance of this engagement we require a retainer in the amount of $15,000.

Our independence

Schonfeld Inc, its principal and its members are independent of the Walton's and Rose and Thistle Group Ltd. The acceptance of this engagement will not limit or preclude us from accepting any other engagement should this matter result in a court mandated proceeding.

If you require any further information please let me know. We are pleased to serve in this capacity.

Yours truly, SCHONFELD INC. Receivers + Trustees Per:

S. Harlan Schonfeld CPA, CA-CIRP Tab C 3 1 5

This is Exhibit "C" referred to in the Affidavit of Harlan Schonfeld sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits Dr. Bernstein Property Investment Profile

Capital Cost Investment Inter-company Mortgages Since Inception Late fees and Dr. Bernstein Norma/Ronauld Walton Under(Over) Dr. Bernstein Norma/Ronauld Walton Due to (from) Revenue Management % of Maintenance Total % Project Total Paid to interest, mainly No. Partnership Holding Company Holding Company Actual Budget to date Equity Debt Equity Debt Rose&Thistle Mortgagor Amount per P&L Fee Revenue Fee of Revenue Costs Rose&Thistle taxes & utilities

1 Twin Dragons DBDC Investments 9,971,201 8,541,000 (1,430,201) 1,120,500 0 350,000 o 1,790,944 368230 Ont 6,660,000 953,400 47,000 4,9% 0 4.9% 180,631 227,631 22,346 Corporation Spadina Ltd. Windsor 1,090,045

2 Bannockburn Lands Inc. DBDC Investments 15,863,271 13,203,800 (2,659,471) 100 2,449,300 100 o 1,656,934 Atrium 12,000,000 3,390 0 0.0% 0 0.0% 1,791,050 1,791,050 149,234 Eglinton Ltd.

3 Wynford Professional 2272551 Ontario Ltd. 12,093,746 14,709,180 2,615,434 o O o 0 853,757 368230 Ont. 9,468,721 4,207,235 0 0.0% 0 0.0% 3,945,741 3,945,741 89,281 Centre Ltd 368230 Ont. (81,339)

4 Liberty Village Lands Inc. DBDC Investments 2,278,874 incl. below 100 396,636 100 0 641,400 368230 Ont. 2,000,000 0 0 0 250,000 250,000 76 Atlantic Ltd,

5 Liberty Village DBDC Investments 14,109,276 15,796,340 (591,810) 100 2,029,959 100 11,351 2,070,503 TCE Beta 13,500,000 1,469,437 63,185 4.3% 135,000 13,5% 2,561500 2,759,685 5,811 Properties Ltd. Atlantic Ltd. $10,000/month

6 Riverdale Mansion Ltd. DBDC Investment 3,781,787 3,940,946 159,159 100 470,373 100 0 487,871 368230 Ont 3,000,000 0 o 60,000 1,183,981 1,243,981 3,671 Pape Ltd. $2,500/month

7 Royal Agincourt Corp. DBDC Investments 16,078,997 16,115,000 36,003 100 2,371,148 100 o 1,601,511 Harbour Mtge 11,600,000 2,546,832 79,608 3.1% 205,000 11.2% 508,100 792,708 11,167 Hwy 7 Ltd. $10,000/month

8 Hidden Gem Development DBDC Investments 3,401,849 4,492,300 1,090,451 100 1,166,050 100 o 553,746 Variety Club 2,160,000 166,333 0 0.0% 0 0.0% 700,000 700,000 4,704 Inc, Trent Ltd.

11 Lesliebrook Holdings Ltd. DBDC Investments 7,185,439 0 (7,185,439) 100 1,212,728 100 0 (79,922) IMC 5,120,347 1,241,131 52,195 4.2% 148,750 16.2% 415,000 615,945 4,141 Lesliebrook Ltd. $8,500/month

12 Lesliebrook Lands Ltd. DBDC Investments 2,154,627 0 (2,154,627) 100 187,600 100 0 450,672 Atlantis 1,750,000 0 0 43,750 220,000 263,750 415 Leslie Ltd. $2,500/month

15 Queen's Comer Corp. DBDC Queen's Comer 3,964,754 5,171,650 1,206,896 100 582,365 100 0 324,104 368230 Ont. 4,000,000 0 o 0 1,175,000 1,175,000 58 Corp.

16 Northern Dancer DBDC Queen's Plate 4,822,999 10,896,560 6,073,561 100 1,657,180 100 0 353,913 Carevest 3,270,000 5,770 0 0.0% 0 0.0% 250,000 250,000 0 Lands Ltd. Holdings Inc.

20 Global Mills Inc. DBDC Global Mills Ltd. 24,898,758 31,020,625 6,121,867 100 6,510,213 100 0 (6,581) Computershare 18,000,000 2,286,619 154,244 6.7% 0 6,7% 150,000 304,244 13,576

21 Donalda Developments Ltd. DBDC Donalda 46,050,236 56,823,908 10,773,672 100 13,371,900 100 0 841,828 Otera 30,562,642 4,366,770 190,000 4.4% 237,500 9.8% 1,841,380 2,268,880 3,119 Developments Ltd. $25,000/month

23 Cityview Industnal Ltd. DBDC Cityview 5,717,289 5,983,750 266,461 100 991,775 100 0 195,100 368230 Ont. 4650000 T97,899 -6,750 3.4% ---42;000- - 24.6%- 295,000 343,750 Industrial Ltd. $3,500/month

1 26 Skyway Holdings Ltd. DBDC Skyway 3,868,544 4,305,300 436,756 100 752,550 100 0 1,050 368230 Ont 2,800,000 280,615 11,324 4.0% 29,750 14.6% 175,000 216,074 , o Holdings Ltd. $3,500/month Dr. Bernstein Property Investment Profile

Capital Cost Investment Inter-company Mortgages Since Inception Late fees and Dr. Bernstein Norma/Ronauld Walton Under (Over) Dr. Bemstein Norma/Ronauld Walton Due to (from) Revenue Management % of Maintenance Total % Project Total Paid to interest, mainly No. Partnership Holding Company Holding Company Actual Budget to date Equity Debt Equity Debt Rose&Thistle Mortgagor Amount per P&L Fee Revenue Fee of Revenue Costs Rose&Thistle taxes & utilities

9 Ascalon Lands Ltd. DBDC Investments 0 8,055,200 8,055,200 0 0 0 0 0 0 St. Clair Ltd. INFORMATION NOT PROVIDED

10 Tisdale Mews Inc. DBDC Investments 0 15,492,000 15,492,000 0 0 0 0 0 0 Tisdale Ltd. INFORMATION NOT PROVIDED

13 Fraser Lands Ltd. DBDC Fraser Lands Ltd. 0 51,644,125 51,644,125 0 0 0 0 0 0 INFORMATION NOT PROVIDED

14 Fraser Properties Corp. DBDC Fraser 0 0 0 0 0 0 0 0 0 Properties Ltd. INFORMATION NOT PROVIDED

17 Dupont Developments DBDC Dupont 0 16,950,625 16,950,625 0 0 0 0 0 0 Developments Ltd. INFORMATION NOT PROVIDED

18 Red Door Developments DBDC Red Door 0 11,641,925 11,641,925 0 0 0 0 0 0 Inc. Developments Inc. INFORMATION NOT PROVIDED

19 Red Door Lands Ltd. DBDC Red Door 0 0 0 0 0 0 0 0 0 Lands Inc. INFORMATION NOT PROVIDED

22 Salmon River Properties DBDC Salmon River 0 1,674,284 1,674,284 0 0 0 0 0 0 Ltd. Properties Ltd. INFORMATION NOT PROVIDED

24 Weston Lands Ltd. DBDC Weston Lands 0 8,270,750 8,270,750 0 0 0 0 0 0 Ltd. INFORMATION NOT PROVIDED

25 Double Rose Developments DBDC Double Rose 0 14,651,750 14,651,750 0 0 0 0 0 0 Ltd. Developments Ltd. INFORMATION NOT PROVIDED

27 West Mall Holdings Ltd. DBDC West Mall 0 17,323,125 17,323,125 0 0 0 0 0 0 Holdings Ltd. INFORMATION NOT PROVIDED

28 Royal Gate Holdings Ltd. DBDC Royal Gate 0 28,925,913 28,925,913 0 0 0 0 0 0 Holdings Ltd INFORMATION NOT PROVIDED

29 Dewhurst Developments Ltd DBDC Dewhurst 0 5,522,000 5,522,000 0 0 0 0 0 0 Developments Ltd. INFORMATION NOT PROVIDED

30 Eddystone Place Ltd. DBDC Eddystone Place 0 0 0 0 0 0 0 0 0 Ltd. INFORMATION NOT PROVIDED

3 Richmond RowHoldings Ltc1313DC Richmond Row 22,515,776— 22,515,776 0 0 Holdings Ltd. INFORMATION NOT PROVIDED

176,241,647 393,667,832 217,426,185 11,736,830 604,305 901,750 15,642,383 17,148,439 308,1100 Tab D 318

This is Exhibit"D" referred to in the Affidavit of Harlan Schonfeld sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits 319 Shara N. Roy

From: [email protected] Sent: Tuesday, October 01, 2013 7:42 AM To: Shara N. Roy Subject: Fw: Bank statements

Sent wirelessly from my BlackBerry device on the Bell network. Envoyé sans fit par mon terminal mobile BlackBerry sur le réseau de Bell.

From: Norma Walton Date: Mon, 30 Sep 2013 20:49:22 +0000 To: [email protected] Cc: Jim Reitan Subject: RE: Bank statements

It may be your day's end but is not yet ours. Kendra will unlock access to the four entities when she leaves; Trudy will leave the memory stick in the downstairs boardroom when she leaves; I will leave copies of the mortgage documents in the downstairs boardroom when I leave; and Sarita will continue scanning and sending you bank statements this week.

Regards, Norma

From: harlanOschonfeldinc.com [mailto:[email protected]] Sent: Monday, September 30, 2013 4:46 PM To: Norma Walton Cc: Jim Reitan Subject: Re: Bank statements

Norma:

Days end is upon us. I am downstairs.

Might I have today's promised materials?

Should I come to your office to get them?

Sent wirelessly—from-my BlackBerry device-on the-Bell network. Envoyé sans Ill par mon terminal mobile BlackBerry sur le réseau de Bell.

From: Norma Walton Date: Mon, 30 Sep 2013 18:01:41 +0000 To: Harlan Schonfeld Cc: Jim Reitan Subject: RE: Bank statements

Dear Harlan,

Yes

Trudy is working on providing you with all leases as agreed. 1 320 Tom and I will chase down and send the mortgage documents for 1450 and 1500 before day's end.

Sarita is scanning all bank statements first then will roll to invoices.

Kendra and I are updating the four entities with a view to providing access.

Regards, Norma

From: Harlan Schonfeld [mailto:harlan©schonfeldinc.com] Sent: Monday, September 30, 2013 1:57 PM To: Norma Walton Cc: Jim Reitan Subject: Re: Bank statements

Norma:

And I expect to receive today mortgage documents for the 2 Don Mills properties (1450 and 1500)that relate to $6 million in increased mortgages; and copies of all of the property leases.

You also said you would let us know (within 2 hours) about us getting access to the files for supporting documents and provide 4 more entities records.

&Harlan Sehonfeld, CPA, CA CIRP SCHONFELD INC. Receivers + Trustees 438 University Avenue, list Floor Toronto, ON MSG 2K8 Tel 416.862.7785 Cell 416254.1992 Fax 416.862.2136

Experience acquired. Experience applied.

This email may contain confidential information and no rights to privilege have been waived. If you are not the intended recipient, please notify us immediately. Thank you.

On Mon, Sep 30, 2013 at 12:56 PM,Norma Walton wrote:

Dear Jim and Harlan,

You had requested bank statements on Friday. Sarita provided you with Global Mills bank statements on Friday afternoon and will provide the remainder of statements this week.

2 Regards,

Norma Tab 6 (4, Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

BETWEEN:

DBDC SPADINA LTD., and THOSE CORPORATIONS LISTED ON SCHEDULE A HERETO

Applicants

and

NORMA WALTON,RONAULD WALTON,THE ROSE & THISTLE GROUP LTD. and EGLINTON CASTLE INC. Respondents

and

THOSE CORPORATIONS LISTED ON SCHEDULE C HERETO,TO BE BOUND BY THE RESULT

AFFIDAVIT OF CHRISTOPHER HUNTER

I, Christopher Hunter, of the City of Toronto, in the Province of Ontario, MAKE OATH

AND SAY:

J. I am a-Student At-Law at Lenc-zner-SlaghtRoyce-Smith-Griffin-LLP-and there-fore-have- knowledge of the matters contained therein.

2. Attached hereto as Exhibit"A" is a copy of a Record of Discipline History against Norma

Jean Walton dated December 21, 2007. 3. Attached hereto as Exhibit "B" is a Notice of Application filed by the Law Society against

Norma Jean Walton on March 7, 2011.

4. Attached hereto as Exhibit "C" is an interlocutory decision by the Law Society Hearing

Panel denying an adjournment to Ms. Walton of the Law Society's Disciplinary Proceedings.

5. Attached hereto as Exhibit "D" is a copy of the Law Society Decision rendered on July 25,

2013.

6. Based on my review of the decision, the Law Society panel found inter alia:

(a) that there was not proper reporting by Walton to two individuals found to be her

clients regarding the placing of mortgages ;

(b) that there was not proper disclosure as to the identity of the borrower. Walton led

the clients to believe the Borrower was a third party, when in fact the funds were

borrowed by Walton and/or her companies;

Mortgages without consent; and rolled the funds into other Mortgages without

consent;

(d) the Mortgages were registered in the name of Walton and her firm in trust without

consent;

(e) the proper ledgers which should have been maintained with Mortgage funds that

were being administered for third parties were not maintained; -3- 324

(0 Walton failed to provide the appropriate forms with respect to disclosure of the

investments;

(g) Walton failed to properly protect the interests of the clients;

(h) Walton failed to arrange for the clients to receive independent representation in a

private Mortgage transaction;

(i) Walton improperly comingled personal and/or her corporate funds with clients'

funds;

(j) Walton filed misleading member annual reports; and

(k) the panel found that while Walton may have been negligent, she did not

deliberately mislead the Law Society;

7. I understand that penalties have not yet been imposed on Ms. Walton as a result of this disciplinary finding.

8. I swear this affidavit in support of an Application and Motion seeking to have Schonfeld

Inc. appointed as inspector of the Projects and the records of Rose & Thistle dealing with the

Properties, Projects and Owner Companies, among other relief , r. -4-- 3*

SWORN BEFORE ME at the City of Toronto, in the Province of Ontario on October 1, 2013.

Commissioner for Taking Affidavits CHRISTOPHER HUNTER (or as may be) DBDC SPADINA LTD., et al -and- NORMA WALTON et al. Applicants Respondents Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

PROCEEDING COMMENCED AT TORONTO

AFFIDAVIT OF CHRISTOPHER HUNTER

LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLP Barristers Suite 2600 130 Adelaide Street West Toronto ON M5H 3P5

Peter H. Griffin (19527Q) Tel: (416)865-2921 Fax: (416)865-3558 Email: [email protected] Shara N. Roy(49950H) Tel: (416)865-2942 Fax (416)865-3973 Email: [email protected]

Lawyers for the Applicants

3157134 Tab A This is Exhibit"A" referred to in the Affidavit of Christopher Hunter sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits The Law Society of Upper Canada Page 1 of 1 3 .

The Law Society area du of Upper Canada Haut-Canada

Lawyer and Paralegal Directory

Discipline History Information

New Search Back to Discipline Summary Page Norma Jean Walton , Lawyer, In Private Practice Conduct Proceeding: 21-Dec-2007

Norma Jean Walton was found to have engaged in professional misconduct OR conduct unbecoming a barrister and solicitor for failing to cooperate with a Law Society investigation by failing to produce requested in numerous communications. By Decision and Order dated December 21, 2007, the Hearing Panel ordered that the lawyer:(1) be reprimanded;(2) successfully complete, by April 30, 2008, the Financial Management, Professional Responsibility and Personal Management modules of the Private Practice Refresher Program; and (3) pay $3,750.00 in costs to the Law Society.

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http://www2.1suc.on.ca/LawyerParalegalDirectory/loadDisciplineSumrnaryDetailsPage.do... 8/12/2013 LEFT DELIBERATELY BLANK Tab B This is Exhibit "B" referred to in the Affidavit of Christopher Hunter sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits .3 13

Law Society Hearing Panel File No. LC (4/

LAW SOCIETY HEARING PANEL

TRIB NES4ICE FILED The Law Society of Upper Canada Applicant 'Date and Time :\S1L n•YY1,

Nottua Jean Walton Respondent Staff Signature •;UNDER subsection 34(1) of the Law Society Act, R.S.O. 1990, c.L.8, as amended.

NOTICE OF APPLICATION

TO THE RESPONDENT:

A CONDUCT PROCEEDING HAS BEEN COMMENCED by the applicant. The claim made by the applicant appears on the following page.

YOU ARE REQUIRED TO ATTEND at a proceeding management conference on Monday, April 18, 2011, at 9:00 a.m. at the offices of The Law Society of Upper Canada, Osgoode Hall, 130 Queen Street West, Toronto, Ontario. You may elect to attend by your representative.

IF YOU OR YOUR REPRESENTATIVE FAIL TO ATTEND AT THE PROCEEDING MANAGEMENT CONFERENCE,THE PANELIST CONDUCTING THE CONFERENCE MAY PROCEED-IN—YOUR ABSENCE.

Date of issue: * c1

TO: Norma Jean Walton Walton Advocates 30 Hazelton Ave. Toronto, ON M5R 2E2 332 -2

APPLICATION

The applicant makes application for:

(a) a determination that the respondent has contravened section 33 of the Law Society Act by engaging in professional misconduct, and

(b) its costs of this application.

2. The grounds for the application are: it is alleged that the respondent has engaged in professional misconduct.

3. The particulars of the application are:

Clients D.N. and A.O.

(1) The Lawyer acted in a conflict of interest when she represented her clients D.N. and A.O. in relation to the following transactions:

a. a company wholly owned by the Lawyer and her spouse (the "Lawyer's Company") borrowed approximately $429,750 from D.N. and A.O. without the Lawyer ensuring that D.N. and A.O.'s interests were fully protected by the nature of the case and by independent legal representation, contrary to Rule 2.06(5) of the Rules of Professional Conduct (the "Rules"), and

b. the Lawyer represented both borrower and lender in private mortgage transactions totalling approximately $429,750 in respect of loans by D.N. and A.O. to the Lawyer's Company, contrary to Rule 2.04 (11).

(2) The Lawyer failed to serve her two lender clients, D.N. and A.O., contrary to Rule 2.01 (2), by:

a. failing to report to D.N. and A.O. with respect to their mortgage transactions;

b. failing to advise A.O. as to the identity of the borrower;

c. failing to advise D.N. and A.O. as to the priority of their mortgages; j7 3

d. failing to register the mortgages securing loan advances by D.N. and A.O. in a timely manner, and

e. registering the mortgages in the name of the Lawyer's law firm in trust without obtaining instructions from D.N. and A.O.

(3) The Lawyer misled her client A.O. about the nature and particulars of A.O.'s investments in private mortgages, contrary to Rules 2.02(1) and 6.01 (1).

(4) The Lawyer failed to complete an Investment Authority and Report on Investment (Forms 18A and 18B, respectively),

a. in connection with the funds borrowed by the Lawyer's Company from D.N. and A.O., contrary to the by-law in effect at the time, By-Law 18, s.7 (1), and

b. in connection with the release of collateral or security held for D.N. and A.O.'s loans, contrary to By-Law 18, s.7 (4) until May 1, 2007, and the By- Law 9, s.24(4) thereafter.

(5) The Lawyer failed to maintain a mortgage asset ledger, mortgage liability ledger and monthly comparisons in connection with the mortgages held in trust by the Lawyer's law firm, contrary to By-Law 18, s.3 until May 1, 2007, and By-Law 9, s.20 thereafter.

(6) The Lawyer failed to obtain the written consent of her clients, D.N. and A.O., for the substitution of security held for their loans, contrary to By-Law 18, s.7 (7) until May 1, 2007, and By-Law 9, s.24 (7)thereafter.

(7) The Lawyer misled the Law Society about the nature and particulars of her client A.O.'s investments in private mortgages, contrary to Rule 6.01 (1).

(8) The Lawyer failed to conduct herself in a way that maintains the integrity of the profession by filing inaccurate or misleading Member Annual Reports, contrary to Rule 6.01 (1). -4

Condominium Purchasers

(9) The Lawyer misappropriated approximately $383,598 held in trust on behalf of purchasers of condominium units by disbursing those funds without authority and, in particular, contrary to the Agreements of Purchase and Sale, the provisions of the Condominium Act, 1998 and the by-law in effect at the time, By-Law 19, s.4 (1).

(10) The Lawyer co-mingled personal/corporate funds with client funds, contrary to the by-law in effect at the time, By-Law 19, s.3 (2).

Jan Parnega-Welch Discipline Counsel The Law Society of Upper Canada Osgoode Hall 130 Queen Street West Toronto, Ontario M5H 2N6

Tel.:(416) 947-3469 Fax: (416) 947-3927 E-mail: [email protected] The Law Society of Upper C' ada Norma Jean Walton and Law Society Hearing Panel File No: L-UU /Y-711 Applicant Respondent

LAW SOCIETY HEARING PANEL

Proceeding commenced at Toronto

NOTICE OF APPLICATION

Jan Parnega-Welch, Discipline Counsel The Law Society of Upper Canada Osgoode Hall 130 Queen Street West Toronto, Ontario M5H 2N6

Tel:(416) 947-3469 Fax: (416)947-3927 Email:[email protected] Tab C - 3 36

This is Exhibit "C" referred to in the Affidavit of Christopher Hunter sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits LAW SOCIETY HEARING PANEL

Citation: Law Society of Upper Canada v. Norma Jean Walton, 2012 ONLSHP 0017 Date: January 24, 2012 Docket: 2011-00022 File No.: LCN17/11

BETWEEN:

The Law Society of Upper Canada, Applicant

Norma Jean Walton, Respondent

Before: Linda R. Rothstein (chair)

Heard: January 23, 2012, in Toronto, Ontario

Counsel: Jan Parnega-Welch, for the applicant Rabinder Sidhu, for the respondent

1 commercial real estate and real estate development. Ms. Walton's law practice is now restricted to providing legal advice to these companies. Ms. Walton testified that these companies employ 20 people directly on pay-roll and another 30 to 40 on a "weekly basis". She told the panel that she and her husband are very active in the running of their companies and that they "do not run themselves".

[5] The Lawyer also described in detail the impact of her in-laws' illnesses on the family schedule. She explained that she drops her young children off at school first thing in the morning and then goes to work. This conforms with the schedule prior to the hospitalization of her father-in-law. Her husband collects the children from school at 3:15 p.m. and takes them home. However, unlike the situation that pertained prior to her father-in law's hospitalization when she would stay at work until 6 or 6:30 p.m., she now leaves the office between 4:30 and 5 p.m. in order to give her husband an opportunity to attend the hospital or his mother's home. In other words, the Lawyer testified that this has "truncated her work day by approximately three hours". It is clear that this calculation is in error and that her work day has been truncated by approximately an hour and a half. Ms. Walton testified that she continues to be able to meet the minimum requirements of her law practice and of the companies that she and her husband run. However, this truncated schedule and the additional stresses have unduly impacted her preparation for the hearing.

[6] Counsel for Ms. Walton argued strenuously for an adjournment until July 2012. Although the prognosis for Ms. Walton's father-in-law is still unclear, he submitted that the additional five months will permit Ms. Walton to prepare for the hearing to the extent that is required. He argued that to force her to a hearing in February would cause her great prejudice and there was no countervailing prejudice to the Law Society. In contrast, counsel for the Law Society argued that the hearing ought to proceed in February. She explained that the Law Society's main witness is 85 years of age, has previously suffered from cancer, and has filed an affidavit which has been in the hands of Ms. Walton and her counsel since the summer of 2011. On two previous occasions, counsel for Ms. Walton had agreed to cross-examine her and the cross-examinations were cancelled at the last minute. Counsel for the Law Society argued that it will cause an undue strain on an important witness to adjourn her examination for a third time.

[7] The Ontario Court of Appeal decisions in Igbinosun, and Dominion Bank, the Divisional Court decision Howett and the College of Physicians and Surgeons all make clear that there is no absolute_dghtto art_acijournment before an_administrative tribunal_ including a disciplinary body. Rather, whether or not the adjournment should be granted should be considered in light of the specific facts of the case, having regard to the right of the Applicant to a fair hearing weighed against the obvious desirability of a speedy and expeditious hearing into charges of professional misconduct. When balancing these two factors, the right of an applicant to a fair hearing must be paramount.

[8] However, fairness to a licensee does not mean that a panel must accede to her view of the time necessary for her to properly prepare with her counsel. In this case, there can be no doubt that the Lawyer has had many months to prepare for the Law Society's evidence at the hearing scheduled for February. The affidavit of the key witness has been in her

3 hands for six months or more. Nor is it common for the key Law Society witness to have sworn an affidavit in advance of testifying at a hearing. Likewise, the report of the Law Society's expert witness has been in the hands of the Lawyer and her counsel since September. A draft of the Agreed Statement of Facts was sent to the Lawyer in May of last year. Moreover, the Lawyer concedes that she and her counsel have been hard at work preparing for the hearing for some time with the result that Mr. Cohen has recently comprehensively responded to the Law Society's proposed Agreed Statement of Facts. co o [9] Nor is this a case where it is the Lawyer's own health condition that undermines her ability to adequately prepare for a hearing. It is apparent from the Lawyer's evidence that the stresses that affect her family have taken a toll. Nevertheless, she is putting in what r) z many would consider to be full days at the office attending to her responsibilities as an o owner of a business. It is inevitable that preparation for a Law Society hearing would cJ interfere with one's regular schedule and would require one to delegate the responsibilities of one's business to a greater degree than might be ideal.

[10] I am not persuaded that the fact that Ms. Walton's days have been "truncated" has caused significant prejudice such as to make an adjournment of the Law Society's evidence necessary in order to prevent unfairness. The Lawyer still has three weeks to assist Mr. Cohen to prepare his cross-examinations. This is a reasonable time.

[11] That said, I agree with counsel for the Law Society that the Lawyer has provided a basis upon which to consider, on compassionate grounds, that she be relieved of the responsibility of testifying. Her counsel resisted this accommodation; he argued that there is an inherent unfairness in hearing the Law Society witnesses followed by a lengthy break before the Lawyer and her witnesses are called.

[12] I disagree. Indeed, this is frequently the way long hearings evolve. Panels take careful notes, review transcripts as required and understand the dangers of drawing premature conclusions.

[13] For all of these reasons, an adjournment of the hearing scheduled for February 13 to 17, 2012 is denied. Should the Law Society's evidence be completed before the end of that week, an adjournment will be granted for the remainder of the week. Tab D This is Exhibit "D" referred to in the Affidavit of Christopher Hunter sworn before me this 1st day of October, 2013

A Commissioner for Taking Affidavits F

LET RIGHT PREVAIL

Barreau -J The Law Society of du Haut-Canada to Upper Canada o

O. r LAW SOCIETY HEARING PANEL cf) z o Citation: Law Society of Upper Canada v. Norma Jean Walton, 2013 ONLSHP 0110 Date: July 25, 2013 File No.: LCN17/11

BETWEEN:

The Law Society of Upper Canada, Applicant

Norma Jean Walton, Respondent

Before: Gerald A. Swaye, Q.C., C.S. (chair) Jacqueline A. Horvat Jan Richadson

Heard: February 13, 14, 15; August 14, 15 and 16, 2012 in Toronto, Ontario

Counsel: Jan Parnega-Welch and Joshua Elcombe, for the applicant Howard Cohen and Lesia Jennifer Lawrence, for the respondent .3 4 3.

Summary: WALTON - Findings of Misconduct - Lawyer acted in a conflict of interest when she represented her clients D.N. and A.O. in relation to the following transactions: a company wholly owned by the Lawyer and her spouse borrowedfrom D.N. and A.O. without the Lawyer ensuring that D.N. and A.O. 's interests were fully protected by the nature of the case and by independent legal representation - Lawyer represented both borrower and lender in private mortgage transactions c in respect of loans by D.N. and A.O. to the Lawyer's Company - Lawyerfailed to serve her two ca lender clients, failing to register the mortgages securing loan advances by D.N. and A.O. in a timely manner; and registering the mortgages in the name of the Lawyer's law firm in trust a_ without obtaining instructions from D.N. and A.O - Lawyer misled her client A.O. about the nature and particulars of A.O.'s investments in private mortgages - Lawyerfailed to complete an Investment Authority Report on Investment in connection with the funds borrowed by the Lawyer's Company from D.N. and A.O. - Lawyer failed to maintain a mortgage asset ledger, mortgage liability ledger and monthly comparisons in connection with the mortgages held in trust by the Lawyer's law firm, Lawyer failed to obtain the written consent of her clients, D.N. and A.O., for the substitution of security held for their loans - Lawyer co-mingled personal/corporate funds with client funds - Expert evidence: Lawyer 'fell below the standard of care of a reasonably competent solicitor" - Even in cases where no one loses money, or no measurable harm is done, afinding ofprofessional conduct may be made

REASONS FOR DECISION ON FINDING

THE ALLEGATIONS

[1] Jacqueline A. Horvat (for the panel):— On March 7, 2011 the Law Society of Upper Canada ("Law Society') brought an application for a finding of professional misconduct against Norma Jean Walton (the "Lawyer') under s. 33 of the Law Society Act on the following particulars:

1) The Lawyer acted in a conflict of interest when she represented her clients D.N. and A.O. in relation to the following transactions:

(a) a company wholly owned by the Lawyer and her spouse (the "Lawyer's Company) borrowed approximately $429,750 from D.N. and A.O. without the Lawyer ensuring that D.N. and A.O.'s interests were fully protected—by the nature—a the case and by—independent legal— representation, contrary to Rule 2.06(5) of the Rules of Professional Conduct (the "Rules"); and

(b) the Lawyer represented both borrower and lender in private mortgage transactions totaling approximately $429,750 in respect of loans by D.N. and A.O. to the Lawyer's Company, contrary to Rule 2.04(11).

2) The Lawyer failed to serve her two lender clients, D.N. and A.O., contrary to Rule 2.01(2), by:

2 4

(a) failing to report to D.N. and A.O. with respect to their mortgage transactions;

(b) failing to advise A.O. as to the identity of the borrower; --J (c) failing to advise D.N. and A.O. as to the priority of their mortgages;

(d) failing to register the mortgages securing loan advances by D.N. and A.O. in a timely manner; and

(e) registering the mortgages in the name of the Lawyer's law firm in trust ONLS without obtaining instructions from D.N. and A.O. 2013 3) The Lawyer misled her client A.O. about the nature and particulars of A.O.'s investments in private mortgages, contrary to Rules 2.02(1) and 6.01(1).

4) The Lawyer failed to complete an Investment Authority Report on Investment (Forms 18A and 18B, respectively),

(a) in connection with the funds borrowed by the Lawyer's Company from D.N. and A.O., contrary to the by-law in effect at the time, By-Law 18, s. 7(1); and

(b) in connection with the release of collateral or security held for D.N. and A.O.'s loans, contrary to By-Law 18, s. 7(4) until May 1, 2007, and By- Law 9, s. 24(4) thereafter.

5) The Lawyer failed to maintain a mortgage asset ledger, mortgage liability ledger and monthly comparisons in connection with the mortgages held in trust by the Lawyer's law firm, contrary to By-Law 18, s. 3 until May 1, 2007, and By-Law 9, s. 20 thereafter.

6) The Lawyer failed to obtain the written consent of her clients, D.N. and A.O., for the substitution of security held for their loans, contrary to By-Law 18, s. 7(7) until May 1, 2007, and By-Law 9, s. 24(7) thereafter.

7) The Lawyer misled the Law Society about the nature and particulars of her client A.O.'s investments in private mortgages, contrary to Rule 6.01(1).

8) The Lawyer failed to conduct herself in a way that maintains the integrity of the profession by filing inaccurate or misleading Member Annual Reports, contrary to Rule 6.01(1).

9) The Lawyer misappropriated approximately $383,598 held in trust on behalf of purchasers of condominium units by disbursing those funds without authority and,

3 in particular, contrary to the Agreements of Purchase and Sale, the provisions of the Condominium Act, 1998 and the by-law in effect at the time, By-Law 19, s. 4(1).

10) The Lawyer co-mingled personal/corporate funds with client funds, contrary to the by-law in effect at the time, By-Law 19, s. 3(2).

[2] The Lawyer admitted service of the Notice of Application and the hearing in this matter proceeded on February 13, 14, 15 and August 14, 15, 16, 2012. The Law Society and the Lawyer agreed that the hearing should be held in public pursuant to s. 9 of the Statutory Powers Procedure Act and Rule 18.01 of the Rules of Practice and Procedure made pursuant to s. 61.2 of the Law Society Act.

[3] We find that the Lawyer engaged in the professional misconduct alleged in Particulars 1, 2, 3, 4, 5,6 and 10 above for the reasons that follow.

FACTS NOT IN DISPUTE

[4] The Law Society and the Lawyer filed an Agreed Statement of Facts ("ASF"). The ASF was admitted as Exhibit 1. The Lawyer admitted the authenticity of the documents in the accompanying Document Book, admitted as Exhibit 2. The undisputed facts follow.

(a) Relevant Persons

[5] The Lawyer was born in 1970. She received her law degree and an Executive MBA from the University of Western Ontario and was called to the Bar in 1995. The Lawyer is a partner at Walton Advocates located at 30 Hazelton Avenue in Toronto, Ontario (the "Tim") where she practises 50% real estate and 50% corporate/commercial. The Lawyer is responsible for the bookkeeping and the accounting at the Firm. The only other partner of the Firm is the Lawyer's husband. The Firm advertises as an in-house law fn►ii and trade mark agent that provides litigation, corporate and real estate services to The Rose and Thistle Group ("Rose and Thistle").

[6] Since approximately 2001, the Lawyer has been involved in the real estate development business, including the development of properties located at 185 Davenport Road in Toronto (the 'Davenport Property") and 1246 Yonge Street in Toronto (the "Yonge Property1 ). The-Lawyer-arranges the-finaneing-for the developments.

[7] Rose and Thistle was incorporated on June 16, 2003 and has its registered address as 30 Hazelton Avenue. The Lawyer and her husband are the only shareholders, directors and officers of Rose and Thistle. Rose and Thistle is a private land and investment company that owns and operates a stable of commercial real estate properties in the Greater Toronto Area. [8] Hazelton Property Management Ltd. ("Hazelton") was incorporated on September 16, 2002 and has as its registered address 30 Hazelton Avenue. The Lawyer uses Hazelton to manage and develop properties.

4 [9] D.N. was born on October 27, 1917 and is not related to the Lawyer by blood, marriage or adoption. The Lawyer began acting for D.N. in 1998 when she prepared a will and a power of attorney for D.N. Subsequently, the Lawyer prepared an additional four or five revised wills for D.N. The Lawyer is the sole estate trustee for D.N. and holds a continuing power of attorney for property and a power of attorney for personal care for D.N. _J

[10] A.O. was born in 1927 and is a friend of D.N. A.O. was introduced to the Lawyer in or about January 2003 by D.N. A.O. is not related to the Lawyer by blood, marriage or adoption. Prior to meeting the Lawyer, A.O. owned three properties that were mortgaged and the Lawyer was not aware of the extent of A.O.'s previous investment experience. (f) z_J (b) Particular 1: Alleged Conflict of Interest

[11] On July 5, 2002 the Lawyer and her husband purchased all of the shares of 364808 Ontario Limited ("Davenport"), a company that owned the Davenport Property. At the time, the Davenport Property was subject to a $1 million first mortgage in favour of Foremost Financial Corp. (the "Foremost Mortgage"). The Foremost Mortgage was assumed by the Lawyer and her husband when they purchased Davenport.

[12] In October 2002 the Lawyer acted for D.N. on the sale of D.N.'s home. On October 26, 2002 the Lawyer deposited the purchaser's $12,000 deposit into the Firm's trust account. On December 12, 2002 the sale closed and the Lawyer received the net proceeds of sale of $221,242.66 into the Firm's trust account. The Lawyer transferred $1,836.88 to the Firm's general account for fees on the sale. D.N. loaned $150,000 to Davenport ("First D.N. Loan"). From the net proceeds, the Lawyer transferred $150,000 to the credit of Davenport and the balance, being $81,405.78, was paid to D.N. The First D.N. Loan was secured by a mortgage, discussed further below. The Lawyer did not recommend, and D.N. did not obtain, independent legal advice or independent legal representation with respect to the First D.N. Loan.

[13] On January 6, 2003 the Lawyer registered a second collateral mortgage for $4.5 million against the Davenport Property in favour of Laurentian Bank of Canada ("Laurentian Mortgage"). The Laurentian Mortgage was collateral security for a mortgage registered against the Yonge Property. The Laurentian Mortgage was discharged against the Davenport Property on December 17, 2003.

[14] A.O. learned from D.N. that D.N. had made an investment with the Lawyer with a favourable interest rate. A.O. then contacted the Lawyer about making a similar investment and on January 24, 2003, A.O. gave the Lawyer a cheque in the amount of $129,750, made out to the Firm in trust ("First A.O. Loan"). The Lawyer deposited the First A.O. Loan into the Firm's trust account. The First A.O. Loan was secured by a mortgage, discussed further below. The Lawyer did not recommend, and A.O. did not obtain, independent legal advice or independent legal representation with respect to the First A.O. Loan. The Lawyer disbursed the First A.O. Loan from the Firm's trust account as follows:

5 34 7

DATE DISBURSED TO AMOUNT

January 31, 2002 Hazelton $40,000 January 31, 2003 The Fit i $18,725 February 3, 2003 Hazelton $50,000 February 11, 2003 Mark M. Orkin, in trust $21,025 c o O [15] On April 25, 2003 D.N. loaned an additional $80,000 to Davenport ("Second D.N. Loan"). The funds were deposited into the Firm's trust account and secured by a mortgage discussed below. The Lawyer did not recommend, and D.N. did not obtain, z independent legal advice or independent legal representation with respect to the Second o D.N. Loan. On April 25, 2003, the Lawyer paid the Second D.N. Loan to Hazelton. M

[16] On April 25, 2003 A.O. loaned an additional $70,000 ("Second A.O. Loan"). The funds were deposited into the Firm's trust account and secured by a mortgage discussed below. The Lawyer did not recommend, and A.O. did not obtain, independent legal advice or independent legal representation with respect to the Second A.O. Loan. The Lawyer disbursed the Second A.O. Loan from the Firm's trust account as follows:

DATE DISBURSED TO AMOUNT

May 13, 2003 Hazelton $30,000 May 20, 2003 The Firm $40,000

[17] The Lawyer acted for Davenport in relation to the loans made by D.N. and A.O. The Lawyer acted for D.N. and A.O. in relation to their loans to Davenport in that she prepared, registered and discharged all mortgage documents securing the loans.

(c) Particulars 2 & 3: Alleged Failure to Serve D.N. and A.O. and Alleged Misleading of A.O. about the Nature and Particulars of Her Investments

[18] On December 30, 2002 the Lawyer sent D.N. a reporting letter regarding the sale of D.N.'s home. The letter stated, in part:

As discussed, we have arranged a mortgage on a condominium in Yorkville in the amount of $150,000 paying 6% interest only. This will provide income of $750 per month or $9,000 per year, commencing February 28, 2003, to assist you in paying your rent without depleting your capital [...] I have transferred the $150,000 to [Davenport], the owner of the property, with interest of 1.5 % from now until then. The mortgage will begin paying on January 31, 2003.

The schedule of payments into your account will be as follows:

January 31, 2003: $281.25 (approximately)

6 348

January 31, 2004: $750

The amount of $150,000 will then be due and payable back to you, unless you wish to extend the mortgage term for a further year. Each year, you will have the c co option of extendingn [sic] for a further year (assuming the purchaser wants to o continue to extend as well).

The address is Suite 100, 185 Davenport Road, Toronto, Ontario. It is a 1,550 square feet main floor suite that will be registered as a condominium. A fellow cf) z named [J.G.] has purchased the condominium for $373,000 and he is taking possession on January 31, 2003. [...]

[19] On January 16, 2003 the Lawyer sent A.O. a reporting letter regarding 'Mortgage of 185 Davenport, Suite 100." The letter stated, in part:

As discussed, a purchaser named [J.G.] is purchasing Suite 100 at 185 Davenport Road with the purchase to close January 31, 2003. He is paying $373,000 for the condominium, and requires a mortgage of 75% of the value of the condominium at a rate of 6% interest only for 12 months. The total mortgage is thus for $279,750. [D.N.] will be investing $150,000 of that amount leaving $129,750 available for you to invest.

Your $129,750 mortgage will provide income of $648.75 per month or $7,785 per year, commencing February 28, 2003. The benefit of an interest-only mortgage is it provides interest income without depleting your capital. As you requested, I will arrange a direct deposit into your account starting February 28, 2003. [...] We will need a cheque prior to January 24th for $129,750 payable to [the Firm] in trust.

The schedule of payments into your account will be as follows:

February 28, 2003: $648.75

[...]

January 31, 2004: $648.75

The amount of $129,750 will then be due and payable back to you, unless you wish to extend the mortgage term for a further year. Each year, you will have the option of extending for a further year (assuming the purchaser wants to continue to extend as well).

[20] On February 13, 2003 the Lawyer sent a second reporting letter to A.O. stating, in part:

7 As promised, enclosed is a copy of the mortgage registered against Suite 100 at 185 Davenport Road. You will note the amount of $129,750 beside your name, being the amount of your principal.

As discussed, we will deposit $648.75 into your bank account at the end of every which month commencing February 28, 2003 and ending January 31, 2004, at c time the $129,750 you loaned will be due and payable in full. We in turn will be collecting this amount from [J.G.], the purchaser of Suite 100.

If at the end of the first 12 months you wish to renew for another 12 months and [J.G.] also wishes to renew, the mortgage will be renewed for a further 12 months. for you. If not, I will attempt to find another source of mortgage interest income ONLSHP

[21] The enclosed mortgage document identified Davenport as the borrower and the lender as 2013 the Firm, trustee for D.N. as to $150,000 and for A.O. as to $129,750. The lands subject to the mortgage were identified as the Davenport Property as a whole. The mortgage document was registered on February 7, 2003 in the amount of $279,750 ("First Davenport Mortgage"). Neither the Lawyer nor her husband personally guaranteed the First Davenport Mortgage, or any subsequent mortgage securing D.N.'s or A.O.'s loans. The loans were ultimately paid in full.

[22] On May 5, 2003 the Lawyer sent a third reporting letter to A.O. stating, in part:

As discussed Suites 200 and 250, being the entire second floor of 185 Davenport Road, have been sold to [J.H.] for $600,000. We will be registering a mortgage against both suites at 185 Davenport Road in the amount of $450,000 — 75% of the purchase price — of which you have contributed $70,000. It will bear interest of6% for the next 12 months.

We will deposit $350.00 into your bank account at the end of every month (in addition to the $648.75 already being deposited from the $129,750 mortgage) commencing May 31, 2003 and ending April 30, 2004, at which time the $70,000 you loaned will be due and payable in full. We in turn will be collecting this amount from [J.H.], the purchaser of Suites 200 and 250.

If at the end of the first 12 months you wish to renew for another 12 months and ew, the mortgage will be renewed for a further 12 months. If not, I will attempt to find another source of mortgage interest income for you.

[...] We will forward a copy of the charge once registered.

[23] On March 5, 2004 the Lawyer sent a fourth reporting letter stating, in part:

Enclosed is a copy of the mortgage registered against Suites 200 and 250 at 185 Davenport Road. You will note we are the Trustee for you and [D.N.] as to the amounts provided. You will note the amount of $70,000 beside your name, being the amount of your principal.

8 3 5 0

We will continue to deposit $350.00 into your bank account at the end of every month, having commenced those deposits on May 31, 2003 continuing to April 30, 2004, at which time the $70,000 you loaned will be due and payable in full. We in turn will be collecting this amount from [J.H.], the purchaser of Suites 200 and 250 (the entire second floor). (Ts o If at the end of the first 12 months you wish to renew for another 12 months and

[J.H.] also wishes to renew, the mortgage will be renewed for a further 12 months. 1 If not, I will attempt to find another source of mortgage interest income for you.

[24] On March 8, 2004 the Lawyer registered a mortgage in the amount of $429,500 against ONLSHP the Davenport Property as a whole ("Second Davenport Mortgage"). The borrower is

identified as Davenport and the lender as the Firm, trustee for D.N. as to $230,000 and 2013 for A.O. as to $199,500 [sic]. The Second Davenport Mortgage ought to have been in the amount of $429,750 and had an interest rate of 6%. The Lawyer intended the Second Davenport Mortgage to replace the First Davenport Mortgage and secure all of D.N.'s and A.O.'s investments.

[25] On January 18, 2005 a Condominium Declaration for the Davenport Property was registered as Toronto Standard Condominium Plan No. 1652. A number of the units at the Davenport Property were sold prior to this registration. The final closing of the sold units took place following the registration. On the closings, the Lawyer was required to register partial discharges of the Second Davenport Mortgage. All of the units were sold with the exception of Suite 300, which was retained by Davenport.

[26] On April 19, 2005 the Lawyer sent a fifth reporting letter to A.O. setting out the mortgage renewal particulars for A.O.'s combined loans in the amount of $199,750. The letter only contained reference to Suites 200 and 250. The letter stated, in part:

We will continue to collect the monies owing from the purchaser on your behalf and deposit into your bank account at the end of each month. Your mortgage will be due and payable in full on April 30, 2006. If at that time you wish to renew for another 12 months, the mortgage will be renewed for a further 12 months.

[27] By November 25, 2005 the Second Davenport Mortgage had been discharged against all - 0 0 11 300 The f.awyer did not provide writt to D.N. or to A.O. regarding these discharges and there are no written instructions from D.N. or A.O. authorizing the discharges.

[28] On November 29, 2005 the Lawyer registered a mortgage in the amount of $429,500 against the Davenport Property, Suite 300, owned by Davenport. The borrower is identified as Davenport and the lender as the Firm, trustee for D.N. in the amount of $230,000 and for A.O. in the amount of $199,500 [sic] (the "Third Davenport Mortgage"). The Third Davenport Mortgage had an interest rate of 6% and ought to have been in the amount of $429,750. At the time of registration, the Third Davenport Mortgage was in second place behind a new first mortgage for $650,000 in favour of The Equitable Trust Company.

[29] On March 2, 2006 the Lawyer sent a sixth reporting letter to A.O. enclosing an "income tax receipt for 2005 interest income from your mortgage registered against 185 Davenport." The letter referred only to units 200 and 250 and the attached income tax of December 31, 2005" was _J receipt stated that the "mortgage principal amount owing as c $199,750.

[30] In September 2006 the Lawyer repaid A.O.'s loans and advised A.O. that "the mortgage that was registered against 185 Davenport Road" was discharged on September 21, 2006. The Lawyer did not provide A.O. with copies of any trust statements showing disbursement of A.O.'s loans. ONLSH

[31] On October 4, 2006 the Lawyer discharged the Third Davenport Mortgage and registered 2013 a new mortgage to secure D.N.'s continuing loans against Suite 300, in favour of the Firm, as trustee for D.N., and the Lawyer's parents (the "Fourth Davenport Mortgage"). There are no written instructions from D.N. authorizing the discharge of the Third Davenport Mortgage.

[32] On December 18, 2008 suite 300 was sold. On closing, the Fourth Davenport Mortgage was discharged. There are no written instructions from D.N. authorizing the discharge of the Fourth Davenport Mortgage.

[33] On January 5, 2009 the Lawyer registered a new mortgage against 247 Ranee Drive in Toronto, Ontario (the 'Ranee Property") in the name of D.N. (the 'Ranee Mortgage"). The Ranee Property was owned by 1304362 Ontario Limited, a company owned by the Lawyer and her husband. The Ranee Mortgage was in second place behind a first mortgage in the amount of $700,000 in favour of B & M Handelman Investments Limited and others.

[34] The Ranee Property was sold with a closing date of June 9, 2009. On June 3, 2009 the Lawyer discharged the Ranee Mortgage. There are no written instructions from D.N. authorizing the discharge of the Ranee Mortgage. Following the sale of the Ranee Property, D.N.'s loans were not secured by a registered mortgage on any property.

[35] On February 4, 2010 the Lawyer repaid D.N.'s loans, paying $168,230.97 in principal and $2,165 in interest.

[36] With the exception of the December 30, 2002 letter sent by the Lawyer to D.N., the Lawyer did not provide any written reports to D.N. regarding her total loan investment of $230,000. The Lawyer did not report to D.N. in writing regarding the:

(a) discharge of the First Davenport Mortgage on March 8, 2004;

(b) registration of the Second Davenport Mortgage on March 8, 2004;

10 7 r I

(d) registration of the Third Davenport Mortgage on November 29, 2005;

(e) discharge of the Third Davenport Mortgage on October 4, 2006;

(t) registration of the Fourth Davenport Mortgage on October 4, 2006; -Jc (g) discharge of the Fourth Davenport Mortgage on December 18, 2008; (0

(h) registration on the Ranee Mortgage on January 5, 2009; and

CO discharge of the Ranee Mortgage on June 3, 2009.

[37] Also with respect to D.N., the Lawyer did not:

(a) provide D.N. with copies of any trust statements showing disbursements of D.N.'s loans (and there is no evidence that D.N. requested copies of trust statements showing disbursements of her loans);

(b) ask D.N. to provide written authorization to discharge her mortgage security, or

(c) provide D.N. with copies of any mortgages registered, discharged or substituted on D.N.'s behalf as security for her loans.

[38] The Lawyer did obtain written authorizations from her parents, also clients, to discharge a mortgage they held against suite 100 of the Davenport Property, signed in advance of the final closing of the sale of Suite 100 to J.G.

(d) Particular 2(d): Alleged Failure to Register Mortgages in a Timely Manner

[39] The First D.N. Loan was transferred to Davenport by December 30, 2002. The funds from the First A.O. Loan were received by the Firm on January 24, 2003. The Lawyer registered the First Davenport Mortgage securing these loans on February 7, 2003 — 39 days after the First D.N. Loan and 14 days after the First A.O. Loan.

[40] The Second D.N. Loan and the Second A.O. Loan were advanced on April 25, 2003. The Lawyer registered the Second Davenport Mortgage securing the total combined loans of $429,500 (which ought to have been $429,750) on March 8, 2004 — 319 days after receiving the loans from D.N. and A.O.

[41] The Lawyer registered the final discharge of the Second Davenport Mortgage on November 25, 2005 but did not register the Third Davenport Mortgage until November 29, 2005, four days later.

[42] The Lawyer discharged the Fourth Davenport Mortgage on December 18, 2008 and registered the Ranee Mortgage on January 5, 2009, leaving a gap of 18 days.

[43] On June 3, 2009 the Lawyer discharged the Ranee Mortgage and did not register any replacement mortgage security securing D.N.'s loans.

11 35 3

(e) Particular 4: Alleged Failure to Complete Forms 18A and 18B Regarding Loans and Release of Collateral or Substitution of Security

[44] The Lawyer did not prepare an Investment Authority (Form 18A). Neither D.N. nor A.O. signed a Form 18A in connection with their first respective advances of funds to, or on behalf of, Davenport. c CO [45] The Lawyer did not deliver a complete Report on the Investment (Form 18B) to either D.N. or A.O. with respect to any of their loans, nor did she provide them with a reporting letter containing all of the required information, including the name and address of the borrower, the legal description of the property and the rank of the particular mortgage.

[46] The Lawyer did not complete Forms 18A and 18B regarding the discharges of the First Davenport Mortgage, the Second Davenport Mortgage, the Third Davenport Mortgage, the Fourth Davenport Mortgage or the Ranee Mortgage.

(f) Particular 5: Alleged Failure to Maintain a Mortgage Asset Ledger, Mortgage Liability Ledger and Monthly Comparisons

[47] The Lawyer did not maintain a mortgage asset ledger, a mortgage liability ledger, or monthly reconciliations of the principal balances outstanding on the mortgages and the balances held on behalf of D.N. and A.O. in relation to any of the mortgages. (g) Particular 8: Alleged Filing of Inaccurate or Misleading Member's Annual Reports

(i) Reporting Borrowing from Clients

[48] Lawyers are required to report in their Member's Annual Report ("MAR") to the Law Society whether they are indebted, directly or indirectly, to a person who, at the time of borrowing, was or had been a client.

[49] The First D.N. Loan was made to Davenport in December 2002 and the last mortgage, being the Ranee Mortgage, was discharged on February 4, 2010. The Lawyer's MARs from 2002 to 2006 do not report any indebtedness to D.N.

[50] The First A.O. Loan was made on January 24, 2003 and A.O. was repaid on September 21, 2006. The Lawyer's MARs from 2003 to 2006 do not report any indebtedness to A.O.

[51] On her 2007 MAR the Lawyer answered "Yes" in response to whether she was indebted, directly or indirectly, to a client. The Lawyer provided the following particulars: "Our company [Davenport] borrowed money from my parents [J.R. and D.M.R.], who are clients of our firm, and my adopted grandmother, [D.N]." The particulars do not include the amount of the loan, the security provided or particulars of independent legal representation for the lender, as required by the MAR. The Lawyer did not consult the Income Tax Act (Canada) for the definition of "related person" before completing her 2007 MAR. D.N. and the Lawyer are not related persons.

12 [52] The Lawyer's MAR for 2008 does not report her indebtedness to D.N.

[53] On her 2009 MAR the Lawyer answered "Yes" in response to whether she was indebted, directly or indirectly, to a client. While the Lawyer provided the following particulars, she failed to include the name of the borrower, the amount of the loan, the security provided and particulars of independent legal representation for the lender, as required by the MAR:

From 2003 through to February 2010, [my husband] and I borrowed monies from [D.N], a good friend of mine and also a client. We also were indebted to [A.O.] for the period from 2003 through to 2006 when she was paid back in full, although [A.O.] was never a legal client of ours. Finally, we borrowed monies from my parents during that same time period - 2003 to 2010 - and remain indebted to them and they are clients of ours as well.

The above-described loans were sometimes processed through corporations that [R. W.] and I owned to the three parties already mentioned above, namely [D.N.], [A.O.] and [J.R and D.M.R.].

(ii) Reporting Mortgage Transactions

[54] Lawyers are required to report on their MAR (i) whether they hold, directly or indirectly, mortgages or other charges on real property in trust for clients or other persons, and (ii) whether they acted for, or received money from, lenders whose loans were secured by a charge or charges on real property.

[55] The Lawyer received money from D.N. into the Firm's trust account in December 2002 and on April 25, 2003. The Firm is listed as the lender in trust for D.N. on the First Davenport Mortgage, the Second Davenport Mortgage, the Third Davenport Mortgage and the Fourth Davenport Mortgage, spanning 2003 to 2008.

[56] The Lawyer received money from A.O. into the Firm's trust account on January 24, 2003 and on April 25, 2003. The Firm is listed as the lender in trust for A.O. on the First Davenport Mortgage, the Second Davenport Mortgage and the Third Davenport Mortgage, spanning 2003 to 2006.

[57] The Lawyer answered "No" on her 2002 and 2003 MARs in response to whether she acted for or received money from a lender who was lending money secured by a charge on real property.

(h) Particular 9: Alleged Misappropriation of Trust Funds

[58] In 2002 and 2003 the Lawyer and her husband developed the Davenport Property and the Yonge Property for sale as residential condominiums.

[59] The Condominium Act, 1998 (the "Act") applies to the sale of residential condominium units. Under the Act, a "declarant" of a condominium is the company that owns the land

13 and registers the declaration and description. Section 81 of the Act requires that all deposit moneys paid by a prospective purchaser, including funds paid on interim occupancy, be held in trust by the declarant's solicitor or by a prescribed trustee until the completion of the transaction, unless the declarant delivers "prescribed security' to the purchaser to protect the deposits.

(i) The Davenport Property

[60] On November 25, 2002 J.G. entered into an agreement of purchase and sale ("APS") with Davenport to purchase Suite 100 at 185 Davenport for $373,000. The APS was executed by the Lawyer on behalf of Davenport. Under the APS, J.G. paid an immediate deposit of $25,000 to Davenport's real estate agent with the balance of the purchase price due on completion of the transaction. The APS also provided that an additional 25% of the purchase price, less the deposit paid to the agent, was due on the interim occupancy date "to be held in trust" by the Firm pending completion or other termination of the APS. J.G. was represented by a lawyer on both the interim occupancy and final closing.

[61] The interim occupancy closing for J.G. took place on January 30, 2003 and the Possession Statement of Adjustments directs J.G. to pay $68,397.24 to the Firm in trust, representing the supplementary deposit or interim occupancy funds, pursuant to the APS. This amount was paid by J.G. and deposited to the Firm's trust account on February 3, 2003.

[62] By April 4, 2003 the Lawyer disbursed all of J.G.'s interim occupancy funds to the Fiiiifs general account by eight trust cheques, each signed by the Lawyer. The Lawyer relied on a document entitled Bond, Guarantee and Indemnity, dated December 6, 2002, and a document entitled Bonding Agreement, dated January 30, 2003 (collectively the `Bonding Agreements"), as her authority for using J.G.'s trust funds in this manner. The Lawyer did not provide a copy of the Bonding Agreements to J.G. or his solicitor.

[63] The Bond, Guarantee and Indemnity states:

364808 Ontario Limited ("364808') is receiving monies from Walton Advocates in trust to finance construction of the five condominium suites at 185 Davenport Road. In consideration of the advance of these funds, and recognizing that something may happen prior to the closing of the sale of these five suites that requires repayment of the monies to Walton Advocates in trust or ultimately to the purchasers, both 364808 and Ron and Norma Walton personally, them being the only directors of 364808, hereby bond, guarantee and indemnify Walton Advocates in trust and ultimately the purchasers for the monies being advanced to 364808. If under any circumstances the monies advanced need to be re-paid to Walton Advocates in trust, 364808 and Norma and Ron Walton will repay such funds forthwith upon the request being made by Walton Advocates in trust. Otherwise they will be applied against the ultimate purchase of units once condominium registration is obtained.

[64] The Bonding Agreement states:

14 WHEREAS 364808 is constructing condominium units for re-sale at 185 Davenport Road, Toronto, Ontario;

AND WHEREAS there will be purchasers who provide deposit monies to Walton Advocates in trust towards the purchase of one of those condominium units;

AND WHEREAS 364808 wishes to use those purchaser deposits to pay for the ro completion of construction;

AND WHEREAS Norma and Ron Walton are Directors and Shareholders of 364808; ONLSHP THEREFORE 364808 and Norma and Ron Walton in their personal capacity

hereby agree as follows: 2013

1. 364808 will use the funds to pay to complete the construction of the units being purchased.

2. Forthwith upon demand, 364808 will return to Walton Advocates in trust the full amount of the deposits that are being used for constructio n.

3. If 364808 does not forthwith return the monies, Norma and Ron Walton personally will forthwith return the monies and will in turn collect the monies from 364808.

[65] On March 4, 2003 J.H. signed an APS to purchase Suites 200 and 250 at the Davenport Property for the initial price of $600,000. The Lawyer and her husband accepted J.H.'s APS on behalf of the vendor, Davenport, on March 8, 2003. The APS required that J.H. pay an immediate deposit of $25,000 to the vendor's real estate agent to be held in trust pending completion or other termination of the APS, with the balance of the purchase price due on completion of the transaction. The APS also provided that an additional $125,000 was due on the interim occupancy date "to be held in trust' by the Firm pending completion or other termination of the APS. The initial interim occupancy date was in July 2003 but was later changed to August 27, 2003. J.H. was represented by a lawyer on the interim occupancy closing.

[66] On June 27, 2003 the Lawyer requested an additional deposit of $35,000 be paid to the Firm, in trust, to bring the total deposit up to 10% of the purchase price. On July 3, 2003 J.H. provided a bank draft for $35,000 payable to the Firm, in trust. The funds were deposited to the Firm's trust account on July 4, 2003. J.H. also provided an additional $20,000 to the Firm for extra construction work. By July 18, 2003 the Lawyer disbursed J.H.'s additional deposit of $35,000 from the Firm's trust account to Hazelton.

[67] The interim occupancy closing took place on August 28, 2003 and the Possession Statement of Adjustments directs that $89,012.64 (this reflects the unadjusted original

15 amount due on the interim closing, being $125,000, with a credit of $35,000), representing the additional sum required pursuant to the APS, be paid to the Firm, in trust. J.H. provided a certified cheque dated August 29, 2003 in the amount of $89,012.64 payable to the Firm, in trust. The cheque was deposited to the Firm's trust account on September 2, 2003.

[68] By November 1, 2003 the Lawyer disbursed all of J.H.'s additional deposit and interim occupancy funds, totaling $124,012.64, to Hazelton, Rose and Thistle, the vendor's real estate agent and the Firm's general account. The Lawyer signed all the trust cheques disbursing the funds. The Lawyer relied on the Bonding Agreements as her authority for using J.H.'s trust funds in this manner.

(h) The Yonge Property ONLS 2013 [69] 1549670 Ontario Inc. ("154') is a company owned by the Lawyer and her husband and Located at 30 Hazelton Ave., Toronto. 154 owns the Yonge Property, a mixed use project containing both residential and commercial units. 154 sold five residential units in the Yonge Property, namely Suites 204, 205, 206, 207 and 304 in five separate transactions. Hazelton acted as agent for the vendor, 154, and the Lawyer acted for both Hazelton and 154 on each transaction. The five APSs for the Yonge Property all had the following provisions:

a) the APS was made between the purchaser and Hazelton;

b) there were staged deposits payable by the purchaser to Hazelton, in trust; and

c) the following clause was the heading "General":

30. The Purchaser acknowledges that amounts payable to the Vendor's solicitors pursuant to this Agreement, if any, may be paid by the Vendor's solicitors to the Vendor or as the Vendor may direct, upon delivery of prescribed security to the Purchaser for repayment in accordance with the provisions of the Act or upon the Purchaser's default hereunder and the Purchaser hereby irrevocable [sic] authorizes and directs the Vendor's solicitors to release such funds, if any, to the Vendor or as it may direct in such event. The foregoing may be pleaded as an estoppcl or •e--Vendor or the Vendor's solicitor with respect to such deposit funds.

[70] On the interim occupancy closings of the five units, the Firm received a total of $191,188.23, in trust, from the purchasers. These funds were immediately disbursed from the Firm's trust account by the Lawyer to Hazelton in trust. The Lawyer relied on the Bonding Agreement for the Yonge Property as her authority for using the trust funds in this manner.

(j) Particular 10: Alleged Co-Mingled Personal/Corporate Funds with Client Funds

16 [71] During 2003 to 2006 the Firm regularly received and deposited into its trust accounts funds belonging to Davenport, Rose and Thistle and 154, all corporations owned by the Lawyer and her husband. The Lawyer acknowledges that corporate and personal funds were put through the Firm's trust accounts and co-mingled with client funds.

[72] In addition to the facts agreed upon by the parties in the ASF, the parties also agreed that fact witnesses would be called at the hearing to give evidence that does not contradict the facts agreed upon in the ASF. The Law Society called the following witnesses: Jan Walker, an intake resolution officer with the Law Society; Vicki MacArthur of Teranet; Auldeen Oldham, otherwise known as A.O. (D.N. has not waived solicitor-client privilege but A.O. has waived her privilege); and Catherine Helen Campbell, assistant manager, legal counsel to Investigations at the Law Society. An expert report by Reuben Rosenblatt was admitted on consent. The Lawyer gave oral evidence at the hearing on ONLSHP

her own behalf. The Lawyer did not call any additional witnesses. 2013

EVIDENCE OF THE LAW SOCIETY

(a) Jan Walker

[73] A.O. filed a complaint against the Lawyer with the Law Society on June 13, 2006. Ms. Walker is an intake resolution officer at the Law Society. She has been employed with the Law Society since 1997. Ms. Walker was assigned A.O.'s complaint and first contacted the Lawyer in early August 2006. The Lawyer explained to Ms. Walker that the reason for the delay in repayment of A.O.'s loan was that "[J.H.] was trying to arrange other financing." Ms. Walker spoke to the Lawyer again on August 15, 2006 and the Lawyer advised her that A.O. "did not appear to understand that the mortgage was not with [the Lawyer]." On August 30, 2006 Ms. Walker spoke to A.O. and A.O. asked Ms. Walker to hold off taking any further action with the Lawyer because the Lawyer told A.O. that "if she went back to the Law Society to cause a problem then there would be no payment." Ms. Walker kept contemporaneous notes of her conversations with both the Lawyer and A.O.

[74] Ms. Walker confirmed that the Lawyer did not advise her of any health issues or of the birth of her twins during their telephone conversations. Ms. Walker stated that if the Lawyer had, then Ms. Walker would have made a notation in her notes. There were no such notations.

(b) Vicki MacArthur

[75] The affidavit of Ms. MacArthur sworn on February 3, 2012 was submitted on consent. Ms. MacArthur is the director of product development at Teranet. Attached to the Lawyer's March 5, 2004 reporting letter to D.N. was a document purporting to be a mortgage registered against the Davenport Property (the 'Purported Mortgage"). Ms. MacArthur's affidavit explains that when a document is being prepared, prior to submission to the Land Registry Office, Teranet automatically generates the notation "This document has not been submitted and may be incomplete" and the text "In preparation on [date] at [time]" on the mortgage document. Ms. MacArthur goes on to

17 explain that once the document has been successfully submitted to the Land Registry Office, text such as The applicant(s) hereby applies to the Land Registrar" and the text "Receipted as [instrument number] on [date] at [time]." Ms. MacArthur concluded her affidavit by stating "I am not aware of any circumstances in which the [Purported Mortgage] would be generated by Teraview, without the report requirements identified above regarding documents in preparation, submitted or certified." There was no cross- examination of Ms. MacArthur.

[76] On February 7, 2008 A.O. swore an affidavit. A.O. also attended the hearing to give her z evidence orally, adopting her affidavit. A.O. was cross-examined. o [77] The Lawyer told A.O. that J.G. needed to borrow money for the purchase of a unit at the Davenport Property and that the Lawyer would arrange a mortgage. A.O. stated: "I thought the mortgage was for [J.G.] and that it would be a first mortgage. I probably assumed the mortgage would be a first mortgage. The Lawyer did not specifically discuss that issue with me." Further, A.O. thought "the mortgage would be held in the name of [D.N.] and me," that J.G. was paying the interest on our loan and that the Lawyer was depositing the payments into our accounts as a matter of convenience" and she "expected the mortgage to be registered immediately." A.O. had the same beliefs about the Second A.O. Loan that she believed to be a mortgage to J.H. She went on to state:

I never would have loaned money to a number company owned by the Lawyer and her husband. I would have investigated the whole situation if I had known a number company was borrowing the money. ...

[78] With respect to the Second A.O. Loan, made on April 25, 2003, A.O. "expected the new mortgage to be registered right away by the Lawyer." Regarding the Second Davenport Mortgage, A.O. confirmed that the Lawyer never asked her if she and D.N. wanted their loans rolled into one mortgage.

[79] A.O.'s loan was due and payable on April 30, 2006. On April 4, 2006 she informed the Lawyer that she did not wish to renew the mortgage and asked that her $199,750 principal be remitted to her bank account on April 30, 2006. When the funds were not returned to A.O. by June 10, 2006, she submitted a complaint to the Law Society. On June 12, 2006 A.O. advised the Lawyer that she wanted her money and was going to seek assistance from the Law Society. A.O. kept notes of her conversations with the Lawyer. A.O. stated that the Lawyer became upset with her and told her: "We have your money not the Law Society. All the Law Society will do is call us and we will explain what's going on." The Lawyer agreed to pay A.O. 11% interest on her loan from June 1st to the date she received repayment. Through the summer of 2006 the Lawyer continued to tell A.O. that she would receive her money by a certain date but each time she failed to make payment. On August 15, 2006 the Lawyer telephoned A.O. and stated: "If you call the Law Society again I will not pay you." It was not until September 21, 2006 that A.O. finally received full repayment of her loans.

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[80] In her evidence, A.O. was clear that she relied on the Lawyer to protect her interests and she did not enquire about the details of the mortgages because "[the Lawyer] was looking after it; she was the lawyer." A.O. confirmed that she never authorized or consented to the Lawyer registering discharges of any of the mortgages and that the Lawyer had never

suggested to A.O. that she ought to consult another lawyer regarding the loans. • J (d) Catherine Campbell

[81] Ms. Campbell, legal counsel to Investigations at the Law Society, interviewed the Lawyer on February 19, 2010. The Lawyer admitted in her interview that "in hindsight" she appreciated that D.N. was a client at the time of the loans but maintained that she did not appreciate that D.N. was her client at the time of the loans. Similarly, with respect to ONLSH Rule 2.06(5), the Lawyer stated that in hindsight she realized that the loan transactions

were "neither sensible nor in accordance with the Law Society's rules" and that she 2013 "would do it differently in the future." The Lawyer also confirmed that she did not provide Foun 18A to D.N. or A.O. at any time. During the interview, the Lawyer took the position that the reporting letters described in detail above were simply chatty letters and not formal reporting letters. With respect to the Purported Mortgage, the Lawyer could not offer any reasonable explanation for it during her interview and undertook to find out if it was ever registered.

[82] In November 2006 Ms. Campbell wrote to the Lawyer seeking a written response to a number of questions. The Lawyer replied on January 31, 2007, writing that J.G. and J.H. required mortgages to finance their purchases of condominium units and that the Lawyer arranged for D.N. and A.O. to provide the money for these mortgages. The Lawyer stated that J.G. and J.H. paid the interest on the mortgages. The Lawyer wrote:

[J.G.] took possession of Suite 100 ... and he paid interest on a mortgage of $279,750, representing 75% of the purchase price ... We arranged with [D.N.] and [A.O.] to provide the funds for that mortgage which was registered against [the Davenport Property] for $279,750. .... We agreed to collect the monies from [J.G.] each month and automatically deposit them into [D.N.'s] and [A.O.'s] and accounts, which we did. This trusteeship arrangement was for banking convenience only, and was to the benefit of [A.O.] and [D.N.] and they were both delighted with the arrangement.

1 - • •• 01114 4 • ifi •uestions asked b Ms. Ca .bell:

1. ... I considered it a non-arms length transaction and therefore did not provide either [A.O.] or [D.N.] with Forms 18a and 18b. I did provide them with most of the information contained on those forms verbally. In future, I will provide forms 18a and 18b in any private transactions to avoid any misunderstandings.

2. I did not prepare a Client Ledger or Mortgage Asset Ledger ... In future, I will prepare them even if the loan is between family or friends;

19 .3 6 1

3. [A.O.] was paid interest only on the first day of each month for the prior month, and [J.G.] and [J.H.] paid the interest income and we then transferred it to [A.O.];

[84] Ms. Campbell testified that there is no evidence in any of the Lawyer's files that show that any money was ever loaned to J.G. or J.H. by either D.N. or A.O. The interim occupancy fees being paid by J.H. and J.G. were used to pay the interest to D.N. and A.O. on the monies loaned. During the interview the Lawyer explained to Ms. Campbell that she felt that she was "administering" the mortgages for A.O. and D.N. and this was her reasoning for registering them in the name of the Firm in trust for A.O. and D.N. At ONLSH no time did the Lawyer obtain a written consent, authorization or direction from A.O. or

D.N. 2013

[85] During her interview with Ms. Campbell the Lawyer said that she relied on the Bonding Agreements as her authorization for using the purchaser's deposit funds and releasing them from the trust account because she believed that the Bonding Agreements protected the deposit funds. The Lawyer prepared the Bonding Agreements and told Ms. Campbell that she did not consult with any other lawyers. The Lawyer did speak to three builders about the Bonding Agreements and she relied on their advice that she was permitted to use the deposits as long as they were bonded. Despite the wording of the Bonding Agreements, the funds were never paid to Davenport but were rather paid to the Firm because the Firm had paid the vendors. The funds were deposited into the Firm's trust account and then transferred to the general account.

[86] In her interview, the Lawyer stated: Now with the benefit of time and far more knowledge about how you go about doing these sorts of developments, I realize that the fact that I was both the developer and the lawyer was a real problem because I did not differentiate between [the Firm] in trust and the developer because we were one and the same in my mind." But the Lawyer maintained her position that at the time of the creation of the Bonding Agreements she "had no question in [her] mine and she "was a hundred percent confident that everything we were doing was proper." The Lawyer admitted that, in hindsight, it was "very stupid" not to look at the relevant legislation and regulations concerning "prescribed security."

[87] The-Lawyer confirmed in her intemieith__Ms._Campbell that no notice was given to the purchasers or their lawyers regarding the dispersing of the deposit funds from the trust account and the Lawyer also confirmed that there were no assets backing up the Bonding Agreements. During the interview, the Lawyer also stated that, in hindsight, she agreed that the Bonding Agreements did not entitle her to use the trust funds. In correspondence to the lawyers for two purchasers, the Lawyer assured them that "the deposit will be held in trust at ID Canada Trust attracting interest, albeit a nominal amount, until the condominium is registered and title can be transferred." During the interview, Ms. Campbell put to the Lawyer that it appeared that the Lawyer was trying to mislead the purchasers and their lawyers. The Lawyer responded: That was never my intention. I was always very confident that what we were doing with the bonding

20 agreement was in accordance with generally accepted practices in the construction industry • • • .

[88] Ms. Campbell testified that she viewed a number of deficiencies in the Lawyer's reporting letters to D.N. and A.O. including the borrower of the funds not being clearly identified, no reference to the priority of the mortgage, and no reference to any prior encumbrances. In reviewing the Lawyer's files, there was no evidence that any money ro was ever lent by D.N. or A.O. to J.G. or J.H. and there was no evidence of any written o consents or authorizations from either D.N. or A.O. Further, there was no evidence in the Lawyer's file about reporting to A.O. on the registration of the Third Davenport Mortgage or any of the discharges. c0 z 0 [89] There was no cross-examination of Ms. Campbell.

(e) Report of Reuben Rosenblatt

[90] The report of Mr. Rosenblatt was admitted on consent. Mr. Rosenblatt's opinion was that the Lawyer 'Tell below the standard of care of a reasonably competent solicitor" both in the manner that she dealt with D.N.'s and A.O.'s mortgage transactions and in disbursing the trust funds of the purchasers of proposed condominium units. He also concluded that a reasonably competent solicitor would have recognized that D.N. was her client at the time of the loans, that the Rules required that D.N. have independent legal representation, and that Forms 18A and 18B were required to be completed. In addition, a reasonably competent solicitor would have explained the risks of the loan to D.N. The same conclusions apply to A.O.

[91] Mr. Rosenblatt was also of the opinion that the Lawyer fell below the standard of care of a reasonably competent solicitor practicing in Ontario in the following ways:

(a) by failing to recognize that A.O. and D.N. were her clients;

(b) by failing to advise A.O. and D.N. to obtain independent legal representation;

(d) by failing to explain the—risks of the lean and_mortgage_irmestrnents nnd_failing to disclose material facts;

(e) by signing discharges of mortgages without written authorizations or directions from D.N. or A.O.; and

(I) by failing to register mortgages in a timely manner.

[92] Further, Mr. Rosenblatt expressed the opinion that the Firm was in breach of the terms of the trust in favour of the purchasers of condominium units by releasing the trust funds without authorizations or directions, and that the Lawyer fell below the standard of care

21 3 3

of a reasonably competent solicitor by releasing those trust funds.

[93] The report also explained the concept of a phantom mortgage as follows: when a building is being developed into a condominium, a vendor may require the purchasers to take possession of their unit as soon as they are fit for occupancy, but before closing; this date is called the interim occupancy date or closing; title does not transfer on this date and the 171c purchaser is not required to pay the purchase price; but the vendor does charge an ro

occupancy fee while the purchaser is living in the unit prior to the final closing date and 0 r transfer of title. To calculate a reasonable occupancy fee, an APS sets out a number of factors such as taxes, monthly common expenses and interest that the purchaser would U) if they had a mortgage for the balance of the purchase price that would hypothetically pay z eventually be due on closing. This hypothetical mortgage interest component of the o interim occupancy fee is called the phantom mortgage.

EVIDENCE OF THE LAWYER

[94] The Lawyer gave evidence on her own behalf. She was born in 1970 in London, Ontario and received her LL.B. in 1993. The Lawyer articled with the family law firm Epstein Cole LLP and was called to the Bar in February 1995 along with her husband. From 1995 to 2000 the Lawyer's practice was focused on family law, with some ancillary wills/estate and real estate work. In 2002 the Lawyer obtained an Executive MBA. The Lawyer also self-published a book called "Seven Steps to Successful Separation." In 2002/2003 approximately 20-30% of the Lawyer's practice related to real estate. The Lawyer's current practice is 50% real estate and 50% corporate/commercial.

[95] The Lawyer first entered into the real estate development business in 2001 when she purchased a property on Hazelton Avenue in Toronto with her husband. They used part of the property as the office for the Firm, and they severed and redeveloped the remainder of the property resulting in a $1.2 million increase in its value.

(a) D.N. and A.O.

[96] The Lawyer described in detail how she met D.N., initially did some wills/estate work for her, and then developed what the Lawyer described as a close relationship with D.N. that continued to the date of the hearing. With respect to D.N.'s loans, the Lawyer said that the only reason that she felt comfortable with D.N. investing with her was because J.G. •• !I tte. 0 - •ase—Suite300 at a price that validated_the investment. The Lawyer said that she would never have agreed to D.N. investing unless J.G. made the purchase and that she saw D.N.'s investment as a win-win situation because the Lawyer would also be benefitting with a better mortgage rate. At the time of her investment, D.N. was in her mid-eighties.

[97] During her evidence, the Lawyer stated that she did not believe that independent legal advice was necessary for D.N. because the Lawyer believed that her and D.N.'s interests were the same and she viewed her relationship with D.N. as one of grandmother- granddaughter and not one of lawyer-client or lender-borrower. While the Lawyer considered herself to be D.N.'s lawyer on the sale of her home, she did not view her role

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as one of a lawyer in D.N.'s investment "because it was between me and her, as opposed to me as the lawyer representing her with a third-party lender." She also stated that she was unaware of the Rules, the By-Laws and Forms 18A and 18B at the time of D.N.'s investment. Under cross-examination the Lawyer did not disagree that she was D.N.'s lawyer, but took the position that with respect to D.N.'s loans, she viewed them as an investment opportunity and not as a solicitor-client relationship. _Jc 0 [98] The Lawyer described being introduced to A.O. by D.N. and A.O.'s desire to invest and

receive the same return that D.N. was receiving. A.O. and the Lawyer did not develop a 110 close relationship like the Lawyer testified she did with D.N., but the Lawyer said that she treated A.O. the same way that she treated D.N. and did not view A.O. as a client. The Lawyer hired A.O.'s son to work at the Firm and he was privy to all the ONLSHP conversations concerning Davenport. At the time of her investments, A.O. was in her

mid-seventies. 2013

[99] The Lawyer stated that it was "crystal clear that A.O. understood that she was loaning the funds to the Lawyer and the Lawyer's husband and not to J.G. or J.H. because the Lawyer advised her verbally. With respect to the First A.O. Loan, the Lawyer told the panel that all of the funds had been used to renovate the Davenport Property. Concerning the various reporting letters sent to A.O., the Lawyer said the letters were intended to be "chatty" personal letters and not formal reporting letters. The Lawyer admitted that she was paying less interest than an institutional lender would have charged for a second mortgage, which is what D.N.'s and A.O.'s loans were secured by. Following the condominium registration of the Davenport Property in January 2005, the Lawyer said that she telephoned both D.N. and A.O. to advise them that their mortgages would be discharged against the individual suites, with the exception of Suite 300, and that their mortgage would remain as against Suite 300 only.

[100] In her evidence, the Lawyer described what she called a "perfect storm" in early 2006: The Lawyer began winding down her practice in preparation for a maternity leave; in March A.O. called the Lawyer and demanded her investment be returned; this caught the Lawyer by surprise; the Lawyer gave birth to twins on April 22, 2006; after only a month, the Lawyer returned to the office and brought her twins to the office with her; the Lawyer described the lack of sleep and stress about paying A.O. back as hampering her law practice; from March 2006 to October 2006 (when the money was returned to A.O.) was the only time in the Lawyer's professional career that she could not meet her obligations. ncl hexhushand_ simply did not have the funds available to pay back A.O. at the time. It took the Lawyer from April to September of 2006 to pay back A.O. and she did so in the following installments:

(a) on June 9, 2006 the first $50,000 repayment came from the Lawyer's legal receipts; and

(b) on September 21, 2006 the remaining $149,750 was repaid to A.O. (the Lawyer borrowed $100,000 from her parent and the remainder came from additional funds owed to the Lawyer by her clients).

23 [101] Throughout her evidence the Lawyer was very respectful to A.O.'s position and appeared to be genuinely embarrassed and upset by the fact that she was unable to repay A.O. immediately upon A.O.'s demand. During this period in 2006 the Lawyer decided to wind down her family law practice and continue to only do legal work for the companies that she owned. _J [102] Concerning the threat that A.O. says the Lawyer made to her about contacting the Law t13 Society and filing a complaint, the Lawyer explained that A.O. told the Lawyer that if the 0 Lawyer did not pay her back, then the Law Society would. The Lawyer denied ever threatening A.O. but did admit to being sharp with A.O. on the phone because she was getting frustrated with her. She explained that emotions were running high on both sides during the telephone conversation but the Lawyer apologized to A.O. and promised that she would get A.O.'s money back to her. The Lawyer also stated that during the various ONLSHP 13 telephone exchanges she had with A.O., A.O. told her that she had another investment opportunity that would pay her 11% and as a result, the Lawyer agreed to increase the interest rate to 11% on A.O.'s loans.

[103] Under cross-examination the Lawyer reiterated her position that she did not consider A.O. to be a client. The Lawyer blamed the Law Society for poisoning A.O.'s mind and stated that A.O.'s understanding of her investment changed after A.O.'s contact with the Law Society. The Lawyer could not recall if she ever told A.O. that her mortgage was second in priority and she confirmed that there were never any discussions with D.N. or A.O. regarding loan to value ratios. The Lawyer also stated that she did not inform A.O. about the Laurentian Mortgage because she forgot that it was registered against the Davenport Property. With respect to independent legal advice for D.N. and A.O., the Lawyer stated that if it had ever occurred to her that they needed it, then she would have encouraged them to obtain it.

[104] With respect to the Laurentian Mortgage, the Lawyer said that she forgot that she agreed that Laurentian could register a collateral mortgage against the Davenport Property, which essentially gave D.N. and A.O. third priority. D.N.'s and A.O.'s loans were registered behind a $1 million mortgage to Foremost and a $4.5 million collateral mortgage to Laurentian, totaling $5.5 million. The Laurentian Mortgage was severable from the principal mortgage registered against the Yonge Property. In the event of a default, Laurentian could enforce its security on the Davenport Property and the Yonge Property simultaneously. The Lawyer explained that she did not immediately register the various Davenport Mortgages because—she—vie~,Pr1 the TAN and A O as incredibly strong and secure and she did not perceive any immediate risks to their loans. Further, the Lawyer stated that she did not perceive the collateral mortgage as a significant risk to D.N.'s and A.O.'s loans.

11051 In cross-examination the Lawyer denied that any of the letters sent to D.N. or A.O., described above, were reporting letters. She explained that she registered the mortgages in trust on behalf of D.N. and A.O. because the Lawyer felt that they wanted her to handle everything and D.N. and A.O. did not want any hassle. The Lawyer agreed that not registering the Second Davenport Mortgage for 319 days was an obscene gap and stated that it was not registered for that long through inadvertence. With respect to the

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Purported Mortgage, it was sent to A.O because A.O. had asked for a copy of the mortgage document securing her second loan a few weeks prior. The Lawyer testified that the document was a mystery and that her law clerk completes all of her Teranet work. The Lawyer did not call her law clerk as a witness.

[106] With respect to her failure to report the various mortgages held in trust by the Firm for -J D.N. and A.O. on her MAR, the Lawyer stated under cross-examination that it never ro occurred to her that D.N. and A.O. were clients until Ms. Campbell explained it to the

Lawyer during their interview. 110

[107] In her evidence the Lawyer described in detail the purchase by J.H. and the resulting ONLSHP legal proceeding and complaint against the Lawyer by J.H. The Lawyer testified that J.H. did not drive but wanted a parking space at the Davenport Property so that he could rent it out. The APS entered into by J.H. bargained for a parking space. As a result of a zoning issue, there were not enough parking spaces available at the Davenport Property and the Lawyer offered J.H. a reduction in his purchase price if he agreed to complete the purchase without a parking space. The Lawyer says that following the offer J.H. was silent for a couple of months and then the Lawyer received a letter from J.H.'s lawyer advising that J.H. did not want to complete the purchase. Negotiations between J.H.'s lawyer and the Lawyer followed and the Lawyer testified that an agreement was reached whereby J.H.'s deposit money could be used by the Lawyer to upgrade and renovate the suites J.H. intended to purchase to make them more marketable. The renovations were completed and the two units were sold to two new purchasers. The Lawyer was then required to complete an accounting and she stated that it was her belief that she owed J.H. approximately $40,000.

[108] Following the accounting J.H. fired his lawyer and hired a new lawyer who made a number of demands on behalf of J.H., including that the Lawyer continue to hold the deposit in trust, and filed an application against the Lawyer and a complaint with the Law Society. The Lawyer stated that ultimately a settlement was reached with J.H. where the Lawyer was required to pay J.H. approximately $125,000. She said that this was because J.H. had a contingency fee agreement with his lawyer and he required this amount to break even. Unsigned minutes of settlement were produced at the hearing; however, the Lawyer could not locate a copy of the signed minutes of settlement. The Lawyer was represented by counsel during these proceedings and negotiations and she stated that her lawyer and J.H.'s first lawyer had an agreement that the Lawyer could use J.H.'s deposit (trust funds) to complete the improvements and renovations to the suites at the Davenport Property. None of J.H., J.H.'s first or second lawyer, nor the Lawyer's lawyer were called as witnesses.

[109] During cross-examination various letters from J.H.'s first lawyer demanding repayment of J.H.'s deposit money were put to the Lawyer. The Lawyer stated that these demands were only made to show mitigation of damages and so that J.H. could secure a potential court action.

25 [110] In her evidence the Lawyer explained that she and her husband gave personal guarantees in the J.H. dispute and the Laurentian Mortgage but did not offer personal guarantees to either A.O. or D.N.

(d) The Lawyer as Condominium Developer

_1 [111] The Lawyer admitted that in hindsight, her knowledge of condominiums was very limited o in 2002 and neither she nor her husband sought outside counsel on the conversion to condominiums process. At the time, the Lawyer and her husband only consulted with architects and surveyors and the Lawyer believed that she knew what she was doing. a_ U) [112] Additionally, the Lawyer admitted that at the time that she drafted the Bonding Agreements she was seven years out and she did not understand what they were, or what "prescribed security" meant under s. 81 of the Act. It never occurred to her that the Bonding Agreements did not satisfy the requirements. The Lawyer's only familiarity with the Act at the time was with respect to the disclosure requirements for purchasers. Under cross-examination the Lawyer admitted to not reading the entire Act and that she only referred to the Act when specific issues arose as the development process moved forward. The Lawyer also admitted that none of the purchasers or their lawyers knew about the Bonding Agreements or her intention to use their deposits. The Lawyer did not give a copy of the Bonding Agreements to any of the purchasers or their lawyers. The Lawyer believed that the Bonding Agreements were her authority to release the deposit funds from trust and to use those funds for renovations.

[113] The Lawyer also emphasized during her evidence that she had no concept that she was doing anything wrong and that at all times, all the funds were fully covered. Further, the Lawyer stated that the only reason she co-mingled the funds was because she was the lawyer for all of the companies.

[114] Under cross-examination the Lawyer described herself as overly confident about her abilities in the condominium development process and that she now realizes that she has more and more to learn about the law. The Lawyer stated that she did not seek third party legal advice regarding the conversion to condominiums of the Davenport Property or the Yonge Property because she was her own client on the condominium developments and she felt that she could be more relaxed with legal formalities.

[115] The Lavvyer did not call any other witnesses. The Lawyer did seek to rely upon a statement of D.N. given on February 5, 2010. The Law Society did not object to the statement being admitted as proof that it was given; however it took the position, correctly, that the statement cannot be admitted as proof of the truth of its contents.

CREDIBILITY AND ADVERSE INFERENCES

[116] The Law Society submits in its written submissions that the various explanations provided by the Lawyer for the events described above "lack an air of plausibility or are unreasonable when placed in the context of other evidence" and as a result the Lawyer was not a credible witness and no weight should be given to her evidence. The Law

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Society relies on the Court of Appeal's decision in Law Society of Upper Canada v. Neinstein,` and the Hearing Panel's decision in Law Society of Upper Canada v. Wong.' The Lawyer in response relies on the Supreme Court of Canada's decision in R. v. W.(D.) 3 on the issue of credibility.

find that no weight should be _J [117] We respectfully decline the Law Society's invitation to c given to the Lawyer's evidence. CO

was not a credible witness, the [118] In addition to asking this panel to find that the Lawyer 110 Law Society asks this panel to draw an adverse inference from the Lawyer's failure to call various witnesses that the Lawyer said could corroborate her position, including her law clerk, various builders and architects who she conferred with during the development ONLSHP of the Davenport Property and the Yonge Property, her lawyer in the proceedings brought Law Society relies on the Court of Appeal's decision in by J.H. and J.H. himself The 2013 Bernardi (c.o.b. Bruno 's Pizzeria & Main Street Billiards) v. Guardian Royal Exchange Assurance Co.' With respect to D.N., the Law Society asks this panel to reject the Lawyer's claims concerning D.N. because they are not supported, but rather contradicted, by other evidence.

[119] In response the Lawyer takes the position that the evidence of these witnesses would have been "superfluous and unnecessary" and that the Law Society equally chose not to call these witnesses. We agree with the Lawyer's position to the extent that the Law Society had an equal opportunity to call these witnesses but chose not to. Adverse inferences are to be drawn sparingly. We do not find it appropriate to draw an adverse inference in the circumstances of this case and rely upon the decision of Justice Lax in Andersen v. St. Jude Medical, Inc.' In short, we do not see any evidentiary gaps on material issues that demanded a response from the Lawyer and, as a result, we decline to draw any adverse inference.

ANALYSIS

[120] There was some disagreement between the Law Society and the Lawyer on the appropriate standard of proof We agree with the Law Society's submission that the appropriate standard is proof on a balance of probabilities and that all of the relevant evidence must be scrutinized "with care to determine whether it is more likely than not that an alleged event occurred.'

[121] The Lawyer has taken the position that no professional misconduct has occurred, that her conduct was as a result of a series of honest mistakes, and that she did things because of her own faith and belief in her own abilities. While some of her actions, including the

2010 ONCA 193 2 2009 ONLSHP 60

3 [1991] 1 S.C.R. 742 4 [1979] O.J. No. 553 (C.A.) at paras. 28-32. 5 2012 ONSC 3660 (S.C.J.) at paras. 31-37. 6 F.H. v. McDougall,[2008] 3 S.C.R. 41 at paras. 45 and 49.

27 Lawyer's reliance on the Bonding Agreements, could be described as technical violations of the Rules, the Lawyer takes the position that her actions did not bring discredit to the profession and that everyone who invested with her made money. The Lawyer submitted that it is difficult to characterize her actions as misconduct under circumstances where A.O. and D.N. were satisfied with her representation, where neither received a poor bargain and where the Lawyer continues to obligingly manage D.N.'s financial affairs. We are of the view that even in cases where no one loses money, or no measurable harm is done, a finding of professional conduct may be made.

Particular I: Conflict of Interest

[122] Rule 2.06(5) states:

In any transaction, other than a transaction within the provisions of subrule (4), in which money is borrowed from a client by a lawyer's spouse or by a corporation, syndicate, or partnership in which either the lawyer or the lawyer's spouse has, or both of them together have, directly or indirectly, a substantial interest, the lawyer shall ensure that the client's interests are fully protected by the nature of the case and by independent legal representation. [Emphasis added]

[123] While the Lawyer now agrees in hindsight that both D.N. and A.O. were her clients during the loan transactions, she has taken the position the she did not realize that D.N. and A.O. were her clients while her corporation was borrowing money from them and, as a result, she is not guilty of professional misconduct. The Lawyer says that she merely saw her role as one of facilitator for the investments, as opposed to acting as a lawyer. The Law Society, on the other hand, takes the position that the Lawyer knew at all material times that both D.N. and A.O. were her clients because: (i) she sent reporting letters to D.N. and A.O.; (ii) she had a longstanding solicitor-client relationship with D.N.; (iii) the Lawyer was providing legal services; (iv) the Lawyer knew that neither D.N. nor A.O. were legally sophisticated; and (v) the Lawyer admitted her awareness during her initial interview with Ms. Campbell.

[124] We agree with the submissions of the Law Society and find that, on the balance of probabilities, the Lawyer knew at the time of the loans from each of D.N. and A.O. that D.N. and A.O. were her clients. In her evidence the Lawyer stated that she did not consider D.N. and A.O. to be her clients on the loan transactions because the transactions were mutually beneficial to her and to D.N./A.O. We agree with the following submission of the Law Society: "If a lawyer finds herself in a business transaction with a client that would benefit the lawyer, it is submitted that the rules regarding conflict of interest operate to put the lawyer on guard, not at ease." Given the Lawyer's intelligence and sophistication, which was evident in her oral evidence, we find it difficult to believe that it never occurred to her that D.N. and A.O. were her clients. Further, the Lawyer's position was not supported by any of the evidence and flew in the face of the plain reading of the various reporting letters, the mortgage documents and A.O.'s evidence that she believed that the Lawyer was acting in her interests and acting as her lawyer.

[125] There is no dispute on the facts that the Lawyer did not advise either D.N. or A.O. to

28 370

obtain independent legal advice or representation, and that neither D.N. nor A.O. sought such advice. Given that Rule 2.06(5) requires that the client's interests be protected by the nature of the case "and" by independent legal representation, the fact that neither D.N. or A.O. were represented by independent legal counsel is enough to find a breach of Rule 2.06(5). We find, however, that in addition to the lack of independent legal representation, D.N.'s and A.O.'s interests were not fully protected. The most c placement of the Davenport ro compelling reasons, in our view, are: (i) the third priority 0 Mortgage; (ii) the 319 day gap in the registration of the Second Davenport Mortgage; and CD (iii) the fact that the Lawyer controlled the mortgages by naming herself as chargee. We are of the view that, A.O.'s and D.N.'s interests were not 'Tully protected" as Rule I U) requires. As a result, we find that the Lawyer is in breach of Rule 2.06(5). —J 2.06(5) z o [126] Rule 2.04(11) states: C'e)

Subject to subrule (12), a lawyer or two or more lawyers practising in partnership or association shall not act for or otherwise represent both lender and borrower in a mortgage or loan transaction.

[127] None of the exceptions listed in subrule (12) apply in this case and the Lawyer does not rely on any. Given our finding under Particular 1 above concerning the Lawyer's knowledge that D.N. and A.O. were her clients and the agreed fact that the Lawyer acted for 364 and D.N./A.O. on the mortgages, we also find that the Lawyer has contravened Rule 2.04(11).

Particular 2: Failure to Serve

[128] The Law Society argues that the Lawyer has failed to serve D.N. and A.O., contrary to Rule 2.01(2), in various ways including by failing to report to D.N. and A.O. regarding their mortgage transactions, failing to advise A.O. of the identity of the borrower, failing to advise both D.N. and A.O. as to the priority of their mortgages, failing to register the mortgages in a timely manner, and registering the mortgages in the name of the Firm in trust rather than in D.N.'s and A.O.'s names. We are of the view that the agreed to facts establish each of these failings on the part of the Lawyer. The question for this panel now is did the Lawyer act to the standard of a competent lawyer?

[129] Rule 2.01(2) states: "A lawyer shall perform any legal services undertaken on a client's behalf to the standard of a competent lawyer." Rule 2.01(1) defines a "competent lawyer" as:

2.01 (1) In this rule

"competent lawyer" means a lawyer who has and applies relevant skills, attributes, and values in a manner appropriate to each matter undertaken on behalf of a client including

(a) knowing general legal principles and procedures and the substantive law and procedure for the areas of law in which the lawyer practises,

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[Amended — June 2007]

(b) investigating facts, identifying issues, ascertaining client objectives, considering possible options, and developing and advising the client on appropriate courses of action,

(c) implementing, as each matter requires, the chosen course of action through the applicatio n of appropriate skills, including,

i. legal research, ONLSH ii. analysis, 2013 iii. application of the law to the relevant facts,

iv. writing and drafting,

v. negotiation,

vi. alternative dispute resolution,

vii. advocacy, and

viii. problem-solving ability,

(d) communicating at all stages of a matter in a timely and effective manner that is appropriate to the age and abilities of the client,

(e) performing all functions conscientiously, diligently, and in a timely and cost- effective manner,

(f) applying intellectual capacity, judgment, and deliberation to all functions,

(g) complying in letter and in spirit with the Rules of Professional Conduct,

(h) recognizing limitations in one's ability to handle a matter or some aspect of it, and taking steps accordingly to ensure the client is appropriately served,

(i) managing one's practice effectively,

(j) pursuing appropriate professional development to maintain and enhance legal knowledge and skills, and 372

(k) adapting to changing professional requirements, standards, techniques, and practices.

[130] The commentary to Rule 2.01(2) states:

This rule does not require a standard of perfection. An error or omission, even -J though it might be actionable for damages in negligence or contract, will not necessarily constitute a failure to maintain the standard of professional competence described by the rule. [...] ONLSHP The Act provides that a lawyer fails to meet standards of professional competence

if there are deficiencies in (a) the lawyer's knowledge, skill, or judgment, (b) the 2013 lawyer's attention to the interests of clients, (c) the records, systems, or procedures of the lawyer's professional business, or (d) other aspects of the lawyer's professional business, and the deficiencies give rise to a reasonable apprehension that the quality of service to clients may be adversely affected. [Emphasis added]

[131] Neither the Law Society nor the Lawyer provided any authorities to the panel concerning the interpretation of this Rule. On the facts of this case, based on the evidence presented and a plain reading of the Rule, we are satisfied that the Law Society has proven on the balance of probabilities that the Lawyer did not perform legal services to the standard of the competent lawyer, most notably by not communicating at all stages to D.N. and A.O. on the full particulars of their mortgage transactions.

Particular 3: Misleading A.O.

[132] The Law Society argues that the Lawyer breached Rules 2.02(1) and 6.01(1) by misleading A.O. about the nature and particulars of her loans. Rule 2.02(1) requires a lawyer to be honest and candid when advising clients and Rule 6.01(1) states: "A lawyer shall conduct himself or herself in such a way as to maintain the integrity of the profession." It submits that the Lawyer misrepresented the nature of the mortgages to A.O. and concealed a number of risk factors about the loans such as who the true borrower was, the priority of the mortgage security, and that the project had not yet received condominium status.

[133] The Lawyer submits that there was a "distinct correlation between D.N.'s and A.O.'s investments and J.G.'s and J.H.'s purchases" and that "there was a very distinct and discernible indirect relationship among [D.N./A.O. and J.G./J.H.]." The Lawyer further argues that a "superficial reading' of the letters may lead one to mistakenly infer that J.G./J.H. were the borrowers and that the Lawyer provided full details to D.N. and A.O. "of their investments through other media (i.e. through property tours and frequent verbal communications, as well as through A.O.'s son ..."). She also attempts to defend her letters by arguing that she never explicitly stated in her letters that J.G./J.H. would be responsible for payment of interest on the loans and repayment of the principal

31 3 7 3

investments. With respect, a plain reading of the letters is all that should be required of a client and we reject the Lawyer's submissions. We also reject the Lawyer's self-serving evidence that she did not further particularize the letters because she verbally told D.N. and A.O. the full particulars. We prefer the evidence of A.O. on this point and find that the Lawyer did not at any point communicate the full particulars of the investments to A.O. c ro o [134] The Lawyer argued that the reliability of the evidence of A.O. is diminished because she could not recall fundamental details of her conversations with the Lawyer, particularly regarding priority of the mortgages. We find that the reliability of the evidence of A.O. was not diminished in any respect. A.O. did not recall being told about the priority of the z_J mortgages. The Lawyer confirmed that she did not provide fundamental details of the o investments and mortgages to A.O. in her reporting letters, but claimed that that was because she advised A.O. of those details verbally. The Lawyer had no evidence to CD support her claim. We prefer the evidence of A.O. on this point.

[135] It is apparent on the face of the reporting letters to A.O., as described in detail above, that the Lawyer misled A.O. with respect to various aspects of her loan, including the fact that the Lawyer was the actual borrower and not J.H./J.G. The Lawyer did not provide any explanation or reason for the inaccuracies in her reporting letters or for the Purported Mortgage sent to A.O., other than to say that full particulars were provided to A.O. verbally.

[136] In her written submissions the Lawyer argues that A.O. "shares significant responsibility" for not being concerned "about conducting a documentary review" and for failing "to seek clarification ... regarding any issue or confusion." We reject this submission. Whether or not A.O. should have sought clarification, completed her own legal research, or hired another lawyer to review all of the Lawyer's correspondence is not a question for us and it does not change the fact that the Lawyer's reporting letters to A.O. were misleading in many respects.

[137] Most troubling to this panel is the Purported Mortgage sent to A.O. on March 5, 2004. Only three days following the Purported Mortgage being sent to A.O., the Lawyer registered the Second Davenport Mortgage consolidating the four loans made by D.N. and A.O. The Second Davenport Mortgage was never disclosed to A.O. The Lawyer's only explanation for the Purported Mortgage is that she has no explanation for it as she relies exclusively on her law clerk to use the Teraview software. The Lawyer chose not to call her law clerk as a witness.

[138] We find that on the balance of probabilities, the Lawyer was not honest and candid when reporting to A.O. and as a result, she did not conduct herself in a manner so as to maintain the integrity of the profession. The Lawyer has contravened Rules 2.02(1) and 6.01(1).

Particular 4: Failure to Complete Forms 18A and 18B

[139] At the material times, s. 7(1) of By-Law 18 required the Lawyer to maintain a number of

32 .3 4

documents relating to the loans including an investment authority completed by D.N. and A.O. for each mortgage, and a report on the investment for each mortgage completed by the Lawyer. Section 7(4) of By-Law 18 required the Lawyer to obtain a new investment authority and complete a new report on investment each time that she discharged one of D.N.'s or A.O.'s mortgages. The Forms 18A (investment authority) and 18B (report on the investment) are prescribed by the By-Laws. On May 1, 2007 By-Law 18 was 7.3 c revoked and replaced with By-Law 9. cs C.)

[140] As we found above, the Lawyer knew that D.N. and A.O. were her clients at the time of 110 their loans. The Lawyer admitted in the ASF, during her interview with Ms. Campbell and in her evidence at the hearing that she did not have D.N. or A.O. complete a Form 18A at any time, and the Lawyer did not complete any reports on investment for their ONLSHP

loans. In her evidence the Lawyer took the position, however, that she did not know 3 about the requirements of the By-Laws and that her failure to complete the forms was a function of her overall approach to D.N. and A.O. as non-arms length investors.

[141] We agree with the Law Society's submission that ignorance of the By-Laws is no defence. The evidence establishes that the Lawyer failed to complete the required forms even after she wrote to Ms. Campbell in January 2007 stating that "[i]n future, given this experience, I will always prepare and provide Forms 18a and b ...". More than a year later she discharged the Fourth Davenport Mortgage (December 18, 2008) and two years following the letter she registered the Ranee Mortgage and discharged it without completing the required forms.

[142] On the balance of probabilities, we therefore find that the Lawyer failed to complete Forms 18A and 18B and contravened By-Law 18.

Particular 5: Failure to Maintain Mortgage Asset Ledger, Mortgage Liability Ledger and Monthly Comparisons

[143] Section 3 of By-Law 18 required the Lawyer to maintain extensive financial records, including a mortgage asset ledger, a mortgage liability ledger, a record of monthly reconciliations of the outstanding principal balances held in trust and the outstanding balances as they appeared on the financial documents. Section 3 provides precise requirements for the documents.

[144] The Lawyer admitted in the ASF that she did not maintain a mortgage asset ledger, mortgage liability ledger, or monthly reconciliations for any of D.N.'s or A.O.'s mortgages. This non-compliance continued following her assurance to Ms. Campbell in January 2007 that she would prepare the documents and comply with the requirements of By-Law 18 going forward.

[145] We therefore find, on the balance of probabilities, that the Lawyer breached s. 3 of By- Law 18.

Particular 6: Failure to Obtain Written Consent

33 375

[146] Section 7(7) of By-Law 18 required the Lawyer to obtain the written consent of D.N. and A.O. for the substitution of the security held for their loans, before the substitution is made. The Lawyer admitted that she did not receive any written instructions, consents or authorizations from D.N. or A.O. regarding the discharges of their mortgages or the substitution of the mortgage security. A.O. was clear in her evidence that at no time had she provided any written instructions or consents to the Lawyer, and the Lawyer did not c dispute this.

[147] The Lawyer substituted D.N.'s and A.O.'s mortgage security at least four times without written consent: (i) the discharge of the First Davenport Mortgage and the registration of the Second Davenport Mortgage; (ii) the discharge of the Second Davenport Mortgage and the registration of the Third Davenport Mortgage; (iii) the discharge of the Third Davenport Mortgage and the registration of the Fourth Davenport Mortgage; and (iv) the ONLSHP

discharge of the Fourth Davenport Mortgage and the registration of the Ranee Mortgage. 2013 As a resuk, we find that, on the balance of probabilities, the Lawyer contravened s. 7(7) of By-Law 18.

Particular 7: Misleading the Law Society

[148] Rule 6.01(1) states: "A lawyer shall conduct himself or herself in such a way as to maintain the integrity of the profession." The Commentary to the Rule states:

Integrity is the fundamental quality of any person who seeks to practise as a lawyer. If a client has any doubt about his or her lawyer's trustworthiness, the essential element in the true lawyer-client relationship will be missing. If integrity is lacking, the lawyer's usefulness to the client and reputation within the profession will be destroyed regardless of how competent the lawyer may be.

Public confidence in the administration of justice and in the legal profession may be eroded by a lawyer's irresponsible conduct. Accordingly, a lawyer's conduct should reflect credit on the legal profession, inspire the confidence, respect and trust of clients and the community, and avoid even the appearance of impropriety.

[149] The Law Society submits that the Lawyer misrepresented to Ms. Walker the borrower in A.O.'s loan and misrepresented to Ms. Campbell that A.O. and the Lawyer were non- arm's length parties. With respect to Ms. Walker, the Lawyer misled her by suggesting that A.O.'s mortgage was with J.H. and that J.H. was having difficulty repaying the loan. The Lawyer did not disclose to Ms. Walker that she was the true borrower. The Law Society also submits that the Lawyer's letter to Ms. Walker stating that she and her husband will personally pay A.O. and replace her as mortgagee is also misleading because it suggests that the Lawyer was not the borrower. With respect to her communications with Ms. Campbell, the Law Society argues that the Lawyer's January 31, 2007 letter, responding to Ms. Campbell's request for a full and frank response, conveyed two misleading impressions: it obscured the identity of the real borrower and exaggerated her friendship with A.O. before the loans were advanced.

[150] In response, the Lawyer submits she did not intend to mislead the Law Society in her

34 "7 6

communications with Ms. Walker and Ms. Campbell and that she was truthful and forthcoming with the Law Society at all times.

[151] Neither the Law Society nor the Lawyer submitted any authorities or provided any guidance on the interpretation of Rule 6.01(1).

[152] While we agree with the Law Society's position that the Lawyer was less than full and frank in her communications with Ms. Walker and Ms. Campbell, we are not satisfied 0 that the Law Society has satisfied its burden of proving that the Lawyer conducted herself 0 in such a manner as to breach Rule 6.01(1).

Particular 8: Filing Inaccurate or Misleading MARs ONLSHP [153] The Law Society submits that the Lawyer failed to conduct herself in a way that maintains the integrity of the profession, contrary to Rule 6.01(1) (reproduced above), by 2013 filing inaccurate or misleading MARs. The Law Society argues that MARs play an important part in the regulation of the profession and when a lawyer provides misleading information in the MAR, this "damages the Law Society's ability to protect the public and undermines the reputation of lawyers as a well-regulated profession."

[154] The MAR at the relevant times required a lawyer to answer the following two questions:

(a) "were you indebted, either directly or indirectly, to a client or person who at the time of borrowing was or had been your client or a client of a firm of which you were then a member?" and

(b) "did you directly or indirectly through a related person or corporation, hold mortgages or other charges on real property in trust for clients or other persons?"

[155] The Lawyer remained indebted to A.O. from January 2003 to September 2006 and to D.N. from December 2002 to February 2010 and registered the mortgages with the Firm as "in trust" for D.N. and A.O. The Lawyer admitted in the ASF that she failed to report her indebtedness to D.N. and A.O. and her role and the Firm's role in the mortgages on her MARs from 2002 to 2006. The evidence establishes that the Lawyer also failed to report her indebtedness to D.N. in her MAR for 2008. While the Lawyer responded in the affirmative to whether she was indebted directly or indirectly to a client in her 2007 MAR, the Lawyer admitted that she failed to provide full particulars of D.N.'s loan. Even if D.N. and A.O. were not the Lawyer's clients at the relevant times, the failure of the Lawyer to respond in the affirmative to the question of whether she held property or mortgages in trust for "other persons" was an inaccurate answer.

[156] The Law Society has not relied on any authorities for their position and we are not satisfied, in all of the circumstances and facts of this case, that the failure of the Lawyer to provide accurate answers in her MARs is a breach of Rule 6.01(1). While we find that the Lawyer provided inaccurate answers in her MARs for the years 2002 to 2006 and 2008, we are not satisfied that the Law Society has satisfied its burden of showing on a

35 77

balance of probabilities that the Lawyer acted in contravention of Rule 6.01(1).

Particular 9: Misappropriation

[157] The Law Society submits that the Lawyer misappropriated approximately $383,598 held

in trust by the Firm on behalf of purchasers of condominium units by disbursing those -J funds without authority and in contravention of the APS, the provisions of the Act and s. a1 o 4(1) of By-Law 19. The definition of "professional misconduct" in Rule 1.02 provides that it includes "misappropriating or otherwise dealing dishonestly with a client's or a third party's money or property." The fact that the purchasers were not the Lawyer's clients does not relieve her from dealing with their deposits in accordance with the Rules. z Section 4(1) of By-Law 19 states: o A member may withdraw from a trust account only the following money:

1. Money properly required for payment to a client or to a person on behalf of a client.

2. Money required to reimburse the member for money properly expended on behalf of a client or for expenses properly incurred on behalf of a client.

3. Money properly required for or toward payment of fees for services performed by the member for which a billing has been delivered.

4. Money that is directly transferred into another trust account and held on behalf of a client.

5. Money that under this By-Law should not have been paid into a trust account but was through inadvertence paid into a trust account.

[158] The Law Society relies on Sullivan' for the following definition of misappropriation: "any unauthorized use ... of clients' funds entrusted to [a lawyer], including not only stealing, but also unauthorized temporary use for the lawyer's own purposes, whether or not he derives any personal gain or benefit therefrom." The Law Society must establish on a balance of probabilities that the Lawyer knew at the time that the disbursing of the funds was unauthorized. In Law Society of Upper Canada v. Reiten8 the Appeal Panel defined misappropriation as follows:

[47] 'Misappropriation" refers to a deliberate (i.e., knowing) taking with a dishonest intention, usually theft, or fraud or some other serious wrong. Such allegations are among the most serious that can be brought. The usual consequences — disbarment, or permission to resign, subject to unusual

Law Society of Upper Canada v. Sullivan,2011 ONLSHP 40 at paras. 20-21. 8 2007 ONLSAP 7.

36 3< 8

circumstances such as a small amount, the absence of loss, medical or psychological evidence — are commensurate with that specific intent. They do not form a rule, but rather reflect the experience of the Bench year after year, case after case. [Emphasis added]

[48] A person who is reckless or willfully blind in the operation of a trust account has committed an act or omission of professional misconduct that requires no such specific intent. Each state of mind, the equivalent of knowledge, is sufficient to justify a finding of professional misconduct, but the appropriate penalty will reflect all the circumstances. There will be cases where disbarment or permission to resign is appropriate, and others where suspensions, fines or remedial measures will properly protect the public. The Hearing Panel will ONLSHP consider the previous history of the licensee, the harm caused, and any 13 considerations of ungovemab ility.

[49] There can also be a merely negligent operation of a trust account, based on a failure to take proper care. Negligence, unless rebutted by evidence of due diligence, is also an appropriate state of mind to characterize professional misconduct.

[159] The Law Society submits that Reiten was overruled by the Appeal Panel's subsequent decision in Kazman.9 We do not interpret the decision in Kazman as overruling Reiten and the Reiten definition of "misappropriation" has been adopted and applied by the Hearing Panel subsequent to the Kazman decision.1° Kazman was in the context of allegations of a mortgage fraud and when analyzing the Supreme Court of Canada's decision in R. v. Sansregret," the appeal panel in Kazman stated (at para. 60):

While the Court does later say that culpability for recklessness may [our emphasis] be less than culpability for willful blindness in the criminal context, nowhere does the Court say that the difference exists in the administrative law context (the issue was not before them). The Court does say that culpability is "justified" under either recklessness or willful blindness and describes the two means by which the culpability is established (consciousness of risk or deliberate failure to inquire). Therefore, while recklessness may result in less culpability, it may also result in identical culpability.

[160] The Lawyer argues that the decision in Reiten shows comparable circumstances to the present case, particularly, the manner in which Ms. Reiten was overwhelmed by her inexperience. The Lawyer relies on the hearing panel's decision in Law Society of Upper Canada v. Farant' and argues that the Law Society must adduce clear and cogent evidence of intent to take the funds and that the standard of proof is higher than on the

9 Law Society of Upper Canada v. Kazman,2008 ONLSAP 7. io See Law Society of Upper Canada v. Leslie Andrew Vandor,2012 ONLSHP 66 at para. 134; Law Society of Upper Canada v. Pradeep BridglalPachai, 2010 ONLSHP 130 at para. 38; Law Society of Upper Canada v. Terence Austin Kelly, 2009 ONLSHP 81 at para. 64. 11 [1985] 1 S.C.R 570. 12 2005 ONLSHP 1.

37 3 7 9

balance of probabilities. In Reiten, the appeal panel stated that "cogent" evidence was required along with proof that is "clear and convincing." In reply, the Law Society vehemently opposes the Lawyer's interpretation of Reiten.

[161] With great respect to the position of the Law Society, the definition of misappropriation

in Sullivan has not been adopted by the Appeal Panel. We feel bound to follow, and _J prefer, the definition of misappropriation as outlined by the Appeal Panel in Reiten. (C1 0 [162] The undisputed facts before us are as follows: the Lawyer and her husband received approximately $383,598 in deposit funds on the sale of units in the Davenport Property and the Yonge Property; the Lawyer was obligated under the APS, s. 81 of the Act and its regulations to hold the funds in trust until the renovations were complete and title transferred to the purchasers; rather than keeping the funds in trust, the Lawyer ONLSH transferred the deposits into the Firm's general account and spent the funds on renovating 2013 the suites.

[163] In her written submissions, the Lawyer stated that the "purchasers were not, at any time, clients of the [Lawyer]" and relies on the Bonding Agreements as the reason that she believed at the time that she was permitted to withdraw and use the deposits from the trust account. Additionally, the Lawyer says that she was confident in her abilities as a lawyer and developer and "genuinely believed" that she was able to be in legal compliance without requiring the assistance of a real estate lawyer despite her inexperience. Despite this, the Lawyer has taken the position that while now she realizes that the Bonding Agreements are not in compliance with the Act, at the time she was not aware of the provisions of the Act relevant to prescribed security. The Lawyer also says that at the time that she drafted and put in place the Bonding Agreements (in 2002 and 2003), she and her husband had substantial equity and that, in her view, this provided sufficient security for the repayment of the purchasers' deposits.

[164] While the Lawyer now admits that the Bonding Agreements do not constitute prescribed security under the Act, the Lawyer has maintained the position throughout that at the time she believed that she was entitled to use the funds because of the Bonding Agreements. She submits that while she may have been overly confident in her abilities, this does not disclose the mindset of a lawyer "involved in furtive and clandestine activities that are criminal in nature." We agree. And we equally agree with the Lawyer's submissions that her actions with respect to the deposit funds are as a result of her "inexperience, tremendous self-confidence and zeal." The standard before us is not a criminal one. We must be satisfied on the balance of probabilities that the Lawyer deliberately took the deposits from the trust account with a dishonest intention:3

[165] We are unable to find, on the balance of probabilities, that it is more likely than not that the Lawyer knew at the time that she was unauthorized to disburse the funds. Further, we are unable to find on the balance of probabilities that the Lawyer was reckless (as the Law Society explains in its submissions, the Lawyer would have to appreciate the risk

13 Reiten, supra at para. 47.

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associated with improper use of trust funds yet proceed in any event) or wilfully blind (as the Law Society explains in its submissions, the Lawyer had numerous opportunities to ask qualified advisors for their advice, or to research the matter herself but preferred not to inform herself). On recklessness, the Lawyer did appreciate the risk but she took steps that she believed authorized her to use the funds (the Bonding Agreements), and only proceeded to use the funds after she put those agreements in place in 2002 and 2003. We therefore find that recklessness cannot apply. On wilful blindness, the Lawyer did ask for advice and while she perhaps completed her legal research negligently, we cannot ignore that she took the step of putting the Bonding Agreements in place and believe that they authorized her to use the funds. We are of the view that the Lawyer's actions with the Bonding Agreements are more akin to negligence than to recklessness or wilful blindness.

[166] In the result, we find that the Law Society has not discharged its burden of proving on the balance of probabilities that the Lawyer misappropriated approximately $383,598 held in trust by the Firm on behalf of purchasers of condominium units.

Particular 10: Co-Mingling Personal/Corporate Funds with Client Funds

[167] Section 3(2) of By-Law 19 prohibits lawyers from using their firm trust account to conduct their own affairs. The Lawyer has admitted in the ASF that she used the Firm's trust account to hold her personal funds and that her personal funds were co-mingled with client funds. The Lawyer also admitted that she used the Firm's trust accounts to hold funds belonging to the various companies owned by the Lawyer and her husband.

[168] We therefore find on a balance of probabilities that the Lawyer contravened s. 3(2) of By- Law 19.

FINDINGS OF PROI4ESSIONAL MISCONDUCT

[169] In summary, the Lawyer engaged in professional misconduct as set out in Particulars 1, 2, 3, 4, 5, 6, and 10 of the Notice of Application. Given this finding of professional misconduct, arrangements should be made through the Tribunals Office to set a date for the penalty hearing.

[170] We thank both counsel for the Law Society and for the Lawyer for their thoughtful and thorough written submissions.

39 DBDC SPADINA LTD., et al NORMA WALTON et al. Applicants Respondents Court File No.

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

PROCEEDING COMMENCED AT TORONTO

APPLICATION AND MOTION RECORD OF THE APPLICANTS

LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLP Barristers Suite 2600 130 Adelaide Street West Toronto ON M5H 3P5

Peter H. Griffin(19527Q) Tel: (416)865-2921 Fax: (416)865-3558 Email: [email protected] Shara N. Roy(49950H) Tel: (416)865-2942 Fax (416)865-3973 Email: [email protected]

Lawyers for the Applicants