Court File No. CV-17-578761-00CL ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST IN THE MATTER OF AN APPLICATION UNDER SECTION 182 OF THE BUSINESS CORPORATIONS ACT(ONTARIO) R.S.O. 1990, c.B.16. AS AMENDED PHI KAPPA PI BUILDINGS, LIMITED Applicant (Moving Party) MOTION RECORD OF THE APPLICANT (EX PARTE MOTION FOR AN INTERIM ORDER WITH RESPECT TO A PLAN OF ARRANGEMENT) (RETURNABLE ON JULY 20, 2017) LERNERS LLP 130 Adelaide Street West Suite 2400 Toronto, ON M5H 3P5 Jason Squire LSUC#: 431830 Tel: 416.601.2369 Fax: 416.867.2404 Domenico Magisano LSUC#: 45725E Tel: 416.601.4121 Fax: 416.601.4123 Lawyers for the Applicant INDEX INDEX Tab Description Page No 1 Notice of Motion 1 2 Affidavit of Hugh Anson-Cartwright sworn July 11, 2017 4 Exhibits A Reasons for decision of Justice Grace dated March 9 29, 2011 B Buildings' Letters Patent dated October 21, 1920 18 C Buildings' By-Laws, Numbers One and Two 21 D Land Title Parcel Register 29 E Mr. Avey's report dated October 23, 2006 30 F Minutes of the shareholders meeting dated November 149 10, 2010 G Resolutions of the Directors dated March 22, 2017 154 3 Draft Interim Order 163 4 Blacklined comparison of Draft Interim Order and 186 Appendices to Commercial List Users' Committee Form of Model Interim Order TAB I Court File No.: CV-17-578761-00CL ONTARIO SUPERIOR COURT OF JUSTICE - COMMERCIAL LIST IN THE MATTER OF AN APPLICATION UNDER SECTION 182 OF THE BUSINESS CORPORATIONS ACT(ONTARIO) R.S.O. 1990, c.B.16, AS AMENDED PHI KAPPA PI BUILDINGS, LIMITED Applicant NOTICE OF MOTION (EX PARTE MOTION FOR AN INTERIM ORDER WITH RESPECT TO A PLAN OF ARRANGEMENT) (RETURNABLE JULY 20, 2017) The Applicant, Phi Kappa Pi Buildings, Limited, will make a motion without notice to a judge presiding over the Commercial List on July 20, 2017 at 9:30 a.m., or as soon after that time as the motion can be heard, at 330 University Avenue, Toronto, Ontario. PROPOSED METHOD OF HEARING: The motion is to be heard orally. THE MOTION IS FOR: (a) the advice and directions of this Honourable Court in connection with an arrangement (the "Arrangement") proposed by Phi Kappa Pi Buildings, Limited under section 182 of the Business Corporations Act (Ontario), R.S.O. 1990, c.B.16, as amended ("OBCA"), on the terms of the draft Interim Order attached at Tab 3 of this Motion Record; and, (b) such further and other relief as this Court may deem just. THE GROUNDS FOR THE MOTION ARE: (a) Phi Kappa Pi Buildings, Limited is an OBCA corporation headquartered in Toronto, Ontario; (b) the applicant requests the advice and directions of this Court in respect of the calling, holding and conducting of a meeting of the holders of its Common Shares - 2 - to consider and vote upon a special resolution approving the Arrangement under section 182 of the OBCA; (c) the Arrangement is an "arrangement" as defined in section 182(1) of the OBCA; (d) section 182(5) of the OBCA provides that this Court may make such orders as it considers appropriate in connection with the proposed Arrangement; (e) rules 16.04(1), 16.08, 37.02(1) and 37.07(2) of the Rules of Civil Procedure; (f) section 182 of the OBCA; and, (g) such further and other grounds as counsel may advise and this Honourable Court may consider. THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the motion: (a) the affidavit of Hugh Anson-Cartwright, sworn July 11, 2017; and, (b) such further and other materials as counsel may advise and this Court may permit. July 13, 2017 LERNERS LLP 130 Adelaide Street West Suite 2400 Toronto, ON M5H 3P5 Jason Squire LSUC#: 431830 Tel: 416.601.2369 Fax: 416.867.2404 Domenico Magisano LSUC#: 45725E Tel: 416.601.4121 Fax: 416.601.4123 Lawyers for the Applicant IN THE MATTER OF AN APPLICATION UNDER SECTION 182 OF THE CV-17-578761-00GL BUSINESS CORPORATIONS ACT(ONTARIO) R.S.O. 1990, c.B.16, AS AMENDED Court File No.: PHI KAPPA PI BUILDINGS, LIMITED Applicant ONTARIO SUPERIOR COURT OF JUSTICE - COMMERCIAL LIST Proceeding commenced at Toronto. NOTICE OF MOTION LERNERS ALP 130 Adelaide Street West Suite 2400 Toronto, ON M5H 3P5 Jason Squire LSUC#: 431830 Tel: 416.601.2369 / Fax: 416.867.2404 Domenico Magisano LSUC#: 45725E Tel: 416.601.4121 / Fax: 416.601.4123 Lawyers for the Applicant 4558296.1 Lk) TAB 2 Lf Court File No.: CV-17-578761-00CL ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST IN THE MATTER OF AN APPLICATION UNDER SECTION 182 OF THE BUSINESS CORPORATIONS ACT(ONTARIO) R.S.O. 1990, c.B.16, AS AMENDED PHI KAPPA PI BUILDINGS, LIMITED Applicant AFFIDAVIT OF HUGH ANSON-CARTWRIGHT (Sworn July 11, 2017) I, Hugh Anson-Cartwright, of the City of Toronto, Province of Ontario, MAKE OATH AND SAY: 1. I am the President and a Director of Phi Kappa Pi Buildings, Limited, and I instruct counsel on behalf of the Corporation, and as such I have knowledge of the matters to which I herein depose. 2. I make this affidavit for purposes of seeking an Interim Order for directions with respect to the implementation of a Plan of Arrangement for Phi Kappa Pi Buildings, Limited, described herein. 3. Attached and marked as Exhibit "K to my affidavit is a copy of the reasons for decision of Justice Grace dated March 29, 2011. Those reasons give some history of the Applicant, including prior legal proceedings it was involved in. The Corporation and the Building 4. Phi Kappa Pi Buildings, Limited ("Buildings') was incorporated in 1920. Attached and marked as Exhibit "13" to my affidavit is a copy of Buildings' Letters Patent, dated October 21, 1920. At Exhibit "C" is a copy of Buildings' By-Laws, Numbers One and Two. 5. Attached at Exhibit "D" to my affidavit is a Land Title Parcel Register with respect to the lands known municipally as both 85 Bedford Road and 51 Elgin Avenue, Toronto (the "Property"). 5 -2- 6. The Property was acquired in 1958. Because of zoning restrictions, title was held in the name of Robert Bowlby, a member of the Phi Kappa Pi Alumni Association. Mr. Bowlby held the Property in trust for Buildings and transferred the Property to it in 1988. 7. The Property has been used as a chapter house for the Phi Kappa Pi Fraternity, and members and non-members of the fraternity have at times rented residential quarters from Buildings. At present, there are 14 people who rent quarters at the Property, ten who are members of the Fraternity (and who attend Ryerson University) and four other students who are non-members. They all rent pursuant to written, month-to-month tenancy agreements. 8. Other than the Property and a bank account at the TD Bank, there are no other assets of Buildings. 9. As referred to in Justice Grace's reasons, the affairs of Buildings between 1975 and 2005 were in an operational and organizational mess. Corporate records were misplaced or lost, corporate filings were not kept up to date, banking records vanished and mounting deficits jeopardized the company's future. It was impossible to determine definitively who all the shareholders of the corporation were, given the state of Buildings' records. 10. As a result of an application in the Superior Court of Justice (Commercial List) that I commenced in 2005, Justice Lederman directed that Tedd Avey of Navigant Consulting investigate the business and affairs of Buildings and report to the court. 11. Attached and marked as Exhibit "E to my affidavit is a copy of Mr. Avey's October 23, 2006 report'. Among other matters, Mr. Avey attempted to discern who the shareholders of Buildings were. At Schedules 1 and 2 of his report is the outcome of his investigation in that regard. Those Schedules have been treated as the de facto Shareholders' Register, and have been placed in Buildings' Minute Book. 12. As referred to in Justice Grace's reasons, Justice Spence ultimately ordered that a meeting of shareholders of Buildings be held pursuant to Section 106 of the Ontario Business Corporations Act, in order to elect directors of Buildings. That meeting was held on November 10, 2010, and in preparation for that meeting, efforts were undertaken to locate shareholders of Buildings for purposes of sending notices of a special meeting of shareholders sent on October 22, 2010. On October 23, 2010, a notice was published in the Globe and Mail. l Except for the final Schedule of Mr. Avey's report, which included all share certificates he had copies of, which has here been omitted for length and relevance. Those documents do not indicate shareholders' addresses. cP -3- 13. Attached and marked as Exhibit "F" to my affidavit is a copy of the Minutes of the shareholders meeting of November 10, 2010. As indicated in those Minutes, Buildings' efforts brought forth only shareholders of 13 shares of Buildings, totalling 6 people. 14. The following are the only shareholders of Buildings that the Board of Directors is aware of that are still alive: Shareholder Position No. of Shares Hugh Anson-Cartwright Director, President 2 Toronto, ON Donald W. Cockburn Director 2 Richmond Hill, ON John A. Cottenden Director 1 Shuniah, ON Gerald B. Skea Director 2 Thunder Bay, ON George W. Rombough 2 Toronto, ON Michele Guest, widow of Gowan T. Guest 2 Toronto, ON W.A. Sheppard 32 Toronto, ON 2 Mr. Avey determined that the subscription price for two shares subscribed for by Mr.