District of British Columbia Division No. 03 – Vancouver Court No. B141356

District of British Columbia
Division No. 03 – Vancouver
Court No. B141356
Estate No. 11-253825
FORM 40
REPORT OF TRUSTEE ON PROPOSAL
(Paragraph 58(d))
IN THE SUPREME COURT OF BRITISH COLUMBIA
IN BANKRUPTCY & INSOLVENCY
IN THE MATTER OF THE CONSOLIDATED PROPOSAL OF
COLWOOD CITY CENTER LP, COLWOOD CITY CENTER GP INC.
COLWOOD SOOKE DEVELOPMENTS LTD., COLWOOD JEROME
DEVELOPMENTS LTD., COLWOOD BELMONT DEVELOPMENTS LTD., and
07811591 B.C. LTD. (COLLECTIVELY THE “COLWOOD ENTITIES”)
I, Neil Bunker, of PricewaterhouseCoopers Inc., the Trustee acting in the Consolidated
Proposal of the Colwood Entities, hereby report to the Court as follows:
1. That on the 17th day of November, 2014, the Colwood Entities filed assignments in
bankruptcy and that PricewaterhouseCoopers Inc. (“PwC”) was appointed Trustee of
the estates of the debtor.
2. That a Consolidated Proposal was filed with me on the 19th day of November, 2014, a
copy of which is attached as Exhibit “A”, and that I filed a copy of the Consolidated
Proposal with the Official Receiver on the 19th day of November, 2014.
2.1. The Consolidated Proposal was filed as part of a corporate restructuring that was
described to the Court in a report by PwC acting in its capacity as Monitor (the
Monitor’s 23rd report dated October 7, 2014) pursuant to CCAA proceedings
(Court # S-137743). The Court approved the corporate restructuring on October
9, 2014.
2.2. On November 19, 2014 the Court authorized the filing of a Consolidated
Proposal for the Colwood Entities by the Trustee. The Monitor’s 27th report
dated November 17, 2014 was a joint report by the Trustee and supported the
application for authorization to file the Consolidated Proposal as well as other
procedural steps.
3. That on the 19th day of November, 2014, I gave Notice to the creditors of the creditor
meeting by email (8 creditors, for which email addresses were not available, were
Page 1 of 4
mailed notice on November 21, 2014). A copy of the Notice was also posted on the
Monitor’s website at www.pwc.com/car-leagueassets.
4. That with the notice was included a condensed statement of the assets and liabilities
of each debtor, a list of all of the creditors affected by the proposal, showing the
amounts of their claims, and a copy of the Consolidated Proposal. Copies of the
notice, the condensed statement of assets and liabilities, and list of creditors are
attached as Exhibits “B1”, “B2” and “B3” respectively.
5. That prior to the meeting of creditors I made a detailed and careful inquiry into the
liabilities of the debtor, the debtor’s assets and their value, the debtor’s conduct and
the causes of the debtor’s insolvency. This analysis was conducted by PwC in its
capacity as Monitor (the “Stakeholder Report”) and included in its 19th report to
Court dated June 24, 2014. The Stakeholder Report was also posted on the Monitor’s
website when it was released in June 2014. In accordance with an order of the Court
made November 19, 2014, the Trustee’s traditional report to creditors for the
Consolidated Proposal was replaced by a Cover Letter from the Trustee to the
creditors which:
5.1. Provided summary background information on the Colwood Entities;
5.2. Described the Consolidated Proposal;
5.3. Made known the Trustee’s recommendation on the Consolidated Proposal; and
5.4. Notified them of the creditor meeting. The trustee’s Cover Letter is attached as
Exhibit “C”.
6. That the meeting of creditors was held on the 1st day of December, 2014 at 10:00 am
and was presided over by Mr. Neil Bunker.
7. That the Consolidated Proposal was accepted by the required majority of creditors.
Ninety-nine percent of the creditors voting accepted the Consolidated Proposal which
represents 99.8% of the claims that were voted.
8. That a copy of the minutes of the meeting is attached as Exhibit “D”.
9. That I am of the opinion that:
9.1. The assets of the debtor and their fair realizable value (“FRV”) are as follows:
Assets
Cash held in trust
Deposits in financial institutions
Accounts receivable
Real property
Total
Estimated FRV
180,104
178,642
420
17,500,000
17,859,166
All of these assets are subject to security interests.
Page 2 of 4
9.2. The estimated liabilities of the debtor are as follows:
Estimated Value
Liabilities
Onni Development Corp.
Class B Term Notes
Farmers Constructors Inc.
Romspen Investment Corporation
Other secured creditors
Total secured creditors
17,500,000
11,959,508
1,782,735
2,129,000
278,353
33,649,596
IGW REIT LP
Colwood City Centre Class II Term Notes
Colwood City Centre Term Notes
Colwood City Centre Class I Term Notes
Romspen Investment Corporation
Other unsecured creditors
Total unsecured creditors
110,503,314
13,766,646
2,721,415
1,844,000
12,771,535
4,142,745
145,749,655
Total liabilites
179,399,251
10. That I am also of the opinion that:
10.1. The causes of insolvency of the debtor are as follows:
10.2. The Colwood Entities were developing the Colwood City Center real
estate development project (the “Project”). Their source of financing was
primarily borrowings from IGW REIT. The Colwood Entities and IGW
REIT are among 105 entities within the League Group which filed for a
stay of proceedings pursuant to the CCAA on October 13, 2013. The
Colwood Entities were unable to carry on development of the Project after
the filing as they were unable to raise additional capital required to
complete the Project.
10.3. The conduct of the debtor is not subject to censure.
10.4. No facts mentioned in section 173 of the Bankruptcy and Insolvency Act
may be proved against the debtor.
11. That I am further of the opinion that the debtor’s Consolidated Proposal is an
advantageous one for the creditors for the following reasons:
11.1. Absent the completion of the Onni Restructuring Agreement (approved by
the Court on October 9, 2014) and the approval of this Consolidated
Proposal, there will be no funds available to the unsecured creditors or
secured creditors suffering a shortfall from the value of their security
(collectively the “Proposal Creditors”).
11.2. Completion of the Onni Restructuring Agreement and the approval of this
Consolidated Proposal will result in approximately $8.9 million being paid
to the Monitor. After deduction of specific and general costs pursuant to
the Amended and Restated Initial Order dated October 25, 2013, 95% of
the net balance will be made available for distribution to Proposal
Creditors.
Page 3 of 4
12. That I forwarded a copy of this report to the Official Receiver on this day.
Dated at Vancouver, British Columbia this 2nd day of December, 2014.
PricewaterhouseCoopers Inc.
Trustee acting in re: the Consolidated Proposal of the Colwood Entities
Neil P. Bunker, CA, CIRP
Vice-President
Page 4 of 4
Exhibit A
Consolidated Proposal dated November 19,
2014
No. B141356
Vancouver Registry
Estate # 11-253825
IN THE SUPREME COURT OF BRITISH COLUMBIA
IN BANKRUPTCY
IN THE MATTER OF THE BANKRUPTCY AND INSOLVENCY ACT
R.S.C. 1985 c. B-3
IN THE MATTER OF THE CONSOLIDATED PROPOSAL OF
COLWOOD CITY CENTRE LIMITED PARTNERSHIP,
COLWOOD CITY CENTRE GP INC., COLWOOD SOOKE DEVELOPMENTS LTD.,
COLWOOD JEROME DEVELOPMENTS LTD.,
COLWOOD BELMONT DEVELOPMENTS LTD. and 0781591 B.C. LTD.
ARTICLE 1
INTERPRETATION
1.1
Definitions
In this BIA Proposal, unless otherwise stated or unless the context otherwise requires:
a)
“Bankruptcy Annulment Date” has the meaning ascribed to it in Section 5.4.
b)
“Bankruptcy Assignments” means the assignment of the Debtors as bankrupts.
c)
“Bare Trustees” means collectively Colwood Sooke Development Ltd., Colwood
Belmont Developments Ltd., Colwood Jerome Developments Ltd. and 0781591
B.C. Ltd. as bare trustees holding beneficial title in lands for the Partnership as
described in Schedule B of the Restructuring Agreement.
d)
"BIA" means the Bankruptcy and Insolvency Act (Canada).
e)
"BIA Approval Order" means an Order pursuant to Subsection 4.2(b) herein,
which Order shall be sought by the Trustee following the Creditors' Meeting if the
BIA Proposal is approved by the Required Majority of Unsecured Creditors in form
approved by the Trustee and the Sponsor each acting reasonably.
f)
"BIA Procedural Order" means the Order approving the procedures and steps to
be taken by the Trustee with respect to the Consolidated Bankruptcy Estate and
the BIA Proposal granted by this Court on November 19, 2014.
11/17/2014 CW
-2g)
"BIA Proposal" means this consolidated proposal, as varied, amended, modified
or supplemented in accordance with the provisions hereof and the BIA.
h)
“BIA Unsecured Claims” means the amount or any portion of the amount of a
Claim against the Debtors or any of them, as allowed by the Trustee or Proposal
Trustee or determined pursuant to the Consolidated Bankruptcy Proceedings, in
accordance with the BIA Procedural Order, the provision of the BIA or any
applicable Orders.
i)
"Business Day" means any day except Saturday, Sunday or any day on which
banks are generally not open for business in the City of Vancouver, British
Columbia.
j)
“Cash Consideration” means the aggregate amount to be distributed to the
Unsecured Creditors in accordance with the Cash Consideration Order.
k)
“Cash Consideration Order” means an Order of the Court in the CCAA
Proceedings determining the amount of the Cash Consideration and directing the
CCAA Monitor to provide the Cash Consideration to the Proposal Trustee for
distribution under the BIA Proposal and in accordance with the Restructuring
Agreement.
l)
“CCAA” means the Companies’ Creditors Arrangement Act, RSC 1985, c C-36, as
amended.
m)
“CCAA Filing Date” means October 18, 2013, being the date of Court granted the
Initial Order for the CCAA Proceedings.
n)
“CCAA Monitor” means PricewaterhouseCoopers Inc. in its capacity as courtappointed monitor in the CCAA Proceedings.
o)
"CCAA Post-Filing Claims" means Claims due to any Person for any goods or
services supplied to the Debtors subsequent to the CCAA Filing Date.
p)
“CCAA Proceedings” means the proceeding under the CCAA, and the Business
Corporations Act, SBC 2002, c 57, as amended, being British Columbia Supreme
Court Action No. S-137743.
q)
"CCAA Proof of Claim" means the form delivered by the CCAA Monitor to
creditors of the Debtors completed by creditors and returned to the CCAA
Monitor for such creditors to prove their Claims, pursuant to the CCAA
Proceedings or any applicable Orders.
r)
"CCAA Unsecured Claims" means the amount or any portion of the amount of a
Claim against the Debtors or any of them, as allowed by the CCAA Monitor or
determined pursuant to the CCAA Proceedings, in accordance with the provisions
of the CCAA or any applicable Orders.
11/17/2014 CW
-3s)
“Claim” means any right or claim of any Person against the Debtors in connection
with any indebtedness, liability or obligation of any kind whatsoever of the
Debtors owed to such Person and any interest accrued thereon or costs, fees or
other amounts in respect thereof, whether reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured, unsecured, present, future, known or unknown, by guarantee,
surety or otherwise, and whether or not such right is executory or anticipatory in
nature, the commission of a tort (intentional or unintentional), any breach of duty
(legal, statutory, equitable, fiduciary or otherwise), any right of ownership or title
to property, employment, contract, a trust or deemed trust, howsoever created,
any claim made or asserted against the Debtors through any affiliate, or any right
or ability of any Person to advance a claim for contribution or indemnity or
otherwise with respect to any grievance, matter, action, cause or chose in action,
whether existing at present or commenced in the future, in each case based in
whole or in part on facts which existed on the Filing Date or which would have
been, or together with any other claims of any kind that, if unsecured, would
constitute, a debt provable in bankruptcy within the meaning of the BIA had the
Debtors become bankrupt on the Filing Date and shall include Secured Deficiency
Claims and Repudiation Claims irrespective of when such claims arose. For
greater certainty, Claims do not include Excluded Claims
t)
“Claims Assignee” means •.
u)
“Claims Assignment Time” means the Effective Date.
v)
"Consolidated Bankruptcy Estates" means collectively the bankruptcy estates of
the Debtors as consolidated by the Order granted by this Court on November 19,
2014.
w)
“Consolidated Bankruptcy Proceedings” means proceedings in the Bankruptcy
Registry for the Consolidated Bankruptcy Estates.
x)
"Contingent Value Certificates" means the certificates to be issued by the
Partnership to Unsecured Creditors for the Contingent Value Consideration
pursuant to the Contingent Value Certificate Indenture, substantially in the form
attached hereto as Schedule B.
y)
“Contingent Value Certificate Indenture” means the Contingent Value Certificate
Indenture substantially in the form attached hereto as Schedule B;
z)
"Contingent Value Consideration" means the amount to be distributed to the
Unsecured Creditors under the terms set out in Schedule A.
aa)
"Court" means the Supreme Court of British Columbia.
bb)
"Creditors' Meeting" means the meeting of Unsecured Creditors to be held on
December 1, 2014 for the purpose of considering and voting upon this BIA
Proposal, and any adjournment of such meeting.
11/17/2014 CW
-4cc)
“Creditor Representative” means the agent of the holders of the Contingent
Value Certificates as provided for in the Contingent Value Certificate Indenture.
dd)
"Crown Claims" means Claims of Her Majesty in right of Canada or a province, for
amounts that were outstanding as at the Date of Bankruptcy and are of a kind
that could be subject to a demand under:
(i)
subsection 224(1.2) of the Income Tax Act;
(ii)
any provision of the Canada Pension Plan or of the Employment Insurance
Act that refers to subsection 224(1.2) of the Income Tax Act and provides
for the collection of a contribution, as defined in the Canada Pension Plan,
or an employee's premium, or employer's premium, as defined in the
Employment Insurance Act, and of any related interest, penalties or other
amounts; or
(iii)
any provision of provincial legislation that has a similar purpose to
subsection 224(1.2) of the Income Tax Act, or that refers to that
subsection, to the extent that it provides for the collection of a sum, and
of any related interest, penalties or other amounts, where the sum:
A.
has been withheld or deducted by a person from a payment to
another person and is in respect of a tax similar in nature to the
income tax imposed on individuals under the Income Tax Act; or
B.
is of the same nature as a contribution under the Canada Pension
Plan if the province is a "province providing a comprehensive
pension plan" as defined in subsection 3(1) of the Canada Pension
Plan and the provincial legislation establishes a "provincial
pension plan" as defined in that subsection.
ee)
"Date of Bankruptcy" means November 17, 2014, the date on which the Debtors
were subject to Bankruptcy Assignments.
ff)
“Debtors” means collectively the Partnership, General Partner and Bare Trustees.
gg)
"Disputed Claim" means any Claim which has been received by the Proposal
Trustee in accordance with the terms of this BIA Proposal and the BIA but has not
been accepted as proven or which is being disputed in whole or in part by the
Trustee, the Proposal Trustee or any other person entitled to do so and has not
been resolved by agreement or by Order of the Court.
hh)
"Disputed Creditor" means a Person holding a Disputed Claim to the extent of
their Disputed Claim.
ii)
"Effective Date" has the meaning ascribed to it in Section 4.3.
jj)
"Employee Non-Severance Claim'' means Claims of employees of the Debtors
required to be paid under subsection 60(1.3) of the BIA.
11/17/2014 CW
-5kk)
"Excluded Claim" means:
(i)
any Claims by the Trustee and Proposal Trustee and counsel for the
Trustee and Proposal Trustee;
(ii)
any Claim for amounts owing by the Trustee on account of goods,
property or services actually provided to and received by the Trustee at
the Trustee's request after the Date of Bankruptcy, which monies shall be
paid in full by the Trustee in accordance with the terms agreed upon with
the suppliers of such goods, property or services;
(iii)
any Claims against directors and/or officers of the General Partner;
(iv)
CCAA Post-Filing Claims;
(v)
Crown Claims; and
(vi)
the Claims of Persons arising from the repudiation of an agreement where
notice of repudiation was not given, or repudiation did not occur, more
than 7 days prior to the Creditors' Meeting in accordance with Section 3.6.
ll)
"General Partner" means Colwood City Centre GP Inc., a British Columbia
company, acting as itself or on behalf of the Partnership.
mm)
"including" means "including, without limitation", and "includes" means "includes
without limitation".
nn)
“Inspector” means the person(s) appointed or elected as inspectors under and
pursuant to the BIA in respect of the Debtors.
oo)
“Levy” means the levy imposed by the Superintendent of Bankruptcy under the
BIA.
pp)
“Lien” means, with respect to any interest in property, any mortgage, lien, pledge,
charge, security interest, easement or encumbrance of any kind whatsoever,
under applicable law, affecting such interest in property of the Debtors, and shall
include such interest of Secured Deficiency Creditor.
qq)
"Official Receiver" is the officer appointed pursuant to Section 12(2) of the BIA in
the City of Vancouver, British Columbia, to perform the duties and responsibilities
more fully set out in the BIA.
rr)
"Order" means any order of the Court.
ss)
"Partnership" means Colwood City Centre Limited Partnership, a limited
partnership formed under the laws of British Columbia.
tt)
"Person" is to be broadly interpreted and includes an individual, a corporation, a
partnership, a trust, an unincorporated organization, the government of a country
11/17/2014 CW
-6or any political subdivision thereof, or any agency or department of any such
government, and the executors, administrators or other legal representatives of
an individual in such capacity.
uu)
“Preferred Claim” means a claim enumerated in subsection 136(1) of the BIA and
entitled to payment in full in priority to other Claims.
vv)
“Proof of Claim” means the form to be completed by an Unsecured Creditor
setting forth its Claim pursuant to the Bankruptcy Procedural Order and the
provisions of the BIA.
ww)
"Proposal Trustee" means PricewaterhouseCoopers Inc., in its capacity as
proposal trustee under this BIA Proposal.
xx)
"Repudiation Claim" means any Unsecured Claim that arises as a result of a
repudiation of an agreement by any of the Debtors in accordance with Section
3.6.
yy)
"Required Majority" means a majority in number and two-thirds in value of the
Unsecured Claims of all Unsecured Creditors entitled to vote who are present and
voting at the Creditors' Meeting (whether in person, by proxy or by voting letter)
in accordance with the voting procedures established by this BIA Proposal, the BIA
Procedural Order and the BIA.
zz)
“Restructuring Agreement” means the agreement dated October 3, 2014 entered
into by the Partnership with an affiliate of the Sponsor with respect to
restructuring the ownership of the Partnership.
aaa)
“Restructuring Order” means the Order of the Court obtained on October 9, 2014
authorizing and approving the Restructuring Agreement.
bbb)
“Restructuring Transaction” means the series of transactions to be completed as
set forth in the Restructuring Agreement.
ccc)
“Secured Creditor” means a Person holding a secured interest against the
property of the Partnership as of the CCAA Filing Date.
ddd)
"Secured Deficiency Claim" mean a Claim of a Secured Creditor for any
deficiencies the Secured Creditor would suffer in the recovery of the indebtedness
owed to it, where such deficiency has arisen from the Restructuring Order.
eee)
“Secured Deficiency Creditor” means any Person having a Secured Deficiency
Claim.
fff)
“Sponsor” means •.
ggg)
“Trustee'' means PricewaterhouseCoopers Inc. in its capacity as trustee of the
Consolidated Bankruptcy Estates.
11/17/2014 CW
-7hhh)
“Trustee's Certificate" has the meaning ascribed to it in Section 4.3.
iii)
“Unsecured Claims” mean CCAA Unsecured Claims, BIA Unsecured Claims,
Repudiation Claims and Secured Deficiency Claims.
jjj)
"Unsecured Creditor" means any Person having an Unsecured Claim to the extent
of its Unsecured Claim.
kkk)
“Unsecured Creditors Class" means the class for the purposes of considering and
voting on this BIA Proposal comprised of Unsecured Creditors.
1.2
Date of Any Action
In the event that any date on which any action is required to be taken under this BIA Proposal by
any of the parties is not a Business Day, the action shall be required to be taken on the next
proceeding day which is a Business Day.
1.3
Time
All times expressed in this BIA Proposal are local time Vancouver, British Columbia, Canada, unless
stipulated otherwise. Time is of the essence in this BIA Proposal.
1.4
Statutory References
Any reference in this BIA Proposal to a statute includes all regulations made thereunder and all
amendments to such statutes or regulations in force from time to time.
1.5
References
References in this BIA Proposal to the singular shall include the plural and references to the plural
shall include the singular.
1.6
Monetary References
All references to currency and to "$" are to Canadian dollars, unless otherwise states.
ARTICLE 2
BIA PROPOSAL AND DISTRIBUTION TO CREDITORS
2.1
Effect of BIA Proposal
As provided for in this BIA Proposal and the BIA Approval Order:
a)
the Claims are assigned to the Claims Assignee at the Claims Assignment Time,
and thereafter as between the prior holder of such Claims and the Partnership
shall be fully and finally settled, discharged and extinguished;
b)
at all times prior to the BIA Approval Order the Partnership existed and continues
to exist as a valid and subsisting limited partnership under the Partnership Act
11/17/2014 CW
-8(British Columbia) as at and from the time immediately preceding the Date of
Bankruptcy;
c)
at all times prior to the BIA Approval Order the Bare Trustees held and continue to
hold the beneficial title and interests in their property as bare trustees and
nominee for the Partnership;
d)
the Partnership and the Bare Trustees will remain bankrupt and their property
shall not revest in them until the Bankruptcy Annulment Date; and
e)
the bankruptcy of the Consolidated Bankruptcy Estates shall be annulled on the
Bankruptcy Annulment Date.
2.2
Class of Creditors
For the purpose of considering and voting upon this BIA Proposal, there shall be one class of
creditors, being the Unsecured Creditors Class.
2.3
Treatment of Unsecured Claims
Cash Consideration
Each Unsecured Creditor under this BIA Proposal will receive its pro rata share (determined by
multiplying the Cash Consideration less the amount of the Preferred Claims by a fraction, the
numerator of which is the amount of the Claim of such Unsecured Creditor, as determined by the
Proposal Trustee and the denominator of which is the total amount of all such Claims) of the Cash
Consideration.
Contingent Value Consideration
Each Unsecured Creditor under this BIA Proposal will receive its pro rata share (determined by
multiplying the Contingent Value Consideration by a fraction, the numerator of which is the
amount of the Claim of such Unsecured Creditor, as determined by the Proposal Trustee and the
denominator of which is the total amount of all such Claims) of the Contingent Value
Consideration.
2.4
Distributions
Upon receiving the Cash Consideration, the Proposal Trustee shall pay in full all Preferred Claims in
accordance with the provisions of the BIA and thereafter shall distribute to each Unsecured
Creditor its pro rata share of the Cash Consideration and the Contingent Value Certificates in full
and final satisfaction of its Unsecured Claim.
A Creditor Representative shall be appointed pursuant to the Contingent Value Certificate
Indenture to act as agent for the holders of the Contingent Value Certificates and shall have the
full authority to represent the holders of the Contingent Value Certificates in all matters.
All distributions under this BIA Proposal shall be subject to the Levy which will be deducted from
each distribution prior to any payment by the Proposal Trustee, and shall be made by cheque sent
11/17/2014 CW
-9via regular mail to such Unsecured Creditor at the address set out on the Unsecured Creditor’s
CCAA Proof of Claim or Proof of Claim.
A Disputed Creditor will not receive a distribution until its Disputed Claim is resolved. Upon
resolution of a Disputed Claim, the Proposal Trustee shall distribute to such Unsecured Creditor its
pro rata share of the Cash Consideration and the Contingent Value Certificates in full and final
satisfaction of its Unsecured Claim.
2.5
Excluded Claims
This BIA Proposal shall not compromise, release or otherwise affect the Excluded Claims.
Creditors with Excluded Claims will not be entitled to vote the amounts of their Excluded Claims at
the Creditors’ Meeting or receive any distributions pursuant to this Proposal in respect of the
portions of their Claims that are Excluded Claims.
2.6
Required Payments
In addition to payments to be made by the Proposal Trustee out of the Cash Consideration, on the
Effective Date, the Trustee on behalf of the Partnership shall pay or make provision to pay the
following:
a)
all Crown Claims within 6 months of the date of the BIA Approval Order is made;
b)
any Employee Non-Severance Claims that have not been paid by the Proposal
Trustee out of the Cash Consideration;
c)
all fees and disbursements, including legal costs, of the Proposal Trustee; and
d)
all fees and disbursements of counsel to the Debtors.
ARTICLE 3
PROOFS OF CLAIMS, CREDITORS’ MEETING AND RELATED MATTERS
3.1
Proof of Claims and CCAA Proof of Claims
CCAA Proofs of Claims shall stand as Proofs of Claims filed in respect of this BIA Proposal and
Unsecured Creditors who have filed CCAA Proofs of Claims need not file an additional Proof of
Claim in order to vote at the Creditors' Meeting in respect of the BIA Proposal and to receive a
distribution in respect of their Unsecured Claims under the BIA Proposal. Pursuant to the BIA
Procedural Order, the Proposal Trustee will determine the Claims of such Unsecured Creditors
using the CCAA Proofs of Claim and will not require each Unsecured Creditor to file a further Proof
of Claim, unless required to do so by further Order of the Court.
A Person with a Repudiation Claim or Secured Deficiency Claim may filed a Proof of Claim
pursuant to the BIA Procedural Order in order to vote at the Creditors' Meeting in respect of the
BIA Proposal and to receive a distribution in respect of their Unsecured Claims under the BIA
Proposal. The Proposal Trustee will determine the Claims of such Persons using the Proofs of
Claims.
11/17/2014 CW
- 10 In order to vote at the Creditors’ Meeting, a Proof of Claim must be received by the Proposal
Trustee prior to the commencement of the Creditors’ Meeting. In order to receive any distribution
under this BIA Proposal, an Unsecured Creditor must submit a Proof of Claim prior to the Effective
Date.
3.2
Creditors' Meeting, Proxies and Voting Letters
Proxies as provided for in the BIA indicating a Person authorized to act on behalf of an Unsecured
Creditor may be submitted to the Proposal Trustee (who, subject to the consent of the Official
Receiver, will chair the Creditors' Meeting) at, or any time prior to, the commencement of the
Creditors' Meeting. Voting Letters as provided for in the BIA submitted to the Proposal Trustee
prior to the Creditors' Meeting must indicate whether the Unsecured Creditor wishes to cast their
vote in favour of or against the BIA Proposal. Voting Letters that do not indicate either preference
will be deemed to indicate a vote in favour of the BIA Proposal. Persons in attendance at the
Creditors' Meeting shall cast their vote in the manner prescribed by the Proposal Trustee and the
BIA. All votes will be recorded and tabulated by the Proposal Trustee, who may seek the
assistance of the Court with respect to any dispute arising from or out of the tabulation of the
votes. A quorum shall be constituted for the Creditors' Meeting or any adjournment thereof if
there is one Unsecured Creditor, entitled to vote, present in person or by proxy or if one
Unsecured Creditor, entitled to vote, has submitted a Voting Letter in accordance with the
provisions of the BIA and this BIA Proposal. If the requisite quorum is not present at the Creditors'
Meeting or if the Creditors' Meeting has to be postponed for any reason, then the Creditors'
Meeting shall be adjourned by the Proposal Trustee to such date, time and place as determined by
the Proposal Trustee. The Creditors' Meeting shall take place in Vancouver, British Columbia.
3.3
Claims for Voting Purposes
Each Unsecured Creditor shall be entitled to a single vote at the Creditors’ Meeting valued at the
amount of their Unsecured Claim. If the amount of the Unsecured Claim of a Disputed Creditor is
not finally determined prior to the date of the Creditors' Meeting, the Disputed Creditor shall be
entitled to vote at the Creditors' Meeting on the portion of its Unsecured Claim, if any, that has
been accepted by the Trustee for voting purposes without prejudice to the rights of the Proposal
Trustee, the Trustee and the Disputed Creditor to have the quantum of the Disputed Creditor's
Unsecured Claim finally determined for the purposes of receiving its share of the Cash
Consideration and Contingent Value Consideration.
3.4
Inspectors
At the Creditors’ Meeting, the Unsecured Creditors may appoint from one to five (5) Inspectors
under this BIA Proposal, whose powers shall be restricted to advising the Proposal Trustee in
respect of such matters as the Proposal Trustee may consider appropriate from time to time, and
considering and approving any amendments to this BIA Proposal which have been agreed and
consented to by the Proposal Trustee.
Provided that all acts done by the Inspectors are done in good faith, the Inspectors shall not be
liable to the Unsecured Creditors for any actions taken by the Inspectors.
11/17/2014 CW
- 11 3.5
Approval by Unsecured Creditors
In order to be approved, the BIA Proposal must receive the affirmative vote of the Required
Majority.
3.6
Repudiation of Contracts
The Debtors may repudiate or give notice of repudiation of any contract, arrangement,
agreement, or lease to which it is a party, other than loan agreements or debt obligations, and
provided that such notice of repudiation is given, or repudiation takes place, at least 7 days prior
to the Creditors' Meeting, the Claims of each Person resulting or arising from the repudiation of
such contracts, arrangements, agreements, leases and indentures shall be an Unsecured Claim in
this BIA Proposal (a “Repudiation Claim”).
3.7
Modification of the BIA Proposal
Subject to the consent of the Proposal Trustee, at any time prior to the Creditors' Meeting, the
Trustee on behalf of the Debtors reserves the right at any time to file any modification,
amendment or supplement of and to the BIA Proposal, including by way of a supplementary
proposal, and file such amended or supplementary proposal with the Official Receiver as soon as
practical, in which case any such supplementary proposal or proposals shall, for all purposes, be
and be deemed to be a part of and incorporated into the BIA Proposal. At the Creditors' Meeting,
the Trustee and/or the Proposal Trustee shall provide all Unsecured Creditors in attendance with
details of any modifications or amendments of and to the BIA Proposal prior to the vote being
taken to approve the BIA Proposal. After the Creditors' Meeting (and both prior to and
subsequent to the BIA Approval Order) and subject to the consent of the Proposal Trustee, the
Trustee on behalf of the Debtors may at any time and from time to time vary, amend, modify or
supplement the BIA Proposal if the Court determines that such variation, amendment,
modification or supplement is of a minor, immaterial or technical nature or would not be
materially prejudicial to the interest of any of the Unsecured Creditors under the BIA Proposal and
is necessary in order to give effect to the substance of the BIA Proposal or the BIA Approval Order.
ARTICLE 4
CONDITIONS AND EFFECTIVE DATE
4.1
BIA Approval Order
Provided that the BIA Proposal is approved by the Required Majority, the Trustee shall file an
application for the BIA Approval Order no later than 5 Business Days following the Creditors'
Meeting or such other date as the Court may order, which application shall be heard as soon as
possible according to the procedure set out in Section 58 of the BIA.
4.2
Conditions Precedent to the Effective Date
The Effective Date is subject to the satisfaction of the following conditions precedent:
a)
11/17/2014 CW
the BIA Proposal is approved by the Required Majority;
- 12 b)
11/17/2014 CW
the BIA Approval Order sanctioning this BIA Proposal shall have been made, and
the effect of the BIA Approval Order shall not have been stayed, revised, modified,
reversed or amended, and the BIA Approval Order shall, among other things:
(i)
declare that: (A) the BIA Proposal has been approved by the Required
Majority in conformity with the BIA; and (B) the BIA Proposal and the
transactions contemplated hereby are fair and reasonable, and in the best
interest of the Debtors, the Unsecured Creditors and the other
stakeholders;
(ii)
order that the BIA Proposal is sanctioned and approved pursuant to the
BIA;
(iii)
declare that all steps taken by the Trustee as contemplated by the BIA
Procedural Order have been satisfied;
(iv)
declare that the Partnership was never dissolved as a result of the
bankruptcy of the General Partner or the Bare Trustees;
(v)
declare that the Partnership has been at all times since its formation and
is, a valid and subsisting limited partnership under the Partnership Act
(British Columbia);
(vi)
declare that the Partnership continued to carry on its business and all
property and business of the Partnership remained vested in the
Partnership after and during the Consolidated Bankruptcy Proceedings;
(vii)
authorize and direct the Proposal Trustee to issue, execute and deliver the
agreements, documents, securities and instruments contemplated by the
BIA Proposal in order to effect all actions contemplated by this BIA
Proposal;
(viii)
authorize the Trustee to issue, execute and deliver the appropriate
documents to the British Columbia Registrar of Lands to discharge all
Liens affecting the real property of the Debtor and the registrar under the
Personal Property Security Act (British Columbia) (“PPSA”) existing as of
the Effective Date;
(ix)
direct the British Columbia Registrar of Lands to discharge all Liens
affecting the real property of the Debtors pursuant to the BIA Proposal
existing as of the Effective Date
(x)
direct the registrar under the PPSA to discharge all Liens filed in the
personal property register under the PPSA affecting the personal property
of the Debtors existing as of the Effective Date ; and
(xi)
annul the bankruptcy of the Consolidated Bankruptcy Estates as of the
Bankruptcy Annulment Date;
- 13 c)
the Restructuring Transaction has closed and $8,915,619 or such further amounts
as contemplated by the Restructuring Agreement has been paid to the CCAA
Monitor;
d)
the partnership agreement for the Partnership has been amended as
contemplated by the Restructuring Agreement and all steps to implement the
transactions contemplated by the Restructuring Agreement have been completed;
e)
the Debtors have repudiated all contracts, arrangements, agreements and leases
pursuant to Section 3.6 and as required by the Sponsor; and
f)
all other actions, documents and agreements necessary to implement the BIA
Proposal as required herein shall have been effected and executed.
4.3
Trustee's Certificate and Effective Date
Upon the satisfaction or waiver of the conditions precedent set out in Section 4.2, the Proposal
Trustee will file with the Court a copy of the certificate given by the Proposal Trustee to the
Debtors and the Official Receiver stating that all conditions precedent set out in Section 4.2 have
been satisfied or waived (the "Trustee’s Certificate''). The date the Trustee's Certificate is given to
the Debtors and the Official Receiver and filed with the Court shall be deemed the "Effective
Date". If the Proposal Trustee has not filed the Trustee's Certificate within 5 months of the
issuance of the BIA Approval Order, this BIA Proposal shall become null and void and any
document or agreement executed pursuant to this BIA Proposal shall become null and void unless
the Trustee on behalf of the Debtors provides its written consent to extend the period for the
satisfaction or waiver of the conditions precedent beyond 5 months following the issuance of the
BIA Approval Order.
ARTICLE 5
RELEASE AND ANNULMENT
5.1
Binding Effect
On the granting of the BIA Approval Order by the Court, this BIA Proposal will become effective
and be binding on and enure to the benefit of the Debtors and all Unsecured Creditors,
irrespective of whether the Unsecured Creditor submits a Proof of Claim under this BIA Proposal
or has submitted a CCAA Proof of Claim, and all other Persons named or referred to in, or subject
to, this BIA Proposal and their respective heirs, executors, administrators and other legal
representatives, successors and assigns.
5.2
Release and Confirmation
At the Claims Assignment Time, all Claims, other than those that have, pursuant to this BIA
Proposal, been assigned to the Claims Assignee, shall as against the Debtors and each of them, be
deemed to be fully and finally satisfied, settled and discharged and no Person other than the
Claims Assignee shall have any further right, remedy or claim against the Debtors or any of them
in respect of all or any portion of a Claim and all Claims that have, pursuant to this BIA Proposal,
been assigned to the Claims Assignee remain valid, subsisting and enforceable Claims against the
Debtors.
11/17/2014 CW
- 14 Any Claims against the Partnership that arose before the CCAA Filing Date regardless of the date
of crystallization of such Claim and that relate to the obligations of the Partnership where the
General Partner or its directors are by law liable in their capacity as General Partner or directors
for payment of such obligations, shall be deemed to be fully satisfied by the terms of this BIA
Proposal and shall not be enforceable against the General Partner or those directors in law or in
equity. For greater certainty, Excluded Claims are not released.
5.3
Cancellation of Liens
Concurrently with the granting of the BIA Approval Order by the Court, all Liens on or affecting or
in respect of any property of the Debtors or any of them, other than the Excluded Claims, shall be
terminated, null and void and be of no effect.
5.4
Annulment of Bankruptcy
On, but not before, the day immediately following the Effective Date (such day immediately
following the Effective Date is herein called the “Bankruptcy Annulment Date”), the bankruptcy of
the Consolidated Bankruptcy Estates will be annulled and the property of the Debtors will revest
in them, but until the Bankruptcy Annulment Date, the Debtors will remain bankrupts within the
meaning of the BIA.
ARTICLE 6
GENERAL
6.1
Capacity of Proposal Trustee
PricewaterhouseCoopers Inc. is acting in its capacity as Trustee and as Proposal Trustee under this
BIA Proposal and not in its personal capacity, and shall not incur any liabilities or obligations in
connection with this BIA Proposal or in respect of the business or obligations of any of the
Debtors, whether existing as at the CCAA Filing Date or incurred subsequent thereto and no
Person shall have any Claim against PricewaterhouseCoopers Inc. in respect thereof.
6.2
Certificate of Completion
Upon the making of the distributions by the Proposal Trustee to Unsecured Creditors from the
Cash Consideration as contemplated by this BIA Proposal, the terms of the BIA Proposal shall be
deemed to be fully performed and the Proposal Trustee shall provide to the Debtors and to the
Official Receiver a certificate pursuant to Section 65.3 of the BIA and the Proposal Trustee shall
thereupon be entitled to be discharged.
6.3
No Default
Each Unsecured Creditor will be deemed to have waived any default by any of the Debtors in any
provision, expressed or implied or in any agreement existing between the Unsecured Creditor and
the Debtor that occurred on or prior to the CCAA Filing Date. Each Unsecured Creditor will be
deemed to have agreed that, to the extent there is any conflict between the provisions of any
such agreement and the provisions of this BIA Proposal, the provisions of the BIA Proposal takes
precedence and the provisions of any such agreement are amended accordingly.
11/17/2014 CW
- 15 6.4
Paramountcy
From and after the Effective Date, any conflict between (i) this BIA Proposal, and (ii) the
covenants, warranties, representations, terms, conditions, provisions or obligations, express or
implied, of any contract, purchase order, mortgage, security agreement, indenture, trust
indenture, loan or other agreement, commitment letter, lease or other arrangement or
undertaking, written or oral (including any and all amendments or supplements thereto) existing
with, between or among one or more of the Unsecured Creditors and any of the Debtors as at the
Effective Date will be deemed to be governed by the provisions of this BIA Proposal and the BIA
Approval Order, which shall take precedence and priority. For greater certainty, all Unsecured
Creditors shall be deemed to consent to all transactions contemplated in this BIA Proposal.
6.5
Severability of BIA Proposal Provisions
If, prior to the Effective Date, any term or provision of this BIA Proposal is held by the Court to be
invalid, void or unenforceable, the Court, at the request of the Proposal Trustee, shall have the
power to alter and interpret such term or provision to make it valid or enforceable to the
maximum extent practicable, consistent with the original purpose of the term or provision held to
be invalid, void or unenforceable, and such term or provision shall then be applicable as altered or
interpreted. Notwithstanding any such holding, alteration or interpretation, the remainder of the
terms and provisions of this BIA Proposal shall remain in full force and effect and shall in no way
be affected, impaired or invalidated by such holding, alteration or interpretation.
6.6
Further Assurances
Each of the Persons named or referred to in, or subject to, this BIA Proposal will execute and
deliver all such documents and instruments and do all such acts and things as may be necessary or
desirable to carry out the full intent and meaning of this BIA Proposal and to give effect to the
transactions contemplated herein.
6.7
Governing Law
This BIA Proposal will be governed by and construed in accordance with the laws of the Province
of British Columbia and the laws of Canada applicable therein.
6.8
Notices
Any notice or other communication to be delivered hereunder must be in writing and may, unless
otherwise set out herein, be made or given by personal delivery, registered mail, facsimile or such
other written electronic communication acceptable to the parties, as follows:
11/17/2014 CW
- 16 a)
if to the Proposal Trustee:
PricewaterhouseCoopers Inc.
250 Howe Street, Suite 700
Vancouver, BC V6C 3S7
Attention:
Fax:
Email:
Neil Bunker
604-806-7806
[email protected]
With a copy to:
Osler, Hoskin & Harcourt LLP
Box 50, 1 First Canadian Place
Toronto, Ontario, Canada M5X 1B8
Attention:
Fax:
Email:
b)
Tracey Sandler / Jeremy Dacks
416-862-6666
[email protected] / [email protected]
if to the Debtors:
League Investments Services Inc.
1889 Island Highway
Colwood, BC
V9B 1JH
Attention:
Fax:
Email:
John Parkinson
250-999-8929
[email protected]
With a copy to:
Clark Wilson LLP
900-885 West Georgia Street
Vancouver, BC V6C 3H1 Canada
Attention:
Fax:
Email:
Christopher Ramsay
604-687-6314
[email protected]
Any such communication so given or made shall be deemed to have been given or made and to
have been received on the day of delivery if delivered, or on the day of faxing or sending by other
means of recorded electronic communication, provided that such day in either event is a Business
Day and the communication is so delivered, faxed or sent before 4:30 p.m. on such day.
Otherwise, such communication shall be deemed to have been given and made and to have been
received on the next following Business Day.
11/17/2014 CW
- 17 -
6.9
Deeming Provisions
In this BIA Proposal, the deeming provisions are not rebuttable and are conclusive and irrevocable.
DATED as of /(L2/ / ,2014
Consolidated
Bankruptcy
Estates
by PricewaterhouseCoopers Inc. in its
capacity as Trustee of the Consolidated
Bankruptcy Estates
Per:
Neil Bunker
CW7733234.3 1/17/2014 CW
- 18 Schedule A
Contingent Value Consideration
1. The Contingent Value Consideration will be 17.5% of the cumulative net income, other
than rental income, of the Partnership derived only from the development of the Colwood
City Centre Development in the period January 1, 2015 to December 31, 2016.
2. The holders of the Contingent Value Certificates are entitled to receive annual financial
statements of the Partnership for each 12-month period ending December 31, 2015 and
2015, but have no other rights to information from the Partnership.
3. The Creditor Representative shall act as agent for the holders of the Contingent Value
Certificates and shall have full authority to represent the holders of the Contingent Value
Certificates in all matters.
4. The Contingent Value Certificates are to be issued under a trust indenture with a trustee.
5. The Contingent Value Certificates are not transferable except by operation of the law
(death, bankruptcy, actions by creditors, matrimonial proceedings, etc.).
11/17/2014 CW
SCHEDULE B
Form of Contingent Value Certificate Indenture
COLWOOD CITY CENTRE LIMITED PARTNERSHIP
- and -

CONTINGENT VALUE CERTIFICATE INDENTURE
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TABLE OF CONTENTS
Page
ARTICLE 1 INTERPRETATION ............................................................................................................ 2
1.1
Definitions .......................................................................................................................... 2
1.2
Gender................................................................................................................................. 3
1.3
Meaning of “Outstanding” .................................................................................................. 4
1.4
Interpretations Not Affected by Headings .......................................................................... 4
1.5
Applicable Law ................................................................................................................... 4
1.6
Currency.............................................................................................................................. 4
1.7
Business Day....................................................................................................................... 4
1.8
Severability ......................................................................................................................... 4
ARTICLE 2 ISSUE OF CONTINGENT VALUE CERTIFICATES .................................................... 4
2.1
Creation/Issue/Designation ................................................................................................. 4
2.2
Form and Terms of Contingent Value Certificates ............................................................. 4
2.3
Issue of Contingent Value Certificates; Computation of, and Payment to,
Holders ................................................................................................................................ 5
2.4
Contingent Value Certificates to Rank Pari Passu............................................................. 6
2.5
Signing of Contingent Value Certificates ........................................................................... 6
2.6
Certification by Trustee ...................................................................................................... 6
2.7
Representation by Trustee................................................................................................... 6
2.8
Issue in Substitution for Lost Contingent Value Certificates ............................................. 6
2.9
Cost for Replacement.......................................................................................................... 7
ARTICLE 3 REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP
OF CONTINGENT VALUE CERTIFICATES .......................................................................... 7
3.1
Fully Registered Contingent Value Certificates ................................................................. 7
3.2
No Transfer ......................................................................................................................... 7
3.3
No Verification ................................................................................................................... 7
3.4
Resales in the United States ................................................................................................ 7
3.5
Requirements for Transfer .................................................................................................. 8
3.6
Exchange of Contingent Value Certificates ........................................................................ 8
3.7
Place for Exchange ............................................................................................................. 8
3.8
Charges for Registration, Transfer and Exchange .............................................................. 8
3.9
Applicant to Pay Charges.................................................................................................... 8
3.10
Register Open for Inspection .............................................................................................. 8
3.11
Closing of Register ............................................................................................................. 8
3.12
Ownership of Contingent Value Certificates ...................................................................... 9
3.13
No Notice of Trusts............................................................................................................. 9
3.14
No Set-Offs ......................................................................................................................... 9
3.15
Actual Production Not Required ......................................................................................... 9
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE ISSUER .................................... 9
4.1
Representations and Warranties .......................................................................................... 9
4.2
Reliance and Survival ....................................................................................................... 10
ARTICLE 5 ISSUER’S COVENANTS .................................................................................................. 10
5.1
Positive Covenants ............................................................................................................ 10
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- ii 5.2
Performance of Covenants by Trustee .............................................................................. 11
ARTICLE 6 DEFAULT AND ENFORCEMENT ................................................................................. 12
6.1
Events of Default .............................................................................................................. 12
6.2
Notice of Events of Default .............................................................................................. 12
6.3
Late Payments and Deliveries ........................................................................................... 13
6.4
Waiver of Default ............................................................................................................. 13
6.5
Remedies of Trustee ......................................................................................................... 13
6.6
No Suits by Holders .......................................................................................................... 13
6.7
Application of Proceeds by Trustee .................................................................................. 14
6.8
Distribution of Proceeds ................................................................................................... 14
6.9
Remedies Cumulative ....................................................................................................... 14
6.10
Trustee Appointed Attorney ............................................................................................. 15
6.11
Judgment Against the Issuer ............................................................................................. 15
6.12
Immunity of Issuers and Others ........................................................................................ 15
ARTICLE 7 ASSIGNMENT.................................................................................................................... 15
7.1
Assignment by Issuer ........................................................................................................ 15
7.2
Assignment by Trustee ..................................................................................................... 15
7.3
Obligations of Assignee .................................................................................................... 16
ARTICLE 8 SATISFACTION AND DISCHARGE.............................................................................. 16
8.1
Repayment of Unclaimed Monies to Issuer ...................................................................... 16
8.2
Release from Covenants ................................................................................................... 16
ARTICLE 9 MEETING OF CONTINGENT VALUE CERTIFICATE HOLDERS ........................ 16
9.1
Contingent Value Certificate Holders to Convene Meeting ............................................. 16
9.2
Notice ................................................................................................................................ 16
9.3
Chair ................................................................................................................................. 17
9.4
Quorum ............................................................................................................................. 17
9.5
Power to Adjourn .............................................................................................................. 17
9.6
Show of Hands .................................................................................................................. 17
9.7
Poll .................................................................................................................................... 17
9.8
Voting ............................................................................................................................... 18
9.9
Persons Entitled to Attend Meetings................................................................................. 18
9.10
Regulations ....................................................................................................................... 18
9.11
Powers Exercisable by Special Resolution ....................................................................... 19
9.12
Powers Cumulative ........................................................................................................... 19
9.13
Minutes ............................................................................................................................. 19
9.14
Instruments in Writing ...................................................................................................... 20
9.15
Binding Effect of Resolutions ........................................................................................... 20
ARTICLE 10 CONCERNING THE TRUSTEE AND THE CREDITOR
REPRESENTATIVE ................................................................................................................... 20
10.1
Trust Indenture Legislation ............................................................................................... 20
10.2
Rights and Duties of Trustee and the Creditor Representative ......................................... 20
10.3
Evidence, Experts and Advisers ....................................................................................... 21
10.4
Documents, etc. Held by Trustee ...................................................................................... 22
10.5
Action by Trustee to Protect Interests ............................................................................... 22
10.6
Trustee Not Required to Give Security ............................................................................. 22
10.7
Protection of Trustee and Creditor Representative ........................................................... 22
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- iii 10.8
10.9
10.10
10.11
10.12
10.13
10.14
Resignation, Removal or Replacement of Trustee or the Creditor
Representative ................................................................................................................... 23
Conflict of Interest ............................................................................................................ 24
Acceptance of Trust .......................................................................................................... 24
Authority of Trustee.......................................................................................................... 24
Indemnification ................................................................................................................. 24
Investment of Funds by the Trustee .................................................................................. 25
Creditor Representative .................................................................................................... 25
ARTICLE 11 NOTICES .......................................................................................................................... 26
11.1
Notice to Holders .............................................................................................................. 26
11.2
Notice to the Trustee ......................................................................................................... 26
11.3
Notice to the Issuer ........................................................................................................... 26
11.4
Notice to the Creditor Representative ............................................................................... 26
ARTICLE 12 FORMS OF CONTINGENT VALUE CERTIFICATES ............................................. 27
12.1
Contingent Value Certificate Certificates ......................................................................... 27
ARTICLE 13 SUCCESSOR COMPANIES ........................................................................................... 27
13.1
Certain Requirements in Respect of Merger, etc. ............................................................. 27
13.2
Successor Substituted ....................................................................................................... 28
ARTICLE 14 SUPPLEMENTAL INDENTURES ................................................................................ 28
14.1
Supplemental Indentures................................................................................................... 28
ARTICLE 15 ANTI-MONEY LAUNDERING ..................................................................................... 29
15.1
Third Party Interests.......................................................................................................... 29
15.2
Not Bound to Act .............................................................................................................. 29
ARTICLE 16 EXECUTION .................................................................................................................... 30
16.1
Counterparts and Formal Date .......................................................................................... 30
SCHEDULE “A” FORM OF CONTINGENT VALUE CERTIFICATE ................................1
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THIS INDENTURE is made as of the ______ day of December, 2014
BETWEEN:
COLWOOD CITY CENTER LIMITED PARTNERSHIP, a limited
partnership existing under the laws of British Columbia, as represented
by its General Partner, COLWOOD CITY CENTER GP INC., a
British Columbia company 
(the “Issuer”)
AND:

(the “Creditor Representative”)
AND:
, a trust company incorporated under the laws of  and having an
office at , Vancouver, British Columbia, 
(the “Trustee”).
WHEREAS:
A.
The Issuer has assigned and compromised all indebtedness and liabilities of the Issuer to its
creditors pursuant to the Proposal (defined below) under which, among other things, the former creditors
of the Issuer are entitled to receive Contingent Value Consideration (defined below) that is to be
determined on the basis of the financial performance of Colwood City Centre Development (as defined
below) as provided for herein;
B.
In order to effect the rights of the former creditors of the Issuer to receive the amounts referred to
in Recital A, the Issuer has agreed to create and issue to the former creditors of the Issuer any certificates,
as constituted and issued in the manner set out in this Indenture, representing the rights of the former
creditors of the Issuer to receive such amounts;
C.
The Issuer is duly authorized to create and issue the Contingent Value Consideration (defined
below) to be issued as set out in this Indenture;
D.
The Creditor Representative has been appointed and designated as the attorney and representative
of the Holders (defined below) pursuant to the Proposal;
E.
All things necessary have been done and performed to make the Contingent Value Certificates,
when certified by the Trustee and issued in the manner set out in this Indenture, valid, binding and legal
obligations of the Issuer with the benefits, and subject to the terms of this Indenture; and
F.
Whereas the foregoing Recitals are statements made by the Issuer and not by the Trustee.
NOW THEREFORE THIS INDENTURE WITNESSETH and it is hereby agreed and declared as set
forth herein.
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-2ARTICLE 1
INTERPRETATION
1.1
Definitions
In this Indenture, the following terms have the meanings assigned below:
“Accountants” mean the Persons acting as the accountants of the Issuer including the internal accounting
staff of the Issuer;
“Business Day” means a day which is not a Saturday, Sunday or civic or statutory holiday in Vancouver,
British Columbia;
“Colwood City Centre Development” means the development of the lands located in Colwood, British
Columbia legally described as ;
“Colwood City Centre GP Inc.” means the general partner of the Issuer;
“Contingent Value Certificates” means the Contingent Value Certificates of the Issuer issued and
certified hereunder, and for the time being outstanding;
“Contingent Value Consideration” means 17.5% of the cumulative consolidated net income, other than
net rental income, from the development of the Colwood City Centre Development in the period from and
including January 1, 2015 to and including December 31, 2016, as shown in the financial statements of
the Colwood City Centre Development prepared by the Accountants in accordance with GAAP, which
17.5% of the amount of such cumulative consolidated net income, other than net rental income as shown
on such financial statements is, absent manifest error, the amount of cumulative consolidated net income,
other than net rental income to which the Holders are entitled;
“Creditor Representative” means the Person named as a Creditor Representative in the Proposal, and
any successor to such Person;
“Effective Date” has the meaning provided for in the Proposal;
“GAAP” means generally accepted accounting principles in Canada as applicable to the Issuer, but
which, unless required under such generally accepted accounting principles, do not include International
Fiscal Reporting Standards;
“Holders” means the persons from time to time entered in the Register as holders of Contingent Value
Certificates;
“Indenture” means this indenture and and all amendments made hereto;
“Issuer” means Colwood City Centre Limited Partnership, a British Columbia limited partnership and
every successor corporation, which has complied with the provisions of section 13.1 of this Indenture;
“Non-Resident Holders” means a Holder that is a non-resident of Canada under the Tax Act;
“Payment Date” means September 30, 2017;
“Person” means an individual, a body corporate, a partnership, a trustee or an unincorporated
organization, and pronouns have a similarly extended meaning;
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-3“Proposal” means the consolidated proposal under the Bankruptcy and Insolvency Act (Canada) of the
Issuer and Colwood City Centre GP Inc., Colwood Cooke Developments Ltd., Colwood Jerome
Developments Ltd., Colwood Belmont Developments Ltd. and 0781591 B.C. Ltd. as approved by an
order of the Supreme Court of British Columbia in Bankruptcy on December , 2014;
“Pro-Rata Share” means, in respect of each Holder, the portion expressed as a percentage that the
number of Contingent Value Certificates held by that Holder as at the Record Date for any Payment Date
is of all of the Contingent Value Certificates issued and outstanding as at such Record Date;
“Record Date” means the day that is 10 days prior to the Payment Date;
“Register” means the register of Holders maintained pursuant to Article 3 of this Indenture;
“Special Resolution” means a resolution passed at a meeting of Holders by Holders of less not less than
two-thirds of the Contingent Value Certificates or by way of an instrument in writing, signed by Holders
of not less than two-thirds of the Contingent Value Certificates;
“subsidiary” means: (i) any corporation or company of which at least a majority of the outstanding
securities having by the terms thereof ordinary voting power to elect a majority of the board of such
corporation or company is at the time directly, indirectly or beneficially owned or controlled by the
Issuer; (ii) any partnership of which, at the time, the Issuer directly, indirectly or beneficially owns or
controls at least a majority of the voting interests (however designated) thereof, or otherwise controls such
partnership; and (iii) any other Person of which at least a majority of the voting interests (however
designated) are at the time directly, indirectly or beneficially owned or controlled by the Issuer;
“Tax Act” means the Income Tax Act (Canada), as amended; and
“Trustee” means and its successors for the time being in the trusts hereby created.
1.2
Other Defined Terms
Each of the following terms is defined in the Section set forth opposite such term:
Term
Section
“Contingent Value Certificate Indenture”............................................................................. Schedule A
“Disposition”..............................................................................................................................13.1(a)
“Event of Default”......................................................................................................................6.1
“Successor Person”................................................................................................................... 13.1(a)
“U.S. Person”............................................................................................................................. Schedule A
“U.S. Securities Act” ................................................................................................................ Schedule A
1.2
Gender
Throughout this Indenture words importing the singular number include the plural and vice versa and
words importing gender include the masculine, feminine and neuter genders.
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-4Meaning of “Outstanding”
1.3
Every Contingent Value Certificate certified and delivered by the Trustee will be deemed to be
outstanding until it has been fully paid, provided that where a new Contingent Value Certificate has been
issued in substitution for a Contingent Value Certificate which has been lost, stolen or destroyed, only
one of them will be counted for the purposes of determining the aggregate principal amount of the
Contingent Value Certificates outstanding.
1.4
Interpretations Not Affected by Headings
The division of this Indenture into sections, subsections and paragraphs and the provision of a table of
contents and the insertion of headings are for convenience of reference only and do not affect the
construction or interpretation of this Indenture.
1.5
Applicable Law
This Indenture and the Contingent Value Certificates are governed by the laws of British Columbia and
the laws of Canada applicable therein and will be treated in all respects as British Columbia contracts.
The parties hereto attorn to the non-exclusive jurisdiction of the courts of the Province of British
Columbia.
1.6
Currency
Except as otherwise expressly provided herein, all references to dollar amounts herein are to Canadian
dollars.
1.7
Business Day
Whenever any payment is due or required to be taken under this Indenture or the Contingent Value
Certificates on or as of a day that is not a Business Day, that payment must be made and the other action
must be taken on or as of the next day that is a Business Day.
1.8
Severability
The invalidity or unenforceability of any particular provision of this Indenture shall not affect or limit the
validity or enforceability of the remaining provisions of this Indenture.
ARTICLE 2
ISSUE OF CONTINGENT VALUE CERTIFICATES
2.1
Creation/Issue/Designation
An aggregate of ● [equal to the amount of aggregate amount of the Claims accepted by the Trustee
and paid to the holders of proven claims under the Proposal] Contingent Value Certificates are hereby
created and authorized to be issued.
2.2
Form and Terms of Contingent Value Certificates
(a)
The Contingent Value Certificates are direct unconditional obligations of the Issuer.
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-5(b)
Each Contingent Value Certificate will entitle the Holder thereof to receive the
Contingent Value Consideration in accordance with such Holder’s Pro-Rata Share, as
determined pursuant to this Indenture.
(c)
The Contingent Value Consideration will be paid to the Holders in Canadian dollars
pursuant to section 2.3.
(d)
The place at which the Register of the Contingent Value Certificates will be kept and
transfers, conversions, and exchanges of the Contingent Value Certificates may be
effected in accordance with Article 3, will be at the office of the Trustee in Vancouver,
British Columbia.
(e)
The Contingent Value Certificates will be issued in substantially the form set out in
Schedule “A” to this Indenture.
(f)
The certificates representing the Contingent Value Certificates may be in printed form or
may be engraved or lithographed or may be partly in one form and partly in the other, as
the Issuer may determine.
(g)
In the event of a conflict between the Contingent Value Certificates and this Indenture,
this Indenture shall prevail and be binding.
2.3
Issue of Contingent Value Certificates; Computation of, and Payment to, Holders
(a)
 [see section 2.1]Contingent Value Certificates representing the aggregate entitlement
of the Holders to the Contingent Value Consideration will be issued to the Persons
entitled thereto under the Proposal so that each such Person will be issued such number
of Contingent Value Certificates as is equal to the amount distributed to such Person
under the Proposal.
(b)
The Contingent Value Certificates will be issued and dated as of the Effective Date and
certificates representing the Contingent Value Certificates will be delivered to the
creditors of the Issuer in accordance with the Proposal.
(c)
The aggregate number of Contingent Value Certificates held by a Holder will entitle such
Holder to the Holder’s Pro-Rata Share of the Contingent Value Consideration.
(d)
The Contingent Value Consideration will be paid to the Holders in accordance with their
respective Pro-Rata Shares on the Payment Date.
(e)
At least ten Business Days prior to the Payment Date, the Issuer will: (i) file with the
Trustee a certificate of the Issuer specifying the amount of the Contingent Value
Consideration, if any, and a calculation of the Pro-Rata Share of the Contingent Value
Consideration, if any, payable to each Holder; and (ii) will pay to the Trustee the amount
of money representing the aggregate of the Contingent Value Consideration, if any, by
delivering a certified cheque payable to the Trustee drawn on a Canadian chartered bank
or by wiring such funds to an account designated by the Trustee for such purpose.
(f)
The Issuer shall not be required to pay any amount of the Contingent Value
Consideration if the aggregate amount of the Contingent Value Consideration to be paid
to all Holders is less than $10,000.
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-6(g)
The Trustee will pay to the Holders the amount of money representing their respective
Holder’s Pro-Rata Share of the Contingent Value Consideration, less any applicable
withholding taxes under the Tax Act in respect of Holders who are Non-Resident
Holders, on the Payment Date in accordance with the Issuer’s instructions provided to the
Trustee under section 2.3(f) by mailing cheques payable to the Holders drawn on a
Canadian chartered bank.
(h)
The Trustee will act and rely upon certificates and other documents filed by the Issuer
pursuant to this section for all purposes of the payment of the Holders’ entitlements to the
Contingent Value Consideration without any further investigation.
(i)
The Issuer shall not be required to pay the amount of the Contingent Value Consideration
to any Holder if the amount of the Contingent Value Consideration to be paid to such
Holder is less than $100.
2.4
Contingent Value Certificates to Rank Pari Passu
All Contingent Value Certificates rank equally pari passu with each and every other Contingent Value
Certificate without discrimination, preference or priority.
2.5
Signing of Contingent Value Certificates
The Contingent Value Certificates must be signed by any one director or officer of the general partners of
the Issuer. These signatures may be mechanically reproduced in facsimile and Contingent Value
Certificates bearing such facsimile signatures will be binding upon the Issuer as if they had been manually
signed by such authorized signatories. Notwithstanding that any of the persons whose manual or facsimile
signatures appear on any Contingent Value Certificate may no longer hold office at the date of this
Indenture or at the date of such Contingent Value Certificate. A Contingent Value Certificate signed as
aforesaid will be valid and binding upon the Issuer upon certification.
2.6
Certification by Trustee
No Contingent Value Certificate may be issued or, if issued, will have any legal effect until it is certified
by or on behalf of the Trustee substantially in the form of the certificate set out in Schedule “A” and such
certification by the Trustee on any Contingent Value Certificate is conclusive evidence as against the
Issuer that the Contingent Value Certificate so certified has been duly issued hereunder.
2.7
Representation by Trustee
The certification of the Trustee on a Contingent Value Certificate issued hereunder will not be construed
as a representation or warranty by the Trustee as to the validity of this Indenture or of the Contingent
Value Certificates (except the due certification thereof) and the Trustee will in no respect be liable or
answerable for the use made of the Contingent Value Certificate or any of them or of the proceeds
thereof.
2.8
Issue in Substitution for Lost Contingent Value Certificates
If any of the Contingent Value Certificates are mutilated, lost, destroyed or stolen, the Issuer in its
discretion may issue and the Trustee will certify and deliver a new Contingent Value Certificate of like
date and tenor as the one mutilated, lost, destroyed or stolen in exchange for and in place of and upon
cancellation of such mutilated Contingent Value Certificate or in lieu of and in substitution for such lost,
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-7destroyed or stolen Contingent Value Certificate. The new Contingent Value Certificate will be entitled to
the benefit of this Indenture and rank equally in accordance with its terms with all other Contingent Value
Certificates issued or to be issued hereunder.
2.9
Cost for Replacement
The applicant for the issue of a new Contingent Value Certificate pursuant to this section will bear the
cost of the issue thereof and in case of loss, destruction or theft will, as a condition precedent to the issue
thereof, furnish to the Issuer and to the Trustee:
(a)
evidence of ownership and of the loss, destruction or theft of the Contingent Value
Certificate so lost, destroyed or stolen satisfactory to the Issuer and the Trustee in their
discretion;
(b)
an indemnity and surety bond in amount and form satisfactory to the Issuer and the
Trustee in their discretion; and
(c)
the reasonable charges of the Issuer and the Trustee in connection with the issue of the
new Contingent Value Certificate.
ARTICLE 3
REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP
OF CONTINGENT VALUE CERTIFICATES
3.1
Fully Registered Contingent Value Certificates
The Issuer hereby appoints the Trustee as registrar and transfer agent of the Contingent Value
Certificates. The Issuer will cause to be kept by and at the principal office of the Trustee in Vancouver,
British Columbia, the Register in which will be entered the names and addresses of the holders of the
Contingent Value Certificates, the particulars of the Contingent Value Certificates held by them
respectively and of all transfers of Contingent Value Certificates.
3.2
No Transfer
The Contingent Value Certificates will not be transferable except to the Person entitled thereto by
operation of law.
3.3
No Verification
The Trustee will have no obligation to ensure or verify compliance with any applicable laws or regulatory
requirements on the issue, transfer or redemption of any Contingent Value Certificates. Unless the Trustee
is otherwise instructed by the Issuer in writing, the Trustee will be entitled to process all proffered
transfers of Contingent Value Certificates upon the presumption that such transfers are permissible
pursuant to all applicable laws and regulation requirements and the terms of the Contingent Value
Certificate Indenture.
3.4
Resales in the United States
The Contingent Value Certificates have not been and will not be registered under the U.S. Securities Act
and may not be transferred to a U.S. Person, or for the account or benefit of a U.S. Person, in the absence
of compliance with Regulation S under the U.S. Securities Act, a registration statement in effect with
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-8respect to the securities under such act or an opinion of counsel satisfactory to the Issuer that such
registration is not required or unless sold pursuant to Rule 144 of the U.S. Securities Act.
3.5
Requirements for Transfer
No transfer of a Contingent Value Certificate will be valid unless made by the executors, administrators
or other legal representatives of a Holder or his, her or their attorney duly appointed by an instrument in
writing in form and with execution satisfactory to the Trustee upon compliance with such reasonable
requirements as the Trustee may prescribe, nor unless the name of the transferee will have been noted on
the Register by the Trustee.
3.6
Exchange of Contingent Value Certificates
Contingent Value Certificates in any denomination may be exchanged upon reasonable notice to the
Trustee for Contingent Value Certificates of equal aggregate amount in any other denomination.
3.7
Place for Exchange
Contingent Value Certificates may be exchanged only at the principal office of the Trustee in Vancouver.
Any Contingent Value Certificates tendered for exchange must be surrendered to the Trustee. The Issuer
will execute and the Trustee will certify all Contingent Value Certificates necessary to carry out
exchanges as aforesaid. All Contingent Value Certificates surrendered for exchange will be cancelled.
3.8
Charges for Registration, Transfer and Exchange
For each Contingent Value Certificate exchanged, registered or transferred on the Register, the Issuer
will, if required by the Trustee, reimburse the Trustee for its actual out of pocket expenses in connection
therewith, including, without limitation, legal fees and disbursements on a special costs basis.
3.9
Applicant to Pay Charges
Payment of any such charges and reimbursement of the Trustee or the Issuer for reasonable fees and any
transfer taxes or governmental or other charges required to be paid will be made by the party requesting
such exchange, or transfer on the Register as a condition precedent thereto.
3.10
Register Open for Inspection
The Register will be open for inspection by the Issuer, the Trustee or any Holder during normal business
hours on Business Days. The Trustee will from time to time when requested to do so by the Issuer furnish
the Issuer with a list of the names and addresses of holders of Contingent Value Certificates entered on
the said Register showing the principal amount and serial numbers of the Contingent Value Certificates
held by each such holder.
3.11
Closing of Register
Neither the Issuer nor the Trustee will be required to make transfers or exchanges of any Holder’s fully
registered Contingent Value Certificate during the 10 days preceding the Payment Date.
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-93.12
Ownership of Contingent Value Certificates
The person in whose name any Contingent Value Certificate is registered will, for the purposes of this
Indenture, be deemed to be the owner of the Contingent Value Certificate for all purposes and payment of
or on account of the Contingent Value Certificate.
3.13
No Notice of Trusts
Neither the Issuer nor the Trustee will be bound to take notice of or see to the execution of any trust,
whether express, implied or constructive, in respect of any Contingent Value Certificate and may transfer
the same on the direction of the person registered as the holder thereof, whether named as trustee or
otherwise, as though that person were the beneficial owner thereof.
3.14
No Set-Offs
The Holder for the time being of any Contingent Value Certificate will be entitled to such Holder’s ProRate Share of the Contingent Value Consideration as calculated and payable pursuant to this Indenture
and evidenced by a certificate representing such Contingent Value Certificate(s) free from all equities or
rights of set-off or counterclaim between the Issuer and the original or any intermediate holder thereof
and all persons may act accordingly and the receipt of any such registered holder, for any such Holder’s
Pro-Rate Share of the Contingent Value Consideration will be a good discharge to the Issuer and the
Trustee for the same, and neither the Issuer nor the Trustee is bound to inquire into the title of any such
Holder.
3.15
Actual Production Not Required
The Issuer and the Trustee may treat the registered holder of any Contingent Value Certificate as the
owner thereof without actual production of a certificate representing such Contingent Value Certificate
for the purpose of any resolution, requisition, direction, consent, instrument or other document as
aforesaid.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
4.1
Representations and Warranties
The Issuer represents and warrants to the Trustee that:
(a)
the Issuer is a limited partnership validly existing under the laws of British Columbia.
(b)
Colwood City Centre GP Inc. has the corporate power and capacity and the full power
and authority to execute and deliver this Indenture and the Contingent Value Certificates
on behalf of the Issuer;
(c)
Colwood City Centre GP Inc. has taken all necessary corporate proceedings to authorize
the execution and delivery of this Indenture and the Contingent Value Certificates on
behalf of the Issuer;
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- 10 (d)
the Issuer will not, by entering into this Indenture or the Contingent Value Certificates,
contravene any law or the constating documents of the Issuer or any agreement by which
it is bound;
(e)
there are no actions or proceedings pending or, to the knowledge of the Issuer,
threatened, which challenge the validity of this Indenture or which would materially
adversely affect the ability of the Issuer to perform its obligations under this Indenture,
the Contingent Value Certificates or any document evidencing any indebtedness of the
Issuer to the Trustee or the Holders.
4.2
Reliance and Survival
All representations and warranties of the Issuer made herein or in any certificate or other document
delivered by or on behalf of the Issuer for the benefit of the Trustee are material, will survive the
execution and delivery of this Indenture and will continue in full force and effect without time limit. The
Trustee will be deemed to have relied upon each such representations and warranties notwithstanding any
investigation made by or on behalf of the Trustee at any time.
ARTICLE 5
ISSUER’S COVENANTS
5.1
Positive Covenants
The Issuer covenants that, during the term of this Indenture, it will:
(a)
duly and punctually pay, or cause to be paid, all amounts which may, at any time and
from time to time, be payable in respect of the Contingent Value Certificates or which
otherwise may be payable pursuant to the terms of this Indenture, all payments to be
made by the Issuer in accordance with the applicable provisions of this Indenture and in
connection therewith the Issuer will furnish the Trustee with evidence of each such
payment as soon as practicable after the payment is made;
(b)
except as provided for in Article 13, at all times maintain its existence and carry on its
business in accordance with applicable laws;
(c)
provide the Trustee with written notice of any change in the name of the Issuer and of
any change in the principal office address of the Issuer as soon as reasonable practicable
upon the occurrence of such a change;
(d)
in any judicial proceedings taken to cancel or enforce this Indenture, the Contingent
Value Certificates or the covenants of the Issuer hereunder, the Trustee will be entitled to
costs on a “special costs” basis. Any costs so recovered will be credited against any
solicitors’ fees and charges paid or incurred by the Trustee relating to the matters in
respect of which the costs were awarded and which have been added to the monies
secured hereunder pursuant to the foregoing clause;
(e)
until all duties of the Trustee under this Indenture are finally and fully performed, pay to
the Trustee from time to time, reasonable remuneration for its services hereunder and will
pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in the administration or execution of the
trusts hereby created (including the reasonable compensation and the disbursements of its
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- 11 counsel and all other advisers and assistants not regularly in its employ) both before any
default hereunder and thereafter and will pay the Trustee interest on any overdue
accounts owing pursuant to this section, at the Trustee’s normal rates of interest but,
notwithstanding the foregoing, the Issuer shall not be required to pay any such expense,
disbursement or advance as may arise from the negligence or fraud of the Trustee;
(f)
perform and carry out all of the acts or things to be done by it as provided in this
Indenture;
(g)
pay all costs, charges and expenses of and incidental to the taking, recovering or
enforcing the remedies in this Indenture or otherwise in relation to this Indenture or by
reason of non-payment or procuring payment of the monies hereby payable;
(h)
if the Issuer defaults in the performance of any covenant hereunder, the Trustee may, but
will not be obligated to, perform any covenant of the Issuer capable of being performed
by the Trustee and if the Trustee is put to any costs, charges, expenses or outlays to
perform any such covenant, the Issuer will indemnify the Trustee for such reasonable
costs, charges, expenses or outlays and such costs, charges, expenses or outlays
(including solicitors’ fees and charges incurred by the Trustee on a “special costs” basis)
will be payable forthwith by the Issuer to the Trustee, and will bear interest at the highest
rate borne by any of the other obligations;
(i)
do, execute, acknowledge and deliver or cause to be done, executed, acknowledged or
delivered, such further acts, deeds, and assurances as the Trustee may reasonably require
for the accomplishing and effecting the intention of this Indenture;
(j)
keep or cause to be kept proper and adequate records and books of account in which true
and complete entries will be made in a manner sufficient to enable the preparation of
financial statements in accordance with GAAP; and
(k)
furnish to the Holders by first class mail, as soon as reasonably practicable after they are
available, and in any event within 180 days after the end of the fiscal years of the Issuer
ended December 31, 2015 and 2016, the financial statements of the Colwood City
Development including a balance sheet and related statements of income (or loss) and
retained earnings (or deficit) as of the end of and for such fiscal year, setting forth in each
case in comparative form, the figures for the previous fiscal year, in accordance with
GAAP and showing thereon the amount of the Contingent Value Consideration, if any
accrued to the end of such fiscal year.
5.2
Performance of Covenants by Trustee
If the Issuer fails to perform any of its covenants in this Indenture, the Trustee may notify the Holders of
the failure or may itself perform any of the covenants capable of being performed by it, but the Trustee
will be under no obligation to do so or to notify the Holders. All sums so expended or advanced by the
Trustee will be repayable by the Issuer on demand and will bear interest from the time of advance at the
Trustee’s normal rates of interest. No such performance or advance by the Trustee will relieve the Issuer
of any default hereunder.
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- 12 ARTICLE 6
DEFAULT AND ENFORCEMENT
6.1
Events of Default
The following events will constitute events of default under this Indenture (an “Event of Default”):
(a)
subject to section 6.3, the Issuer fails to make any payment required under this Indenture
as and when any such payment becomes due pursuant to the provisions of this Indenture;
(b)
subject to section 6.3, the Issuer fails to observe or perform any material covenant of the
Issuer as provided in this Indenture the consequence of which is or may reasonably be to
materially adversely affect the credit worthiness of the Issuer;
(c)
an order is made or a resolution is passed for the winding up or liquidation of the Issuer;
(d)
the Issuer commits any act of bankruptcy, including if the Issuer (i) institutes proceedings
to be adjudicated a bankrupt or insolvent, (ii) consents to the institution of bankruptcy or
insolvency proceedings against it, (iii) becomes insolvent, (iv) makes an assignment or
proposal, or serves notice of its intention to make a proposal under the applicable
bankruptcy or insolvency legislation, (v) a general assignment in favour of its creditors or
a bankruptcy petition is filed or presented against the Issuer, (vi) admits in writing its
inability to pay its debts generally as they become due, or (vii) takes any corporate action
in furtherance of any of the aforesaid purposes;
(e)
if a decree or order of a court having jurisdiction is entered adjudging the Issuer as
bankrupt or insolvent under applicable bankruptcy or insolvency laws, or issuing
sequestration or process of execution against any substantial part of the property of the
Issuer;
(f)
if any receiver, receiver-manager, trustee, custodian, liquidator or similar agent is
appointed for the Issuer or for any of the Issuer’s property, or if the Issuer consents to any
such appointment or a decree or order of a court having jurisdiction is made for such
appointment;
(g)
if the Issuer ceases or threatens to cease to carry on its business; and
(h)
if any execution, sequestration, extent or any other process of any court becomes
enforceable against the Issuer or if a distress or analogous process will be levied upon
any collateral of the Issuer, or any part thereof.
6.2
Notice of Events of Default
If an Event of Default occurs and is continuing the Trustee will, within 30 days after it becomes aware of
the occurrence of such Event of Default, give notice of such Event of Default to the Issuer and the
Holders in the manner provided in Article 11, unless the default has been waived pursuant to section 6.4.
Where notice of the occurrence of an Event of Default has been given and the Event of Default is
thereafter cured, notice that the Event of Default is no longer continuing will be given by the Trustee to
the holders of Contingent Value Certificates in the manner provided in Article 11 within a reasonable
time not exceeding 30 days after the Trustee becomes aware that the Event of Default has been cured.
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- 13 6.3
Late Payments and Deliveries
The failure by the Issuer to make the payments within the times required in section 2.3 will not constitute
an Event of Default if the Issuer makes reasonable efforts to make the payments within the times required,
or as soon as possible thereafter, and the payment is made no later than ten Business Days after the time
for payment.
6.4
Waiver of Default
If an Event of Default occurs, Holders of not less than two-thirds of all Contingent Value Certificates then
outstanding have the power (without prejudice to the powers exercisable by Special Resolution) by
requisition in writing to instruct the Trustee to waive the default or to cancel any declaration made by the
Trustee pursuant to section 6.2 and the Trustee will then waive the default or cancel the declaration upon
such terms and conditions as such Holders prescribe; and the Trustee will, so long as it has not become
bound to institute any proceedings hereunder, have the power, subject to applicable law, to waive any
default arising hereunder if, in the Trustee’s opinion, such default is not adverse to the interests of the
Holders or has been cured or adequate satisfaction has been made, and in such event to cancel any such
declaration made by the Trustee in the exercise of its discretion, upon such terms and conditions as the
Trustee may deem advisable; provided that no act or omission either of the Trustee or of the Holders in
the premises will extend to or be taken in any manner whatsoever to affect any subsequent default or the
rights resulting therefrom.
6.5
Remedies of Trustee
Following the occurrence, and during the continuance of an Event of Default, the Trustee may, and shall
upon receipt of a Special Resolution directing it to do so, enforce its rights by any remedy or proceeding
authorized or permitted by this Indenture or by law or equity.
All action taken under this section 6.5 will be taken on behalf of and for the equal benefit of all Holders.
6.6
No Suits by Holders
No Holder of any Contingent Value Certificate will have any right to institute any action, suit or
proceeding at law or in equity, or to exercise any other remedy authorized by this Indenture for the
purposes of enforcing payment on any Contingent Value Certificate, or enforcing any right on behalf of
the Holders for the execution of any trust or power hereunder, for the appointment of a liquidator or
receiver, for a receiving order under the Bankruptcy and Insolvency Act (Canada), to have the Issuer
wound up, to file or prove a claim in any liquidation or bankruptcy proceeding, or for any other remedy
hereunder, unless (i) such Holder has previously given to the Trustee written notice of the happening of
an Event of Default hereunder; (ii) the Holders by Special Resolution have made a request to the Trustee
and the Trustee has been afforded a reasonable opportunity either itself to proceed to exercise the powers
hereinbefore granted, or to institute an action, suit or proceeding in its name for such purpose; (iii) the
Holders or any of them has furnished to the Trustee, when so requested by the Trustee, sufficient funds
and security and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred
therein or thereby; and (iv) the Trustee has failed to act within a reasonable time after such notification,
request and offer of indemnity; in such case, but not otherwise, any Holder acting on behalf of himself
and all other Holders will be entitled to take proceedings in any court of competent jurisdiction such as
the Trustee might have taken under section 6.5; it being understood and intended that no one or more
holders of Contingent Value Certificates will have any right in any manner whatsoever to effect, disturb
or prejudice the rights hereby created by his, her or their action or to enforce any right hereunder or under
any Contingent Value Certificate, except subject to the conditions and in the manner herein provided, and
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- 14 that all powers and trusts hereunder will be exercised and all proceedings at law will be instituted, had
and maintained by the Trustee, except only as herein provided, and in any event for the equal benefit of
all holders of Contingent Value Certificates.
6.7
Application of Proceeds by Trustee
Subject to the claims of secured creditors ranking in priority to this Indenture, all monies arising from any
enforcement hereof, together with any other monies then or thereafter in the hands of the Trustee
available for that purpose, will be applied by the Trustee as follows:
(a)
first, in payment or reimbursement to the Trustee of the remuneration, expenses,
disbursements and advances of the Trustee earned, incurred or made in the administration
or execution of the trusts hereunder or otherwise in relation to this Indenture with interest
thereon as herein provided;
(b)
secondly, in or towards payment of the outstanding Contingent Value Certificates, and
interest on amounts in default under the Contingent Value Certificates which are then
outstanding, and all other monies owing hereunder in that order of priority; and
(c)
the balance, if any, to the Issuer.
6.8
Distribution of Proceeds
Payments to holders of Contingent Value Certificates pursuant to section 6.7(b) will be made as follows:
(a)
at least 15 days’ notice of every such payment will be given to the Holders in the manner
provided in section 11.1 specifying the time when and the place or places where the
certificate representing the Contingent Value Certificates are to be presented, and the
amount of the payment and the application thereof as between the applicable Holders;
(b)
payment to Holders will be made upon presentation of the certificate to the Trustee
representing the applicable Contingent Value Certificate at any one of the places
specified in such notice and a memorandum of such payment will be endorsed thereon;
but the Trustee may in its discretion dispense with presentation and surrender or
endorsement in any special case upon such indemnity being given as it deems sufficient;
and
(c)
from and after the date of payment specified in the notice, interest will accrue only on the
amount owing on each Contingent Value Certificate after giving credit for the amount of
the payment specified in such notice.
6.9
Remedies Cumulative
No remedy herein conferred upon or reserved to the Trustee, or upon or to the holders of Contingent
Value Certificates is intended to be exclusive of any other remedy, but each and every such remedy will
be cumulative and will be in addition to every other remedy given hereunder, now existing or hereafter to
exist by law or by statute.
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- 15 6.10
Trustee Appointed Attorney
The Issuer irrevocably appoints the Trustee as the attorney of the Issuer in the name and on behalf of the
Issuer to execute any instruments and do any acts and things which the Issuer ought to execute and do,
and has not executed or done, under the covenants and provisions contained in this Indenture and
generally to use the name of the Issuer in the exercise of all or any of the powers hereby conferred on the
Trustee, with full powers of substitution and revocation.
6.11
Judgment Against the Issuer
The Issuer covenants and agrees with the Trustee that, in case of any judicial or other proceedings to
enforce the rights of the Holders of Contingent Value Certificates, judgment may be rendered against it in
favour of the Holders of Contingent Value Certificates or in favour of the Trustee, as trustee for the
Holders of Contingent Value Certificates, for any amount which may remain due in respect of the
Contingent Value Certificates.
6.12
Immunity of Issuers and Others
No recourse under or upon any other obligation, covenant or agreement contained in this Indenture or any
other right issued hereunder or because of the creation of any indebtedness or security hereunder will be
had against any Issuer, officer or director, past, present or future, of the Issuer or of subsidiaries of the
Issuer or of any successor of the Issuer, either directly or through the Issuer, or its subsidiaries, or
otherwise by the enforcement of any assessment or by any legal or equitable proceeding by virtue of any
statute or otherwise. It being expressly understood that this Indenture and the Contingent Value
Certificates issued hereunder are solely corporate obligations and that no personal liability whatever will
attach to or be incurred by affiliates, officers or directors of the Issuer, or of subsidiaries of the Issuer, or
of any successor of the Issuer, or any of them, because of the creation of the indebtedness hereby
authorized or the creation of any security interest, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Contingent Value Certificates issued hereunder or
implied therefrom. Any and all personal liability of every name and nature either at common law or in
equity or by statute and any and all Contingent Value Certificates and claims against every such Issuer,
officer or director, are hereby expressly waived as a condition of, and as consideration for, the execution
of this Indenture and the issue of the Contingent Value Certificates.
ARTICLE 7
ASSIGNMENT
7.1
Assignment by Issuer
Subject to compliance with Article 13, this Indenture may not be assigned by the Issuer without the prior
written consent of the Trustee.
7.2
Assignment by Trustee
This Indenture may not be assigned by the Trustee except with the prior written consent of the Issuer,
such consent not to be unreasonably withheld, and in compliance with section 10.8.
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- 16 7.3
Obligations of Assignee
Upon the assignment of this Indenture as provided in this Article 7, the assignee will assume all
obligations and covenants of the assignor under this Indenture as if the assignee were in the position of
the assignor.
ARTICLE 8
SATISFACTION AND DISCHARGE
8.1
Repayment of Unclaimed Monies to Issuer
Subject to applicable legislation in effect from time to time, any monies paid to the Trustee in respect of
any Contingent Value Certificate and not paid to the Holders within three years after the date of such
payment will be repaid to the Issuer by the Trustee on demand, and thereupon the Trustee will be released
from all further liability with respect to such monies, and thereafter the Holders will have no rights in
respect of such Contingent Value Certificates, except to obtain payment of such monies (without interest
thereon) from the Issuer.
8.2
Release from Covenants
Upon proof being given to the reasonable satisfaction of the Trustee that all amounts on all the Contingent
Value Certificates thereon and other monies payable hereunder have been paid or satisfied, such payment
has been duly and effectually provided for by payment to the Trustee or otherwise; or that the total
liability of the Issuer hereunder in respect of the Contingent Value Consideration is less than $1,000, and
upon payment of all costs, charges and expenses properly incurred by the Trustee in relation to these
presents and all interest and the remuneration of the Trustee, or upon provision satisfactory to the Trustee
being made therefor, the Trustee will, at the request and at the expense of the Issuer, execute and deliver
to the Issuer such deeds or other instruments as are necessary to evidence the release of the Issuer from its
covenants herein contained, except those relating to the indemnification of the Trustee.
ARTICLE 9
MEETING OF CONTINGENT VALUE CERTIFICATE HOLDERS
9.1
Contingent Value Certificate Holders to Convene Meeting
The Trustee may at any time and from time to time and will, on receipt of a written request of the Issuer
or Holders holding not less than 25% of the principal amount then outstanding under the Contingent
Value Certificates, and upon being funded and indemnified to its reasonable satisfaction by the Issuer or
by the Holders against the costs which may be incurred in connection with the calling and holding of such
meeting, convene a meeting of the Holders. In the event of the Trustee failing within 30 days after receipt
of such request and indemnity to give notice convening such meeting, the Issuer or such Holders, as the
case may be, may convene such meeting. Every such meeting will be held in the City of Vancouver or at
such other place as may be approved or determined by the Trustee.
9.2
Notice
At least 21 days’ notice of any meeting must be given to the Holders in the manner provided in Article 11
and a copy of the notice will be sent by mail to the Trustee (unless the meeting has been called by it) and
to the Issuer (unless the meeting has been called by it). Such notice must state the time and the place of
the meeting and will state briefly the general nature of the business to be transacted. It will not be
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- 17 necessary for any such notice to set out the terms of any resolution to be proposed or any of the provisions
of this Article.
9.3
Chair
Some person, who need not be a Holder, nominated in writing by the Trustee will chair the meeting and if
no person is so nominated, or if the person so nominated is not present within fifteen minutes from the
time fixed for the holding of the meeting, the Holders present in person or by proxy will choose some
person present to be the chair.
9.4
Quorum
(a)
At any meeting of the Holders, a quorum will consist of Holders present in person or by
proxy representing at least 51% of the outstanding Contingent Value Certificates.
(b)
If a quorum of the Holders is not present within half an hour from the time fixed for
holding any meeting, the meeting, if convened by the Holders, will be dissolved, but if
otherwise convened the meeting will stand adjourned without notice to the same day in
the next week (unless such day is a non-Business Day in which case it will stand
adjourned to the next following Business Day thereafter) at the same time and place,
unless the chair appoints some other place, day or time of which not less than seven days’
notice will be given in the manner provided in Article 11.
(c)
At the adjourned meeting, the Holders present in person or by proxy will form a quorum
and may transact the business for which the meeting was originally convened
notwithstanding that they may not represent 51% of the outstanding Contingent Value
Certificates.
9.5
Power to Adjourn
The chair of any meeting at which a quorum of the Holders is present may with the consent of the holders
of a majority in principal amount of the Contingent Value Certificates represented thereto, adjourn any
such meeting and no notice of such adjournment need be given except such notice, if any, as the meeting
may prescribe.
9.6
Show of Hands
Every question submitted to a meeting will be decided in the first place by a majority of the votes given
on a show of hands. At any such meeting, a declaration by the chair that a resolution has been carried, or
carried unanimously, or by a particular majority, or lost, or not carried by a particular majority, will be
conclusive evidence of the fact.
9.7
Poll
On every Special Resolution, and on any other question submitted to a meeting, when demanded by the
chair or one or more Holders or proxies for Holders holding at least 10% of the Contingent Value
Certificates, a poll will be taken in such manner and either at once or after an adjournment, as the chair
will direct. Questions other than Special Resolutions will, if a poll is taken, be decided by votes of the
holders of a majority in principal amount of the Contingent Value Certificates represented at the meeting
and voted on the poll.
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- 18 9.8
Voting
On a show of hands every person who is present and entitled to vote, whether as Holder or as proxy for
one or more absent Holders or both, will have one vote. On a poll, each holder of Contingent Value
Certificates present in person or represented by proxy will be entitled to one vote for each Contingent
Value Certificate of which the person is a holder. A proxy need not be a Holder. In the case of joint
registered holders of a Contingent Value Certificate, any one of them present in person or by proxy at the
meeting may vote in the absence of the other or others; but in case more than one of them be present in
person or by proxy, they will vote together in respect of the Contingent Value Certificates of which they
are joint registered holders.
9.9
Persons Entitled to Attend Meetings
The Issuer, the Trustee and the Holders, by their respective officers and directors, the Auditors of the
Issuer and the legal advisers of the Issuer, the Trustee and any Holder may attend any meeting of Holders,
but persons, other than Holders and proxies representing one or more absent Holders, will have no vote as
such.
9.10
Regulations
The Trustee, or the Issuer with the approval of the Trustee, may (for the purpose of enabling Holders to
be present and vote at any meeting without producing their Contingent Value Certificates, and of enabling
them to be represented and vote at any such meeting by proxy and of enabling the lodging of such proxies
at some place other than the place where the meeting is to be held) make and vary such regulations as it
may from time to time think fit providing for any of the following matters:
(a)
providing for and governing the voting by proxy by Holders and the form of instrument
appointing proxies and the manner in which the same will be executed, and for the
production of the authority of any person signing on behalf of the giver of such proxy;
(b)
the deposit of instruments appointing proxy holders at such places as the Trustee, the
Issuer or the Holders convening the meeting, as the case may be, may on the notice
convening the meeting direct; and
(c)
the deposit of instruments appointing proxy holders at some approved place or places
other than the place at which the meeting is to be held and enabling particulars of
instruments appointing proxy holders to be mailed, delivered or transmitted by facsimile
before the meeting to the Issuer or to the Trustee at the place where the meeting is to be
held and for the voting of proxies so deposited as though the instruments themselves were
produced at the meeting.
Any regulations so made will be valid and proxies received and votes given in accordance with such
regulations will be valid and will be counted. Except as such regulations may provide, the only person
who will be recognized at any meeting as the Holder, or as entitled to vote or be present at the meeting
with respect thereto, will be registered Holders and persons whom registered Holders have by instrument
in writing duly appointed as their proxies.
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- 19 9.11
Powers Exercisable by Special Resolution
In addition to all other powers conferred upon them by any other provisions of this Indenture or by law, a
meeting of the Holders will have the following powers exercisable from time to time by Special
Resolution, subject to the receipt of necessary regulatory and stock exchange approvals, if any:
(a)
power to agree to any modification, abrogation, alteration, compromise or arrangement of
the Contingent Value Certificates of Holders or the Trustee against the Issuer or against
its undertaking, property and assets or any part thereof whether such Contingent Value
Certificates arise under this Indenture or the Contingent Value Certificates or otherwise;
(b)
power to direct or authorize the Trustee to exercise any power, Contingent Value
Certificate, remedy or authority given to it by this Indenture or the Contingent Value
Certificates or to refrain from exercising any such power, Contingent Value Certificate,
remedy or authority;
(c)
power to waive and direct the Trustee to waive any default on the part of the Issuer in
complying with any provision of this Indenture or the Contingent Value Certificates,
and/or to annul and to direct the Trustee to annul any declaration in respect of such
default made by the Trustee;
(d)
power to assent to any modification of or change in or omission from the provisions
contained herein which will be agreed to by the Issuer and to authorize the Trustee to
concur in and execute any deed or instrument supplemental hereto embodying such
modification, change or omission;
(e)
power to appoint a committee with power and authority (subject to such limitations, if
any, as may be prescribed in the resolution) to exercise, and to direct the Trustee to
exercise, on behalf of the Holders, such of the powers of the Holders as are exercisable
by special or other resolution as are included in the resolution appointing the committee.
The resolution making such appointment may provide for payment of the expenses and
disbursements of and compensation of such committee. Such committee will consist of
such number of persons as is prescribed in the resolution appointing it and the members
need not themselves be Holders; and
(f)
power to amend, alter or repeal any Special Resolution previously passed by the Holders
or by any committee appointed pursuant to clause (e).
9.12
Powers Cumulative
Any one or more of the powers and any combination of powers stated in this Indenture to be exercisable
by the Holders by Special Resolution or otherwise may be exercised from time to time and the exercise of
any one or more of such powers or any combination of them from time to time will not be deemed to
exhaust the Contingent Value Certificate of the Holders to exercise such power or powers or combination
of powers thereafter from time to time.
9.13
Minutes
Minutes of all resolutions passed and proceedings at every such meeting as aforesaid will be made and
duly entered in books to be from time to time provided for that purpose by the Trustee at the expense of
the Issuer, and any such minutes as aforesaid, if signed by the chair of the meeting at which such
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- 20 resolutions were passed or proceedings had, or by the chair of the next succeeding meeting of the
Holders, will be prima facie evidence of the matters therein stated and, until the contrary is proved, every
such meeting, in respect of the proceedings of which minutes will have been made, will be deemed to
have been duly held and convened, and all resolutions passed thereat or proceedings taken, to have been
duly passed and taken.
9.14
Instruments in Writing
All actions that may be taken and all powers that may be exercised by the Holders at a meeting held as
provided in this section may also be taken and exercised by the holders of not less than two thirds in
principal amount of all the outstanding Contingent Value Certificates by an instrument in writing signed
in one or more counterparts and the expression “Special Resolution”, when used in this Indenture, will
include an instrument so signed.
9.15
Binding Effect of Resolutions
Every Special Resolution passed in accordance with the provisions of this Article at a meeting of Holders
will be binding upon all the Holders, whether present at or absent from such meeting, and every
instrument in writing signed by the Holders in accordance with section 9.14 will be binding upon all the
Holders, whether signatories thereto or not, and each and every Holder and the Trustee (subject to the
provisions for its indemnity herein contained) will be bound to give effect accordingly to every such
resolution and instrument in writing.
ARTICLE 10
CONCERNING THE TRUSTEE AND THE CREDITOR REPRESENTATIVE
10.1
Trust Indenture Legislation
(a)
In this section the term “applicable legislation” means the provisions, if any, of any
statute of Canada or the Province of British Columbia and of regulations made under any
such statute and any statute that may be substituted therefor as from time to time
amended, relating to trust indentures and to the Contingent Value Certificates, duties and
obligations of trustees under trust indentures and of corporations issuing debt obligations
under trust indentures, to the extent that such provisions are at the time in force and
applicable to this Indenture.
(b)
If and to the extent that any provision of this Indenture limits, qualifies or conflicts with a
mandatory requirement of applicable legislation, such mandatory requirement will
prevail.
(c)
The Issuer and the Trustee agree that each will at all times in relation to this Indenture
and in any action to be taken hereunder, observe and comply with and be entitled to the
benefits of applicable legislation.
10.2
Rights and Duties of Trustee and the Creditor Representative
(a)
In the exercise of the rights, duties and obligations prescribed or conferred by the terms
of this Indenture, each of the Trustee and the Creditor Representative will act honestly
and in good faith with a view to the best interests of the holders of the Contingent Value
Certificates and will exercise the degree of care, diligence and skill that a reasonable
prudent person would exercise in comparable circumstances.
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- 21 (b)
The obligation of the Trustee or the Creditor Representative to commence or continue
any act, action or proceeding for the purpose of enforcing any rights of the Trustee or the
Holders hereunder will be conditional upon the Holders furnishing, when required by
notice in writing by the Trustee or the Creditor Representative, as the case may be,
sufficient funds to commence or continue such act, action or proceeding and indemnity
reasonably satisfactory to the Trustee or the Creditor Representative, as the case may be,
to protect and hold harmless the Trustee or the Creditor Representative, as the case may
be, against the costs, charges and expenses and liabilities to be incurred thereby and any
loss and damage it may suffer by reason thereof. None of the provisions contained in this
Indenture will require the Trustee or the Creditor Representative, as the case may be, to
expend or risk its own funds or otherwise incur financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers unless indemnified and
funded as aforesaid.
(c)
The Trustee or the Creditor Representative may, before commencing or at any time
during the continuance of any such act, action or proceeding, require the Holders at
whose instance it is acting to deposit with the Trustee or the Creditor Representative, as
the case may be, the Contingent Value Certificates held by them, for which Contingent
Value Certificates the Trustee or the Creditor Representative, as the case may be, will
issue receipts. Every provision of this Indenture that by its terms relieves the Trustee of
liability or entitles it to rely upon any evidence submitted to it, is subject to the provisions
of applicable legislation.
10.3
Evidence, Experts and Advisers
(a)
In addition to the reports, certificates, opinions and other evidence required by this
Indenture, the Issuer will furnish to the Trustee or the Creditor Representative, as the case
may be, such additional evidence of compliance with any provision hereof, and in such
form, as may be prescribed by applicable legislation or as the Trustee may reasonably
require by written notice to the Issuer.
(b)
In the exercise of its rights, duties and obligations, the Trustee or the Creditor
Representative, as the case may be, if it is acting in good faith, may rely as to the truth of
the statements and the accuracy of the opinions expressed therein, upon statutory
declarations, opinions, reports, certificates or other evidence referred to in subsection (a)
hereof, provided that such evidence complies with applicable legislation and that the
Trustee or the Creditor Representative, as the case may be, examines the same in order to
determine whether such evidence indicates compliance with the applicable requirements
of this Indenture.
(c)
Whenever applicable legislation requires that evidence referred to in subsection (a) be in
the form of a statutory declaration, the Trustee may accept such statutory declaration in
lieu of a certificate of the Issuer required by any provision hereof. Any such statutory
declaration may be made by one or more of the president, the secretary, the treasurer, or
any vice-president, or a director of the Issuer.
(d)
The Trustee or the Creditor Representative, as the case may be, may employ or retain
such counsel, accountants, engineers, appraisers or other experts or advisers as it may
reasonably require for the purpose of discharging its duties hereunder, the costs and
expenses of which shall be paid for by the Issuer and neither the Trustee nor the Creditor
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- 22 Representative, as the case may be, will be responsible for any misconduct on the part of
any of them.
10.4
Documents, etc. Held by Trustee
Any securities, documents of title or other instruments that may at any time be held by the Trustee subject
to the trusts hereof may be placed in the deposit vaults of the Trustee or of any Canadian chartered bank,
or deposited for safekeeping with any such bank. Pending the application or withdrawal of any monies so
held under any provision of this Indenture, the Trustee, unless it is herein otherwise expressly provided,
may deposit the same in the name of the Trustee at the rate of interest (if any) then current on similar
deposits, or invest such monies in securities or instruments issued or guaranteed by the Government of
Canada or a province thereof or in obligations, maturing not more than one year from the date of
investment, of any Canadian chartered bank, loan or trust company. Unless an event of default will have
occurred and be continuing all interest or other income received by the Trustee in respect of such deposits
and investments will belong to the Issuer.
10.5
Action by Trustee to Protect Interests
Subject to the discretion of the Holders expressed by Special Resolution, or in accordance with section
6.4 or 6.6, the Trustee will have the power to institute and to maintain such actions and proceedings as it
may consider necessary or expedient to preserve, protect or enforce its interests and the interests of the
Holders.
10.6
Trustee Not Required to Give Security
The Trustee will not be required to give any bond or security in respect of the execution of the trusts and
powers of this Indenture, or otherwise in respect of the premises.
10.7
Protection of Trustee and Creditor Representative
By way of supplement to the provisions of any law for the time being relating to trustees, it is expressly
declared and agreed as follows:
(a)
Neither the Trustee nor the Creditor Representative, as the case may be, will be liable for
or by reason of any statements of fact or recitals in this Indenture, or in the Contingent
Value Certificates (except in the certificate of the Trustee thereon), or be required to
verify the same, but all such statements or recitals are and will be deemed to be made by
the Issuer.
(b)
The Trustee is not obliged to see to or to require evidence of the registration or filing (or
renewal thereof) of this Indenture or any instrument ancillary or supplemental hereto.
(c)
The Trustee will not be bound to give notice to any person or persons by reason of the
execution hereof.
(d)
Neither the Trustee nor the Creditor Representative, as the case may be, will incur any
liability or responsibility whatsoever or be in any way responsible for the consequence of
any breach on the part of the Issuer of any of the covenants herein contained, or of any
acts of the agents or servants of the Issuer.
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- 23 (e)
Subject to subsection 10.2(a), the Issuer and the Holders acknowledge and agree that the
sole obligation of the Trustee is to exercise the powers granted hereunder only and on the
specific written instructions of the Holders, and that the Issuer will save and hold
harmless the Trustee from all liability for any and all acts or omissions in respect of its
trusteeship hereunder.
(f)
The Trustee, its affiliates and their respective directors, officers and employees, in a
personal or any other capacity, may buy, lend upon and deal in shares in the capital of the
Issuer and in the Contingent Value Certificates and generally may contract and enter into
financial transactions with the Issuer or any affiliate without being liable to account for
any profit made thereby.
(g)
Subject to subsection 10.2(a), in the event of any dispute arising regarding any term of
this Indenture, the Trustee may, at its option, refuse to comply with any or all demands
made under this Indenture until such dispute is resolved either by agreement among the
parties or by a court of competent jurisdiction.
(h)
Subject to subsection 10.2(a), the Trustee is entitled not to act and will not be liable for
refusing to act unless it has received clear and reasonable instructions from the Issuer or
the Holders, as the case may be, which comply with the terms of this Indenture and which
do not require the exercise of any discretion or independent judgment on the part of the
Trustee.
(i)
The Trustee is entitled to refuse all instructions and will not be liable for refusing
instructions, which in any way alter the purpose of this Indenture unless such
instructions, if affecting the Issuer, are consented to by the Issuer and, if affecting the
Holders, are approved by Special Resolution.
(j)
The Trustee will not be bound to act upon documents that are not authorized pursuant to
the terms of this Indenture.
(k)
The Trustee and the Creditor Representative may accept communications by facsimile
transmission or other electronic means that enable the Trustee to confirm the identity of
the sender and may rely as to the truth of the information contained in such
communications.
10.8
Resignation, Removal or Replacement of Trustee or the Creditor Representative
The Trustee and the Creditor Representative may each resign its trust and be discharged from all further
duties and liabilities hereunder by giving to the Issuer 30 days’ notice in writing or such shorter notice as
the Issuer may accept as sufficient. The Holders by Special Resolution will have the power at any time to
remove the Trustee or the Creditor Representative and to appoint a new Trustee or Creditor
Representative by giving the Trustee or the Creditor Representative 30 days’ notice in writing, or such
shorter notice as the Trustee or the Creditor Representative may accept as sufficient. In the event of the
Trustee or the Creditor Representative resigning or being removed as aforesaid or being dissolved,
becoming bankrupt, going into liquidation or otherwise becoming incapable of acting hereunder, the
Issuer will forthwith appoint a new Trustee or Creditor Representative, unless a new Trustee or Creditor
Representative has already been appointed by the Holders; failing such appointment by the Issuer the
retiring Trustee or Creditor Representative or any Holder may apply to a Judge of the Supreme Court of
British Columbia for the appointment of a new Trustee or Creditor Representative; but any new Trustee
or Creditor Representative so appointed by the Issuer or by the Court will be subject to removal as
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- 24 aforesaid by the Holders. On any new appointment, the new Trustee or Creditor Representative will be
vested with the same powers, rights, duties and responsibilities as if it had been originally named herein
as Trustee or Creditor Representative without any further assurance, conveyance, act or deed; but there
will be immediately executed, at the expense of the Issuer, all such conveyances or other instruments as
may, in the opinion of counsel, be necessary or advisable for the purpose of assuring the same to the new
Trustee or Creditor Representative.
10.9
Conflict of Interest
The Trustee represents that at the time of the execution and delivery hereof no material conflict of interest
exists in the Trustee’s or Creditors Representative’s role as a fiduciary hereunder and agrees that in the
event of a material conflict of interest arising hereafter it will, within 60 days’ after ascertaining that it has
such material conflict of interest, notify the Holders with full particulars of the nature and extent of the
conflict and will within 90 days after becoming aware that a material conflict of interest exists either
eliminate the conflict of interest or resign from its office. Notwithstanding the foregoing, until the
resignation, removal or replacement of the Trustee or the Creditor Representative pursuant to section
10.8, the Trustee will continue to be entitled and required to perform the obligations required and exercise
the rights granted pursuant to this Indenture.
10.10
Acceptance of Trust
The Trustee hereby accepts the appointment as agent for the Holders pursuant to this Indenture and agrees
to perform and administer this Indenture for and on behalf of the Holders upon the terms and conditions
herein set forth.
10.11
Authority of Trustee
Subject to subsection 10.2(a), the Trustee will have the authority to take any action on behalf of the
Holders which is, in its opinion, acting reasonably:
(a)
contemplated by this Indenture;
(b)
not inconsistent with its rights, powers, duties or obligations under this Indenture; or
(c)
necessary or desirable to exercise its rights and powers and to perform its duties and
obligations under this Indenture.
10.12
Indemnification
Without limiting any protection or indemnity of the Trustee or the Creditor Representative under any
other provision of this Indenture, or otherwise at law, the Issuer hereby agrees to indemnify and hold
harmless each of the Trustee and the Creditor Representative from and against any and all liabilities,
losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements, including reasonable
legal or advisor fees and disbursements, or of whatever kind or nature, which may at any time be imposed
on, incurred by or asserted against the Trustee or the Creditor Representative in connection with the
performance of its duties and obligations hereunder, other than such liabilities, losses, damages, penalties,
claims, actions, suits, costs, expenses and disbursements arising by reason of the negligence or fraud of
the Trustee or the Creditor Representative, as the case may be. This provision shall survive the resignation
or removal of the Trustee or the Creditor Representative, as the case may be, or the termination of this
Indenture. Neither the Trustee nor the Creditor Representative shall be under any obligation to prosecute
or defend any action or suit in respect of the relationship which, in the opinion of its counsel, may involve
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- 25 it in expense or liability, unless the Issuer shall, so often as required, furnish the Trustee or the Creditor
Representative, as the case may be with satisfactory indemnity and funding against such expense or
liability.
10.13
Investment of Funds by the Trustee
All funds in the possession of the Trustee that the Trustee does not expect to pay to the Holders within 15
days of the receipt of such funds by the Trustee shall be invested by the Trustee solely in one or more of
the investments, as selected by the Trustee in its discretion) referred to below:
(a)
interest bearing time deposits with maturity dates of 30 days or less of any Canadian
chartered bank, including one or more accounts maintained in the commercial banking
department (if any) of the Trustee;
(b)
overnight bank deposits or certificates of deposit with maturity dates of 30 days or less
issued by the commercial banking department (if any) of the Trustee or of any Canadian
chartered bank;
(c)
direct obligations of, or obligations guaranteed as to all principal and interest by, the
government of Canada, in each case with maturity dates of 30 days or more;
(d)
commercial paper with maturity dates of 30 days or less that is rated A-1 by Standard &
Poor’s Corporation or Prime-1 by Moody’s the Purchaser Service, Inc., or better; or
(e)
investments in institutional money market funds investing principally in obligations
permitted by Sections (a) through (d) above.
The parties acknowledge that the Trustee shall not be responsible for any diminution in the value of any
such funds due to losses resulting from investments made pursuant to this Agreement. Absent its timely
receipt of specific written investment instructions from the Issuer, the Trustee shall have no obligation or
duty to invest (or otherwise pay interest on) such funds; provided however, that in the event the Trustee
shall not have received such written investment instructions, the Trustee shall be authorized to invest any
of such funds as provided in sub-section (b) above until such investment instruction is received.
10.14
Creditor Representative
The Creditor Representative has been appointed pursuant to the Proposal as agent for the Holders with
full authority to represent the Holders in all matters in respect of the Contingent Value Consideration
including the exercise of the power to (i) agree to, negotiate, enter into settlements and compromises of
and comply with orders of courts and awards of arbitrators with respect to the Contingent Value
Consideration; (ii) resolve any dispute with respect to the amount of the Contingent Value Consideration
and (iii) take all actions necessary in the judgment of the Creditor Representative for the accomplishment
of the foregoing. Accordingly, the Holders acknowledge by the acceptance of a Contingent Value
Certificate, the Creditor Representative has unlimited authority and power to act on behalf of the Holders
in respect of the Contingent Value Consideration and the Holder will be bound by all actions taken by the
Creditor Representative in connection with the Contingent Value Consideration and the Issuer shall be
entitled to rely on any action or decision of the Creditor Representative in respect thereof.
The Creditor Representative will not be required to take any action involving any expense or risk of its
own funds unless the payment of such expense is made or provided for in a manner satisfactory to the
Creditor Representative. The Holders severally release the Creditor Representative from and against any
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- 26 and all losses, claims, damages, liabilities, fees, costs and expenses incurred by the Holders and without
wilful misconduct, bad faith or gross negligence on the part of the Creditor Representative and arising out
of or in connection with the acceptance or administration of its duties. The powers, immunities and rights
to indemnification granted to the Creditors Representative (i) are coupled with an interest and shall be
irrevocable and survive the death, incompetence, bankruptcy or liquidation of the Holders and shall be
binding on any successor thereto, and (ii) shall survive the resignation or removal of the Creditor
Representative and/or any termination of this Indenture.
ARTICLE 11
NOTICES
11.1
Notice to Holders
Unless herein expressly provided, any notice to be given hereunder to Holders will be deemed to be
validly given to the holders of registered Contingent Value Certificates if such notice is sent by first class
mail, postage prepaid, addressed to such holders at their respective addresses appearing on the register
maintained under Article 3, or sent by fax. If in the case of joint holders of any Contingent Value
Certificate more than one address appears in the register in respect of such joint holding, such notice will
be addressed only to the first address so appearing.
Any notice sent by mail will be deemed to have been given two business days following the day of
mailing and any notice sent by fax will be deemed to have been given at the time of transmission. In
determining under any provision hereof the date when notice of any meeting or other event must be given,
the date of giving the notice will be excluded and the date of the meeting, or other event will be excluded.
Accidental error or omission in giving notice or accidental failure to mail notice to any Holder will not
invalidate any action or proceeding founded thereon.
11.2
Notice to the Trustee
Any notice to the Trustee under the provisions of this Indenture will be valid and effective if delivered to
an officer of the Trustee or if sent by first class mail, postage prepaid, addressed to the Trustee at its
principal office in Vancouver, British Columbia, or sent by fax to (604) . Any notice sent by mail will
be deemed to have been given two business days following the day of mailing and any notice sent by fax
will be deemed to have been given at the time of transmission. The Trustee’s address is , Vancouver,
BC, , Attention: Manager, Corporate Trust.
11.3
Notice to the Issuer
Any notice to the Issuer under the provision of this Indenture will be valid and effective if delivered to the
Issuer or if sent by first class mail postage prepaid, addressed to the Issuer at , or sent by fax to (604)
. Any notice sent by mail will be deemed to have been given two business days following the day of
mailing and any notice sent by fax will be deemed to have been given at the time of transmission. The
Issuer may from time to time notify the Trustee, the Creditor Representative and the Holders of a change
in address which thereafter, until changed by like notice, will be the address of the Issuer for all purposes
of this Indenture.
11.4
Notice to the Creditor Representative
Any notice to the Issuer under the provision of this Indenture will be valid and effective if delivered to the
Creditor Representative or if sent by first class mail postage prepaid, addressed to the Creditor
Representative at , or sent by fax to (604) . Any notice sent by mail will be deemed to have been
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- 27 given two business days following the day of mailing and any notice sent by fax will be deemed to have
been given at the time of transmission. The Creditor Representative may from time to time notify the
Trustee and the Issuer of a change in address, which thereafter, until changed by like notice, will be the
address of the Creditor Representative for all purposes of this Indenture.
ARTICLE 12
FORMS OF CONTINGENT VALUE CERTIFICATES
12.1
Contingent Value Certificate Certificates
The form of the certificate representing the Contingent Value Certificate will be substantially in the form
set out in Schedule “A” to this Indenture.
ARTICLE 13
SUCCESSOR COMPANIES
13.1
Certain Requirements in Respect of Merger, etc.
Except in the ordinary course of business, the Issuer shall not, in a single transaction or a series of related
transactions, amalgamate or consolidate with or merge into any other Person, or permit any other Person
to amalgamate or consolidate with or merge into the Issuer, or directly or indirectly transfer, sell, lease or
otherwise dispose of all or substantially all of its property and assets (a “Disposition”) to any Person
unless:
(a)
the Issuer shall be the surviving Person, or the Person (if other than the Issuer) formed by
such amalgamation, consolidation or into which the Issuer is merged or that acquires by
disposition all or substantially all of the property and assets, or shares of the Issuer, and
shall expressly assume, by a supplemental indenture executed and delivered to the
Trustee in form satisfactory to the Trustee based on the advice of counsel, all of the
Issuer’s obligations under this Indenture and the Contingent Value Certificates and, in the
case of an entity organized other than under the laws of the Province of British Columbia,
shall attorn to the jurisdiction of the courts of the Province of British Columbia (the
Issuer or such other Person who becomes such a successor obligor under this Indenture
being herein referred to as the “Successor Person”);
(b)
immediately before and after giving effect to such transaction, no Event of Default shall
have occurred and be continuing; and
(c)
the Successor Person shall have delivered to the Trustee (i) a certificate of the Successor
Person stating that such amalgamation, consolidation, merger or disposition by the Issuer,
and, if a supplemental indenture is required in connection with such transaction, such
supplemental indenture, comply with this Article 13 and Article 14, if applicable, and that
all conditions precedent herein provided for relating to such transaction have been
satisfied, and (ii) an opinion of counsel stating that such amalgamation, consolidation,
merger or other disposition complies with subsection 13.1(a), and, if a supplemental
indenture is required in connection with such transaction, such supplemental indenture
has been duly authorized, executed and delivered by the Successor Person and constitutes
a legal, valid and binding obligation of, and is enforceable against, such Successor
Person, subject to such assumptions, qualifications and limitations as the Trustee, acting
reasonably, may accept.
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- 28 13.2
Successor Substituted
Upon any consolidation, amalgamation, merger or disposition described herein, and complying with the
provisions of section 13.1 in which the Issuer is not the continuing corporation, the Successor Person
shall succeed to, and be substituted for, and may exercise every Contingent Value Certificate and power
of, the Issuer, and the Issuer shall be discharged from all its obligations and covenants under this
Indenture and the Contingent Value Certificates.
ARTICLE 14
SUPPLEMENTAL INDENTURES
14.1
Supplemental Indentures
From time to time the Trustee and, when authorized by a resolution of its directors, the Issuer may, and
they will, when required by this Indenture, execute, acknowledge and deliver, by their proper officers,
deeds or indentures supplemental hereto, which thereafter will form part hereof, for any one or more of
the following purposes:
(a)
adding to the covenants of the Issuer herein contained for the protection of the holders of
the Contingent Value Certificates and/or providing for events of default in addition to
those herein specified;
(b)
making such provision not inconsistent with this Indenture as may be necessary or
desirable with respect to matters or questions arising hereunder, including the making of
any modifications in the form of the Contingent Value Certificates which do not affect
the substance thereof and which, in the opinion of the Trustee, upon advice of counsel, it
may be expedient to make, provided that the Trustee will be of the opinion that such
provisions and modifications will not be prejudicial to the interests of the holders of
Contingent Value Certificates;
(c)
evidencing the succession, or successive successions, of other corporations to the Issuer
and the covenants of and obligations assumed by any such successor in accordance with
the provisions of this Indenture;
(d)
giving effect to any Special Resolution passed as provided in Article 9; and
(e)
for any other purpose not inconsistent with the terms of this Indenture.
The Trustee may also, without the consent or concurrence of the holders of Contingent Value Certificates,
by supplemental indenture or otherwise, concur with the Issuer in making any changes or corrections in
this Indenture which it has been advised by counsel are required for the purpose of curing or correcting
any ambiguity or defective or inconsistent provision or clerical omission or mistake or manifest error
contained herein or in any deed or indenture supplemental or ancillary hereto, provided that in the opinion
of the Trustee the Contingent Value Certificates of the Trustee and of the holders of Contingent Value
Certificates are in no way prejudiced thereby.
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- 29 ARTICLE 15
ANTI-MONEY LAUNDERING
15.1
Third Party Interests
Each party to this Indenture hereby represents to the Trustee that any account to be opened by, or interest
to held by the Trustee in connection with this Indenture, for or to the credit of such party, either (i) is not
intended to be used by or on behalf of any third party; or (ii) is intended to be used by or on behalf of a
third party, in which case such party hereto agrees to complete and execute forthwith a declaration in the
Trustee’s prescribed form as to the particulars of such third party.
15.2
Not Bound to Act
The Trustee shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of
information or for any other reason whatsoever, the Trustee, in its sole judgment, determines that such act
might cause it to be in non-compliance with any applicable anti-money laundering or anti-terrorist
legislation, regulation or guideline. Further, should the Trustee, in its sole judgment, determine at any
time that its acting under this Indenture has resulted in its being in non-compliance with any applicable
anti-money laundering or anti-terrorist legislation, regulation or guideline, then it shall have the right to
resign on 10 days written notice to the Issuer, provided (i) that the Trustee’s written notice shall describe
the circumstances of such non-compliance; and (ii) that if such circumstances are rectified to the
Trustee’s satisfaction within such 10 day period, then such resignation shall not be effective.
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- 30 -
ARTICLE 16
EXECUTION
16.1
Counterparts and Formal Date
This Indenture may be executed in several counterparts each of which so executed will be deemed to be
an original, and such counterparts together will constitute one and the same instrument and
notwithstanding their date of execution, will be deemed to bear the date set out above.
IN WITNESS WHEREOF the parties hereto have executed these presents under their respective
corporate seals and the hands of their proper officers on that behalf.
By the Issuer
COLWOOD CITY CENTRE LIMITED PARTNERSHIP
by its General Partner
COLWOOD CITY CENTRE GP INC.
By:
its;
By the Trustee

By:
its;
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A-1
SCHEDULE “A”
FORM OF CONTINGENT VALUE CERTIFICATE
CONTINGENT VALUE CERTIFICATE
COLWOOD CITY CENTRE LIMITED PARTNERSHIP
(the “Issuer”)
(a British Columbia limited partnership)
Certificate No. ________
____________CONTINGENT VALUE CERTIFICATES
THIS CERTIFICATE IS TO CERTIFY that for value received _____________(the “Holder”), is the
registered holder of the ____________________ Contingent Value Certificates of the Issuer stated above
and is entitled to receive the Contingent Value Consideration determined pursuant to the Contingent
Value Certificate Indenture (as hereinafter defined), on the Payment Date provided for in the Contingent
Value Certificate Indenture.
The Contingent Value Certificates represented by this Certificate are issued or issuable in fully registrable
form only under the provisions of an indenture (which indenture together with all other instruments
ancillary thereto is referred to herein as the “Contingent Value Certificate Indenture”) dated as of
December , 2014 between the Issuer and  (the “Trustee”). Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Contingent Value Certificate Indenture. Reference
is hereby made to the Contingent Value Certificate Indenture for a full description of the rights of the
Holders of the Contingent Value Certificates, the Issuer and the Trustee in respect thereof, and the terms
and conditions upon which the Contingent Value Certificates evidenced hereby are issued and held, all to
the same effect as if the provisions of the Contingent Value Certificate Indenture were herein set forth. By
acceptance of this Certificate, the Holder assents to all provisions of the Contingent Value Certificate
Indenture. To the extent that the terms and conditions set forth in this Certificate conflict with the terms
and conditions of the Contingent Value Certificate Indenture, the Contingent Value Certificate Indenture
shall prevail. The Issuer will furnish to the holder of this Certificate, upon request and without charge, a
copy of the Contingent Value Certificate Indenture.
These Contingent Value Certificates and all other Contingent Value Certificates now or hereafter
outstanding under the Contingent Value Certificate Indenture rank pari passu without discrimination,
preference or priority.
The terms and conditions relating to the Contingent Value Certificates and this Certificate may be
modified, changed or added to in accordance with the provisions of the Contingent Value Certificate
Indenture. The Contingent Value Certificate Indenture contains provisions making binding upon all
holders of Contingent Value Certificates outstanding thereunder resolutions passed at meetings of such
holders held in accordance with such provisions and instruments in writing signed by the holders holding
a specified majority of the Contingent Value Certificates.
The holding of the Contingent Value Certificates evidenced by this Certificate shall not constitute, or be
construed as conferring upon the Holder, any right or interest whatsoever as a shareholder of the Issuer
except such rights as may be provided in the Contingent Value Certificate Indenture or in this Certificate.
The Holder of this Certificate may, upon compliance with the reasonable requirements of the Trustee and
the requirements contained in the Contingent Value Certificate Indenture and upon surrender of this
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A-2
Certificate, exchange this Certificate for another certificate or certificates entitling the Holder thereof to
the same number of Contingent Value Certificates as are represented by this Certificate.
The Contingent Value Certificates evidenced by this Certificate are not transferable by the Holder except
by operation of law.
The Contingent Value Certificates represented hereby and securities which may be acquired hereunder
have not been and will not be registered under the United States Securities Act of 1933, as amended (the
“U.S. Securities Act”) or applicable state securities laws, and the Contingent Value Certificates
evidenced by this Certificate may not be exercised by or on behalf of any “U.S. Person”, as such term in
defined in Regulation S under the U.S. Securities Act, or a Person within the United States unless
registered under the U.S. Securities Act or pursuant to an applicable exemption from registration under
the U.S. Securities Act and applicable state securities laws and the Issuer has received an opinion of
counsel of recognized standing to such effect in form and substance satisfactory to the Issuer, subject to
certain exceptions set forth in the Contingent Value Certificate Indenture.
This Certificate shall not be valid for any purpose until it has been certified by or on behalf of the Trustee
under the Contingent Value Certificate Indenture.
This Certificate shall be governed by and construed in accordance with the laws of British Columbia and
the federal laws of Canada applicable therein.
Time shall be of the essence hereof.
IN WITNESS WHEREOF the Issuer has caused this Certificate to be signed as of the ______day of
______________.
COLWOOD CITY CENTRE LIMITED PARTNERSHIP
as represented by its general partner
COLWOOD CITY CENTRE GP INC.
By:______________________________
its:
Countersigned by:

By__________________________________
its:
The Contingent Value Certificates evidenced by this Certificate are not transferable by the Holder
except by operation of law.
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Exhibit B1
Copies of the Notice to Creditors
NOTICE OF FIRST MEETING OF CREDITORS AND OF THE MEETING TO
CONSIDER THE CONSOLIDATED PROPOSAL
IN THE MATTER OF THE BANKRUPTCIES AND CONSOLIDATED PROPOSAL OF
Colwood City Centre Limited Partnership, Colwood City GP Inc., Colwood Sooke
Developments Ltd., Colwood Jerome Developments Ltd., Colwood Belmont
Developments Ltd. and 0781591 B.C. Ltd. (collectively, the “Colwood Entities”)
TAKE NOTICE THAT:
1. The Colwood Entities filed assignments in bankruptcy on November 17, 2014, and
PricewaterhouseCoopers Inc. was appointed as trustee of the bankruptcy estates by the
Official Receiver, subject to the affirmation by creditors of the trustee's appointment or, the
substitution of another trustee by creditors. In addition, the trustee has lodged a
Consolidated Proposal with the Official Receiver.
2. The First Meeting of Creditors of the Colwood Entities will be held on December 1, 2014 at
10:00 am at a meeting room in Waterfront Center with an address of #260-200 Burrard St.,
Vancouver, British Columbia.
3. The First Meeting of Creditors will followed by the Meeting to Consider the Consolidated
Proposal of the Colwood Entities. The purpose of the second meeting is to consider and vote
on the Consolidated Proposal, a copy of which is enclosed. The Consolidated Proposal is to
all creditors who shall be treated as unsecured creditors. Approval of the Consolidated
Proposal requires a 2/3 in value of the claims voted, and 50% in number plus 1 of the claims
voting, to vote in favour of the proposal.
4. In the event that creditors approve the Consolidated Proposal, an application will be made to
the Court on December 5, 2014, to have the Court approve the Consolidated Proposal.
5. To be entitled to vote at the meetings, a creditor must lodge with the trustee, prior to the
meeting, a Proof of Claim and, where necessary, a Proxy. Any creditor that has already filed
a claim pursuant to the CCAA Claims Process against the Colwood Entities is not required to
file another claim.
6. A creditor who has filed a claim may also vote on the Consolidated Proposal by submitting a
Voting Letter to the trustee in advance of the meetings.
7. Enclosed with this notice are a Proof of Claim form, a form of General Proxy, and a Voting
Letter. Also enclosed is a summary of the assets and liabilities of each of the Colwood
Entities and list of creditors, showing the amounts of their claims.
DATED AT Vancouver, British Columbia this 19th day of November, 2014.
PricewaterhouseCoopers Inc.
Trustee of the Estates of the Colwood Entities
Please direct enquiries to Patricia Marshall by email at [email protected] or by
phone at (604) 806-7800.
Exhibit B2
Condensed Statement of
Assets and Liabilities
District of:
British Columbia
Division No.
03- Vancouver
riginaI
lTmended
Court No.
Estate No.
- Form 78 -Statement of Affairs (Business Bankruptcy) made by an entity
(Subsection 49(2) and Paragraph 158(d) of the Act / Subsections 50(2) and 62(1) of the Act)
In the matter of the bankruptcy of
0781591 B.C. Ltd.
of the City of Victoria, in the Province of British Columbia
To the bankrupt
You are required to carefully and accurately complete this form and the applicable attachments showing the state of your affairs on the date of the bankruptcy, on the 17th day
of November 2014. When completed. this form and the applicable attachments will constitute the Statement of Affairs and must be verified by oath or solemn declaration.
LIABILITIES
(as stated and estimated by the officer)
1 Unsecured creditors as per list 'A'
ASSETS
(as stated and estimated by the officer)
1,316.00
Bslance of secured claims as per list 'B"
0.00
1.Inventory ........................
0.00
2. Trade fixtures, etc...............................
0.00
3, Accounts receivable and other receivables, as per list "E"
Total unsecured creditors
1,316.00
2. Secured creditors as per list "B" .......................
3. Preferred creditors as per list "C" .....................
Good ...................
0.00
0.00
0.00
Doubtful ................
0.00
Bad ...................
0.00
Estimated to produce..........................
4. Contingent, trust claims or other liabilities as per list "D"
estimated to be reclaimable for ...................
Total liabilities.
0.00
5. Deposits in financial institutions
1,316.00
0.00
4. Bills of enchange, promissory note, etc., as per list "F".
6. Cash
0.00
.....................
0.00
101.00
..........................................
7. Livestock.........................................
Surplus
NIL
0.00
8. Machinery, equipment and plant.......................
0.00
9. Real property or immovable as per list "G" ...............
0.00
10. Furniture .........................................
0.00
11. RRSPs, RRIFs, life insurance, etc....................
0.00
12. Securities (shares, bonds, debentures. etc.) ...........
0.00
13. Interests under wills ................................
0.00
14.Vehicles ........................................
0.00
15. Other property. super list "H" .......................
0.00
If bankrupt is a corporation, add:
Amount of ssbscribed capital .........
0.00
Amount paid on capital .............
0.00
Balance subscribed and unpaid....................
0.00
Estimated to produce ............................
0.00
Total assets
101.00
Deficiency.
1,215.00
I, John Parkinson, of the City of Victoria in the Province of British Columbia, do swear (or solemnly declare) that this statement and the attached lists are to the best of my
knowledge. a full, true and complete statement of the Corporation's affairs on the 17th day of November 2014 and fully disclose all property of every description that is in the
Corporation's possession or that may devolve on the Corporation in accordance with the Act.
SWORN (or SOLEMNLY DECLARED)
before me at the City of Victoria in thq,jOsoO
etBi9tish Columbia, on this 17th day of November 2014.
01 Parkinson
Page 1
District of:
British Columbia
Division No.
03- Vancouver
jriginaI
Ljmended
Court No.
Estate No.
- Form 78 -Statement of Affairs (Business Bankruptcy) made by an entity
(Subsection 49(2) and Paragraph 158(d) of the Act! Subsections 50(2) and 62(1) of the Act)
In the matter of the bankruptcy of
Coiwood City Centre GP Inc.
of the City of Victoria, in the Province of British Columbia
To the bankrupt:
You are required to carefully and accurately complete this form and the applicable attachments showing the state of your affairs on the date of the bankruptcy, on the 17th day
of November 2014. When completed, this form and the applicable attachments will constitute the Statement of Affairs and must be verified by oath or solemn declaration.
LIABILITIES
(as stated and estimated by the officer)
1 Unsecured creditors as per list "A".....................
Balance of secured claims as per list "B"
...............
Total unsecured creditors .....................
ASSETS
(as stated and estimated by the officer)
1,148.31
0.00
1. Inventory
3. Preferred creditors as per list "C" ......................
0.00
3. Accounts receivable and other receivables, as per list "E"
1148.31
Good ...................
_________________
2. Secured creditors as per list "B" .......................
0.00
.......................................
2. Trade fixtures,
0.00
Doubtful
0.00
0.00
Bad ....................
0.00
4,000.00
__________________
Estimated to produce...........................
4. Contingent, trust claims or other liabilities as per list "D"
estimated to be reclaimable for
Total liabilities....................................
Surplus ........................................
0.00
1,148.31
NIL
___________________
120.00
4. Bills of exchange, promissory note, etc.. as per list "F"
.
5. Deposits in financial institutions ......................
0.00
6. Cash
0.00
0.00
...........................................
7. Livestock.........................................
0.00
8. Machinery, equipment and plant.......................
0.00
9. Real property or immovable as per list "G"
0.00
10. Furniture,,,..,,,,,,.,,.,..,.,..,,,,
0.00
11. RRSPs, RRIF5, life insurance, etc. ...................
0.00
12. Securities (shares, bonds, debentures, etc.)
0.00
13. Interests under wills
0.00
..................... . ..
14.Vehicles .........................................
0.00
15. Other property, as per list "H" ...............
0.00
If bankrupt is a corporation, add:
Amount of subscribed capital ..... . . .
0.00
Amount paid on capital
0.00
Balance subscribed and unpaid....................
0.00
Estimated to produce ............................
0.00
Total assets .....................
120.00
1,028.31
I, John Parkison, of the City of Victoria in the Province of British Columbia, do swear (or solemnly declare) that this statement and the attached lists are to the best of my
knowledge. a full, true and complete statement of the corporation's affairs on the 17th day of November 2014 and fully disclose all property of every description that is in the
corporation's possession or that may devolve on the corporation in accordance with the Act.
SWORN (or SOLEMNLY DECLAR.rEvi
before me at the City of Victoiiairrt
f'British Columbia, on this 17th day of November 2014.
John Parkison
Page 1
District of:
British Columbia
Division No.
03 - Vancouver
riginaI
Ljmended
Court No.
Estate No.
-- Form 78 -Statement of Affairs (Business Bankruptcy) made by an entity
(Subsection 49(2) and Paragraph 158(d) of the Act / Subsections 50(2) and 62(1) of the Act)
In the matter of the bankruptcy of
Colwood Sooke Developments Ltd
of the City of Victoria. in the Province of British Columbia
To the bankrupt:
You are required to carefully and accurately complete this form and the applicable attachments showing the state of your affairs on the date of the bankruptcy, on the 17th day
of November 2014. When completed, this form and the applicable attachments will constitute the Statement of Affairs and must be verified by oath or solemn declaration.
LIABILITIES
(as stated and estimated by the officer)
1 Unsecured creditors us per list "A" ...........
Balance of secured claims as per list "B"
Total unsecured creditors .................
ASSETS
(as stated and estimated by the officer)
1.3 16.00
132,488.04
1. Inventory......................
0.00
2. Trade fixtures, etc,.,.,,,.,,,,,,,,,,,,,,,,.,,.,,,.
0.00
3. Accounts receivable and other receivables, as per list "E"
133,804.04
2. Secured creditors us per list "B" .........
1.00
3. Preferred creditors us per list 'C" .....................
0.00
Good ...................
0.00
Doubtful ................
0.00
Bad ...................
0.00
Estimated to produce...........................
4. Contingent, trust claims or other liabilities as per list "0"
estimated to be reclaimable for ..................
Total liabilities.....
Surplus
0.00
133.805,04
NIL
0.00
4. Bills of exchange, promissory note, etc., as per list "F".
0.00
5. Deposits in financial institutions .......
0.00
6. Cash
..........................
1.00
7.Livestock........................................
0.00
8. Machinery, equipment and plant......................
0.00
9. Real property or immovable as per list "G" ......
0.00
10.Furniture ...............................
0.00
11. RRSP5, RRIF5, life insurance, etc...........
0.00
12. Securities (shares, bonds, debentures, etc.) .
0.00
.
13. Interests under wills.,.,.,,,
0.00
14. Vehicles.,,,,,....,.,,.,,
0.00
15. Other property. as per list "N".
0.00
If bankrupt is a corporation, add:
Amount of subscribed capital .........
Amount paid on capital . .
0.00
.....
0.00
Balance subscribed and unpaid..................
0.00
Estimated to produce .....
0.00
Total assets ....
1.00
Deficiency ........
133,804.04
I, John Parkinson. of the City of Victoria in the Province of British Columbia, do swear (or solemnly declare) that this statement and the attached lists are to the best of my
knowled9e, a full, true and complete statement of the Corporation's affairs on the 17th day of November 2014 and fully disclose all property ot every description that is in the
Corporahon's possession or that may devolve on the Corporation in accordance with the Act,
SWORN (or SOLEMNLY DECLARED)
before me at the City of Victoria in the rovtffce of Briti
bia. on this 17th day of November 2014.
John Parkinson
Page 1
District of:
British Columbia
Division No.
03 - Vancouver
riginaI
I3mended
Court No.
Estate No.
- Form 78
Statement of Affairs (Business Bankruptcy) made by an entity
(Subsection 49(2) and Paragraph 158(d) of the Act / Subsections 50(2) and 62(1) of the Act)
In the matter of the bankruptcy of
Coiwood Belmont Developments Ltd.
of the City of Victoria, in the Province of British Columbia
To the bankrupt:
You are required to carefully and accurately complete this form and the applicable attachments showing the state of your affairs on the date of the bankruptcy, on the f 7th day
of November 2014. When completed, this form and the applicable attachments will constitute the Statement of Affairs and must be verified by oath or solemn declaration.
LIABILITIES
(as staled and estimated by the officer)
1. Unsecured creditors as per list "A".
ASSETS
(as stated and estimated by the officer)
2,927.80
Balance of secured claims as per list "B" ...... . . ......
Total unsecured creditors ....................
0.00
2,927.80
1.Inventory .........................................
0.00
2. Trade fixtures, etc. . .
0.00
........
3. Accounts receivable and other receivables, as per list "E"
Good ...................
0.00
2. Secured creditors as per list "B" .......................
0.00
Doubtful ...............
0.00
0.00
Bad ....................
3. Preferred creditors as per list "C" .....................
0.00
0.00
Estimated to produce..........................
4. Contingent, trust claims or other liabilities as per list "D"
estimated to be reclaimable for ................
Total liabilities,
0.00
2,927.80
Surplus
NIL
4. Bills of exchange, promissory note, etc., as per list "F" .
0.00
5. Deposits in financial institutions ......................
0.00
...........................................
1.00
7. Livestock.........................................
0.00
6. Cash
8. Machinery, equipment and plant,.,.,,.,,,,
0.00
9. Real property or immovable as per list "0" ................
0.00
10. Furniture .........................................
0.00
11. RRSPs. RRIF5, life insurance, etc.....................
0.00
12. Securities (shares, bonds, debentures, etc.) ...........
0.00
13.Interests under wills ....................
0.00
14.Vehicles .............................
0.00
15. Other property. as per list "H" ............
0.00
If bankrupt is a corporation, add:
Amount of subscribed capital
0.00
Amount paid on capital .............
0.00
Balance subscribed and unpaid..................
0.00
Estimated to produce .........................
0.00
Total assets .....................
Deficiency .......................
1.00
2,926.80
I, John Parkinson, of the City of Victoria in the Province of British Columbia, do swear (or solemnly declare) that this statement end the attached lists are to the best of my
knowledge, a full, true and complete statement of the Corporation's affairs on the 17th day of November 2014 and fully disclose all property of every description that is in the
Corporation's possession or that may devolve on the Corporation in accordance with the Act.
SWORN mr SOLEMNLY DECLARED)
. ',,,
b fore me at the City of Victoria in the Province of British Columbia
this 17th day of November 2014.
John Parkinson
Page 1
District of:
British Columbia
Division No.
03- Vancouver
1riinaI
EI3mended
Court No.
Estate No.
-- Form 78 -Statement of Affairs (Business Bankruptcy> made by an entity
(Subsection 49(2) and Paragraph 158(d) of the Act! Subsections 50(2) and 62(1) of the Act)
In the matter of the bankruptcy of
Colwood Jerome Developments Ltd.
of the City of Victoria, in the Province of British Columbia
To the bankrupt:
You are required to carefully and accurately complete this form and the applicable attachments showing the state of your affairs on the date of the bankruptcy, on the 17th day
of November 2014. When completed, this form and the applicable attachments will constitute the Statement of Affairs and must be verified by oath or solemn declaration.
LIABILITIES
(as stated and estimated by the officer)
1. Unsecured creditors as per list "A" -
ASSETS
las stated and estimated by the officer)
1,316.00
Balance of secured claims as per list "B" ...............
Total unsecured creditors ....................
2. Secured creditors as per list "B" ......................
3. Preferred creditors as per list "C" ......................
0.00
1. Inventory .....................................
0.00
2. Trade fixtures, etc................................
0.00
3. Accounts receivable and other receivables, as per list "E"
1,316.00
0.00
0.00
Good..................
0.00
Doubtful ................
0.00
Bad ...................
0.00
0.00
Estimated to produce..........................
4. Contingent, trust claims or other liabilities as per list "D"
estimated to be reclaimable for ...................
Total liabilities........................
Surplus..
0.00
1,316.00
NIL
4. Bills of exchange, promissory note, etc., as per list "F" - .
0.00
5. Deposits in financial institutions .....................
0.00
6.Cash
1.00
.........................................
7. Livestock.,.,.,,...,,,,.,..
0.00
8. Machinery, equipment and plant.......................
0.00
9. Real property or immovable as per list "G"......
10.
0.00
0.00
Furniture ......,.....,...,....,,,. ......
11. RRSP5, RRIF5, life insurance, etc,,,,,,,....,
0.00
12. Securities (shares, bonds, debentures. etc.) .
0.00
13. Interests under wills ...........................
0.00
14. Vehicles....,,,,...,......,...
0.00
15. Other property, super list "H"........................
0.00
If bankrupt is a corporation, add:
Amount of subscribed capital .........
0.00
Amount paid on capital .............
0.00
Balance subscribed and unpaid...................
0.00
Estimated to produce ............................
0.00
Total assets .................
Deficiency.,.,.,.,,,,..,..,,
1.00
1,315.00
I. John Parkinson. of the City of Victoria in the Province of British Columbia, do swear (Or solemnly declare) that this statement and the attached lists are to the best of my
knowledge, a full, true and complete statement of the Corporations affairs on the 17th day of November 2014 and fully disclose all property of every description that is in the
Corporafion's possession or that may devolve on the Corporation in accordance with the Act.
SWORN (or SOLEMNLY DECLARED)
.
before me at the Crty of Vruloria n the Province of British Columbia on his 17th day of November 2014.
fin Parkinson
Page 1
Exhibit B3
List of Creditors
District of:
British Columbia
Division No.
03
Vancouver
Court No.
Estate No.
FORM 78 -- Continued
List
Unsecured Creditors
0781591 BC, Ltd.
Name of creditor
No.
1
Canada Revenue Agency
Address
Unsecured claim
Regional Intake for Insolvency
Balance of claim
Total claim
100
000
100
100000
000
1,080.00
315.00
000
315.00
1,316.00
0.00
1,31600
P0 Box 11575 Station Main
Surrey BC V3T 005
2
Cotwood City Centre GP Inc.
P0 Bun 28070 Westshnre RPO
Victoria BC V9B 6K8
3
KPMG LLP
PD Bun 10426
Attn: Gait Kolot
777 Dunsmuir Street
Vancuuver BC V7Y 11<3
Total:
17-Nov-20 14
Date
John Parkinson
Page 2 of 9
District of:
British CoJumbia
Division No.
03 - Vancouver
Court No.
Estate No.
FORM 78 - Continued
List 'A'
Unsecured Creditors
Coiwood City Centre GP Inc.
No.
Name of creditor
1
2
Address
Bull Housser & Tupper LLP
900
Alto: Max Collett
Vancouver BC V6Z 2M4
Canada Revenue Agency
Regional Intake for Insolvency
Unsecured claim
900 Howe Street
Balance of claim
Total claim
821.03
0.00
821.03
1.00
0.00
100
315.00
0.00
315,00
11.28
0.00
11.28
0.00
1,148.31
P0 Box 11575 Station Main
Surrey BC V3T 0E5
3
KPMG LLP
P0 Box 10426
AtIn: Gail Kolot
777 Dunsmuir Street
Vancouver BC V7Y 1K3
4
-
Royal BankotCanada
1200-200 Burrard Street
Attn: William Skelly
Vancouver BC V7X 112
Total:
1,14831
17-Nov-20 14
Date
John Parkison
Page 2 of 9
District of:
British Columbia
Division No.
03 - Vancouver
Court No.
Estate No.
FORM 78 Continued
List 'A'
Unsecured Creditors
Culwood Sooke Developments Ltd
No.
Name of creditor
I
Address
Canada Revenue Agency
Regional lntske Centre fur lnsstvency
Altn: Insolvency Unit
P0 Box 11575 Station Main
Unsecured claim
Balance of claim
Total claim
100
000
I 000.00
0.00
1.00000
0.00
132,488.04
13248804
315.00
0.00
31500
1316.00
132,48804
133,804.04
j
00
Surrey BC V3T 0E5
2
Colwood City Centre GP Inc.
P0 Box 28070 Westahore RPO
Victoria BC V98 1J4
3
Glotman Simpson Cunsalting Engineers
c/s Twinning, ShortS Haakonson
Atm: KerryA. Short
500
1122 Mainland Street
Vancouver BC V6B 5L1
4
KPMG LLP
P0 Box 10426
Attn: Gail Kolot
777 Dunsmuir Street
Vancouver BC V7Y 1K3
Total:
17-Nov-2014
Date
I
Page 2 of 9
John Parkinson
District of:
British Columbia
Division No.
03 - Vancouver
Court No.
Estate No.
FORM 78 -- ConOnued
List 6
Secured Creddors
Colwood Ssoke Developments Ltd
Amount of
No.
Name of creditor
Address
Glotman Gmpson Consulting
c/s Twinning. Short &
Engineers
Haakonson
Alto: Kerry A. Short
500- 1122 Mainland
Particulars of security
claim
132,48904
Cssh on Hand - Chequing -
When given
18-Sep-2013
Estimated
Estimated
value of
surplus from
security
security
Balance of
claim
1.0
132,48804
Royal Bank of Canada
Street
Vancouver BC V6B 5L1
Total:
132,489.0
1.0
0.B
17-Nov-20 14
Date
John Parkinson
Page 3 of 9
132,488.0
District of:
British Co!umbia
Division No,
03
Vancouver
Court No.
Estate No.
FORM 78 Continued
List 'A'
Unsecured Creditors
Cotwood Belmont Developments Ltd.
No.
Name of creditor
I
Address
BC Hydro
c/s Credit Administration
Attn: Lee Mold
COl - 69111 Ssuthpsint Drive
Canada Revenue Agency
Regional Intake Centre for Insolvency
Unsecared claim
Balance of claim
Total claim
161180
000
1,611.80
1.00
0.00
1,00
1,800.00
0.00
1,000.00
315.00
0.00
315.00
2,927.80
0.00
2,927.80
Burnaby BC V3N 4X8
2
PD Box 11S75 Station Main
Surrey BC V31 0E5
3
Colwxsd City Centre GP Inc.
PD Box 28070 Westshore RPO
Victoria BC V9B 61<8
4
KPMG LLP
PD Box 10426
Atm: Gail Kolot
777 Dunsmuir Street
Vancouver BC V7Y 11<3
Total:
1 7-Nov-201 4
Date
I'
Page 2 of 9
John Parkinson
District of:
Division No.
Court No.
Estate No.
British Columbia
03 - Vancouver
FORM 78-- continued
List A
Unsecured Creditors
Colwood Jerome Developments Ltd.
No.
Nameofcreditor
i
2
3
canada Revenue Agency
Attn: Insolvency Unit
____________________________________________
Colwood City Centre GP Inc.
KPMG LLP
Attn: Gail Kolot
Address
Linsecuredclaim
Regional Intake centre for Insolvency
P0 Box 11575 Station Main
Surrey BC V3T 0E5
PD Box 28070 Westshore RPO
Victoria BC V9B 6K8
P0 Box 10426
777 Dunsmuir Street
Vancouver BC V7Y 1 K3
Total:
Balanceofclaim
0.00
1.00
1000.00
0.00
1000.00
315.00
0.00
31500
1,316.00
0.00
1,316.00
1 7-Nov-2014
Date
/
Page 2 of 9
Totaiclaim
100
John Parkinson
Exhibit C
Cover letter to creditors dated November 19,
2014
November 19, 2014
In the Matter of the Bankruptcies of Colwood City Centre Limited Partnership, Colwood
City GP Inc., Colwood Sooke Development Ltd., Colwood Jerome Developments Ltd.,
Colwood Belmont Developments Ltd. and 0781591 B.C. Ltd. (collectively, the “Colwood
Entities”) and the Consolidated Proposal of the Partnership Entities
To Unsecured Creditors of the Colwood Entities:
Background
Since October 18, 2013, the Partnership Entities have, along with many other entities within the League
Assets Corp. group of companies (“League”), been subject to proceedings pursuant to the Companies’
Creditor Arrangement Act (the “CCAA”). The Colwood Entities were developing the Colwood City Center
project (the “Colwood Project”) prior to League’s insolvency, but work on the project had ceased due to
League’s financial difficulties.
During the CCAA proceedings, League undertook a review of the Colwood Project in an effort to maximize
value for all the stakeholders of the Colwood entities, but was unable to redesign the Colwood Project so
anyone other than secured mortgage lenders would see a return on their investment. Certain mortgage
lenders undertook a sales process of the Colwood Project under separate foreclosure proceedings from
June 2014 to September 2014, and it became apparent to League that the sales results were disappointing.
League, working with the Monitor in the CCAA proceedings, undertook its own sales process which
resulted in it reaching an agreement (the “Onni Restructuring Agreement”) with Onni Development
Capital Corp. (“Onni”). Approval of the Onni Restructuring Agreement by the Court resulted in the
discontinuance of the foreclosure proceedings. Onni’s offer exceeded offers from four other bidding
parties and significantly exceeded the recoveries for creditors of the Colwood Entities that would have
been realized had the foreclosure proceedings been concluded.
Pursuant to the Onni Restructuring Agreement, Onni will pay $26.4 million plus a share of the
development profits earned in 2015 and 2016 in return for ownership of the Colwood Entities and the
Colwood Project. These proceeds are to be allocated as follows:
 $17.5 million which has already been paid to secured lenders to the Colwood Entities. This
amount represents the fair market value of the Colwood Project lands.
 $8.9 million will be paid for the benefit of unsecured creditors and limited partnership unit
holders. After deduction of costs pursuant to a court order in the CCAA proceedings, the
unsecured creditors of the Colwood Entities will receive 95% of the net balance, while limited
partnership unit holders will receive the remaining 5%.
 17.5% of the cumulative net income of the Colwood Entities (other than rental income) derived
from the development of the Colwood Project earned during the period January 1, 2015 to
December 31, 2016 will be paid to the unsecured creditors of the Colwood Entities.
The Court considered the total value offered by the Onni Restructuring Agreement and the treatment of
the various stakeholders to the Colwood Entities, and ultimately authorized League to seek to complete
the transaction. Further details of the Onni Restructuring Agreement can be found in the Monitor’s 23 rd
report to the Court on the Monitor’s website at www.pwc.com/car-leagueassets .
Prior to receiving the $8.9 million, a number of steps must be taken to complete the restructuring of the
Colwood Entities and the transfer of the ownership to Onni. One of these steps includes having the
Colwood Entities file for bankruptcy and then obtain the approval of the unsecured creditors of a
Consolidated Proposal at a meeting of creditors to be held on December 1, 2014.
On November 17, 2014, the Colwood Entities filed assignments into bankruptcy and
PricewaterhouseCoopers Inc. has been appointed as trustee in the bankruptcies. On November 19, 2014
a Consolidated Proposal was made to the creditors of the Colwood Entities.
Summary of the Consolidated Proposal
The Onni Restructuring Agreement resulted in a payment of $17.5 million which was used to repay
secured creditors based on the priority of their mortgage charges against the lands. These funds were
used to repay the outstanding property taxes and the outstanding loans to Peoples Trust, Epix Colwood
LP and the Class M Term Notes.
As the $17.5 million was insufficient to repay the Class B Term Notes and the July 2013 Term Notes which
held mortgages against the Colwood Project, investors holding these notes are now considered unsecured
creditors. Furthermore, any creditor who filed a lien against the Colwood Project that remains unpaid is
also now considered an unsecured creditor.
The Consolidated Proposal provides unsecured creditors with the following recovery on their claims:
 A cash distribution equivalent to 95% of the $8.9 million payment net of costs incurred during the
CCAA proceedings to be established by order of the court;
 A Contingent Value Certificate (“CVC”) which will entitle unsecured creditors to 17.5% of the
cumulative net income of the Partnership Entities (other than rental income) derived from the
development of the Colwood Project earned during the period January 1, 2015 to December 31,
2016. Payments to unsecured creditors from the CVC will be made by September 30, 2017.
Unsecured creditors will share in the cash distribution on a pro-rata basis and receive a CVC for their prorata share of the future income from the development of the Colwood Project. The Trustee estimates that
the cash distribution represents a recovery of 3-5 cents on each dollar of unsecured claim. The Trustee
further estimates that distributions of the CVC’s and the cash payments could be made in February 2015
in the event that the Consolidated Proposal is approved by the creditors and the Court.
Trustee’s Recommendation
The Trustee has evaluated the Consolidated Proposal on behalf of the unsecured creditors
and recommends that unsecured creditors vote FOR the approval of the Consolidated
Proposal.
The Trustee based its conclusion on the following factors:
 The total proceeds offered by the Onni Restructuring Agreement exceeded the offers of four other
bidders (each being a major developer) and the recoveries under the foreclosure proceedings.
The foreclosure proceedings would not have provided any recovery to unsecured
creditors. Based on these results, the Trustee does not believe that any better offer exists for the
Colwood Project.
 If the Consolidated Proposal is not approved, the unsecured creditors will not be entitled to their
share of the $8.9 million payment and the CVCs.
 Onni now holds first mortgage security against the Colwood Project for the $17.5 million it loaned
to the Colwood Entities to repay the secured lenders. The loan matures on January 31, 2015 and
if the Colwood Entities are unable to repay the Onni loan, then Onni will be in a position to
foreclosure on the Colwood Project in any event.
Next Steps
The unsecured creditors of the Colwood Entities must vote on the Consolidated Proposal. Therefore,
enclosed in this package are:
1.
A notice of the meeting of creditors to be held at 10:00 am on December 1, 2014 at a meeting room in
Waterfront Center (#260 -200 Burrard St., Vancouver, B.C.). During that meeting, creditors will have
the opportunity to hear a report from the trustee in bankruptcy on the financial affairs of the Colwood
Entities and the Onni Restructuring Agreement. Also, at a separate meeting at the same location to be
held immediately following the first meeting of creditors, a vote of the creditors will be held on
whether to approve the Consolidated Proposal. This vote by creditors will have a significant
impact on your recovery and you are encouraged to exercise your vote.
2. A copy of the Consolidated Proposal.
3. A summary of assets and liabilities and a list of creditors for each of the Colwood Entities.
4. A Proof of Claim Form. If you have filed a claim or received a Notice of Investor Claim in early 2014
as part of the CCAA claims process, you do not need to file a claim in the bankruptcy and proposal
proceedings. Only creditors having Restructuring Claims or Secured Mortgage Lender
Claims arising from a deficiency on its mortgage security need to complete a Proof of
Claim and file it with the trustee. Proofs of Claim must be filed with the trustee prior to the
creditor meetings in order vote at the creditor meetings. Restructuring Claims or Secured
Mortgage Lender Claims that are not filed with the trustee prior to the Effective Date
stipulated in the Consolidated Proposal shall be forever extinguished and barred.
5.
A Voting Letter and Proxy Form - This document must be completed and returned to the Trustee
prior to the time of the meeting if you do not intend to attend the creditor meeting in person. If you
do not intend to attend the creditor meeting, you may vote by completing the voting letter and
submitting it to the trustee in advance of the creditor meeting. If you wish another person to
represent you at the creditor meeting and vote on your behalf, you must submit a Proxy to the trustee
in advance of the creditor meeting. These forms can be delivered by mail, email or fax.
6. A copy of the order made by the Court on November 19, 2014 authorizing the procedure to be
followed for the filing and approval of the Consolidated Proposal.
If you have any questions with respect to this process, please contact Patty Marshall by email at
[email protected] or by phone at 604-806-7800.
PricewaterhouseCoopers Inc.,
Trustee in re: the Consolidated Proposal of the Colwood Entities
Neil P. Bunker, CA, CIRP
Vice President
Enclosures
Exhibit D
Copy of the Minutes of the Creditor Meeting
held December 1, 2014
DISTRICT OF BRITISH COLUMBIA
DIVISION NO. 03 Vancouver
COURT NO.
B141356
ESTATE NO.
11-253825
N THE MATTER OF THE CONSOLIDATED PROPOSAL OF
COLWOOD CITY CENTRE LIMITED PARTNERSHIP
COL WOOD CITY GP INC.
COL WOOD SOOKE DEVELOPMENTS LTD.
COLWOOD JEROME DEVELOPMENTS LTD.
COLWOOD BELMONT DEVELOPMENTS LTD.
0781591 B.C. LTD.
(collectively, the "Coiwood Entities")
MINUTES OF A MEETING OF CREDITORS TO CONSIDER A PROPOSAL
10:40 AM, DECEMBER 1, 2014
Attendance: See attached attendance list for details.
Mr. Neil Bunker for PricewaterhouseCoopers Inc., Trustee, introduced himself and acted as
Chairman under the authority of subsection 51(3) of the Bankruptcy & Insolvency Act. He
declared the meeting properly called, and a quorum being present, duly constituted.
The Trustee tabled the following documents:
•
•
•
•
•
•
Notice to Creditors of the Consolidated Proposal and Meeting of Creditors
Affidavit of Mailing
Consolidated Proposal
Statement of Affairs
The Trustee's Preliminary Report on the Administration
Proof of Claim forms, Proxies and Voting letters received from creditors
Mr. Bunker explained:
•
•
•
That the purpose of the meeting was to consider the proposal, the financial affairs of the
debtor, and to hold a vote on the proposal;
What voting parameters are needed in order for a proposal to pass; and
What a failed vote would mean for the debtor company.
Mr. Bunker called for the vote on the proposal. Six creditors voted at the meeting, either in
person or by proxy. 300 creditors had cast their votes prior to the meeting by submitting a voting
letter. A voting summary is provided below:
303
99.0%
139,532,369
99.8%
3
1.0%
245,000
0.2%
306 100.0%
139,777,369
100.0%
Based on the votes of eligible creditors, it was:
RESOLVED that the proposal be accepted.
There being no further business, Mr. Bunker adjourned the meeting at 10:48 am.
Neiflunker, Picewatli&iseCoopers Inc.
Court No: B141356
Estate No.: 11-253825
IN THE MATTER OF THE BANKRUPTCIES &
CONSOLIDATED PROPOSAL OF
COL WOOD CITY CENTRE LP, COL WOOD CITY CENTRE GP INC.,
COL WOOD SOOKE DEVELOPMENTS LTD., COL WOOD JEROME
DEVELOPMENTS LTD., COL WOOD BELMONT DEVELOPMENTS LTD.,
AND 0781591 BC LTD.
Creditors present or represented:
Name of Creditor
(PLEASE PRINT)
jgathe
7/
Represented By
(PLEASE PRINT)
Amount of Claim
$
Court No: B141356
Estate No.: 11-253825
IN THE MATTER OF THE BANKRUPTCIES &
CONSOLIDATED PROPOSAL OF
COL WOOD CITY CENTRE LP, COL WOOD CITY CENTRE GP INC.,
COL WOOD SOOKE DEVELOPMENTS LTD., COL WOOD JEROME
DEVELOPMENTS LTD., COL WOOD BELMONT DEVELOPMENTS LTD.,
AND 0781591 BC LTD.
ATTENDANCE AT FIRST MEETING OF CREDITORS:
Trustee and Representatives:
Mr. Neil Bunker
Ms. Patricia Marshall
Creditors present or represented:
Name of Creditor
(PLEASE PRINT)
jgte
Represented By
(PLEASE PRINT)
Amount of Claim
S
Jennifer E Fung & Charles Fung
PwC
$188,102.00
Farris, Vaughan, Willis &
Muhy LLP
Sam Parrotta
$ 25,115.47