2faanmortgageadmin.com/wp-content/uploads/2019/09/CHAT... · 2019. 8. 23. · Gerald Auger, Plan...

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that end, my nephew, Brendon Smith, advised me that a married couple was interested in

acquiring a portion of Margin Music's debt.

3. Ultimately, in July 2016, a numbered company controlled by Ms. Tess Tsang, 1957419

Ontario Inc. ("195"), acquired $115,000 of Margin Music's $550,000 principal loan. A

copy of the registration on title (AT4365786) to the CHAT Property listing 195 as a LH1

Investor is attached hereto as Exhibit A.

4. In connection with its acquisition of $115,000 of Margin Music's position, 195 executed

certain documents in respect of that investment. Attached as Exhibit "B" hereto are

documents that 195 signed in respect of its investment, including an "Investment

Authority — Form 9D" and "Form 1— Investor/Lender Disclosure Statement for Brokered

Transactions".

5. I have reviewed the affidavit of Mardiros Gerard Panossian sworn August 15, 2019.

Attached as Exhibit "N' to Mr. Panossian's affidavit is an "Investment Authority — Form

9D", and attached as Exhibit "E" is a "Form 1 — Investor/Lender Disclosure Statement

for Brokered Transactions". Based on my review of the terms of the Form 9D and Form

1 executed by Mr. Panossian, they appear be substantially identical to the Form 9D and

Form 1 signed by 195 in July 2016.

6. Among other things, it appears from the Form 9Ds and Form 1 s signed by both 195 and

Mr. Panossian that they were each advised they would hold a second ranking charge as

security for their respective loans, junior only to a $8.245 million charge in favour of

Diversified.

7. I also note that, in Schedule "G" to the Form 1 attached as Exhibit "F' to Mr. Panossian's

affidavit (as well as in the Form 1 executed by 195), litigation commenced by me and

two other plaintiffs against, among others, BDMC, Fortress and Mr. Pahuja is identified

("2014 Litigation"). The 2014 Litigation does not relate to the CHAT Project and is

unrelated to the loan Margin Music made as an LH1 Investor. The 2014 Litigation was

preceded by a lawsuit commenced by me and two other individuals against Del

Terrelonge, Naheel Suleman and John Wee Tom in 2012 over a loan made to them (the

THIS IS EXHIBIT "A" TO THE

SUPPLEMENTARY AFFIDAVIT OF MARK WELLS

SWORN BEFORE ME ON AUGUST 23, 2019

A Commissioner for '1Lig Affidavits

Ti-Anna Wang, aCommissioner, etc., Province of Ontario,while a Student-at-Law.Expires April 24, 2020.

LRO # 80 Transfer Of Charge

The applicant(s) hereby applies to the Land Registrar.

Registered as AT4365786 on 2016 10 06 at 16:01

yyyy mm dd Page 1 of 5

I PropertiesPIN

Description

Address

21412 - 0151 LT

LT 1-2 PL D160 TORONTO; CITY OF TORONTO

46 CHARLOTTE STTORONTO

I Source InstrumentsRegistration No.

AT3689249

AT4224266

Date Type of Instrument

20140915 Charge/Mortgage

20160524 Transfer Of Charge

I Transferor(s)

This transfer of charge affects all lands that the charge is against which are outstanding.

Name

Address for Service

BUILDING & DEVELOPMENT MORTGAGES CANADA INC.

8 - 25 Brodie Drive,Richmond Hill. ON L4B 3K7

I, Ildina Galati-Ferrante, have the authority to bind the corporation.

This document is not authorized under Power of Attorney by this party.

Name

Address for Service

THE BANK OF NOVA SCOTIA TRUST COMPANY

130 King Street West, 29th FloorToronto, ON M5X 1K1

I, George H. Elliott, Executive Trust Manager, and I, Manuela Leite, Executive Trust Manager, have the authority to bind the corporation.


Name

Address for Service

OLYMPIA TRUST COMPANY

2200 125-9th Avenue South EastCalgary, Alberta T2G OP6

I, Anna Le, Supervisor, and I, Lori Ryan, Vice President Registration Plans & TFSA Division, have the authority to bind the corporation.


I Transferee(s) Capacity Share

Name BUILDING & DEVELOPMENT MORTGAGES CANADA INC. Trustee 40.96%

Address for Service 8 - 25 Brodie Drive,Richmond Hill. ON L4B 3K7

Name THE BANK OF NOVA SCOTIA TRUST COMPANY Trustee 55.49%

Address for Service 130 King Street West, 29th FloorToronto, ON M5X 1K1

Name OLYMPIA TRUST COMPANY Trustee 3.55%

Address for Service 2200 125-9th Avenue South EastCalgary, Alberta T2G OP6

I StatementsThe chargee transfers the selected charge for $2.00

Schedule: See Schedules

I Signed ByTara Welat 2600-120 Adelaide St. West

TorontoM5H 1T1

acting forTransferor(s)

Signed 2016 10 06

LRO # 80 Transfer Of Charge

The applicant(s) hereby applies to the Land Registrar.

Registered as AT4365786 on 2016 10 06 at 16:01

yyyy mm dd Page 2 of 5

I Signed By

Tel 416-868-1080

Fax 416-868-0306

I have the authority to sign and register the document on behalf of all parties to the document.

Tara Welat 2600-120 Adelaide St. West acting forToronto Transferee(s)

M5H 1T1

Tel 416-868-1080

Fax 416-868-0306

I have the authority to sign and register the document on behalf of all parties to the document.

Signed 2016 10 06

I Submitted ByROBINS APPLEBY LLP

Tel 416-868-1080

Fax 416-868-0306

l Fees/Taxes/PaymentStatutory Registration Fee

Total Paid

2600-120 Adelaide St. WestTorontoM5H 1T1

2016 10 06

$62.85

$62.85

SCHEDULE TO TRANSFER OF CHARGE

WHEREAS:

1. By a Charge/Mortgage registered in the Land Registry Office for the Land TitlesDivision of Toronto (No. 80) (the "Land Titles Office) on September 15, 2014,as Instrument No. AT3689249, FORTRESS CHARLOTTE 2014 INC.("Fortress") as Chargor, gave a Vendor-Take-Back Charge/Mortgage upon thelands described herein in favour of DIVERSIFIED CAPITAL INC. ("Diversified")as chargee, to secure the payment of the principal sum of THREE MILLIONNINE HUNDRED AND SEVENTY-ONE THOUSAND NINE HUNDRED ANDTHIRTY-FOUR DOLLARS---71/100 ($3,971,934.71) with interest as therein setout upon the terms therein mentioned (the "Charge").

2. The Payments set out under the heading "Provisions" on the face page of theCharge is hereby deleted and replaced with $79,438.69.

3. Subsequent to the registration of the Charge, Diversified by way of a Transfer ofCharge registered in the Land Titles Office on September 15, 2014, asInstrument No. AT689250, transferred all of its rights and interests in the Chargeto The Bank of Nova Scotia Trust Company ("BNS") as to a 69.25% interest, andto Centro Mortgage Inc., ("Centre) as to a 30.75% interest in the Charge, incomplete satisfaction of its obligations.

4. Each Transferor hereby acknowledges that it holds percentage shares of variousinvestors representing the interests, and transfers such percentage sharesrepresenting the interests set forth in Schedule "A" attached hereto, as may beamended from time to time to the Transferees named herein, together with anyand all amendments and/or notices related to the said Charge without altering,modifying or waiving any rights of the existing Transferee.

5. In all other respects the parties hereto confirm the terms and conditionscontained in the aforesaid Charge and to any amendments or notices registeredsubsequent thereto.

6. Provided that nothing herein contained shall create any merger or alter the rightsof the Transferees as against any subsequent encumbrancer or other personinterested in the said lands, nor affect the liability of any person not a party

hereto who may be liable to pay the said mortgage money or the rights of anysuch person, all of which rights are hereby reserved.

7. The parties hereto acknowledge and agree that any amounts transferredpursuant to his agreement are cumulative and that the purpose and effect of thisTransfer of Charge is to acknowledge the cumulative amount of the said Chargeowned by each Transferee named herein.

8. By Articles of Amendment dated January 25, 2016 and registered as InstrumentNo. AT4136473 on February 3, 2016, Centro Mortgage Inc. changed its name toBUILDING & DEVELOPMENT MORTGAGES CANADA INC.

SCHEDULE "A"LIST OF INVESTORS

THE BANK OF NOVA SCOTIA TRUST COMPANY in trust for:

(a) Patricia Paspalis, Plan No. 4910235318 in the amount of $60,000.00(b) Shahrahman Bhatti, Plan No. 4915027611 in the amount of $30,000.00(c) Valerie Heron, Plan No. 4915023917 in the amount of $202,000.00(d) -Glenn Bannon, Plan No. 4915023511 in the amount of $47,000.00(e) Ian Colquonon, Plan No. 4918038219 in the amount of $109,500.00

Darrell Shimizu, Plan No. 4918038417 in the amount of $38,000.00(g) Stephen Blyth Plan No. 4915024014 in the amount of $53,000.00(h) Charles Goodvin, Plan No. 4910215518 in the amount of $10,000.00

Jason Yue, Plan No. 4940323613 in the amount of $50,000.00(j) Clifford Bird, Plan No. 4915024212 in the amount of $26,900.00(k) Barbara Alexander, Plan No. 4940323019 in the amount of $50,000.00

(1) Joan Kinsman, Plan No. 4910215617 in the amount of $50,000.00

(m) Irvin Shawayahamish, Plan No. 4918037815 in the amount of $41,000.00(n) Kevin Leahey Plan No. 4915024311 in the amount of $20,000.00(o) Bruce McKenzie, Plan No. 4915024717 in the amount of $49,000.00(p) Sherry Main, Plan No. 4918039514 in the amount of $19,000.00

(q) Patryk Halkiewicz, Plan No. 4915024113 In the amount of $12,000.00(r) Christine Lajoie, Plan No. 4918038912 in the amount of $22,800.00(s) Matthew Spreckler, Plan No. 4915023719 in the amount of $11,000.00(t) Michelle Duval, Plan No. 4918039316 in the amount of $107,300.00(u) Susana Martinez, Plan No. 4918039019 in the amount of $64,000.00(v) Gene Lefler, Plan No. 4918039415 in the amount of $76,400.00(w) Cory Roesler, Plan No. 4915024915 in the amount of $44,000.00(x) David Price, Plan No. 4918039811 in the amount of $90,000.00

(y) Mark Beggs, Plan No. 4918039712 in the amount of $34,300.00(z) Terry Thomas, Plan No. 4915025011 in the amount of $51,000.00(aa) Katherine Cornelius, Plan No. 4940326517 in the amount of $10,000.00(bb) Melvin Prpic, Plan No. 4940326319 in the amount of $10,000.00(cc) Pauline Prpic, Plan No. 4940327317 in the amount of $10,000.00(dd) Lynn Chefero, Plan No. 4940326111 in the amount of $10,000.00(ee) Steven Easter, Plan No. 4940326210 in the amount of $10,000.00

(ff) Albert Belfour, Plan No. 4918040512 in the amount of $121,200.00

(99) Patrick Collins, Plan No. 4918039910 in the amount of $36,200.00(hh) Christine Lajoie, Plan No. 4918038813 in the amount of $28,000.00(ii) Donald Shannon, Plan No. 4918040017 in the amount of $159,300.00

Gerald Auger, Plan No. 4918040116 in the amount of $28,300.00(kk) Joan Covera, Plan No. 4910215815 in the amount of $55,200.00(II) Pauline Fairn, Plan No. 4910215716 in the amount of $9,700.00(mm) Kevin Sparrow, Plan No. 4918040819 in the amount of $47,000.00(nn) Mario Da Silva, Plan No. 4915025219 in the amount of $12,200.00(oo) Larry Stefaniuk, Plan No. 4915025318 in the amount of $29,500.00(pp) Daniel Batten, Plan No. 4918041015 in the amount of $91,000.00(qq) Susan Miller, Plan No. 4915026118 in the amount of $12,500.00(rr) Carol Petras, Plan No. 4915025110 in the amount of $46,000.00(ss) Leslie Campen, Plan No. 4915025417 in the amount of $25,000.00(tt) Peter Gazzleone, Plan No. 4918040918 in the amount of $15,000.00(uu) Shahrahman Bhatti, Plan No. 4915027611 in the amount of $41,600.00(vv) Laurie Leclerc, Plan No 4918053010 in the amount of $28,300.00

BUILDING & DEVELOPMENT MORTGAGES CANADA INC., in trust for:

(a) Margin Music (per: Mark Wells) in the amount of $435,000.00(Partial Outgoing: Mrgin Music aka Margin Music (per: Mark Wells) -$115,000.00 (Original investment $550,000.00))

(b) Steve Staryk in the amount of $300,000.00(c) Cantek Investment Inc. in the amount of $50,000.00(d) Alan Cornelius in the amount of $10,000.00(e) Pauline Chung in the amount of $50,000.00

Joan Covera in the amount of $4,800.00(g) 1957419 Ontario Inc. in the amount of $115,000.00

OLYMPIA TRUST COMPANY in trust for:

(a) Jennifer Correia, Plan No. 100221 in the amount of $20,000.00(b) Jawad Rathore, Plan No. 92577 in the amount of $35,000.00(c) Michael Bingham, Plan No. 144877 in the amount of $60,180.82(d) Vincenzo Petrozza, Plan No. 107009 in the amount of $26,000.00

robapp\3408343.1

THIS IS EXHIBIT "B" TO THE

SUPPLEMENTARY AFFIDAVIT OF MARK WELLS

SWORN BEFORE ME ON AUGUST 23, 2019

A Commissioner fold Affidavits

Ti-Anna Wang, aCommissioner, etc., Province of Ontario,while a Student-at-Law.Expires April 24, 2020.

Investment Authority — Form 9j)

To: Building & Development Mortgages Canada Inc.Mortgage Administrator8-25 Brodie DriveRichmond Hill, Ontario L4B 3K7Attention: Data Gelid- Ferrante

I, 1957419 Ontario Inc, Per: Tess Tsang, hereby instmct you to act on my behalf, on myMortgage investment of $115,000.00, the details, conditions and disclosures of which areset below,

Details about the inv nt:

1. Name and Address of the BorrowFortress Charlotte 2014 Inc.25 Brodie Drive, Unit 1Richmond Hill, ONL4B 3K7

2. Municipal Address and LegalDescription of the real property(' 353 Adelaide Street West Toronto, Ontario

Legal Description: LT 1-2 PL DI60 TORONTO', CITY OF TORONTO

Future Security: Any adjacent lands to the current or future parcels.

3. Type ofproperty: 32 Storey Residential High Rise Condominium Suites

4. Principal amount of mortgage/charge: S9,700,000.00 — [increasing to a Maximumof $25.000,000.00 ($5,000,000.00 of which is a buffet)], see paragraph 20.

5, Amount of loan to be advanced: 5115,000.00.

6. Rank of mortgage or charge: .A Second ranking Charge/Mortgage (Theranking of the mortgage can change at any time over the duration of theterm) — sublect to Dliregillat 21. she below.

7, Encumbrances: First ranking Charge/Mortgage will be registered in priorityof this mortgage investment, see below.

Balance 1" mortgage $8,245,000400 to Diversified Capital Inc.

Please refer to paragraph 20, below for details on future postponements toconstruction financing and development agreements.

My investment of $115,000.00 represents 1.19% of the total loan to the botiower.

4.0113tipl.ti

9. I a nt, satisfied that the approximate and current market value of the propertyagainst which my investment has been secured is $22,100,000.00 The meanstaken to determine said value was an Opinion Of Value authored by KevinFerguson 41c. Jeff Cheong, of Legacy Global tvietr.atitile Partners Ltd on March 15,2016 in combination with a Planning Opinion. Authored by Paul Demczak, MCIP,RPP.

10. Including my investm t and mortgage amount of 5115,000.00, the percentage ofthe value of the property Including this mortgage and all prior ranking charges iscurrently 81.2%.

The LTV outlined above incorporates the and 2" mortgages, there aremortgages registered on the properties that postpone to the 1P and 2 charge notincluded in this calculation.

11.48 months, commencing on the date of advance (January 5, 2015) of the Loan andending on the final day of such period (the "Maturity Date"). At the Borrower'soption (to be exercised in writing not less than three (3) months prior to the.Maturity Date), the Borrower may extend the. Maturity Date for twelve (12)additional months (the "Extension"). THE LENDER ACKNOWLEDGESINTEREST CALCULATIONS AND PAYMENT DATES ARE TO BEBASED ON THE ACTUAL DATE OF THE FIRST ADVANCE OF FUNDSTO BORROWER UNLESS OTHERWISE PROVIDED IN ANY LOANAGREEMENTS OR DOCUMENTS THERETO.

12. The due date of the loan is January 5, 2019 (Extension date January 5, 2020)THE LENDER ACKNOWLEDGES INTEREST CALCULATIONS ANDPAYMENT DATES ARE TO BE BASED ON THE ACTUAL DATE OFTHE FIRST ADVANCE OF FUNDS TO BORROWER UNLESSOTHERWISE PROVIDED IN ANY LOAN AGREEMENTS ORDOCUMENTS THERETO.

13. The loan is amortized over 0 years- the mortgage is an interest only m

14. 'The interest rate is 8.00% calculated mutually, not in advance.

115. Particulars of amounts and due dates (monthly, quarterly, etc.) of payments ofinterest only; Interest incurs at 8.00%, calculated annually, not in advance,interest only quarterly payments in the amount of $2300.00, commencing April1°,2015.

The first interest payments will be pro-rated and based on actual date of

There is an interest reserve on this project equal to the amount of4 yeainterest payments, raised annually.

Should the Borrower choose to exercise the 12 month term extension, interest willooxitinue to accrue at Eight Percent (8.00%) per annum (calculated annually, notin advance) and the final year of accrued interest will be paid in full with all otheraccrued interest at the time of the "extended" maturity.

414129463 1 2

16. Particulars and amounts of any bonus or holdback or any other spccial .

In addition to the above and not later than thirty (30) days following substantialcompletion of the Project, the Borrower shall pay to the Lender a Projectcompletion fee/deferred lender fee ("Deferred Lender Pee") as set forth belowand which fees shill be secured under the Security:

a) in the event that the Project Profit is less than. $14,500,000.00 there will be no

Deferred Lender Fee;

b) in the event that the Project Profit exceeds S14,500,000.01 and is less than$17,000,000.00 the Deferred Lender Fee would be equal to 6% of the Loan

principal;

) in the event that the Project Profit is greater than 17,000,000.01 theDeferred Lender Fee shall be equal to 12% of the Loan principal.

Project Profit shall be determined in accordance with GAAP upon completion ofthe Project and 95% residential sales having been completed with a projection onthe value of the remaining 5%, but shall exclude all fees payable to Fortresspursuant to the Development Agreement. The Lender's Security shall remain infull force and effect until the project completion fee is paid in full.

17. The mortgage is to be registered in the name of: "Building& DevelopmentMortgages Canada Inc, in Trust" FOR "1957419 Ontnrto Inc. Per: TessTune

18. After completion of the mortgage tray action, a collection or traction foe ofper instalment is payable by the borrower. N/A

19, If the mortgage is held in trust, the dates on which payments are made by thetrustee to me arc: Quarterly commencing on Awl L 2015. barest nave=cannot be disbursed to the Lender by the Trustee until funds are received by theTrustee/Administrator from the Borrower (on behalf of non-registered investors),or by the Trustee. trust corgpanv from the Borrower fon behalf of reaistered investQrs.)

20. I understand that the mortgage shall be tribally registered indicating a fliGe valueof $9,700,000,00, and that fiom time to time the loan amount will increase uponthe compiction of certain development and construction milestones on theProperty by die Borrower. It is anticipated that the loon amount shall be amendedduring the term of the loan to a MAXIMUM OF 525,000,000.00 ($5,000,000.00of which is a burro).

21. I understand the Charge/Mortgage in which I have an. interest is currently asecond ranking Change/ Mortgage against the Property and the position of themortgage can change over the duration of the term.

MOW& II 3

I understand that a first ranking Charge/Mortgage against the Property in favourof Diversified Capital Inc, in the principal amount of $8,245,000,00 currently, andthe second mortgagee will postpone ite position to construction financing.

I understand that during the course of this investment the Borrower anticipatesobtaining additional construction financing for the Property which is expected totake priority to the second ChargelMortgage, changing its position to a greatermaking ChargeMortgage.

hereby understand, consent and agree that other chargesimortpges and/ordevelopment agreements may be registered in priority to the secondcharges/mortgages against the property during the term of my investment in thesecond charges/ mortgages.

I hereby confirm that 1 understand and agree that the second (+a mortgage inwhich I have invested shall be required to postpone and standstill to priorcharges/mortgages to a maximum of $150,000,000 plus a 10% contingency ifrequired, in priority financing. I understand that priority financing is expected toperiodically increase over the term of this charge/mortgage and that suchpostponements shall be permitted and shall occur on the basis of cost consultentreports prepared on behalf or. the bonewer.

I understand that additional priority fmancing may be required if there is ashortfall pursuant to the terms of the chargeimortgage in which I am investing, Inthe event of a shortfall in the funding of this charge/mortgage I understand andagree that other charges/mortgages may be registered against the property to fundand secure any such shortfall.

I understand that the trustees of this chine/mortgage may requested to executesuch documents as may be required to permit the registration of certainagreements for the purpose of facilitating the planned development of theproperty, examples of such agreements include, but are not limited to: site plans,development plans, planning act requirements, mezzanine financing, insurance ondeposits, or condominium registration documents.

I hereby confirm that I am aware of and understand that I have provided thetrustee of my charge/mortpge with my irrevocable consent to execute anyrequired documents as a condition of my participation in this charge/ mortgage.

I hereby re-confirm my consent and agreement to postpone and standstill to anyrequired financing or development agreements, and to partially discharge mycharge/mortgage, without payment, with respect to any lands secured by thecharge/mortgage which may be required for public or quasi-public purposes,

I understand and agree to provide partial discharges of this security for sales of allcondominium units or the office/retail/parking components, without charge,provided the proceeds of the sale are used to pay off the First-RankingConstruction Loan Security andior trade creditors.

4

I understand that save and except as outlined herein, there shall be no otherpostponements or encumbrances which affect the position or security afforded bythe current second charge/mortgage.

1 agree to provide partial discharges of the Loan Documenta in respect of all.Project 1ottunit sales to third parties and in respect of all. Projectoffice/retail/parking component sales to third parties, without compensation,provided that the full proceeds thereof shall be used immediately to first paydown the First-Ranking Crynstruction Loan Security and then to pay down otherProject trade creditors.

artial Investor Dischare

The investor hereby agrees that in the event there is an early repayment of theLoan by the Borrower (excluding receipts from enforcement or sale of Projectunits) (Early Repayment"), Utile shall be paid to investors in the Loan in theorder of priority of advance by the applicable trundle in the original Loan, and thepari passu amongst the investors who had their share of the Loan funded withinthe same loan tranche.

23. In the event that BDMC & Olympia, in its sole discrcttori, acting as approvedLender and administrator, detennines that the Borrower, as a result of an act of"Force Majeure" (shall mean any event or series of events beyond the control ofthe Borrower such as strikes, walkouts, labour troubles, inability to procurematerials or services or construction fmancing, power failures, restrictivegovernmental laws or regulations or the orders or directions of any administrativeboard, governmental department, officer or other authority, riots, insurrections,war, sabotage, rebellion or acts of God, material changes or delays in marketconditions affecting sales or closings, delays in obtaining governmentalapprovals, permits, rezoning or similar regulatory requirements, none of which isthe fault of the Borrower), will not be able to complete the Project so as to repaythe Loan on or before the maturity date on the Loan under the Loan Agreement(as it may be extended under the terms thereof), it shall have the authority toextend the term of the Loan for such period of time, not exceeding 24 months soas to permit the Borrower to complete the Project and its sales, and thereby repaythe Loan. BDMC & Olympia shall have the right to do so on one or moreoccasions but for a period of time not exceeding 24 months as aforesaid, withoutthe consent of the investor;

24. Interest Accrual - Investor acknowledges that the Loan includes funds raised foran interest reserve to pay out regular Investor interest payments. In the event .thatsuch interest reserve is not fully funded to cover all interest pitmenParticipants, interest payments may be delayed, reduced or be unpaid untilmaturity of the Loan. In such event, all such interest would continue to accrueand be recoverable as and when the interest reserves are replenished or the Loanmatures and is fully repaid, assuming successful completion of the Project andfull repayment of the Loan at that time, It is anticipated that such interest reserve%

tw)r 5

will be fully funded for the term of the Loan p vided BDMC & Olympia hasraised all required fluids contemplated under the Loan.

25. Net proceeds raised under this mortgage may be used to refinance portions ofexisting prior encumbrances and/or investors/lenders.

26. Particulars of disbursements made for legal, brokerage or other fees orcommissions in connection with the placement of the loan, including the nrecipients and amounts paid by the borrower, are:

i E tie Pahl to Purpose$0,00 Building & Development Mortgages

Canada Inc.Co-Brokensge Fee - 1-Vo

S1O0 Building & Development MortgageeCanada Inc.

Adminl Fee — Per clienttyear

Distributer (paid Via Building &Devele9ment Merges Canada loc.)

Sales lesions to II need Mortgagevents,

$0.00 Distributer (paid Via Buliding &Development Mortgagee Canada Inc.)

Po4nt of Saie ancpenass kscludIng,laut notllmlketi ter, the following: maintenance of trentoft* support for operations, staff, insurer**promotion, events, training, due diligence, proforme radiews, repeating and compliance andIMO ,

50.00 Distributer (paid Via I uildktig &Development Mortgages Canada Inc,)

For the provision of back office functionalityincluding, but not limited to, customer serviceoperations, project reviews, compliance,dedicated project & market commit:legions,client updates, events, ongoing training,continuing education, site visits, reviews ofDeWitt, Special Audited Procedure Reports.

$10,000 Fo sr LLP Legai Fees (Prciect commencement)

1.(Infractions: Clauses (a) and (b) below refer to information which eachinvestor may require from the laver. If you require the information referred toin a clause, initial Me clause).

The information which I require from you as my administrator before theathninistrator for the trustee completes the transaction and makes the advance isas follows:

(a) If my investment will be in a position other than a first mortgage or charge,details, including amounts, of all existing encumbrances outstanding are disclosedbelow:

111 Ranking Mortgage Charge registered with the first Mortgagee (DiversifiedCapital Inc.) with a face value of $8,245,000.00 This mortgage is up to dateand in good standing; subject to hiture postponements as per paragraph 20,above.

(b) lithe mortgage or siege is a syndicated mortgage, and is exempt:

6

We have acknowledged and accept that you as my in str r express noopinion as to the necessity for a validity of a prospectus.

2. (Instructions: Each investor to complete and initial clause (a) and, if clause (a) isanswered in the affirmative, to complete (if necessary) and initial clause (b) and toinitial clause (c)).

(a) I instruct you to obtain a current and independent appraisal of the subject propertyand provide it to me before you complete this mortgage transaction. No. I havereviewed the appraisal with my licensed mortgage agent/broker.

•Initials

) The appraisal to be paid by me. Not Applicable.

(c) I have been advised and accept that you as my administrator do not express anopinion as to the validity of the appraisalNaluationfletter of opinion.

Disclosure:

1. I acknowledge being advised by you as the Lender's Independent Legal Advice(ILA), or as an independent lawyer to the transaction, that to the best of ourknowledge the Independent Legal Advice Solicitor does not have any direct orindirect interest in the Borrower, (Specin) yes or no and indicate the date on whichthe lawyer advised you that he or she has no direct or indirect in the borrower orborrowers).

No independen legal advice

* Investor to

a direct o

ClttA 76 ((:,

current date here

GC st in the Borrower.

(l the lawyer has an intemst in the borrower or borrowers, he or she Ls unable to actfor you on this loan (Rule 2,06 of the Rules of Professional Conduct)).

WARNINGS:

1. You are cautioned that the responsibility for assessing the financial merits ofthe mortgage investment resb with YOU the investor or investors at all times.The above-named lawyer's responsibility is limited to ensuring the mortgage is jetaliv registered pn title in accordance with the investor's or investors' instructions. The lawyer Is not Permitted to Persona& guarantee the obligations of the Borrower or Bojrowera nor the tgliabiity of the Property as security forthe morteake hvestment.

2. Any loss you may suffer on this mortgage investment will not be insuredender the lawyer's professional liability policy if the lawyer has acted as amortgage broker or has helped to arrange it.

aft2OUEI

Investor's Signatu

1 hereby acknowledgeor on behalf of the Boabove warnings.

SiMac 1957419 Ontario Inc. Per: Tess TsangAddress: no - 12 Woodstream. Blvd. Vaughan, Ontario L4L 8C3

eipt of a copy of this form prior to the advance of Rinds toI further acknowledge having read and taidastood the

_vt "SS NAME

tiry-11 atelk) XvIr ontr4VeSTOR AME

201 f in the Tow

sign the d

\:\

titled"investment Authority — Form 9D".

cal of No , AublicfCommissionDate: Phone:Name: Fax:Address: Lourdes Segaline Vedia Email

Commissioner of Oaths, QuebecFor all provinces of Canada

and all countries. No. 198821Expfres January 9, 2018

) did witness

Financial ServicesCommissionof Ontario

Ontario

Form 1 - Investor/Lender Disclosure StatementFor Brokered Transactions

Mortgage Brokerages, Lenders and AdmInIstratore Act, 2006

Transaction Number 10459

Important Disclosure Duties

In this Investor/Lender Disclosure Statement For Brokered Transactions ("Disclosure Statemenr), mortgagebrokerages are required to provide you with the completed. Disclosure Statement that contains Importantinformation in connection with this transaction.

A brokerage must:

1. Advise you if the brokerage cannot verify the Identity of another party to the transaction.

2. Disclose vvhether the brokerage is acting for the lender, the borrower, or both the borrower and lender.

3. Disclose to a lender the brokerage's relationship with each borrower, and disclose to an investor thebrokerage's relationship with each party to the transaction.

4. Disclose whether the brokerage Is receiving a fee or other remuneration for referring you to a person orentity, and disclose the relationship with that person or entity.

5. Disclose material risks about the transaction that you should consider.

6. Disclose actual or potential conflicts of interest that may arise from this transaction.

7. Take reasonable steps to ensure that any mortgage investment the brokerage presents'to you Is suitablehaving regard to your needs and circumstances.

8. if applicable, complete the Addendum (Form 1.1) if Construction and Development Loans are Involved,including syndicated or non-syndicated mortgages.

If your investment Is being administered, the mortgage administrator must

1. Disclose the relationship, if any, between the administrator and each borrower.

2. Disclose whether the administrator may receive, or may pay, any fees or other remuneration inconnection with the administration of the mortgage, the basis for calculating them and the payor'sidentity.

3. Disclose whether it is receiving a fee or other remuneration for referring you to a person or entity, anddisclose the administrator's relationship with that person or entity.

4. Disclose actual or potential conflicts of interest that may arise from the transaction.

You must receive these disclosures in writing and acknowledge receipt of them. You should keep a copyfor your records.

Important: This form is required by law and will provide the prospective Investor/lender with importantinformation to assist you in making a decision about whether to invest/lend.

This information must be disclosed at least two business day$ before you commit to lend/Invest, i.e. two businessdays before the earliest of the following events:

■ When the brokerage receives or enters into an agreement to receive money from you.

■ When you enter into a mortgage agreement or an agreement to trade in a mortgage,

■ The money Is advanced to the borrower under the mortgage.

■ The trade completion date.

You may agree to reduce the two business day waiting period to one business day by consenting in writing bycompleting the approved Waiver (Form 1.2).

O Queen's Printer for Ontario, 2015FSCO 1153E.2'(2015.07-01) Page 1 of 13

Section 1 - 'caution •

1. This Disclosure Statement has not been filed with the Financial Services Commission of Ontario (FSCO). NeitherFSCO nor any other authority of the Government of Ontario has reviewed or approVed the completed DisclosureStatement.

2. All mortgage investments carry a risk. There is a relationship between risk and return. In general, the higher therate of return; the high-011ie risk of the investment. You should very carefully assess the risk of the mortgagetransaction described in this Disclosure Statement, the Addendum (Form 12) if applicable and in the supportingdocumentation before making a commitment.

3. Syndicated mortgages (defined as more than one investor/lender) may carry additional riski pertaining not onlyto the risk of default but also to the risks associated with participating in a syndication and the financing of realestate transactions.

4. Inexperienced investors are not advised to enter into rriortgage investments.

5. You should consider inspecting the property or projeot as identified in section 3 Part .A of this DisclosureStatement.

6. This mortgage investment is not insured by the Government of Ontario or any other investor protection fund.

7. You are strongly advised to obtain independent legal advice before committing to invest.

8. This mortgage investment cannot be guaranteed by the mortgage brokerage. If you are not prepared to risk aloss, you should not consider mortgage investments.

9. If this investment is for a mortgage to fund a development, construction or commercial project, the repayment ofthis investment may depend on the successful completion of the project, and its successful leasing or sale.

10. If you are one of several investors in a syndicated mortgage, you may not be able to enforce repayment of yourinvestment on your own if the borrower defaults.

11. You should ensure you have sufficient documentation to support the property valuation quoted in thisDisclosure Statement. The property value may decrease over time, including the period between the date of themost recent appraisal and the date you complete the transaction, A decline in property value may also affectthe return and/or value on your investment in the event of a default in payments under this mortgage.

12. You should satisfy yourself as to the borrowers ability to meet the payments required under the terms of thismortgage investment

13, The mortgage administrator, if applicable, cannot make payments to you except from payments of principal andinterest made by the borrower under the mortgage. Therefore, the mortgage administrator cannot continuemortgage payments to you if the borrower defaults.

14. If you want to withdraw your money before the end of the term, a new investor/lender may be required andthere is no assurance that there will be a market for the resale or transfer of the mortgage.

15. If the contract provides for an extension, you may not be able to opt out of any extension of a mortgage term.You need to review terms relating to the extension of mortgages carefully.

16. This Disclosure Statement, the Addendum (Form 1.2) if applicable and the attached documents are notintended to provide a comprehensive list of factors to consider in mailing a r;lecision concerning this investment.By law, the mortgage brokerage must disclose in writing the materiel &Ica .3f the mortgage investment. Theremay be additional risks to the investment. You should satisfy yourself A3Cimiing ail factors relevant;to thisinvestment before you commit to invest.

Michael Daramola #M08003647

Print name of Mortgage Broker Licence:number of Mortgage Broker

Signature of Mortgage Broker

FMP Mortgage Investments Inc.

Name of Mortgage Brokerage Licence number of Mortgage Brokerage

Date (yyyy-mm-dd)

LIC#12373

FSCO 1153E.2.(2015-07-01) Page 2 of 13

AcknOvviedgepOnt- —

1, 1957419 Ontario Inc. Per: Tess Tsang

Print name of Investor/Lender

220 - 12 Woodstream Blvd. Vaughan, Ontario L4L 8C3

, of

Address

acknowledge receipt of this Caution, signed by the above named mortgage broker.

ignature of Investor/Lender Dated by Investor/Lender (yyyy-mm-dd)

FSCO 1163E.2 (2015-07-01) Page 3 of 13

Se6tion 2 - DeClar6iiOn,by the Mortgage Brokerade•

1. The Mortgage Brokerages, Lenders end Administrators Act, 2006 requires disclosure of the nature of the relationshipbetween the mortgage brokerage and other persons and entities involved in the mortgage transaction. For the purposesof this Disclosure Statement and Addendum, two persons are "related" if they share any relationship other than an arm'slength business relationship. For example, a shareholder, director, officer, partner or employee of a mortgage brokerageis related to the mortgage brokerage and to any broker or agent authorized to deal or trade In mortgages on behalf ofthe mortgage brokerage (referred to below as "Its" [the brokerage's] brokers and agents).

This declaration is made by

FMP Mortgage Investments Inc. Michael Daramola, 930 the East Mall, Main Floor Toronto, Ont. M9B 6J9 LIC #12373

Name, address and licence number of mortgage brokerage

2. Does the mortgage brokerage or any of its brokers or agents have or expect to have a direct or indirect interest in thisproperty identified in section 3, Part A?

No ED YesIf Yes, explain:

Certain licensed mortgage agents and/brokers of Building & Development Mortgages Canada Inc. are officers anddirectors of the cieveloper/borrower. They will receive fees and may receive additional earnings based on thedevelopment of the subject property and indexed on a percentage of profit. See Schedules A and I.

3. Does any person related to the mortgage brokerage or any of its brokers or agents have or expect to have a direct orindirect interest in this property?

El No []Yes

If Yes, explain:

Certain licensed mortgage agents and or brokers of Building & Development Mortgages Canada Inc. are officers anddirectors of the borrower. They will receive fees and may receive additional earnings based on the development of theproperty and Indexed on a percentage of profit. See Schedules A and I.

4. Is the borrower related to the mortgage brokerage or to any of the officers, directors, partners, employees orshareholders of the brokerage or any of its brokers or agents?

No Yes

If Yes, explain:

Certain licensed mortgage agents and or brokers of Building & Development Mortgages Canada Inc. are officers anddirectors of the borrower. They Will receive fees and may receive additional earnings based on the development of theproperty and indexed on a percentage of profit. See Schedules A and I.

5. Is the individual or company that appraised the property related !,o ti it, mortgage brokerage or to any of its brokers oragents?

in No 1=1 Yes

If Yes, explain:

NA

FSCO 1153E.2 (2015-07-01)

•VIInvestor/Lender Initials: Date20 ,sv AlPage 4 of13

6. Describe any conflicts or potential conflicts of Interest in connection with this mortgage investment, other than thosedescribed above.

Certain officers and directors of both Building 8, Development Mortgages Canada Inc. and the developer/borrower are alsodirectort and officers of other entities that provide services to the developer/borrower in return for fees and additionalearnings based on the development of the subject property and indexed on a percentage of profits.

7. Describe what steps the mortgage brokerage has taken to reduce the risk resulting from any conflicts or potentialconflicts of interest.

See schedule J.

8. The mortgage brokerage is acting for.

The investor/lender and not• the borrower

The borrower and not the Investor/lender

Both the borrower and the investor/lender

9. If this investment is a purchase of an existing mortgage or a portion of an existing mortgage, is the mortgage now indefault?

2 No Yes

Has it been in default In the last twelve months?

No Yes

If Yes to either, explain:

See Schedule E.

10. Will the Mortgage proceeds be used to refinance, pay out, redeem or reduce an existing mortgage on this property?

Ei No 2 Yes

if Yes, explain:

A portion of proceeds may be used to pay and retire existing bridge financing from title.

11. Does the mortgage brokerage or any of its brokers or agents expect to gain any interest or benefit from this transactionother than the fees disclosed in Part D of this Disclosure Statement?

E No 0 Yes

If Yes, explain:

Please see Schedule B attached hereto.

FSCO 1153E2 (2015-07-01)

Investor/Lender initials pater 06 to t /Page 5 of

12. The mortgage brokerage Is required to disclose in writing the material risks of this Investment.

Describe the material risks of this. Investment.

Investments in syndicate mortgages are speculatiVe and involve a high degree of risk. Investors should be aware thatthis investment has not only the usual risks associated with the financial ability of the borrower to make repayments butalso risks associated with financing real estate and risks associated with syndication. This include but are not limited to:

i) No Market for`Investments in Syndicated Mortgages; ii) No Liquidity; iii) The Reliance on a Mortgage Broker(s); iv)Risks of Real Estate Developments; v) Revenue Shortfalls; vi) Cost Overruns; vii) Interest Rate Fluctuations; viii) Risksof Delays; lx) Use of Bare Trustee; and x) Conflicts of Interest with Management and Others.

For detailed definitions of the material risks listed above, please refer to the Project Fact Sheet.

The mortgage brokerage has fully complied with all requirements of the Mortgage Brokerages, Lenders and AdministratorsAct, 2006 and its regulations.

I have fully completed the above Declaration of Brokerage Relationships and Potential Conflicts of Interest in accordancewith the Mortgage Brokerages, Lenders and Administrators Act, 2006 and its regulations and declare it to be accurate inevery aspect to the best of my knowledge.

Signature of Mortgagee Broker

Michael Daramola

Print name of Mortgage Broker

• AokittrAiletigeilltBil

1957419 Ontario Inc. Per: Tess Tsang

Date (yyyy-mm-dd)

#M08003647

Licence number of Mortgage Broker


acknowledge receipt of this Declaration by the Mortgage Brokerage signed by

Michael Daramola


FSCO 1153E2 (2015-97-01)

VP 101(Dated by Investor/Lender (yyyy-mm-dd)

Page 8 of 13

Section 3 - information DiclosUre Summary

Part A. Property/Security to Be Mortgaged

1. Legal and Municipal address of the property:

Please see Schedule C, attached hereto, for municipal addresses and full legal descriptions.

2. Type of Property:

El Property with existing buildings

I=1 Single family residential 1:1 Commercial

El owner occupied El Industrial

D rental Ej AgricultUral

El condominium ❑ Other, explain below

:j1 One-to-four unit residential.

El Five or more unit residential

Vacant land, development or construction project. Detail of project/proposed use, including projected starting and

completion dates:

32 Storey Residential Condominium Suites. The tower is planned for 215, one and two bedroom units.

Ei Other:

3. Purchase Price:

(a) Purchase Price of Property: $12,700,000.00 (b) Date of Purchase Sept 15, 2014

4, Property Taxes:

(a) Annual property taxes: $12,500.00

Are taxes in arrears?

No

p Yes

D Investor/Lender's Solicitor to verify taxes prior to closing or ensure coverage under title insurance.

Amount of arrears $.00

5. Condominium Fees (if applicable):

(a) monthly condominium fees $.00

Are fees In arrears?

Ej No

❑ Yes

Amount of arrears $.00

Investor/Lender Initials Date: . C=•(01P_TI (.<g

FSCO 1153E2 (2015-07-01) Page 7 of 13

Part A. Property/Security to Be Mortgaged (continued)

6, Zoning:

Is the zoning on the property appropriate for the proposed use?

2 NoEj Yes

Investor/Lender's Solicitor to verify zoning prior to closing or ensure coverage under title insurance.

If No, details:

See Planning Letter

7. Appraisal

EJ An appraisal has not been done on the property within the past 12 months ORED An appraisal has been done on the property within the past 12 months

For all properties, appraised "as is" value: $22,100,000.00

If the appraisal was addressed'to someone other than the investor/lender of record, provide a transmittal letter.

Date of appraisal: March 16 2016

Name and address of appraiser:

Jeff Cheong & Kevin Ferguson of Legacy Global Mercantile Partners Ltd. in combination with a Planning Letter authoredby Paul Demczak, RPP, MCIP. A copy of the appraisal will, be provided separately.

FSCO 1153E.2 (2015-07-01)

I investor/Lender Initials:" 1,4 Date:1.A) k (pi 0 v11

Page 8 of 13

Ej No 0 Yes

Part B. Mortgage Particulars

1. Type of Mortgage:

Your investment represents:

D the entire mortgage OR.D a portion of the mortgage Your portion represents 1.2% of the total.

Number of other parties that have an Interest in this mortgage. 202

In what name(s) Will the mortgage be registered?

Building & Development Mortgages Canada Inc. and/or Olympia Trust Company

If the mortgage is not registered in the investor's name, explain:

The mortgage will be registered in the name of Building & Development Mortgages Canada Inc. and/or Olympia TrustCompany in Trust for the investor and other investors.

2. Existing or New Mortgage:

0 An existing registered mortgage or portion of an existing registered mortgage is being purchased.

0 Your investment will fund a new mortgage or portion of a new mortgage that has not yet been registered.

3. Administered Mortgage:

Will the mortgage be administered for you? Important: A Mortgage Administrator must be licensed underMortgage Brokerages, Lenders and Administrators Act, 2006.

If "Yes", name, address and licence number of administrator:

Building & Development Mortgages Canada Inc.; 25 Brodie Drive, Unit 8, Richmond Hill, ON, L4B 3K7; License # 12304

4. Terms of the Mortgage:

Amount of your investment: $115,000.00

Face value of the mortgage: $9,700,000.00

Interest rate is fixed at 8% per annum OR

Interest rate is variable. Explain:

NA

Compounding period: Annually

What is the borrower's cost ofborroWing as disclosedto the borrower? See Schedule D

Payment frequency Quarterly

Payments to be made by borrower: $2300o0

Payments to you: $2300.00

(See Part D for fees charged to you)

FSCO 1153E.2 (2015-07-01)

Term: 48M +12M

Amortization: NA Interest only

Maturity date: 01/05/19 (01/05/20)

Balance on maturity: $115,000.00

Borrowers first payment due: April 1, 2015

Borrowers rate of interest if different from the rate of interestto be paid to the investor.BorroWer's rate of interest: 8%

Investor(s) rate of interest; 8%

Terms and conditions of repayment:

Interest Only, Prinoipal Due on MaturityPAYMENTS ARE MADE QUARTERLY

Investor/Lender Initials:77r,Date:ZAA0 an ((VPage 9 of 13

Part B. Mortgage Particulars (continued)

5, Rank of Mortgage (according to Information from borrower):

The mortgage to be purchased/advanced is/will be a:

D First Second 0 Third 0 Other mortgage

Can the rank of the mortgage change?

0 Na EJ Yes

If yes, explain how it might change and is it expected to change?

Further priority financing will be added, in accordance with the terms of the Loan Agreement/Project Fact Sheet & Form9D.

Prior encumbrances (existing or anticipated):

El None OR

a) Priority: First

Face Amount: $8,245,000.00

Amount Owing: $8,245,000,00

In default?

El no El yes 0 unknown

If yes, explain

Name of Mortgagee:

Diversified Capital Inc.

b) Priority:

Face Amount:

AmoUnt Owing:

In default?

0 no El yes 0 unknownIf yes, explain

Name of Mortgagee:

Other encumbrances, including environmental, regulatory and/or liens:

NA

6. Loan to value ratio (according to information from borrower):

a) Total of prior encumbrances

b) Amount of this mortgage: $9,700,000.00

c) Total amount of mortgages: (a + b)

d) Appraised "as is value: (from Part A) $22,100,00.00

e) Loan to "as is" value: (c/d X 100) 81.2%

f) Projected value: (where appropriate):

g) Loan to "projected value" ratio: (c/f X 100) 81.2%

$8,245,000.00

$17,945,000.00

7. Amount of Mortgage Advance

If the amount of the mortgage advance is less than the face value of the mortgage, provide explanation

Funds will be advanced to the borrower in installments based on the project costs and time lines in the project budgets;these can change from time to time.

FSCO 1153E.2 (2015-07-01)Dnvestor/Lender

Page o 13

Part C. The Borrower

Name and Address of Borrower.

Fortress Charlottle 2014 Inc,1-25 Brodie Drive Richmond Hill, ON L4B 3K7

The brokerage has Identified the borrower(s) and evidence of identity is attached/will be provided on

Date (yyyy-mm-dd) Dec 1, 2014

The brokerage has not verified the identity of the borrower(s).

Explain what steps the brokerage will take to verify the identity before closing:

Important; Financial informatiori about the borrower's ability to meet the mortgage payments must be attached tothis Disclosure Statement.

Part D. Fees

1. Fees and charges payable by the. investor/lender

EstimateMortgage brokerage fee/commission/other costs: $0

Approximate legal fees and disbursements: $0

Administration fees (where applicable): $0

Any other charges; Specify:

Are any of the above fees or charges refundable?

ID Nop YesExplain:

Total: $0

NA- No fees will be paid by the lender/investor. All fees will be paid out of the proceeds raised from the lenders/Investors.

2. Fees and costs payable by the bOrrower:

Estimate

$0.00

Pald to

BDMC

Purpose

CO-BROKER FEE - H/O

$100 BDMC ADMINISTRATOR FEE (PER CLIENT / PER YEAR)

$10,000 Fogler Rublnoff LLP LEGAL FEES (PROJECT COMMENCEMENT)

SEE SCHEDULE 'B & I FOR OTHER FEES, COMMISSION & COST PAID BY THE BORROWEd

FSCO 1153E2 (2015-07-01)

jnvestor/Lender Init ais Pate:2c(47 /CZ

Page 11 of 13

Part E. Attached Documents

Important: You should review the following documents carefully and assess the risks of this Investment beforecommitting to Invest. You should check that all documents are consistent with this disclosure summary. Thafollowing documents should be attached. If not available or applicable, provide comments In the box below.

Attached

1. If the statement concerns an existing mortgagei provide a copy of the mortgage.

2a. If an appraisal of the property has been done In the preceding twelve months and Isavailable to the mortgage brokerage, a copy of the appraisal.

2b. If a copy of an appraisal of the property is not delivered to you, documentaryevidence of the property value, other than an agreement of purchase and sale.

3. If an agreement of purchase and sale in respect of the property has been entered intoin the preceding twelve months and is available to the mortgage brokerage, a copy ofthe agreement of purchase and sale and all related schedules, amendments andwaivers.

4a. Documentary evidence respecting the borrowers ability to meet the mortgage payments.

4b. If you request, a copy of the borrowers application for a mortgage includingdocuments submitted in support of application,

5. If the mortgage is for the purchase of a property, documentary'evidence of any clownpayment made by the borrower for the purchase of the property.

6. A copy of any agreement that you may be asked to enter into with the mortgagebrokerage and/or mortgage administrator.

7. Completed Addendum for Construction and Development Loans (Form 1.1)

8. List other documents being provided here.

RE; 4A (A full interest reserve will be raised for the duration of the term)Project budget, Market Analysis Report, Property Valuation, Title Searches, Planning

Opinion. PLEASE SEE SCHEDULE K

9. If other relevant documents are not being provided or the documents are notattached explain:

In some'cases additional Information and materials regarding the investment isavailable from your mortgage broker; please ensure If any further:information and

materials you require are requested prior to investing.

Important: The mortgage brokerage is also required'to provide you with all other Information a lender or aninvestor of ordinary prudence would consider to be material to a decision whether to lend money on the securityof the property or invest in the mortgage, so that you can make an informed decision before you commit to lend/invest. This information might Include the following:

1. If the property is a rental property, details of leasing arrangements, assignment of rent prCiVisions and vacancystatus.

2, Environmental considerations affecting the value of the property.

3. If applicable, attach any power of attorney authorizations.

L Investor/Lender Initials. • Date;e0,\4 (61.1k.4

FSCO 1153E.2 (2015-07-01) Page 12 of 13

Part F. Certification

This Information Disclosure Summary hes been completed by:

FMP Mortgage Investments Inc. Michael Dararnota, 930 the East Mall, Main Floor Toronto, Ont. M9B 6J9 LID #12373

Name, address and licence number of mortgage brokerage

I have fully completed the above Information Disclosure Summary in accordance with the Mortgage Brokerages, Lendersand Administrators Act, 2006 and its regulations and declare it to be accurate in every respect to the best of myknowledge.

Michael Daramola


Signature

Acknowledgement.


#M08003647


Date (yyyy-mm-dd)


220 - 12 Woodstream Blvd. Vaughan, Ontario L4L 8C3

address

acknowledge receipt of this Information Disclosure Summary, signed by the above named mortgage broker.

gnat re of Investor/Lender

,of

raz,t() (61/(0

Dated by Investor/Lender (yyyy-mm-dd)

One copy of this form must be provided to the prospective lender/investor, and one copy must be retained by themortgage brokerage

Important: The information in this Disclosure Statement must be provided to you at the earliest opportunity and, inany case, no later than two business days before the earliest of the following events:

• When the brokerage receives or enters an agreement to receive money from you.

• When you enter Into a mortgage agreement or an agreement to trade In a mortgage.

• The money Is advanced to the borrower under the mortgage.

• The trade completion date.

You may agree to reduce the two business day waiting poliod to one business day by consenting In writing bycompleting the approved Waiver (Form 1.2).

FSCO 1153E2 (2015-07-01) Page 13 of 13

Financial ServicesCommissionof Ontario

Ontario

Form IA - Investor/Lender Disclosure StatementFor Brokered Transactions — Addendum for

Construction and Development Loans

Including Syndicated or Non-Syndicated Mortgages

Mortgage Brokerages, Lenders and Administrators Act, 2006

Transaction Number 19459

Important: This Investor/Lender Disclosure Statement For Brokered Transactions - Addendum forConstruction and Development Loans ("Disclosure Statement Addendum") and Investor/Lender DisclosureStatement For Brokered Transactions Form 1 are required by law, and will provide the prospective investor/lender with important information to assist you In making a decision about whether to invest/lend. This formneeds to be completed in conjunction with Form1 - Investor/Lender Disclosure Statement For BrokeredTransactions.

To enable potential investors and lenders to thoroughly review the document and obtain independent legal advice,this disclosure of information must be made at the earliest opportunity and, in any case, no later than two businessdays before the earliest of the follcwing events:

■ When the brokerage receives or enters an agreement to receive money from you.

■ When you enter into a mortgage agreement or an agreement to trade in a mortgage.

■ The money Is advanced to the borrower under the mortgage.

is The trade completion date.


---• - V7.7r "37...1777P- =̀"' "'"

Section 1 f' CaLition

This Disclosure Statement Addendum has not been filed with the Financial Services Commission of Ontario (FSCO).Neither FSCO nor any other authority of the Government of Ontario has reviewed or approved the completed DisclosureStatement Addendum. _

Investor/Lender Initials:

Queen's Printer for Ontario, 2015FSCO 1324E (2015-07-01)

„. Date•

Page 1 of 6

Section 2 - Additional Declarations by the. Mortgage Brokerage

1. The Mortgage Brokerages, Lenders and Administrators Act, 2006 requires disclosure of the nature of the relationshipbetween the mortgage brokerage end other persons and entities Involved in the mortgage transaction. For the purposesof this Disclosure Statement and Addendum, two persons are "related" If they share any relationship other than an arm'slength business relationship. For example, a shareholder, director, officer, partner or erriployee of a mortgage brokerageis related to the mortgage brokerage and to any broker or agent authorized to deal or trade in mortgages on behalf ofthe mortgage brokerage (referred to below as "Its" [the brokerage's] brokers and agents).

This additional declaration is made by

FMP Mortgage Investments Inc. Michael Daramola, 930 the East Mall, Main Floor Toronto, Ont. M9B 6J9 LIC #12373

Name, address and-licence number of mortgage brokerage

2. Is/are the developer(s) related to the mortgage brokerage or to any of the officers, directors, partners, employees orshareholders of the brokerage or any of its brokers or agents?

El No Ei Yes Not applicable

If Yes, explain:

Certain officers and directors of the developer are licensed mortgage agents and/or brokers of BDMC. The will receivefees and may receive additional earnings based on development of the property. See Schedules A & I.

3. Is the brokerage or any of its brokers or agents related to any of the other investors/lenders in the mortgage?

El No ❑ Yes

If Yes, explain:

Due to the number of persons investing In this syndicated mortgage, it is possible that a mortgage agent or brokerassociated with Building & Development Mortgages Canada Inc. may be related to one or more of the investors.

Investor/Lender I nitialsrat Dater2.o

FSCO 1324E (2015-07-01) Page 2 of 6

Section 3 Additional information Disclosure Summary

Part A. Project. Details

1. Construction/Development Loans

What will the funds be used for (check all that apply)?

Soft costs (e.g. applying for zoning charges. advertising, interior design and architect's fees)

0 Construction costs

El Other

If other, explain:

See Schedule A and I for a detailed explanation of use of funds.

2. Identity any person(s) who will monitor the disbursements of funds to the borrower and the use of those funds by theborrower:

Including but not limited to: the mortgage administrator, the project coordinator, Fortress Real Developments Inc., and thecost consultants during. construction.

3. Name, address and Tarion warranty number(s) of the developer(s)

Not yet available.

4. Have the developer(s) ever been a party to a project that has had a mortgage default and power of sale proceedingcommenced?

D No 1:] Yes

If yes, explain:

Please see Schedule E, attached, wherein details are given of the steps by which the developer acquired andrefinanced the property from a previous developer for the purpose of rehabilitating the project.

5. Have/Are any of the principal(s) of the developer(s) such as the directors, officers, owners or partners:

(a) ever been convicted, found guilty of or currently charged with any criminal or regulatory offence under any law of anyprovince, territory, state or country?

❑ No E] Yes Unknown

If Yes, explain:

Please see Schedule F, attached.

(b) currently the subject of any civil proceedings or any unsatistitAi ludgments imposed by a civil court, in Canada orelsewhere, against them personally or against a business in which they have an interest of at least ten percent in theequity shares or ownership interests of the business?

El No El Yes El Unknown.

If Yes, explain:

Please see Schedule F,, attached.

FSCO 1324E (2015-07-01)

Investor/Lender Initials:77-Date:7.0(k./o1/12J

Page 3 oU6

Part. A. Project Details (continued)

6. What due diligence has the mortgage brokerage done regarding the background and experience of the developer(s)?

Please see the Project Fact Sheet.

Part B. Appraisal and Valuation of Project

1:3An appralsal/valuation has not been done on the property within the past 12 months OR

An appraisal/valuation has been done on the property within the past 12 months

For all properties, appraised "as is" value: $22,100,000.00

If the appraisal/valuation was addressed to someone other than the investor/lender of record, provide a transmittalletter.

Projected value when project is complete as proposed: $

Briefly describe any assumptions made and the methodology to determine the projected value of the project when it iscompleted as proposed:

The Planning Opinion Is assumed to be: i) accurate; and ii) reliable, Please see. Schedule "B" of the appraisal providedto you as part of your due diligence package for details.

Name and address of appraisal/valuation company;

Legacy Global Mercantile Partners Ltd., 500 King Street West, Suite 300, Toronto ON M5V 1L9

FSCO 1324E (2016-07-01)

I Investor/Lender InItIalDate-2.4). 4/0 t‘a,,,42

Page 4 of

Part C. Additional Attached. Documents

Important: You should review the following documents carefully and assess the risks of this investment beforecommitting to invest. You should check that all documents are consistent with this disclosure summary. ThefolloWing documents should be attached or if not available, comments must be included on each in the box below:

1. a detailed description of the project and the developer(s)

2. a schedule of the funds that have been advanced or are to be advanced to the borrower, and

3. if this investment is in a syndicated mortgage; any loan agreement, syndication agreement or mortgagecommitment relevant to the borrower in this transaction must be provided to you.

List other documents being provided here.

Schedule I - Additional DisclosureSchedule J - Use of Funds

Investor package, including "Loan Agreement", "Lender Acknowledgment and Consent" and "Project Fact Sheet"

If other relevant documents are not being provided or any of the the documents listed above are not attached, explain:

NA

FSCO 1324E (2015-07-01)

Investor/Lender Initials: Date.. zehiLta te7(

Page 5 of 6

Part D. Certification

This Disclosure Statement Addendum has been completed by:

FMP Mortgage Investments Inc. Michael Daramola, 930 the East Mall, Main Floor Toronto, Ont. M9B 6J9 LIC #12373 Name, address and licence number of mortgage brokerage

I have fully completed the above Information In accordance with the Mortgage Brokerages, Lenders and AdministratorsAct, 2006 and its regulations and declare it to be accurate in every respect to the best of my Knowledge.

Michael Daramola

Print harne of Mortgage Broker

Signature

Acknowledgement


#M08003647


Date (yyyy-mm-dd)


acknowledge receipt of this Disclosure Statement Addendum, signed by the above named mortgage broker. '

.a re of Investor/Lender Dated by Investor/Lender (yyyy-mm-dd)

One copy of this form must be provided to the prospective lender/investor, and one copy must be retained by themortgage brokerage.

Important: The information in this Disclosure Statement must be provided to you at the earliest opportunity and,in any case, no later than two business days before the earliest of the following events

■ When the brokerage receives or enters an agreement to receive money from you.

■ When you enter into a mortgage agreement or an agreement to trade in a mortgage.

■ The money is advanced to the borrower under the mortgage.

■ The trade completion date.


FSGO 1324E (2015-07-01) Page 6 of 6

One of the Principals of the Borrower is a licensed Mortgage Agent with Building & DevelopmentMortgages Canada Inc, the brokerage representing the borrower in this transaction, and the brokeragewhich provided the selling Brokerage the information necessary to help determine client suitability. Theselling Brokerage is relying on this information in order to determine the suitability of this mortgage forits dients. After a thorough review of all documentation and due-diligence materials, and after discussingthe matter with the Principal Broker of Building & Development Mortgages Canada Inc., the sellingBrokerage has determined that Building & Development Mortgages Canada Inc. has properly conductedtheir due-diligence, and has not allowed this potential conflict of interest to effect their determination ofrisks or any documentation related to this project. The selling Brokerage is of the opinion that thispotential conflict of interest has no bearing on the quality of information provided by BuOdlag &Development Mortgages Canada Int.

Scheciejs 6— Benefits to Brokerage of ljokers..other than as EIt fgrjh Jaen O of the DisclosureXatement

Estimate Paid to Pur e50.00 Building & Development Mortgag

Canada Inc.Co-Bmkerage Fee - IilO

Building & Drivel esCanada Inc.

Adrranistrelor Fee Per nt/year

.00 Dieirlbubtr (paid Via Building &Development Mortgages Canada Inc.)

Sales&one to licensed mortgage agents.

50.00 Distributer (paid Vla Building &Development Mortgagee Canada Inc.)

Point of Sale IN tpenses Including. but not limitedto, the fallowing; maintenance of frontoffice support for operations, staff, insurance,promotion, events, training, due diligence,. proforma reviews, reporting and compliance and;goal

Di trtl uler (paid Via Building &De p rtgagea Canada inc.)

For lire provision of back office functionalityincluding, but not limited to, customer aervicaoperations, project reviews, compliance,dedleate4 proioct & mar)* oommunketions,dent updates, events, (mph° training,continuing education, site visits, reviews ofDeloitte Special Audited Procedure Reports.

10,000 F al r Rubinotf LLP Legal Fees (Nolact common nti

SchedrAle C —6dttess and Loral 9esorlotl2n of Property

Property Address; 353 Adelaide Street West Toronto, ON

Legal Description: LT 1-2 Pl. D160 TORONTO; CITY OF TORONTO

of the settlement that their involvement in the trading of shares of two companiesbetween January 2007and June 2009 occurred without certain required registrations and was contrary to the publicInterest. Mr. Rathore and Mr. Petrozza each agreed to pay $100,000 to the OSC and all of the respondentsjointly and severally agreed to pay an administrative penalty of $250,000 and costs of $100,000. Underthe settlement, Mr. Rathore and Mr, Petrozza can act as officers and directors of companies that trade inmortgage instruments, in accordance With provincial legislative requireirrents. They also agreed to certainrestrictions on; (1) trading in securities; and (ii) acting as officers and/or directors of certain types ofcompanies. Mr. Rathore and Mr. Petrorm have compiled with the terms of the settlement and all

payments to the OSC have been made, as agreed.

Rheduie G Prociii400

The developer has not been a party to any legal proceedings; however, directors, opartners of the developer are involved in the fotlowing proceedings, which are wirelator syndicated mortgage;

owners orthis project

Executive Leasing Capital Coro. et 41. v, J1 in Capital Ventures Inc. et al,

On turte 12, 2012, Executive Leasing Capital Corp. and others commenced an action In the OntarioSuperior Court of Justice against Fortress Real Capital Inc, (FRC), Jawed Rathore and others alleging,among other things, breach of contract, Intentional interference with contractual relations anddefamation. The plaintiffs also sought, among other things, a declaration that the defendants, includingFRC and Mr, Rathore, do not hotel and cannot apply for trade-mark rights to the trade-marks 'Titan","Titan Capttal", 'Titan Construction Management", or "Titan Capital Ventures', The defendants broughta motion to strike various portions of the claim including the declaratory relief that the defendants arenot entitled to apply for, use or register certain trademarks. The motion to strike was heard in May,2014. The defendants were largely successful on this motion and many of the claims and causes of actionasserted were struck, If the plaintiffs elect to proceed with this matter, the defendants intend •tovigorously defend the remaining allegations.

Macias et al. v. 2221163 Qntario Inc,

On February 26, 2015, Lisa Maclag, Frank Maciag (through a litigation guardian), Centreelane EnterprisesLtd. and Darryl Rigby commenced an action In the Ontario Superior Court against 2221563 Ontario Inc.(2221563) seeking repayment of amounts loaned to 2221563. Together, the plaintiffs seek $286,000 indamages for the principal loaned, plus interest allegedly owing from November 12, 2013. The basis forthe claim is an allegation that 2221563 is in breach of its contractual obligation to repay funds on or byNovember 1.2, 201.3. 2221563 has served a Statement of Defence In the action and intends to vigorouslydefend the allegations against it.

Welts et AL v. Pahula Law at al

On July 31, 2014, Mark Wells, Giuseppe Abate and FC Financial Private Wealth Group Inc.. commenced anaction in the Ontario Superior Court of Justke against Pah* Law, Sanjay Pahuja, Fortress Real CapitalInc. (FRC) and Building & Development Mortgages Canada Inc, seeking repayment of amounts loaned toDel Terrelonge and John Wee Tom. Together, the plaintiffs seek $650,000 in damages for the principalloaned, plus interest, The plaintiffs appear to allege, among other things, that FRC misrepresented the

InvestortLender

Q; Can you obtain agreements that you request from the mortgage brokerage?A. Yes, copies of these con be provided to your PMielpal Mortgage Broker to revkw with you.

Q If the mortgage Is a new mortgage, documentary evidence of any down payment made by the borrowerfor the purchase of the property.A: Not applicable In this case; lond acquisition far development voiles in equity requirements.

The mortgage brokerage is also required to provide you with all other Information an investor of ordinary.prudence would consider to be material to a decision whether to lend money on the security of theproperty, so that you can make an informed decision before you commit to invest. This information mightInclude the following:

Q: is the mortgage for a construction or development project?A. Yes, for o detailed description of the project — fkose see the attached for set far detollsvThe schedule of the funds that hove been advanced or are to be advonced to the borrower, ore as follows:

Fitectojdjedule:

February 2015August 2015February 2016August 2016February 2017August 2017February 2018

Nene note the mafunding sdtedule,

$4,000,000.00$3,000,000,00$3,000,000.00$3,000,000.00$3,000,000.00$3,000,000.00$1,000,000.00

face value of the project includes Mime u

0: Is the property rental property? If yes, the &tatfollows:A: Nat Applicoble

the outlined

Ieasing arrangements vacancy status are as

a: Are there environmental considerations affecting thevalue of e property?A: No

Schedule i — (Jae of Funds

Use of funds includes:L Soft costs towards permits and municipal development fees2. A portion of the project development fees pursuant to the Development Consulting Agreement

paid to Fortress Real Developments Inc. This percentage will range from 2-7% of the projectbudget.

3. A portion of development fees pall to Fortress Charlotte 2014 inc.

investor/Len r InNiabtabx

Te investor here脚arees thatl n t1e event there s ・”・・向repayment of the toari 铆the Borrower(exeluding recelpts froii enfarcement orsele。份p叫eet wts) ('Early Re洲y找ent':,, same s彻11te paldtol・，estors In the toan in the order of pflorlty成advance切the app?Icabie trai比elntIeorl砂nel t.oa”李 andw水比pan四sso emon带t the nvestors who hed 跳叫r‘肪re o! the Loan funed wi比橄比e sane匆en七ranche. Any port沁n时t城rnor娘鳍e repaid pror to the maturltywifl not be‘峋ect to a卿Oeferred Le 曲r Fee.

Pr?orltv qf re・avrnent tI 翻 taterfail NA

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