COURT FILE NUMBER 1601-07750 ~'II.,~li

COURT OF QUEEN'S BENCH OF ALBERTA ~~V ' ~ ~~~y

JUDICIAL CENTRE CALGARY ~~jL~A~I; ~~~3~=ETA

PLAINTIFF ROYAL BANK OF CANADA

DEFENDANT WALTER HERRADOR PROFESSIONALCORPORATION and WALTER HERRADOR

APPLICANT KPMG INC., IN ITS CAPACITY AS COURT-APPOINTEDRECEIVER AND MANAGER OF WALTER HERRADORPROFESSIONAL CORPORATION and WALTERHERRADOR.

DOCUMENT SECOND REPORT TO THE COURT SUBMITTED BYKPMG INC., IN ITS CAPACITY AS COURT-APPOINTEDRECEIVER AND MANAGER OF WALTER HERRADORPROFESSIONAL CORPORATION DATED NOVEMBER14, 2016

ADDRESS FOR SERVICE ANDCONTACT INFORMATION OFPARTY FILING THIS DOCUMENT

KPMG INC.3100, 205 — 5 Ave. S.W.Calgary, AB T2P 4B9Att: Ryan Adlington/Neil HonessTelephone: 403-691-8504/403-691-8014Facsimile: 403-691-8008Email: radlin6ton(a?,kpm~.ca

neilhoness(a~knma.ca

CASSELS BROCK & BLACKWELL LLPSuite 1250, Millennium Tower440 — 2nd Avenue SWCalgary, AB T2P SE9Attn: Jeffrey Oliver

Danielle MarechalTelephone: 403-351-2921Facsimile: 403-648-1151Email: ioliver(a~casselsbrock.com

dm~u~echalncasselsbrock.com

Table of Contents Page

1. INTRODUCTION AND PURPOSE OF REPORT ......................................................................... 2

2. RECEIVER’S ACTIVITIES SINCE THE FIRST REPORT ........................................................... 5

3. RECEIPTS AND DISBURSEMENTS ............................................................................................ 6

4. RECEIVER’S DISCHARGE ........................................................................................................... 8

5. RECOMMENDATIONS ................................................................................................................. 9

Page | 1

Listing of Appendices

Appendix “A” - Receivership Order dated June 14, 2016

Appendix “B” - Approval and Vesting Order filed September 16, 2016

Appendix “C” - Final Statement of Receipts and Disbursements from June 14, 2016 to November 7, 2016

Page | 2

1. INTRODUCTION AND PURPOSE OF REPORT

Introduction

1. Walter Herrador Professional Corporation (“WHPC” or the “Company”) is a private dental

practice in Calgary, Alberta. The Company’s principal assets include leasehold improvements, and

dental tools and equipment (X-rays, dental chairs etc.). All assets are located in Calgary, Alberta.

2. The Company’s primary secured lender is Royal Bank of Canada (“RBC”) who has advanced funds

of approximately $1.3 million to WHPC. These amounts were borrowed by WHPC pursuant to the

facility agreements between RBC and WHPC dated October 23, 2014 (the “Facility Agreement”).

3. The Company had a very limited customer list before commencing operations and experienced

difficulty attracting new patients to the practice. These low patient volumes resulted in significant

cash flow difficulties and the Company was unable to make loan payments due or successfully

restructure its financing arrangement with RBC. Accordingly, the Company is and remains in

default of the Facility Agreement.

4. On March 18, 2016, RBC issued a demand for payment and notice of intention to enforce security

(the “RBC Notice”) pursuant to Section 244 of the Bankruptcy and Insolvency Act (“BIA”).

5. In June 2016, RBC commenced legal proceedings and sought to appoint KPMG Inc. (“KPMG”)

as receiver and manager of WHPC (the “Receiver”) pursuant to section 243 of the BIA and section

13(2) of the Judicature Act, RSA 2000, c J-2 to, inter alia, take possession of and exercise control

over the assets of the Company (including the shares of the Company) and any and all proceeds,

receipts and disbursements arising out of or from the assets (the “Property”).

6. On or around June 10, 2016, Dr. Walter Herrador (“Dr. Herrador”) has filed an assignment for

personal bankruptcy. Hardie & Kelly Inc. has been appointed as the trustee of the estate of Dr.

Herrador.

7. On June 14, 2016, the Court of Queen’s Bench of Alberta (“Court”) issued an order appointing

KPMG as the Receiver over all of the Property and undertakings of WHPC (the “Order”). A copy

of the Order is attached hereto as Appendix “A”.

Page | 3

8. On or around August 29, 2016 the Receiver filed the First Report of the Receiver (the “First

Report”), which described the Company’s primary asset and liabilities, the Receiver’s activities to

date, the Company’s receipts and disbursements, and other matters.

9. In conjunction with filing the First Report, the Receiver filed a confidential supplement report to

the First Report (the “First Supplemental Confidential Report”) to the Court dated September

12, 2016 that further details the sales and marketing process (“Sales Process”) undertaken by the

Receiver to solicit offers from parties interested in acquiring the Property of WHPC.

10. For further background information on WHPC and these receivership proceedings please refer to

the Receiver’s website www.kpmg.ca/walterherrador.

11. In preparing this report, the Receiver has been provided with, and has relied upon, unaudited and

other financial information, books and records (collectively, the “Information”) prepared by the

Company and/or their representatives, and discussions with the Company’s management and/or

representatives. The Receiver has reviewed the Information for reasonableness, internal

consistency and use in the context in which it was provided and in consideration of the nature of

evidence provided to this Honourable Court. However, the Receiver has not audited or otherwise

attempted to verify the accuracy or completeness of the Information in a manner that would wholly

or partially comply with Canadian Auditing Standards (“CAS”) pursuant to the Chartered

Professional Accountants Canada Handbook and, accordingly, the Receiver expresses no opinion

or other form of assurance contemplated under the CAS in respect of the Information.

12. The information contained in this report is not intended to be relied upon by any prospective

purchaser or investor in any transaction with the Receiver.

13. All references to monetary amounts in this report are in Canadian dollars unless otherwise

specified.

Purpose of the Receiver’s Second Report

14. This is the Receiver’s second report (the “Second Report”) and is filed to provide this Honourable

Court with:

a) An update on the actions of the Receiver since the date of the First Report;

Page | 4

b) The final statement of receipts and disbursements for the receivership period June 14, 2016

to November 7, 2016;

c) The Receiver’s fees and disbursements for the period June 14, 2016 to October 12, 2016

and the Receiver’s legal counsel’s fees and disbursements for the period June 14, 2016 to

October 12, 2016;

d) A request for an order discharging KPMG Inc. as the Receiver of Walter Herrador

Professional Corporation upon the filing with the Court by the Receiver of a certificate

confirming the completion of the Receiver’s remaining obligations (the “Receiver’s

Completion Certificate”); and

e) The Receiver’s recommendations.

15. Defined terms not defined herein have the same meaning as defined in the First Report and First

Supplemental Confidential Report.

Page | 5

2. RECEIVER’S ACTIVITIES SINCE THE FIRST REPORT

Books and Records

15. The Company’s books and records were packed up and held in storage in Calgary, Alberta.

Closing of the Sales Process

17. As discussed in the First Report and the First Supplemental Confidential Report, the Receiver was

able to find a successful bidder for the Company’s primary assets and a Court order was obtained

for the approval of the sale transaction. A copy of the approval and vesting order is attached as

Appendix “B”.

18. Since the approval of the sale transaction, the following activities were performed by the Receiver:

a) The Receiver completed negotiations and executed agreements with the leasing companies,

De Lage and National Leasing, to obtain certain assets free and clear upon closing of the

sale transaction;

b) The Receiver wiped out the computer hard drives located in the clinic to ensure no medical

records were stored on the premises upon closing the sale transaction; and

c) The Asset Purchase Agreement (“APA”) was executed with a closing date of September

30, 2016.

Insurance

19. The Receiver cancelled coverage as the sale of the Company’s primary assets meant no such

coverage was required as there are no remaining assets.

Medical Records

20. As described in the First Report, the Receiver maintained all medical records as confidential and

the Receiver provided former patients the ability to retrieve their medical records upon request.

21. The Receiver will continue to provide medical records to former patients upon request until six

months after the Receiver’s discharge.

Page | 6

3. RECEIPTS AND DISBURSEMENTS

22. The Receiver’s disbursements during the receivership have primarily relate to the preservation of

the Company’s assets and include other costs, such as rent and insurance.

23. The Company’s operating costs to date have been financed by the Receiver’s borrowing from RBC

under Receiver’s Certificates, to date totalling $55,000 in principle.

24. Below is a summary of the final receipts and disbursements (“R&D”) from June 14, 2016 to

November 7, 2016. The final statement of receipts and disbursements is attached as Appendix “C”.

25. As discussed in detail in the First Report, the Receiver’s legal counsel has undertaken a review of

the validity and enforceability of the security held by RBC, De Lage and National. Counsel has

advised that all parties had a valid security interest in the right, title and interest of WHPC in its

applicable real and personal property, subject to certain standard assumptions and qualifications.

26. As result of the above, all funds remaining in the estate after the payment of certain costs are to be

made to RBC. No other distributions have been made in these proceedings to date.

27. Any additional funds currently held or subsequently received by the Receiver, including potential

GST refunds, will be remitted to the secured creditor as soon as possible.

28. Included in the cash receipts of the R&D are the proceeds from the APA. A condition of the offer

from the Successful Bidder was that the purchase price was to remain confidential. As such, the

Receiver has only presented the total cash receipts balance.

Final Statement of Receipts and Disbursements - June 14, 2016 - November 7, 2016

in CAD

Total Cash Receipts 560,456$ Cash Disbursements

Equipment purchase from leasing companies 191,268 Payment to secured creditor 120,430 Deposit refund from Sales Process 100,000 Receiver's fees and disbursements 43,660 Occupation rent 43,299 Legal fees and disbursements 28,582 GST paid on fees and disbursements 15,422 Wages from Pre-Receivership 12,964 Miscellaneous costs (including insurance, computer services, etc) 4,831

Total Cash Disbursements 560,456 Excess Receipts Over Disbursements -$

Page | 7

29. The Receiver and its legal counsel have billed fees of $45,843 and $30,000 from June 14, 2016 to

October 12, 2016, respectively. These fees are collectively referred to as the “Receivership

Professional Fees”.

30. At the November 22, 2016 hearing, the Receiver will be seeking approval of the Receivership

Professional Fees. Copies of the invoices described therein, including detailed time analysis, will

be made available to the Court at November 22, 2016 hearing upon request.

31. The activities of the Receiver and its legal counsel are documented in this report, the First Report

and the First Supplemental Confidential Report. The Receiver has dealt with the Company’s assets

and has secured an offer from a reputable buyer over two months. The Receiver is of the view that

the Receivership Professional Fees have been incurred in a prudent and economical matter and are

fair and reasonable in all of the circumstances.

Summary of Receivership Professional Fees

Period June 14, 2016 - October 12, 2016

In CAD $Service Period

Fees and Disbursements GST

Total Amount

KPMG Inc.June 14, 2016 - October 12, 2016 43,660 2,183 45,843

Total KPMG Inc. 45,843 Cassels Brock LLP

June 14, 2016 - October 12, 2016 28,582 1,418 30,000 Total Cassels Brock LLP 30,000 Total Receivership Professional Fees 75,843

Page | 8

4. RECEIVER’S DISCHARGE

32. Upon the completion of the sale transaction, the Receiver’s administration of the estate will be

essentially complete. The Receiver may have some miscellaneous administrative items to attend to

post-discharge, but these items are immaterial and, in the Receiver’s opinion, should not prevent

this Honourable Court from granting an unconditional discharge.

33. There are no other remaining assets in the estate once the payout to RBC is made other than the

medical records. Medical records are to be retained by the Receiver until six months after the

discharge date. The medical records would be destroyed by the Receiver after the expiration of six

month period.

34. The Receiver respectfully requests this Honourable Court approve an order terminating these

receivership proceedings and unconditionally discharging the Receiver from any and all obligations

as Receiver of WHPC effective upon the date of November 22, 2016 hearing and filing of the

Receiver’s Completion Certificate.

Page | 9

5. RECOMMENDATIONS

35. We submit this Second Report in support of our Application respectfully requesting this

Honourable Court to:

a) Approve the Second Report and the activities of the Receiver described herein;

b) Approve the Receiver’s final Statement of Receipts and Disbursements for the period from

June 14, 2016 to October 12, 2016;

c) Approve the fees of the Receiver and the Receiver’s counsel for the period from June 14,

2016 to October 12, 2016; and

d) The discharge of KPMG Inc. as Receiver of Walter Herrador Professional Corporation.

All of which is respectfully submitted this 14th day of November, 2016.

KPMG INC., COURT-APPOINTED RECEIVER AND MANAGER OF WALTER HERRADOR PROFESSIONAL CORPORATION, and not in its personal capacity

Per: Ryan J. Adlington Senior Vice President

Per: Neil A. Honess Senior Vice President

Appendix A

Receivership Order dated June 14, 2016

Appendix B

Approval and Vesting Order filed September 16, 2016

COURT FILE NUMBER

COURT

JUDICIAL CENTRE

PLAINTIFF

DEFENDA(~T

DOCUMENT

ADDRESS FOR SERVICE ANDCONTACT INFQRMATION OF PARTYFILING THIS DOCUMENT

1601-07750

COURT OF QUEEN'S BENCH OF ALBERT

CALGARY

ROYAL BANK OF CANADA

WALTER HERRADOR PROFESSIONALCORPORATION AND WALTER HERRADOR

~ -~

~~ 1~. ~~~o SEp ~ 6 2016

J~C~'~9 Gp

\OFTN~

APPROV~4L AND iO~STING ORDER(Sale by R~~eiver)

Cassels Brock & Blackwell LLPSuite 1250 fVlillennium Tower440 2"`' Avenue SWCalgary, P,Iberta T2P 5E9Attention: Jeffrey sliverPhone: 403-351-2921

~~~r~~y certify this to be a true copy ofthe arigsn~l,~Qr~---e----_„

~~~ed ~hfs~~ day o3~~.~D

~~r ~ - ~~ the ~4Ur3 'DATE ON V4IHICH ORDER 1A/AS PRONOIJ~VCEa: September 16, 2016

LC~C~aTSON 1NFiERE ORDER 1~',~~ PRONOUNCED: Calgary, Alberta

IVAtV1E OF Jl1STICE V1/H0 MADE THIS ORDER: The Honourable Justice Macleod

U~C)N THE APPLO~AT'ION by KPMG Inc. in its capacity as the Court-appointed receiver and

manager (the "Receiver"} of the undertaEcing, property and assets of Walter Herrador Professional

Corporation (the "Debtor") for an order approving the sale transaction (the "Transaction") contemplated by an

agreement of purchase and sale (the "Sale Agreement"} between the Receiver and Strategic Equity Corp.

(the "Purchaser") dated September 9, 2016 an unredacted version ofi which is appended to the Confidential

Supplemen# to the First Report of the Receiver (the "Confidential Supplement"), and vesting in the Purchaser

(or its nominee) the Debtor's right, title and interest in and to the assets describes in the Sale Agreement (the

'̀Purchased Assets");

~~~ ~.U~C~fV HAVING READ the Receivership Order dated June 14, 2016 (the "Receivership Order"),

the Report, the Confidential Supplement and the Affidavit ofi Service; .~IVD 11PON HE~4R1(VG the submissions

of counsel for the Peceiver, the Purchaser, no one appearing for any other person on the service list,

although properly served as appears from the Affiidavit of Service, filed;

9̀ ~ ~S H~RE~~ ORDERED AND D~~LARED ~f ~A u~o

SERVICE

Legal*32139291.1

2

Service of notice of this application and supporring materials is hereby declared to be good and

sufficient, and no other person is required to have been served with notice of this application, and

dime for service of this application is abridged to thafi actually given.

APPROVAL O~ f ~l~NSACTIONS

2. The Transaction is hereby approved, and the execution of the Sale Agreemeni by the Receiver is

hereby authorized and approved, with such minor amendments as the Receiver may deem

necessary. The Receiver is hereby authorized and directed to take such additional steps and

execute such additional documents as may be necessary or desirable for the completion of the

Transaction or for the conveyance of the Purchased Assets to the Purchaser (or its nominee).

@~~~T1~9~ ~F PROPERTI'

3. Upon the delivery of a Receiver's certificate to the Purchaser (or its nominee) substantially in the form

set out in Schedule "A" hereto (the "Receiver's Certificate"), all of the Debtor's right, title and inierest

in and io the Purchased Asses described in the Sale Agreement shall vest absolutely in the name of

the Purchaser (or its nominee), free and clear of and firom any and all security interests (whether

contractual, statutory, or otherwise), hypothecs, mortc~ages, trusts or deemed trusts (whether

contractual, statutory, or otherwise), liens, executions, levies, charges, or other financial or monetary

claims, whether or' not they have attached or been perfected, registered or filed and whether secured,

unsecured or otherwise (collectively, the "Claims") including, ~rvithout limiting the generality of the

foregoing:

any encumbrances or charges created by the Receivership Order;

all charges, security interests or claims evidenced by registrations pursuant to the Personal Pro,~erty

Security Act (Alberta) or any other personal property registry system; and

those Claims listed on Schedule "~" hereto (collectively, fihe "E~a~umbrances") and,

for greater certainty, this Court orders that all o~f the Encumbrances afifecting or relating to the Purchased

Assets are hereby expunged and discharged as against the Purchased Assets. From and after the

closing of the Transaction (including the payment of the purchase price by the Purchaser to the

Receiver), the Receiver is authorized to discharge from the Personal Property Registry any claim

registered against any of the Purchased Asse'~s being purchased by the Purchaser, to the extent the

security interest is registered against the interest of the Debtor.

4. For the purposes of determining the nature and priority ofi Claims, 'the net proceeds from the sale ofi

the Purchased Assets (to be held in an interest bearing trust account by fihe Receiver) shall stand in

Legal~32139291.1

the place and stead of the Purchased Assets, and from and afiter the delivery of the Receiver's

Certificate al l Claims and Encumbrances shall attach to the net proceeds from the sale ofi the

Purchased Assets with the same prioriiy as they had with respect to the Purchased Assets

i mmediately prior fo the sale, as if the Purchased ,4ssets had no~~ been sold and remained in the

possession or control of the person having that possession or conrrol immediately prior to the sale.

5. The Purchaser (and its nominee, if any) shall, by virtue of the completion of the Transaction, have no

liability of any kind whatsoever in respect of any Claims against the Debtor.

6. The Debtor and all persons who claim by, through or under the Debtor in respect of the Purchased

Asses, save and except for the persons entitled fo the benefit ofi the Perrnitrec~ Encumbrances, shall

stand absolutely barred and foreclosed from all estate, right, title, interest, royalty, rental and equity of

redemption of the Purchased Assets and, to the extent that any such persons remains in possession

or control of any of the Purchased Assets, they shall forthwith deliver possession thereof to the

Purchaser (or its nominee).

7. The Purchaser (or its nominee) shall be entitled to enter into and upon, hold and enjoy the Purchased

Assets for its own use and benei it without any interference of or by the Debtor, or any person

claiming by or through or against the Debtor.

8. Immediately afiter the closing of 'the Transaction, the holders of the Permitted Encumbrances shall

have no claim whatsoever against the Receiver or the Debtor.

9. The Receiver is to file with the Court a copy ofi the Receiver's Certificate, forthwith after delivery

thereofi to the Purchaser (or its nominee).

10. Pursuanfi to clause 7(3){c) ofi the Canada Personal Information Protection and Electronic Documents

Act and section 20(e) of the Alberta Personal lnformafion Protection Acf, the Receiver is authorized

and permitted to disclose and transfer to the Purchaser all human resources and payroll information

in the Debtor's records pertaining to the Debtor's pasfi and current employees, including personal

information of those employees lisped in -the Sale Agreement. The Purchaser (or its nominee) shall

maintain and protect the privacy of such information and shall be entitled to use the personal

informafiion provided to it in a manner which is in all material respects idEntical to the prior use of

such information by the Debtor.

1 1. Notwi~ths~anding:

The pendency of these proceedings;

Legal~32139291.1

Any applications for a bankruptcy order now or hereafter issued pursuant to the Bankruptcy and

Insolvency Act (Canada) in respect of the Debtor and any bankruptcy order issued pursuant to any

such applications; and

Any assignment in bankruptcy made in respect o~f the Debtor

the vesting of the Purchased Assets in ~rhe Purchaser (or its nominee} pursuant to this Order shall be binding

on any trustee in bankruptcy that may be appointed in respect of the Debtor and shall not be void or

voidable by creditors of the Debtor, nor shall it constitute nor be deemed to be a settlement,

fraudulent preference, assignment, fraudulent conveyance, transfer at undervalue, or other

reviewable transaction under the Bankruptcy and Insolvency Act (Canada) or any other applicable

federal or provincial I~gisla~ion, nor shall it constitute oppressive or unfairly prejudicial conduct

pursuant to any applicable fiederal or provincial legislation.

12. The Receiver, the Purchaser (or its nominee) and any other interested party, shall be at liberty zo

apply fior further advice, assistance and directions as maybe necessary in order to give ful l force and

effect to the terms of this Order and to assist and aid the parties in closing the Transaction.

911lIISCELLAfVEOIJS MATTERS

13. This Court hereby requests the aid and recognition of any court, tribunal, regulatory or administrative

body having jurisdiction in Canada or in the United States fo give efifect to This Order and to assist the

deceiver ancJ its agents in carrying out the terms ofi this Order. Ail courts, tribunals regulatory and

administrative bodies are hereby respectfully requested to make such orders as to provide such

assistance to the Receiver, as an officer of this Court, as may be necessary or desirable to give effect

to this Order or to assist the Receiver and its agents in carrying out the terms ofi this Order.

14. This order must be served only upon those interested parties attending or represented at the within

application and service may be effected by facsimile, electronic mail, personal delivery or courier.

Service is deemed to be efi~ected the next business day following the transmission or delivery of such

documents.

15. Service ofi this Order on any party not atrending this applica'~ion is hereby dispensed with.r P ~ 1

J.C.C.Q.B.A.

Legal*32139291.1

5

COURT FILE NUMBER

COURT

JUDICIAL CENTRE

PLAINTIFF

DEFENDAfJT

DOCUMENT

ADDRESS FOR SERVICE ANDCONTACT INFORMATION OFPARTY FILING THIS DOCUMENT

RECITe4LS

Schedule ••A••

~'orr~o of Receiver's Certificate

160-07750

COURT OF QUEEN'S BENCH OF ALBERTA

CALGARY

ROYAL BANK OF CANADA

WALTER HERRADOR PROFESSIONALCORPORATION AND WALTEP HERRAD4R

RECEIVER'S CERTIFICATE

Cassels Brock &Blackwell LLPSuite 1250 Millennium Tower440 2"`' Avenue SWCalgary, Alberta T2P 5E9Attention: Jeffrey OliverPhone: 40~-351-292-1

Clerk's Stamp

A. Pursuant to an Order of the Honourable Justice Sfrekaf of the Court of Queen's Bench of Alberta,

Judicial Districi of Calgary (the "Court") dated June 14, 2016, KPMG Inc. was appointed as the

receiver (fhe "Receiver") of the undertaking, property and assets of Walter ~lerrador Profiessional

Corporation (the ̀ 'Debtor")

B. Pursuant to an Order of the Court dated September 16, 2016, the Court approved the agreement of

purchase and sale made as of September 9, 2016 (the "Sale Agreement") between the Receiver and

Strategic Equity Corp. {the "Purchaser") and provided for the vesting in the Purchaser o~ the Debtor's

right, title and interest in and to the Purchased Assets, which vesting is to be effective with respect to

the Purchased Assets upon the delivery by the Receiver to the Purchaser of a certificate confirming

(i) 'the payment by the Purchaser of the Purchase Price for ~~he Purchased /assets; (ii) That 'she

conditions to Closing as se~~ out in Articles 9 and 10 of the Sale Agreement have been satisfiied or

waived by fhe Receiver and the Purchaser; and (iii) the Transaction has been completed to the

satisfaction of the Receiver.

C. Unless otherwise indicated herein, terms with initial capitals have the meanings set out in the Sale

Agreement.

Legal~32139291.1

~~

THE RECEIVER CERTIFIES the following:

1. The Purchaser (or its nominee) has paid and the Receiver has received the Purchase Price for

the Purchased Assets payable on the Closing Date pursuant to the Sale Agreement;

2. The conditions to Closing as set out in Articles 9 and 10 of the Sale Agreement have been

satisfied or waived by the Receiver and the Purchaser (or its nominee); and

3. The Transaction has been completed to the satisfaction of the Receiver.

4. This Certificate was delivered by the Receiver at [Tune] on [Date].

KPMG Inc., in its capacity as Receiverof the undertaking, property anc9assets of Walter Herrador ProfessionalCorporation, and not in its personalcapacitya

Per;

Name:

Title:

Legal"32139291.1

7

Schedule "~„

Encumbrances

Registration Noo Ilegi~~ration Secui•cd (:ollatei•al DescriptionDate Warty

10092001404 September 20, National All goods and equipment of every2010 Leasing nature or kind leased pursuant to

Group Inc. master lease agreement number50280969 dated Sept 17, 2010between the secured party, as lessorand the debtor as lessee, as amendedfrom time to time, together with allattachments, accessories andsubstitutions, including all afteracquired goods and equipment subjectto any interim funding agreements)and any lease schedules attached toand forming part of master leaseagreement number 50280969.

2 10123016892 December 30, National All light posts, chairs, mounts, dental2010 Leasing medicaX equipment of every nature or

Group Inc kind described in lease schedulenumber 2527097 dated December 29,2010, which lease schedule is attachedto and forms part of master leaseagreement number 502$0969 betweenthe secured party, as lessor and thedebtor as lessee, as amended fromtime to time, together with allattachments, accessories andsubstitutions.

3. 11072114023 July 21, 2011 National All medical dental equipment of everyLeasing nature ~ or kind described in leaseGroup Inc. number 2526530 between the secured

party, as lessor and the debtor as lessee,as amended from time to time, togetherwith all attachments, accessories andsubstitutions,

4. 13041525482 April 15, 2013 National All medical dental equipment of everyLeasing nature or kind described in leaseGroup Inc. number 2612022 between the secured

party, as lessor and the debtor as lessee,as amended from time to time, togetherwith all attachments, accessories and

Legal~32139291.1

S

substitutions,

5. 14102930599 October 29, Royal Bank All present and after-acquired personal2014 of Canada property

6. 15091502989 September 15, BMW Seria] No. Goods:2015 Canada Inc. SYMKT6C58FOC89450 2015 BMW

XS M MV -Motor Vehicle

7. 16021610308 February 16, Henry Dental Equipment; Secured amount2016 Schein $218,551.00

Canada Inc.

8. 16051835223 May 18, 2016 De Lage All personal property of the debtorLanden financed by the secured party, whereverFinancial situated, consisting of dental equipmentServices as per Henry Schein invoiceCanada Inc. #12079381, together with all parts and

accessories relating thereto, allattachments, accessories and accessionsthereto or thereon, all replacements,substitutions, additions andimprovements of all or any part of theforegoing. Proceeds: all of the debtor'spresent and after acquired goods, motorvehicles, accounts, money, chattelpaper, documents of title, investmentproperty, instruments and intangibles asdefined in the Personal PropertySecurity Act, insurance proceeds andall other substitutions, renewals,alterations or proceeds of everydescription and of any kind whatsoeverderived directly or indirectly from anydealings with the general collateraldescribed above, or proceeds therefrom.

Legal~32139291.1

Appendix C

Final Statement of Receipts and Disbursements from June 14, 2016 to November 7, 2016

IN THE MATTER OF THE RECEIVERSHIP OFWALTER HERRADOR PROFESSIONAL CORPORATION

RECEIVER'S FINAL STATEMENT OF RECEIPTS AND DISBURSEMENTSFOR THE PERIOD JUNE 14, 2016 - NOVEMBER 7, 2016

RECEIPTS: Notes AmountTotal Cash Receipts 1 560,455.68

DISBURSEMENTS:Equipment purchase from leasing companies 191,267.75 Payment to secured creditor 120,430.34 Deposit refund from Sales Process 100,000.00 Receiver's fees and disbursements 43,659.61 Occupation rent 43,299.09 Legal fees and disbursements 28,582.31 Wages from Pre-Receivership 12,963.50 GST paid on fees and disbursements 15,421.84 Miscellaneous costs (including insurance, computer services, etc) 2 4,831.24 TOTAL DISBURSEMENTS 560,455.68$

EXCESS OF RECEIPTS OVER DISBURSEMENTS -$

Note1

2

Total cash receipts includes the proceeds received from the Successful Bidder. A condition of the offer from the Successful Bidder was that the purchase price was to remain confidential. As such, only the total cash receipts is presented.Miscellenaous costs include insurance, computer services, OSB fees, etc.