TAB 2

185

Court File No. CV-15-10980-00CL

ONTARIOSUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

IN THE MATTER OF THE COMPANIES' CREDITORSARRANGEMENT lCZ, R.S.C., 1985, c.C-36, AS AMENDED

AND IN THE MATTER OF A PLAN OF COMPROMISE ORARRANGEMENT OF TRAVELBRANDS INC.

APPLICANT

AFFIDAVIT OF FRANCESCO DEMARINIS(Sworn September 21, 2015)

I, Francesco DeMarinis, of the City of Kleinburg, in the Province of Ontario,

MAKE OATH AND SAY:

l. I am Francesco DeMarinis, the President and former Co-Chief Executive Officer

of TravelBrands Inc. (referred to herein as "TravelBrands", the "Company" or the "Applicant").

I am also a Vice President of Red Label Vacations Inc. ("Red Label"), the ultimate parent

corporation of TravelBrands. As such, I have personal knowledge of the matters deposed to in

this Affidavit. Where I have relied upon other sources of information, I verily believe such

information to be true.

2. I swear this Affidavit in support of the motion brought by TravelBrands for an

Order, inter alia, extending the stay of proceedings granted by this Court pursuant to the

Companies' Creditors Anangement Act, R.S.C. 1985, c. C-36 as amended (the "CCAA") until

and including December 11,2015 and authorizing the Applicant to call and conduct a meeting

(the !'Meeting") of the Affected Creditors (as defined below) to consider and vote on a resolution

approving the Applicant's proposed plan of compromise or arrangement (the "Plan"), and an

Order approving a claims process (the "Claims Procedure") for the identification and

determination of claims against the Applicant and its present and former directors and officers.

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Background3. On May 27 ,2015 (the "Filing Date"), TravelBrands was granted protection under

the CCAA pursuant to an initial order of the Ontario Superior Court of Justice (Commercial List)

(the "Initial Order"). In the Initial Order, the Court, among other things:

(a) granted a stay of proceedings in favour of TravelBrands until and including June

26,2015, or such later date as the Court may order (the "Stay Period");

(b) authorized TravelBrands to obtain and borrow funds under a Commitment

Agreement with Red Label in order to finance the Company's working capital

requirements and other general corporate purposes and capital expenditures, in an

amount not to exceed $4 million unless permitted by further order of the Court;

and

(c) appointed KPMG Inc. as the monitor of the Company (the "Monitor").

4. Since the Initial Order, the Company has continued to operate its business in the

normal course with the benefit of the stay of proceedings.

5. On June 24,2075, TravelBrands sought and was granted an Order which, among

other things, extended the Stay Period to and including August 77,2015.

6. On June 24, 2015, TravelBrands also sought and was granted approval of an

amended and restated Initial Order (the "Amended and Restated Initial Order"), which provided

greater clarification for the ongoing protection of trust funds. In particular, the Amended and

Restated Initial Order clarihed that the Charges will not apply to any funds held in trust in any of

the Applicant's bank accounts or by Chase Paymentech Solutions for the purpose of refunding

deposits or prepayments by the Applicant's customers in connection with travel which such

customers have not yet taken (collectively, the "Customer Funds"), provided however that, once

such travel occurs or a refund is made, the Charges will then apply to the corresponding

Customer Funds that are released from trust. Attached to this Affidavit as Exhibit "A" is the

Amended and Restated Initial Order.

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L On August 14,2015, TravelBrands sought and was granted an Order (the "August

Extension Order") which, among other things, extended the Stay Period to and including

September 30,2015. Attached as Exhibit "B" is the August Extension Order.

8. Effective September 14, 2075, Zeina Gedeon was appointed as the new Chief

Executive Officer of TravelBrands. This appointment has been publicized in various travel

industry magazines and websites, including the September 10, 2015 article attached as Exhibit

"C" hereto.

9. I swore an afhdavit on May 26, 20T5 (the "Initial Affidavit") in support of the

initial application of TravelBrands. A copy of the Initial Affrdavit is attached without exhibits as

Exhibit "D" to this Affrdavit. I also s\ilore an affidavit on August 10,2015 (the "August

Affrdavit") in support of the motion for the August Extension Order. A copy of the August

Affrdavit is attached without exhibits as Exhibit "E" to this Affrdavit.

10. Capitalized terms contained herein that are not otherwise defined have the

meaning ascribed to them in the Initial Affidavit, the August Affidavit and the Plan, as

applicable.

I ntern ati o n al Ai r Tran sport Associ ati o n

11. TravelBrands and the Monitor have continued to engage in ongoing

communications with the International Air Transport Association ("IATA") and its counsel.

TravelBrands and the Monitor have provided IATA with all information requested to date and

will continue to be responsive to all further information requests.

12. TravelBrands and IATA discussed the potential need to increase a letter of credit

that had been provided by the Company to IATA in connection with the Purchase Transaction,

currently in the amount of $5.06 million, which was set to expire on August l, 2015 (the "Letter

of Credit"). In light of its ongoing dialogue with IATA, TravelBrands extended the expiration

date of the Letter of Credit to September 30, 2015. At this time, the value of the Letter of Credit

has not been increased.

13. TravelBrands, the Monitor and IATA were scheduled to meet in person in Miami,

Florida on September l, 2015 for the purpose of discussing TravelBrands' restructuring, its

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continued compliance with IATA's financial requirements, and the value and term of the Letter

of Credit. Due to concerns that Tropical Storm Erika would pass through Miami, this meeting

was rescheduled to September 30, 2015.

14. Given its continued discussions with IATA, TravelBrands has extended the

expiration date of the Letter of Credit to October 3I,2015.

Travel lndustry Council of Ontario

15. TravelBrands and the Monitor have continued to provide the Travel Industry

Council of Ontario ("TICO") with extensive continuing and timely financial reporting, including

with respect to funds received from customers for travel services that TravelBrands is holding in

trust. TICO continues to closely monitor TravelBrands' business during its CCAA proceedings

and remains supportive of TravelBrands' restructuring efforts.

16. TravelBrands sought and obtained approval of the revisions contained in the

Amended and Restated Initial Order, described in further detail above, at TICO's request.

Agents & Suppliers

17. TravelBrands, in close consultation with the Monitor, has continued to be in

contact with a number of its critical suppliers and key agents to ensure the continued supply of

goods and services.

18. Since the Filing Date, TravelBrands has and continues to pay its key agents pre-

filing and post-filing amounts in the normal course. Additionally, TravelBrands, in close

consultation with the Monitor, has and continues to deal with its critical suppliers on an as

needed basis to ensure that there will be no disruption of services to its customers and that

business continues as usual.

19. TravelBrands' most significant suppliers have continued to supply goods and

services to the Company and, as provided for in the Amended and Restated Initial Order,

TravelBrands has and continues to pay its suppliers amounts owing for goods and services

supplied during the CCAA proceedings.

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Sears

20. As described in the August Affidavit, on July 6,2075, Sears and TravelBrands

entered into an Amending Agreement whereby the terms of the license agreement between Sears

and the Company dated January 18, 2011, as amended and restated on February 2,2014 (Ihe

"Sears Agreement"), would be further amended (the "Amending Agreement"). The terms of the

Sears Agreement were described in the Initial Affidavit.

21. Pursuant to the Amending Agreement, the Sears Agreement has been amended so

that, inter alia:

(a) TravelBrands and Sears will share earnings generated by Sears Travel;

(b) TravelBrands is no longer required to make minimum annual commission

payments to Sears;

(c) TravelBrands and Sears granted each other certain conditional releases from

liabilities arising from occurrences prior to the date of the Amending Agreement,

being July 6, 2015; and

(d) A special purpose bank account has been established, which Sears will administer

as trustee, for the benefit of Sears and TravelBrands, to assist with administering

the Sears Agreement, as amended by the Amending Agreement.

22. The Amending Agreement provides for a release of all actual or potential claims

against TravelBrands, conditional upon the implementation of a Plan or other occunence in the

CCAA proceeding satisfactory to Sears, acting reasonably, whereby TravelBrands continues to

be bound by the Amending Agreement.

23. TravelBrands and Sears continue to implement the Amending Agreement, and

TravelBrands continues to operate the Sears Travel business in the ordinary course.

75 Eglinton24. On May 29,2015, TravelBrands, with the consent of the Monitor, delivered a

disclaimer notice to the 75 Eglinton landlord (the "Landlord"). The Landlord did not object to

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the disclaimer within fifteen days of the disclaimer notice being delivered, and the disclaimer

became effective as of June 28,2015.

25. As described in the August Affidavit, counsel to TravelBrands, the Monitor and

the Landlord have engaged in numerous without prejudice meetings and conference calls to

discuss a possible settlement. This culminated in the decision to enter into a settlement (the

"Landlord Settlement"), which will be memorialized in an agreement that is currently being

discussed between the relevant parties and will be executed in the near tetm. The Landlord

Settlement will provide for the settlement of claims and potential claims of the Landlord against

TravelBrands and certain related parties.

26. The key terms of the Landlord Settlement are:

(a) 2224855 Ontario Inc. ("Holdco") will make various payments to the Landlord

over the next ten yeals. The quantum of such payments will be, in part, contingent

on TravelBrands' financial performance;

(b) The Applicant will provide the Landlord with a secured guarantee of Holdco's

obligations under the Landlord Settlement; and

(c) The Landlord will agree to support the Plan, or any other plan of compromise or

arrangement set forth by TravelBrands that provides treatment to the Landlord

that is consistent with the terms of the Landlord Settlement.

Sa/e Process Update

27. As outlined in the August Affidavit, the Company has been working to develop a

Sale Process whereby prospective purchasers would have the opportunity to bid for the

Company's assets. The purpose of the Sale Process was to effectuate a balance sheet and an

operational restructuring of TravelBrands. TravelBrands has prepared motion materials for the

pu{pose of obtaining an Order approving of the Sale Process, including a form of stalking horse

asset purchase agreement between Holdco and TravelBrands whereby a sale of substantially all

of TravelBrands' assets to Holdco would be effected by way of a credit bid. However, the

Company, in consultation with the Monitor, has considered whether a restructuring could also be

achieved by way of the Plan.

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28. In light of the progress that has been made with IATA since the commencement

of the CCAA Proceedings, as well as the execution of the Amending Agreement and the

Landlord Settlement, the Applicant, in consultation with the Monitor, has concluded that its

restructuring goals can be achieved by way of a Plan. TravelBrands believes that under a Plan

(versus a Sale Process) it may benefit from, among other things, better continuity in the

operation of the business.

Plan of Compromise or Arrangement29. TravelBrands proposes to present the Plan to its Affected Creditors to facilitate

the continuation of TravelBrands' business and to provide certain recoveries to stakeholders.

30. The material terms of the Plan include the following:

(a) the Plan provides for one class of affected unsecured creditors (the "Affected

Creditors"), which includes Convenience Creditors (Affected Creditors with

claims that are not more than CDN $15,000);

(b) Convenience Creditors will be paid in cash for the full value of their Allowed

Affected Claim within two (2) business days of the implementation of the Plan;

(c) Affected Creditors (other than Convenience Creditors) will receive the full value

of their Allowed Affected Claims in cash (sixty percent of the value of their

allowed claims will be remitted on January 31, 2016, and the remainder on

November 30,2016);

(d) certain claims against TravelBrands, including claims covered by insurance,

claims for which funds are being held by the Applicant or Chase Paymentech

Solutions in trust, intercompany claims and secured claims, will remain

unaffected by the Plan;

(e) the Commitment Agreement will be terminated;

all Affected Claims will be compromised, released and discharged in exchange

for the payments to be made to Affected Creditors, as described above; and

(Ð

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(g) TravelBrands reserves the right to revoke or withdraw the Plan at any time prior

to the Plan Implementation Date.

31. The Plan also provides for a subset of Deemed Proven Claims (i.e., the Landlord's

and Sears' Affected Claims). Pursuant to the terms of the Plan:

(a) Sears will be entitled to receive distributions in accordance with the Amending

Agreement and will be deemed to have waived its rights to, and shall not be

entitled to, what it otherwise would have received under the Plan. As described

above, the Amending Agreement provides for a conditional release, which

condition can be satisfied by implementation of the Plan; and

the Landlord will be deemed to have waived its entitlement to the amounts that

would otherwise be payable to it under the Plan.

(b)

32. Implementation of the Plan is conditional upon, among other things, the Applicant

and Red Label or Holdco entering into a funding agreement whereby Red Label or Holdco will

agree to fund, on a revolving basis until December 31,2076, up to a maximum of $6 million, the

Applicant's necessary operating and other expenses incurred in a manner consistent with past

practices, subject to customary terms and conditions precedent (the "Funding Agreement").

TravelBrands anticipates that it will not make any draws under the Funding Agreement;

however, the Funding Agreement will be entered into out of an abundance of caution.

33. Ultimately, in reviewing its alternatives and available options, the Applicant has

determined that TravelBrands and its stakeholders would be best served by pursuing the Plan.

TravelBrands believes that the Plan will result in better continuity in the operation of the

business and is preferable to other alternatives because it provides a superior recovery for the

Applicant's Affected Creditors, as compared to any alternative to the Plan.

34. If the Plan is not approved by the Required Majority of the Affected Creditors

Class, or if TravelBrands determines that such approvals are not forthcoming, TravelBrands

plans to revoke the Plan and seek this Courl's approval of a credit bid whereby Holdco will

purchase substantially all of TravelBrands' assets.

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Claims Procedure Order and Meeting Order

35. The procedure for determining the validity and quantum of the Affected Claims

for voting and distribution purposes under the Plan will be governed by a Claims Procedure

Order, a Meeting Order, the CCAA, the Plan and any further Order of this Courl.

The Applicant is seeking approval of:36

(a) a Claims Procedure Order authorizing and directing the Applicant to identify and

determine all Affected Claims against the Applicant and its present and former

directors and ofhcers for voting and distribution purposes with respect to the Plan;

and

(b) a Meeting Order authorizing and directing the Applicant to file the Plan with the

Court and to convene meetings of its Affected Creditors to vote on a resolution to

approve the Plan.

(i) Represented Travel Trade Creditors

37. The Plan, Claims Procedure Order, and Meeting Order include provisions specific

to "Represented Travel Trade Creditors", being creditors that are represented by any of the

Travel Trade Creditor Representatives listed on Schedule "J" of the Claims Procedure Order, in

connection with an agreement pursuant to which such creditors have an Affected Claim against

TravelBrands.

38. Represented Travel Trade Creditors are comprised of various hotels which are

counter-parties to agreements with TravelBrands. These agreements are negotiated by Travel

Trade Creditor Representatives, who typically represent a group of hotels that are often located

in various places across the world. TravelBrands interacts only with the Travel Trade Creditor

Representatives, rather than the individual Represented Travel Trade Creditors, when negotiating

agreements and as part of day-to-day operations. In contrast, TravelBrands will only deal directly

with a Represented Travel Trade Creditor when such Represented Travel Trade Creditor raises a

specific problem, such as customer complaints.

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39. The relationship between Travel Trade Creditor Representatives and Represented

Travel Trade Creditors in the travel industry takes two forms, being:

(a) Travel Trade Creditor Representatives have signing authority for the Represented

Travel Trade Creditors they act for, for the purpose of entering into agreements

with TravelBrands; or

(b) Travel Trade Creditor Representatives have the ability to give binding directions

to Represented Travel Trade Creditors to enter into agreements with

TravelBrands.

40. I understand that these two forms of relationship between Travel Trade Creditor

Representatives and Represented Travel Trade Creditors are standard for the travel industry. IfTravelBrands were to contact a Represented Travel Trade Creditor directly for the purpose of

entering into an agreement, such Represented Travel Trade Creditor would need to either have

its Travel Trade Creditor Representative execute such an agreement or get the Travel Trade

Creditor Representative's approval before so doing.

41. Generally, agreements between Travel Trade Creditor Representatives and

Represented Travel Trade Creditors also provide that the Travel Trade Creditor Representatives

shall indemnify the Represented Travel Trade Creditors for certain losses suffered as a result of

an agreement negotiated by the Travel Trade Creditor Representative.

42. Of note, often TravelBrands does not have contact information for individual

Represented Travel Trade Creditors. In contrast, TravelBrands engages in frequent

communication with the Travel Trade Creditor Representatives.

43. Accordingly, the Plan, Claims Procedure Order, and Meeting Order have been

developed to take into account the unique relationship between Travel Trade Creditor

Representatives and the Representative Travel Trade Creditors. When preparing the procedures

contemplated in the proposed Claims Procedure Order and Meeting Order, the Applicant

consulted with certain of its key Travel Trade Creditor Representatives to ensure the process was

efficient and catered to the unique relationship between Travel Trade Creditor Representatives

and the Represented Travel Trade Creditors.

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(ii) Claims Procedure Order

44. Capitalized terms not otherwise defined within this subsection shall have the

meaning ascribed to them in the Claims Procedure Order.

45. The draft Claims Procedure Order provides for a process for the identification and

determination of claims against the Applicant and its present and former directors and officers,

which includes, inter alia, the following:

(a) the Monitor will send a Claims Package to all Known Creditors, except

Represented Travel Trade Creditors;

(b) the Monitor will send Claims Packages to each Travel Trade Creditor

Representative for distribution by the Travel Trade Creditor Representative to

each of the Represented Travel Trade Creditors;

(c) the Monitor will send a Representative Instruction Letter to each Travel Trade

Creditor Representative;

(d) the Claims Package shall include a Notice of Claim specifying the Known

Creditor's Claim against the Applicant for voting and distribution purposes;

(e) the Claims Procedure Order contains provisions that allow Known Creditors to

dispute their Claim as determined in the applicable Notice of Claim for voting

and/or distribution purposes, and sets out a procedure for resolving such disputes;

(Ð the Monitor will publish a notice to creditors in The Globe and Mail Q.trational

Edition) to solicit claims against the Applicant by any claimants that are not

known to the Applicant;

(g) the Monitor will deliver a Claims Package to any Unknown Creditor who requests

one prior to the Claims Bar Date, which will contain a Proof of Claim that must

be completed and filed with the Monitor prior to the Claims Bar Date;

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(h) the Claims Procedure Order contains provisions that allow the Applicant to

dispute a Proof of Claim as against an Unknown Creditor for voting andlor

distribution purposes, and sets out a procedure for resolving such disputes;

(i) the proposed Claims Bar Date for Proofs of Claim for Unknown Creditors and for

Notices of Dispute in the case of Known Creditors is October 28,2015 (which is

thirty (30) days following the date of the Claims Procedure Order, assuming that

Order is granted at this time);

c) the Restructuring Period Claims Bar Date, which will apply to Affected Claims

arising on or after the Filing Date (i.e., Restructuring Period Claims), shall be

seven (7) days after the day such Restructuring Period Claim arises;

(k) Proofs of Claim may be filed with respect to Director/Offrcer Claims; and

with regard to the Deemed Proven Claims, Sears and the Landlord will be deemed

to have accepted Notices of Claim in the amounts of their respective Affected

Claims (being $6,208,846.28 and $15,000,000, respectively), and neither Sears

nor the Landlord are required to take any further action to prove their Affected

Claims in the Claims Process.

46. The Claims Procedure Order has been designed to identify the Claims of Known

and Unknown Creditors in a manner that preserves the rights of such Creditors, while allowing

for the expeditious identification of the claims of all of TravelBrands' potential creditors.

(iii) Meering Order

41. Capitalized terms not otherwise defined within this subsection shall have the

meaning ascribed to them in the Meeting Order.

48. The draft Meeting Order provides that the Applicant is authorized to convene the

Meeting of the Affected Creditors' Class to consider and vote on the Plan. The Affected

Creditors' Class consists of all affected unsecured creditors, including Convenience Creditors.

49. The draft Meeting Order provides that, after the granting of the Order, the

Monitor shall send Information Packages to all Creditors (other than the Represented Travel

(l)

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Trade Creditors) known to the Monitor and the Applicant as of the date of the Order. For

Represented Travel Trade Creditors, the Order provides that the Monitor shall send Represented

Creditor Information Packages to each Travel Trade Creditor Representative, who shall

distribute Represented Creditor Information Packages to the Represented Travel Trade Creditors,

and shall confirm the completion of such distribution to the Monitor and the Applicant.

50. The draft Meeting Order also provides that the Monitor shall use reasonable

efforts to cause the Notice of Meeting to be published for two (2) Business Days in The Globe

and Mail (lr{ational Edition).

51. The draft Meeting Order provides for, inter alia,the following in respect of the

governance of the Meeting:

(a) a representative of the Monitor shall preside as the Chair of the Meeting;

(b) the only Persons entitled to notice of, attend or speak at the Meeting are the

Eligible Voting Creditors (or their respective duly appointed proxyholders),

representatives of the Monitor, the Applicant, all such parties' financial and legal

advisors, the Chair, Secretary and the Scrutineers, and any other person that may

be admitted to the Meeting by invitation of the Applicant or the Chair;

(c) each Affected Creditor with a Voting Claim or a Disputed Voting Claim shall be

entitled to one vote as a member of the Affected Creditors' Class;

(d) each Affected Creditor with a Voting Claim or a Disputed Voting Claim that is a

Convenience Creditor, as defined in the Plan, shall be deemed to vote in favour of

the Plan, unless such Convenience Creditor has notified the Monitor of its

intention to vote against the Plan prior to the Meeting and does vote against the

Plan at the Meeting (in person or by proxy);

(e) each Affected Creditor with a Deemed Proven Claim (i.e., Sears and the

Landlord) shall be deemed to vote in favour of the Plan;

the Meeting Order contains provisions outlining the requirements for voting by

proxy, and sets out a procedure for submitting a Creditor's Proxy (the form of

proxy for Eligible Voting Creditors other than Represented Travel Trade

(Ð

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Creditors) or Represented Creditor's Proxy (the form of proxy for Represented

Travel Trade Creditors), as applicable;

(g) any Represented Travel Trade Creditor that does not submit a Represented

Creditor Proxy shall be deemed to have duly appointed their Travel Trade

Creditor Representative to act for them at the Meeting and to vote on their behalf;

(h) the quorum required at the Meeting shall be one Creditor with a Voting Claim

present at the Meeting in person or by proxy;

(i) the Monitor may appoint Scrutineers for the supervision and tabulation of the

attendance, quorum and votes cast at the Meeting, and the Scrutineers shall

tabulate the votes in respect of all Voting Claims and Disputed Claims, if any, at

the Meeting;

the Monitor shall keep separate tabulations of votes cast at the Meeting in respect

of (a) Voting Claims and (b) Disputed Voting Claims, if applicable;

(k) following the vote at the Meeting, the Scrutineers shall tabulate the votes in the

Affected Creditors' Class and the Monitor shall determine whether the Plan has

been accepted by the Required Majority; and

(l) the result of any vote conducted at the Meeting of the Affected Creditors' Class

shall be binding upon all Creditors of that Affected Creditors' Class, whether or

not any such Creditor was present or voted at the Meeting.

52. As noted above, the Meeting Order, if approved, authorizes and directs the

Monitor to tabulate votes in respect of Voting Claims separately from votes in respect of

Disputed Voting Claims.

53. It is proposed that the Meeting be held at Osler, Hoskin & Harcourt LLP, Suite

6300, 1 First Canadian Place, Toronto, Ontario, on October 30,2015 at l0:00 a.m. The Applicant

believes that it is in the best interests of the company and its stakeholders to exit the CCAA as

promptly as possible, given the progress that has been made in these CCAA Proceedings, the

upcoming winter sales season and the positive impact this would have on consumer perception of

TravelBrands. Furthermore, the Applicant is seeking to hold the Meeting prior to its hscal year

û)

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end, being October 37,2015, given that the anticipated approval of the Plan by that time will

have a favourable impact on its audited financial statements for such fiscal year.

Approval of Stay Extension54. TravelBrands has continued to operate its business in the normal course with the

benefit of the stay of proceedings, which has provided stability to the business and alleviated the

liquidity crisis that TravelBrands faced at the time of filing the application for the Initial Order. I

believe that TravelBrands has acted and is continuing to act in good faith and with due diligence

in these CCAA proceedings.

55. TravelBrands seeks an extension of the Stay Period up to and including December

ll, 2015. This extension is necessary and appropriate in the circumstances to allow for the

continued operation of TravelBrands' business, the completion of the Claims Process and the

completion of the Meeting. TravelBrands believes that this course of action will best facilitate

the continuation of its business as a going concem, while providing certain recoveries to its

stakeholders.

56. The updated cash flow forecast shows that TravelBrands has sufficient liquidity to

fund operations during the requested extension of the Stay Period. A copy of the updated cash

flow forecast will be attached to the Third Report of the Monitor.

57. The Monitor has expressed its support for the extension of the Stay Period to

December 17,2015.

SWORN BEFORE ME at the City of

Toronto, in the Province of Ontario, on

September 21,2075.

pa.vto\ ØtV^n5f r,.,,f

200

THIS IS EXHIBIT 6(A'' REFERRED TO IN

THE AFFIDAVIT OF FRANCESCO DEMARINIS

SV/ORN BEFORE ME ON THIS 2IST DAY OF SEPTEMBER, 2OI5

A sioner for Taking Affrdavits.

Dl^r\ cl' f2.,s-l4^bt^,1-

201

Court File No. CV-15-10980-00CL

ONTARIOSUPERIOR COURT OF JUSTICE

(COMMERCIAL LrST)

THE HONOURABLE MR. V/EDNESD AY,THE2TTH

JUSTICE NEWBOULD DAY OF MAY, 2015

IN THE MATTER OF THE COMPANIES' CREDITORSARRANGEMENT lCT, R.S.C. 1985, c. C-36, AS AMENDED

TN THE MATTER OF A PLAN OF COMPROMISE OREMENT OF TRAVELBRANDS INC. (the

IJIìL f\Y.

AMENDED AND RESTATED INITIAL ORDER

THIS APPLICATION, made by the Applicant, pursuant to the Companies' Creditors

Arrangement Act, R.S.C. 1985, c. C-36, as amended (the "CCAA") was heard this day at 330

University Avenue, Toronto, Ont¿rio.

ON READING the affidavit of Francesco DeMarinis swom May 26, 2015 (the

"DeMarinis Affidavit") and the Exhibits thereto and the pre-filing report dated May 26,2015 of

KPMG Inc. ("KPMG") in its capacity as the Proposed Monitor of the Applicant (the "Pre-

Filing Report"), and on being advised that the secured creditors who are likely to be affected by

the charges created herein were given notice, and on hearing the submissions of counsel for the

Applicant and KPMG and on reading the consent of KPMG to act as the Monitor,

)

)

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SERVICE

l. THIS COURT ORDERS that the time for service of the Notice of Application and the

Application Record is hereby abridged and validated so that this Application is properly

returnable today and hereby dispenses with further service thereof.

APPLICATION

2. THIS COURT ORDERS AND DECLARES that the Applicant is a company to whichthe CCAA applies.

PLAN OF ARRANGEMENT

3' THIS COURT ORDERS that the Applicant shall have the authority to file and may,

subject to further order of this Court, file with this Court a plan of compromise or arrangement

(hereinafter referred to as the "Plan").

POSSESSION OF PROPERTY AND OPERATIONS

4. THIS COURT ORDERS that the Applicant shall remain in possession and control of itscurrent and future assets, undertakings and properties of every nature and kind whatsoever, and

wherever situate including all proceeds thereof (the "Property"). Subject to further Order of this

Court, the Applicant shall continue to carry on business in a manner consistent with the

preservation of its business (the "Business") and Property. The Applicant is authorized and

empowered to continue to retain and employ the employees, consultants, agents, experts,

accountants, counsel and such other persons (collectively "Assistants") currently retained or

employed by it, with liberty to retain such further Assistants as it deems reasonably necessary or

desirable in the ordinary course of business or for the carrying out of the terms of this Order.

5. THIS COURT ORDERS that the Applicant shall be entitled to continue to utilize the

central cash management system currently in place as described in the DeMarinis Aff,rdavit orreplace it with another substantially similar central cash management system (the ',Cash

Management System") and that any present or future bank providing the Cash Management

System shall not be under any obligation whatsoever to inquire into the propriety, validity orlegality of any transfer, payment, collection or other action taken under the Cash Management

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System, or as to the use or application by the Applicant of funds transferred, paid, collected or

otherwise dealt with in the Cash Management System, shall be entitled to provide the Cash

Management System without any liability in respect thereof to any Person (as hereinafter

defined) other than the Applicant, pursuant to the terms of the documentation applicable to the

Cash Management System, and shall be, in its capacity as provider of the Cash Management

System, an unaffected creditor under the Plan with regard to any claims or expenses it may suffer

or incur in connection with the provision of the Cash Management System.

6. THIS COURT ORDERS that the Applicant shall be entitled but not required to pay the

following expenses whether incuned prior to or after this Order:

(a) all outstanding and future wages, salaries, employee and pension benefits, vacation

pay and expenses payable on or after the date of this Order, in each case incurred in

the ordinary course of business and consistent with existing compensation policies

and arrangements;

(b) all outstanding or future commissions, loyalty points, override payments, marketing

frurds and amounts owing to travel agents in connection with the Company's sale of

travel products;

(c) the fees and disbursements of any Assistants retained or employed by the Applicant

in respect ofthese proceedings, at their standard rates and charges; and

(d) with the consent of the Monitor and Red Label Vacations Inc. ("Red Label"),

amounts owing for goods and services actually supplied to the Applicant prior to the

date ofthis order or to obtain the delivery ofservices contracted for prior to the date

of this order by suppliers of hotel, cruise-line, car rental and airline leisure travel

services that, in the opinion of the Applicant, are critical to the Business; and

(e) any other costs and expenses that are deemed necessary for the preservation of the

Property and/or Business by the Applicant with the consent of the Monitor and Red

Label.

7. THIS COURT ORDERS that, except as otherwise provided to the contrary herein, the

Applicant shall be entitled but not required to pay all reasonable expenses incuned by the

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Applicant in carrying on the Business in the ordinary course after this Order, and in carrying outthe provisions of this order, which expenses shall include, without limitation:

(a) all expenses and capital expenditures reasonably necessary for the preservation oftheProperty or the Business including, without limitation, payments on account ofinsurance (including directors and officers insurance), maintenance and security

services; and

(b) payment for goods or services actually supplied to the Applicant following the date ofthis Order

8. THIS COURT ORDERS that the Applicant shall remit, in accordance with legalrequirements, or pay:

(a) any statutory deemed trust amounts in favour of the Crown in right of Canada or ofany Province thereof or any other taxation authority which are required to be

deducted from employees' wages, including, without limitation, amounts in respect of(i) employment insurance, (ii) Canada Pension Plan, (iii) Quebec Pension Plan, and

(iv) income taxes;

(b) all goods and services or other applicable sales taxes (collectively, "Sales Taxes")

required to be remitted by the Applicant in connection with the sale of goods and

services by the Applicant, but only where such Sales Taxes are accrued or collected

after the date of this Order, or where such Sales Taxes were accrued or collected prior

to the date of this Order but not required to be remitted until on or after the date ofthis Order, and

(") any amount payable to the Crown in right of Canada or of any Province thereof or

any political subdivision thereof or any other taxation authority in respect ofmunicipal realty, municipal business or other tæ<es, assessments or levies of any

nature o¡ kind which are entitled at law to be paid in priority to claims of secured

creditors and which are attributable to or in respect of the carrying on of the Business

by the Applicant.

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9, THIS COURT ORDERS that until a real property lease is disclaimed or resiliated in

accordance with the CCAA, the Applicant shall pay all amounts constituting rent or payable as

rent under real property leases (including, for greater certainty, common area maintenance

charges, utilities and realty taxes and any other amounts payable to the landlord under the lease)

or as otherwise may be negotiated between the Applicant and the landlord from time to time

("Rent"), for the period commencing from and including the date of this Order, twice-monthly in

equal payments on the frrst and fifteenth day of each month, in advance (but not in arrears). On

the date of the flrrst of such payments, any Rent relating to the period commencing from and

including the date of this Order shall also be paid.

10. THIS COURT ORDERS thal, except as specifically permitted herein, the Applicant is

hereby directed, until further Order of this Court: (a) to make no payments of principal, interest

thereon or otherwise on account of amounts owing by the Applicant to any of its creditors as of

this date; (b) to grant no security interests, trust, liens, charges or encumbrances upon or in

respect of any of its Property; and (c) to not grant credit or incur liabilities except in the ordinary

course of the Business.

RESTRUCTURING

11. THIS COURT ORDERS that the Applicant shall, subject to such requirements as are

imposed by the CCAA and such covenants as may be contained in the Definitive Documents (as

hereinafter defined), have the right to:

(a) permanently or temporarily cease, downsize or shut down any of its business or

operations and to dispose of redundant or non-material assets not exceeding $100,000

in any one transaction or $500,000 in the aggregate;

(b) terminate the employment of such of its employees or temporarily lay off such of its

employees as it deems appropriate; and

(c) pwsue all avenues of refinancing of its Business or Property, in whole or part, subject

to prior approval of this Court being obtained before any material refinancing;

all of the foregoing to permit the Applicant to proceed with an orderly restructuring of the

Business (the "Restructuring").

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12. THIS COURT ORDERS that the Applicant shall provide each of the relevant landlords

with notice of the Applicant's intention to remove any fixtures from any leased premises at least

seven (7) days prior to the date of the intended removal. The relevant landlord shall be entitled

to have a tepresentative present in the leased premises to observe such removal and, if the

landlord disputes the Applicant's entitlement to remove any such fixture under the provisions ofthe lease, such fixture shall remain on the premises and shall be dealt with as agreed between any

applicable secured creditors, such landlord and the Applicant, or by further Order of this Court

upon application by the Applicant on at least two (2) days' notice to such landlord and any such

secured creditors. If the Applicant disclaims or resiliates the lease goveming such leased

premises in accordance with Section 32 of the CCAA, it shall not be required to pay Rent under

such lease pending resolution of any such dispute (other than Rent payable for the notice period

provided for in Section 32(5) of the CCAA), and the disclaimer or resiliation of the lease shall be

without prejudice to the Applicant's claim to the fixtures in dispute.

I 3 ' THIS COURT ORDERS that if a notice of disclaimer or resiliation is delivered pursuant

to Section 32 of the CCAA, then (a) during the notice period prior to the effective time of the

disclaimer or resiliation, the landlord may show the affected leased premises to prospective

tenants during normal business hours, on giving the Applicant and the Monitor 24 hours' prior

written notice, and (b) at the effective time of the disclaimer or resiliation, the relevant landlord

shall be entitled to take possession of any such leased premises without waiver of or prejudice to

any claims or rights such landlord may have against the Applicant in respect of such lease or

leased premises, provided that nothing herein shall relieve such landlord of its obligation to

mitigate any damages claimed in connection therewith.

NO PROCEEDINGS AGAINST THE APPLICANT OR THE PROPERTY

14. THIS COURT ORDERS that until and including Friday, June 26, 2015, or such later date

as this Court may order (the "Stay Period"), no proceeding or enforcement process in any court

or tribunal (each, a "Proceeding") shall be commenced or continued against or in respect of the

Applicant or the Monitor, or affecting the Business or the Property, except with the written

consent of the Applicant and the Monitor, or with leave of this Court, and any and all

Proceedings currently under way against or in respect of the Applicant or affecting the Business

or the Property are hereby stayed and suspended pending further Order of this Court.

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NO EXERCISE OF RIGHTS OR REMEDIES

15. THIS COURT ORDERS that during the Stay Period, all rights and remedies of any

individual, firm, cotporation, govemmental body or agency, or any other entities (all of the

foregoing, collectively being "Persons" and each being a "Person") against or in respect ofthe

Applicant or the Monitor, or affecting the Business or the Property, are hereby stayed and

suspended except with the written consent of the Applicant and the Monitor, or leave of this

Court, provided that nothing in this Order shall (i) empower the Applicant to carry on any

business which the Applicant is not lawfully entitled to carry on, (ii) affect such investigations,

actions, suits or proceedings by a regulatory body as are permitted by Section 11.1 of the CCAA,

(iii) prevent the filing ofany registration to preserve or perfect a security interest, or (iv) prevent

the registration of a claim for lien.

NO INTERFERENCE \ilITH RIGHTS

16. THIS COURT ORDERS that during the Stay Period, no Person shall discontinue. fail to

honour, alter, interfere with, repudiate, terminate or cease to perform any right, renewal right,

contract, agreement, licence or permit in favour of or held by the Applicant, except with the

written consent of the Applicant and the Monitor, or leave of this Court.

CONTINUATION OF' SERVICES

17. THIS COURT ORDERS that during the Stay Period, all Persons having oral or written

agreements with the Applicant or statutory or regulatory mandates for the supply of goods and/or

services, including without limitation all computer software, communication and other data

services, centralized banking services, payroll services, insurance, transportation services, utility

or other services to the Business or the Applicant, are hereby restrained until further Order of this

Court from discontinuing, altering, interfering with or terminating the supply of such goods or

services as may be required by the Applicant, and that the Applicant shall be entitled to the

continued use of its cunent premises, telephone numbers, facsimile numbers, intemet addresses

and domain names, provided in each case that the normal prices or charges for all such goods or

services received after the date of this Order are paid by the Applicant in accordance with normal

payment practices of the Applicant or such other practices as may be agreed upon by the supplier

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or service provider and each of the Applicant and the Monitor, or as may be ordered by this

Court.

18' THIS COURT ORDERS that during the Stay Period, Chase Paymentech Solutions("Chase"), Bank of Nova Scotia and JPMorgan Chase Bank (collectively the "processing

Parties") are hereby restrained until further Order of this Court from discontinuing, altering,

interfering with or terminating the supply of goods or services as may be required by the

Applicant under the Merchant Agreement between Red Label and the Processing parties, based

on the insolvency of the Company, provided in each case that the normal prices or charges for allsuch goods or services received after the date of this Order are paid by in accordance withnormal payment practices or such other practices as may be agreed upon by the processing

Parties and each of the Applicant, Red Label and the Monitor, or as may be ordered by this

Court.

NON.DEROGATION OF RIGHTS

19. THIS COURT ORDERS that, notwithstanding anything else in this Order, no Person

shall be prohibited from requiring immediate payment for goods, services, use of lease orlicensed property or other valuable consideration provided on or after the date of this Order, nor

shall any Person be under any obligation on or after the date of this Order to advance or re-

advance any monies or otherwise extend any credit to the Applicant. Nothing in this Order shall

derogate from the rights confened and obligations imposed by the ccAA.

PROCEEDINGS AGAINST DIRECTORS AND OFFICERS

20. THIS COURT ORDERS that during the Stay Period, and except as permitted bysubsection 11.03(2) of the CCAA, no Proceeding may be commenced or continued against any

of the formet, current or future directors or officers of the Applicant with respect to any claim

against the directors or offtcers that arose before the date hereof and that relates to any

obligations of the Applicant whereby the directors or officers are alleged under any law to be

liable in their capacity as directors or officers for the payment or performance of such

obligations, until a compromise or arïangement in respect of the Applicant, if one is filed, issanctioned by this Court or is refused by the creditors of the Applicant or this Court.

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DIRECTORS' AND OFF'ICERS' INDEMNIFICATION AND CHARGE

21. THIS COURT ORDERS that the Applicant shall indemnify its directors and officers

against obligations and liabilities that they may incur as directors or officers of the Applicant

after the commencement of the within proceedings, except to the extent that, with respect to any

offtcer or director, the obligation or liability was incurred as a result of the director's or officer's

gross negligence or wilful misconduct.

22. THIS COURT ORDERS that the directors and officers of the Applicant shall be entitled

to the benefit of and are hereby granted a charge (the "Directors' Charge") on the Property,

which charge shall not exceed an aggregate amount of $4.3 million, as security for the indemnity

provided in paragraph 21 of this Order. The Directors' Charge shall have the priority set out in

paragraphs 39 and 41 herein.

23. THIS COURT ORDERS that, notwithstanding any language in any applicable insurance

policy to the contraty, (a) no insurer shall be entitled to be subrogated to or claim the benefit ofthe Directors' Charge, and (b) the Applicant's directors and officers shall only be entitled to the

benefit of the Directors' Charge to the extent that they do not have coverage under any directors'

and officers' insutance policy, or to the extent that such coverage is insufficient to pay amounts

indemnified in accordance with paragraph 21 of this Order.

APPOINTMENT OF MONITOR

24. THIS COURT ORDERS that KPMG Inc. is hereby appointed pursuant to the CCAA as

the Monitor, an officer of this Court, to monitor the business and financial affairs of the

Applicant with the powers and obligations set out in the CCAA or set forth herein and that the

Applicant and its shareholders, officers, directors, and Assistants shall advise the Monitor of all

material steps taken by the Applicant pursuant to this Order, and shall co-operate fully with the

Monitor in the exercise of its powers and discharge of its obligations and provide the Monitor

with the assistance that is necessary to enable the Monitor to adequately carry out the Monitor's

functions.

25. THIS COURT ORDERS that the Monitor, in addition to its prescribed rights and

obligations under the CCAA, is hereby directed and empowered to:

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(a) monitor the Applicant's receipts and disbursements;

(b) report to this Court at such times and intervals as the Monitor may deem appropriate

with respect to matters relating to the Property, the Business, and such other matters

as may be relevant to the proceedings herein;

(c) assist the Applicant, to the extent required by the Applicant, in its dissemination, to

Red Label (being a lender to the Applicant pursuant to the Commitment Agreement,

as hereinafter defined), the Bank of Montreal and their respective counsel on a basis

to be agreed upon with each of Red Label and the Bank of Montreal of financial and

other information as agreed to between the Applicant and each of Red Label and the

Bank of Montreal which may be used in these proceedings including reporting on abasis to be agreed with each of Red Label and the Bank of Montreal;

(d) advise the Applicant in its preparation of the Applicant's cash flow statements and

reporting required by Red Label and the Bank of Montreal, which information shall

be reviewed with the Monitor and delivered to Red Label, the Bank of Montreal and

their respective counsel on a periodic basis agreed to by each of Red Label and the

Bank of Montreal;

(e) advise the Applicant in its development of the Plan and any amendments to the plan;

(Ð assist the Applicant, to the extent required by the Applicant, with the holding and

administering of creditors' or shareholders' meetings for voting on the Plan;

(g) have full and complete access to the Property, including the premises, books, records,

data, including data in electronic form, and other financial documents of the

Applicant, to the extent that is necessary to adequately assess the Applicant's

business and financial affairs or to perform its duties arising under this Order;

(h) be at liberty to engage independent legal counsel or such other persons as the Monitordeems necessary or advisable respecting the exercise of its powers and performance

of its obligations under this Order; and

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(Ð perfonn such other duties as are required by this Order or by this Court from time to

time.

26. THIS COURT ORDERS that the Monitor shall not take possession of the Property and

shall take no part whatsoever in the management or supervision of the management of the

Business and shall not, by fulf,rlling its obligations hereunder, be deemed to have taken or

maintained possession or control of the Business or Property, or any part thereof.

27. THIS COURT ORDERS that nothing herein contained shall require the Monitor to

occupy or to take control, care, charge, possession or management (separately and/or

collectively, "Possession") of any of the Property that might be environmentally contaminated,

might be a pollutant or a contaminant, or might cause or contribute to a spill, discharge, release

or deposit of a substance contrary to any federal, provincial or other law respecting the

protection, conservation, enhancement, remediation or rehabilitation of the environment or

relating to the disposal of waste or other contamination including, without limitation, the

Canadian Environmental Protection Act, the Ontario Environmental Protection Act,the Ontario

Water Resources Act, or the Ontario Occupational Health and Safety Act and regulations

thereunder (the "Environmental Legislation"), provided however that nothing herein shall

exempt the Monitor from any duty to report or make disclosure imposed by applicable

Environmental Legislation. The Monitor shall not, as a result of this Order or anything done in

pursuance of the Monitor's duties and powers under this Order, be deemed to be in Possession ofany of the Property within the meaning of any Environmental Legislation, unless it is actually in

possession.

28. THIS COURT ORDERS that that the Monitor shall provide any creditor of the Applicant

and Red Label with information provided by the Applicant in response to reasonable requests for

information made in writing by such creditor addressed to the Monitor. The Monitor shall not

have any responsibility or liability with respect to the information disseminated by it pursuant to

this paragraph. In the case of information that the Monitor has been advised by the Applicant is

confidential, the Monitor shall not provide such information to creditors unless otherwise

directed by this Çourt or on such terms as the Monitor and the Applicant may agree.

29. THIS COURT ORDERS that, in addition to the rights and protections afforded the

Monitor under the CCAA or as an officer of this Court, the Monitor shall incur no liability or

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obligation as a result of its appointment or the carrying out of the provisions of this Order, save

and except for any gross negligence or wilful misconduct on its part, Nothing in this Order shall

derogate from the protections afforded the Monitor by the CCAA or any applicable legislation.

30' THIS COURT ORDERS that the Monitor, counsel to the Monitor and counsel to the

Applicant shall be paid their reasonable fees and disbursements, in each case at their standard

rates and charges, by the Applicant as part of the costs of these proceedings. The Applicant ishereby authorized and directed to pay the accounts of the Monitor, counsel for the Monitor and

counsel for the Applicant on a weekly basis and, in addition, the Applicant is hereby authorized

to pay to the Monitor, counsel to the Monitor, and counsel to the Applicant, retainers in the

amounts of $25,000, $25,000 and $50,000, respectively, to be held by them as security forpayment of their respective fees and disbursements outstanding from time to time.

31. THIS COURT ORDERS that the Monitor and its legal counsel shall pass their accounts

from time to time, and for this purpose the accounts of the Monitor and its legal counsel are

hereby referred to a judge of the Commercial List of the Ontario Superior Court of Justice.

32. THIS COURT ORDERS that the Monitor, counsel to the Monitor, if any, and the

Applicant's counsel shall be entitled tp the benefit of and are hereby granted a charge (the

"Administration Charge") on the Property, which charge shall not exceed an aggregate amount

of Sl million, as security for their professional fees and disbursements incurred at the standard

rates and charges of the Monitor and such counsel, both before and after the making of this Order

in respect of these proceedings. The Administration Charge shall have the priority set out inparagraphs 39 and41 hereof.

INTERCOMPANY F'INANCING

33, THIS COURT ORDERS that the Applicant is hereby authorized and empowered to

obtain and borrow under a credit facility from Red Label in order to finance the Applicant's

working capital requirements and other general corporate pu{poses and capital expenditures,

provided that borrowings under such credit facility shall not exceed $4 million unless permitted

by further Order of this Court.

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34. THIS COURT ORDERS THAT such credit facility shall be on the terms and subject to

the conditions set forth in the Commitment Agreement between the Applicant and Red Label

dated as of May 26,2015 (the "Commitment Agreement") filed.

35. THIS COURT ORDERS that the Applicant is hereby authorized and empowered to

execute and deliver such credit agreements, mortgages, charges, hypothecs and security

documents, guarantees and other definitive documents (collectively, the "Definitive

I)ocuments"), as are contemplated by the Commitment Agreement or as may be reasonably

required by Red Label pursuant to the terms thereof, and the Applicant is hereby authorized and

directed to pay and perform all of its indebtedness, fees, liabilities and obligations to Red Label

under and pursuant to the Commitment Agreement and the Definitive Documents as and when

the same become due and are to be performed, notwithstanding any other provision of this Order.

36. THIS COURT ORDERS that Red Label shall be entitled to the benefit of and is hereby

granted a charge (the "Intercompany Charge") on the Property, which Intercompany Charge

shall not secure an obligation that exists before this Order is made. The Intercompany Charge

shall have the priority set out in paragraphs 39 and 41 hereof.

37. THIS COURT ORDERS that, notwithstanding any other provision of this Order:

(a) Red Label may take such steps from time to time as it may deem necessary or

appropriate to file, register, record or perfect the Intercompany Charge or any of the

Def,rnitive Documents;

(b) Red Label, upon 3 calendar days' notice to the Applicant and the Monitor, may

exercise any and all of its rights and remedies against the Applicant or the Property

under or pursuant to the Commitment Agreement, Definitive Documents and the

Intercompany Charge, including without limitation, to cease making advances to the

Applicant and set off and/or consolidate any amounts owing by Red Label to the

Applicant against the obligations of the Applicant to Red Label under the

Commitment Agreement, the Def,rnitive Documents or the Intercompany Charge, to

make demand, accelerate payment and give other notices, or to apply to this Court for

the appointment of a receiver, receiver and manager or interim receiver, or for a

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bankruptcy order against the Applicant and for the appointment of a trustee inbankruptcy of the Applicant; and

(c) the foregoing rights and remedies of Red Label shall be enforceable against anytrustee in bankruptcy, interim receiver, receiver or receiver and manager of theApplicant or the Property.

38' THIS COURT ORDERS AND DECLARES that Red Label shall be treated as unaffectedin any plan of arrangement or compromise filed by the Applicant under the CCAA, or anyproposal filed by the Applicant under the Banl<ruptcy and Insolvency Act ofCanada (the ..BIA,),

with respect to any advances made under the Definitive Documents.

VALIDITY AND PRIORITY OF'CHARGES CREATED BY THIS ORDER

39. THIS COURT ORDERS that the priorities of the Administration Charge, the Directors'charge and the Intercompany charge, as among them, shall be as follows:

First - Administration Charge (to the maximum amount of $1 million);

Second - Directors' Charge (to the maximum amount of $4.3 million); and

Third - Intercompany Charge (to the maximum amount of $4 million).

40' THIS COURT ORDERS that the filing, registration or perfection of the Directors,Charge, the Administ¡ation Charge or the Intercompany Charge (collectively, the ..Charges,,)

shall not be required, and that the Charges shall be valid and enforceable for all purposes,

including as against any right, title or interest filed, registered, recorded or perfected subsequent

to the Charges coming into existence, notwithstanding any such failure to file, register, record orperfect.

41. THIS COURT ORDERS that each of the Directors'Charge, the Administration Charge

and the Intercompany Charge (all as constituted and defrned herein) shall constitute a charge onthe Property and such Charges shall rank in priority to all other security interests, trusts, liens,charges and encumbrances, claims of secured creditors, statutory or otherwise (collectively,"Encumbrances") in favour of any Person other than any validly perfected security interestgranted in favour of the Bank of Montreal and Element Fleet Management Inc. and set out in

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Schedule "4" hereto. For gleater certainty. the Charges will not applv to anl¡ funds held in trust

ln anv of the Annlì 's bank accounts or bv Chase for the nlnîìose refundins deoosits or

prepayments by the Applicant's customers in connection with travel which such customers have

that are released from trust.

42. THIS COURT ORDERS that except as otherwise expressly provided for herein, or as

may be approved by this Court, the Applicant shall not grant any Encumbrances over any

Property that rank in priority to, or pari passu with, any of the Directors' Charge, the

Administration Charge or the Intercompany Charge, unless the Applicant also obtains the prior

written consent of the Monitor, Red Label and the beneficiaries of the Directors' Charge and the

Administration Charge, or further Order of this Court.

43. THIS COURT ORDERS that the Directors' Charge, the Administration Charge, the

Commitment Agreement, the Definitive Documents and the Intercompany Charge shall not be

rendered invalid or unenforceable and the rights and remedies of the chargees entitled to the

benefit of the Charges (collectively, the "Chargees") and/or Red Label thereunder shall not

otherwise be limited or impaired in any way by (a) the pendency of these proceedings and the

declarations of insolvency made herein; (b) any application(s) for bankruptcy order(s) issued

pursuant to the BIA, or any bankruptcy order made pursuant to such applications; (c) the filing ofany assignments for the general benef,rt of creditors made pursuant to the BIA; (d) the provisions

of any federal or provincial statutes; or (e) any negative covenants, prohibitions or other similar

provisions with respect to borrowings, incurring debt or the creation of Encumbrances, contained

in any existing loan documents, lease, sublease, offer to lease or other agreement (collectively,

an "Agreement") which binds the Applicant, and notwithstanding any provision to the contrary

in any Agreement:

(a) neither the creation of the Charges nor the execution, delivery, perfection, registration

or performance of the Commitment Agreement or the Definitive Documents shall

create or be deemed to constitute a breach by the Applicant of any Agreement to

which it is a party;

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(b) none of the Chargees shall have any liability to any Person whatsoever as a result ofany breach of any Agreement caused by or resulting from the Applicant entering into

the Commitment Agreement, the creation of the Charges, or the execution, delivery

or performance of the Definitive Documents; and

(c) the payments made by the Applicant pursuant to this Order, the Commitment

Agreement or the Definitive Documents, and the granting of the Charges, do not and

will not constitute preferences, fraudulent conveyances, transfers at undervalue,

oppressive conduct, or other challengeable or voidable transactions under any

applicable law.

44. THIS COURT ORDERS that any Charge created by this Order over leases of real

property in Canada shall only be a Charge in the Applicant's interest in such real property leases.

SERVICE AND NOTICE

45. THIS COURT ORDERS that the Monitor shall (i) without delay, publish in the Globe

and Mail a notice containing the information prescribed under the CCAA, (ii) within five days

after the date of this Order, (A) make this Order publicly available in the manner prescribed

under the CCAA, (B) send, in the prescribed manner, a notice to every known creditor who has a

claim against the Applicant of more than $1000, and (C) prepare a list showing the names and

addresses of those creditors and the estimated amounts of those claims, and make it publicly

available in the prescribed manner, all in accordance with Section 23(l)(a) of the CCAA and the

regulations made thereunder.

46. THIS COURT ORDERS that the E-Service Protocol of the Commercial List (the

"Protocol") is approved and adopted by reference herein and, in this proceeding, the service ofdocuments made in accordance with the Protocol (which can be found on the Commercial Listwebsite at

protocol/) shall be valid and effective service. Subject to Rule 17.05 this Order shall constitute

an order for substituted service pursuant to Rule 16.04 of the Rules of Civil Procedure. Subject to

Rule 3.01(d) of the Rules of Civil Procedure and paragraph 21 of the Protocol, service ofdocuments in accordance with the Protocol will be effective on transmission. This Court furtherorders that a Case Website shall be established in accordance with the protocol with the

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following URL: http://www.kpmg.com/Calen/services/Advisory/TransactionRestructuring/

CreditorlinkSites/TravelBrands/Pases/default. aspx.

47. THIS COURT ORDERS that if the service or distribution of documents in accordance

with the Protocol is not practicable, the Applicant and the Monitor are at liberty to serve or

distribute this Order, any other materials and orders in these proceedings, my notices or other

correspondence, by forwarding true copies thereof by prepaid ordinary mail, courier, personal

delivery or facsimile transmission to the Applicant's creditors or other interested parties at their

respective addresses as last shown on the records of the Applicant and that any such service or

distribution by courier, personal delivery or facsimile transmission shall be deemed to be

received on the next business day following the date of forwarding thereof, or if sent by ordinary

mail, on the third business day after mailing.

GENERAL

48. THIS COURT ORDERS that the Applicant or the Monitor may from time to time apply

to this Court for advice and directions in the discharge of its powers and duties hereunder.

49. THIS COURT ORDERS that nothing in this Order shall prevent the Monitor from acting

as an interim receiver, a receiver, a receiver and manager, or a trustee in bankruptcy of the

Applicant, the Business or the Property.

50. 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, to give

effect to this Order and to assist the Applicant, the Monitor and their respective agents in

carrying out the terms of this Order. All courts, tribunals, regulatory and administrative bodies

are hereby respectfully requested to make such orders and to provide such assistance to the

Applicant and to the Monitor, as an officer of this Court, as may be necessary or desirable to give

effect to this Order, to grant representative status to the Monitor in any foreign proceeding, or to

assist the Applicant and the Monitor and their respective agents in carrying out the terms of this

Order.

5l . THIS COURT ORDERS that each of the Applicant and the Monitor be at liberty and is

hereby authorized and empowered to apply to any court, tribunal, regulatory or administrative

body, wherever located, for the recognition of this Order and for assistance in carrying out the

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terms of this Order, and that the Monitor is authorized and empowered to act as a representative

in respect of the within proceedings for the pulpose of having these proceedings recognized in ajurisdiction outside Canada.

52. THIS COURT ORDERS that any interested party (including the Applicant and the

Monitor) may apply to this Court to vary or amend this Order on not less than seven (7) days,

notice to any other party or parties likely to be affected by the order sought ot upon such other

notice, if any, as this Court may order.

53. THIS COURT ORDERS that this Order and all of its provisions are effective as of12:01 a.m. Eastern standard/Daylight Time on the date of this order.

f-

JUN 2 L ?015

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SCHEDULE ú'A''

SecuredParty

FilingNumber CollateralDescription

EquipmentSerial No. (ifapplicable)

Jurisdiction

ElementFleetManagementInc.

649304379 -2008 101619501 53 17545(10 years)

Equipment, MotorVehicle; GeneralCollateralDescription: Anyvehicles specifiedand any othervehicles ofwhatever year,make or modelincluding afteracquired vehiclesand including anytrailers and/orequipment, andincluding proceedsthereo{ providedto the debtorpursuant to a motorvehicle leaseagreement madebetween theparties. No otherassets included.

N/A Ontario

Bank ofMontreal

6663067t1 -2010t202131315322720(5 years)

Inventory,Equipment,Accounts, Other,Motor Vehicle

N/A Ontario

Bank ofMontreal

686407545 -20130426145215909482(7 years)

Inventory,Equipment,Accounts, Other,Motor Vehicle

N/A Ontario

Bank ofMontreal

893190F (registeredDecember 2,2010;5years)

All present andafter acquiredpersonal propertyofthe debtor and,without limitation,all fixtures, crops,and licences

N/A BritishColumbia

220

-20 -

Bank ofMontreal

3 I 7103H (registeredApril29,2013;7 years)

All present andafter acquiredpersonal property

N/A BritishColumbia

Bank ofMontreal

13-0336151 -0002(registered Apnl29,2013;10 years)

Nature of registration:Movable hypothecwithout delivery

All movableproperty, presentand future,corporeal andincorporeal, ofevery nature andkind andwheresoeverlocated.

N/A Quebec

ElementFleetManagementInc. (lessor)

08-0601273-0001(registered October 20,2008; expiring July 26,2018)

Nature of registration:Global registrationpertaining to rightsresulting from a lease(master agreement)

The universaiity ofall vehicles,present and future,provided to thelessee pursuant tothe motor vehiclelease agreementbetween the lessorand the lessee,including allreplacements,supplements oramendmentsthereto, togetherwith anyreplacement orsupplementaryvehicle provided tothe lessee inaccordance withthe terms of thesaid motor vehiclelease agreement,and including allaccessories andequipment attachedthereto from timeto time.

N/A Quebec

221

!

IN THE MATTER OF COMPANIES' CREDITORS ARRANGEMENT ACT' R.S.C. 1985, c. C-36, AS AMENDEDAND IN TIM MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF TRAVELBRANDS INC.

ApplicantCourt File No. CV-15-10980-00CL

ONTARIOSUPERIOR COURT OF JUSTICE

COMMERCIAL LIST

PROCEEDING COMMENCED ATTORONTO

AMENDED A¡ID RESTATED INITIAL ORDER

osLER, HOSKIN & IIARCOURT LLPBarristers & SolicitorsP. O. Box 501 First Canadian PlaceToronto ON M5X 188

John A. MacDonald (LSUC# 25884R)Tel: 416.862.5672

Marc Wasserman (LSUC#44066M)Tel: 416.862.4908

Michael Delellis (LSUC# 48038U)Tel: 416.862.5997Fax: 416.862.6666

Lawyers for the ApplicantMatterNo. 1163346

222

THIS IS EXHIBIT '68'' REFERRED TO IN

THE AFFIDAVIT OF FRANCESCO DEMARINIS

SV/ORN BEFORE ME ON THIS 21ST DAY OF SEPTEMBER, 2015

A ss1oner for Taking Affidavits.

Þ\^rc { %wrnttfJ

223

ONTARIO

SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

Court File No. CV-ls-109r?,00",

FRIDAY, THE I4TH

DAY OF AUGUST,2Ol5

)

)

)

THE HONOURABLE MR.

JUSTICE NEWBOULD

t,rTHE MATTER OF THE COMPANIES' CREDITORS

lcf, R.S.C. 1985, c. C-36, AS AMENDED

THE MATTER OF A PLAN OF COMPROMISE OROF TRAVELBRANDS INC. (the

t")

É-

STAY EXTENSION ORDER

THIS MOTION, made by the Applicant, pursuant to the Companies' Creditors

Arrangement Act,R.S.C. 1985, c. C-36, as amended (the "CCAA") for an Order, inter alia:

(a) extending the Stay Period (as defined in paragraph 14 of the Initial Order dated

}y'ray 27,2015) until and including September 30, 2015; and

(b) approving the first report of KPMG Inc., in its capacity as the Court-appointed

monitor of the Applicant (in such capacity, the "Monitor") dated Jwrc 23,2015

(the "First Report") and the activities of the Monitor described therein.

ON READING the affidavit of Francesco DeMarinis sworn August 10, 2015 and the

Exhibits thereto and the second report of the Monitor dated August 13, 2015, and on hearing the

submissions of counsel for the Applicant, the Monitor and such other cormsel as were present,

and on being advised that the Service List was served with the Motion Record herein;

224

a-¿-

SERVICE

1' THIS COURT ORDERS that the time for service of the Notice of Motion and the Motion

Record is hereby abridged and validated so that this Motion is properly returnable today and

hereby dispenses with further service thereof.

EXTENSION OF TIIE STAY PERIOD

2' THIS COURT ORDERS that the Stay Period is hereby extended until and including

September 30,2015,

MONITOR'S ACTIVITIES

3' THIS COURT ORDERS that the First Report and the activities of the Monitor described

therein are hereby approved.

GE¡¡:ERAL

4. 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, to give

effect to this Order and to assist the Applicant, the Monitor and their respective agents incarrying out the terms of this Order. All courts, tribunals, regulatory and administative bodies

are hereby respectfully requested to make such orders and to provide such assistance to the

Applicant and to the Monitor, as an officer of this Court, as may be necessary or desirable to give

effect to this Order, to grant representative status to the Monitor in any foreign proceeding, or to

assist the Applicant and the Monitor and their respective agents in canying out the terms of this

Order.

2\>",1E;'.iTEfiËD Aï i iN"SCfitTÀ TO,tìOiN,irOoû.,1 / tsOQi( {rlo:I.Ê / DANS LE REG¡STBE NO.:

n)W

AUG 1 r- ZOll

225

. IN THE MATTER OF COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN TITE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF TRAVELBRANDS INC.Applicant

Court File No. CV-15-10980-00CL

ONTARIOSUPERIOR COURT OF JUSTICE

(COMMERCTAL LrST)

PROCEEDING COMMENCED ATTORONTO

STAY EXTENSION ORDER

OSLE& IIOSKIN & IIARCOURT LLPBarristers & SolicitorsP. O. Box 50I First Canadian PlaceToronto ON M5X 188

John A. MacDonald (LSUC#25884R)Tel: 416.862.5672

Ma¡c'WasseÍnan (LSUC#44066M)Tel: 416.862-4908

Michael De Lellis (LSUC# 48038U)Tel: 416.862.5997Fax: 416.862.6666

Lawyers for the ApplicantMatterNo. 1163346

226