EX-10.4

EX-10.4 4 d597838dex104.htm EX-10.4 EX-10.4

EXECUTION VERSION

Exhibit 10.4

GATEWAY CASINOS & ENTERTAINMENT LIMITED

“VENDOR”

– and –

7588674 CANADA INC.

“VENDOR NOMINEE”

– and –

MESIROW REALTY SALE-LEASEBACK, INC.

“PURCHASER”

AGREEMENT OF PURCHASE AND SALE

TABLE OF CONTENTS


ARTICLE 1 INTERPRETATION		2

1.1	Definitions	2

ARTICLE 2 AGREEMENT OF PURCHASE AND SALE		12

2.1	Agreement of Purchase and Sale/Allocation of Purchase Price	12
2.2	Grand Villa Easement	13
2.3	Initial Deliveries by Vendor	13
2.4	Access to Property	13
2.5	Purchaser’s Conditions	15
2.6	Confidentiality	16
2.7	Subsequent Deliveries	16
2.8	Non-Refundable Sum	17

ARTICLE 3 PURCHASE PRICE		18

3.1	Deposit	18
3.2	Method of Payment of Purchase Price	19
3.3	No Adjustments	19

ARTICLE 4 CONDITIONS		20

4.1	Conditions for Vendor	20
4.2	Conditions for Purchaser	21
4.3	Non-Satisfaction of Conditions	22
4.4	Efforts to Satisfy Conditions	23
4.5	Competition Act	24

ARTICLE 5 CLOSING DOCUMENTS		25

5.1	Closing Arrangements	25
5.2	Vendor’s Closing Documents	25
5.3	Purchaser’s Closing Documents	29
5.4	Forms of Closing Documents	30
5.5	Registration and Other Costs	30
5.6	Transfer Closing Procedure	31

ARTICLE 6 REPRESENTATIONS, WARRANTIES AND COVENANTS		32

6.1	Vendor’s Representations	32
6.2	Purchaser’s Representations	36
6.3	Survival of Representations and Covenants	38
6.4	“As-Is” Purchase	40
6.5	Third Party Claims	41
6.6	Letters of Reliance	42
6.7	Estoppel Certificates and Subordination Agreements.	42

ARTICLE 7 OPERATION UNTIL CLOSING		43

7.1	Operation Before Closing	43
7.2	Damage or Expropriation Before Closing	43

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7.3	Leasing and Contracts	43

ARTICLE 8 GENERAL		44

8.1	Interpretation	44
8.2	Schedules	44
8.3	Gender and Number	45
8.4	Captions	45
8.5	Obligations as Covenants	45
8.6	Applicable Law	45
8.7	Currency	45
8.8	Invalidity	46
8.9	Amendment of Agreement	46
8.10	Time	46
8.11	Further Assurances	46
8.12	Entire Agreement	46
8.13	Waiver	47
8.14	Solicitors as Agents and Tender	47
8.15	Survival	47
8.16	Successors and Assigns	47
8.17	Assignment	47
8.18	Real Estate Commissions	48
8.19	Notice	48
8.20	Effect of Termination of Agreement	50
8.21	No Registration of Agreement	50
8.22	Counterparts	50
8.23	Site Profile Waiver	50
8.24	Fees, Costs and Expenses	50
8.25	Vendor’s Obligations Limited	50

Schedule “A” Legal Descriptions

Schedule “B” GST Declaration and indemnity

Schedule “C” Waiver Notice

Schedule “D” Permitted Encumbrances

Schedule “E” Specific Excluded Property

Schedule “F” Purchase Price Allocation and Initial Master Lease Rent Allocation

Schedule “G” Data Room Index

Schedule “H” Off Title Search Results

Schedule “I” Master Lease Form

Schedule “J” Existing Leases

Schedule “K” Master Lease Beneficial Covenants Form

Schedule “L” Landlord BCLC Agreement Form

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THIS AGREEMENT OF PURCHASE AND SALE made as of December 15, 2017,

BETWEEN:

GATEWAY CASINOS & ENTERTAINMENT LIMITED

(hereinafter referred to as the “Vendor”)

OF THE FIRST PART,

- and -

7588674 CANADA INC.

(hereinafter referred to as the “Vendor Nominee”)

OF THE SECOND PART,

- and -

MESIROW REALTY SALE-LEASEBACK, INC.

(hereinafter referred to as the “Purchaser”)

OF THE THIRD PART.

WHEREAS:

A.	The Vendor is the beneficial owner of the Subject Assets;

B.	The Vendor Nominee is the registered owner of the Cascades Strata Property, the Grand Villa Property and the Starlight Property;

C.	The Cascades Freehold Nominee is the registered owner of the Cascades Freehold Property;

Each of the Cascades Strata Property, the Cascades Freehold Property, the Grand Villa Property and the Starlight Property are subject to a lease between the Vendor Nominee (and, with respect to the Cascades Strata Property and the Cascades Freehold Property, the Cascades Freehold Nominee), as landlord, and the applicable Master Lease Tenant, as tenant (the “Nominee Ground Leases”), a notice of which has been registered in the applicable LTO; and

E.	The Vendor and Vendor Nominee have agreed to sell, transfer, assign, set over and convey the Subject Assets to the Purchaser and the Purchaser has agreed to purchase, acquire and assume the Subject Assets from the Vendor and Vendor Nominee on the terms and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement and the sum of Ten Dollars ($10.00) paid by each of the Vendor, the Vendor Nominee and the Purchaser to each other and for good and other valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto covenant and agree as follows:

ARTICLE 1

INTERPRETATION

1.1

Definitions

The terms defined in this Section 1.1 shall have, for all purposes of this Agreement, the following meanings, unless the context expressly or by necessary implication otherwise requires:

“Agreement” means this agreement of purchase and sale and the schedules hereto, as amended from time to time in writing.

“Anti-Corruption Laws” has the meaning ascribed thereto in Subsection 6.2(e)(ii).

“Applicable Laws” means all federal, provincial, municipal and local statutes, laws, by-laws, regulations, ordinances and orders, directives and decisions of Governmental Authorities having jurisdiction (in each case having the force of law), including Gaming Laws.

“ARC Request” has the meaning ascribed thereto in Subsection 4.5(b).

“Article”, “Section”, “Subsection” and “Paragraph” mean and refer to the specified article, section, subsection and paragraph of this Agreement.

“Balance” has the meaning ascribed thereto in Subsection 3.2(b).

“BCLC” means British Columbia Lottery Corporation, and its successors and assigns.

“BCLS” or “British Columbia Land Surveyor”, is a professional land surveyor licensed to practice within the Province of British Columbia and is governed by the Association of British Columbia Land Surveyors.

“Buildings” means, collectively, all buildings, building systems, structures and fixed improvements located on, in or under the applicable Lands and all fixed equipment, improvements and fixtures owned by the Vendor and contained in or on such buildings, structures and fixed improvements, but excluding Excluded Tenant Property and Excluded Master Tenant Property.

“Business” means, collectively, the business(es) carried on by the Vendor and its affiliates and by its Tenants at the Property, including without limitation, their operations and businesses in respect of a Gaming Facility, hospitality, conference centers, as a landlord under Leases, and all related and ancillary businesses and operations.

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“Business Day” means any day other than a Saturday, Sunday or a statutory holiday in Toronto, Ontario or Vancouver, British Columbia.

“Cascades Freehold Nominee” means 1144801 B.C. LTD., the registered title holder of the Cascades Lands Freehold Lot.

“Cascades Freehold Property” means the Cascades Lands Freehold Lot and the Buildings located thereon.

“Cascades Lands Freehold Lot” means the lands and premises known municipally as 20389 Fraser Highway, Langley, British Columbia and as more particularly described in Part C-3 of Schedule “A” hereto, and all easements and other rights appurtenant thereto.

“Cascades Lands Strata Lots” means the lands and premises known municipally as #1-20393 and #2-20393 Fraser Highway, Langley, British Columbia each as more particularly described in Parts C-1 and C-2 of Schedule “A” hereto, and all easements and other rights appurtenant thereto.

“Cascades Lands Strata Lots Landlord’s Assignment” means the assignment by the Purchaser, as landlord under the Cascades Master Lease and owner of the Cascades Lands Strata Lots, to the Master Lease Tenant under the Cascades Master Lease of all of the Purchaser’s powers and duties under the Strata Property Act (British Columbia), applicable regulations, bylaws and rules in connection with the Cascades Lands Strata Lots, excluding the Purchaser’s responsibility under section 131 of the Strata Property Act (British Columbia) for fines or the costs of remedying a contravention of the bylaws or rules, but incorporating any limitations or other specifications provided for under Article 16 of the Cascades Master Lease as to be settled in accordance with Article 4.

“Cascades Lands Strata Lots Notice of Landlord’s Assignment” means the written notice to the applicable strata corporation of the Cascades Lands Strata Lots Landlord’s Assignment.

“Cascades Master Lease” means an amendment and restatement of the Nominee Ground Lease of the Cascades Strata Property and the Cascades Freehold Property in the form attached hereto as Schedule “I”, subject to settlement of the forms of Landlord Lender Agreement, Subordination/Non-Disturbance Agreement, Sublease Acknowledgment and Article 16 thereof as provided for in Article 4.

“Cascades Master Lease Beneficial Covenant” means an agreement by the Vendor in favour of the Purchaser, in its capacity as landlord under the Cascades Master Lease in the form attached hereto as Schedule “K”.

“Cascades Nominee Agreement” means the nominee agreement to be entered into on Closing between the Vendor and the Master Lease Tenant, pursuant to which the Master Lease Tenant agrees to hold all rights and benefits pursuant to the Cascades Master Lease as nominee and bare trustee for the Vendor, as the beneficial owner thereof.

“Cascades Strata Property” means the Cascades Lands Strata Lots and all Buildings thereon.

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“Chattels” means the equipment, machinery, inventory, supplies and other chattels or moveables (including computer equipment) which are owned by the Vendor or leased by the Vendor, whether in connection with the Subject Assets or the Business.

“Claiming Party” has the meaning ascribed thereto in Subsection 6.5(a).

“Claims” means any claims, suits, proceedings, liabilities, obligations, losses, damages, penalties, judgments, costs, expenses, fines, disbursements, legal fees, interest, demands and actions of any nature or any kind whatsoever.

“Closing” means the closing of the Transaction contemplated by this Agreement, including without limitation the payment of the Purchase Price and the delivery of the Closing Documents.

“Closing Date” means, subject to the provisions of this Agreement, January 31, 2018, provided that the Purchaser shall have a one-time election to extend the Closing Date to February 14, 2018 by delivering written notice of such election to the Vendor prior to January 31, 2018.

“Closing Documents” means the agreements, instruments and other deliveries to be delivered to the Purchaser or the Purchaser’s Solicitors pursuant to Section 5.2 and the agreements, instruments and other deliveries to be delivered to the Vendor or the Vendor’s Solicitors pursuant to Section 5.3.

“Comfort Letter” has the meaning ascribed thereto in Subsection 4.2(k).

“Commissioner” means the Commissioner of Competition appointed under the Competition Act (Canada).

“Competition Act Approval” means:

(a)

the issuance to the Purchaser of an advance ruling certificate by the Commissioner of Competition under Subsection 102(1) of the Competition Act (Canada); or

(b)

both of (i) the waiting period, including any extension thereof, under Section 123 of the Competition Act (Canada) shall have expired or been terminated or the obligation to provide a pre-merger notification in accordance with Part IX of the Competition Act (Canada) shall have been waived in accordance with paragraph 113(c) of the Competition Act (Canada), and (ii) the Purchaser shall have received a No-Action Letter and such letter shall not have been rescinded.

“Confidential Information Memorandum” means the confidential information memorandum prepared by the Vendor’s Real Estate Broker and provided by or on behalf of the Vendor to the Purchaser relating to the Subject Assets.

“Confidentiality Agreement” means the agreement between the Vendor and the Purchaser dated August 23, 2017, relating to confidentiality and other related matters, as amended or supplemented in writing.

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“Contracts” means, collectively:

(a)

any and all contracts and agreements (other than Encumbrances which will be discharged by the Vendor on or before Closing and Leases), including all policies of insurance, property management contracts, asset management agreements and any contracts and agreements relating to the Property to which the Vendor or the previous owners are a party or by which the Vendor or the Property is bound in respect of the Business or the maintenance, operation, leasing, cleaning, security, fire protection or servicing of the Property.

(b)

the Warranties relating to the Excluded Assets; and

(c)

all contracts and agreements relating to any Chattels leased by the Vendor and located on the Property;

in each case as amended, supplemented, renewed or otherwise varied.

“Corporate Certificate re: Purchaser” means a corporate certificate by the Purchaser, repeating on Closing the representations and warranties of the Purchaser set out herein, in the form to be agreed upon by the Vendor and the Purchaser each acting reasonably, provided that if a representation or warranty is herein stated to be made as of a specified date or time, the certificate shall be subject to the same limitation.

“Corporate Certificate re: Vendor” means a corporate certificate by the Vendor, repeating on Closing the representations and warranties of the Vendor set out herein, in the form to be agreed upon by the Vendor and the Purchaser each acting reasonably, provided that if a representation or warranty is herein stated to be made as of a specified date or time, the certificate shall be subject to the same limitation.

“Data Room” means the electronic data room(s) set up by the Vendor or the Vendor’s Real Estate Broker.

“Deposit” has the meaning ascribed thereto in Subsection 3.1(b).

“Designee” has the meaning ascribed thereto in Section 8.17.

“Disclosed to the Purchaser” means information which has been or is made available for the Purchaser’s or the Purchaser’s Solicitors’ review as follows: (a) the information contained in, or supplied in connection with, the Confidential Information Memorandum, (b) all information in the Data Room from time to time and any documentation contained on any CD-Rom, DVD, flash drive or other computer disk(s) delivered to Purchaser as provided herein, (c) all information as is provided to the Purchaser or the Purchaser’s Solicitors electronically, (d) all information reviewed by the Purchaser or the Purchaser’s Solicitors at the offices of the Vendor or at a Property, and (e) all information which is sent to the Purchaser or the Purchaser’s Solicitors as provided herein, in each case, not later than 5:00 p.m. central time on the day which is two (2) Business Days prior to the Purchaser’s Condition Date.

“Due Diligence” has the meaning ascribed thereto in Subsection 2.5(a).

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“Easement” has the meaning ascribed thereto in Section 2.2.

“Encumbrances” means, in the case of any of the Subject Assets, all registered or unregistered mortgages, pledges, charges, liens, debentures, trust deeds, assignments by way of security, security interests, conditional sales contracts or other title retention agreements or similar interests or instruments charging, or creating a security interest in, such Subject Assets or any part thereof or interest therein, and any agreements, leases, options, easements, rights of way, restrictions, executions or other encumbrances (including notices or other registrations in respect of any of the foregoing) affecting title to the Subject Assets or any part thereof or interest therein.

“Environmental Laws” means all Applicable Laws, including any obligations or requirements arising under common law, in each case, relating to the protection of the environment, human health and safety or the manufacture, processing, distribution, use, treatment, storage, presence, disposal, packaging, labeling, recycling, transport, handling, containment, clean-up or other remediation of or corrective action in respect of any Hazardous Substance.

“Excluded Assets” means the Excluded Master Tenant Property and the Excluded Tenant Property.

“Excluded Master Tenant Property” means:

(a)

the Business;

(b)

all Chattels;

(c)

all Leases;

(d)

insurance policies related to the Subject Assets and to the Excluded Assets and all proceeds thereof;

(e)

all bank accounts and marketable securities with respect to the Business;

(f)

all Contracts;

(g)

all Intellectual Property;

(h)

the property particularly listed in Schedule “E” hereto; and

(i)

all leasehold improvements, trade fixtures and equipment, systems and services owned or leased by the Master Lease Tenant and removable by the Master Lease Tenant pursuant to the terms of any of the Grand Villa Master Lease, the Starlight Master Lease or the Cascades Master Lease.

“Excluded Tenant Property” means all improvements, fixtures and equipment, systems and services owned or leased by any Tenant and which is removable by such Tenant pursuant to the terms of its Lease.

“Execution Date” means the date of execution of this Agreement by all parties hereto.

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“Existing Leases” means all Leases in existence as of the Execution Date, as set forth on Schedule “J”.

“First Deposit” has the meaning ascribed thereto in Subsection 3.1(a).

“Freehold Mortgagee” has the meaning ascribed thereto in the form of Master Lease attached hereto as Schedule “I”.

“Gaming Authority” means any Governmental Authority (including crown corporations), with regulatory, licensing or permitting authority or jurisdiction over any Gaming Facility (including the BCLC and GPEB).

“Gaming Facility” means any gaming or pari-mutuel wagering establishment, including any casino, and other property or assets related, ancillary or complementary thereto located at the Property.

“Gaming Law” means all applicable provisions of all: (a) constitutions, treaties, statutes or laws governing Gaming Facilities and rules, regulations, codes and ordinances of Gaming Authorities and all administrative or judicial orders or decrees or other laws pursuant to which any Gaming Authority possesses regulatory, licensing or permitting authority over gambling, gaming or Gaming Facility activities conducted at the Property, including without limitation, the GCA; and (b) orders, decisions, determinations, judgments, awards, decrees, approvals, consents and waivers of any Gaming Authority.

“Gaming Lessor” means a gaming service provider that, as a lessor, provides to other gaming services providers premises to be used as facilities for gaming, as set out in Section 29(1)(q) of the Gaming Control Regulation.

“GCA” means the Gaming Control Act, SBC 2002 Chapter 14.

“GCR” means the Gaming Control Regulation, B.C. Reg. 208/2002, as amended from time to time, made pursuant to the GCA.

“Governmental Authority” means any government, regulatory authority, government department, agency, commission, board, tribunal or court having jurisdiction on behalf of any nation, province or state or other subdivision thereof or any municipality, district or other subdivision thereof.

“GPEB” means Gaming Policy and Enforcement Branch, a division of British Columbia Ministry of Attorney General and its successors and assigns.

“Grand Villa Lands” means the lands and premises known municipally as 4331 Dominion Street, 4320/4350 Dominion Street, Burnaby, British Columbia, each as more particularly described in Parts A-1 and A-2 of Schedule “A” hereto, and all easements and other rights appurtenant thereto.

“Grand Villa Master Lease” means an amendment and restatement of the Nominee Ground Lease of the Grand Villa Property in the form attached hereto as Schedule “I”, subject to settlement of the forms of Landlord Lender Agreement, Subordination/Non-Disturbance Agreement, and Sublease Acknowledgment as provided for in Article 4.

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“Grand Villa Master Lease Beneficial Covenant” means an agreement by the Vendor in favour of the Purchaser, in its capacity as landlord under the Grand Villa Master Lease, in the form attached hereto as Schedule “K”.

“Grand Villa Nominee Agreement” means the nominee agreement to be entered into on Closing between the Vendor and the Master Lease Tenant, pursuant to which the Master Lease Tenant agrees to hold all rights and benefits pursuant to the Grand Villa Master Lease as nominee and bare trustee for the Vendor, as the beneficial owner thereof.

“Grand Villa Property” means the Grand Villa Lands and all Buildings thereon.

“GST” means goods and services tax payable pursuant to the Excise Tax Act (Canada).

“GST Declaration and Indemnity” means the GST declaration and indemnity attached as Schedule “B” hereto.

“Hazardous Substance” means, as defined by Environmental Laws, any pollutant, contaminant, chemical, waste (including, liquid industrial waste, other industrial waste, toxic waste and hazardous waste) and deleterious substance (“deleterious substance” having the meaning ascribed thereto in the Fisheries Act (Canada)) and any substance, condition or chemical, biological or physical agent of any nature or kind which is prohibited, controlled, monitored or regulated pursuant to Environmental Laws.

“Initial Master Lease Rent” means the aggregate amount of basic rent that shall be payable in the first year of the terms of the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease, being $35,000,000.

“Intellectual Property” means any goodwill, trade-marks, trade names, business or building names, internet domain names, logos and designs, commercial symbols, and other intellectual property of any kind owned by the Vendor and/or related to the Property.

“Landlord” means Purchaser, or its nominee or Designee, in its capacity as landlord under the Cascades Master Lease, the Grand Villa Master Lease and/or the Starlight Master Lease, as applicable.

“Landlord BCLC Agreement” means a written agreement, by and among Landlord, the applicable Master Lease Tenant, Vendor and BCLC, substantially in the form attached hereto as Schedule “L”, with respect to each Master Lease.

“Landlord Lender Agreement” means, as may be applicable, an agreement between the Landlord, the Master Lease Tenant and the mortgagee of the Master Lease Tenant’s leasehold interest in the form attached to the applicable Master Lease.

“Lands” means collectively, the Grand Villa Lands, the Starlight Lands, the Cascades Lands Freehold Lot and the Cascades Lands Strata Lots.

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“Leases” means all agreements to lease or sublease, leases, subleases, renewals of leases or subleases and all other rights, licenses and agreements granted by or on behalf of the Vendor or its predecessors in interest as owner of the Property, which entitle any Person to possess or occupy any portion of the Property, as applicable, together with all security, guarantees and indemnities of the tenants’, subtenants’, licensees’, or occupants’ obligations thereunder, in each case as amended, renewed, supplemented or otherwise varied, and including without limitation any parking agreements and storage space leases with respect to space on the Property; and “Lease” means any one of the Leases, but specifically excludes the Nominee Ground Leases and each of the Grand Villa Master Lease, the Cascades Master Lease and the Starlight Master Lease.

“Letter of Intent” means the offer letter dated September 25, 2017, issued by the Purchaser and accepted by the Vendor on September 26, 2017, providing for the Transaction and contemplating the execution and delivery of this Agreement.

“LTO” means the Land Title Office, situate in British Columbia.

“Master Lease” means each of the Cascades Master Lease, the Grand Villa Master Lease and the Starlight Master Lease.

“Master Lease Beneficial Covenant” means each of the Cascades Master Lease Beneficial Covenant, the Grand Villa Master Lease Beneficial Covenant and the Starlight Master Lease Beneficial Covenant.

“Master Lease Tenant” means 1144803 B.C. LTD. in respect of the Cascades Strata Property and the Cascades Freehold Property, 1144808 B.C. LTD. in respect of the Grand Villa Property and 1144809 B.C. LTD. in respect of the Starlight Property, each of which is a wholly-owned (directly or indirectly) subsidiary of the Vendor.

“Material Value Reduction” has the meaning ascribed thereto in Subsection 6.3(c)(iv).

“No-Action Letter” means a letter from the Commissioner indicating that he does not, as of the date of the letter, intend to make an application under Section 92 of the Competition Act (Canada) in respect of the Transaction.

“Nominee Ground Leases” has the meaning ascribed thereto in Recital D.

“Nominee Shares” means all of the issued and outstanding shares in the capital of the Cascades Freehold Nominee.

“Norfolk Lot” means the lands and premises legally described as Parcel Identifier 000 847 054, Lot 51, Except Part in Plan BCP21070 District Lot 70 Group 1 NWD Plan 62993.

“Notice” has the meaning ascribed thereto in Section 8.19.

“Option Agreement” means an agreement between the Purchaser and, with respect to the Cascades Freehold Property and the Cascades Strata Property, the Cascades Freehold Nominee, on the one hand, and the Vendor or the applicable Master Lease Tenant, on the other hand,

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pursuant to which the Purchaser (and, if applicable, the Cascades Freehold Nominee) grants the Vendor or the applicable Master Lease Tenant one (1) option to lease the Cascades Strata Property, the Cascades Freehold Property, the Starlight Property and the Grand Villa Property, for two (2) consecutive terms of ten (10) years each and one (1) consecutive term of ten (10) years less one (1) day, in form and substance reasonably satisfactory to the parties (the “Option Agreements”).

“Permitted Encumbrances” means those Encumbrances and other items which are listed in Schedule “D” hereto (and for clarity, does not include any Master Leases).

“Person” means an individual, partnership, corporation, trust, unincorporated organization, government, or any department or agency thereof, and the successors and assigns thereof or the heirs, executors, administrators or other legal representatives of an individual.

“Proceeding” means any civil action or proceeding, whether insured or uninsured, (including any claim, demand, order, directive, suit, inquiry, hearing, discovery, investigation or other proceeding of whatever nature), whether threatened, commenced, pending, continuing or completed, and any appeal thereof.

“Property” means, collectively, the Grand Villa Property, the Starlight Property, the Cascades Strata Property and the Cascades Freehold Property.

“Property Information” has the meaning ascribed thereto in Section 2.2.

“Purchase Price” means Five Hundred Three Million Five Hundred and Ninety-Five Thousand Dollars ($503,595,000) in lawful money of Canada subject to any applicable GST in accordance with Section 5.5.

“Purchaser’s Condition Date” means January 24, 2018.

“Purchaser’s Conditions” means those conditions set forth in Section 4.2.

“Purchaser’s Expenses” has the meaning ascribed thereto in Subsection 6.3(c)(iii).

“Purchaser’s Solicitors” means Goldberg Kohn Ltd. and Boughton Law or such other firm or firms of solicitors as are appointed by the Purchaser from time to time and Notice of which is provided to the Vendor or the Vendor’s Solicitors.

“Rent” means and includes all rent and all other amounts payable by a Tenant pursuant to its Lease.

“Responding Party” has the meaning ascribed thereto in Subsection 6.5(a).

“Responsible Party” has the meaning ascribed thereto in Subsection 6.3(b).

“Second Deposit” has the meaning ascribed thereto in Subsection 3.1(b).

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“Starlight Lands” means the lands and premises known municipally as 350 Gifford Street, New Westminster, British Columbia and 3811 Boundary Road, Richmond, British Columbia each as more particularly described in Parts B-1 and B-2 of Schedule “A” hereto, and all easements and other rights appurtenant thereto.

“Starlight Master Lease” means an amendment and restatement of the Nominee Ground Lease of the Starlight Property in the form attached hereto as Schedule “I”, subject to settlement of the forms of Landlord Lender Agreement, Subordination/Non-Disturbance Agreement, and Sublease Acknowledgment as provided for in Article 4.

“Starlight Master Lease Beneficial Covenant” means an agreement by the Vendor in favour of the Purchaser, in its capacity as landlord under the Starlight Master Lease, substantially in the form attached hereto as Schedule “K”.

“Starlight Nominee Agreement” means the nominee agreement to be entered into on Closing between the Vendor and the Master Lease Tenant, pursuant to which the Master Lease Tenant agrees to hold all rights and benefits pursuant to the Starlight Master Lease as nominee and bare trustee for the Vendor, as the beneficial owner thereof.

“Starlight Property” means the Starlight Lands and all Buildings thereon.

“Subject Assets” means all of the Vendor’s right, title, interest and estate in and to:

(a)

the Lands;

(b)

the Buildings;

(c)

the landlord’s interest under the Nominee Ground Leases; and

(d)

the Nominee Shares,

in each case, subject to Permitted Encumbrances (including, for greater certainty, the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease), but excluding the Excluded Assets.

“Subsequent Property Information” has the meaning ascribed thereto in Section 2.6.

“Survey Certificate” means a survey certificate or certificates prepared by a BCLS depicting the locations of improvements, structures and Buildings on the Lands, registered charges, dimension of the improvements, structures and Buildings, encroachments on the Lands, and other property information typical of survey certificates.

“Survival Period” has the meaning ascribed thereto in Subsection 6.3(a).

“Surviving Covenants” means those covenants of the parties which, in accordance with the express provisions of this Agreement, shall survive the Closing.

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“Tenants” means Persons having a right to possess or occupy any portion of the Property, now or hereafter, pursuant to a Lease.

“Third Party Claim” has the meaning ascribed thereto in Subsection 6.5(a).

“Title Insurer” means First American Title Insurance Company, FCT Insurance Company Ltd., or such other title insurance companies as are reasonably acceptable to the Purchaser.

“Title Policies” has the meaning ascribed thereto in Section 4.2(g).

“Transaction” means the purchase and sale of the Subject Assets provided for in this Agreement.

“Transfer Documents” has the meaning ascribed thereto in Subsection 5.2(a).

“Unsatisfied Condition” has the meaning ascribed thereto in Subsection 4.3(a).

“Vendor Nominee” means 7588674 Canada Inc.

“Vendor’s Conditions” means those conditions set forth in Section 4.1.

“Vendor’s Real Estate Broker” means Colliers Macaulay Nicolls Inc. and Colliers Capital Markets Canada.

“Vendor’s Solicitors” means Bennett Jones LLP.

“Waiver Notice” has the meaning ascribed thereto in Subsection 2.5(b).

“Warranties” means the warranties and guarantees, if any, in connection with the Excluded Assets or warranties and guarantees, if any, in connection with the Subject Assets, as the context applies.

ARTICLE 2

AGREEMENT OF PURCHASE AND SALE

2.1

Agreement of Purchase and Sale/Allocation of Purchase Price

(a)

The Vendor hereby agrees to sell, transfer, assign, set over and convey the Subject Assets and all Warranties relating to the Subject Assets to the Purchaser and the Purchaser hereby agrees to purchase, acquire and assume the Subject Assets from the Vendor for the Purchase Price, on and subject to the terms and conditions of this Agreement.

(b)

The Purchase Price shall be allocated as between the Starlight Property, the Cascades Strata Property, the beneficial interest in the Cascades Freehold Property and the Grand Villa Property as more particularly set out in Schedule “F” hereto, and for the purposes of the Starlight Master Lease, the Cascades Master Lease and the Grand Villa Master Lease, the Initial Master Lease Rent shall be allocated as more particularly set out in Schedule “F” hereto.

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Any further allocation of the Purchase Price, among the components of the Subject Assets, will be, subject to the following, on a basis agreed between the Vendor and the Purchaser by the Purchaser’s Condition Date and the Vendor and the Purchaser shall adopt such allocations for the purposes of all tax returns and filings respectively made by them or on their behalf. The Vendor and the Purchaser, each acting reasonably, shall use reasonable efforts to reach agreement on such further allocations of the Purchase Price, but failing such agreement, each of the Vendor and the Purchaser shall be entitled to make their own allocation.

2.2

Grand Villa Easement

To the extent that the Norfolk Lot is required for the Grand Villa Property to be in compliance with all Applicable Laws, the Vendor shall on Closing grant for the benefit of the Grand Villa Property such easements or restrictive covenants as may be required to effect compliance with Applicable Laws, in form and substance reasonably satisfactory to the parties (the “Easement”). The parties shall use good faith and diligent efforts to agree on the form of the Easement prior to the Purchaser’s Condition Date.

2.3

Initial Deliveries by Vendor

The Vendor shall make available to the Purchaser, either electronically, by computer disk or in hard copy form, in one or more Data Rooms or by delivery in accordance with Section 8.19, not later than three (3) Business Days following the Execution Date, the documents listed in Schedule “G” hereto, to the extent in the possession or control of the Vendor (collectively, the “Property Information”).

The Vendor shall continue to make the Property Information and Subsequent Property Information available until Closing or the termination of this Agreement. It is agreed the Property Information does not include all information registered on title to the Lands. It is the Purchaser’s obligation to obtain and review anything registered on title to the Lands.

2.4

Access to Property

(a)

Subject to the Purchaser complying with each of its obligations herein and to Gaming Authorities and subject to any limitations imposed by the Vendor’s reasonable security requirements, and observing the rights of the Tenants under the Leases, from and after the execution of this Agreement until the Closing or earlier termination of this Agreement, the Purchaser and its agents, advisors, consultants, employees and lenders shall have access to the Property during the Vendor’s normal business hours upon reasonable notice to the Vendor (which notice shall not be less than two (2) Business Days’ prior written notice) at the Purchaser’s sole risk and expense, for the purpose of inspecting the Property including, without limitation, performing physical and structural inspections, soil tests and environmental audits provided that such inspections, tests and audits are conducted in accordance with Applicable Law and any limitations or requirements imposed by Gaming Authorities or the Vendor’s reasonable security requirements, and shall not unreasonably interfere with the normal operation of

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the Property and do not unreasonably interfere with any of the Tenants. The Purchaser and its agents, advisors, consultants, employees and lenders shall not have any communications with Tenants or any on-site employees of the Vendor or of Tenants in the course of such inspections. The Vendor shall have the right to accompany the Purchaser and its agents, advisors, consultants, employees and lenders on any inspections and shall have the right to approve invasive or intrusive inspections, tests and audits, if any are proposed by the Purchaser, prior to such inspections, tests and audits being undertaken, such approval not to be unreasonably withheld or delayed. No such inspections, tests or audits shall occur unless the Purchaser has given the Vendor at least two (2) Business Days’ prior written notice and complies with the foregoing requirements.

(b)

The Purchaser shall repair any damage caused by inspections, tests and audits performed by the Purchaser or its agents, advisors, consultants, employees or lenders and fully indemnify the Vendor from all costs of repairing any damage or any loss caused by such inspections, tests or audits and all Claims relating to any such inspections, tests and audits and from all Claims incurred by the Vendor as a result thereof including, without limitation, any construction liens (or certificates of pending litigation) registered against the Property as a result thereof. For greater certainty, the Purchaser hereby agrees that the Deposit shall stand as security for such indemnity and shall be held by the Vendor’s Solicitors for a period of ten (10) Business Days after termination of this Agreement (if applicable), but not the Closing, during which time the Vendor may submit Notice of any Claims or potential Claims to the Purchaser and the Vendor’s Solicitors and if the Purchaser agrees in writing within a further five (5) Business Days with the Claim then the Vendor’s Solicitors shall forthwith pay the amount of the agreed upon Claim to the Vendor from the Deposit and remit the balance (if any) to the Purchaser, or if the Purchaser does not agree in writing with the Claim or does not respond in writing within such five (5) Business Day period, then the Vendor’s Solicitors shall pay the Deposit into court and thereupon shall be relieved of all responsibilities and liabilities with respect thereto. Provided the transaction herein is not completed, this indemnity shall survive termination of this Agreement regardless of the cause of such termination. Notwithstanding anything to the contrary, if the Transaction is completed, the Deposit shall be credited against the Purchase Price due on the Closing pursuant to and in accordance with Section 3.2.

(c)

From and after the execution of this Agreement, the Vendor shall permit the Purchaser, at the Purchaser’s sole expense, to have reasonable access to and use reasonable commercial efforts to cause the Vendor’s third party architects, engineers, property, construction or leasing managers, consultants and contractors to be available to meet with the Purchaser and its agents, advisors, consultants, employees and lenders for the purpose of conducting information interviews relating to the management, operation, maintenance, condition, state of repair, construction or leasing of the Property, provided that the Vendor and its representatives shall be entitled to be present at and participate in such discussions. Save only as set out in Section 6.6, all updates of reports (and any related reliance letters) shall be obtained by the Purchaser or the Purchaser’s Solicitors at the expense of the Purchaser.

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(d)

The Vendor hereby expressly authorizes the Purchaser and its agents, consultants and advisors to correspond with the appropriate Governmental Authority for the purpose of obtaining information which such Governmental Authorities have on record regarding the Property, including but not limited to information regarding the Property’s compliance with laws, bylaws, regulations and assessments; provided that, the Purchaser shall not correspond with any Gaming Authority with respect to the Vendor (other than for the sole purpose of satisfying the conditions in Section 4.1(a), 4.1(b) and 4.1(c) and Section 4.2(b), 4.2(c) and 4.2(d) or correspond with the Canada Revenue Agency regarding the income tax payment status of the Vendor or its affiliates; the Vendor shall promptly, within three (3) Business Days of the Purchaser’s request, execute and deliver any authorizations reasonably required by the Purchaser in the Purchaser’s form to authorize the appropriate Governmental Authority to release such information to the Purchaser, save for the release of information specifically excluded in this Agreement. Notwithstanding the foregoing, the Purchaser acknowledges and agrees that the Vendor will deliver to the Purchaser in the Data Room those responses from Governmental Authorities received by the Vendor in 2017, and listed in Schedule “H” hereto and any updates thereto received by Vendor or Vendor’s Solicitors.

2.5

Purchaser’s Conditions

(a)

On or before 5:00 p.m. on the Purchaser’s Condition Date the Purchaser may conduct (subject to compliance with other relevant provisions of this Agreement) any investigations, inspections, reviews, tests and audits relating to the Subject Assets (including, without limitation, title to the Subject Assets and compliance with Applicable Laws) (collectively referred to herein as the “Due Diligence”) which the Purchaser deems necessary or desirable in its sole discretion.

(b)

Notwithstanding any other provisions of this Agreement, the obligation of the Purchaser to complete the Transaction pursuant to this Agreement is subject to the condition that the Purchaser is satisfied with the Due Diligence in its sole, absolute and unfettered discretion on or before 5:00 p.m. on the Purchaser’s Condition Date. The Purchaser shall be deemed not to be satisfied with the results of its Due Diligence unless it delivers to the Vendor on or before 5:00 p.m. on the Purchaser’s Condition Date a written notice in the form attached hereto (with the relevant details inserted therein) as Schedule “C” (the “Waiver Notice”) stating that it irrevocably waives the condition contained in this Subsection 2.5(b). In giving the Waiver Notice, the Purchaser waives any right to make requisitions as to title to, or the condition of, the Subject Assets and agrees to purchase the Subject Assets on an “as is, where is” basis pursuant to Section 6.4. If the Purchaser fails to give the Vendor the Waiver Notice prior to 5:00 p.m. on the Purchaser’s Condition Date, then this Agreement shall automatically terminate at such time and, upon such termination, the Purchaser and the Vendor shall be

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released from all obligations under this Agreement (except for those obligations which are expressly stated to survive the termination of this Agreement) and the First Deposit and all interest earned thereon shall be returned to the Purchaser, subject to Section 2.4(b). This provision shall survive the termination of this Agreement.

(c)

For greater certainty, the Purchaser acknowledges and agrees that, in entering into this Agreement, the Purchaser has relied or will rely entirely upon its own inspections and investigations with respect to all aspects of the Subject Assets and the Transaction and, except for the representations and warranties expressly set out herein, the Purchaser is not relying on any information, written or oral, furnished by the Vendor or any other Persons on behalf of or at the direction of the Vendor.

2.6

Confidentiality

(a)

The Purchaser agrees that until Closing (and in the event this Agreement is terminated for any reason other than its completion, also from and after such termination), the Purchaser shall comply with its obligations under the Confidentiality Agreement. For greater certainty, notwithstanding any provisions of the Confidentiality Agreement which provided for termination thereof upon the execution of this Agreement, each of the Vendor and the Purchaser agree that the provisions of the Confidentiality Agreement shall remain in full force and effect and survive the execution of this Agreement.

(b)

The Purchaser shall not issue any press release or other public announcement or release information with respect to this Agreement to the press or the public unless the same has been approved both as to timing of release and content by the Vendor, which approval shall not be unreasonably withheld or unduly delayed. If such disclosure is required in order to comply with any Applicable Laws or the rules, orders or regulations of any stock exchange, the Vendor and Purchaser shall coordinate their disclosures so as to comply with Applicable Laws. The provisions of this Section 2.6 are supplementary to the provisions of the Confidentiality Agreement and do not in any way derogate from the obligations of the Purchaser pursuant to the Confidentiality Agreement except to the extent required for the Purchaser to comply with Applicable Laws. In the case of any conflict between the provisions of this Section 2.6 and the provisions of the Confidentiality Agreement, the former shall prevail.

2.7

Subsequent Deliveries

In the event that the Vendor (i) receives additional documents or information in the nature of the Property Information or receives documents that would amend or supplement the Property Information which, in each case, existed prior to the Purchaser’s Condition Date, or (ii) becomes aware of an inadvertent failure by the Vendor to provide any Property Information in accordance with Section 2.2, the Vendor shall promptly (but in no event more than two (2) Business Days after receipt or knowledge thereof) deliver

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the same to the Purchaser as provided in Section 2.2 (“Subsequent Property Information”) from time to time until and including up to the Purchaser’s Condition Date. In the event that any Subsequent Property Information is delivered to Purchaser after 5:00 p.m. central time on the day that is two (2) Business Days prior to Purchaser’s Condition Date, Purchaser’s Condition Date shall be extended by two (2) Business Days. In the event that any Subsequent Property Information is delivered prior to the Purchaser’s Condition Date, then the Purchaser’s sole remedy shall be to terminate this Agreement on or prior to the Purchaser’s Condition Date. If, following the Purchaser’s Condition Date, the Vendor delivers to the Purchaser any Subsequent Property Information, and such Subsequent Property Information discloses to the Purchaser information that the Purchaser was not previously aware of (“New Information”), and such New Information results in a Material Value Reduction (such New Information being “Material Adverse New Information”), then the Purchaser shall have the right to terminate this Agreement no later than three (3) full Business Days after the delivery of any such Material Adverse New Information to the Purchaser by Notice to the Vendor, in which event, if the Purchaser gives the Vendor Notice that the Purchaser exercises its right to terminate, this Agreement shall terminate, the Purchaser and the Vendor shall be released from all obligations under this Agreement (except those obligations which are stated to survive the termination of this Agreement), the Deposit and the interest earned thereon shall be returned to the Purchaser, subject to Section 2.4(b), and the Vendor shall reimburse the Purchaser for Purchaser’s Expenses, which obligations of the Vendor shall survive the termination of this Agreement. If, following the Purchaser’s Condition Date, the Vendor delivers New Information to the Purchaser which New Information does not result in a Material Value Reduction, the Purchaser shall not have the right to terminate this Agreement due to such New Information, but shall have the right (if any) to make a Claim pursuant to Section 6.3 of this Agreement. If any Subsequent Property Information is delivered by posting to the Data Site, the Vendor shall deliver notice thereof to the Purchaser and the Purchaser’s Solicitors on the date such Subsequent Property Information is posted, which notice may be sent by e-mail or overnight courier.

2.8

Non-Refundable Sum

In consideration of the sum of ten dollars ($10.00) now paid by each of the parties hereto to the other (the receipt and sufficiency of which is hereby acknowledged by both the Vendor and the Purchaser) the Vendor and the Purchaser acknowledge and agree that, although the obligations of the other party contemplated by this Agreement are subject to the satisfaction or waiver of the Purchaser’s Conditions or the Vendor’s Conditions, as the case may be:

(a)

such conditions are not a condition to there being a binding agreement constituted by this Agreement; and

(b)

this Agreement is not void, voidable, revocable, or otherwise capable of being terminated by any of the parties hereto until the time limited for the fulfillment of such conditions has expired.

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ARTICLE 3

PURCHASE PRICE

3.1

Deposit

(a)

Prior to 11:00 a.m. on the third (3rd) Business Day following the Execution Date, the Purchaser shall deliver the amount of $5,000,000 (the “First Deposit”) by wire transfer to the Vendor’s Solicitors or the Title Insurer, at Purchaser’s option, to be invested by the Vendor’s Solicitors, or the Title Insurer, as applicable, in an interest-bearing trust account with a Canadian Schedule I bank pursuant to the Bank Act (Canada).

(b)

Prior to 11:00 a.m. on the third (3rd) Business Day following receipt of the Waiver Notice, the Purchaser shall deliver the amount of $10,000,000 (the “Second Deposit”) by wire transfer to the Vendor’s Solicitors or the Title Insurer, as applicable, to be invested by the Vendor’s Solicitors or the Title Insurer, as applicable, in an interest-bearing trust account with a Canadian Schedule I bank pursuant to the Bank Act (Canada). The First Deposit and the Second Deposit if paid are collectively referred to as the “Deposit”.

(c)

Except as otherwise provided herein, the Deposit, together with all interest earned thereon, is non-refundable and shall be forfeited to the Vendor if the Transaction fails to close due to a default by the Purchaser. Vendor acknowledges and agrees that its sole and exclusive remedy in the event of a default by the Purchaser hereunder shall be to terminate this Agreement and receive the Deposit, together with all interest accrued thereon, said disbursement to the Vendor representing the payment of liquidated damages representing a genuine pre-estimate of the loss resulting from such default and upon such termination of this Agreement all of the parties’ respective rights and obligations hereunder (except those obligations which are expressly stated to survive the termination of this Agreement) shall terminate. Purchaser and Vendor acknowledge and agree that the actual damages suffered by the Vendor resulting from such a breach would be difficult or impossible to measure and that the Deposit represents the parties’ good faith estimate of such damages. In further consideration thereof, the Vendor waives any right to specifically enforce the actual purchase of the Subject Assets by the Purchaser under this Agreement.

If this Agreement is terminated other than as the result of a default by Purchaser or failure by the Purchaser to give the Vendor the Waiver Notice prior to 5:00 p.m. on the Purchaser’s Condition Date in accordance with Section 2.4, the Deposit, together with all interest earned thereon, shall, subject to Subsection 2.4(b), be thereupon returned to the Purchaser, without prejudice to all other rights and remedies which the Purchaser may have against the Vendor at law or in equity.

(d)

If the Transaction is completed, the Deposit shall be credited against the Purchase Price due on Closing and the interest accrued thereon shall be paid by the Vendor’s Solicitors or the Title Insurer, as applicable, directly to the Purchaser within a reasonable period of time following the Closing.

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(e)

In holding and dealing with the Deposit and interest pursuant to this Agreement, the Vendor’s Solicitors are not bound in any way by any agreement other than this Agreement, and the Vendor’s Solicitors shall not be considered to assume any duty, liability or responsibility other than to hold the Deposit and interest in accordance with the provisions of this Agreement as stakeholder and not as agent for any party and to pay the Deposit and interest to the Person becoming entitled thereto in accordance with the terms of this Agreement. In the event of a dispute between the parties as to entitlement to the Deposit and interest, the Vendor’s Solicitors may, in their discretion, pay the Deposit and interest in dispute into court, whereupon the Vendor’s Solicitors shall have no further obligations relating to the Deposit and interest earned thereon. The Vendor’s Solicitors shall not, under any circumstances, be required to verify or determine the validity of any notice or other document whatsoever delivered to the Vendor’s Solicitors and the Vendor’s Solicitors are hereby relieved of any liability or responsibility for any loss or damage which may arise as the result of the acceptance by the Vendor’s Solicitors of any such notice or other document in good faith. The parties hereto acknowledge that the Vendor’s Solicitors may rely upon the provisions of this Section 3.1(e) and that such provisions shall only be effective in the event that the Deposit is held by the Vendor’s Solicitors.

(f)

In the event that the Purchaser elects to have the Title Insurer hold the Deposit, prior to delivery thereof, the Purchaser, the Vendor and the Title Insurer shall enter into an escrow agreement consistent with the terms of this Section 3.1 and otherwise reasonably acceptable to the parties thereto.

(g)

The provisions of this Section 3.1 shall survive the termination of this Agreement.

3.2

Method of Payment of Purchase Price

On Closing the Purchase Price shall be satisfied as follows:

(a)

by application of the Deposit held by the Vendor’s Solicitors; and

(b)

by payment to the Vendor or as the Vendor shall direct in writing, of an amount (the “Balance”) equal to the Purchase Price adjusted in accordance with Section 5.5 less the Deposit; the Balance shall be paid on Closing by the Purchaser by wire transfer to the trust account of the Purchaser’s Solicitors.

3.3

No Adjustments

(a)

For the avoidance of doubt, the Vendor and the Purchaser acknowledge and agree that this Transaction constitutes a sale by the Vendor to the Purchaser of the Subject Assets, and a lease-back by the Vendor from the Purchaser of the Subject Assets on and subject to the terms set out in each of the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease. In connection

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therewith: with the exception of the specific expenses referred to in Section 5.5, (i) all Contracts in existence on Closing are not being assigned to the Purchaser, and remain the property of the Vendor on Closing; (ii) as no Leases existing as of Closing are being assigned to the Purchaser, there will be no adjustments for Rents and deposits of Tenants under Leases on Closing, (iii) there shall be no adjustment of rent or any other amounts under the Nominee Ground Leases and (iv) all operational expenses, including property taxes, that would otherwise be the matter of a customary adjustment on the sale of land and buildings in British Columbia, are not to be adjusted, as they continue to be the responsibility of the Vendor, in its capacity as tenant under and in accordance with the terms of the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease, as applicable. From and after Closing, the Purchaser’s entitlement to revenues to the Property is governed by the terms of the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease, as applicable.

(b)

The provisions of this Section 3.3 shall survive the Closing.

ARTICLE 4

CONDITIONS

4.1

Conditions for Vendor

The obligation of the Vendor to complete the Transaction shall be subject to fulfillment of each of the following conditions on or before the dates set out below:

(a)

by the Closing Date, the Purchaser or its Designee shall be registered as a Gaming Lessor in accordance with the Gaming Laws in British Columbia;

(b)

by the Closing Date, each of the Freehold Mortgagees, security agreements and related agreements shall, if requested by GPEB, be registered or approved in accordance with the Gaming Laws of British Columbia;

(c)

by the Closing date, the Purchaser obtaining Competition Act Approval;

(d)

on the Closing Date all of the terms, covenants and conditions of this Agreement to be complied with or performed by the Purchaser shall have been complied with or performed in all material respects; and

(e)

on the Closing Date, all of the representations and warranties of the Purchaser set out in Section 6.2 shall be true and accurate in all material respects as if made as of the Closing Date provided that, for greater certainty, it is confirmed that if a representation and warranty is stated in Section 6.2 to be made only with reference to a specified date or time, it shall not be required to be true and accurate on the Closing Date except with reference to such date and time; and

(f)

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Subordination/Non-Disturbance Agreement, the form of Sublease Acknowledgment, as each such term is defined in the Master Lease, and with respect to the Cascades Master Lease only, the provision of Article 16 regarding the Cascades Lands Strata Lots, and to replace the forms attached thereto (or included therein) as of the Execution Date.

The conditions set forth in this Section 4.1 are for the benefit of the Vendor and may be waived in whole or in part by the Vendor (subject to Section 4.3(a)) by Notice to the Purchaser by the date and time set forth above for the satisfaction of each such condition.

4.2

Conditions for Purchaser

The obligations of the Purchaser to complete the Transaction shall be subject to fulfillment of each of the following conditions on or before the dates set out below:

(a)

by the Purchaser’s Condition Date, delivery by the Purchaser to the Vendor of the Waiver Notice pursuant to Section 2.4(b);

(b)

by the Closing date, the Purchaser obtaining Competition Act Approval;

(c)

by the Closing Date, the Purchaser or its Designee shall be registered as a Gaming Lessor in accordance with the Gaming Laws in British Columbia;

(d)

by the Closing Date, each of the Freehold Mortgagees, security agreements and related documents shall, if requested by GPEB or BCLC, be approved in accordance with the Gaming Laws of British Columbia;

(e)

on the Closing Date, all of the terms, covenants and conditions of this Agreement to be complied with or performed by the Vendor shall have been complied with or performed in all material respects;

(f)

on the Closing Date, all of the representations and warranties of the Vendor set out in Section 6.1 shall be true and accurate in all material respects, subject to the restriction set forth in Section 6.3 of this Agreement on the right of the Purchaser to terminate this Agreement where the breach of such representations and warranties does not result in a Material Value Reduction;

(g)

on or prior to the Closing Date, the Purchaser shall receive one or more title policies in the aggregate amount of the Purchase Price, in the forms approved by the Purchaser by the Purchaser’s Condition Date (the “Title Policies”);

(h)

on or prior to the Closing Date, all parties thereto shall have executed and delivered a BCLC Agreement for each of the Cascades Strata Property, the Grand Villa Property and the Starlight Property;

(i)

the Subject Assets shall be in the same or better condition as they are on the Execution Date, subject to ordinary wear and tear and, subject to Section 7.2 hereof, damage and expropriation, including without limitation the Subject Assets’ compliance with Applicable Laws;

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(j)

on or prior to the Closing Date, Vendor shall have entered into an operating services agreement (or multi-casino operating services agreement) with the BCLC for each of the Cascades Strata Property, the Grand Villa Property and the Starlight Property, which agreements shall have an initial term expiring no earlier than the expiration date of the applicable Master Lease;

(k)

on or prior to the Closing Date, each of the franchisor under the franchise agreement for the hotel located at the Cascades Strata Property and the property manager for the hotel located at the Grand Villa Property shall, where such consent is required, have consented to the Transaction and shall have entered into a “comfort letter” or similar agreement, in form and substance reasonably acceptable to the Purchaser, pursuant to which such franchisor or property manager, as applicable, acknowledges and agrees that upon a termination of the applicable Master Lease, the Purchaser or its designee may succeed to the interest of the Vendor under the franchise agreement or hotel management agreement, as applicable (each, a “Comfort Letter”). The Purchaser and the Vendor shall use good faith and diligent efforts to cause the forms of each Comfort Letter to be negotiated and approved by the Purchaser, the Vendor and the franchisor or hotel property manager, as applicable, prior to the Purchaser’s Condition Date; and

(l)

by that day which is ten (10) days after the Execution Date, the Vendor and the Purchaser shall have settled, each acting in good faith and using reasonable commercial efforts, the terms of the Landlord Lender Agreement, the Subordination/Non-Disturbance Agreement, the form of Sublease Acknowledgment, as each such term is defined in the Master Lease, and with respect to the Cascades Master Lease only, the provision of Article 16 regarding the Cascades Lands Strata Lots, and to replace the forms attached thereto (or included therein) as of the Execution Date.

The conditions set forth in this Section 4.2 are for the benefit of the Purchaser and may be waived in whole or in part by the Purchaser (subject to Section 4.3(a)) by Notice to the Vendor by the date and time set forth above for the satisfaction of each such condition.

4.3

Non-Satisfaction of Conditions

(a)

In the event any conditions set forth in Sections 4.1 and 4.2 are not satisfied or waived as therein provided on or before the applicable date or time referred to in Section 4.1 or 4.2, as the case may be (such condition being referred to as the “Unsatisfied Condition”), the Closing Date shall be automatically extended for a period of sixty (60) days to allow for the satisfaction of any Unsatisfied Condition. If the Closing Date is extended and the condition subsequently satisfied or waived, then the Closing Date shall be automatically accelerated to the fifth (5th) Business Day following such a waiver or satisfaction. If any such condition remains unsatisfied after such sixty (60) day period, this Agreement

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shall, upon Notice by the party having the benefit of the Unsatisfied Condition to the other party, be terminated and both parties hereto shall be released from all of their liabilities and obligations under this Agreement (other than those obligations which are expressly stated to survive termination of this Agreement) unless the sole reason for the Unsatisfied Condition not being satisfied is the breach by a party hereto of an obligation under this Agreement, in which case, subject to the other relevant provisions of this Agreement, a Claim may be made against the Vendor, and the Deposit, together with all interest earned thereon shall be returned to Purchaser without prejudice to all other rights and remedies which the Purchaser may have against the Vendor at law or in equity, in the case of breach by the Vendor; or the Deposit shall be forfeited, in the case of breach by the Purchaser.

(b)

If, on the Closing Date, all of the conditions in Section 4.1 have been satisfied or waived and the Purchaser is not in default under any provision of this Agreement and the Vendor is in default under any provision of this Agreement then the Purchaser, at its option, may elect either (i) if there has been a Material Value Reduction, to terminate this Agreement by Notice to the Vendor and, subject to Section 6.3 and, if applicable, Section 6.5, bring an action for damages against the Vendor, or (ii) to proceed to Closing (or require specific performance) of this Agreement and, subject to Section 6.3 and, if applicable, Section 6.5, bring an action for damages against the Vendor with respect to the Vendor’s default. In the event of a termination of this Agreement under this Section 4.3(b), the Deposit, together with all interest earned thereon shall be returned to Purchaser without prejudice to the Purchaser’s right to bring an action for damages caused by any a Material Value Reduction under this Section 4.3(b).

(c)

Notwithstanding the foregoing, the Purchaser shall not be entitled to claim from the Vendor indirect, consequential, punitive or special damages.

(d)

The provisions of this Section 4.3 shall survive the termination of this Agreement.

4.4

Efforts to Satisfy Conditions

(a)

Without derogating from any party’s rights or obligations under this Agreement and subject to Section 4.5, it is agreed that:

(i)

the Vendor shall act in good faith and use reasonable commercial efforts to satisfy, or cause to be satisfied, all of the conditions set forth in Sections 4.1 and 4.2 (as applicable) and shall promptly and diligently respond to requests for information, either from the Purchaser or from any applicable Gaming Authority or Governmental Authority; and

(ii)

the Purchaser shall act in good faith and use reasonable commercial efforts to satisfy, or cause to be satisfied, all of the conditions set forth in Sections 4.1 and 4.2 (as applicable) and shall promptly and diligently respond to requests for information, either from the Vendor or from any applicable Gaming Authority or Governmental Authority.

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(b)

Each party shall fully cooperate with the other party and provide the other party with information in its possession or control, and not otherwise available to the other party, necessary to seek the approvals or waivers referred to in Section 4.1 and 4.2. Each of the Purchaser and the Vendor shall act in good faith in determining whether or not a condition in its favour has been satisfied.

4.5

Competition Act

(a)

Notwithstanding any other provision of this Agreement, the obligation of each of the Vendor and the Purchaser to complete the Transaction on Closing shall be subject to the condition that the Purchaser shall have, obtained the Competition Act Approval on or before one (1) Business Day prior to the Closing Date. The condition contained in this Section 4.5 cannot be waived by either party to this Agreement.

(b)

Within seven (7) Business Days after the Execution Date or as soon thereafter as commercially reasonably possible, the Purchaser shall, with the cooperation of the Vendor, file with the Commissioner a detailed competition submission (an “ARC Request”) requesting that the Commissioner issue an advance ruling certificate pursuant to Section 102 of the Competition Act (Canada) or a No-Action Letter.

(c)

Notwithstanding any other provision of this Agreement, the Purchaser will use reasonable commercial efforts to obtain Competition Act Approval and each of the Purchaser and the Vendor will use their reasonable commercial efforts to satisfy all requests for additional information received pursuant to any filings and submissions and any orders or requests made by the Commissioner as promptly as practical.

(d)

The Purchaser and the Vendor will keep each other fully informed as to all communications with the Commissioner regarding the Transaction, including providing each other with drafts of any filings, requests or correspondence submitted to the Commissioner and will provide the Vendor final copies thereof, as well as copies of any requests or correspondence received from the Commissioner. The Purchaser shall provide the Vendor or the Vendor’s Solicitors with reasonable opportunity (not to exceed two (2) Business Days) to comment on any filings, submissions or correspondence with the Commissioner and to attend all meetings and participate in all telephonic and electronic communications with the Commissioner regarding this Transaction. The Purchaser and the Vendor shall co-operate with each other with respect to all communications with the Commissioner regarding the Transaction and provide each other with information in their possession that is reasonably necessary in respect of dealings with the Commissioner. Notwithstanding the provisions of this Section 4.5, the Purchaser and the Vendor are not required to share competitively sensitive or confidential information with each other, provided that such information is provided to

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counsel for the other party on an outside-counsel-only basis, which disclosure may redact confidential information. Notwithstanding the foregoing, the Vendor need not disclose the value of other offers for the Subject Assets, even to outside counsel.

(e)

In the event the condition set forth in Section 4.5(a) is not satisfied as therein provided on or before the applicable date or time referred to in Section 4.5(a), this Agreement shall automatically be terminated and both parties hereto shall be released from all of their liabilities and obligations under this Agreement (other than those obligations which are expressly stated to survive termination of this Agreement) unless the sole reason for such condition not being satisfied is the breach by a party hereto of an obligation under this Section 4.5, in which case, subject to the other relevant provisions of this Agreement, a Claim may be made against the Vendor and the Deposit, together with all interest earned thereon, shall be returned to Purchaser, without prejudice to all other rights and remedies which the Purchaser may have against the Vendor at law or in equity, in the case of breach by the Vendor; or the Deposit shall be forfeited, in the case of breach by the Purchaser.

(f)

In this Section 4.5, for greater certainty the term Purchaser also includes any Designee.

(g)

The provisions of this Section 4.5 shall survive the termination of this Agreement.

ARTICLE 5

CLOSING DOCUMENTS

5.1

Closing Arrangements

The Closing shall commence at 10:00 a.m. on the Closing Date at the office of the Purchaser’s Solicitors or at such other time or place as the parties shall mutually agree upon in writing and shall continue until the Closing is completed or this Agreement is validly terminated, in each case, in accordance with the terms hereof.

5.2

Vendor’s Closing Documents

At least two (2) Business Days prior to the Closing Date, subject to the provisions of this Agreement, the Vendor shall deliver, or cause to be delivered, to the Purchaser’s Solicitors the following, duly executed by the Vendor, the Vendor Nominee or the Master Lease Tenant, in each case where it is to be a party thereto:

(a)

registrable Form A freehold transfers (the “Transfer Documents”) of all of the Lands but for the Cascades Lands Freehold Lot in favour of the Purchaser, Designee or nominee as directed by the Purchaser, subject only to Permitted Encumbrances;

(b)

transfer of beneficial interest agreement of the Subject Assets in favour of the Purchaser or Designee

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(c)

the Grand Villa Master Lease;

(d)

the Grand Villa Master Lease Beneficial Covenant;

(e)

the Grand Villa Nominee Agreement;

(f)

the Starlight Master Lease;

(g)

the Starlight Master Lease Beneficial Covenant;

(h)

the Starlight Nominee Agreement;

(i)

the Cascades Master Lease;

(j)

the Cascades Master Lease Beneficial Covenant;

(k)

the Cascades Nominee Agreement;

(l)

the Landlord BCLC Agreement(s);

(m)

an assignment and assumption of Permitted Encumbrances, in form and substance reasonably acceptable to the Vendor and the Purchaser, with respect to all applicable contractual Permitted Encumbrances, for which the applicable Permitted Encumbrances shall be agreed upon by the Vendor and the Purchaser prior to the Purchaser’s Condition Date;

(n)

any specific assignment and/or assumption and/or non-disturbance or landlord acknowledgement agreements or replacement agreements which may be required under any of the Permitted Encumbrances or any hotel management or hotel license agreement governing a Property or by any Gaming Authority in respect of the Transaction;

(o)

an assignment of the Vendor’s interest in all Warranties, licenses and permits (to the extent that such licenses and permits are assignable) to the extent that they relate to the Subject Assets and not to the operation of the Business;

(p)

a statement of adjustments;

(q)

a mutual undertaking to readjust;

(r)

the Corporate Certificate re: Vendor;

(s)

a direction as to the payee or payees of the Balance;

(t)

a certificate of an officer of the Vendor confirming that the Vendor is not a “non-resident” of Canada within the meaning of the Income Tax Act (Canada);

(u)

any documents or deliveries contemplated to be delivered by the Master Lease Tenant to the Purchaser, as landlord, pursuant to any of the Grand Villa Master

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Lease, the Cascades Master Lease, and the Starlight Master Lease, including without limitation, evidence of insurance as required thereby, estoppel certificates and a subordination, non-disturbance and attornment agreement to the Purchaser’s mortgagee as contemplated thereby, or other documents specifically contemplated thereby that may be required in connection with the Purchaser’s financing, provided that, in each case, the Purchaser provides written Notice to the Vendor specifically requiring same, no later than ten (10) Business Days prior to Closing;

(v)

estoppel certificates for the Nominee Ground Leases, executed by the landlord and the tenant thereunder, confirming that such Nominee Ground Leases are in full force and effect and that there are no defaults by either party thereunder;

(w)

estoppel certificates for all the Leases (each, an “Existing Lease Estoppel Certificate”), in the Purchaser’s form or such form as may be prescribed by the Leases. To the extent that the Vendor is unable to obtain and deliver to the Purchaser on or before the Closing Date Existing Lease Estoppel Certificates from those tenants not referred to in the preceding sentence despite using all reasonable commercial efforts to obtain the same, the Vendor will execute and deliver to the Purchaser and the Purchaser’s lender or lenders on the Closing Date a certificate of the Vendor for all such tenants (the “Replacement Estoppel Certificate”) certifying the information contemplated in the Purchaser’s form of Existing Lease Estoppel Certificate. The Replacement Estoppel Certificate will be deemed for all purposes to be a representation and warranty by the Vendor, subject to the limitations in Article 6, of the truth and accuracy of the matters set out in the Replacement Estoppel Certificate;

(x)

registrable discharges of all Encumbrances registered against the Lands in the LTO which are not Permitted Encumbrances. However, if discharges of such Encumbrances are not available on the Closing Date, the Vendor shall be entitled to register a discharge of same within sixty (60) days after the Closing Date so long as the Encumbrance is in favour of a Canadian Schedule I chartered bank pursuant to the Bank Act (Canada), other British Columbia credit union, BNY Trust Company of Canada or Computershare Company of Canada (the “Existing Chargees”) and commercially reasonable undertakings regarding the discharge of such Encumbrances post-closing are complied with, including the provision to the Purchaser prior to the Closing Date of a payout statement for discharge purposes in respect of the Encumbrances to be paid out and an undertaking of the Vendor’s Solicitors satisfactory to the Purchaser’s Solicitors to pay the balance due under the Encumbrances out of the Balance once received by the Vendor’s Solicitors and provided that the Title Insurer has agreed to “insure over” and remove such Encumbrance as an exception on Purchaser’s Title Policies. For clarity, on or before the Closing Date, the Vendor shall deliver to the Purchaser registrable discharges for any financial Encumbrances and financing statements registered under personal property security legislation affecting the Subject Assets in favour of any entity that is not a Canadian Schedule I chartered bank pursuant to the Bank Act (Canada), other British Columbia credit union, BNY Trust Company of Canada or Computershare Company of Canada;

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(y)

where applicable, registrable discharges in respect of all financing statements registered under personal property security legislation affecting the Subject Assets which are in respect of Encumbrances other than Permitted Encumbrances (subject to any provisions as to the release and registration of such discharges otherwise set out herein) or, alternatively, provided that such financing statements registered under personal property security legislation affecting the Subject Assets are in favor of a Canadian Schedule I bank pursuant to the Bank Act (Canada) or other British Columbia credit union, a certificate or “no interest” letter from such bank or credit union as the secured party in respect of such financing statement (which shall survive Closing) certifying that none of the financing statement(s) registered under personal property security legislation against the Vendor, the Cascades Freehold Nominee or the Vendor Nominee, affect the Subject Assets, such certificate or letter to be satisfactory to the Purchaser, acting reasonably;

(z)

the Cascades Lands Strata Lots Landlord’s Assignment;

(aa)

the Cascades Lands Strata Lots Notice of Landlord’s Assignment;

(bb)

the Comfort Letters, executed by Vendor and the applicable property manager or franchisor;

(cc)

legal opinions as to the due authorization, execution and delivery of the Master Leases and the Master Lease Beneficial Covenants and as to matters of Gaming Law in a form settled by the Purchaser’s Condition Date (which opinions shall be addressed to the Purchaser and the Purchaser’s lenders), as may be requested by the Purchaser or the Purchaser’s lenders, acting reasonably, or as requested by the Title Insurer in order to issue the Title Policies;

(dd)

certified copies of resolutions of the directors or shareholders, as applicable, of the Cascades Freehold Nominee authorizing the transfer of the Nominee Shares to the Purchaser;

(ee)

an assignment of the Nominee Shares to Purchaser, which assignment shall include an indemnity from the Vendor to the Purchaser and the Cascades Freehold Nominee against all losses, claims, actions, damages, liabilities and expenses arising from the existence or occurrence of any facts or circumstances whatsoever relating to the Nominee Shares or the Cascades Freehold Nominee that existed or occurred prior to the Closing Date, including without limitation, any known or unknown liabilities of the Cascades Freehold Nominee existing on or before the Closing Date;

(ff)

registration of the Nominee Shares in the name of the Purchaser and issuance of a new share certificate to the Purchaser in respect of the Nominee Shares;

(gg)

resignations executed by all persons holding positions as directors or officers of the Cascades Freehold Nominee and indemnities from the Purchaser in favour of such directors and officers;

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(hh)

all minute books and other corporate records of the Nominees in the possession of the Cascades Freehold Nominee or the Vendor;

(ii)

an assignment and assumption of the Nominee Ground Leases;

(jj)

the Option Agreements;

(kk)

the Easement;

(ll)

such other documents and certificates, including without limitation an officer’s certificate as to the continued accuracy of the surveys provided in the Property Information, as may be reasonably requested by the Title Insurer in order to issue the Title Policies; and

(mm)

any other closing documents, certificates and assurances as may be requisite in the reasonable opinion of the Purchaser’s solicitors for more perfectly and absolutely assigning, transferring, conveying and assuring to and vesting in the Purchaser, title to the Subject Assets free and clear of any lien, charge, encumbrance or legal notation other than the Permitted Encumbrances as contemplated herein.

5.3

Purchaser’s Closing Documents

Except where expressly provided otherwise, at least two (2) Business Days before the Closing Date, subject to the terms and conditions of this Agreement, the Purchaser shall deliver or cause to be delivered to the Vendor’s Solicitors (except where expressly provided otherwise) the following, duly executed by the Purchaser where it is a party thereto:

(a)

the adjusted Balance (to be delivered on the Closing Date to the Title Insurer or Vendor’s Solicitors, at Purchaser’s option);

(b)

those documents and agreements described in Section 5.2 to which the Purchaser is a party;

(c)

a purchaser’s statement of adjustments;

(d)

the Landlord BCLC Agreement(s);

(e)

any documents or deliveries contemplated to be delivered by the Purchaser as landlord to the Master Lease Tenant as tenant pursuant to any of the Grand Villa Master Lease, the Cascades Master Lease, and the Starlight Master Lease, including without limitation any documents specifically contemplated thereby that may be required in connection with the Master Lease Tenant’s financing of its leasehold interest, including a Landlord Lender Agreement, provided that, in each case, the Vendor provides written Notice to the Purchaser specifically requiring same, no later than ten (10) Business Days prior to Closing;

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(f)

any assumptions or notices specifically required of the Purchaser by the terms of the Permitted Encumbrances;

(g)

the Corporate Certificate re: Purchaser;

(h)

the GST Declaration and Indemnity;

(i)

the Comfort Letters executed by the applicable Landlord;

(j)

(k)

a notice and direction to the applicable Governmental Authority directing that payment of all property tax vacancy credits or rebates for the period prior to or after Closing to be continued to be made to the Vendor (or the Master Lease Tenant as applicable);

(l)

an assignment and assumption of the Nominee Ground Leases;

(m)

the Option Agreements;

(n)

the Easement; and

(o)

all other documents which the Vendor reasonably requests to give effect to the Transaction and to result in the proper assumption of the Subject Assets by the Purchaser; and such other closing documents as may be requested by the Vendor, acting reasonably, whether or not similar to the foregoing.

5.4

Forms of Closing Documents

Except where expressly provided otherwise in this Agreement, or where it is provided that an agreement is to be satisfactory to a party in its sole and absolute discretion, the form and substance of all agreements to be delivered by the Purchaser and the Vendor on Closing shall be acceptable to both parties, each acting reasonably, provided that none of such documents shall contain covenants, representations or warranties which are in addition to or more onerous upon either the Vendor or the Purchaser than those expressly set forth in this Agreement.

5.5

Registration and Other Costs

(a)

The Vendor and the Purchaser shall be responsible for the costs of the Vendor’s Solicitors and the Purchaser’s Solicitors, respectively, in respect of the Transaction.

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(b)

Except as otherwise provided in this Section 5.5, the Purchaser and the Vendor shall each be responsible for and pay one-half (¹⁄₂) of all taxes, fees and other costs payable in connection with the conveyance or transfer of the Subject Assets, including without limitation, costs of registering the Transfer Documents by the Purchaser, all provincial and municipal land transfer taxes payable upon registration of the Transfer Documents (but excluding all provincial and municipal land transfer taxes payable upon registration of the Master Lease (or notices thereof) for which the Vendor shall be solely responsible), costs of the Title Policies, fees for obtaining the Competition Act Approval and fees for obtaining GPEB and BCLC approval.

The Vendor and Purchaser shall make all adjustments in their respective statements of adjustments in accordance with this Section 5.5(b). The parties shall make readjustments after Closing as necessary. Each party will pay to the other promptly such net amounts as are shown to be owed by it to the other on the readjustment statements.

(c)

The Purchaser shall be responsible for the cost of any title insurance for its lenders. The Vendor shall be responsible for the costs of preparing and registering any discharges of Encumbrances with respect to the Subject Assets which are not Permitted Encumbrances.

(d)

The Purchaser shall indemnify and save harmless the Vendor and its shareholders, directors, officers, employees and agents from all Claims incurred, suffered or sustained as a result of a failure by the Purchaser to file any returns, certificates, filings, elections, notices or other documents required to be filed by the Purchaser with any federal, provincial or other taxing authorities in connection with the conveyance or transfer of the Subject Assets.

(e)

The Purchaser and the Vendor agree that if GST is exigible on this Transaction then it is the Vendor’s obligation to collect GST, and the Purchaser’s obligation to pay GST on Closing. The Purchaser confirms that it will be registered with CRA or any successor thereto in compliance with subdivision d of Division V of Part IX of the Excise Tax Act (Canada) relating to GST on the Closing Date. The Purchase Price does not include GST and the Purchaser confirms that it will be responsible for the GST payable with respect to the Transaction and will account directly to Canada Revenue Agency (“CRA”) with respect thereto in accordance with Schedule “B”. The Purchaser covenants and agrees that on Closing it shall either: (i) confirm its GST registration number to the Vendor on the Closing Date by providing a signed GST Declaration and Indemnity pursuant to Section 5.3 or (ii) pay, in addition to the Purchase Price, GST on the Purchase Price.

(f)

The provisions of this Section 5.5 shall survive the Closing.

5.6

Transfer Closing Procedure

The Closing will be conducted in accordance with the following provisions:

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(a)

all Closing Documents will be delivered in escrow to the offices of Boughton Law Corporation in accordance with this Agreement;

(b)

the parties obtain confirmation from the Title Insurer that it is irrevocably committed to issue the Title Policies;

(c)

the Purchaser will pay to the Vendor’s Solicitors or the Title Insurer, at Purchaser’s option, in trust the Balance, and thereupon the Closing Documents and closing funds shall be released from escrow; and

(d)

Forthwith following receipt by the Vendor’s Solicitors or the Title Insurer, as applicable, of the payment pursuant to Section 5.6(b) and by the Purchaser’s Solicitors and the Vendor’s Solicitors the documents and items referred to in Section 5.2, the Purchaser will cause the Purchaser’s Solicitors to file the Transfer Documents in the appropriate LTO on the Closing Date concurrently with any security documents applicable to any mortgage financing arranged by the Purchaser in connection with the purchase of the Subject Assets.

After receipt by the Purchaser’s Solicitor of satisfactory post-filing registration searches of the Lands in the LTO, the Vendor’s Solicitors shall register the Master Leases.

In the event that any of the Transfer Documents, the security documents, or any other documents being registered in connection with the Transaction are rejected by the LTO for filing, the parties hereto shall cooperate as may be reasonably necessary to cause the proper registration of such documents. The provisions of this grammatical paragraph shall survive the Closing.

ARTICLE 6

REPRESENTATIONS, WARRANTIES AND COVENANTS

6.1

Vendor’s Representations

The Vendor and the Vendor Nominee, hereby represents and warrants to and in favour of the Purchaser that as of the date of this Agreement and (except as otherwise provided in this Section 6.1) as of the Closing Date:

(a)

the Vendor is the beneficial owner of the Subject Assets and has good and marketable title to the Subject Assets free and clear of all liens, claims, charges and encumbrances other than Permitted Encumbrances;

(b)

the Vendor Nominee is the registered owner of legal title to the all of the Cascades Lands Strata Lots, the Grand Villa Lands and the Starlight Lands as nominee, agent and bare trustee for and on behalf of the Vendor; Cascades Freehold Nominee is the registered owner of the legal title to the Cascades Freehold Property;

(c)

each of the Vendor Nominee and the Cascades Freehold Nominee is duly incorporated and validly subsisting under the laws of the province of British

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Columbia, neither the Vendor Nominee nor the Cascades Freehold Nominee is a reporting or public company and each of the Vendor Nominee and the Cascades Freehold Nominee is in good standing with all appropriate governmental offices of British Columbia;

(d)

neither the Vendor Nominee nor the Cascades Freehold Nominee owns any assets of any kind, has no beneficial interest in the Subject Assets and has carried on no business or activity of any kind other than holding legal title to the Lands or the Cascades Lands Freehold Lots, as applicable, in trust for the Vendor and dealing with the Lands or the Cascades Lands Freehold Lots, as applicable, on behalf of and as directed by the Vendor;

(e)

neither the Vendor Nominee nor the Cascades Freehold Nominee has any liabilities or indebtedness whatsoever, contingent or otherwise;

(f)

neither the Vendor Nominee nor the Cascades Freehold Nominee has any employees;

(g)

the Vendor is a corporation duly incorporated and subsisting under the laws of its place of incorporation, and has the necessary corporate authority, power and capacity to own its interest in the Subject Assets and to enter into this Agreement and all agreements, transfers, assignments and other documents to be delivered by it pursuant hereto and to complete the Transaction and perform its obligations under the documents to be entered into by it pursuant hereto in respect of the Transaction on the terms and conditions herein contained, all of which have been duly and validly authorized by all requisite proceedings and that this Agreement constitutes a legal, valid, and binding obligation of the Vendor in accordance with its terms;

(h)

the obligations of the Vendor and Vendor Nominee under this Agreement and of Vendor and each Master Lease Tenant under each of the agreements, transfers, assignments and other documents entered into by it pursuant hereto (including without limitation, the Closing Documents), and the Transaction contemplated herein, have been duly and validly authorized by all requisite corporate proceedings and constitute (or will constitute on Closing, in the case of Closing Documents) legal, valid and binding obligations, enforceable against it in accordance with their terms;

(i)

neither the entering into nor delivery of this Agreement nor the completion by the Vendor Nominee, the Cascades Freehold Nominee and Vendor of the Transaction will conflict with or constitute a default under any Applicable Laws; and no approval or consent is required of (i) any Governmental Authority or (ii) a party to any Permitted Encumbrance, in connection with the execution and delivery of this Agreement by the Vendor and the consummation of the Transaction, save and except for the Competition Act Approval, and as set out in each of Section 4.1(a), 4.1(b) and 4.1(c) and Section 4.2(b), 4.2(c) and 4.2(d), and as may be set out in the Permitted Encumbrances;

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(j)

the execution, delivery and performance of this Agreement by the Vendor does not result in the violation of any of the provisions of its constating documents or by-laws;

(k)

except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, none of the Vendor, the Vendor Nominee or the Cascades Freehold Nominee has received written notice of any, and to the best of Vendor’s knowledge there are no, pending or threatened expropriation or rezoning proceedings relating to the Property;

(l)

except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, none of the Vendor, the Vendor Nominee or the Cascades Freehold Nominee has received written notice which remains outstanding from any Governmental Authority or other Person with respect to any actual or threatened complaint, claim, citation, order (including any pollution control order, stop order, pollution abatement order, pollution prevention order or remediation order), directive, request for information, statement of claim or notice of investigation concerning any alleged violation of, liability or potential liability under any Applicable Laws relating to environmental matters with respect to the Property (each, a “Hazardous Material Claim”) and Vendor has no knowledge of any actual or threatened Hazardous Material Claim;

(m)

to the best knowledge of the Vendor, except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, there is no Proceeding relating to the Vendor, the Vendor Nominee or the Cascades Freehold Nominee or affecting the Subject Assets or the Cascades Freehold Property, which could reasonably be expected to materially adversely affect the Subject Assets or the Cascades Freehold Nominee, and there is not, outstanding against the Vendor or the Cascades Freehold Nominee any judgment, decree, injunction, rule or order of any Governmental Authority or arbitrator which could reasonably be expected to materially adversely affect the Subject Assets or the Cascades Freehold Nominee;

(n)

the Vendor is not a non-resident of Canada for the purposes of the Income Tax Act (Canada);

(o)

the Vendor is duly registered under Subdivision D of Division V of the Excise Tax Act (Canada) and the registration number assigned to the Vendor by CRA is 81098 3262 RT0001;

(p)

as of the Execution Date, there are no collective bargaining agreements or proceedings under the British Columbia Labour Relations Code which are or will affect the Property on Closing other than as shall be Disclosed to the Purchaser prior to 5:00 p.m. central time on the third (3rd) Business Day prior to the Purchaser’s Condition Date;

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(q)

except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, the Vendor has not received any notice from any Governmental Authority (other than a Gaming Authority) of zoning, building, fire, water, use or other Applicable Law violations (other than Gaming Laws violations) issued in respect of the Property which remain uncorrected;

(r)

except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, the Vendor has not received (i) any notice from any Gaming Authority of any Gaming Laws violations issued in respect of the Property which remain uncorrected, or (ii) any notice of investigations from any Gaming Authority in respect of any gaming operations and/or the Property and which, in either case, if uncorrected could reasonably be expected to materially adversely affect the Property or the Business;

(s)

there will be no tenancies affecting the Subject Assets at the time of Closing other than the Existing Leases and other Leases delivered to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date;

(t)

The Property Information, including all Leases, and the Subsequent Property Information Disclosed to Purchaser are complete copies of such materials. To the knowledge of the Vendor, the Property Information and Subsequent Property Information includes all site plans, surveys, plans and specifications, Phase I and Phase II environmental reports, property condition reports, the most recent title commitments, all unregistered documents that would affect title to the Subject Assets or bind Purchaser, after Closing, in each case, affecting the Subject Assets and in Vendor’s possession or control;

(u)

except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, at the time of Closing, the Vendor and the Cascades Freehold Nominee shall have prepared and filed all tax returns and other documents required to be filed by it and such returns and documents are complete and correct; the Vendor and the Cascades Freehold Nominee shall have paid all taxes which are due and payable by it on or before the Closing Date; and the Vendor shall have made adequate provision for taxes payable for each current period for which tax returns are not yet required to be filed and withheld from each amount paid or credited to any person the amount of taxes required to be withheld therefrom and has remitted such taxes to the proper tax or other receiving authorities within the time required under applicable legislation;

(v)

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might now or hereafter by operation of law or otherwise constitute a lien, charge or encumbrance on the Subject Assets, or any part thereof, or which could affect the right of the Purchaser to own, occupy and obtain revenue from the Subject Assets, or any part thereof; and

(w)

to the best knowledge of the Vendor, except as will be Disclosed to the Purchaser prior to 5:00 p.m. central time on the fifth (5th) Business Day prior to the Purchaser’s Condition Date, there is no claim or litigation pending, threatened with respect to the Vendor, the Vendor Nominee, or the occupancy or use of the Subject Assets by the Vendor which could affect the right of the Purchaser to own, occupy, and obtain revenue from the Subject Assets or the ability of the Vendor or Vendor Nominee to perform its obligations under this Agreement.

For the foregoing purposes of this Section 6.1, “to the best knowledge of the Vendor” or similar words mean to the Vendor’s actual knowledge after inquiry of the head of operations for the Property and any third-party property managers for the Property. This Section 6.1 shall survive the Closing, subject to Section 6.3 and, if applicable, Section 6.5.

If before the Closing either party acquires knowledge of any condition which would make any of the representations and warranties set forth in Section 6.1 not true, such party shall promptly notify the other party of such condition. If the Vendor is not able to cure any such condition prior to the Closing Date, and if such condition results in a Material Value Reduction, the Purchaser may terminate this Agreement by delivering written notice to the Vendor within ten (10) days after the date that the Vendor notifies the Purchaser that the Vendor is unable to cure such condition. If such condition was the result of the Vendor’s misrepresentation in any material respect or default hereunder (any such condition arising by the Vendor’s misrepresentation in any material respect or default hereunder, being a “Material Condition”), in addition to the termination right set forth in the preceding sentence, the Vendor shall reimburse the Purchaser for the Purchaser’s Expenses, which obligation of the Vendor shall survive the termination of this Agreement. Upon such termination, the Deposit, together with all interest earned thereon, shall be refunded to the Purchaser and both parties hereto shall be released from all of their liabilities and obligations under this Agreement (other than those obligations which are expressly stated to survive termination of this Agreement). If the Purchaser fails to terminate this Agreement within such ten (10) day period, the Purchaser shall be deemed to waive its right of termination with respect to any such condition. In the event of such a waiver or in the event that the Purchaser does not have the right to terminate this Agreement as a result of such condition, the Purchaser shall retain its right to make a Claim under Section 6.3 with respect to such condition.

6.2

Purchaser’s Representations

The Purchaser hereby represents and warrants to and in favour of the Vendor that as of the date of this Agreement and as of the Closing Date:

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(a)

the Purchaser is a corporation duly incorporated and subsisting under the laws of its place of incorporation (and is or will be extra-provincially registered in British Columbia if necessary), and has the necessary corporate authority, power and capacity to own the Subject Assets and to enter into this Agreement and all agreements, transfers, assignments and other documents to be delivered by it pursuant hereto and to complete the Transaction and perform its obligations under the documents to be entered into by it pursuant hereto in respect of the Transaction on the terms and conditions herein contained;

(b)

this Agreement and the obligations of the Purchaser hereunder and each of the agreements, transfers, assignments and other documents entered into by the Purchaser pursuant hereto (including, without limitation, the Closing Documents) and the Transaction contemplated herein will have been duly and validly authorized by all requisite corporate proceedings of the Purchaser and constitute (or will constitute on Closing, in the case of the Closing Documents) legal, valid and binding obligations of the Purchaser enforceable against the Purchaser in accordance with its and their terms;

(c)

neither the entering into nor delivery of this Agreement nor the completion by the Purchaser of the Transaction will conflict with or constitute a default under any Applicable Laws; and no approval or consent of any Governmental Authority is required in connection with the execution and delivery of this Agreement by the Purchaser and the consummation of the Transaction, save and except for the Competition Act Approval and as set out in each of Section 4.1(a), 4.1(b) and 4.1(c) and Section 4.2(b), 4.2(c) and 4.2(d);

(d)

the execution, delivery and performance of this Agreement by the Purchaser does not result in the violation of any of the provisions of the constating documents or by-laws of the Purchaser;

(e)

in respect of the following matters:

(i)

the Purchaser has not offered, promised, given or agreed to give and shall not during the term of this Agreement offer, promise, give or agree to give to any Person any bribe on behalf of the Vendor or otherwise with the object of obtaining a business advantage for the Vendor or otherwise;

(ii)

the Purchaser has not engaged in any activity or practice which would constitute an offence under the Foreign Corrupt Practices Act of the United States and the applicable anti-bribery and/or anti-corruption laws of Canada (“The Anti-Corruption Laws”);

(iii)

the Purchaser has in place, its own policies and procedures to ensure compliance with the Anti-Corruption Laws;

(iv)

the Purchaser has in place, effective accounting procedures and internal controls necessary to record all expenditures in connection with this Agreement, which enable the Vendor and the Purchaser to readily identify the Purchaser’s financial and related records in connection with this Agreement;

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(v)

from time to time during the term of this Agreement including without limitation, on Closing, at the reasonable request of the Vendor, the Purchaser shall confirm in writing that it has complied with its representations under this Sections 6.2(e)(ii) through 6.2(e)(iv), inclusive and shall provide any information reasonably requested by the Vendor in support of such compliance; and

(vi)

the Purchaser shall notify the Vendor as soon as practicable of any breach of any of the representations contained in this Sections 6.2(e)(ii) through 6.2(e)(iv), inclusive of which it becomes aware.

(f)

As of the Closing Date, the Purchaser shall not have engaged any asset or property manager in respect of the Subject Assets.

This Section 6.2 shall survive the Closing, subject to Section 6.3 and, if applicable, Section 6.5.

6.3

Survival of Representations and Covenants

(a)

The representations, warranties, and certifications contained in this Agreement shall not merge on Closing and, shall survive until the expiry of one (1) year following the Closing Date (the “Survival Period”). The party which has received a representation, warranty or certification in this Agreement shall give Notice to the other party of each breach of the representation, warranty, or certification, together with details thereof, within a reasonable time after becoming aware of the breach and in any event not later than the last day of the Survival Period. Notwithstanding any other provision of this Agreement, no Claim may be asserted or pursued against any party hereto, or any action, suit or other proceeding commenced or pursued, for or in respect of any breach of any representation, warranty or certification made by such party in this Agreement unless Notice of such Claim is received by such party describing in detail the facts and circumstances with respect to the subject matter of such Claim on or prior to the last day of the Survival Period, irrespective of whether the subject matter of such Claim shall have occurred before or after such date; and upon the expiry of the Survival Period all such representations, warranties, and certifications shall cease to have any effect except to the extent a written Claim has been previously given in respect thereof in accordance with this Subsection 6.3(a) and Subsection 6.3(b). Neither the Vendor nor the Purchaser shall be entitled to make any Claim in respect of a breach of a representation, warranty or indemnity from the other party that it had actual knowledge was false or untrue as of the Closing Date.

(b)

Notwithstanding the foregoing provisions of this Section or any other provisions of this Agreement or any Closing Documents, the liability of any party to this

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Agreement (herein referred to as the “Responsible Party”) after Closing in respect of any representation, warranty, or certification made by such Responsible Party in or pursuant to this Agreement or in any Closing Document made by such Responsible Party shall be subject to and limited by the following:

(i)

the time limits contained in Subsection 6.3(a) as applicable;

(ii)

no Claim shall be brought against the Vendor by the Purchaser until the aggregate of all the amounts claimed pursuant to such Claim or Claims that have then been made by the Initiating Party against the Vendor exceed Five Hundred Thousand dollars ($500,000) provided that if the aggregate of all such Claims exceeds Five Hundred Thousand dollars ($500,000), the Purchaser shall be entitled to recover the full amount of the Claim or Claims including the initial Five Hundred Thousand dollars ($500,000) and only if such Claim or Claims are successful;

(iii)

if any breach of any such representation, warranty or certification or Surviving Covenant can be remedied within a reasonable period of time (not to exceed one hundred eighty (180) days after Notice thereof is given) the Responsible Party shall be given a reasonable opportunity to remedy any such breach, provided such breach is capable of being remedied and granting such opportunity does not, in the opinion of the Initiating Party, acting reasonably, adversely affect the Initiating Party; and

(iv)

the provisions of Subsection 6.3(a) and Section 6.5 if applicable.

(c)

It is agreed that, notwithstanding any other provision of this Agreement:

(i)

the Purchaser shall not have the right to terminate this Agreement as a result of the breach by the Vendor of one or more representations and warranties made by the Vendor in this Agreement, unless it results in a Material Value Reduction;

(ii)

if there is any breach by the Vendor of one or more representations and warranties made by the Vendor in this Agreement that does not result in a Material Value Reduction, then the Purchaser shall not have any right to terminate this Agreement as a result of such breach, but the Purchaser shall have the right to bring an action for damages, if any, which may otherwise be asserted subject to the provisions of this Section 6.3 and, if applicable, Section 6.5;

(iii)

if there is any breach by the Vendor of one or more representations and warranties made by the Vendor in this Agreement as a result of a Material Condition that results in a Material Value Reduction, then the Purchaser shall have the right to terminate this Agreement as a result of such breach as set out in Section 6.1, and in such event the Deposit and all interest earned thereon shall be returned to the Purchaser, and the Vendor shall reimburse the Purchaser for its reasonable and customary third-party out

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of pocket costs and expenses incurred in connection with its negotiation of this Agreement, due diligence and obtaining financing for the transactions contemplated in this Agreement, including without limitation, all commitment fees, lenders’ rate lock expenses and legal fees incurred to its acquisition lenders following the Purchaser’s Condition Date (collectively, “Purchaser’s Expenses”) up to the amount of the Deposit; and

(iv)

for greater certainty, it is confirmed that reference to a breach of any representation and warranty means such representation and warranty is not true and accurate. “Material Value Reduction” means that, in the Purchaser’s reasonable determination, the fair market value of the Subject Assets is at least two percent (2%) of the Purchase Price less than what the value of the Subject Assets would be if such representation and warranty were true and accurate.

(d)

This Section shall survive the Closing or the termination of this Agreement.

6.4

“As-Is” Purchase

The Purchaser acknowledges and agrees that:

(a)

except for the representations, warranties and covenants of the Vendor expressly set out in Section 6.1 or in the Closing Documents, in entering into this Agreement and closing the Transaction, the Purchaser has relied and will continue to rely entirely and solely upon its own inspections and investigations with respect to the Subject Assets;

(b)

except as otherwise expressly provided for in this Agreement or in the Closing Documents (including, for clarity, the Grand Villa Master Lease, the Cascades Master Lease and the Starlight Master Lease), the Subject Assets are being purchased and assumed by the Purchaser on an “as is, where is” basis as of the date of this Agreement and without any express or implied agreement or representation and warranty of any kind whatsoever or any liability or obligation of the Vendor as to the physical or financial condition, suitability for development, fitness for a particular purpose, merchantability, title, physical characteristics, profitability, use or zoning, environmental condition, existence of latent defects, quality, or any other aspect or characteristic thereof;

(c)

except as otherwise expressly provided for in this Agreement, the Vendor makes no agreements or representations and warranties concerning any statements made or other information delivered or made available to the Purchaser (whether by the Vendor, the Vendor’s Real Estate Broker, the Vendor’s Solicitors, or any other agents, representatives or advisors of the Vendor or any of each such Person’s respective affiliates, or any other Person) with respect to the Subject Assets, whether as part of the information Disclosed to the Purchaser or otherwise;

(d)

except as otherwise expressly provided for in this Agreement, the Property Information is provided to the Purchaser without representation or warranty and the Purchaser shall rely entirely and solely upon its own investigations and inspections; and

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(e)

except as otherwise expressly provided for in this Agreement or in the Closing Documents (including, for clarity, the Master Leases and the Master Lease Beneficial Covenants), the Vendor shall have no obligations or responsibility to the Purchaser after Closing with respect to any matter relating to the Subject Assets or the condition thereof.

The provisions of this Section 6.4 shall survive Closing or the termination of this Agreement.

6.5

Third Party Claims

(a)

In the case of any Claim (a “Third Party Claim”) made by any third party (which shall not include affiliates or related parties to the Purchaser or the Vendor) after the Closing against either the Vendor or the Purchaser (such party hereto against whom such Third Party Claim is made being referred to herein as the “Claiming Party”) with respect to which the Claiming Party seeks to make a Claim against the other party to this Agreement (the “Responding Party”) as a result of the breach by the Responding Party of any representation, warranty or certification made by such Responding Party in or pursuant to this Agreement or any Closing Document or the breach by such Responding Party of any Surviving Covenant made by such Responding Party, or pursuant to any indemnity made by such Responding Party in this Agreement which survives Closing, the Claiming Party shall give Notice to the Responding Party of any such Third Party Claim forthwith after receiving notice thereof. If the Claiming Party fails to give such Notice to the Responding Party, such failure shall not preclude the Claiming Party from making such claim against the Responding Party, but its right to indemnification may be reduced to the extent that such delay prejudiced the defence of the Third Party Claim or increased the amount of liability or the cost of the defence.

(b)

The Responding Party shall have the right, by Notice to the Claiming Party given not later than thirty (30) days after receipt of the Notice referred to in Subsection 6.5(a), to assume the control of the defence, compromise or settlement of the Third Party Claim, so long as there is no conflict between the position of the Claiming Party and the Responding Party.

(c)

Upon the assumption of control of any Third Party Claim by the Responding Party as contemplated by Subsection 6.5(b), the Responding Party shall diligently proceed with the defence, compromise or settlement of the Third Party Claim at its sole expense, including, if necessary, employment of counsel reasonably satisfactory to the Claiming Party and, in connection therewith, the Claiming Party shall co-operate fully (but at the expense of the Responding Party) to make available to the Responding Party all pertinent information and witnesses under the Claiming Party’s control, make such assignment and take such other steps as

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in the opinion of counsel for the Responding Party, acting reasonably, are reasonably necessary to enable the Responding Party to conduct such defence. The Claiming Party shall have the right to participate in the negotiation, settlement or defence of any Third Party Claim at its own expense and no Third Party Claim shall be settled, compromised or otherwise disposed of without the prior written consent of the Claiming Party, such consent not to be unreasonably withheld or delayed. The parties acknowledge and agree that it shall not be unreasonable for the Claiming Party to withhold approval of a settlement or compromise of a Third Party Claim if such settlement or compromise imposes any obligations or liabilities on the Claiming Party or the Subject Assets unless such liabilities and obligations are assumed by the Responding Party. If the Responding Party elects to assume control of the Third Party Claim as contemplated by Subsection 6.5(b), the Claiming Party shall not pay, or permit to be paid, any part of the Third Party Claim unless the Responding Party consents in writing to such payment, such consent not to be unreasonably withheld or delayed, or unless the Responding Party, subject to the last sentence of Subsection 6.5(d), withdraws from the defence of such Third Party Claim or unless a final judgment from which no appeal may be taken by or on behalf of the Responding Party is entered against the Claiming Party in respect of such Third Party Claim.

(d)

If the Responding Party fails to give Notice to the Claiming Party as contemplated by Subsection 6.5(b) or fails to defend or, if after commencing or undertaking such defence, fails to prosecute or withdraws from such defence, the Claiming Party shall have the right to undertake the defence or settlement thereof. If the Claiming Party assumes the defence of any Third Party Claim and proposes to settle it prior to a final judgment thereon or to forego any appeal with respect thereto, then the Claiming Party shall give the Responding Party prompt Notice thereof, and the Responding Party shall have the right to participate in the settlement or assume or reassume the defence of such Third Party Claim.

(e)

This Section 6.5 shall survive the Closing.

6.6

Letters of Reliance

The Vendor agrees to provide the Purchaser and the Purchaser’s lenders, at the Purchaser’s request, with letters of reliance from Keystone Environmental Ltd. with respect to its Environmental Site Investigations for each Property, which letters of reliance shall be on the consultant’s standard form.

6.7

Estoppel Certificates and Subordination Agreements.

The Vendor shall use good faith and commercially reasonable efforts to obtain estoppel certificates and/or subordination agreements for any Existing Leases or Leases entered into after the Execution Date requested by the Purchaser in form and substance reasonably acceptable to the Purchaser.

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ARTICLE 7

OPERATION UNTIL CLOSING

7.1

Operation Before Closing

From the date hereof until Closing, the Vendor shall insure, repair, and maintain the Property in accordance with the management practices of a reasonably prudent owner of lands and buildings of a similar quality, type and size as the Property in British Columbia.

7.2

Damage or Expropriation Before Closing

The interest of the Vendor in and to the Property shall be at the risk of the Vendor until Closing. If loss, damage or expropriation of the Property occurs prior to Closing, Vendor shall promptly notify the Purchaser of such loss, damage or expropriation. If the cost to repair such damage, or the value of the property taken, in the case of an expropriation, exceeds Five Million Dollars ($5,000,000) or cannot be repaired within one hundred and eighty (180) days, then the Vendor or the Purchaser shall have a period of five (5) Business Days following such occurrence (or notice thereof) to terminate this Agreement by giving Notice to the other party. In the event of such termination, the Deposit shall be returned to the Purchaser, together with interest accrued thereon, and both parties hereto shall be released from all of their liabilities and obligations under this Agreement (other than those obligations which are expressly stated to survive termination of this Agreement). If neither the Purchaser nor the Vendor terminates this Agreement as aforesaid, then notwithstanding the extent of such damage or destruction, (a) the Transaction shall be completed and the Master Lease Tenant shall pay all rent required to be paid under each of the Grand Villa Master Lease, the Cascades Master Lease and the Starlight Master Lease, as and when due in accordance with the terms thereof, without abatement, as if such damage or destruction had not occurred, (b) the Master Lease Tenant shall repair and/or rebuild such damage following Closing as required by the terms of the Grand Villa Master Lease, the Cascades Master Lease or the Starlight Master Lease, as applicable and (c) all proceeds of insurance and awards for expropriation shall be held and disbursed as provided in the applicable Master Lease and the Vendor shall execute such documents as are reasonable necessary to assign such proceeds or awards over to the Purchaser as and to the extent provided in the applicable Master Lease.

If the damage, or destruction or expropriation occurs at such time that there is insufficient time for the Vendor or Purchaser to make its election to terminate hereunder, the Closing Date shall be postponed to a date which is five (5) Business Days after the earlier of the date such election is made or the period for making such election has expired. This Section 7.2 shall survive the Closing.

7.3

Leasing and Contracts

From and after the Execution Date, the Vendor shall not enter into any Lease unless such lease has the landlord protections included in the Sublease Acknowledgment. From and after the Purchaser’s Condition Date, the Vendor shall not enter into any Lease or

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Contract or any amendment of any Lease or Contract that would bind the Purchaser after Closing or bind the Purchaser or the Subject Assets following a termination of the applicable Master Lease. The Vendor shall provide the Purchaser with copies of all Leases promptly following the execution thereof. This Section 7.3 shall survive the Closing.

ARTICLE 8

GENERAL

8.1

Interpretation

Unless the context otherwise requires (i) “or” is not exclusive; (ii) “this Agreement”, “hereof”, “herein”, “hereto” and similar expressions mean this Agreement together with all schedules to this Agreement and all amendments and supplements that may be made to this Agreement from time to time in writing; (iii) references to Articles, sections, subsections and schedules are references to Articles, sections, subsections and schedules of this Agreement; and (iv) wherever any provision of any schedule to this Agreement conflicts with the body of this Agreement, the body of this Agreement shall prevail.

Whenever a statement or provision in this Agreement is followed by words denoting inclusion or example (such as “including”) and then a list of, or reference to, specific matters or items, such list or reference shall not be read so as to limit or restrict the generality of such statement or provision, even though words such as “without limitation” or “without limiting the generality of the foregoing” or “but not limited to” do not precede such list or reference. If any provision of this Agreement is illegal or unenforceable, such provision shall be considered severable (and automatically severed) from the remaining provisions of this Agreement, which shall remain in force. There shall be no inference, presumption or conclusion drawn whatsoever by virtue of: (a) any one or more of the Vendor, the Vendor’s Solicitors, the Vendor’s Real Estate Broker, the Purchaser or the Purchaser’s Solicitors having drafted this Agreement or any portion thereof; or, (b) this Agreement being drawn using the standard or preferred form of the Vendor, the Vendor’s Solicitors or the Vendor’s Real Estate Broker; or, (c) the deletion of language or wording from this Agreement prior to execution by the Vendor or the Purchaser; or, (d) the selection or use of the words “not applicable” or “intentionally left blank” in any provision of this Agreement and, in this regard, the use of such words is for the convenience of the parties hereto only to preserve the numbering system of this Agreement; or (e) the particular words chosen and used to label or identify the defined terms of this Agreement; or (f) the selection or use of any bold, italicized, underlined or coloured print in this Agreement.

8.2

Schedules

The following schedules attached to and incorporated into this Agreement by reference shall form part of this Agreement:


Schedule “A”		Legal Descriptions
Schedule “B”		GST Declaration and Indemnity

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Schedule “C”		Waiver Notice
Schedule “D”		Permitted Encumbrances
Schedule “E”		Specific Excluded Property
Schedule “F”		Purchase Price Allocation and Initial Master Lease Rent Allocation
Schedule “G”		Data Room Index
Schedule “H”		Off Title Search Results
Schedule “I”		Master Lease Form
Schedule “J”		Existing Leases
Schedule “K”		Master Lease Beneficial Covenant Form
Schedule “L”		Form of Landlord BCLC Agreement

8.3

Gender and Number

Words importing the singular include the plural and vice versa. Words importing gender include all genders.

8.4

Captions

The caption, headings and table of contents contained herein are for reference only and in no way affect this Agreement or its interpretation.

8.5

Obligations as Covenants

Each agreement and obligation of any of the parties hereto in this Agreement, even though not expressed as a covenant, is considered for all purposes to be a covenant.

8.6

Applicable Law

This Agreement shall be construed and enforced in accordance with the laws of the Province of British Columbia and the laws of Canada applicable thereto therein, without giving effect to choice of law principles established or enacted in accordance with such laws, and shall be treated in all respects as a British Columbia contract for all purposes. The parties hereto hereby irrevocably attorn to the courts of the Province of British Columbia and irrevocably select the appropriate courthouse in Vancouver, British Columbia (given the nature of the legal proceeding and the jurisdiction of the particular court) to be the venue for all legal proceedings in respect of this Agreement, the Closing and any matter related thereto.

8.7

Currency

All references to currency in this Agreement shall be deemed to be references to Canadian dollars. Unless otherwise expressed, any amount set out in or contemplated by this Agreement excludes any GST or retail sales taxes which are required to be remitted or paid with respect to such amount.

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8.8

Invalidity

If any immaterial covenant, obligation, agreement or part thereof or the application thereof to any Person or circumstance, to any extent, shall be invalid or unenforceable, the remainder of this Agreement or the application of such covenant, obligation or agreement or part thereof to any Person, party or circumstance other than those to which it is held invalid or unenforceable shall not be affected thereby. Each covenant, obligation and agreement in this Agreement shall be separately valid and enforceable to the fullest extent permitted by law.

8.9

Amendment of Agreement

No supplement, modification, waiver or termination (other than an automatic termination pursuant to the terms of this Agreement) of this Agreement shall be binding unless executed in writing by the parties hereto in the same manner as the execution of this Agreement.

8.10

Time

Time shall be of the essence of this Agreement. If anything herein is to be done on a day which is not a Business Day, the same shall be done on the next succeeding Business Day. Unless otherwise provided hereto, all references to time herein shall mean local time in Vancouver, British Columbia.

8.11

Further Assurances

Each of the parties hereto shall from time to time hereafter and upon any reasonable request of the other, execute and deliver, make or cause to be made all such further acts, deeds, assurances and things as may be required or necessary to more effectually implement and carry out the true intent and meaning of this Agreement, without receiving additional consideration therefor, and without imposing any additional liabilities or obligations on such party.

8.12

Entire Agreement

This Agreement and any agreements, instruments and other documents herein contemplated to be entered into between, by or including the parties hereto constitute the entire agreement between the parties hereto pertaining to the Transaction provided for herein and supersede the Letter of Intent and all prior agreements, understandings, negotiations and discussions, whether oral or written, with respect thereto, excluding the Confidentiality Agreement which shall continue in full force and effect, and there are no other warranties or representations and no other agreements between the parties hereto in connection with the Transaction provided for herein except as specifically set forth in this Agreement or the Schedules hereto.

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8.13

Waiver

No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision (whether or not similar) nor shall any waiver constitute a continuing waiver unless otherwise expressed or provided.

8.14

Solicitors as Agents and Tender

Any notice, Notice, approval, waiver, agreement, instrument, document or communication permitted, required or contemplated in this Agreement may be given or delivered and accepted or received by the Purchaser’s Solicitors on behalf of the Purchaser and by the Vendor’s Solicitors on behalf of the Vendor and any tender of Closing Documents and the Balance may be made upon the Vendor’s Solicitors and the Purchaser’s Solicitors, as the case may be.

8.15

Survival

Except as otherwise expressly provided in this Agreement, no representations, warranties, covenants or agreements of the Vendor and Purchaser in this Agreement shall survive the Closing.

8.16

Successors and Assigns

All of the covenants and agreements in this Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall enure to the benefit of and be enforceable by the parties hereto and their respective successors and their permitted assigns pursuant to the terms and conditions of this Agreement.

8.17

Assignment

The Purchaser shall not assign its rights and/or obligations hereunder without the prior written consent of the Vendor, which consent may be withheld by the Vendor in its sole and absolute discretion. Notwithstanding the foregoing, the Purchaser shall be entitled, without the prior written consent of the Vendor but by prior Notice given to the Vendor on or before the day which is five (5) Business Days after the Execution Date, to assign this Agreement to a Person that is an affiliate of the Purchaser (within the meaning of the Business Corporations Act (British Columbia)) (a “Designee”) and/or direct a nominee or nominees to take legal title to the Subject Assets as bare trustee for and on behalf of the Purchaser or Designee, provided that: (a) such assignment is to a Person in respect of which Section 4.1(a), 4.1(b) and 4.1(c) and Section 4.2(b), 4.2(c) and 4.2(d) have been satisfied, and such assignment shall not release the original Purchaser from its obligations and liabilities under this Agreement, and (b) prior to such assignment taking effect, the Purchaser and the Designee shall enter into an agreement with the Vendor which is satisfactory to the Vendor, acting reasonably, pursuant to which the Purchaser and the Designee agree to be jointly and severally liable for the obligations and liabilities of the Purchaser under this Agreement. The Vendor shall not assign its rights and/or obligations under this Agreement without the prior written consent of the Purchaser.

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8.18

Real Estate Commissions

The Vendor shall pay the commission or fee payable to the Vendor’s Real Estate Broker, which the Vendor represents and warrants are the only real estate agents, brokers or sales people that the Vendor have used in connection with the Transaction. The Purchaser represents and warrants to the Vendor that the Purchaser has not used the services of any real estate agent or broker in connection with the purchase and sale of the Subject Assets contemplated hereby. Each of the Purchaser and the Vendor indemnifies the other party from any Claims by any real estate agent or broker claiming otherwise. This Section 8.18 shall survive the Closing or termination of this Agreement.

8.19

Notice

Any notice, demand, approval, consent, information, agreement, offer, payment, request or other communication (hereinafter referred to as a “Notice”) to be given under or in connection with this Agreement shall be in writing and shall be given by personal delivery, reputable overnight courier or e-mail addressed or sent as set out below or to such other address as may from time to time be the subject of a Notice:


(a) Vendor
Attention:		Tolek M. Strukoff, Chief Legal Officer & Corporate Secretary and Brad Bardua, Chief Financial Officer
E-mail:		tstrukoff@gatewaycasinos.com bbardua@gatewaycasinos.com
with a copy to the Vendor’s Solicitors:

Bennett Jones LLP Suite 3400 One First Canadian Place Toronto, ON M5X 1A4

Attention:		S. Paul Mantini and Simon P. Crawford
Email:		mantinisp@bennettjones.com crawfords@bennettjones.com

(b) Purchaser:
Mesirow Realty Sale-Leaseback, Inc. 353 North Clark Street Chicago, Illinois 60654
Attention:		Garry W. Cohen Douglas Barker

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E-mail:		gcohen@mesirowfinancial.com
		dbarker@mesirowfinancial.com

with a copy to the Purchaser’s Solicitors:

Goldberg Kohn Ltd. 55 East Monroe Street, Suite 3300 Chicago, Illinois 60603

Attention:		Jami L. Brodey
		Gary N. Ruben
E-mail:		jami.brodey@goldbergkohn.com
		gary.ruben@goldbergkohn.com

and to:

Boughton Law Corporation
Suite 700 – 595 Burrard Street
Vancouver, British Columbia V7X 1S8
Attention:		George Cadman
		Hugh Claxton
E-mail:		gcadman@boughtonlaw.com
		hclaxton@boughtonlaw.com

Any Notice, personally delivered, shall be deemed to have been validly and effectively given and received on the date of such delivery unless delivered after 5:00 p.m. of the recipient’s local time or on a non-Business Day, in which case it shall be deemed to have been effectively given on the Business Day next following the day it was delivered.

Any notice delivered by overnight courier shall be deemed to have been validly and effectively given and received on the date of such delivery unless delivered after 5:00 p.m. of the recipient’s local time or on a non-Business Day, in which case it shall be deemed to have been effectively given on the Business Day next following the day it was delivered.

Notices shall be permitted to be given by email and shall be deemed to have been validly and effectively given and received on the date of delivery unless delivered after 5:00 p.m. of the recipient’s local time or on a non-Business Day, in which case it shall be deemed to have been effectively given on the Business Day next following the day it was delivered, so long as a duplicate notice is delivered by personal delivery or overnight courier.

It is agreed that any Property Information may be delivered to the Purchaser by (i) adding it to the Data Room so long as notice is given by email to the Purchaser or the Purchaser’s Solicitors at each time additional information is posted to the Data Room or (ii) by transmitting it to the Purchaser or the Purchaser’s Solicitors by e-mail transmission at the e-mail addresses set out above.

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8.20

Effect of Termination of Agreement

Notwithstanding the termination of this Agreement for any reason, the following provisions shall survive and shall remain in full force and effect: (a) the confidentiality provisions contained in the Confidentiality Agreement and Section 2.6 including, without limitation, the Purchaser’s obligations to return documents to the Vendor; (b) Subsection 2.4(b); (c) this Section 8.20 and (d) such other provisions (such as those in Section 3.1 relating to the forfeiture or return of the Deposit following termination) the survival of which following termination are necessary to give practical effect thereto and such other provisions as stated to survive herein. For greater certainty, it is confirmed that termination of this Agreement does not, for the purposes of this Section 8.20, include the Closing of this Agreement and that Section 8.15 governs the survival of provisions of this Agreement after the Closing.

8.21

No Registration of Agreement

The Purchaser shall not register this Agreement or any notice of this Agreement on title to the Lands.

8.22

Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original and which, taken together, shall constitute one and the same instrument. This Agreement may be delivered by emailed pdf and the parties adopt any signature received by emailed pdf as original signatures of the parties. In the case of email pdf transmission, the transmitting party shall forthwith deliver an originally executed copy of this Agreement to the other parties.

8.23

Site Profile Waiver

The Purchaser hereby waives any right it has to be provided with a site profile relating to the Subject Assets pursuant to the provisions of the Environmental Management Act (British Columbia) and the regulations promulgated thereunder.

8.24

Fees, Costs and Expenses

Notwithstanding any other provision in this Agreement, unless otherwise expressly provided herein, each of the Vendor and the Purchaser shall be solely responsible for its own accounting and other professional advisory fees, costs and expenses incurred in connection with this Agreement and the Transaction.

8.25

Vendor’s Obligations Limited

Prior to Closing, the liabilities, obligations and covenants of the Vendor under this Agreement shall be limited in aggregate to the amount equal to the actual amount of the Deposit.

(Signature Page Follows)

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IN WITNESS WHEREOF the parties hereto have executed this Agreement by their properly authorized officers in that behalf as of the day and year first above written.


GATEWAY CASINOS & ENTERTAINMENT LIMITED



Per:
		Name: Anthony Santo
		Title: Chief Executive Officer


I have authority to bind the Corporation.


Per:
		Name: Brad Bardua
		Title: Chief Financial Officer


I have authority to bind the Corporation.

7588674 CANADA INC.


Per:
		Name: Anthony Santo
		Title: Director


I have authority to bind the Corporation.


Per:
		Name:
		Title:


I have authority to bind the Corporation.

MESIROW REALTY SALE-LEASEBACK, INC.


Per:
		Name: M. Douglas Barker
		Senior Managing Director


I/We have authority to bind the Corporation.

-51-

SCHEDULE “A”

LEGAL DESCRIPTIONS

Part A

A-1

Grand Villa Casino / Hotel - 4331 Dominion Street, Burnaby, BC

Parcel Identifier: 026-658-038

Lot 1 District Lot 70 Group 1 NWD Plan BCP21069

A-2

Grand Villa Casino Parking Structure – 4320/4350 Dominion Street, Burnaby, BC

Parcel Identifier: 003-517-918

Lot A, Except: Firstly; The East 569.25 feet, Secondly; Portions in Plan LMP32853, Thirdly; Part in Plan BCP21070 District Lot 70 Group 1 NWD Plan 9892

Part B

B-1

Star Light Casino - 350 Gifford Street, New Westminster, BC

Parcel Identifier: 026-069-903

Lot 1 District Lot 758 Group 1 NWD Plan BCP13760 Except Part Subdivided by Plan BCP35830

B-2

Vacant Lot Next To Starlight Casino – 3811 Boundary Road, Richmond, BC

Parcel Identifier: 001-109-022

Parcel 61 District Lot 757, 758 and 6883 Group 1 NWD Plan 64783, Except: Firstly; Part Highway on Plan 74380, Secondly; Part shown as 0.0802 hectares on Plan 74467, Thirdly; Part Highway on Plan LMP23314, Fourthly: Part shown as 0.4163 hectares on Plan 74467, Fifthly; Part in Plan BCP13760; Sixthly; Part Subdivided by Plan BCP43137

Part C

C-1

Cascades Casino - #1 – 20393 Fraser Highway, Langley, BC

Parcel Identifier: 026-507-552

Strata Lot 1 District Lots 36, 308 and 309 Group 2 NWD Strata Plan BCS1615, Together with an interest in the common property in proportion to the unit entitlement of the strata lots as shown on Form V.

C-2

Cascades Casino Hotel #2 – 20393 Fraser Highway, Langley, BC

Parcel Identifier: 026-507-561

Strata Lot 2 District Lots 36, 308 and 309 Group 2 NWD Strata Plan BCS1615, Together with an interest in the common property in proportion to the unit entitlement of the strata lots as shown on Form V.

C-3

Office Building next to Cascade Casino/Hotel – 20389 Fraser Highway, Langley, BC

Parcel Identifier: 024-760-579

Parcel A District Lot 309 Group 2 NWD Plan LMP45619

A - 2

SCHEDULE “B”

GST DECLARATION AND INDEMNITY

TO:

Gateway Casinos & Entertainment Limited (the “Vendor”)

RE:

Sale by the Vendor to the undersigned of the Vendor’s interest in the property known as 4331 Dominion Street and 4320/4350 Dominion Street and Burnaby BC, 350 Gifford Street, New Westminster, BC and 3811 Boundary Road, Richmond, BC and as 20393 and 20389 Fraser Highway, Langley, BC, British Columbia (the “Property”)

The undersigned (the “Purchaser”) hereby declares, certifies and agrees as follows:

(a)

it is purchasing the Property as principal for its own account and same is not being purchased by the Purchaser as an agent, trustee or otherwise on behalf of or for another person;

(b)

it is registered under Subdivision d of Division V of Part IX of the Excise Tax Act (Canada) (the “Act”) for the collection and remittance of goods and services tax (“GST”); its registration number is R●; and such registration is in good standing and has not been revoked;

(c)

it shall be liable, shall self-assess and remit to the appropriate governmental authority all GST which is payable under the Act in connection with the transfer of the Property, all in accordance with the Act; and

(d)

it shall indemnify and save harmless the Vendor from and against GST, penalties, costs and/or interest which may become payable by or assessed against the Vendor as a result of any failure by the Purchaser to comply with the provisions of this GST Declaration and Indemnity.

The undersigned acknowledges and agrees that the foregoing GST Declaration and Indemnity shall survive and not merge upon closing of the above-noted transaction. Capitalized terms unless otherwise defined herein have the same meanings as in the purchase agreement between the Vendor and the Purchaser with respect to the Property.

Dated as of ● day of ●, 2017.


[PURCHASER]
Per:
		Name:
		Title:
Per:
		Name:
		Title:
I/We have authority to bind the Corporation.

SCHEDULE “C”

WAIVER NOTICE

TO:

Gateway Casinos & Entertainment Limited

RE:

4331 Dominion Street and 4320/4350 Dominion Street, Burnaby BC, 350 Gifford Street, New Westminster, BC and 3811 Boundary Road, Richmond, BC and as 20393 and 20389 Fraser Highway, Langley, BC

We refer to the Agreement of Purchase and Sale made between Gateway Casinos & Entertainment Limited. and ● dated as of ●, 2017 (the “Purchase Agreement”). Pursuant to Section ● of the Purchase Agreement, we hereby irrevocably waive the condition in Subsection ● of the Purchase Agreement.

DATED as of the ● day of ●, 2017.


● [PURCHASER]
Per:
		Name:
		Title:
Per:
		Name:
		Title:
I/We have authority to bind the Corporation.

SCHEDULE “D”

PERMITTED ENCUMBRANCES

A.	GENERAL

Any subsisting reservations, limitations, provisos, conditions or exceptions, including royalties, contained in the original grant from the Crown of any land or interests therein, reservations of under surface rights to mines and minerals of any kind such as, rights to coal, petroleum and minerals of any kind and rights to enter, prospect and remove the same whether or not such subsisting reservations, limitations, provisos, conditions or exceptions are reserved to or vested in any Governmental Authority by any Applicable Laws.

The Nominee Ground Leases and registered notices thereof.

B.	SPECIFIC ENCUMBRANCES

1.	As to PID 026-658-038 (Grand Villa Casino / Hotel – 4331 Dominion Street, Burnaby)

Legal Notations

Hereto is annexed Easement BA68143 over part of Parcel B (Bylaw Plan BCP21071) shown on Plan BCP21072

Hereto is annexed Easement BA68144 over part of Parcel C (Bylaw Plan BCP21071) shown on Plan BCP21072

Hereto is annexed Easement BX395145 over part of Parcel A (Bylaw Plan BCP21071) shown on Plan BCP21072

Charges, Liens and Interests

Statutory Right of Way C46474 in favour of District of Burnaby, Plan 31634, Ancillary Rights over Part Formerly West ¹⁄₂ of Lot 10

Lease BN251714 in favour of Clearnet PCS Inc., Part on Plan LMP43340

Restrictive Covenant BN251715, as to part formerly West ¹⁄₂ of Lot 10, appurtenant to Lease BN251714

Statutory Right of Way BX395147 in favour of City of Burnaby, Part on Plan BCP21073

Statutory Right of Way BX395150 in favour of City of Burnaby, Part on Plan BCP21074

Covenant BX395153 in favour of City of Burnaby

Covenant BX395156 in favour of City of Burnaby

Covenant BX395158 in favour of City of Burnaby

Covenant BX395160 in favour of City of Burnaby

10.

Covenant BX395162 in favour of City of Burnaby

11.

Covenant BX395164 in favour of City of Burnaby

12.

Covenant BB512427 in favour of City of Burnaby

13.

Statutory Right of Way BB1067466 in favour of British Columbia Hydro and Power Authority

14.

Covenant CA4986787 in favour of City of Burnaby

2.	As to PID 003-517-918 (Grand Villa Casino / Parking Structure – 4320/4350 Dominion Street, Burnaby)

Legal Notations

Hereto is annexed Easement BA68143 over part of Parcel B (Bylaw Plan BCP21071) shown on Plan BCP21072

Hereto is annexed Easement BA68144 over part of Parcel C (Bylaw Plan BCP21071) shown on Plan BCP21072

Hereto is annexed Easement BX395145 over part of Parcel A (Bylaw Plan BCP21071) shown on Plan BCP21072

Charges, Liens and Interests

Covenant BN28240 in favour of City of Burnaby

Covenant BW507131in favour of City of Burnaby

Covenant BX395170 in favour of City of Burnaby

Covenant BB512427 in favour of City of Burnaby

3.	As to PID 026-069-903 (Star Light Casino – 350 Gifford Street, New Westminster)

Legal Notations

Hereto is annexed Easement K35635 over Plan 45762 of Parcel “B” (25-207- 16362F) and Parcel “A” (25-207-16363F) of Block 34 and Parcel “B” (Reference

D - 2

Plan 1109) of Lot 35 All of District Lots 757 and 758 Group 1 Plan 2620. Partial Release BT432443 as to all except portions in Plan BCP1713. Partial Release BA115633 as to all that portion dedicated road on Plan BCP21095. Part derived from Lot 2 Plan 83367

Hereto is annexed Easement P7339 over Plan 45162 of Parcel “A” (Reference Plan 1454) of Block 35 District Lot 757 Group 1 Plan 2620. Partial Release BT432444 as to all except portions in Plan BCP1713. Part derived from Lot 2 Plan 83367

Hereto is annexed Restrictive Covenant K35637 over Parcel “B” (25-207-16362F) and Parcel “A” (25-207-16363F) of Block 34 and Parcel “B” (Reference Plan 1109) of Lot 35 all of District Lost 757 and 758 Group 1 Plan 2620. Part derived from Lot 2 Plan 83367

Hereto is annexed Restrictive Covenant P7341 over Parcel “A” (Reference Plan 1454) of District Lot 757 Group 1 Plan 2620. Part derived from Lot 2 Plan 83367

This title may be affected by a permit under Part 26 of the Local Government Act, See BX415334

This title may be affected by a permit under Part 26 of the Local Government Act, See CA3943189

This title may be affected by a permit under Part 26 of the Local Government Act, See CA4985149

Hereto is annexed Restrictive Covenant CA5077208 over Lot 1 Plan BCP48311

Hereto is annexed Restrictive Covenant CA5469717 over Lots 13 & 14 Plan 26780, North Half of Lot 3 Plan 7213, North 331.70 feet Lot 4 Except: Part on SRW Plan 25810 Plan 7213

10.

Zoning Regulation and Plan under The Aeronautics Act (Canada) Filed 10.2.1981 under No. T17084 Plan No. 61216

Charges, Liens and Interests

Undersurface Rights 91801C, Part Formerly Parcel “K” (Explanatory Plan 22476) See 171517E

Statutory Right of Way 212086C in favour of City of New Westminster, Explanatory Plan 15264

Statutory Right of Way W8849 in favour of City of New Westminster, Plan 55922

D - 3

Statutory Right of Way AC272535 in favour of City of New Westminster , ancillary rights, Part derived from Lot 2 Plan 83367

Covenant AC272536 in favour of Her Majesty the Queen in Right of the Province of British Columbia and the City of New Westminster, Part derived from Lot 2 Plan 83367

Covenant BW314959 in favour of the Corporation of the City of New Westminster, Part derived from Parcel 61 Plan 64783

4.	As to PID 001-109-022 (Star Light Casino / Vacant Lot 3811 Boundary Road, Richmond and Boundary Road, Westminster)

Legal Notations

This title may be affected by a Permit under Part 26 of the Local Government Act, See BB567783

Hereto is annexed Restrictive Covenant CA5077208 over Lot 1 Plan BCP48311

Hereto is annexed Restrictive Covenant CA5469717 over Lots 13 & 14 Plan 26780, North Half of Lot 3 Plan 7213, North 331.70 feet Lot 4 Except: Part on SRW Plan 25810 Plan 7213

Zoning Regulation and Plan under The Aeronautics Act (Canada) Filed 10.2.1981 under No. T17084 Plan No. 61216

Charges, Liens and Interests

Statutory Right of Way W8849 in favour of City of New Westminster, Plan 55922

Covenant BW314959 in favour of the Corporation of the City of New Westminster

Covenant BB121236 in favour of the Corporation of the City of New Westminster

Covenant BB121237 in favour of the Corporation of the City of New Westminster

5.	As to PID 026-507-552 (Cascades Casino, #1-20393 Fraser Highway, Langley)

Legal Notations

This title may be affected by a Permit under Part 26 of the Local Government Act, See BB832468

Subject to Provisos, See BP83218, Land Act, Section 50, As to part formerly Parcel 1 (Bylaw Plan LMP24694)

D - 4

Subject to Provisos, See BP83219, Land Act, Section 50, As to part formerly Parcel 2 (Bylaw Plan LMP24694)

Subject to Provisos, See BP83220, Land Act, Section 50, As to part formerly Parcel 3 (Bylaw Plan LMP24694)

Subject to Provisos, See BP83221, Land Act, Section 50, As to part formerly Parcel 4 (Bylaw Plan LMP24694)

This title may be affected by a Permit under Part 26 of the Local Government Act, See BW181711

This title may be affected by a Permit under Part 26 of the Local Government Act, See BX191962

Hereto is annexed Restrictive Covenant CA5077208 over Lot 1 Plan BCP48311

Hereto is annexed Restrictive Covenant CA5469717 over Lots 13 & 14 Plan 26780, North Half of Lot 3 Plan 7213, North 331.70 feet Lot 4 Except: Part on SRW Plan 25810 Plan 7213

10.

Zoning Regulation and Plan under The Aeronautics Act (Canada) Filed 31 03 1976 under No. M26464 Plan No. 49871

11.

This title may be affected by a Permit under Part 29 of the Municipal Act, See DF BF21601

Charges, Liens and Interests

Statutory Right of Way BP83245 in favour of British Columbia Hydro and Power Authority, as to parts formerly

Covenant BW106580 in favour of the City of Langley

Statutory Right of Way BW363637 in favour of Terasen Gas Inc.

Statutory Right of Way BX381008 in favour of British Columbia Hydro and Power Authority

Statutory Right of Way BX381009 in favour of Telus Communications Inc.

Modification BA579621A, being a Modification of Covenant BW106580

6.	As to PID 026-507-561 (Cascades Hotel, #2-20393 Fraser Highway, Langley)

Legal Notations

Subject to Provisos, See BP83218, Land Act, Section 50, As to part formerly Parcel 1 (Bylaw Plan LMP24694)

D - 5