motion record (returnable may 17, 2017) - fuller landau llp · 2018-10-22 · v. 2777427 ontario...

Court File No. CV-17-11726-OOCL

ONTARIOSUPERIOR COURT OF JUSTICE

COMMERCIAL LIST

BETWEEN:

I3ARBOUREDGE MORTGAGE INVESTMENT CORPORATION

Applicant

-and-

2177427 ONTARIO LIMITED

Respondent

MOTION RECORD(Returnable May 17, 2017)

May 10, 2017 FOGLER, RUBINOFF LLP77 King Street West, Suite 3000PO Box 95TD Centre North TowerToronto, ON MSK 1 G8

Vern W. Dane (LSUC# 32591E)Tel: 416.941.8842Fax: 416.941.8852Email: vdare(a~fo~lers.com

Lawyers for The Fuller Landau Group Inc., in itscapacity as court appointed receiver of theproperty of the Respondent

TO: SERVICE LIST

SERVICE LIST

BALDWIN LAWBarristers and Solicitors54 Victoria AvenueBelleville, ONK8N 1 Z7

Ian Brady/Gregory R.M. ParkerTel.: 613-771-9991Fax: 613-771-9998Email: ibradvnbaldwinlaw.ca / g~arker(a~baldwinlaw.ca

Lawyers for 2177427 Ontario Limited

ELIE KHOURI (Email: elie(a~capitalrentals.ca )1505 Stittsville Main StreetStittsville, Ontario K2S lA2

GRUDEFF, BERGBarristers and Solicitors5-3300 Steeles Ave. WestVaughan, OntarioL4K 2Y4

Sheldon J. BergTel: 905.761-9445Fax: 905.761-8500Email: s.ber~(cr~,rogers.com

Lawyers for Giuseppe Mozzone

ROMSPEN INVESTMENT CORPORATION162 Cumberland StreetSuite 300, Toronto, ON MSR 3N5

diane.winters (a~ j ustice. gc. caJUSTICE CANADATax Section, P.O. Box 36, Exchange Tower3400-130 King Street WestToronto, ON MSX 1K6Tel: 416.973 3172Fax: 416.973.0810Attention: Diane H. A. Winters

Kevin.ohara(a,ontario.caMINISTRY OF FINANCELegal Services Branch33 King Street West, 6~' Floor

Oshawa, ON L1H 8H5Attention: Kevin O'Hara

NATIONAL LEASING GROUP INC.1525 Buffalo PlaceWinnipeg, Manitoba R3T 1L9

Attention: Anna NeustaedterEmail: Anna9093(a~nationalleasin~.com

HEWLETT-PACKARD FINANCIAL SERVICES COMPANY200 Connell DriveBerkeley Heights, New Jersey 07922 U.S.A.

Attention: Lisa A. KelderEmail: lisa.kelder(cr~,ht~e.com

J.D.F.R. INVESTMENTS INC.4 — 139 Bayswater Ave.Ottawa, Ontario KlY 2G2

Christopher A. MooreBarrister and Solicitor63 Robert Street, Ottawa, Ontario K2P 1 GS

Tel: 613.230-9448Fax: 613.230-3624Email: chalmo(c~istar.ca

Lawyer for HTG Management Group Inc.

VICTOR L. VANDERGUST PROFESSIONAL CORP.Barrister and Solicitor11 Hurontario StreetP.O. Box 39Collingwood, ON L9Y 3Z4

Victor L. VandergustTel: 705-445-4544Fax: 705-445-4160Email: vic(c~vandergustlaw.com

Lawyers for HarbourEdge Mortgage Investment Corporation

O'Flynn Weese LLP65 Bridge Street E.Belleville, ON K8N 1 L8

William C. King

Tel.: 613-966-5222 x 232Fax: 613-966-8036Email: wkin~(a~owtlaw.com

Lawyers for Prospective Purchaser

Chaitons LLP5000 Yonge Street, 10~' FloorToronto, OntarioM2N 7E9

Harvey ChaitonTel.: 416-218-1125Fax: 416-218-1849Email: harvey(a~,chaitons.com

Lawyers for Prospective Purchaser

Garfin Zeidenberg LLP5255 Yonge Street, Suite 800Toronto, OntarioM2N 6P4

David DownsTel.: 416-642-5406Fax: 416-512-9992Email: dd(a~ ~z al.com

Lawyers for Wildwood Capital Inc.



COMMERCIAL LIST

BETWEEN:

HARBOUREDGE MORTGAGE INVESTMENT CORPORATION

Applicant

-and-


Respondent

INDEX

Tab Description

1 Notice of Motion, returnable May 17, 2017

2 First Report of the Receiver dated May 10, 2017

A Appendix "A"—Receivership Order

B Appendix "B"—Stalking Horse APA

C Appendix "C"—Bidding Procedures

D Appendix "D"— CRA Letter

E Appendix "E" —Security Funds documents

F Appendix "F" —Interim Statement of Receipts and Disbursements

G Appendix "G"—Interim Fees and Disbursements of the Receiver

H Appendix "H"—Interim Fees and Disbursements of Receiver's Counsel

CONFIDENTIAL APPENDICES

A Appendix "A"—Appraisal dated January 21, 2016

B Appendix "B" —Colliers Listing Agreement with the Receiver

3 Draft Order



(COMMERCIAL LIST)


Applicant

- and


Respondent

NOTICE OF MOTION(Returnable May 17, 2017)

The Fuller Landau Group Inc., the court-appointed receiver (the "Receiver") of

the properties, assets and undertakings of 2177427 Ontario Limited ("217"), will make a motion

to the Court on Wednesday, May 17, 2017 at 10:00 a.m., or as soon after that time as the

motion can be heard at 330 University Avenue, 8th Floor, Toronto, Ontario.

THE PROPOSED METHOD OF HEARING:

The motion is to be heard orally.

THE MOTION IS FOR an order:

1. if necessary, validating the service of this Notice of Motion, the Motion Record and the

First Report of the Receiver dated May 10, 2017 (the "First Report") so that this Motion

is properly returnable May 17, 2017 and dispensing with further service thereof;

2. approving the First Report and the activities of the Receiver as described therein;

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3. approving the stalking horse agreement of purchase and sale dated May 8, 2017 (the

"Stalking Horse APS") entered into between Casa-Dea Finance Limited, in trust for a

corporation to be incorporated (the "Stalking Horse Bidder") and the Receiver,

substantially in the form attached as Appendix "B" to the First Report and authorizing the

Receiver to execute all necessary documents in respect of the Stalking Horse APS,

including without limitation, the payment of the Break Fee (as defined in the Stalking

Horse APS) by the Receiver to the Stalking Horse Bidder in accordance with the

provisions of the Stalking Horse APS;

4. approving the marketing and sale process (the "Sale Process") as described in the First

Report;

5. approving the schedule for the Sale Process attached as Schedule B to the draft Order;

6. authorizing the Receiver to carry out the Sale Process and to take such steps and

execute such documentation as may be necessary or incidental to the Sale Process;

7. approving the Receiver's Interim Statement of Receipts and Disbursements included in

the First Report;

8. approving the interim fees and disbursements of the Receiver and its counsel as set out

in the First Report;

9. approving the sealing of Confidential Appendices "A" and "B" to the First Report until

further order of this Court;

10. scheduling a returnable motion date regarding the security funds in the amount of

$234,559.78 (the "Security Funds") paid into Court in the action, Wildwood Capital Inc.

v. 2777427 Ontario Limited and Bhupinder Sandhu also known as Bobby Sandhu (Court

File No. CV-14-504414); and

11. such further relief as is just.

THE GROUNDS FOR THE MOTION ARE:

1. On April 7, 2017, the Receiver was appointed as court-appointed Receiver over the

assets, property and undertaking of 217, including the property municipally known or

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commonly known as 500 Brisebois Crescent, Ottawa, Ontario K1 E OA6, which is used

in connection with the business operating the hotel known as Holiday Inn Express &

Suites-Orleans (the "Hotel") (collectively, the "Property") pursuant to the Order of Mr.

Justice Myers of the Ontario Superior Court of Justice (the "Appointment Order");

2. The Appointment Order authorizes the Receiver to, inter a/ia, market any or all of the

Property, including advertising and soliciting offers in respect of the Property or any part

or parts thereof and negotiating such terms and conditions of sale as the Receiver in its

discretion may deem appropriate (s. 3(k));

3. The Receiver was approached by interested parties who wished to purchase the Hotel.

As a result, the Receiver has entered into a sale agreement with the Stalking Horse

Bidder. In light of the interest in the Hotel, the sale agreement is in the form of the

Stalking Horse APS;

4. The Receiver seeks approval of the Stalking Horse APS along with its proposed Sale

Process, the terms of which are set out in Schedule B to the draft order attached to this

Motion Record. The Sale Process contemplates offers being delivered to the Receiver

by June 7, 2017 and a possible auction;

5. The Receiver recommends the Sale Process on the basis that: it will accelerate the sale

of the Hotel and avoid ongoing costs; and the proposed sale price will reflect the market

value of the Hotel;

6. The Receiver will return to this Court to seek approval of the successful bid, including

the Stalking Horse APS (in the event it is the successful bid);

7. The Receiver has carried out its duties and responsibilities in accordance with the

Appointment Order as set out in the First Report;

8. Accordingly, the Receiver seeks court approval of the First Report including approval of

its interim statement of receipts and disbursements and its interim fees and

disbursements including those of its counsel;

9. The Receiver is also requesting that the Court set down a returnable motion date in

these receivership proceedings regarding whether or not the Security Funds are part of

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the Property or estate of 217 for the benefit of all creditors since the issue is being

disputed by certain parties; and

10. Such further grounds as are just.

THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the Motion:

1. the First Report of the Receiver; and

2. such further and other materials as counsel may advise and this Honourable Court may

permit.

Date: May 10, 2017 FOGLER, RUBINOFF LLPLawyers77 King Street WestSuite 3000, P.O. Box 95TD CentreToronto, Ontario M5K 1 G8

Vern W. Dane (LSUC# 32591E 1 D)Tel: 416-941-8842Fax: 416-941-8Lawyers for The Fuller Landau Group Inc.,in its capacity as court appointed receiverof the property of the Respondent

TO: Service List


ONTARIO

SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

BETWEEN:


-and-


Applicant

Respondent

FIRST REPORT OF THE FULLER LANDAU GROUP INC. IN ITSCAPACITY AS COURT APPOINTED RECEIVER

MAY 10, 2017

TABLE OF CONTENTS

I. INTRODUCTION AND BACKGROUND .....................................................................1

II. PURPOSE OF THIS REPORT ........................................................................................2

III. NOTICE TO READER .....................................................................................................3

IV. INITIAL RECEIVERSHIP ACTIVITIES .................................................:....................4

V. THE STALKING HORSE APA AND THE SALE PROCESS .....................................5

VI. HARMONIZED SALES TAX (HST) ARREARS ..........................................................9

VII. SECURITY FiTNDS IN THE WILDWOOD CAPITAL LITIGATION .:....................9

VIII. RECEIPTS AND DISBURSEMENTS ...........................................................................10

IX. PROFESSIONAL FEES .................................................................................................10

X. SUMMARY AND RECOMMENDATIONS .................................................................10

APPENDICES

A Receivership Order

B Stalking Horse APA

C Bidding Procedures

D CRA Letter

E Statement of Claim, Court Order, Mortgage Loan Application, Proof ofPayment of Security Funds, and Email exchanges between Fogler andWildwood's lawyer

F Statement of Receipts and Disbursements to May 9, 2017

G Fees and Disbursements of the Receiver to Apri130, 2017

H Fees and Disbursements of Fogler Rubinoff LLP to April 24, 2017

CONFIDENTIAL APPENDICES

A Appraisal dated January 21, 2016

B Colliers Listing Agreement with the Receiver

I. INTRODUCTION AND BACKGROITND

1. 2177427 Ontario Limited ("217" or the "Debtor") is an Ontario company incorporated on

June 25, 2008. 217 owns and operates a 5 storey Holiday Inn Express hotel located on

approximately 1 acre of land at 500 Brisebois Crescent, Ottawa, Ontario (the "Hotel

Property"). The Hotel Property has approximately 100 rooms, including 51 suites, an

indoor pool, fitness centre, meeting rooms, and a parking lot with approximately 100

spaces.

2. The Hotel Property was newly constructed by 217 and opened for business during

November 2014 as part of the Orleans Town Centre master development located in Ottawa

east, which includes the Shenkman Arts Centre, government services, office and retail

space.

3. HarbourEdge Mortgage Investment Corporation ("HarbourEdge") provided loans to 217

in the principal amounts of $10,520,000 (the "First Loan") and $3,240,000 (the "Second

Loan") to finance the construction of the Hotel Property. The security for the First Loan

included a Charge/Mortgage of Land dated February 19, 2014 granted by 217 to

HarbourEdge (the "First Mortgage") and a General Assignment of Rents dated January

13, 2014 granted by 217 to HarbourEdge (the "GAR"). The First Mortgage and GAR were

originally registered against title to the Hotel Property on February 19, 2014. The First

Loan was also secured by way of a General Security Agreement dated January 10, 2014,

granted by 217 in favour of HarbourEdge (the "GSA"), which were registered under the

Personal Property Security Act (Ontario) (the "PPSA"). Additional security granted by

217 to HarbourEdge under the First Loan Credit Facility included an Assignment of HST

Rebates dated January 10, 2014 (the "HST Rebate Assignment") and an Assignment of

Contracts dated Januaxy 10, 2014 (the "Contracts Assignment"), both of which were

registered under the PPSA.

4. The security for the Second Loan included a Charge/Mortgage of Land dated December

17, 2014 granted by 217 to HarbourEdge (the "Second Mortgage"). The Second

Mortgage was registered against title to the Hotel Property on December 17, 2014.

5. On o r about D e c e m b e r 2 3, 2 016 ,the First Mortgage, GAR, G S A, HST Rebate

Assignment and Contracts Assignment were transferred or assigned to Romspen Investment

Corporation ("Romspen"). Each assignment was registered on title to the Hotel

Property and the PPSA on December 23, 2016.

6. The First and Second Mortgages were in default and HarbourEdge demanded repayment

from 217 and issued notices of its intention to enforce their security pursuant to section 244

of the Bankruptcy and Insolvency Act (Canada) (the "BIA") dated March 8, 2017.

7. By letter dated March 22, 2017, Canada Revenue Agency (the "CRA") notified HarbourEdge

of arrears of HST owing by 217 since July 1, 2015, which CRA claimed were subject to a

deemed trust claim pursuant to the Excise Tax Act (Canada). On February 22, 2016 CRA

registered a lien on title to the Hotel Property.

8. On March 22, 2017, HarbourEdge made an application to appoint a receiver over the

property of 217. Shortly after filing the application, HarbrourEdge became aware that 217's

bank account was frozen and all funds deposited to 217's bank account were being paid to

CRA pursuant to a requirement to pay issued to the Toronto Dominion Bank, where 217 had

its operating account (the "Requirement to Pay").

9. By an order (the "Receivership Order") of the Ontario Superior Court of Justice (the

"Court"j dated April 7, 2017 (the "Receivership Date"), The Fuller Landau Group Inc. was

appointed receiver (the "Receiver") of the assets, undertaking and property of 217. A copy of

the Receivership Order is attached hereto as Appendix "A".

II. PURPOSE OF THIS REPORT

10. The purpose of this first report of the Receiver (the "First Report") is to:

(a) provide this Court with information on:

(i) activities of the Receiver since the Receivership Date;

(ii) details of the Hotel Property;

(iii) the Receiver's plans to offer the Hotel Property for sale, including:

• the terms of the stalking horse asset purchase agreement (the

"Stalking Horse APA") entered into by the Receiver with the

Purchaser (as defined in the Stalking Horse APA) for- the sale of the

Hotel Property including the Break Fee (as defined in the Stalking

Horse APA); and

• the details of the proposed marketing process (the "Sale Process")

and proposed bidding procedures (the "Bidding Procedures");

2

(iv) the funds paid to CR.A from 21Ts bank account;

(v) the issues regarding priority to the Security Funds (as defined below) paid

into Court by 217, as part of the Wildwood Litigation (as defined below);

(vi) the Receiver's statement of receipts and disbursements to May 9, 2017; and

(vii) the fees and disbursements of the Receiver and its legal counsel, Fogler

Rubinoff LLP ("Fogler"), billed to date.

(b) recommend to this Court that it issue Order(s):

(i) approving the First Report and the conduct and activities of the Receiver

described herein;

(ii) approving the Stalking Horse APA, and the Break Fee;

(iii) approving the Sale Process and the Bidding Procedures;

(iv) setting a returnable date for a motion regarding the determination of priority

to the Security Funds paid into Court by 217 as part of the Wildwood

Litigation;

(v) sealing the Confidential Appendices to the First Report until the completion

of a sale of the Hotel Property, or until further Order of this Court;

(vi) approving the Receiver's statement of receipts and disbursements to May 9,

2017; and

(vii) approving the Receiver's fees and disbursements and those of its legal

counsel as set out herein.

11. All amounts referred to in the Report are in Canadian dollars unless otherwise noted.

III. NOTICE TO READER

12. This report is prepared solely for the use of the Court, for the purpose of assisting the Court in

making a determination whether to approve the relief being sought. It is based on the

Receiver's analysis of information provided to it by the management and directors of the

Debtor, which includes unaudited financial statements and internal financial reporting. The

Receiver's procedures did not constitute an audit or review engagement of the Debtor's

3

financial reporting. The Receiver has relied upon the financial statements and financial and

other records of the Debtor in reaching the conclusions set out in this report.

IV. INITIAL RECEIVERSHIP ACTIVITIES

13. The initial activities of the Receiver since the Receivership Date include:

(a) attending at the Hotel Property to meet with the Debtor to inspect and discuss the:

(i) Hotel Property;

(ii) Receivership Order and the duties of the Receiver;

(iii) current operating status and plans to continue operations with appropriate

controls in place;

(iv) financial affairs including creditor information; and

(v) status and results of the Debtor's efforts to sell the Hotel Property to date.

(b) meeting with the Debtor's bankers and discussions with CRA., which resulted in a

lifting of the freeze on the Debtor's bank account;

(c) preparing an operating cash flow forecast;

(d) discussions with a representative of Holiday Inn franchising group regarding the

Receivership Order, continuing operations and the plans for a sale of the Hotel

Property;

(e) notifying utilities and suppliers to arrange for ongoing purchases of goods and

services;

(~ arranging for continuing insurance coverage;

(g) retaining 217's accountants to update the accounting records, and to prepare the

outstanding financial statements and income tax returns for filing;

(h) requesting security documents and payout statements from equipment lessors and

sending the materials received to the Receiver's legal counsel for review;

(i) preparing and issuing of the prescribed notice and statement of the Receiver

pursuant to sections 245 (1) and 246(1) of the BIA, which was sent to creditors on

April 18, 2017;

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(j) responding to creditor inquiries and setting up the Receiver's website for 217

(http://fullerlip.com/active_engagements/2177427-Ontario-limited; and

(k) reviewing and approving post receivership operating invoices for payment, banking

and all other administrative duties.

V. THE STALKING HORSE APA AND THE SALE PROCESS

14. Colliers International Hotels ("Colliers"), a well known and reputable Canadian real estate

brokerage with international connections, was retained by the Debtor during July 2015 to carry

out a marketing and sales process to sell the Hotel Property.

15. Colliers's marketing process commenced during September 2015 and some offers were

received by the initial offer deadline of November 26, 2015 (the "Debtor's Marketing

Process"). None of these offers were accepted by the Debtor.

16. An appraisal of the Hotel Property was prepared by Colliers International Realty Advisors

dated January 21, 2016 (the "Colliers Appraisal"). A copy of the Colliers Appraisal is

attached hereto as Confidential Appendix "A".

17. Colliers continued the Debtor's Marketing Process, which led to receipt of additional offers,

including a conditional offer received during May 2016, which was accepted by the Debtor,

and a conditional asset purchase agreement was negotiated and executed by the Debtor and the

offeror during July 2016 (the "July 2016 APA").

18. Shortly following the Receivership Date, the Receiver was advised by representatives of the

offeror who made the July 2016 APA (the "July 2016 Offeror") that it had waived all

conditions and was prepared to complete the July 2016 APA.

19. According to the Debtor's financial records, the total debt owing by 217 at the Receivership

Date is estimated to be approximately $18.9 million.

20. The Receiver requested and received a copy of the July 2016 APA and concluded that the

purchase price was significantly below the amount of the Collier's Appraisal, and the net

proceeds would not be sufficient to payout all secured claims against the Debtor, leaving no

funds available for unsecured claims.

21. The Receiver is of the view that it would be best to carry out a stalking horse sales process

over a condensed timeframe for the following reasons:

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(a) the July 2016 APA is now almost one year old, and since the purchase price is not

sufficient to payout the secured and unsecured claims against 217, the Receiver is

unable to conclude that this is the best offer available at this time;

(b) the Hotel Property is relatively new having commenced operations in 2015, and with

additional time the occupancy rates and gross revenues are projected to improve;

(c) the Receiver spoke to Colliers who advised that the market for the sale of hotel

properties has improved since the Debtor's Marketing Process was carried out and

therefore it was reasonable to assume that there may be additional interest from

qualified parties;

(d) 217's operating cash forecast shows that the Hotel Property can continue to operate for

the next several weeks without the need to borrow funds and therefore during a short

sales process, creditors will not be in any worse position;

(e) a stalking horse sale process will allow the Receiver to continue operations with some

certainty to 217's creditors, customers, employees and other stakeholders that the Hotel

Property will be sold and its operations will continue;

(~ Colliers advised the Receiver that based on their previous experience with the Debtor's

Marketing Process, carrying out a further sale process over athree-week period should

be sufficient to properly canvass the market;

(g) the Receiver believes that it makes sense to retain Colliers as the realtor to carry out

the Sale Process, based on Colliers reputation and experience with the Hotel Property

and since Colliers has prepared materials in hand including:

(i) a list of targets (the "List of Targets");

(ii) a virtual data. room (the "Electronic Data Room");

(iii) an investment profile (the "Sales Teaser"); and

(iv) a confidential information memorandum (the "CIM").

22. Colliers and the Receiver have entered into an agreement (the "Colliers Listing Agreement

with the Receiver") with terms including payment of a nominal work fee and a commission

structure that will provide incentive to Colliers to solicit significantly improved offers. A copy

of the Colliers Listing Agreement with the Receiver is attached hereto as Confidential

Appendix "B".

6

23. The Receiver was contacted by HarbourEdge, Romspen and Elie Khouri (the "Third

Registered Mortgagee"), and the Receiver recommended that based on the above reasons it

would be best for the Receiver to negotiate a stalking horse offer and carry out a bidding

process to see if a superior offer could be obtained. HarbourEdge, Romspen and the Third

Registered Mortgagee agreed with the Receiver's recommendation.

24. The Receiver held discussions with the July 2016 Offeror regarding the terms of a stalking

horse offer. During these discussions, the Receiver received an unsolicited offer from a third

party that was significantly higher than the purchase price in the July 2016 APA (the "Higher

Offeror").

25. Having two offers to consider, without carrying out any marketing process, supports the

Receiver's view that a stalking horse sales process should be carried out, as it would offer

certainty of a sale, provide an opportunity to the July 2016 Offeror, the Higher Offeror and

other interested and qualified parties to make further bids, which may result in an even higher

offer, which would benefit all stakeholders.

26. The Receiver gave both the July 2016 Offeror and the Higher Offeror an opportunity to provide

their best offers to be used as stalking horse offers, which led to the Receiver negotiating and

entering into the Stalking Horse APA. A copy of the Stalking Horse APA is attached hereto

as Appendix "B".

27. A summary of the significant terms of the Stalking Horse APA are as follows:

• a purchase price of $18 million

• a deposit of $2 million

• the assets are to be purchased on an "as is, where is" basis

• the purchaser will receive credit for hotel operating revenues and be responsible for

hotel operating expenses commencing June 1, 2017

• a closing date on or before June 30, 2017

• the sale is subject to the Court issuing orders approving the Stalking Horse APA, the

Sale Process and Bidding Procedures, completion of the Sale Process, and following

completion of the Sale Process, the Court issuing further orders approving the sale and

vesting the Purchased Assets in the Purchaser

• the Purchaser will be a Qualified Bidder (as defined in the Bidding Procedures) and has

the option to participate in the Auction, if applicable

7

• a Break Fee of $360,000 will be payable to the Purchaser, if an Alternative Transaction

is accepted and completed

28. The Receiver believes that the terms of the Stalking Horse APA are reasonable in the

circumstances and will not deter prospective purchasers.

29. The initial minimum bid (the "Initial Minimum Bid") will be set at $18.5 million (consisting

of the Purchase Price of $18 million plus the Break Fee of $360,000 plus an initial overbid of

$140,000). The terms and conditions of the Sale Process and the Bidding Procedures are

summarized as follows:

(a) updating the List of Targets and the Electronic Data Room;

(b) sending the Sales Teaser to the List of Targets;

(c) qualifying parties who express interest based on their reputation and their

demonstrated ability to complete a purchase (the "Qualified Parties"};

(d) distributing the CIM and access to the Electronic Data. Room to the Qualified

Parties following receipt of a signed confidentiality agreement;

(e) receiving and reviewing bids, and determining the value of a Qualified Bid, if any,

and whether there will be an auction pursuant to the terms of the Bidding

Procedures.

(~ The proposed timelines for the Bidding Procedures will be as follows:

(i) June 7, 2017 -deadline for receipt of Qualified Bids

(ii) June 9, 2017 —notifying Qualified Bidders of the Receiver's intention to

proceed with the Auction, if applicable

(iii) June 12, 2017 —deadline for Qualified Bidders to confirm participation in

the Auction, if applicable

(iv) June 14, 2017 —Auction, if applicable

(v) June 23, 2017 —hearing of Court motion to approve the Accepted Bid

(vi) June 30, 2017 —closing date of sale

30. A copy of the Bidding Procedures is attached hereto as Appendix "C".

8

VI. HARMONIZED SALES TAX (HST) ARREARS

31. As described above, CRA issued a letter dated March 22, 2017 (the "CRA Letter") to

HarbourEdge, which provided details of arreaxs of HST owing by 217 since July 1, 2015, which

CRA claimed were subject to a deemed trust claim pursuant to the Excise Tax Act (Canada).

The letter refers to mortgages on the land and building, which may be considered "Prescribed

Security Interests", and if so, would have priority over the deemed trust. A copy of the CRA

Letter is attached hereto as Appendix "D".

32. The CRA Letter reports that the HST arrears of 217 total $440,669.55 as at January 1, 2017.

The Receiver has reviewed the bank statements of 217 and has determined that a total of

$245,521.80 was paid or garnished from 217's bank account to CRA prior to CRA agreeing to

the release of the Requirement to Pay on 217's bank account.

VII. SECURITY FUNDS IN THE WILDWOOD CAPITAL LITIGATION

33.217 (along with Bhupinder Sandhu, also known as Bobby Sandhu, a shareholder of 217) is a

defendant in an action dated May 16, 2014 (the "Wildwood Litigation") brought by

Wildwood Capital Inc. ("Wildwood") as plaintiff. Wildwood's claim relates to an alleged

unpaid mortgage brokerage fee payable pursuant to the terms of a mortgage loan application

with 217 dated February 4, 2014. Wildwood claims they are owed a brokerage fee of

approximately $233,500 on a mortgage commitment arranged by Wildwood in favour of 217,

notwithstanding that the mortgage did not close and the mortgage funds were never advanced

to 217.

34. Wildwood's pleading sought a certificate of pending litigation (the "CPL") and on November

6, 2015, the Court Ordered that 217 pay $234,559.78 into Court as security funds (the

"Security Funds") in exchange for the CPL to be lifted. The Security Funds were funded by

HarbourEdge and paid into Court by 217's legal counsel during December 2015. The Receiver

is of the view that the Security Funds belong to the estate of 217 for the benefit of the creditors

according to priority. Wildwood disputes that position.

35. The Receiver is requesting that this Court set down a returnable date for a motion regarding

the priority to the Security Funds. Copies of the applicable statement of claim, court order,

mortgage loan application, proof of payment of the Security Funds, and email exchanges

between Fogler and Wildwood's lawyer are attached hereto as Appendix "E".

D

VIII. RECEIPTS AND DISBURSEMENTS

36. The Receiver's statement of receipts and disbursements to May 9, 2017 (the "Statement of

Receipts and Disbursements to May 9, 2017") shows cash on hand of $153,348.97. A copy

of the Statement of Receipts and Disbursements to May 9, 2017 is attached hereto as Appendix«F,~

IX. PROFESSIONAL FEES

37. The Receivership Order directs and empowers the Receiver to pass its accounts from time to

time, and to include any necessary fees and disbursements of its legal counsel in the passing

of its accounts.

38. Pursuant to paragraph 18 of the Receivership Order, the fees and disbursements of the Receiver

and its legal counsel form a first charge on the Property in priority to all security interests,

trusts, liens, charges and encumbrances, statutory or otherwise, in favour of any person, but

subject to sections 14.06(7), 81.4(4), and 81.6(2) of the BIA.

39. The fees and disbursements of the Receiver invoiced for the period ending April 30, 2017 total

$28,108.38 (excluding HST). Full particulars of the fees and disbursements of the Receiver

are set out in the Affidavit of Ken Pearl sworn on May 9, 2017, a copy of which is attached

hereto as Appendix "G".

40. The fees and disbursements incurred for services provided by Fogler invoiced for the period

ending April 24, 2017 total $17,862.40 (excluding HST). Full particulars of the fees and

disbursements of Fogler are set out in the Affidavit of Martine Garland sworn on May 9, 2017,

a copy of which is attached hereto as Appendix "K".

X. SLJ~VIMARY AND RECOMMENDATIONS

41. The Receiver believes that the terms of the Stalking Horse Agreement, the Break Fee, the

Initial Minimum Bid, and the Bidding Procedures are reasonable and will not deter prospective

purchasers.

42. The Stalking Horse APA, the Sale Process, and the Bidding Procedures will provide certainty

of a sale of the Hotel Property and allow the Receiver to canvass the market in an effort to

obtain a superior offer, which will maximize the recovery for creditors.

43. HarbourEdge, Romspen and the Third Registered Mortgagee agree with the Receiver's

recommendation.

to

44. Colliers is a reputable broker, well known. with. deep experience in sales of hotel properties.

Colliers already has experience with marketing the Hotel Property for $ale and has advised the

Receiver that extending the process over athree-week. period. should be sufficient. to properly

canvas the market.

45. The Receiver and Colliers have agreed on ~1ie terms of an arrangement, which includes

payment of a nominal work fee. and a cor~a~caission structure that will provide an incentive for

Colliers to solicit significantly improved offers.

46. The Receiver respectfully recommends that this Court grant Order(sj:

(a) approving. the First. Report and the conduct and activities. of the Receiver described

therein;

(b) approving the Stalking Horse APA, and the Break Fee;.

{cj approving the Sale Process and the Bidding. Procedures;

~dj setting a rehtrnable date for a motion regardmg the determination of priority to the

Security Funds paid into Court by 217 as part of the Wildwood Litigation;

(e) sealing the Confidential Appendices to the Fixst R~part until. the completion of a

sale of the Hotel Propez-~y, ar until further Order of this Court;

{~} approving. the Receiver's statement of receipts -and disbursements to May 9, 2017;

~a{g) approving the fees and disbursements of the Receiver and. Fogier as set out herein;

This Report ~ respectfully submitted to this Court as of this l Oth day of 1vlay 2017.

THE FULLER LANDAU GROUP INC.,solely in its capacity as Court-appointed Receiver of2172427 Qntario Limitedand not in its personal or corporate capacityPer: ,-~-~ f7

Ken Pearlf, MBA, CPA, CA~CIRP, LITSenior Vice President

~1


ONTARIO

SUPERIOR COURT OF JUSTICE

(CO RCIAI~ LIST')

-and-

2177427 ONTARIO LIlVI[TED

Respondent

i' i

(appointing Receiver)

THIS APPLICATION made by the Applicant for an Order pursuant to section 243(1) of

the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the "BTA") and section 101

of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended (the "CJA") appointing The Fu11er

Landau Group Inc. as receiver (in such capacities, the "Receiver") without security, of all of the

assets, undertakings and properties of 2177427 Ontario Limited (the "Debtor") acquired for, or

used in relation to a business carried on by the Debtor, was heard this day at 330 University

Avenue, Toronto, Ontario.

1771742v3

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f,~~1v~bON READING the affidavit of Tim Duryer sworn March 20, 201 ~ d the Exhibits

thereto and on hearing the subinzssions of counsel for the Applicant, no one else appearing

although duly served as appears from the affidavit of service of Silvana Pocino sworn March 22,

2017, and on reading the consent of The Fuller Landau Group Inc. to act as the Receiver,

SERVICE

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

Application is hereby abridged and validated so that this Application is properly returnable today.

and hereby dispenses with further service thereof.

APPOINTMENT

2. THIS COURT ORDERS that pursuant to section 243(1) of the BIA and section 101 of

the CJA, The Fuller Landau Group Inc. is hereby appointed Receiver, without security, of all of

the- assets, undertakings and properties of the Debtor acquired for, or used in relation to a

business carried on by the Debtor, including all proceeds thereof (the "Property")

RECEIVER'S POWERS

3. THIS COURT ORDERS that the Receiver is hereby empowered and authorized, but nat

obligated, to act at once in respect of the Property and, without in any way limiting the generality

of the foregoing, the Receiver is hereby expressly empowered and authorized to do any of the

following where the Receiver considers it necessary or desirable:

(a) to take possession of and exercise control over the Property and any and

all proceeds, receipts .and disbursements arising out of or from the

Property;

(b) to receive, preserve, and protect of the Property, or any part or parts

thereof, inclut~ing, but not limited to, the changing of locks and security

codes, the relocating of Property to safeguard it, the. engaging of

independent security personnel, the taking of physical inventories and the

placement of such insurance coverage as maybe necessary or desirable;

1771742v3

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(c) to manage, operate, and carry on the business of the Debtor, including the

powers to enter. into any agreements, incur any obligations in the ordinary

course of business, cease to carry on ail or any part of the business, or

cease to perform any contracts of the Debtor;

(d) to engage consultants, appraisers, agents, experts, auditors, accountants,

managers, counsel and such other persons from time to time and on

whatever basis, including on a temporary basis,, to assist with the exercise

of the Receiver's powers and duties, including without limitation those

conferred by this Order;

(e) to purchase or lease such machinery, equipmen#, inventories, supplies,

premises or other assets to continue the business of the Debtor or any part

or parts thereof;

(fl to receive and collect all monies and accounts now owed or hereafter

owing to the Debtor and to exercise all remedies of the Debtor in

collecting such monies, including, without limitation, to enforce any

security held by the Debtor;

(g) to settle, extend or compromise any indebtedness owing to the Debtor;

(Il) to execute, assign, issue and endorse documents of whatever nafure in

respect of any of the Property, whether in the Receiver's name or in the

name and on behalf of the Debtor, for any purpose pursuant to this Order;

(i) to undertake environmental or workers' health and safety assessments of

the Properly and operations of the Debtor;

(j) to initiate, prosecute and continue the prosecution of any and all

proceedings and to defend all proceedings now pending or hereafter

instituted with respect to the Debtor, the Property or the Receiver, and to

settle or compromise any such proceedings. The authority hereby

1771742v3

-4-

conveyed shall e~rtend to such appeals or applications for judicial review

in respect of any order or judgment pronounced in any such proceeding;

(k) to market any or all of the Property, including advertising and soliciting

offers in respect of the Property or any part or parts thereof and

negotiating such teems and conditions of sale as the Receiver in its

discretion may deem appropriate;

(1) to sell, convey, transfer, lease or assign the Property or any part or parts

thereof out of the ordinary course of business,

(i) without the approval of this Court in respect of any transaction not

exceeding $100,000.00, provided that the aggregate. consideration

for all such transactions does nat exceed $500,000.00; and

(ii) with the approval of this Court in respect of any transaction in

which the purchase price or the aggregate purchase price exceeds

the applicable amount set out in the preceding clause;

and in each such case notice under subsection 63(4) of the Ontario

Personal Property Security Act, [or section 31 of the Ontario Mortgages

Act, as the case may be,] shall not be required, and in each case the

Ontario Bulk Sales Act sha11 not apply.

(m) to apply for any vesting order or other orders necessary to convey the

Property or any part or parts thereof to a purchaser or purchasers thereof,

free and clear of any liens or encumbrances affecting such Property;

(n) to report to, meet with and discuss with such affected Persons (as defined

below) as the Receiver deems appropriate on all matters .relating to the

Property and the receivership, and to share information, subject to such

terms as to confidentiality as the Receiver deems advisable;

(o) to register a copy of this Order and any other Orders in respect of the

Properly against title to any of the Property;

1771742v3

-5-

(p) to apply for any permits, licences, approvals or permissions as may be

required by any governmental authority and any renewals thereof for and

on behalf of and, if thought desirable by the Receiver, in the name of the

Debtor;

(c~ to enter into agreements with any trustee in bankruptcy appointed in

respect of the Debtor, including, without limiting the generality of the

foregoing, the ability to enter into occupation agreements for any property

owned or leased by the Debtor;

(r) to exercise any shareholder, partnership, joint venture or other rights

which the Debtor may have; and

(s) to take any steps reasonably incidental to the exercise of these powers or

the performance of any statutory obligations.

and in each case where the Receiver takes any such actions or steps, it shall be exclusively

authorized and empowered to do so, to the exclusion of all other Persons (as defined below),

including the Debtor,, and without interference from any other Person.

DUTY TO PROVIDE ACCESS AND CO-OPERATION TO THE RECEIVER

4. THIS COURT ORDERS that (i) the Debtor, (ii) all of its current and former directors,

officers, employees, agents, accountants, legal counsel and shareholders, and all other persons

acting on its instructions or behalf, and (iu) all other individuals, firms, corporations,

governmental bodies or agencies, ox other entities having notice of this Order (all of the

foregoing, collectively, being "Persons" and each being a "Person") shall forthwith advise the

Receiver of the existence of any Property in such Person's possession or control, shall grant

unmediate and continued access to the Property to the Receiver, and shall deliver all such

Property to the Receiver upon the Receiver's request.

5. THIS COURT t~RDERS that all Persons shall forthwith advise the Receiver of the

existence of any books, documents, securities, contracts, orders, corporate and accounting

records, and any other papers, records and information of any kind related to the business or

1771742v3

affairs of the Debtor; and any computer programs, computer tapes, computer disks, or other data

storage media containing any such information (the foregoing, collectively, the "Records") in

that Person's possession or control, and shall provide to the Receiver or permit the Receiver to

make, retain and take away copies thereof and grant to the Receiver unfettered access to and use

of accounting, computer, software and physical facilities relating thereto, provided however that

nothing in this paragraph 5 or in paragraph 6 of this Order shall require the delivery of Records,

or the granting of access to Records, which may nat be disclosed or provided to the Receiver due

to the privilege attaching to solicitor-client communication ar due to statutory provisions

prohibiting such disclosure.

6. THIS COURT ORDERS that if any Records are stored or otherwise contained on a

computer or other electronic system of information storage, whether by independent service

provider or otherwise, all Persons in possession or control of such Records shall forthwith give

unfettered access to the Receiver for the purpose of allowing the Receiver to recover and fully

copy all of the information contained therein whether by way of printing the information onto

paper or making copies of computer disks or such other manner of retrieving and copying the

information as the Receiver in its discretion deems expedient, and shall not alter, erase or destroy

any Records without the priox written consent of the Receiver. Fzu-ther, for the purposes of this

paragraph, all Persons shall provide the Receiver with all such assistance in gaining immediate

access to the information in the Records as the Receiver may in its discretion require including

providing the Receiver with instructions on the use of any computer or other system and

providing the Receiver with any and all access codes, account names and account numbers that

may be required to gain access to the information.

7. THIS COURT ORDERS that the Receiver shall provide each of the relevant landlords

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

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

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

landlord disputes the Receiver's entitlement to remove any such fixt~zre under the provisions of

the lease, such fixture shall remain on the premises and shall be dealt with as agreed between any

applicable secured creditors, such landlord and the Receiver, or by fiirther Order of this Court

1?'71742v3

-~=

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

secured creditors.

NO PROCEEDINGS AGAINST T~iE RECEIVER

8. THIS COURT ORDERS that no proceeding or enforcement process in any court or

tribunal {each, a "Proceeding"), shall be commenced or . continued against the Receiver except

with the written consent of the Receiver or with leave of this Court.

NO PROCEEDINGS AGAINST THE DEBTOR OR TflE PROPERTY

9. THIS COURT ORDERS tha# no Proceeding against or in respect of the Debtor or the

Property shall be commenced or continued except with the written consent of the Receiver or

with leave of this Court and any and all Proceedings currently under way against or in respect of

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

NO EXERCISE OF RIGHTS OR REMEDIES

10. THIS COURT ORDERS that all rights and remedies against the Debtor, the Receiver, or

affecting the Property, axe hereby stayed and suspended except with the written consent of the

Receiver or leave of this Court, provided however tha#this stay and suspension does not apply in

respect of any "eligible financial contract" as def ned in the BIA, and further provided that

nothing in f.~is paragraph shall (i) empower the Receiver or the Debtor to carry on any business

which the Debtor is not Iawfully entitled to carry on, (ii) exempt the Receiver or the Debtor from

compliance wifh statutory or regulatory provisions relating to health, safety or the environment,

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

the registration of a claim for lien.

NO INTERFERENCE WITH THE RECEIVER

11. THIS COURT ORDERS that no Person shall discontinue, fail to honour, alter, interfere

with; repudiate, terminate or cease to perform any right, renewal right, contract, agreement,

licence or permit in favour of or held by the Debtor, without written consent of the Receiver or

leave of this Court.

1771742v3

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CONTINUATION OF SERVICES

12. THIS COURT ORDERS that all Persons having oral or written agreements with the

Debtor or statutory or regulatory mandates for the supply of goods and/or services, inclucling

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

banking services, payroIl services, insurance, transportation services, utility or other services to

the Debtor are hereby restrained until further Order of this Court from discontinuing, altering,

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

Receiver, and that the Receiver shall be entitled to the continued use of the Debtor's current

telephone numbers, facsimile numbers, Internet addresses and domain names, provided in each

case that the normal prices or charges for all such goods or services received after the date of this

Order are paid by the Receiver in accordance with normal payment practices of the Debtor or

such other practices as may be agreed upon by the supplier or service provider and the Receiver,

or as may be ordered by this Court.

RECEIVER TO HOLD FUNDS

13. THIS COURT ORDERS that all funds, monies, cheques, instruments, and o#her forms of

payments received or collected by the Receiver from and after the making of this Order from any

source who#soever, including without limitation the sale of all or any of the Property and the

coIlection of any accounts receivable in whole or in part, whether in existence on the date of this

Order or hereafter coming into existence, shall be deposited into one or more new accounts to be

opened by the Receiver (the "Post Receivership Accounts"} and the monies standing to the credit

of such Post Receivership Accounts from time to time, net of any disbursements provided for

herein, shall be held by the Receiver to be paid in accordance with the terms of this Order or any

further Order of this Court.

EMPLOYEES

14. THIS COURT ORDERS that all employees of the Debtor shall remain the employees of

the Debtor until such time as the Receiver, on the Debtor's behalf, may terruinate the

employment of such employees. The Receiver shall not be liable for any employee-related

liabilities, including any successor employer liabilities as provided for in section 14.06(1.2) of

the BIA, other than such amounts as the Receiver may specifically agree in writing to pay, or in

1771742v3

respect of its obligations under sections 81.4(5) or 81.6(3) of the BIA or under the Wage Earner

Protection Program Act.

PiPEDA

15. THIS COURT ORDERS that, pursuant to clause 7(3}(c) of the Canada Personal

Information Protection and Electt~onic Documents Act, the Receiver shall disclose personal

information of identifiable individuals to prospec#ive puxchasers or bidders for the Property and

to their advisors, but only to the extent desirable or required to negotiate and, attempt to complete

one or more sales of the Property (each, a "Sale"). Each prospective purchaser or biddex to

whom such personal information is disclosed shall maintain and protect the privacy of such

information and limit the use of such information to its evaluation of the Sale, and if it does not

complete a Sale, shall return all such information to the Receiver, or in the alternative destroy all

such information. The purchaser of any Property sha11 be entitled to continue to use the personal

information provided to it, and related to the Property purchased, in a manner which is in all

material respects identical to the prior use of such information by the Debtor, and shall return all

other personal information to the Receiver, or ensure that all other personal information is

destroyed.

LIMITATION ON ENVIRONMENTAL LIABILITIES

16. THIS COURT ORDERS that nothing herein contained shall require the Receiver to

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

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

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

or deposit of a substance confirary to any federal, provincial ar other law respec#ing the

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

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

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

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

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

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

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

1771742v3

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pursuance of the Receiver's duties and powers under this Order, be deemed to be in Possession of

any of the Property within the meaning of any Environmental Legislation, unless it is actually in

possession.

LINIITATiON ON THE RECENER'S LIABILITY

17. THIS COURT ORDERS that the Receiver shall incur no liability or obligation as a result

of its appointment or the carrying out the provisions of this Order, save and except foz any gross

negligence or wilful misconduct on its part, or in respect of its obligations under sections 81.4(5)

or 81.6{3) of the BIA or under the Wage Earner Protection Program Act. Nothing in this Order

shall derogate from the protections afforded the Receiver by section 14.06 of the BIA or by any

other applicable legislation.

RECEIVER'S ACCOUNTS

18. THIS COURT ORDERS that the Receiver and counsel to the Receiver shall be paid their

reasonable fees and disbursements, in each case at their standard rates and charges, and that the

Receiver and counsel to the Receiver shall be entitled to and are hereby granted a charge (the

"Receiver's Charge"} on the Property, as security for such fees and disbursements, both before

and after the making of this Order in respect of these proceedings, and that the Receiver's Charge

shall form a first charge. on the Property in priority to all security interests, trusts, liens, charges

and encumbrances, statutory or otherwise, in favour of any Person, but subject to sections

14.06(7), 81.4(4), and 81.6(2) of the BIA.

19. THIS COURT ORDERS that the Receiver and its legal counsel shall pass its accounts

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

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

2Q. THIS COURT ORDERS that prior to the passing of its accounts, the Receiver shall be at

liberty from time to time to apply reasonable amounts, out of the monies in its hands, against its

fees and disbursements, including legal fees and disbursements, incurred at the normal rates and

charges of the Receiver or its counsel, and such amounts shall constitute advances against its

remuneration and disbursements when and as approved by this Court.

FITNDING OF THE RECEIVERSHIP

i~n~4ays

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21. THIS COURT ORI?ERS that the Receiver be at liberty and it is hereby empowered to

borrow by way of a revolving credit or otherwise, such monies from time to time as it may

consider necessary or desirable, provided that the outstanding principal amount does not exceed

$200,004.00 (or such greater amount as this Court may by further Order authorize) at any time,

at such rate or rates of interest as it deems advisable for such period or periods of time as it may

arrange, for the puxpose of funding the exercise of the powers and duties conferred upon the

Receiver by this Order, including interim expenditures. The whole of the Property shall be and

is hereby charged by way of a fixed and specific charge (the "Receiver's Borrowings Charge"} as

security for the payment of the monies borrowed, together with interest and charges thereon, in

priority to all security interests, trusts, liens, charges and encumbrances, statutory or otherwise,

in favour of any Person, but subordinate in priority to the Receiver's Charge and the charges as

set out in sections 14.06(7), 81.4(4), and 81.6{2) of the BIA.

22. THIS COURT ORDERS that neither the Receiver's Borrowings Charge nor any other

security granted by the Receiver in connection with its borrowings under this Order sha11 be

enforced without leave of this Court.

23. THIS COURT ORDERS that the Receiver is at liberty and authorized to issue certificates

substantially in the form annexed as Schedule "A" hereto (the "Receiver's Certificates") for any

amount borrowed by it pursuant to this Order.

24. THIS COURT ORDERS that the monies from time to time borrowed by the Receiver

pursuant to this Order or any further order of this Court and any and all Receiver's Certificates

evidencing the same or any part thereof shall rank on a pari passu basis, unless otherwise agreed

to by the holders of any prior issued Receiver's Certificates.

SERVICE AND NOTICE

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

"Protocol") is approved and adopted by reference herein and, in this proceeding, the service of

documents made in accordance with the Protocol (which can be found on the Commercial List

website at http://www.ontariocourts.ca/scj/practicelpractice-directions/toronto/e-service-

protocols shall be valid and effective service. Subject to Rule 17.05 this Order shall constitute

i771742v3

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

Rule 3.01(d) of the Rules of Civil Procedure and paragraph 2 Z of the Protocol, service of

documents in accordance with the Protocol will be effective on transmission. This Court fiartrter

orders that a Case Website shall be established in accordance with the Protocol with the

following URL ̀<@>' .

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

with the Protocol is not practicable, the Receiver is at liberty to serve or distribute this Order, any

other materials and orders in these proceedings, any notices or other correspondence, by

forwarding true copies thereof by prepaid ordinary mail, courier, personal delivery or facsimile

transmission to the Debtor's creditors or other interested parties at their respective addresses as

last shown on the records of the Debtor and that any such service or distribution by courier,

personal delivery or facsimile transmission shall be deemed to be received on the next business

day following the date of forwarding thereof, or if sent by ordinary mail, on the -third business

day after mailing.

GENERAL

27. THIS COURT ORDERS that the Receiver may from time to time apply to this Court for

advice and directions. in the discharge of its powers and duties hereunder.

28. THIS COURT ORDERS that nothing in this Order shall prevent the Receiver from acting

as a trustee in bankniptcy of the Debtor.

29. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,

regulatory or administrative body having jurisdiction in Canada or in the United States to give

effect to this Order and to assist the Receiver and its agents in carrying out the terms of this

Order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully

requested to make such orders and to provide such assistance to the Receiver, as an officer of this

Court, as may be necessary oz desirable to give effect to.this Ordex or to assist the Receiver and

its agents in carrying out the terms of this Order.

30. THIS COURT ORDERS that the Receiver be at liberty and is hereby authorized and

empowered to apply to any court, tribunal, regulatory or administrative body, wherever located,

i~n~4a~s

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for the recognition of this Order and for assistance in carrying out the terms of this Order, and

that the Receiver is authorized and empowered to act as a representative in respect of the within

proceedings for the purpose of having these proceedings recognized in a jurisdiction outside

Canada.

31. THIS COURT ORDERS that the Applicant shall have its costs of this Application, up to

and including entry and service of this Order, provided for by the terms of the Applicant's

security or, if not so provided by the Applicant's security, then on a substantial indemnity basis

to be paid by the Receiver from the Debtor's estate with such priority and at such time as this

Court may determine.

32. THIS COURT ORDERS that any interested party may apply to this Court to vary or

amend this Order on not less than seven (7) days' notice to the Receiver and to any other party

likely to be affected by the order sought or upon such other notice, if any, as this Court may

order.

APR o 7 za~7

1771742v3

~~`{'~~~cD AT ; ! NSCRIT A TOR{1~

Oil 1 BOOK (~0;L~ /DAMS LE REGISTRE N~;

SCHEDULE "A"

RECEIVER CERTIFICATE

CERTIFICATE NO.

AMOUNT $

1. THiS IS TO CERTIFY that The Fuller Landau Group Inc., the receiver (the "Receiver")

of the assets, undertakings and properties flf 2177427 Ontario Limited (the "Debtor") acquired

for, or used in relation to a business carried on by the Debtor, including all proceeds thereof

(collectively, the "Property") appointed by Order of the Ontario Superior Court of Justice

(Commercial List) .(the "Court") dated the 7~' day of April, 2017 (the "Order") made in an action

having Court file number -CL- ,has received as such Receiver from the holder of

this certificate {the "Lender") the principal sum of $ ,being part of the total principal sum

of $ which the Receiver is authorized to borrow under and pursuant to the Order.

2. The principal sum evidenced by this certificate is payable on demand by the Lender with

interest thereon calculated and compounded [daily] [monthly not in advance on the . day of

each month] after the date hereof at a notional rate per annum equal to the rate of per cent

above the prime commercial lending rate of Bank of from time to time.

3. Such principal sum with interest thereon is, by the terms of the Order, together with the

principal sums and interest thereon of all other certificates issued by the Receiver pursuant to the

Order or to any further order of the Court, a charge upon the whole of the Property, in priority to

the security interests of any other person, but subject to the priority of the charges set out in the

Order and in the Bankruptcy and Insolvency Act, and the right of the Receiver to indemnify itself

out of such Property in respect of its remuneration and expenses.

4. All sums payable in respect of principal and 'interest under this certificate are payable at

the main office of the Lender at Toronto, Ontario.

5. Until all liability in respect of this certificate has been terminated, no certificates creating

charges ranking or purporting to rank in priority to this certificate shall be issued by the Receiver

to any person other than the holder of this certificate without the prior written consent of the

holder of this certificate.r

Receivership Order-(Mazch, 2017).docx

-2-

6. The charge securing this certificate shall operate so as to permit the Receiver to deal with

the Property as authorized by the Order and as authorized by any further or other order of the

Court.

7. The Receiver does not undertake, and it is not under any personal liability, to pay any

sum in respect of which it may issue certificates under the terms of the Order.

DATED the day of MONTH, 20YR.

THE FULLER LANDAU GROUP INC., solelyin its capacity as Receiver of the Property, andnot in its personal capacity

Per:

Name:

Title:

Receivership Order-(Mazch, 2017).docx

i

Harbouredge Mortgage Investment Corp. and 2177427 Ontario LimitedCourt File No. CV-17-11726-OOCL

ONTARIOSUPERIOR COURT OF JUSTICE(COMMERCIAL LIST)

Proceedings commenced. at Toronto

ORDER(appointing Receiver)

VICTOR L. VANDERGUSTPROFESSIONAL-CORP.Barrister and Solicitor11 Hurontari.o StreetCollin~gwood, Ontario

L9Y 3Z4

Victor L. Vandergast (LSUC# 16184V~705-445-4544 (tel)705-445-4160 (fax)

vic(cr7,vander~ustlaw. com

Lawyer for the Applicant, HarbourEdge MortgageInvestment Corporation

PURCHASE AGREEMENT

This Purchase Agreement is dated as of May 8, 2017, between The Fuller Landau Group Inc. in itscapacity as Court-appointed receiver of 2177427 Ontario Limited, a corporation incorporated under thelaws of the Province of Ontario ("227") and CASA-DEA FINANCE LIMITED, a corporationincorporaxed and e~sting under the laws of the Province of Ontario, in trust for a corporation to beincorporated {the "Purchaser").

RECITALS

By Order (the "Appointment Order") dated April 7, 2017, The Fuller Landau Group Inc. (the"Receiver") was appointed by the Ontario Superior Court of Justice (the "Court") as receiver of all of217`s assets, undertakings and properties, including the property municipally known ar commonly knownas 500 Brisebois Crescent, Ottawa, Ontario K1E OA6, which is used in connection with the businessoperating the hotel commonly known as the Holiday Inn Express & Suites-Orleans (the "Hotel") and alIproceeds thereof, pursuant to Section 243 of the Bankruptcy and Insolvency Act and Section 101 of theCourts of.7ustice Act (Ontario) {the "Receivership Proceedings");

Under the Appointment Order, the Receiver is empowered and authorized to sell the Purchased Assets (asdefined below} including the Hotel;

Subject to the approval of the Court, the Receiver wishes to sell and the Purchaser wishes to purchase on

an "as is, where is" basis, all of the right, title and interest of tha Receiver or 217 in the Purchased Assetspursuant to the terms and conditions of this Agreement.

In conjunction with the sales procedure contemplated herein, the Receiver will be seeking an Order of theCourt approving this Agreement as a stalking horse bid and the procedures for marketing and selling thePurchased Assets.

NOW THEREFORE WITNESS THAT in consideration of the sum of Two Dollars now paid by the

Purchaser to the Receiver, the mutual covenants and agreements set forth in this Agreement and for other

good and valuable consideration (the receipt and sufficiency of which are hereby aclmowledged), the

Parties covenant and agree as follows:

1. INTERPRETATION

In this Agreement, the following terms shall have the meanings hereunder set forth unless something inthe subject matter or context is inconsistent therewith:

(a) "Accounts Receivable" means all accounts receivable, book debts, trade accounts, notesreceivable and other debts due or accruing due to 217 as of the time of Closing, togetherwith all invoices, chattel paper, sale or purchase orders and other records, howsoeverstored or recorded, in respect thereof.

(b) "Adjusnnents" has the meaning attributed thereto in Subsection 22(b).

(c) "Agreement" means this Stocking Horse Offer or Purchase Agreement and allsupplements and amendments made by written agreement between the Parties.

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(d) "Agreement Date" means the date this Agreement is folly accepted and executed byboth the Receiver and the Purchaser without further amendment.

(e) "Alternative Transaction" means any sale, transfer or other disposition of the PurchasedAssets on an en bloc or piecemeal basis to any third party or third parties other than thePurchaser pursuant to the Stalking Horse and Bidding Procedures Order or otherwiseauthorized by the Court.

(fl "Appointment Order" has the meaning set forth in the recitals to this Agreement.

(g) "Approval and Vesting Order" has the meaning set forth in Section 23(e) andsubstantially in the form of Schedule I .

(h) "Assignment of Contracts" means an assignment and assumption of the interests of 217in and to the Equipment Leases, the Service Contracts and the Contracts, which shallinclude covenants by the Purchaser to assume ail obligations of 217 arising under theEquipment Leases, the Service Contracts and the Contracts from and including theClosing Date. A list of Equipment Leases, the Service Contracts and the Contracts isprovided in Schedule E.

(i) "Auction" has the meaning set forth in Section 23{b}.

(j) "Balance Due on Closing" has the meaning ascribed thereto in Subsection 3(b).

(k) "Bidding Procedures" has the meaning set forth in Section 23(b} and is furtherdescribed in Schedule G.

(1) "Bill of Sale" means a hill of sale for the Chattels.

(m) "Books and Records" means all books and records pertaining to the Business, includingall lists of the names and such addresses as are available of all prior guests, customersand suppliers, files, documents, books, manuals, records, correspondence, data bases, andall contracts regarding the operation of the Property and employment files and pensiondata, if any, and all other papers and information used in the Business in the possession orcontrol of 217.

(n} "Break Fee" has the meaning set forth in Section 24.

(o) "Building" means the Hotel and all other buildings, structures and fixed improvements,including all systems on the Lands of a mechanical nature, located on, in or under theLands.

(p) "Business" means the business carried on by 217 of operating the Hotel, including,without limitation, all parking operations from the Lands, all as a going concern, and ailactivities incidental thereto.

(q) `Business Day" means any day other than a Saturday, Sunday or statutory holiday inOttawa, Province of Ontario.

(r) "Chattels" means (i) all equipment, Inventory, supplies, linens, and other tangiblepersonal property owned by or on behalf of 217 and used as of Closing exclusively in the

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maintenance, repair, operation, ownership or management of the Property or theBusiness, (ii) all computer hardware, all front desk equipment, guest room furnishings,lobby furnishings, conference room furnishings, window coverings, fitness equipment,signage, janitor equipment, landscaping equipment, parking lot equipment, if any, poolequipment and all other tangible personal property of 217 used in connection with theoperation of the Business, (iii) the Inventory and the interest of 217 in the artwork, if any,within the Properly, but specifically excluding those items listed on Schedule B.

(s) "Claims" means all losses, damages, expenses, liabilities (whether accrued, actual,contingent, latent or otherwise), claims and demands of whatever nature or kindincluding, without limitation, all reasonable Iegal fees and costs on a full indemnitysolicitor and client basis.

(t} "Closing" means the closing and consummation of the Transaction including, withoutlimitation, the payment of the Purchase Price and the delivery of the Closing Documents,on the Closing Date, at the office of the Receiver's solicitor.

(u) "Closing Date" has the meaning ascribed thereto in Section 7.

(v) "Closing Documents" means the agreements, instruments and other documents to bedelivered by the Receiver to the Purchaser or the Purchaser's solicitor pursuant to Section

27.2 and the agreements, instruments and other documents to be delivered by thePurchaser to the Receiver or the Receiver's solicitor pursuant to Section 273 orotherwise pursuant to this Agreement.

(w) "Contracts" means ail of the following:

{i) the Warranties;

(ii) all agreements between 217 (or their predecessors in title) and the owners of oneor more of the surrounding pieces or parcels of land and/or the City of Ottawa,relating to the construction and/or maintenance and/or use of physicalconnections with adjoining properties, whether ar not such agreements areregistered against title to the Lands;

(iii) agreements with Governmental Authori#ies, other than Tax Authorities, whichare Permitted Encumbrances; and

(iv) the Franchise Agreement.

(x) "Court" has the meaning set forth in the recitals to this Agreement.

{y) "Damage Threshold" has the meaning ascribed thereto in Subsection 9(a).

(z) `Deposit" has the meaning ascribed thereto in Subsection 3(a}.

(aa) "Effective Date" means 3une 1, 2017;

(bb) "Election" has the meaning ascribed thereto in Section 15.

(cc) "Employee Severance" has the meaning ascribed thereto in Subsection 13(e},

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(dd) ~~Employees" means all those individuals employed at or in respect of the operation ofthe Hotel, whether on a permanent, full-time, part-time or casual basis, but specificallyexctudes Management Employees and individuals who have resigned or been terminatedas of the Closing Date.

(ee} ~~Encumbrances" means all registrations, mortgages, pledges, charges, liens, debentures,trust deeds, assignments by way of security, security interests, conditional sales contractsor other title retention agreements or similar interests or instruments charging, or creatinga security interest in, the Purchased Assets or any part thereof or interest therein, and anyagreements, Leases, options, easements, rights-of-way, restrictions, executions, WorkOrders or other encumbrances (including notices or other registrations in respect of anyof the foregoing) affecting title to the Purchased Assets or any part thereof or interesttherein.

(ffl "Equipment Leases" means the rental agreements and other agreements which allow forthe use of equipment and installations within the Property (other than in regard to fixedequipment and machinery) which are not owned by 217 but which are leased or used by217 in the operation of the Business. A list of Equipment Leases is provided in ScheduleE.

(gg) °GEnvironmental Laws" means Laws relating to;

(i) the protection, preservation or remediation of the Environment;

(ii) occupational, public, or human health and safety;

(iii) the generation, handling, treatment, storage, transportation or disposal of goods,materials or waste; and

(iv) Hazardous Substances;

(whether in e~stence on the date of this Agreement or executed, promulgated orpublished after the date hereo fl, including but not Limited to the Canadian EnvironmentalProtection Act, 1999 (Canada); the Fisheries Act (Canada), the Environmental ProtectionAct (Ontario), and the Dangerous Good Transportation Act (Ontario) and all regulationsthereunder.

(hh) °°Excluded Assets" means the following rights, interests and assets of 217,notwithstanding that they may be situated at, or used in or relate to the operation o~ theHotel:

(i} those items listed on Schedule B;

(ii) all cash on hand or on deposit including cash floats (other than deposits, banquetcharges and conference charges paid by customers of the Business for services tobe rendered on and after the Closing Date, all of which shall form part of theAdjustments);

(iii) all insurance policies of 217 or the Receiver in respect of the Purchased Assets;

(iv) any Tax Refund for the period prior to the Effective Date;

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{v) ail accounts receivable of 217 in respect of the Business existing at the ClosingDate and attributable to any period of time prior to the Closing Date;

(vi} any existing Management Agreement for HoteUBusiness; and

(vii) original accounting records.

(ii) "Final Adjustment Date" has the meaning ascribed thereto in Subsection 22(d).

(jj} "Franchise Agreement" means the franchise agreement associated with the Businessbetween 217 and Holiday Hospitality Franchising Inc. A copy of the FranchiseAgreement is attached herewith as Schedule F.

(kk) "Governmental Authorities" means any federal, provincial, regional, municipal or other

government or governmental authority or official having jurisdiction over the Property

and includes any court, board, commission, department, administrative agency or

regulatory body thereof.

(11) "HST" means the harmonized sales tax under the Excise Tax Act (Canada}.

(tnm) "Hazardous Substances" means any pollutant, contaminant, hazardous, dangerous,

poisonous, noxious, toxic, radioactive and bioaccumulative, chemical, substance, waste,

material or similar term which axe defined and regulated pursuant to Environmental

Laws, including but not limited to:

(i} any substance, waste or material that is toxic, explosive, corrosive, flammable,

infectious, radioactive, carcinogenic, mutagenic, pathological, or otherwise

hazardous;

(ii) any substance or material that may cause harm or discomfort to any Person, have

an adverse effect on the health of any Person, or be an impairment of the safety

of any Person;

(iii) any other dangerous, hazardous or toxic materials or substances which are

prohibited, controlled or regulated pursuant to Environmental Laws; or

(iv) oil, natural gas, petroleum or petroleum derived substance, asbestos, urea

formaldehyde form insulation, tolene, lead radon gas, pentachlorophenol,

polychlorinated byphenyls and any electrical equipment which contains any oil

or dielectric fluid containing levels of polychlorinated byphenyls:

{nn) "Hotel" means the Holiday Inn Express &Suites -Orleans located at 500 Brisebois

Crescent Ottawa, Ontario, together with the Business carried on therein.

(oo} "Insolvency Laws" means the Bankruptcy and Insolvency Act (Canada).

(pp) "Insolvency Proceedings" means the Receivership Proceedings, as well as any other

voluntary or involutt~vy bankruptcy, insolvency, administration or similar judicial

proceedings concerning 217 that are commenced from time to time.

(qq) `Intangible Property" means:

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(i) the names and such addresses as axe available of prior guests, existing andprospective clients and business contacts of and with respect to the Business,together with the benefit of all existing bookings and reservations and all recordsof 217 with respect thereto; and

(ii) all Books and Records and information contained therein excepting originalaccounting records.

(rr) ~~Inteilectual Property" means all rights and interests, if any, in intellectual property ofany nature or kind relating exclusively to the Property or the Purchased Assets which areowned by ar licensed to 217, including the name "Holiday Inn Express &Suites -Orleans".

(ss) °GInventory" means all inventories of supplies, goods, materials, food and beverageswhich are located on the Property pertaining to the Hotel an the Closing Date andincluded inventories in storerooms, refrigerators, pantries and kitchens, but excludinglinens.

(tt} ~~Lands" means those lands and premises in the City of Ottawa, in the Province ofOntario municipally known as 500 Brisebois Crescent Ottawa, Ontario and legallydescribed in Schedule A.

(uu} ~°Leases" means:

(i) any offers to lease, agreements to lease, leases, renewals of leases, binding lettersof intent to lease and other rights, licences and similar written agreementsgranted by or on behalf of 217 {or their predecessors in title) to possess or occupyspace within the Property now or hereafter, but excluding the rental of guestrooms. A list of Leases is provided in Schedule E; and

(ii) all security, guarantees and indemnities of the tenants', subtenants' and licencees'obligations under any of the documents referred to in (i) above.

(ww) "LicQnsor" means Holiday Hospitality Franchising, Inc., a Delaware corporation, whosebusiness address is Three Ravinia Drive, Atlanta, Georgia 30346, U.S.A;

{xY) ~~LTO" means the Province of Ontario Land Titles Office in Ottawa.

(yy) "Management Agreement" means any management agreement between 217 and amanager in connection with the management or operation of the Hotel.

(zz) ~~Management Employees" means all those individuals employed at or m respect of theoperation of the Property in a management or supervisory capacity including forcertainty, the general manager, controller, human resources, front office, informationtechnology (IT), maintenance, sales and marketing, housekeeping, food andbeverage/kitchen department heads, if any, identified in Schedule D.

{aaa) ~~Notices" means the notices required to be given to any Person under any Law orpursuant to any contract or other obligations to which 217 is a party or by which 217 isbound or which is applicable to any of the Purchased Assets in connection with the

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execution and delivery of this Agreement or the completion of the Transactioncontemplated by this Agreement.

(bbb) "Offer" shall mean this offer to purchase once accepted by the Receiver.

(ccc) "Parties" means the Receiver and the Purchaser, as the context requires, their respectivesuccessors and permitted assigns, and "Party" means any one of the Parties.

(ddd) "Permitted Encumbrances" means those Encumbrances and other interests affectingtitle to the Purchased Assets set forth in Schedule C or included in paragraph 17.

(eee) "Person" means any individual, partnership, limited partnership, joint venture, syndicate,sole proprietorship, company or corporation with or without share capital, unincorporated

association, trust, trustee, executor, administrator or other legal personal representative,regulatory body or agency, government or governmental agency, authority or entityhowever designated or constituted.

(fff} "Personal Information" means ail personal information of any Employee, Management

Employee, guest or other individual.

(ggg) "Post-Closing Adjustments" has the meaning ascribed thereto in Subsection 22{d).

(hhh) "Property" means the Lands and the Building.

(iii) "Property Documents" has the meaning ascribed thereto in Section 8.

(jjj) "Purchased Assets" means all:

{i) the Business;

(ii} the Property;

(iii) the Leases;

(iv) the Equipment Leases;

(v) the Contracts and the Service Contracts;

{vi) the Chattels;

(vii) the Intangible Property;

(viii) the Intellectual Property; and

(ix} all other property, assets, rights, interests, entitlements, benefits and privileges of

any nature or kind whatsoever of 217 directly related to the above,

but specifically excludes the Excluded Assets.

(kkk) "Purchase Price" has the meaning ascribed thereto in Section 3.

(111) "Receiver" has the meaning set forth in the recitals to this Agreement.

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(mmm} "Receiver's Broker" has the meaning set forth in Section 30.

(nnn) "Sale Hearing" has the meaning set forth in Section 23(b).

(000) "Sate Motion" has the meaning set forth in Section 23(b).

(ppp) "Service Contracts" means all contracts and agreements entered into by or on behalf of217 with third parties in respect of the maintenance, operation, cleaning, security, fireprotection and servicing of the Property {which for certainty shall not include insurancecontracts). A List of Service Contracts is provided in Schedule E.

(qqq) "Stalking Horse and Bidding Procedures Order" has the meaning set forth in Section23(c) and is substantially in the form of Schedule H.

(rrr) "Stalking Horse Offer" means this Agreement.

(sss) "Stalking Horse Purchaser" means the Purchaser.

{ttt) °GSupplementary Assessment" has the meaning ascribed in Subsection 22(fl.

(uuu) "Tax Appeals" has the meaning ascribed thereto in Subsection 22(fl.

(wv) "Tax Authority" means any local, principal, governmental, state, provincial; territorial,federal or other fiscal, custom or excise authority, body ar official which is responsiblefor imposing, collecting and/or administering any Taxes.

(www} "Tax Refund" has the meaning ascribed thereto in Subsection 22(f).

(xxx} "Tax Returns" means alI returns, reports, declarations, elections, notices, filings, forms,statements and other documents (whether in written, electronic or other form}, includingany amendments, schedules, attachments, supplements, appendices and exhibits thereto,which have been prepaxed and/or filed, or which are required to be prepared and filed, inrespect of Taxes.

(yyy) ;Taxes" means all taaces, surtaxes, duties, fees, assessments, withholdings, imposts, dues,levies and other charges of any nature, including interest, penalties, fines, additions to taxor other additional amounts imposed or collected by any Tax Authority, whether disputedor not, including those levied on, or measured by, or referred to as, income, franchise,capital, capital gains, gross receipts, profits, transfer, land transfer, sales, goods andservices, harmonized sales, use, value-added, excise, withholding, business, property,occupancy, employer health, payroll, employment, health, sociat services, education andsocial security taxes, all surtaxes, alI customs duties and import and export taxes,countervail and anti-dumping and all employment insurance, health insurance andCanada, Quebec and other government pension plan and other employer plan premiums,contributions or withholdings.

(zzz} ~~Transaction" means the purchase and sale of the Purchased Assets provided for in thisAgreement.

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(aaaa) "Transferred Information" means Personal Information disclosed or conveyed to thePurchaser or otherwise acquired by it, and includes all such Personal Informationdisclosed to Purchaser during the period leading up to and including the Closing Date.

2. AGREEMENT OF PURCHASE AND SALE

(a) Subject to the terms and conditions of this Agreement, at the Closing, the Purchaser shallpurchase, be assigned and assume from the Receiver and the Receiver shall sell, transfer,assign, convey and deliver to the Purchaser, alt of 217's right, title and interest in and tothe Purchased Assets, on an "as is where is" basis, free and clear of all Encumbrances(other than Permitted Encumbrances) pursuant to the Approval and Vesting Order.

(b) The agreement of the Receiver and the Purchaser set forth in Subsection 2(a) creates andconstitutes a binding agreement of purchase and sate of the Purchased Assets on andsubject to the provisions of this Agreement.

(c} The Purchaser acknowledges and agrees that, notwithstanding anything else contained inthis Agreement, the Purchased Assets are being sold by the Receiver on an "as is, whereis" basis and the Purchaser accepts the same in their present state, condition and location.No representation, warranty or covenant is expressed or implied by the Receiver or 217,including any warranties as to title, assignability, encumbrance, description,merchantability or fitness for a parricular purpose, environmental compliance, condition,quantity or quality, or in respect of any other matter or thing whatsoever concerning thePurchased Assets or the sale thereof to the Purchaser hereunder. The disclaimer hereto ismade notwithstanding the delivery or disclosure to the Purchaser or its directors, officers,employees, agents ar representatives of any documentarion or other information(including any financial projections or other supplemental data included in thisAgreement and/or any Schedule) and such documentation or information is not warrantedto be complete or accurate or correct and such description does not constitute part of theterms and conditions of the sale of the Purchased Assets.

PURCHASE PRICE

The purchase price shall be the sum of EIGHTEEN MILLION DOLLARS ($18,400,000.00) {the"Purchase Price"), exclusive of HST, subject to the adjustments, Election and other payments requiredpursuant to this Agreement. The Purchase Price shall be paid by the Purchaser to the Receiver as follows:

(a) A refundable deposit of TWO MILLION DOLLARS ($2,00O,OOQ.00) (the "Deposit"} onaccount of the Purchase Price shall be paid by way of certified. cheque or bank draft to theReceiver's solicitors in trust within three (3) Business Days of the Agreement Date.

(b) The balance of the Purchase Price, subject to any adjustment in accordance with thisAgreement (the "Balance Due on Closing"), shall be paid by the Purchaser to theReceiver's solicitor's trust account by way of certified cheque or bank draft or wiretransfer on the Closing Date as hereinafter provided.

4. THE DEPOSIT

(a} The Deposit shall be held and dealt with by the Receiver's solicitors in trust pending theClosing and otherwise on the terms and conditions contained in this Agreement.

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(b) The Deposit will be held in an interest bearing account.

{c) If the Transaction is completed an the Closing Date in accordance with the terms hereofor as verified with the mutual consent of the parties, then the Deposit and all interestearned thereon shall be released from fxust and applied towards payment of the PurchasePrice.

(d) If the Transaction is not completed on the Closing Date due to the Purchaser notsatisfying the Purchaser's Conditions, the Deposit shall be released from trust andreturned to the Purchaser, with any interest earned thereon.

(e) If the Transaction is not completed on the Closing Date:

(i) due to a default of the Purchaser, then the Deposit and all interest thereon sha11 bereleased from trust and paid to the Receiver as liquidated damages within three(3} Business Days of the Closing Date in full and complete satisfaction of aildamages, losses, costs and expenses incurred by the Receiver as a result of suchfailure, whereupon neither the Receiver nor the Purchaser shall have anycontinuing rights or obligations hereunder; or

(ii) due to a default of the Receiver, then at the Purchaser's option, the Deposit andall interest thereon shall be returned to the Purchaser and the Transaction shall benull and void whereupon neither the Receiver nor the Purchaser shall have anyrights of any nature whatsoever hereunder save and except, any provisions whichare stated to survive the termination of this Agreement

ALLOCATION OF PURCHASE PRICE

On or before the Closing Date, the Receiver and the Purchaser may agree upon a written allocation of theamount of the Purchase Price among the Building, the Lands, the Chattels and the Inventory for thepurposes, inter alia, of completing the transfer/Approval and Vesting Order in respect of the Property andcalculating the Land transfer taxes payable in respect thereof, and for the purposes of calculating the HST,if any, payable in respect of the conveyance of the Chattels, provided, however, that the failure to agreeupon such an allocation of the Purchase Price shall not, under any circumstances, constitute a condition toeither Party's obligation to complete the Transaction or otherwise relieve the Parties from theirobligations to complete the Transaction pursuant to this Agreement. If the Parties fail to agree upon theallocation of the Purchase Price, then the Receiver and the Purchaser shall be entitled to allocate theamount of the Purchase Price as each such Party may so choose.

6. INSPECTION

INTENTIONALLY DELETED

7. CLOSING DATE

The date for completion, possession and conveyance of the Property and the Purchased Assets shall be onJane 30, 2017 or such earlier or later date as agreed by the Receiver and the Purchaser provided theconditions set forth under sections 20 and 21 are satisfied (the °°Closing Date") and provided the effectivedate of the Transaction shall be June 1, 2017.

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DELIVERY OF DOCUMENTS

It is understood that the Receiver will deliver to the Purchaser on or before the Closing, the followingdocumentation and information (the "Property Documents"):

(a) a certified copy of the Approval and Vesting Order; and

(b) with respect to the Hotel, any existing surveys, legal descriptions and title policies in thepossession of the Receiver.

9. OPERATION BEFORE CLOSING

(a) The interests of 217 in and to the Lands, Building and the Chattels being purchased,acquired and assumed by the Purchaser pursuant to the terms and conditions of thisAgreement shall be preserved and protected by the Receiver, using its best efforts, untilClosing. If any physical Toss or damage to the Lands, Building or Chattels (which, forcertainty, shall not include any business interruption loss} in excess of an amount equal toOne Million Dollars ($1,000,QOO.dO) in the aggregate not including HST or which resultsin 20 or more rooms in the Hatel not being useable (the ̀ Damage Threshold"} occursbefore that time, the Purchaser, within ten (1 d) days following receipt of Notice from theReceiver regarding such physical toss or damage and the extent thereof, at its option shalleither:

(i) elect to terminate this Agreement by Notice to the Receiver, in which case thisAgreement shall be terminated, null and void and of no further force or effectwhatsoever (save in respect of provisions which are stated to survive anytermination of this Agreement) and the Deposit shall be returned to the Purchaserwith interest and no Party shall have a claim against the other with respect to thisAgreement except as aforesaid; or

(ii) elect to complete the Transaction, in which event the Receiver shall apply anyinsurance proceeds received with respect to such loss or damage to effect theprompt repair, replacement or restoration thereof to the condition of suchPurchased Assets or, at the request of the Purchaser, hold such proceeds forpayment to the Purchaser on Closing.

If the Purchaser fails to terminate this Agreement in the manner and within the time limitprovided for herein, the Purchaser sha11 be deemed to have elected to complete theTransaction.

If physical loss or damage of an amount less than the Damage Threshold occurs to theLand, Building or Chattels, the Purchaser shall have no right to terminate this Agreementpursuant to this section and the Receiver shall apply any insurance proceeds receivedwith respect to such loss or damage to effect the prompt repair, replacement or restorationthereof to the condition of such Purchased Assets or, at the request of the Purchaser, holdsuch proceeds for payment to the Purchaser on Closing.

If any loss or damage to the Building occurs within ten {10} days prior to Closing, theClosing Date will be extended by a period sufficient for the foregoing election to be madeand acted upon by the Purchaser in the manner and times aforesaid.

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If the Receiver and the Purchaser do not agree as to whether any loss or damage is inexcess of the Damage Threshold or as to the repair cost, the matter shall be determinedby the decision of an independent licensed Ontario architect retained by the Receiver,with the cost of such architect's determination being shared equally between the Receiverand the Purchaser.

Notwithstanding anything herein to the contrary, if any physical loss or damage of anyamount occurs to the Land, Building or Chattels above Damage Threshold and basedsolely thereon the Purchaser's lender (who must be a party dealing at arm's length withthe Purchaser) withdraws its lending commitment or the Franchisor terminates theFranchise Agreement, then this Agreement shall be terminated, null and void and of nofurther force or effect whatsoever (save in respect of provisions which are stated tosurvive any termination of this Agreement) and the Deposit shall be returned to the

Purchaser with interest and no Party shall have a claim against the other with respect tothis Agreement except as aforesaid.

(b) If any material portion of the Property is expropriated by public or other lawfulauthorities before Closing, then the Purchaser shall have the right to elect by Notice,within ten (10) days following receipt of Notice from the Receiver regarding suchexpropriation, either:

(i) to flake the damages awarded, as the case may be, and complete the Transaction;or

{ii} to terminate this Agreement by Notice to the Receiver, in which event the InitialDeposit and all interest accrued thereon shall be returned to the Purchaser andthis Agreement shall thereupon be terminated, null and void and of no furtherforce or effect whatsoever and no Party shall have a claim against the other withrespect to this Agreement except to the extent that a claim arises out ofprovisions which are stated to survive the termination of this Agreement.

If the Purchaser fails to terminate this Agreement in the manner and within the time limit,

the Purchaser shalt be deemed to have elected to complete the Transaction. For greater

certainty, the conversion of any private right of way to or into a public right of way, road

or street on or surrounding the Hotel or Property does not constitute an expropriationunder this section.

10. NEW LEASES AND CONTRACTS AND AMENDMENTS TO LEASES AND

CONTRACTS

(a) Subject to this Agreement, the Receiver shall not enter into any:

(i) new offer to lease, agreement to lease, lease, amendment of lease, renewal oflease, binding letter of intent to lease or other licence granted by or on behalf of

217 to possess or occupy space within the Property now or hereafter;

(ii) new agreements on behalf of 217 (as owners of the Properly) and the owner ofany one or more of the surrounding pieces or parcels of land and/or The City of

Ottawa, relating to the construction and/or maintenance and/or use of physical

connections with adjoining properties;

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(iii} hiring of additional Employees or change of remuneration being paid toEmployees; or

(iv) new Encumbrances,

from and after the date hereof without the prior approval of the Purchaser in its solediscretion or the approval of the Court.

(b) The Receiver shall not renew, amend or terminate any Equipment Lease, ServiceContract or Contract from and after the date hereof without the prior approval of the

Purchaser in its sole discretion.

(c} The Purchaser agrees that it will respond by Notice to the Receiver to any request for anyapproval pursuant to this Section 10.1 prior to 4:30 p.m. {EST) on the second (2"d)Business Day after such request and, if it faits to so respond in the manner and within thetime provided therefor, its approval shall be deemed to have been given.

10.2 ASSUMED SERVICE CONTRACTS

If any of the Service Contracts requires the consent of third parties, the Purchaser shall be solely

responsible for obtaining such consent from the third parties prior to Closing.

10.3 FRANCHISE AGREEMENT

(a) Upon signing of this Agreement, the Purchaser shall notify the Licensor, in writing, ofthe Purchase Agreement and the Closing Date, and request the Licensor to provide a

statement setting forth all application and re-license fees payable upon a transfer of theHoliday Inn Express License Agreement (the "Licence Transfer Fee").

(b) The Purchaser shall pay the Licence Transfer Fee an or before the Closing Date to theLicensor and provide evidence of such payment to the Receiver.

(c) In the event that the Licensor issues a Detailed Non-Compliant Report in relation to the

Business or the Hotel, the Purchaser shall be solely responsible to satisfy the items set outin the Detailed Non-Compliant report.

(d) The Licence Transfer Fee shall not include any fees or royalties owed by 217 to theLicensor pursuant to the Holiday Inn Express License Agreement for any period prior tothe Closing Date (except to the extent such fees or royalties are deemed to have occurredsubsequent to the Closing Date).

11. RECEIVER'S REPRESENTATIONS, WARRANTIES AND COVENANTS'

Except as otherwise disclosed to the Purchaser in writing, the Receiver, hereby represents, warrants and

covenants to the Purchaser as of the date of this Agreement and the Closing Date, as follows:

(a) The Receiver, pursuant to the Appointment Order, has the power, authority, right and

capacity to enter into and deliver this Agreement, to carry out the transactions and enter

into the other agreements contemplated by this Agreement in the manner contemplated

by this Agreement.

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(b) The Receiver, pursuant to the Appointment Order, has the power and authority to executeand deliver atl documents required by this Agreement and convey 217's interest in thePurchased Assets to the Purchaser.

(c} The .Receiver is not and will not be non-residents of Canada on the Closing Date withinthe meaning of Section 116 of the Income Tax Act (Canada).

(d) 217 is registered under Part IX of the Excise Tux Act (Canada) and has been assignedHST registration number 857951891 RT0001.

(e) Except as spec~calty set forth in this Agreement, the Receiver makes no representationor warranty with respect to the Purchased Assets, all of which, subject to the provisionsof this Agreement, are purchased by the Purchaser in an "as is, where is" condition.

The representations and warranties of the Receiver contained in this Agreement shall not merge on the

Closing Date but shall continue in full force and effect for the benefit of Purchaser for a period of one (1)year following the Closing Date. The representations and warranties of the Receiver contained in this

Agreement will cease to have effect one (1) year following the Closing Date except to the extent that

written notice of a claim has been made by the Purchaser thereunder prior to that date.

12. PURCHASER'S REPRESENTATIONS AND WARRANTIES

The Purchaser hereby represents, warrants and covenants to the Receiver as of the date of this Agreement

and on the Closing Date, as follows:

(a) It is or will on Closing be a corporation duly organized, validly .existing and in good

standing under the laws of its governing jurisdiction and has the corporate power,authority, right and capacity to own its property and assets and enter into, execute and

deliver this Agreement and carry out the Transaction and enter into the other agreements

contemplated by this Agreement in the manner. contemplated by this Agreement all of

which have been duly and validly authorized by all necessary proceedings.

(b} Neither the execution and delivery of this Agreement nor the completion andperformance of the transactions contemplated herein, nor compliance by the Purchaser

with any provision hereof will conflict with or result in a breach of:

(i) any of the provisions of the constating documents of the Purchaser;

(ii) any material agreement or other instrument to which the Purchaser is a party or

by which they are bound; or

(iii) or any law applicable to the Purchaser.

(c) This Agreement constitutes valid and legally binding obligations of the Purchaser,

enforceable against it in accordance with its terms subject to applicable bankruptcy,

insolvency, reorganization and other laws of general application limiting the enforcement

of creditors' rights generally and to the fact that equitable remedies are available only in

the discretion of the court.

(d) On or before the Closing Date, the Purchaser shall be registered under the Excise Tczz Act

(Canada) for the purposes of HST.

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The Purchaser shall promptly deliver to the Receiver written notice specifying the occurrence or likelyoccurrence of any event which may result in any of the Purchaser's representations and warrantiescontained in this Agreement not continuing to be true in any material fashion as at the Closing Date.

The representations and warranties of the Purchaser contained in this Agreement shall not merge on theClosing Date but shall continue in full force and effect for the benefit of the Receiver for a period of one(1) year following the Closing Date. The representations and warranties of the Purchaser contained inthis Agreement will cease to have effect one (1) year following the Closing Date except to the extent thatwritten notice of a claim has been made by the Receiver thereunder prior to that date.

13. EMPLOYEES

(a) 217 shall bear sole responsibility and liability, and indemnify and hold the Purchaserharmless, for:

(i) payment of all earned and accrued salary, overtime, wages, benefits, bonuses,commissions, gratuities, pension benefits, vacation pay or other amounts for allEmployees and Management Employees for the period prior to the Closing Date;

(ii) any Claims made against the Purchaser in relation to any Employees' andManagement Employees' employment, including but not limited to claims fortermination notice, pay in Iieu of notice, severance pay, wrongful dismissal, andany and all claims made pursuant to human rights, employment standards, andworkers' compensation for the period prior to the Closing Date;

(iii) atl amounts owed to any Employee who is on lay-off as of the Closing Date; and

(iv) all claims for injury, disability, death or workers' compensation arising from, orrelated. to employment in, the Business prior to the Closing Date.

(b} The Purchaser shall bear sole responsibility and liability, and indemnify and hold 217 orthe Receiver harmless, for:

{i) payment of all earned and accrued salary, overtime, wages, benefits, bonuses,commissions, gratuities, pension benefits, vacation pay or other amounts for allEmployees and Management Employees for the period after the Closing Date;

(ii) any Claims made against the Purchaser in relation to any Employees' andManagement Employees' employment, including but not limited to claims fortermination notice, pay in lieu of notice, severance pay, wrongful dismissal, andany and all claims made pursuant to human rights, employment standards, andworkers' compensation for the period after the Closing Date;

(iii) all amounts owed to any Employee who is on lay-off after the Closing Date; and

(iv) all claims for injury, disability, death or workers' compensation arising from, orrelated to employment in, the Business after the Closing Date.

(c) For greater certainty, it is acknowledged that 217 retains all obligations with respect topost-employment health, life insurance and other benefits for former Employees andManagement Employees of 217 who as of the Ctosing Date were retired.

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(d) All Employees and Management Employees shall be terminated by the Receiver on theClosing Date.

(e} The Purchaser may offer employment to any Employees and Management Employees onthe Closing Date or any time after the Closing Date. The Purchaser shall be solely liableand responsible for the payment of any and all pay in lieu of notice, termination pay,severance pay, reasonable notice, amounts for loss of benefits or other - amounts, asapplicable, whether pursuant to statute, contract or common law (the "EmployeeSeverance") that any Employee or Management Employee who accepts an offer ofemployment from the Purchaser may become entitled to as a result of the termination ofemployment of such Employee or Management Employee by the Purchaser at any timeafter the Closing Date.

{fj Nothing herein shall be construed as to prevent the Purchaser from terminating theemployment of any Employee or Management Employee at any time after the ClosingDate for any reason {or no reason), subject to the Purchaser's obligation to provide theEmployee Severance.

(g) The Receiver shall reserve, out of the funds paid an account of the Purchase Price onClosing, and shall hold pending a determination by the Court of those entitled thereto andthe amounts and priority to which they are respectively entitled and authorizing anddirecting the Receiver to effect payment of all such proven amounts to those entitled

thereto, an aggregate amount sufficient to pay all proven unpaid amounts in respect ofEmployees and Management Employees employed by 217 prior to Closing includingproven claims for employment insurance, Canada Pension Plan, employer health tax,applicable statutory hospitalization insurance, workers compensation assessments,accrued wages, salaries and commissions, vacation pay and employee benefit plan

payments and including proven claims that are or may be secured by a security under

Seotion 81.4 or Section 81.6, as the case may be, of the Bankruptcy and Insolvency Act

(Canada}.

(h) The Purchaser covenants and agrees to use and disclose Transferred Information only forthose purposes for which the Transferred Information was initially collected from ar inrespect of the individual to which the Transferred Information relates, and only provide it

to individuals within the Purchaser who have a bona fide need to access the Transferred

Information, unless:

(i) the Purchaser has first notified such individual of such additional purpose, andwhere required by applicable law, obtained the consent of such individual to suchadditional purpose; or

{ii} such use or disclosure is permitted or authorized by applicable law, withoutnotice to, or consent from, such individual.

Subject to tt~e foregoing, the Purchaser acknowledges that the Purchaser shall keep theTransferred Information in strict confidence and in accordance with the terms of the

Personal Privacy and Electronic Documents flct (Canada) and all other applicableprivacy legislation, and shall indemnify the Receiver for any Claims resulting from itsfailure to do so, and shall review the Transferred Information in respect of Employees

and Management Employees solely for the purposes of the Purchaser conducting due

diligence to ensure that it is able to mitigate or eliminate any potential Liability to the

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Purchaser for costs and liabilities associated with Employees and ManagementEmployees.

14. RESIDENCY

The Receiver shall on Closing provide an officer's certificate in a form satisfactory to the solicitor for thePurchaser, acting reasonably, that the Receiver is not anon-resident of Canada. as of the Closing Datewithin the meaning of the Income Tux Act (Canada).

15. TAXES

The Purchaser will be liable for and will pay any and all federal and provincial sales tax ar other taxespayable upon or in connection with the conveyance or transfer of the Property or Purchased Assets,including HST, but specifically excluding any income taxes, including taxes in respect of capital gains, ifany, payable by 217 upon or in connection with the conveyance or transfer. At the option and request ofthe Purchaser, the Purchaser and the Receiver shall elect jointly under subsection 167(1) ofthe Excise TcrxAct (Canada) in the form prescribed for the purposes of that subsection (the ~tElection"), in respect of thesale and transfer of the Purchased Assets. The Purchaser shall file the Election with its HST return for itsreporting period that includes the Closing Date. On the Closing Date, the Purchaser shall be dulyregistered as a registrant under a subdivision (d) of Division "V" of ttie Excise Tax Pict (Canada.), and onar before the Closing Date, the Purchaser shall deliver to the Receiver a certificate and indemnitysatisfactory to the Receiver's solicitor and sufficient to relieve the Receiver from any obligation to collectand remit any HST with respect to the sale of the Property.

1 b. MANAGEMENT AGREEMENT

If there is an existing Management Agreement it shall not be assigned or assumed on Closing as a resultof the sate by the Receiver. The Management Agreement shall terminate on Closing and will be of nafurther force and effect. Any penalties or costs associated with the termination of the agreement shall bethe responsibility of 217.

I7. TITLE

Subject to the conditions set out below in this Agreement, the Receiver shall apply to the Court for anApproval and Vesting Order approving the sale of the Purchased Assets to the Purchaser pursuant to thisAgreement and vesting title to the Purchased Assets free from Encumbrances except as otherwisespecifically provided for in the Approval and Vesting Order including the Permitted Encumbrancesincluding those instruments listed in Schedule C of this Agreement.

18. ADDITIONAL COVENANTS OF THE RECEIVER

The Receiver hereby covenants and agrees with the Purchaser as follows:

(a) The representations and warranties of the Receiver set forth in Section 11 shall be trueand correct in all material respects as of the Closing Date and that the conditions ofclosing for the benefit of the Purchaser set forth in Section 20 shalt have been performed,satisfied or complied with as of the Closing Date.

(b) To permit the Purchaser and its authorized representatives upon reasonable advancenotice to the Receiver to have one right of entry and access to the Property and theChattels before Closing to inspect the same and its sate of repair and to conduct such

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reasonable tests and site assessments, at the expense of the Purchaser, as the Purchaser,acting reasonably, deems necessary provided the Purchaser shall not interfere with theBusiness during such an inspection. The Purchaser shall be liable for any and all Claimsincurred by the Receiver in respect of any damage to the Property resulting from theinspection, tests and assessments undertaken by the Purchaser. The exercise of any rightsof access or inspection by or on behalf of the Purchaser under this Subsection 18(b) shallnot affect or mitigate the covenants, representations and warranties of the Receiverhereunder, which shall continue in full force and effect.

(c) To maintain liability and fire insurance coverage in respect of the Property, the Chattelsand the Business in full force and effect up to and including the Closing Date of suchrisks, in such amounts and on such terms as would a prudent owner and if requested bythe Purchaser, wi11 promptly provide copies of such policies to the Purchaser.

(d} Not to sell, transfer title to, or dispose of or transfer possession of the Purchased Assets,except for those consumed in the ordinary course of business.

19. ADDITIONAL COVENANTS OF THE PURCHASER

The Purchaser hereby covenants and agrees with the Receiver as follows:

(a) To indemnify and save harmless the Receiver and 217 from and against all liabilities(whether accrued, actual, contingent or otherwise), Claims and demands whatsoeverrelating to the Property and accruing after the Closing Date except those liabilities,Claims and demands related to 217 for which 217 is expressly liable. hereunder andexcept those liabilities, Claims and demands that arise through the negligence or wilfulmisconduct of 217.

(b) The representaxions and warranties of the Purchaser set forth in Section 12 will be trueand correct as of the Closing Date and that the conditions of closing for the benefit of theReceiver as are in the control of the Purchaser set forth in Section 21 shall have beenperformed, satisfied or complied with as of the Closing Date.

The Purchaser shall indemnify and save harmless the Receiver from and against all Claims suffered bythe Receiver resulting from any breach of any covenant of the Purchaser contained in this Agreement orfrom any inaccuracy or misrepresentation in any representation or warranty set forth in Section 12.

20. PURCHASER'S CONDITIONS

This Agreement is subject to the following conditions which are for the exclusive benefit of the Purchaserto be performed or complied with at or prior to the Closing Date except as otherwise provided below.

(a) The Receiver shall have performed or complied with all of the terms, covenants andconditions of this Agreement to be performed or complied with by the Receiver in allmaterial respects.

(b} The representations and warranties of the Receiver set forth in Section 11 shall be trueand correct in all material respects on the Closing Date with the same force and effect asif made at and as of such time. If on the Closing Date any of the representations orwarranties made by the Receiver are untrue in any material respect or the Receiver is indefault in under any of the covenants and agreements to be observed or performed by the

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Receiver under this Agreement, the Purchaser may elect not to complete the purchase ofthe Purchased Assets under this Agreement, without prejudice to any rights or remediesthe Purchaser may have at law or in equity in respect of the Receiver's breach or default.

(c) Each of the Stalking Horse and Bidding Procedures Order and the Approval and VestingOrder, described below in this Agreement, shall have been made and entered, and neithershall have been amended or varied in any manner adverse to the interests of the Purchaseror stayed as of the Closing.

The above conditions are for the sole benefit of the Purchaser and may be waived in writing by thePurchaser only within the time specified herein. The Purchaser has the right to waive the Purchaser'sconditions at any time within the time specified at its discretion and proceed with the Transaction.

21. RECEIVER'S CONDITIONS

This Agreement is subject to the following conditions which are for the exclusive benefit of the Receiverto be performed or complied with at or prior to the Closing Date except as otherwise provided below.

(a) The Purchaser shall have performed or complied with ail of the terms, covenants andconditions of this Agreement to be performed or complied with by the Purchaser in allmaterial respects.

(b) The representations and warranties of the Purchaser set forth in Section 12 shall be trueand correct in all material respects on the Closing Date with the same force and effect asif made at and as of such time.

{c} Each of the Stalking Horse and Bidding Procedures Order and the Approval and VestingOrder, described below in this Agreement, shall have been made and entered, and neithershall have been amended or varied in any manner adverse to the interests ofthe Purchaseror stayed as of the Closing.

The above conditions (a) and (b) are for the sole benefit of the Receiver and may be waived in writing bythe Receiver only within the time specified herein. The Receiver has the right to waive the aboveconditions {a) and (b) at any time within the time specified at its discretion and proceed with theTransaction. In the event that the Receiver does not waive or otherwise remove the said Receiver'sconditions in writing within the time specified, then at the option of the Receiver this Agreement shall benull and void and the Purchaser and Receiver shall be released from all obligations hereunder.

22. INVENTORY AND ADJUSTMENTS

(a} The Receiver shall maintain reasonable Inventory levels for the operation of the Hatel tothe Closing Date. For greater certainty, the cost of maintaining the said Inventory levelsand other operating costs from the Effective Date shall be the responsibility of thePurchaser as part of the Closing or Post-Closing Adjustments. Inventory shall beincluded in the Purchase Price without adjustment.

(b} All prepaid expenses, deposits, reat estate taxes, hotel taxes, operating costs, utilityaccounts, rebates, cash floats, gift certificates, gift cards, or any other credit voucher orcoupon, which may be redeemed post-Closing and other usual adjustments between avendor and a purchaser of a hotel similar to the Hotel (t~Adjustments") shall be adjustedbetween the Receiver and the Purchaser as at the Effective Date, with the Receiver being

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entitled to ali revenue and benefit, and responsible for all of the costs, of the PurchasedAssets and the operation of the Hotel up to that time, and the Purchaser entitled to allrevenue and benefits and responsible for all of the costs thereafter. In addition, shouldthe Purchaser receive payment on account of any Excluded Asset (such as any accountsreceivable of 217), the Purchaser shall receive such payment in trust for the Receiver andshall forward such payments to the Receiver forthwith upon receipt The Receiver shalldeliver to the Purchaser a draft statement of Adjustments at least three (3) Business Daysprior to Closing.

{c) The Receiver shall receive a credit for all of the hotel guest room payments and othercharges of hotel room guests with respect to all nights prior to the night before theEffective Date. Room revenues for the night prior to the Effective Date shall beapportioned SQ% to the Receiver and 50%for the Purchaser.

(d) The Parties hereby agree to readjust all errors, omissions and estimated amounts in thestatement of adjustments after Closing ("Post-Closing Adjustments"}. The Receivershall provide within a reasonable time after Closing a statement with reasonablesupporting documentation as to the Gross Revenue of the Hotel from and including theEffective Date and all ordinary expenses in operating the Hotel from the Effective Date,in each case, to the Closing Date. To the extent the revenues exceed the expenses by anamount greater than accounted for in the Closing Adjushnents, the Receiver shall remitsame to the Purchaser. Ta the extent the expenses exceed the revenue to the extent samehave not been accounted for in the Closing Adjustments, the Purchaser shall remit sameto the Receiver. The forgoing Post-Closing Adjustrnents shall be adjustments on accountof the Purchase Price. For the purposes of the operating expenses, no interest payable tocreditors from and after the Effective Date shall be included nor shall the any expenses ofthe Receiver save and except the normal operating expenses required for the operation ofa hotel business of the nature of the Hotel. All requests for Post-Closing Adjustmentsmust be made in writing, with supporting details and calculations, on or before the datethat is one hundred and twenty (120) days after the Closing Date {the ~~Final AdjustmentDate") and neither Party shall be required to make any Post-Closing Adjustments that donot meet the requirements of this Subsection 22(d). Any valid Post Closing Adjushnentpursuant to this Subsection 22(d) in favour of the Receiver or Purchaser shall be paid bythe other Party within ten (10) Days of the written request for same.

{e) The Purchaser shall provide the Receiver, during normal business hours at any time, andfrom time to time, after Closing upon reasonable prior notice to the Purchaser, access tothe books, files and records of the Purchaser relating exclusively to the Purchased Assetsfor the purpose of calculating or verifying the amount of any Post-Closing Adjustments.This right shall continue until the later of the Final Adjustment Date and the settlementand payment of all Post-Closing Adjustments which have been requested by any Partypursuant to Subsection 22(d).

(~ In ttte event that, on Closing, there axe any ongoing realty or business tax appeals relatingto the Purchased Assets for one ar more periods prior to Closing, including for anytaxation or assessment period in which the Closing occurs ("Tax Appeals") the Receivermay, at its option, continue such Tax Appeals, and shall be entitled to receive, as theirown property, any payment or refund resulting from taxes therefrom that is applicable tothe period prior to the Effective Date (a "Tax Refund"). Any Tax Refund paid to thePurchaser after Closing shall be received by the Purchaser in trust for the Receiver andpaid to the Receiver forthwith for and to the extent the Tax Refund is for any taxes during

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the period prior to the Effective Date. Notwithstanding the foregoing, in the event that(and to the extent that) a T~ Refund retates to the year in which Closing occurs, the TaxRefund in respect of such year shall be adjusted as of the Effective Date notwithstandingthat such adjustment occurs after the Final Adjustment Date. In the event that such TaxAppeals result in a supplementary or increased realty or business tax assessment for theperiod prior to the Effective Date (a "Supplementary Assessment"}, suchSupplementary Assessment shall be the responsibility of 217 and shall be paid by 217.Notwithstanding the foregoing, in the event that (and to the extent that} a SupplementaryAssessment relates to the year in which Closing occurs, the Supplementary Assessmentin respect of such year shall be adjusted as of the Effective Date notwithstanding thatsuch adjustment occurs after the Final Adjustment Date.

(g) The provisions of this Section 22 shall survive the Closing.

23. STALKING HORSE AND BIDDING PROCEDURES APPROVAL AND VESTING

QRDER

(a) The Receiver and the Purchaser acknowledge that this Agreement and the Transactioncontemplated hereby are- subject to Court approval.

(b) The Receiver shall, in a timely manner to be able to comply with paragraph (c), file andserve motions (together, the "Sale Motion"}, which Sale Motion shall include copies ofthe Bidding Procedures and of the Stalking Horse and Bidding Procedures Order, seekingCourt approval of (i) the acceptance by the Receiver of this Agreement as a stalkinghorse asset purchase agreement; (ii) a stalking horse sale process and related biddingprocedures in connection with the sale of the Purchased Assets reasonably acceptable tothe Purchaser and substantially in the form of Schedule G hereto (the "BiddingProcedures"); (iii} the payment to the Purchaser of the Break-Fee in the circumstancescalled for hereunder; and (iv) the scheduling of an auction and sale hearing ascontemplated by the Bidding Procedures (the "Auction" and "Sale Hearing",respectively). The Sale Motion shall be served by the Receiver's counsel on all partiesthen on the service list for the Receivership Proceedings and on such other Person, if any,as the Purchaser's counsel may reasonably request.

(c) The Receiver shalt use its commercially reasonable efforts to have the Court enter on orabout May 17, 18 or I9, 2017 an order reasonably acceptable to the Purchaser andsubstantially in the form of Schedule H (i) approving this Agreement and the BiddingProcedures and the payment to tk~e Purchaser of the Break-Fee, in circumstances calledfor hereunder and (ii) scheduling the Auction and the Sale Hearing (collectively, the"Stallang Horse and Bidding Procedures Order").

(d} If the Receiver has received one or more "Qualified Bids" from "Qualified Bidders" (assuch terms are defined in the Stalking Horse and Bidding Procedures Order) on or before5:04 p.m. (E.D.T.} an the date that is 21 days or three weeks from the date the Courtissues the Stalking Morse and Bidding Procedures Order (i.e., June 7, 8 or 9, 2017) (the"Bid Deadline"}, the Receiver shall use its commercially reasonable efforts to conductthe Auction for the Purchased Assets on or before 5 Business Days after the Bid Deadline(i.e., June 14, 15 or 16, 2017).

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(e} The Receiver shall use its commercially reasonable efforts, including by filing andserving a motion with thv Court as soon as practicably possible following the completionof the Auction (the "Approval and Vesting Motion"), #o have the Court make on orbefore June 23, 2017 an order reasonably acceptable to the Purchaser and substantially inthe form of Schedule I (the "Approval and Vesting Order") approving the sale of thePurchased Assets to the Purchaser pursuant to this Agreement or to the Person otherwisesubmitting the highest and otherwise best bids) for the Purchased Assets at the Auctionand vesting title to the Purchased Assets in the Purchaser or such other Person free andclear of all Encumbrances other than Permitted Encumbrances.

(f} In the event leave to appeal is sought, an appeal is taken or a stay pending appeal isrequested with respect to the Stalking Horse and Bidding Procedures Order or theApproval and Vesting Order, the Receiver shall promptly notify the Purchaser of suchleave to appeal, appeal or stay request and shall promptly provide to the Purchaser a copyof the related notices) or order(s). The Receiver shall also provide the Purchaser withwritten notice of any motion or application filed in connection with any leave to appeal orappeal from such orders.

(g) From and after the date hereof, and to the extent the Purchaser is the successful bidder atAuction or if no Auction is required, the Receiver shall not take any action that isintended to result in, or fail to take any action the intent of which failure to act wouldresult in, the reversal, voiding, modification or staying of the Stalking Horse and BiddingProcedures Order or the Approval and Vesting Order.

(h) From and after the date hereof, the Receiver sha11 provide such prior notice as may bereasonable under. the circumstances before filing any materials with the Court that relate,in whole or in part, to this Agreement, the Purchaser or the Auction and shall consult ingood faith with the Purchaser regarding the content of such materials prior to any suchfiling.

24. BREAK-FEE REIMBURSEMENT

In consideration for the Purchaser's expenditure of time and money in acting as the initial bidderin the stalking horse bid and the preparation of this Agreement and subject to the terms andconditions of this Agreement, upon the termination of this Agreement by the Receiver or theclosing of a sale and transfer, or a series of sales and transfers, of substantially all of thePurchased Assets to one or more parties other than the Purchaser, (an "AlternativeTransaction"), the Receiver shall pay to the Purchaser from the proceeds of an AlternativeTransaction aBreak-Fee in the amount of THREE HUNDRED AND SIXTY THOUSANDDOLLARS ($360,000.00). Payment of the Break-Fee shall be made by the Receiver afterconsummation ar the closing of the Alternative Transaction. Upon the payment of the Break-Feeto the Purchaser, the parties shall have no further obligations under this Agreement.

The provision for payment of the Break-Fee is an integral part of this Agreement withoutwhich the Purchaser would not have entered into this Agreement. The obligation to paythe Break-Fee pursuant to this Section 24 shall survive termination of this Agreement dueto a breach or default of the Receiver of this Agreement. The Break Fee shall be payableto the Purchaser if the Purchaser is not the winning bidder whether or not the Purchaser

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participates in the Auction. If the Purchaser participates in the Auction and is thewinning bidder, then the Break Fee will be deducted from its bid.

25. NOTICES

Any notice or other communication required or permitted to be given hereunder shall be in writing andshall be given by facsimile or other means of electronic communication or by hand-delivery as providedbelow: Any notice or other communication, if sent by facsimile or other means of electroniccommunication, shall be deemed to have been received on the Business Day following the sending, or ifdelivered by hand shall be deemed to have been received at the time it is delivered to the applicableaddress noted below either to the individual designated below or to an individual at such address havingapparent authority to accept deliveries an behalf of the addressee. Notice of change of address shall alsobe governed by this section. Notices and other communications shall be addressed as follows:

(a) if to the Receiver, to:

The Fuller Landau Group Inc.151 Bloor St W, 12th Floor,Toronto, ON MSS 1S4

Telephone: (416} 645-6519Facsimile: (416) 645-6501Attention: Ken PearlEmail: kpearl(a~Lfullerllp.com

with a copy to Receiver` s lawyer:

Fogler Rubinoff LLP77 King Street WestSuite 3040P.O. Box 95TD Centre North TowerToronto, ON MSK 1 G8

Telephone: 416 941-8842Facsimile: 416 94i-8852Attention: Vern W. Dane

Email: [email protected]

(b) if to the Purchaser, to:

CasA.-Dea Finance Limited150 North Murray StreetTrenton, ON K8V 6R8

Telephone: 613 392-3585Attention: Darrell Edgett

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Email: [email protected]

with a copy to Purchaser's lawyer:

O'Flynn Weese LLP65 Bridge Street E.Belleville, ON K8N 1L8

Telephone: 613-966-5222 x 232Facsimile: 613-966-8036Attention: William C. KingEmail: [email protected]

26. TENDER OF DOCUMENTS

Except as otherwise provided herein, any tender of documents or money may be made apon therespective solicitor for the Parties, and money shall be tendered by certified cheque, bank draft orelectronic wire transfer. All payment of monies shall be made in Canadian dollaxs. Each of the Partiesshall execute and deliver all such further documents and do such other things as the other Party mayreasonably request in order to give full effect to this Agreement and the transaotion of parchase and saleherein contemplated.

27. CLOSING

27.1 Closing Arrangements

(a) On or before the third Business Day prior to the Closing Date, the Receiver's solicitorshall deliver to the Purchaser's solicitor those of the Closing Documents to be deliveredby the Receiver pursuant to Section 27.2. On or before the Closing Date and subject tothe remaining provisions of this Section 27.1, the Purchaser's solicitor's shall deliver theBalance Due On Closing to the Receiver's solicitor by electronic wire transfer to the trustaccount of the Receiver's solicitor, together with those of the Closing Documents to bedelivered by the Purchaser to the Receiver's solicitor pursuant to Section 27.3.

(b) It is agreed that the transfers) of land to be provided by the Receiver to the Purchaser

pursuant to Subsection 27.2(b) shall not be submitted to the LTO for registration until allof the following conditions have been satisfied, namely:

{i) the Balance Due on Closing shall have been paid by the Purchaser to theReceiver's solicitor to be held in trust by the Receiver's solicitor pendingconfirmation of registration of title to the Lands in the name of the Purchaser,subject only to Permitted Encumbrances;

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(ii) the Closing Documents to be delivered by the Receiver and the Purchaserpursuant to this Agreement shall have been delivered to the Receiver's solicitorand Purchaser's solicitor, as the case maybe; and

{iii) the Receiver and the Purchaser shall each have waived or satisfied all conditionsto the Transaction.

(c) Receiver and Purchaser acknowledge and agree that the Transaction will be completed byelectronic registration pursuant to Part III of the Land Registration Reform Act, R.S.O.1990, c.L4, as amended. Receiver and Purchaser further acknowledge and agree that thedelivery of documents and the release thereof to Receiver and Purchaser shall begoverned by a Document Registration Agreement ("DRA") to be entered into betweenPurchaser's Solicitors and Receiver's Solicitors subs#antially in the form currentlyprescribed by the Law Society of Upper Canada. Registration documents provided for orcontemplated in the Transaction shall be submitted to the LTO on the basis that all suchdocuments shall be registered or none shall be registered. The Parties agree that at therequest of the Receiver's lawyer or the Purchaser's lawyer the lawyers for thePurchaser's lender or the lawyers for any Encumbrance being discharged on Closing maybe asked to become parties to the DRA.

(d) Closing shall be completed by email and courier exchange of documents, and thedeadline for Closing shall be S pm on the Closing Date.

27.2 Receiver's Closing Documents

On ar before Closing, subject to the provisions of this Agreement, the Receiver shall execute or cause tobe executed and shall deliver or cause to be delivered to the Purchaser's solicitor all conveyances andother documents which are required or desirable to give effect to the proper transfer, assignment andconveyance of the Purchased Assets by the Receiver to the Purchaser in accordance with the terms of thisAgreement and to otherwise comply with the obligations of the Receiver hereunder. Suoh conveyancesand other documents shall be delivered to the Purchaser's solicitor in accordance with the terms of Section27.1 and otherwise on trust conditions customarily utilized for transactions of this nature in Ottawa and,without limiting the generality of the foregoing, such deliveries shall include the following:

(a) Approval and Vesting Order.

(b) Registrable #ransfer or transfers of land or of the Approval and Vesting Order andAuthorizations and Directions permitting electronic registration in respect thereof underThe Land Registration Reform Act (Ontario} from the Receiver to the Purchaser free andclear of all Encumbrances save and except the Permitted Encumbrances.

{c} Bill of Sale.

(d) Statement of adjustments including all supporting documents and schedules for anyadjustments contained therein.

(e} Undertaking to readjust any item on or omitted from the statement of adjushnents.

(fl A certificate of an officer of the Receiver dated as of the Closing Date and certifying thatthe Receiver is not anon-resident of Canada as of the Closing Date within. the meaning ofthe Income Tax Act (Canada).

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(g) Such elections as may be applicable to the purchase and sale, including the Electionpursuant to subsection 167(1} of the Excise Tax Act (Canada).

(h) All keys and pass codes to the Property in the possession of the Receiver. As well as,entry codes to the reservation system(s), if applicable.

27.3 Purchaser's Closing Documents

On or before the Closing Date, the Purchaser shall deliver to the Receiver's solicitor the following (whichshall be prepared, settled and delivered, as applicable, on the same basis as the documents contemplatedin Section 27.2).

(a) Executed copies of the documents referred to in Section 27.2, where applicable.

(b) Undertaking to readjust any item an or omitted from the statement of adjustments.

(c) A certificate of an officer of the Purchaser dated as of the Closing Date and certifyingthat all representations and warranties of the Purchaser set forth in this Agreement aretrue and correct in all material respects and that the covenants and agreements to beobserved and performed by the Purchaser, and funds to be delivered by the Purchaser onor before the Closing Date pursuant to the terms of this Agreement, have been dulyobserved, performed and delivered in all material respects.

(d) A certificate of an officer of the Purchaser dated as of the Closing Date and certifyingthat all conditions of closing for the benefit of the Purchaser have been performed,satisfied or complied with as of the Closing Date.

(e) A certificate and indemnity satisfactory to the Receiver's solicitor, acting reasonably,sufficient to relieve the Receiver from any obligation to collect and remit any HST withrespeot to the sale of the Property to the Purchaser.

(~ The Balance Due on Closing.

28. TIME OF THE ESSENCE

Time shall be of the essence in this Agreement.

29. SUCCESSORS AND ASSIGNS

(a) This Agreement may not be assigned by the Receiver without the prior written consent ofthe Purchaser.

{b} The Purchaser may assign its interest herein to an entity related to the Purchaser withoutthe prior consent of {but with Notice to} the Receiver, provided that such related entitycovenants and agrees with the Receiver to assume and be bound by all of the covenantsand obligations of the Purchaser hereunder and that notwithstanding such assignment thePurchaser shall not be released from, and shall remain jointly and severally liable withsuch related entity for, the representations, covenants, obligations, liabiliries andindemnities of the Purchaser hereunder.

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(c) This Agreement shall enure to the benefit of and be binding upon the Parties and theirrespective successors and permitted assigns.

3Q. REAL ESTATE COMMISSIONS

The Receiver acknowledges that a real estate commission and fee to Colliers International Hotels (the"Receiver's Broker") in respect of this Agreement is being negotiated or agreed upon by the Receiverand shall be the sole responsibility of the Receiver. T'he Purchaser confirms to the Receiver that it has notretained any agent or broker nor dealt with any agent or broker other than the Receiver's Broker and thatno commission, fee or similar payment is payable by or on behalf of the Purchaser with respect to theTransaction.

31. ENTIltE AGREEMENT

This Agreement will constitute the entire agreement between the Parties pertaining to the subject matterhereof, and will supersede all prior and contemporaneous agreements, understandings, negotiations anddiscussions between the Receiver and the Purchaser whether oral or written. There are norepresentations, warranties, collateral agreements, conditions or other agreements between the Parties inconnection with the subject matter hereof except as specifically set forth herein. No supplement,amendment, modification, waiver or termination of this Agreement shall be binding unless in writing andexecuted by the Parties. No waiver of any provision of the agreement arising out of this Agreement shallconstitute a waiver of any other provisions nar sha11 such waiver constitute a continuing waiver unlessotherwise expressly provided herein.

32. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the Province ofOntario and the laws of Canada. applicable therein.

33. CONFIDENTIALITY: PRESS .RELEASE

Prior to Closing, except to its directors, bankers and advisors (and provided they agree in writing with thePurchaser to keep this Agreement and the terms hereof in confidence) or as otherwise permitted herein,the Purchaser shall not, without the prior consent of the Receiver, such consent not to be unreasonablywithheld, delayed or conditioned, disclose to any person the entering into or terms of this Agreement.Further, the Parties shall consult with each other before issuing any press release or making any otherpublic announcement with respect to this Agreement or the transactions contemplated hereby and, exceptas required by any applicable law or regulatory requirement, (i} no Party shall issue any such press releaseor make any such public announcement prior to Closing without the prior written consent of the other,such consent not to be unreasonably withheld, delayed or conditioned; and (ii} no Party shall issue anysuch press release or make any such public announcement in the one year after Ciasing without the priorwritten consent of the other, such consent not to be unreasonably withheld, delayed or conditioned.

34. HEADINGS

The division of this Agreement into separate articles, sections and schedules and the insertion of headingsare for convenience of reference only and shall not affect the construction or interpretation hereof.

35. COURT APPROVAL

The acceptance hereof, evidenced by the execution and delivery of this Agreement by the

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Receiver, is subject to the approval of the Court pursuant to the Stalking Horse andBidding Procedures Order and to the terms of the Bidding Procedures.

36. EXECUTION

This Agreement may only be signed ar executed by an original handwritten signature in ink, and no formof electronic signature nor the provisions of the Electronic Commerce Act shall apply to this Agreement.

37. COUNTERPARTS

This Agreement may be executed in any number of counterparts and it shall not be necessary for allParties to execute the same counterpart. All of such counterparts together shall constitute a singleagreement. Delivery of a copy of this Agreement executed or signed as provided for in paragraph 36 byoriginal hand written signatures in ink may be made by email in PDF and when so emailed shall be aseffective as if delivered and received personally.

Signatures on next page.

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~N WITNESS ̀GV :3~1tEt)F the Parcf r has executed this Offer to Furch~ea in tf~e Cry o'£ Beltsville, this$~ da~r of May, O 17.

CASA DEA F~ ;A1~T'~E_LI Eb:ttntral~Y~~;~.~, ~ to be inco~po~$t~

J'rPFD•

Nalat~: D81'rel1, dgett

Title: Vice-pref goat

Accepted this 8' day 4F May, 2017

THE FIJI.LEl LA~DA~ GROi7P Y1~C., solely in itscapacity s~ Cif .rt-~ppantod ~e~'~er of 2177437 ~nt~rtaLtp~nted

PF.R:

rTame: men Pe: ~1

Title; Senior'Vi~ :-Pxesident

I hct~e the auth~ ity to 6~'t~d the Receiver

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IN WI~'NESS ~HE~C7E tl~~ Purehaser.has executexl this C)ffer to Purchase in tl x: City .of;B.elleville, this` $tIi day o~1Vlay, ~U~:7.

CAfiArDEA FT~TANCE: LIMITEDan behalf of a eorporatian to be:incorporateii

k PE12:i

Name: DaarreIt Edgett

T'it1e: Vice-President

Aeceptecl this 9~' day of May; 2017ti

THE- FI7LfiER LANDAU GROUP INC., solely in its.capacity as cc2art-ago uteri :receiver a~ X177427 Qz~tarin _ _._

Limdted and.Not iu its Persaual ar Corporate Capacity

PAR; ,.~`'t-''l~""-.z„'.—„~:---~'-~~.......~"~—

l~Tame: Ken. Pearl

'Pule, Serizor V. ee-Presid~rit

Iluzv~ the crul`hority to bind the..Receiver

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SCHEDULE A

THE LANDS

Leal Description

PIN 14508-0273fLT

PART OF LOT 37 CONCESSION 1 (OLD SURVEY) CUMBERLAND, BEING PART 3 ON PLAN4R-21938, OTTAWA. S/T AN EASEMENT IN GROSS OVER PART 1 PLAN 4823198 AS INOC915909.; SUBJECT TO AN EASEMENT IN GROSS OVER PARTS 1 AND 2 ON PLAN 4828297AS IN OC1643778; TOGETHER WITH AN EASEMENT OVER PT LT 3b CON 1 OS CUM PT 4 PL4827826 AS IN OC1692028; TOGETHER WITH AN EASEMENT OVER PT BLK 2 AND 7 AND PTOF COMMERCIAL DRIVE (CLOSED BY BY-LAW 90-92 INST. NO LT789196 PL SOM-165 PTS 3AND 7 PL 4827826 AS IN OC 1692028; SUBJECT TO AN EASEMENT OVER PT 1 PL 4827826 INFAVOUR OF PT BLKS 2, 6 AND 7 AND PT OF COMMERCIAL DRIVE (AS CLOSED BY BY-LAW90-92 INST. NO. LT789196) PL SOM-165 PTS 5, 12, 13, I5, 20, 21 AND 36 PL 4821938 AND PT LT36 CON 1 (OS) CUM PT 8 PL 4821938 AS IN OC1b92034

PIN 14508-0261 (LT

PART OF BLOCK 6, ALL OF BLOCKS 8 AND 9 AND PART OF COMMERCIAL DRIVE (ASCLOSED BY BY-LAW NO.90-92, INSTRUMENT NO. LT789196}PLAN SOM-I65, BEING PART 4ON PLAN 4R-21938, OTTAWA.; SUBJECT TO AN EASEMENT IN GROSS OVER PART 3 ONPLAN 4828297 AS IN OC1643778; TOGETHER WITH AN EASEMENT OVER PT BLKS 2 AND 7AND PT OF COMMERCIAL DRNE (CLOSED BY BY-LAW 90-92 INST. NO LT789196} PLSOM165 PTS 3 AND 7 PL 4827826 AS IN OC1692028; TOGETHER WITH AN EASEMENT OVERPT LT 36 CON 1 OS CUM PT 4PL 4827826 AS IN OC 1642028; SUBJECT TO AN EASEMENTOVER PT 2 PL 4827826 IN FAVOUR OF PT BLKS 2, 6 AND 7 AND PT OF COMMERCIAL DRIVE(AS CLOSED BY BY-LAW 90-92 INST NO. LT789196} PL SOM-165 PTS 5, 12, 13, I5, 20, 21 AND36 PL 4821938 AND PT LT 36 CON 1 {OS) CUM PT 8 PL 4821938 AS IN OC1692034

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SCHEDULE B

LIST OF EXCLUDED CHATTELS

1. Cash on Hand

2. Personal Items

3. Accounts Receivable

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SC`~IEDULE C

PERMITTED ENCUMBRANCES

General Permitted Encumbrances

1. Encumbrances far real properly takes (which term includes charges, rates and assessments) orcharges for electricity, power, gas, water and other services and utilities in connection with theProperty that have accrued but are not yet due and owing or, if due and owing, are adjusted for onClosing.

2. Development agreements, servicing agreements, utility agreements and other similar agreementswith Governmental Authorities or public utilities which in the aggregate do nat materially impairthe value of the Property.

3. Encroachments by the Property over neighbouring lands and/or permitted under agreements withneighbouring landowners which in the aggregate to not materially impair the value of theProperty.

4. Any subsisting reservations, limitations, provisos, conditions or exceptions, including royalties,contained in the original grant of the Property from the Crown.

5. Any leases, registrations and notices, with respect to the Leases, including any exclusivityprovisions, resfixictive covenants and other rights contained therein, and leasehold mortgages orsecurity interests relating to any tenant secured by such tenarrt's interest in its lease.

6. The limitations, exceptions and qualifications contained in the Land Titles Act {Ontario}.

7. Any rights of expropriation, access or use or any other rights conferred or reserved by or in anystatute of Canada or the Province of Ontario.

8. Any unregistered interest in the Property (including, without limitation, leases, claims and otherencumbrances} of which the Purchaser has actual notice.

9. Any unregistered easements regarding the provision of utilities to the Property.

10. All registrations which are registered against title to the Property or any portion thereof by, for orthrough the actions or instructions of the Purchaser.

11. Any rights reserved to or vested in any Governmental Authorities by any statutory provision orauthority.

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Specific Permitted Encumbrances

Reg. No. Date PartiesRe is~ tered

SOM165 1988/04/47 N/A

RLT43518 1988/06/22 NIA

RLT65591 1990108/20 N/A

RR130453 1990/08/20 N/A

LT789196 1992/08/28 N/A

4821938 2Q07/04/23 N/A

OC713705 2007/05/01 City of Ottawa

OC713796 2007/05/01 OTCP Arts Centre G.P. Inc.

OC713797 2007/05/01

4823198 2008/10/07

OC915909 2008/10/17

4824336 2010/03/01

OC1249431 2011/06/24

OC1536062 2013111/12

OTCP Client Service Centre G.P. Inc.OTCP Hotel Inc.Ottawa Young Men's and YoungWomen's Christian AssociationOTCP Seniors' Housing G.P. Inc.OTCP Retirement Residence G.P. Inc.OTCP Office Inc.City of Ottawa

OTCP Hotel Inc.OTCP Retirement Residence G.F. Inc.OTCP Seniors' Housing G.P. Inc.OTCP Arts Centre G.P. Inc.OTCP Office Inc.City of Ottawa

N/A

OTCP Hotel Inc, and Hydro OneNetworks Inc.

N/A

2177427 Ontario Limited from OTCPHotel Inc.

City of Ottawa and Forum Investmentand Development Corporation, OttawaYoung Men's and Young Women'sChristian Association, OTCP ArtsCentre G.P. Inc. and 2177427 Ontario

Brief Description

Plan Subdivision

Bylaw

Bylaw

Bylaw

Bylaw

Plan Reference

Bylaw

Notice

Notice

Plan Reference

Transfer Easement

Plan Reference

Transfer

Notice

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OC 1536063

4827826

4828297

OC1643778

OC1692034

2013/11/12

2014/04/02

2014/10/15

2014/12/08

2015/06/18

Limited

City of Ottawa and Forum Investment Noticeand Development Corporation and2177427 Ontario Limited

N/A

N/A

2177427 Ontaxio Limited and HydroOne Networks Inc.

Plan Reference

Plan Reference

Transfer Easement

2177427 Ontario Limited and ForumInvestment and DevelopmentCorporation

Transfer Easement

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SCHEDULE D

LIST OF MANAGEMENT EMPLOYEES

None

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SCHEDULE E

LIST OF EQUIPMENT LEASES, SERVICE CONTRACTS AND CONTRACTS

Contract Date PartiesMaster Communications Agreement November 18, 2014 Bell Canada and 2177427 Ontario Ltd.#1-2226644674-MAMegalink Service Schedule (to November 28, 2014 Bell Canada and 2177427 Ontario Ltd.Master Communications Agreement)#1-2226644674-1Datavalet Service Proposal November 17, 2014#HIE-01117Otis United Technologies, October 14, ZOI S Otis Canada Inc. andMaintenance Contract# AFAO$1P1ayNetwork Music Services October 26, 2014 PlayNetwork Inc. and 2177427Agreement, Equipment Purchase Ontario Limited

Rogers Bulk HD Agreement May 20, 2014 Rogers Communications Inc. and2177427 Ontario Limited.

ScentAir Environmental Scent August 13, 2014 ScentAir Technologies Inc. andService A Bement 2177427 Ontario Limited.Tomlinson Customer Service November 28, 2014 Tomlinson Environmental ServicesA reement Ltd. and 2177427 Ontario Limited.Business Lease Agreement April 30, 2015 Hewlett-Packard Financial Services

Canada Company and 2177427Ontario Limited and its principal asuarantor

Lease Contracts August 14, 2014 and National Leasing Group Inc. andSeptember 11, 2014 2177427 Ontario Limited and its

rinci als

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SCHEDULE F

FRANCHISE AGREEMENT

SEE ATTACHED

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L.aCAT10N: Iritersect~oi~ oFPlace D'O~r~eans Dativeand Ceisrruin IioulevnrdQrleans, UN

LOCATION #: 14601

DATE 'k ~~~;:~......_s~~:x

HOLIDAY HOSPITALITY FRANCHISING, INC.kIOLIUAY INN EXPRESSED HOTET.r AND SUITES HQT~L

NEW DEVELUI'iVI~NT

LICENCE AGIt~~M~NT

WITH

BHUPINAER SANDHU

LICENSEE

TABLE OF C(}NTENTS

I. 1'i~e Licence ................. ............................:~. ,. y,W .., .~.,<,. 1

A. The I-~otel. ,.....~ .... :........ ........ r :...,., . ... . <, _ .1B. The System. _ ,... _ . . > ;.. .. . ~ .. ... .... ,.r. l

2. (3~'ant of Licence ................ . . ,. ,,,~. . 2si )fix R~ea~i~ r~>~ Y

3. Liceizsee's Responsibilities ................................................................................................2

A. C}~seratio~~al and Other Rcquixe~►ents...,......:.:;.,,.,;,:,>;,♦.~.,..,.,.<.Y,.,,.t...,.,....,..,,....< , 2I3. Upgrading ofthe I-~ateL ~u~~~~o~~uo~wv~vo. 4t . ♦ute~~~a Mi3~i~r~lk .~..,.,., > , < 4C. Tees. «.,~.,,... ...:.~. .,.,,.,,,. ...., .. ...... ,..5

4. Lieensor's Respo»sibilities..... .,.. .,. .,. .,4,,,.,=.7

A. Training.... ..... ,.... .,..: , . F., . ,.r»., .,>,....,,.,~. 7B.C.

Reservation Services........... .,:. .. .. ....... ... ... ..... . .... , . 7Consutta~ion ot~ Operations, I`aciliiies and Marketing . .................:....;,....~,<,..;:,.:..:: 7

D. M~ii~cei~uice of Standards.>. :.:.... ,...,:~ ..~W .... ......... >.,,.. .....w ..:,.. 8E. „., ,.~ .., .. ., . .....y .,.,Application of Manual ...:... ..... .. .. .., . , . ~..,.~.~; . 8C. Other Arraugeine;its for Ma~ketin~, Etc...,.. ,..... ...,:......;.,..., >n .....:......:..~:.<:;.:.:,.~;:~ 8G. Lfcensor's Use of Other• Advertisingll'ramational Support Funds. ....~:~.....;..<.:,<.,. 8H. Perfarlllanee of Lice~isor's Obligataoea::...,::,>.::,~:,.:;.,.,. :...............,.,,....,.....,.,,..,.,.,.... 9

5. Ap~eats, Cha~tges in the Manual.. ~ . .... ... ...<.<. .,... , :....... : 9

A. Appeals..:., .,...., .. ~, :<.:.: ,~ . ,..,.,,.... , 4I~. Changes in the Manual ............................................... . . :,ti.. : 9C. Deoisions on Appeal ..,...>,. .:~...., ,.,..;~;..,......o... , . .. ..,.. 9D. Limitation on Appeal Rights ...... . ..... ..~..~.,~.. :.,..~.., ;;:;...., ,.a~..;:....,..10

A. Mernberslx~p ................................................................. ....................................... IOH, k~netion of Committees . ................................. .............................................. 10

7. Proprietary Rights ................ .. ,. ,,.,,.Y................................... ......... 10

A. flwRzership of S~+stem.......... .................. .....................10B. Use o~Trade-marks ............. ...>..~ _ . ~.. ... ,.,.... ..~.,:.,.~..:..,.~,~....1IC. Trademark Disputes :,.„,>.,. ......, .. ~ . ....s. .. - X 1U. Protection of Name andYMarks ..... ..... ............................................................12. .,.E. Modification or Lfiscontinuatson ofMarks ........................................................:.12

8. Records and Audits. . ,.e: ..>.:... ;....,, ~ ~ :.:..:......::.., ,.,,... .....,.,......,............12

A. Montt~y Statements ................. ................... r~...,<.,.,...,... _ . .. •• . . . 12B. Preparario~n and Maintenance of Records, .... , ,. _ >.., .......~..........~ .............13C. Audit . . ................................................... .... _ .13D. Annual Financial Statements ........................................... . ...... .13

9. indemnity and Insurance ............... ............................................... ................................13... .. . ..~:.:..:...; t.. ,

B. Insurances ♦ .> ;~tk4>.i~a~~rrieY~~~4l~~~ul:~xtaYMlx~~xaMr.v~~~~H~uu~~~~u~~~~r~~~~q~~~~~~~~~u~~w~~~~~ 14

TAI3LC OTC' CUNT~NTS

C. evidence of I~~scua~~ce .................................... ,,.. ~• ,i S10. 7'ransfer ..................... .............................................................................. >,, . .,.. , ..;. l5

1~. Transfer by Lice»sor _ . .t<..R .~,,.~.: ..~.........r,............ , . . ..,.15B. Tt~at~sfer by Lice~xsee .. _ . ~ .,,. .• . .~.,15C.

...Transfer of Equiiy I~~terests That Are Nat Publicly 'Traded... ,~,.,.,,,~;,,,;,:.:IG

D. Tz~~s~'ers ofPublicly-Traded Eq~~ity Interesfis.....,;:... ..... .<x ...R. _ .] 7E. 'Traiasfer of the Licence . .............................................. .:.................................... 17r. Tra~~s£ers of ~uity Interest iii #~e Licence Upon Dea#h or Ta Family

Me~nt~ers ................. .. ..... .. •~~~~.r.~~~.vr~~iSY~1~~s~wasea~sutt~i%F:s..•.wsi+li~~<~c~~rY.1~r, p+fisr.vtrr~ ~ ~♦ ~ •~ 18G. Proposed T~~ansfer ~f Equity Interests ..,,:,. _ :::~ ....:..: : ......:: ,.~,.,....,. I9H. Cliatsge of ~wx~ership ...................... ,_ _ .s.. .14I. Transfee of Real Estate ......................................................................................... 20J. Management of the Hotel.., .,,. ,.. ....... .... ................>,....2U

1 l . Cxpropxiation, DCglO~iti011 Aild C8S1181#~ ................................................ A,F.........,.; 2Q

A. Ex~t'opriation or Detnolit~an ..................................... > ~..... , y,: ~:..,:.,.:. 2UB. Casualty ................... .,,. . ....,. . t .... .,.... , .. ..~ .2I

~~~s~%C, No Extensions of Term• _ ~~Y' aeE~x~ _ ~~ Y • 2112. '1'exiui~~.ation..~ .. ...... ~ ., ._.., . ... _ ... . ..........x. .....,.,..21

A. Expiration of'1'erm .................. ....... . .,,., . ........_.,<.......~,:,.,:«.;.:........,.,..,..:.2~B. ... ..,..Termination by Licensee an Advance Notice.< .. ., . .,..,. ....................<,....,..,..,,...22G Termination by Licensor oi~ Advance Notice .......................::. ..,.,, .,.~~„.,.>,,:...,.:~2_D. immediaxe Terminatio~i by Licensor. ..r;;.. . =r,.:..:. ;..~,.: ,,,,. ;.r.......:.22~. De-ideuti~ication of motel Upon Termir~atiosl ............................................. ...24P. ~'aynzeitt of Liquidated Damages...........< ................ .. .r:..,....;...........,.,.;,..... w,.., 24

13. Relationship Of Parties .:..,,.., ...>.. ...... ...:... ,.,.,. :.,~.., ., ,.~...~, .....x., ,,,;:.?a4

A. No Agency Relationship.,,,..: ..<,...,, ,.,.... ..,.;,x, ..,.., .,;.: ,.,:...;:.., 24B. Licensee's Notices to Public Concerning Independent Status ...............~,.~,.,... ., 25

14. Iv~iscella~ieous . ,. , .:...,.. .,o.. ,. ,..........~ ... ,... ~.. , ...: ,w ,, . ., .. ,,, 2S

A. Severability and I~~terpretation....,, . .~,...,.~ .....::..........:......:...~.:.....:...........:......,,..25B. I3indaixg Effect. ,..... ..... • ,~ ,.. ,.j.,..,. . _ ,x.....,..:.26C. Exclusive Benefit ....... ................ . .. ..,. ..~...~, < .26D. entire A~reernent .............. .~...., ... ..~..., .....,:~.. ,,.,_.>;.,. ~.,<..~... ...~..2bE. Licensor Withholding Consent ............. .. . >,..~.. ,.,_. x..................,....26F. Notices ......... ... . ..... . .......... . . t _ .....t.,.:>,.....,:..: .2&G. Authority ........................,............s.... ...... ,. .. . .27H. Genexal Tease and Covenant Not to Sue .......................................................... 2?I. Perfoxn~a►;ceofthe Woik..... ..~ ... ........ ..e...:, :...,.... ...:,< .:.;:.;.:.,;28J. Reimt>ucsement of Expenses ..,... ........ ........., ~ , ., ,.: 28K. Business Judgment... .,.,,..;. ...<,,.. t .:,;..:. ;;.. ~ ..,.......,.H... _ .,~. ~.>. 2$L. Descriptive Headrn~s............,...,... , .......................................................,............ 28M. Capital Iteserve ................................................:................................................... 24N. Terrarisin.....,.......,..,, L.. ..... ..<,., t ... .~.. , .:.. ::~~~. .....,., ,<.,y.~....,.29O. Cwrr~ney a«d Withholding Taxes:.. .. „~ •,,...~: ... ~ .~,.*..:29P. Privacy Legislation ......................,....,........,........,.........................................,..... 30

I~inliday Hos~i~atity Fr~ttchi~~.g; Tnc.Throe°1t~vi~t~ia D~Iv~; AtXapta, Geo~g~a 3U346

Licence A~nreeynent

This T~icence dated; ~~ ~~j~.,~ '~°~..: p~ {~Ne "'Tei~ai ~t~~~i~n~a~c.~n,~nt. I3ai~"}, -isbetween 1~oliday I~iaspita[ity Fra►3cliisin~, tn~,,, a- lletawa~e cbr~ao~#itm (°~icet~~or"~, ani~'Bhu~iuder Sandhu, individually {°°Licensee") ~vlios~ ad~lY is 2'7~.1?u~das ~tre~t F,~s~ "1'i~iyt~uON IC8V 1M2.

The Parties Agree As Follows:

1. The Licenea,

L~~~iYssax etperates and Ti~eri~~s a sysen% t~es~~t~c1 tc~ ~y~ov~de:~ d~stx t~~, txgli~ c~uatity4t~c~Yel secs€~e t~ fh~:~ub~i~ under the~azries`"aialr~t~~ S~i~~'; ̀~~~~li~ay ~ ~i7; xpxess~" ~~ii<̀Hol~~a~ ~ri~k.I~ss~r~" (the "~~ste~n'"}, I~x~h ~az~d~i~is. ~il~shed ~iy: Le~r~spx. are tessence of .t~►e S~ste~n:. I~ut~re :i.~,~~e~i~ may be eequzi~e~i .a~ ~ic~i~e~ uitdcr ik~tiI~ c~~~ t~gr t~~oni ("~ic~~t~~"~. ~~c~ns liar dep~nc eaat~~ i~x~ves~sga~ect t'he disks t~f the

~aus~i~ess t~ 6~. U~erat.~d herew~d~r, Y~J.UfI{~'!~*.:~Ut'CC31~ 7d~ld j~E1 111~tA~ i'Xl~l' 1 CQk'lt~i~t'►JIS~c~~ ~p~t~tiv~ fade ~s a~ict risk, h~ss:::it~ct :~,i~nso~s i~ascl~isur~ ~~eu~~zent.~or }~rr~spect~vel ot~~a~ .~~~~ anc~ :C=lol~t~ay ~ntt 'Cx~n~ss. brand groins I'rauchisees and has made anrilztepeitdet~ ~:y~tiu~~~.~~i c~~" ~Il ~u~k~ .~t~ Neithez Lieensar nor any other person onl~~~ei~sor'~ ~5~~~~if i~a~ ~x~»tte qty r~a~esei~tiatton to Licensee concerning this Licei3ce notfully set forth herein. ,t~,~are of the retevani :i~~ts, ~ eeiss~e :~iesixes Ito enter: ink th%s.Licence iri rnder to obtain► a licence to use i[ie Sysi~m ;iii the c~~ei~at9o~ ~:~F ~1~e tit~nd: ofhotel rdenti~i~t~ ~i~. p~c~grap~ iS.A bel~v~ located; at ~tk~e:7nte~s~ti~n t~£ I'l€~ce v'C?rle~as:Drive d ~~~ntrus~~:Bcsul~vai~tt, Or2eens;:{~N (the ̀ °Hote!'~.

A» The Hotel.

'T ie Z~pte~' eomp i~~s all sirt~otures, f~tc ~i ~s., a~spurtez~u~es, furniture, ~ixf:~rc~,eq~ ps~ze~~~ ~n~ ~x~t~y, ex~t;~: ~axl~i~ng ~~~ti.~iher areas frc~nl tfime to time touted o~i~~ l~~d ici~z~tlCei~ by Licenses to Licensor ~ ~ :~~~t~t~~~~at pan o f tl~i~ ~ c;~~ ceR ~r1a it~d on sny land fron:l i~~ne to #i~ne a~~~t~~~d::~y t;i~i:e~~s~r.°Ft~r ~dditio~s, sins+a,~ cater facilities. The ~'lot~t now inclui~es the fae rxti~;s 1'tsi~d vii ;1~lttaeli~ie~7t "1~"hereto. No change in the number of agp~~.ved west raUs~ss or suites and no othersigt~ificai~t cha#fie ~n the Hotel: or to ili~:m~ririe~ in :r~tsi~l .the Hotel rooms ~ix~ls~rvic~s are of~'ei~ed to the ,ju~ita (in~lut~ing fi3ine~Ys~r~a~g a~~~~ cazit~~ri~i~~urn t to~ipr .ecfis not vlv'ing share' ter~i- stays bye •tracts ant ~u~,st~~ ~~ay b~ u~~tde ~'rtt ~f~ ~~nsor's: <app~~~t. L c~nsee re~~~se~~:. tlr~~ it- is +~r~t filed to ~asst~s~ on of t1~eH~tet dc~i~ the entire 1ic,~~ea tee without res€~iab~ ~tha~ vvoutd ii~terf~~~ w~ h.ar~~fl ing a~nten~~ lath ~ti ~h~s ~ ce~.c~; . Thruug~~o~t Airs L cei~~, t~i~ v~or#i~~'tYJ[1117" Ettlt~ Y`~1tt'SE; 3`i?OS13"~ 8C~ ~II~tFe11lt1A(~ t0 Illi`.~1Tt~E~' t~1L' WO(~ ~'0&L11~~Sa~ UTl~P.58otherwise indicated.

B. The System.

The System is composed of alt elements wluoh are designed to Identify HolidayInn, Holiday Inn Express and Holiday Inn Resort branded hotels to the coa~suming

t: CAN08

3

public ar are designed to be associated with those hotels of to contt~i~ute to sucl~ ~.ide~i~ifcadon or associatio~i and all elements which identify or reflect the qualitystandards Arid business practices of such hotels, al! as specified in this ~.ice~ice aras designated from tinge to time by Licet~sar, The System at present includes, butis itot liniit~;to, the trade-mai~[~s Hotiday'Iw~~3; H~tiday Xnu Express~~;Hali~y.Inn E~tp~•es~G~ Hotel &Suites;..I3niiday ~Tzt~~: I~,c~.tel &Suites, I3olii~~y lt~i~tItesart, (as appropriate to tine specific hotel operation to wlsich it pertains),Holidex~ and the other Marks {as defined in paragraph 7.0 below) a~1dintelleotual property rights r~aade available to licensees of tote System by reason o~a licence; alt iigl~ts to do~iiain names and other identificatio;~s or ele~i~ei~ts used inelectronic corrunercti: as may t~ designated from time to time by Licensor i~~accordance with Licensor's speeifieatians to be part of the System; access to areseivAti.ort sei`vice operated i~~ accordance with specifications sstaUlished ,byLicensor from time to time; distributiau of advertising, publicity and other~narketi~zg progi~a~ns and t~~aferials; the fw~nishing of training programs a~1dmaterials; confidential ar proprietary information standards, specifications aizdpolicies far construction, furnishing, operation, appeat~ance and service of theHotel, and otter requirements as stated or ~~eferred to in this Licence at~d fromtime to time zca Lic or's Standards Ma~tual {the "ManuaP') or in otherco~~nrnunicatians to Licensee; and programs fax inspecting the hotel, measuringand assessing service, quality and cansurner opinio~~ and cai~sulting withLicensee. Licensor may add elements to tie System or modify, alter or deleteeletneiits of the System in its discretion from time to tin~se.

2. Grant a£Lieence.

Licensor hereby grants fio Lic~~lsee a »on-exclusive licence to use the Systetu onty at theHotel, but only iii accordaztae with this Licence and only during the "Licence Tern1"beguu~ing with the Term Conunencement Tate and terminating as provided underparagraph 12 hereof 'I'1~e I: ceaiee applies to tlx: I~e~~i~t~;s~ecrf ~d I~,~r~i~~ ~a~ to Sao citi~e~rl~~afi~on. Licensee acknor~i ges: that LiaeTasar. its ~l~visi(sit~s,. ~ubsuli~'t'~, ai~it at~s anti.parents ace and may in the future be engage ~.:,fn ofher Pius ~~s het:`r+e~i~s i~~3.z~diii~lodging acid related activities, and that Licensee -is acqu ~~ng rya rI~'~ hereunder ~itiis~rthan the right to use the System as specifically defi~xed herein in accordance with theterx~ns of this Licence. This Licence does not limit Liceusor's xight or the rights of anyparent, sutisidzacy.'~x ~ Vitiate o€`Licensor, to use<ox l~aene~ ~ System of a~ky;parE't~tietica~'or to e~tpag~ rr~ o"r.-ii~cei tse any ~ausiness activ~Ly at ~i~? a'[~er :~ t~~~~ ~:cludYng wltht~t~tlimitation, the licensing, franchising, ownerslU~; dperat au.~tz~tt~r:maza~~e~~nt.af lode n~faeili~ies and related activities under the names and maiks associated with tk~ Systemandlor other names and marks. Licensee acknowledges that T~icensar's rights to useand/or licence tkce System, referenced immediately above, pre-date this agreement and arenot iirnited or changed by the terms of this agrceraen~ Licensee agrees that byacknotiwledging those rights, the parties da not intend to make ~,icensor's exercise of sucvrights subject to 'rotes applicable to contractual performance or the exercise of contractualdiscretion under #his Licence.

~. Licensee's ResponsibitiEies,

A. ~perationa~l and Other Requirements.2 CAI32008

During tiie Licence Terns, Licensee will:

{I) rnaintaixi a high moral and ethical standard acid atmosphere at Che ~-Iatel;

(2) maintain the Hotet in a c;tea~~, safe and orderly ~nauner and in f xst class conditioiz;

(3) provide efficient, courteous a~~d high-quatity service to the public;

(4) operate the I-totel 24 hours a dray every day except as otherwise permitted byLicensor based ott special circumstances;

..(S} st~i4tily ro»i~ ly ~n ail iespects.r~ittz<t~~ ~v[a~taal (as it i~~ay b~ ~~iod~~"i~d or~re~ised_.

by Lce~lsos•) and vvfl~--~t1 otlser po~i~ie~,. ~r~cet#ur.~~ atst~ r~quir~a~enfs o~ ~r~ensorvt~t~ich .may be :fxam t tue to time ~orz~z~u}3 ca to ~, c~s~e -~u~Zxia~scommunication n~►ay be, at Licensor's o~tx~ict; ~n ~~trd. ~~p~~ _spy .fir digi t,electronic or computerized foxm and Licensee must pay any costs to rebieve,review, use oa~ access such digital, electronic ar computerized communicatiian);

{6) strictly comply with all of I.iceiisor's standards etas specifications for goods andservices used in the operafiion of the Hotel and ocher reasonable requirements toprol~at the System and tt~o Hotel from unreliable sources of supply;

(7) strictly comply with Liceiisox's requirements as to:

(a) the types of services and pro8ucts that may be used, promoted or offeredat the Hotel;

{b) tlie;t~pes ~z~:it;~uatity o~ services anc~:pxodu~t~.that, fio supplein~nfi::se~:~vicesl~tst~e i on ~tt~u~l tnent A, rz~ust be ~~s `, Pm~t~c . or oi~'ered;~~ the ~ot~I;

{c) the use, display, style and type of signage anal of all other firms ofidentification at or pertai►~ing to the Hotel, including but not limited to anyuse of the Holiday vin or Holiday Inn express games or a~~y other ofLicenser's trade-marks or copyrsgl~.is (in al! fo~7nats, includuig but notlimited to pritti; eIeetronic or other media}, which era seen by members ofthe consuming public or used to identify the Hotel to ac#uat or prospectiveconsumers;

(d) directory and reservation service listings of the Hotet;

(e) paining of persons to be involved in the operation of the Hotel;

(fl part~c~~~t on a~ all n ~ti~g! ~' rw~~on`~erv~c~, a~v~xt ~iug, t~~►~~ ~n~ aidapera~in~:~~tzg~ra~in~ des $z aced bx ~ ice~sor as cysts t~~~de {or yea wide}px+~~~acns ~ti f~i~ ~e~ in'terc~t~ of haf~Is. using ih~. System; pr~v ~~d thatv~t;~: xegaxd. to arre~ ~nde ~ro~ra~tis, ~.Zcense~ inay .t~e~~est :L.e~ssor'sappm~l ~l~at t,ic~~ss~e need not.~tar~ic~~. t`~a~o~~sl~ ~pp~v~l zzvL tt~withheld;

(g) maintenance, appearance si~d condition of the Hotel; andCAN2048

(ls) quality and Lypes of services offered to cusWmers ~t ll~e ~~iotet.

(8) use such auto~na#ed ~iaes; service a~~dCo~. laatel :n~ar~~tta~~t ~rrcdlor. C~1.~~hote ai~felccamn~ut~tca~zc~n s~,st~s~~:(s) wliicli ~,tce~&t~r do tiffs t~ lie ~tx't~e :bes~.:ii~Zei~ests ciftl~e Sysie~n, including any additions, ~eszht~t~re~a~nt~, ~uppt~ria~~ts,: asp ~vat~i~~ttsthereof which may be developed durIr~ the term hereof;

(9} participate in anti nse those reservation services which Licensor deems to be i~~tl~e best ixiteiests of the 5ysteirs, including any additions, enhancements,supplements or variagts thereof whieIi nay be developed during the term hereof;

{10} adopt all itnpravements or changes to tl~e Syste~zx as may be from time to timedesignated by Licensor;

(1 Y) su~ictly comply with all governmental requiiem~t~fs, ply alb loxes, and ri~ ~'ta~ atl~vverrunental licences and permits necessary tp .gpe ate the Hatel in acci~r i~ncewith the System;

(12} permit inspection of the I~iotel by Licensor's ~~~SreS~tztatives at oily t~m~::and ~~~udiem free lodging for such time as may be ►easariabiy`necessary to ctir~plete theiri~~.spectioxis;

{13) promoti~~ dZe ~lote~. an ~ Kcal ox i`ag trnat basis subject to Licenser`s requirementsas to ~'px~an, c,~~~t~iti: and pi.Tor app~o'uals;

{l4} zt~ure::}~afi: no part of tlxe ~o~el or fl~~ ~ys~ena> i~ ~as~ :ko fir~t~ser tsr.~~nr~ate a.~tiip.~n;husiness or otheP l.Dtiging f~Gflit$~, St as ~ie~nstir'ii~~y ap~a~~,fo~busi~~esses or lodging facilities ow~'te~ir ~1~IlS~ Q~7~18~C~ 4T ~)~'1~T1t~t15~. A~~`4VSC~by Licensor or its parents, divisions, subsidiaries, and affiliates;

(15) use every :xeasox~ttl ~e mans to e2~couraq e use of HaIiday Inn and kIoliday Ixul~x~ es~~'~c~lrties everywhere by the public;

(l6) in al] respects use LiC4ii15~e~S 13ESG et~~i'~S to reflect ~t~z~it upon and er~atfavoura131e public respoits~ to Vie.: nai~~' "Hot~day :~ zt'" and "Holiday I tit_.Express";

{I7) promptly pay to Licensor all amounts due Licensor, its parents, subsidiaries andaffitiates as royalties ox fees, whether or not arising ant of this Licence, or forgoods or services purchased by Licexisee far use at the Hotel; and

(18) cam~3ly° with Licensor's teasonabie requirements eor~~e~n~rt~ can~r.[enft~lt~y of~i~fcirina~ion, and in parf~cula~r Licensee shall not ~xs~~as~ ~vitha~lx`. Lce~tsor'swritten permission, information pertaining to Licensor's marketing andrsseivataons programs that have not been disclosed to the public.

~. Upgrading of the Hotel.

Usie~g the saute requirements applicable generally to hotels under the Systemoperated 6y Licensor and its Licensees in the same category as the Hotel, Licenser

4 CAN20t18

may at any time duri~ the term hereof i~eyuire subseantiai ii~oderi;ization,renovatio~i a~~d other upgrading of tl~e Hotel. Limited excepl:io~zs from thoserequi~~ements rrtay be made by Licensor bAsed nn tocaE coiiditiotis ox specialcircun~stauces. if the upgrading requirements contained in this pa~a~rapli 3.~cause J..icensee undue hardship, Licensee may fer~xiinate the Licence bycci~~s~yi~~~~?vz'!h p~sagt'~~h.:"I2,~3 TE~~~~~►uis~ot~s bf.Ylie pr~ced~ng.sci3'i~~ are not.ap~li~bie: tc~ the. V+r~rk as da~a~~c~ ~ this ~ e~,nc~ ~r to f~tut~ ups liri~re~a k~~r~c<~:ts due to ~i1v~~s~~n~ ~~4~~r~s~~~; producfi c~ua~ty ~as~ectzaris~ ~f theHotel, Sta~idards Manual reyuirenients tix s i~e9uest fair' chaz~g~ of o~t±sa t~ by:Licensee.

C. fees.

(I) Fox. el~ ,o~~tlx:.{ar part ~rf;a ~~i~ntI~~ ~ura~~g tla~ l;~cence"~~r~n, Li:~~nsee v~ill payto Lic;~cxsar by t1 ~. 15th of ~~e foliaw »~ ~tc~zith, exeepf iix ' ~ ~a~e of theTe~~t~al~ '~~ ~ p~ca~raph ~.~('t)jc) b~iov~r; v~+h~~T~ is p~'yabTa :x7xQschly inadvance:

(a) a .loyalty of• 6°/n of the g~'oss rooxt~ sr~veutte at~'i'1~u~b1c xct ~~~ E~~~}~I~ :fart~utal of guest raoins at the Hit~l w~tti »~ :A~c~uc~n f~~ any ~t~zx~incTudi~xg but sot limited to no ~ ~justti~~trt for ire cx►~t off` a~~ : f~o~C ~t~dbeverage items provided or made ~u~t~~~t~~~ td ~.:g~esL f~' Vin. rn~ ~i~At ~tfguest room i~el~tal, however witu deductions for sales, goods aiul servicesand room taxes only (`Gross Rooms Revenue"}; and

(b) a "Services CQutribution" equal to tiie percentage of Gross RoomsRevenue set forth in paragraph 15.5 below, to be used by Licensor formarketing, reserva#ions, and other related activities which, in Licensar'ssole business judgment as to the land-term interests of the System, supportmarketing, rese~~va~ions a~zd othex related functions. Costs which aLicensee incurs in the acquisition, installation or ivaintei~ance ofreservations sexvices, equipment or training, or in its own marketingactivities, do not constitute payment of the "Services Contribution". TheServices Contribution is subject to change by Licensor from time to time ifeither approved by: (i} a majoxity of members (which shall be cau~ited onthe bas~s;ef one hotel, one vo#e~ of the System. who .i~.pi~sent a: r~ia~as,i~y ofthe l~zit~~s to be subject to :the `increase, :~r:: Chi) app~r€~veci by a ~»ajoxit~ ofthe members of the System or the "IAHI" (tlie franchisee association orsuccessor sanctioned as such by Licensor) at a meeting of SystemLicensees or at ui annual IAHT meeting either as may be convened byLicensor upon no less than 45 days' advance ~auftee ~icet►~or>ri ay, in itssole discretion upon 34 days' prior writtea~ no.~ce, zn~rease thisContribution by an amount not to exceed 1 % of Gross Rooms Revenueand such increase shall be effective for a period no [anger than 12 months;provide~I: that, in tlts :e~retit'~if such inere~~~,. Licensor shalt not . ~lte sucha discretie~r~~ry incr~~se again for a ':period of 24 rnoirths :~~ter theexpiration of any such increase; and

cAN20os

(c) a.rnoY~i~~y•1`ec;l~~te~Iri~y:E'~~ec~f$1:i:~3~ fir°~~~i:g~rest rarrn~.ai.tl~:l~ioi~l is~::t~~ ~~ed;G~' ~yc~zj~c~r for ~icov~sr~ti cif t~el~it~lo~y serv"it;e~~ st,~ck~ as b;~ i o .Itt}'~iYCC~: apt, S~f~I[l~ CCf11S1iI.Uli1C'd1E(?lt5 SCl'Vi~~~: C{3: ~I~C :~~SII~*ja Ii}~< st~~l~::i~~ccc~s~ ~.I~ice~ts~~ ~n~yjud~~: r ssanat~l~, i~ut iii i~,o c~s~ rxe siig.inax~.y ~alet~t~a~ yeas 1(~~a of hc: fee zi7 ~i'~t~t a~:the E~gi2ti7t n~ of.that y~ir .a~a

(d) all fees due for Travel Agent Camn~ission Programs ox ElecfxonieComroissipn Seivic~s ~tid Fietd Mat~keting; and

(e) Lo-op programs attributable to the Notel; and

(fl ;an:amc~vn~-e~ua1'to~ny:sales,:goodsa~d_;s~rv~~es;; oss:rer~i}~~sarsr~~~~~'tax Tm~tis on ~ice~i~e a~3d c~lcui..ate~ solely oil p~yrrre~ is r~~ii~ed3~.er~u»~f~r, uai~ss the i ~s a~~ opt oti~] att~~~r ati°v~ Via: ate _ iicoYrr~ 'faxatlierwise payable by Licensor.

Licensor ►nay, at its election, eequire Licensee to pay alt outstanding Fees byelectrQruc funds transfer/direct debit of account or other similar technologydesigned to accomplish the same purposes.

Licensee wilt aperatE the Hote! so as to maximize Gross Rooms Revenue of theZ~otel consistent with sound rrtarketing and industry practice and will not engagein any conduct which reduces Gross Rooms Revenue of die Hotel in order tofurther other business activities.

(2) A standard initial application fee fax additional rooms as set fartiz in Lieensor'sthen current Holiday Iiu~lHaliday Inn E~tpress Disclosure llocu►nent or asotherwise conimuniaa#ed to Licensee, will be charged upon application for anyadditional guest rooms to be added to tl~e Hotel.

(3) Additional royalties may be charged on revenues {or upon any other basis, if sodetermined by Lice~asor) from any activity iF it is added at the Hotel by mutualagreeme~it and:

(a) it is not now o£~ered at ~ysten~ k~ot~~.~ :geE~era11~! ̀ at~c~ ~s ~Z`kety'~si banefitsigciifica~rtly fiazn or be ct~nt~~iecl si~~~►~~car~tl~ w#~; the ~gli~~y` Lm orHoliday T.nn Express ~3ame or ott~ ~~p~ 'z~ft1~~ yst~ri~; Vii.

(b) it is designed ar davelaped by or far Licensor.

(4) Charges may be .xxi~e for optit~n~l products or services ae~epYe~ l~y< LicenseeFranz Licensa~, e #~ e 'rn accordanc:~ with current pta~t ce or as,,.dev~~lo~~d in thefutura.

(5) B~c~t. p~ysi ettt nt~tl~r this pttr~~raph 3 C, except the stacuiard Additional RoomAppti~atton fee, s~ial! be a~coznp~~~ thy: ~~ie <m~t:thiy :s~a~r►i~i~t re€e~rr~d t€~ Snp gxa~sh 5.;~ L~c~~sor tna~ apply a~~~ a~nc~ur~~s r~c~~~~ undex .this ~ae~graph3..0 to any ,ainc~un~: due unidea tl~~ ~cence If any am6t~nts are not paid wl~e~

CAN2048

14

due, such non-payment shall crn~.~titute a breach of this Licence and iii addition, ~scieh u»paid amounts wilt accrue interest bebinziing on the first day of the monthfollowing the due date at 1 1/2%per month (equivalent to 28%per annum.),

},G Local -~~~d i~ " iniial ~ai~kei~it i~o ts> ats~ ~~la~ed ~ctvit~es i5a: t~e::cand~i~t~(

by I.i`~►~see, but ~a~~}r at ~i~es~s~"5 ~x~~:~ise a~sd au'bjecf tc~ T~ice~~.s€s}'s: a~~uime~its. Reasar~~ble cli~u~ges rnay'f ~~i~ade !'a~ o~ti~~~Z ad~t~f~ltsarg~tn~t~a~a~s:

c~~~i'et~e~~ or supptietfi'by Licensor to I,e~»s~e fay stt~l~ prt~~rrti~~~..~iltf a~t~v~t~~sy

(7) ~~c~I'~or lids tf~e r(~tit in its' d~scretioi~, to require Liee►~ee>La fetxi~er any pay~~~~i5ts.date iu-L ~~i~sor a;~c~er this :L~~enee to Licensor's par~j~~; ~f~l ~#e~,.subsi ii~~~~:t~rotrier desig~sees.

4. Licensor's Responsibilities.

A. Training.

pur n~ tie Lac ee ~'eim, ~~:censor vsrilT ion ue ~~ speci~`y Enid ~aczvi~ie ret~uare~(E~4~C~: ~ptEopal 'ti`~tntl~ sei~t s and j~~,~~i~arn~ :at vtu~~rs 4v~~~.it~axs,. ;tci~cti~bt~c~tic~~s~ in tiZ~ U iit~d Std#es, A ~e.~ ~z~ay b~ el~arg~ ~ poi c~rt~~i~ ~e~ui~erl ~n~.opt~n~ trainix2g servr`u~s. Travel,.n~~;~n~ ~ttc4 a~o~ ~~j~:eai~~ i~~llceii~~ ~~~~'i .~z»~layees will be :bor~:~:by L-i~ei~s~e: ~t;~as~x~at~le ~;har~;es-also sua~ ~ e::as~~ssefar traini»g materials.

B. Reservation Services.

Uurix~g the Licence Term, so long as Lio~nsee is in full compliance with itsobi~ga~~~ns. hereui~~ec,. Li~enso~;wili afford Licensee access to reservation servicefor ~h~ 3~'titel on te~tx~s ~nnsi~teiit with this Licence.

C. Consultation an Operations, Raci~ities and Marketing,

~IIuixz~ ,~ the Lic~iyae `Te~rn~, Lie~nsz~r will, from time to timo at Licensor°sdiscretion, make avairin~ le to Lirel~ e consultation and advice in connection withoperations, facilities and marketing. ' J~ i~et~pr may from iii~~e to time furnish toLicensee names of suppliers or rect>tnz~ieni~ to Licensee suppliers of goods andservices required or usefitl in the operation of the Hotel; however, Licensor is notobli~a i to .fi~rrxslz any such names or to continue doing so, and licensee isundi~r riet~obligaf onto use any such st~~%plier, unless exp essly required to do s~ bythe certns of this Licence, the :IVC~xttal or oilier wise. In identifying oxrecammeuding suppliers, Licensor exercises its business judgment based on its~~f~irmat r~tr ~s oft ~~ date a~~d its ;~ens~ ~f the l~iag fez ~ u►texe~ts of tl~e system.Iace.~sor':s: id~nt ~i~atxnz~: o~^ recommanda~ion of a~ step liar ~ ~i~rt. a representationar wai7anty of the financial condition or pet fvrxnance of any supplier ter of anyothez factor, and Licensee's ttse of an i~nt~~ietl ox recommended pplier thatsells products or services mcetin~g Licensor's standards and specifications mayfacilitate compliance with those standards and speei~icatioi~s, but it is not asubstitute for such cQm~liance.

CAN2~8

1l: Maintc»ante of Standards.

Licensor will coi~sciet~tiously seek to maintain high standards of quality,~~~~~i~I~tte~tSs. 0pj t~i~~~ .a~td. sexvf fit. all lt~tels using tha System sa as to~omot~, pi'~tti~et ~c~d e~4ia~~ce ~hc,puC~li~ i~~ta~e and ~}~ut~tian of il~e l~oli~(t~y ~i~na~~::T3tslitiay ~n~~ ~x~res~;:rX~t~~es ~ii~ t~ .~~iCre~se the ~e~taa~~d for sea~uices nf'~~re~~j? ~ttt~ ~y5t~ear~ Lic,e~~st~r's ,~ud~~ tin: such matters sl~al~ b~ controlling iii allrespi~t~, a~~ it slial~ l~av~ ~~vicet~''tal t~d~.gin making such judgments.

E. 1#pplication of Manual.

Licensee's Hotel and aI! other hotels operated under the System will be subject tothe Manual, as it tz2ay fconz dine to time be inodi~ed or revised by ~ieensor,neltid~~sgi'im~ted ~x~~t~ins f~a~ri ~a~~a~~.iar►e~ v~+t:ch ni~iy be i~ati~ ba~ett:~ai~ IQ~~I

co~~~i~~on~ . type a.~' at~l or spe~i~t! .e3 u~~sta~yces; '~t~~ ,t~as~tt~l ax~~[ .pity~~ipdiS~catic~23 tra:`it c~t~ c~ltv~i~tl-day ~,r~~n~cu~ ~ti i.i~e~~se~ iii 1~€~rci ~~~~~r cc>~y;esrr.at Licensor's option, be made available tc~ Licensee in dig t~al,, ~~~cT~onics yr, .ca~u~u#erixed fe~riz~. If coinmuni~:afes~ in~~ltgit~l, electronic or~a~ptttet~ c1 ~irsniL~eei~see :~~us~ pay any casts to i'€~i`r eve, review, use or acces,~s tie tvl~rt~~l, I'!teManual is co~~~dential as~d remains the property of Licensor.

~'. Qther Arrac~gements for Marketing, Etc.

Licensor may enter into arrangements for development, reservation services,~n~ket~~~,.flpe~at~ous, artuiriis.~r~tzue~:;~chnical and suppa~K functions, faciiiGes,~~.~~arris . ~~rviees: ai~,cf/~r persoz~~e1 v~ fil .a~,y ot~ier. crttity, _atn~ may use aid+

~i~xe~,.p~og~a`r t~r~uis:~s ~ar.personr~elusec['In cc~nrtectnn _w~ih the Syst~~;.i~co..~rnecczon: w►t~i tiny biisiries~ acEi~v'st ~s of its parents, subsidiaries, divisions oraffiliates.

G. I,icensor's Use of Other AdvertisingfF'romotio~nal 5upporE Funds.

To fhe extent that advertising andlar proxnatio~nal support and/or flun~ding maybecame available to Licensor's parents, affiliates or subsidiaries and/or Licensorfram thick p~rt~es ox~ a i~t of :tl~e fatal t~+ cr~`the acti uitia~ c~£ 1;i~~ensor's pai~~ts,~ Bates ~~d ~v bsidaax ~.4t rncl~id ng Itptet~, c~p~ratc;~ u~ld~x~ l e System, suo~;sub ~s~~t anidtc~x fun~i~Y~; may be used ar deb ~nai~t~:".by Lice~~~ris:pareiit~,;a~} afesor.~uts~i~~aries; or Liaerisor; to t~eztefit:sue?t ~rtt~~ ~i~es iri tie aggi~~xe;:an sta~t~p~cipt►~t~~~t;~uY,d'~~~a~ut~r as ~ i~nsor's parents, affiliates or subsidiaries, or Licensord~tc~m~~ es ~~ason~~~y . .proinotus the ta4ality of -such entexp~ ses, exe~~singreast~ita~sle ga t# .faint .busii~e~~ ~tir~tgt~e~~t wsth resper;~ to sc~?~I .determination,}~T€~'v tt~d. t~iat anp such sup~art ar fuix~ling coming from activities of the SystemslalE be ~s~~ fo~r.t~i~ b~~e~t ~sf the~yste~ri:

CAN20Q8

H. I'erFarmance oi' Licensfl~r's Obligation,

Liceixsee understands and agrees thAi Licensor, u~ its disct~etion, n ay perform at~yor all of its obligations raider this ~.iceizce directly or through Licensor's parents,affiliates, subsidiaries or other designees.

5. Ap~eais, Changes in the Manual.

A. Appeals.

U~eisioz~s, other that ter~nit~atiotl nof~ces ter t~ ~sit~~~s :~F' T.ie'.ensor's ;Ty~~al~ seConunittee, made on behalf of C,icensai` spe~x~ciilly ti~vitih: ~ef~r~nce.t+~-~ ~ k~lt~t~l'aixa~ be appealed to Lic~n~~ ̀s rra~~t~iu~e Gt~~in~fit~: if dtanie :p~om~tiy a~k~i~;t~ex~see t~~s df~°tgently ;~nu~tit l;el~~f t~ra~~li 'l'fiC~aisOY'S not~~~al cltarir~~1~ t~fau~aarity. V~Yt tl~ app<a~al in r~+riliixg~ ~r :arty ~t~ei~~laei~ t~~` tl~v ~'cat~~~~i.Cosiir3zittee,.;k~ie:decision.ri~y`~e fu~fl~er.~~~e,~[ed tt~ E~~e ~xe~ittivc ~~~Yiiuille~::erFLicensor's Board cif Directors,

i3. Changes in the M$nual.

L~aC~ ~ha~:ge ~i~ tk~e=t~~►ci~al must iss:~om~unicated in writing to Licensee at !eastk3Q :d~~s be~c~re lt: ~;aes !taro ~~e~t<~wt~~ch.;cainmui~~c~tioit. x~nry~+ :b~ tax _l~~'c! ~i~per

copy a~~ at.;T.~cen~or's ciptiun, ~~s_~igi~al, etQ~t~i~ie ~r ~ta~uteriz~d for~ri,.~»d if~tt~l con~t~~i~~~icr~t tin is ~n:di~~t~t .:elccirnt~'i~;c~r coxr~~~.ut~~i2ed ~isrtn; Li~~~sc~anust1~Y arzy costs to retie ~, :review, ~5e: o~~ access sam'~}; LiCE"ar ~3(?I''9 :~`t'Hi1GEliSt~:~i~n~rii~tee or its ~.qui~~lent mast ap r~vc,~t~~ suds ehait e Uzi d musE ;clQ~~mi ~~:that the change was formulai:ed in go~~ faikl~ i~ ~li~.Io~g-teen ~r~t:Y~tt~~~~t~ of#lxSystem.

C. Decisions on Appeal

Licensor shall have the right to decide: a~geals ct~~der ttu3 ~ai~~i~;rap~ S;. s~le1~+ ot~.the basis of written submissions. Na a~pe~! will. sit~}>e~at~ ~ ;d~~ist~n i~r :.a}~~iga?until and unless the appoal is suce~Ss~'t~~:. r~.~y; ~c~o~t ~k~n E~~ 'i.scet~sor ~n ~h~enforcement of this Licence that is shovrti~ ~o ̀ Y~e arbt~rttr~ ~~: e~~ricic~t~~. iu~t1 !re$~ tided by Licensar to 1)~e extent; Ceasi~r2~; but wide discretion at~d latii'~~~ i~! libe :all~awed W the judg~e~t of 'Lieei~soi in the discttarg~ of its •t5~ierr~di~g=:respons ~ l~ty to maintain and improve the standards, performance and facilitiesof the }t~~tels~ usuag tYxe Holiday Inn, °FIIul day fnri '~FoteF .& Suites, ~t~i~tl~~ ln~~x~ r~s~, HRriday ~iui E~:~si~s~ ~Ioiel & ~u~tes, ]ic~ay .Is~.u. ltes±axt or airy ~t~iex'~~rl~d"ay ~i~n ~a~d: iyx I~,oliil~y Intl nan~t~ . L,x stir wall ~nsci~.nt~ously ~e~k Wmtt~ntaii~ ki~~ sf~;t dartls tip i~u~.lil~; CfG'81T~1}~~5~i ~,T~p~~~~CG 812{ S~TvtG~ ~~ ~iI.I.:~~est~ls ~~s~ng-the ~~rst~n ~a as ~a.,~r~zx►~t~; g~oieot.a~~d o~1~nc~ ~f1~e pul~~~c~ rm~gegrid re~utal~an a~:a11 Ho~i~ay Iau~. hotcs~ brand ~~rn~s ar, any- ~ti~r; I-~~l day lni~na~rt~ atzd: tc~ ii~r~se tt~: l oud. far: se i~ss _c~~f'ereil` ~~ tie Sy~ezn 'theManual will appty to all hotels operated under. fih~s Sys ~ ~Zy'~ ic~nso~ a~nt1.:i~slice~asees. Limited exceptions ~ ~ix►piiarice may tip: trs~cfi~ his, on Iocalconditions or special circumstances.

CAN2048

D. LfmffAtion o~n Appcai Rights.

Licensee wil! not lie afbitraty, cRpricious or unreaso~unble iii exercising its appeal(or any other) rights timder this Licence, and will use then only fox the purpose forwhich intei~des~.

G. t.A~~i.

A. Mcmbershi~.

Liaeusee, atlier licensees of the System, and Licensor are eligible i'or membersUipis the IAHI, the franchisee association ar successor sanctioned as sue}1 byLicensor, and are entitled to vote at its meetings o~ tl~e basis of o~ie hotel, onevote, provided that Iaic~~~see or T~icensor, as the case may be, has paid aii its duesand fees owing to the TAHI. '~'hc purposes of the IAI~II will be to consider ai ddxscu.5s, aid make recomrnandations .on comma~~ problems xelatiiig to thets~s~~~~tion of System'l~ot~~s. Licensaz will ~~ek>xhe -~dv~~=arid co~ns~l of the TA~IIIS~o~'t~cl of Directors :aid its Rules of (~perats~ii; Adt~~z~t3~ang at~d Reser~~t nr~Commixtees, car their successor cammiteees.

Q. Function of Committees.

IAHI committees, their functions xnd their n~eunbers will be subject to apprcrval in~!xit3n~~ by C.icensor, which approval w~J~ x ~t lie; :u~tr~~or~~b~y w .tl~~ eld.I~.~o~i~izing that the IAHi must functio~i ̀ 3n ~. ~ria~~~~is ci s#e~t-~iti~ ifi~ 6~stinterests of all. persons using the System, tl~e Licenses atYd ~, ~er~si>~` 'Ill ~s~:tlteil~best efforts to cause the governing rules of the IAHI to be consistent with thisLicexloa

7. Proprietary Rights.

A. Owuershiri of System.

The Licensee aeknowledgeg and will trot contest, either directly or indirectly,Liceasor's unrestricted and exolusivs ownership of the System and any elemant(s)or, eom~ozicuti~s}°.thereu#~;..or.'that`S> censar'l~s xhe: st~ie ~aglit tt~ grztt~~;lzee.~ces Co use°all +~i :~tny elemet~t{s) or s,.t~~p~:~,ent{a) of the Syst~~ Licensee spe;et~ea~iy'a~rees:and acknowledges that Licensor owns or is-li~~ns~:d .tt~ irse the ~a~ks ~~}i~ay Itui

~Io~.~~y Inn I-iotel & ~~:~~s;.Holiday Inn ~~p~ess;;: Holiday Ire :: Express:: Hotel &suites, Holiday Tnn I~:esort; acid all other ̀Iv~~rks; as ~le~rn~ in ~ax~graph 7.Gbelow, other elements associated wi#h the Syster+~ ax der ved there from {~noludingbut not limited to domain names or other t3~rt#~~i.r~~ions or elements used ine~~~tr~nic coxrunerce), toget~t~r with tie _~~od ~t+ill synt~i~Iized Y~e~e~y, and thatLi:~~~ see will not contest :~lii~~'~ly or indic~tly the val~etity ar vv~nership of theMarks either during the term of this Licence or after its expiration or termina#ion,A.11 iniprQvements and additions whenever made to or associaY,ed with the Systemby the parties hereto or anyone else, and all trade-marks, copyrights, domainname or similar registrations at any time used, applied for or granted inconnection with the System, aYnd all ~oadr„till arising from Licensee's use of

1 p CAN2008

t

Licenso~'s marks shall inure to the benefit of and become the property ofI.icei~sor. Upon ex~ii~atian or texminatio~~ of this Licence, no rnouetary atnouf~C ~shall be assigned as attributable to any goodwill associated with ~,icei~see's use ofthe Syste►n ar aa~y eleanent(s) or oomponent(s) of the System izicluding any hade-it~~•ks licensed he~•eunder,

{B. Use ofTrade-maxks.

Licensee agrees and acknowledges that the ri~hi granted herein to Liceissee to usethe Licettsor's marks apgEies only to their use in ec»~nection with the T~~tei andnet elsewhere, a~~d Licensee further agrees:

(i} ~ use ttie ii?ia ~k.~: anl~+ aC the Hotel and ,ai~ly sn :soctatiari nth ther~a~es and :seruices of . . Ho~et= in a ~nan~~r which ~~itifc ~~ sinnatut~e and quality and to those reasonable standards, methods,procedures, te~hnit~~te~ ancl; specifications as may be set ~rLicensor isi its st~3e;dlsra~~t~on; and cammut~icated to Licensee #'tamtime to time;

(ii) to op~~at~ and adve e>t1iE I3otiel. or~ljr under the Mar~Cs: a.~r~tl uti~derno a~~ier:z~sme or marS~ nt~ti'use ~~Se m~~ks only w9th ~~ca (~any9ngwards or synabofs approved xn writing by Lieeltsor;

(iii) to permit Licensor ox its authorized representatives, at allreasonable times, to enter the I~otel for the purpose of inspec#ing~,icensee's services and the ativertisemeni rn• performance thereofand any relevant documei~t~s; maker a~~ a~ad rc r~is p~rt~iriing to,..Lice~~ 's .s~~vtees in a,~ hex to :~etei~t~ ine whether I; cerisee hascomplied with paca~'aph 7.B.(i) hereof; and

(iv} to o;Eiserve :st~a~i reasonable ret{ ~reil~~ifs with respect to co~~yri~t~tand`ir~de-ark;notis;°~e3~d~:~~~nte te~~tr~iions ~tni~ other:~'~ritis ofmarking as Licensor nay direct from time to time.

C. Trade-mark Disputes.

The "Marks" means the names and maxtcs,k~al kiay ton, ~ol~itay :tun. E~°press;<~til~Ylay Inn Res±~~.t~ HU~i~lay Inn H+ ! 8c Surtes„ l~oiitl~y Tian ~~,~ress Hnfi~l &'Sites and Holitlex, and their cUsti uz~~~~~ig c~~t~►a[ertst~cs anti t~i~ n~~ietrademarks, trade names, slo~ns, ca~nritexc3at s~m~cil~r iogasy -trade drams>:;ca~~~~~htei matu~~a1 ana ~~teit~etual pr rty> assoc~aied ~itti, the Syst~xn,~nal~t€iii~ vJtthput".lst~i't~it~on, ~ios~e ~lxicl~ ~ycensor may desigt~at~ in the ~`i~hirefci~ uses ti~x+~ those wkci~ h ~,#e }soy dae~ ~~ot t~~ sate as ~vitla~rawn.. f'ro~~ ~s~;Licensee shall niitify L~cetk5t~~' ~~'atnptl~ v~ arty at~ptt ~y a~~y persa~i o.~rer ili~nLicensor ar a Itc~~xsee o~~ar,~nsorr tc~ cis the 1VI~r[cs, ur.au3~ vari~tio~~ ~r~~na~s~~~of the Marks, and to notify Licensor ~f~ m~it~i~t~~y of ~,y act csra iz~uaivcng tMarks that is threatened or instituted b~ as~~ persi~i~ wait si I>iceris~~_ a~td to ~Itc~4~Licensor to undertake the defence of ~i~y su~k~.:~~tio~t, I<ice~sor.. v~±itt I}ay.~:tli~ solright and responsibility to handle cl~sput~s-wtfh:fil~ird per# as cane~xntri~<<us~ of all

I 1 CAN2008

,. .o~~ any ~?~F k tsf ilYe Sj~sl~t'~, al~d T~ic;~r~~ee wsal, a! its a~o1~€►lite: expeztse, e~i~ its:lutl ~oa~leraf~s~~~ tai ̀ f iceiase~r zn all:s~ch ~~atte~s. Ali r~z:oirerIeS made as a :resui't of ~~tispz~tes vi?i~l~ t~tixti ~~i~es: regart~in~ vise of the lvla~ks oc System or. a~~y parlt~e~~af:~li~i1 t~•£r~r il~~.ao~ouni. v~;L~xce r. Licensor need i~ot initiate suit a~a~i~st ~a1l~ged imitafars:_or ~n~Fr1:~a~e7s, at~d i~~ay settle any dispute by grant of a licence orcitl ext~~se, ~ieensee r~+111 not ini~tat~ clay suit or pxoceeding a~,a fi alleged `;imilatars or ii~fiingers or any other suit oc ps~aceedxn~~: to enf~~sce t~~ ~Src~x treMarks or System.

D. Pcotectian of Namc and Marks.

Both parEies will make every eFfort eousistent with the foregoing tv protect andz~a~ ~.t~rx t~~.I~arlts;: Liens a~~ees ter ~t~eufe:~ixy documents deemed ~~rece~s~ry.try ~ic:~~suc ~r ids cs~iui~rset ~o ssb~c'in pra~~ef~t~n ~r the Marks or to maizttz~ut~ t~i'eirco}itnued -va~d~ty ar~ci ~~forc~ea~i~ity: 'L,icensee ag~~ees #.~ use Marks associatedv~+i h the }rs~m vnl~! iri the ~~~~i~~i authorized by Licensor and aeknowled~esf1ir~C atky uiiauttiorize i use tlieteaf shall constitute ii3fx'it~gement of Licensor'si~igh~s.

C. Modifica#ion or Discontinuation of 1V~arics.

~~` ~ir~nso~-madz.~es t~~r iis~on~ ~ ~~s use t~f and ~~` the Maass: as a r~~ult a~ ~rt~.} ~ocecdii~g. ar~ s~ttle~~~e~f~ ~hec~ E~irer~s~e agi;ins to. coxapa~> `~~~th .Ltc~a~az~s;instru~t~r~ns iri.~rr+~~x t~s: mpt Vin# such madafiaa~son nr discvz~ifntaati~ ~~. L~~ea~see.further agte that it will have no right to>t~ny com~se~~saton or other reet~ectiesfibm Lice~7~~r t~r:any of its subsidiaries, affiliates or p~.~~ttts as a consegi~ei~c~. ofany such nlodi~cation or discontinuation.

Records and Audrts.

A. Monthly StatementB.

At least t~onthty, Licensee shall prepare a statement which will include allinforanation concerning Gross Rooms Revenue, other revenues };enei~ated at theHotel, rovm aacupancy rates, reservation data and other infarmat~on required byLicensor t4~at may be useful {in Liaensor's business judgement) in caiuiecfionwith marketing and other functions of Licensor, its parents, subsidiaries, divisionsc~c ~ff3itatcs (the `'~?ata"j, T~~~ ~3~ta shall f tl ~ prnp~rt~ ;af nsor.. `Z•`h~ Datavv%It b~. per~aezie~ ~t~ ~rrcordsd :aid. rei~`sn~d by T~ioerise~ as .tney die:: r~~sv~alatyreq~itEd by T.~c. enter ~~+ the. `tI~i~c~ .off ~cb month; ~ eez~~e wilk sti~~iit tii~,a nstar ~ s'taxe ~z~t getting ~o~~ ~ke~~3ata and reflecting the computation of theamou~tits then due under paragraph 3.G. Tha statement will be in such form(including but not limited to electronic transmission or autonia~ic capture) anddetail as Licensor may reasonably requast from tiin;e to time, and maybe used byLicensor for its reasonable purposes.

12 CAN2008

B. Prc~aratian and Maintenance of Records.

Licensee wilt, u~ a n~aFmer and form satisfactory to Licensor and ufiilizin~accounting and repo~~iiug standards as reasonably required by Licensor, prepareon a current basis (and preserve for ~~o less than 6 yeat~s oc Licensor's recai~dretention z~equirements, whichever is loiter), complete and ac me re~r~tsconcerni~~g Gmss Rooms Revenue and ,:all financial, c~pera~ing, rti~iPk~i'in~ ~ii3dotl~ex as~~ects of tl~e Hotei, and maintain a~~ accouutii~g system wlaicll fully andaccurately reflects all ~naiieial aspects of: the Hotel and its business. Suc4~ recordsshall include but not be limited to bootcs of account, lax returns, gaverntne~talrepaxCs, register tapes, daily aep~rts, and ~oz~ ~~ete qu~:~terly and annual ~~ia~ciaEstatements (profit and Toss statements, bala~c~ sheets ~ntT cash flov~ s#aten~ectts),.

C. AudIE.

Licensor inay require Lieet~see to lave Licensee's Gross Rooms Revenue andlorrno~sies due hereunder coitapated and cert~ed as accurate by an auditor orchartered accountant. During the Licence Tern and for two years a~te~rward,Licensor and its autharixed agents will have the right to verify informationrequired under flats Licence by requesting, xe ova ig, 't~s~ectitig and audi~i"tag;. atall reasoiaable times, auy and all records refer ~o a#~ov~ wherever they» y be3b~iteri 'fior else~wh~r~ ~f reasai~~ly ~ q~es ed by .~ic.~nsa~): If :any su~l~~nsp~c~ia~:;os~ atttiit:.t~is~l~ses ~. ~e~i~ie~y~y ~~ a►~y.~~yrner~4s d~.ie :~e~suz~d , and lhe.~e~e~~~tcy_ in aaiy ~~~m~iit is not +0~'s£~: ~}~ ~C7V~'.zp~y»iet .t'' Licensee sh all'immediately pay to Licensor the deficiency ai d inters# ther~~x~ as .:provs~t~cl; inparagrapl2 3.C(5) and Licensee shall also immediately pay: to L~~erisor:~r~;aud t feefor $3,000. If the audit does not result in a deficiency being assessed, then noaudit fey will be assessed, Tf the audit discloses an overpayment, Liaensar willimmediately refund zt to Licensee.

D. Annual Ffuaneial Statements.

Licensee will submit to Licensor as soon as available but not later than 90 daysafter the eitd of Licensee's fiscal year, and in a format as reasonably required byLicensor,, exar~~~Ce~~:.~t~~~;c~~ st~ tr~ents'~`or ~uc3~- ~~r la,~~nse~ ►~vrt1 ce~rEfy :~i~r~ato ~ ~ t~i~~ end ~~irr~ct anal to: have b~en:pzepared iri .~e~ocd~nce. vait~i; ~~~reraily=accs~~fed accourifi~~ :~~rYsic pl.~s c~rts~st~~atly appt ~d, avid ~n~ ~'als~ c~a~i~r,~t~~:tx:will be a breach of this Licence.

9~ Indemnity and Insurance.

A. Indemnity.

Licensee will ivademnify T,icensor, ~ts,p~ren#s,..:at~d yts:s~b~~dz~rie~ ~»d: ~~ahafes.and their officers; directors, emplo~e~~; ~~efl~s,:;sac~essot`~ end` ~ss~ a~a3risthold them harmless from, and promptly ~eii~laurse ~h~m 'Far all pants ofmoney (including without timitadon fizzes; dat~kag~s, lega# fees a~~t1 ~x~n~es.) Iiyreason of any claim, demand, tax,. ~~naliy; p~ ,i~d ~~~l o ~ adm rii~t~~ativeinvesti~a#ion or prooeeding whenerr~r ~ssei~t~ti it file (~~~n ~vl~~ xte~ gei~ce ~~

13 CAN2008

Licensor a~~d/or its parents, subsidiaries and affiliates is alleged) arising from. anyclain~.ed occurrence at the l~~otel ur auy act, ocizission ox obligation of Licezisee or~n~€i ie assoc~i d of at~il aced wilt Lie~as~ ~7 Elie I~p~e~: ~;fi t1~e _et ~~in of.~.~c~~st~r, L,icet~se~;w~ll ~il`so defond Ly~e~zsat ~~dl~r iis:: az~nt~s~ ~ubsz~i~~ies ~~tii~affiliates aild their officers, directors, employees, gge~~~,_sa~esso.,rs,~~n~ ~ss~gttsagaic~st same. tai airy event, Licensor wi11 t~a~e ~ti~ ~dg,S~~, tl~rau~1~' ct~i~t s~1 0~` ids:choice, to control any matter so the extent it could directly or indirectly af~'ectLice~~sor and/o~ its pare~its, subsidiaries o~c affiliates or their officers, directors,employees, agents, successors or assigns. Liceitisee agrees to pay Licensor allexpenses including legal fees (on a solicitor and its own client basis or asubsta~~tia1 i~idemnity basis} and court costs, incurred by Licensor, its parents,subsidiaries or affiliates, and their successors and assigns to remedy any defaultsof or enforce any rights under the Licence, effect terminatio~z of the Licence ~rcatlect ax~y amounts dui under tue Licence.

B. Insurance.

During the Licence Term, Licensee will ̀co~7~i~y with all t~ssuxanee, requi~~?? entsof any lease or m~artga~e cove~i»~ the t-~i t~ls and Liceltso3~9 :Sp~G[~lcatiOIIS. fir~~isi i~aa~iae ~s tt~: the amc~u~.t a~~zi ~y.~e af' c_averag~ as ~x~ay lac r~strii~~ly syae;~a~i~dby ~ sc~~snr~ fr~rt time tv°time in :v~+roizc~g,, and w tl 3~i arch event- naYrifa~~: nis fis~.I~Iot~l, as a:n~it~iin~, the f~lcz~ ::insuraiice:usi~ex~w~ii~et~:b~ tus insurer a~prt~ve~by Licensor (unless required otherwise by law):

(1) worker`s compensation insurance ar workers safety and insurance boardpremiums as required by federal ox provincial law; and

(2) com~ne~~~a3: general lra~ tits_ ~nszirance (~n~iadistg eov~ri~ge fe~r.•;p ~tuct liability,comp~~Yed. op~r~tit~tor~.s, c~r~t~~tual.~x~bll#y~ l~ijut~r Isab~l~t~-.anc~ ~i~ Iega~ I~ab~~y)at~d ~us~~~s au€vri~rbilc. liala~lify. ~sur~ix~e (inct~d~ng ~avera~e: ~ccs~ ~iy: ;~~m~3autos and in any event hired and non-owned ~iabiiity} with single-limit coveragefox pexst~nal enr~ bt~~ ly i~ijury: and property d~'ia~;e of at boast Tin. Mil1~~Y~.DolS~r~.~$1~,t~t~~,tib0} per;nc~t~xrence In eonne~t~ri witls all e~si~#rue~o» at il~ieHotel du~Yng the Licence Term, Licensee will cause the general contractor tomaintain business general liability insurance (including coverage for productliability, completed operations and contractual liability) a~ad business automobileliability insurance (i~lcluding hired and non-ovtmed liability) vv~th limits of at leastTen Million l7ollars ($14,000,Q04) per occurrence for personal and bodily injuryand property damage undeiwvritten with insurers approved by Licensor. Licensorand its parents, subsidiaries and affiliates will be named as additions] insureds.

(3) Coverage must be written an a~i occurrence basis. Claims made basis is notacceptable. -

(4} Coverage must be underwritt~u by an insurer appi-~ved by Licensor.

(5} The coverages provided by any policy shall include and respond to any legalproceeding wheresoever brought, on $worldwide basis, including states and

t4 CAN20~8

fei~eitories within the legal jurisdiction of the Uaiited Scales of Anierien. Policy~nonies shall be payahla worldwide.

(G) Tf n3~ltipI~ -1t~ea'kvr~s a~~ :insured oi~ ~alicies c+xiafi~iti~n~. ata .agregale limit, thent[~e ~g~regate iuni~ ~~us~..~~1y an s per°1~cai~on ag~r~~ak~.l~as~s.

(7) All onvea^ages:: ~S avided by :~~y po11c~ ~ltal~ k~~ iii U.S, dollars or Canadianequivakenical~ui~ted at an aut4ibr.ized ~~e~Att~~~ ~orei~i exchange rate a'.t}~efinesuelz imsuratle~ is obtained.

(8) All policies a~~~fi: lze ~~er~ on a fully iris ire basis. Deductibles or self-insuredretentions aresi~b;~eet.to.approval on aii i~rlvi~ual basis.

C. Evi~3ence of Insurance.

At all times duriin~, the Liceeice_ Term, Li~~~~see will furl sit to LYc~aa~oi~.certificates of ~ u t~ce ev~dcneii~g the terns ~n~l limits o;~ ct~verage in J'o~cnames of applicable insurers ar~d persons insured, and a statement that coverage~~►xay nat be eatx~lleC1, altered or perr~%~t~d to ~a~se-or expire v~?~tltaut 30 days'adt?~isce written nv~ce to T,icensor Z~~vised cei~ificates of it ~~atce shall befor~a~~ded to Li~t~sa~ etch 1r~~~ a ~l~~t~ge in r+~i~age or ~~5urance ~:cz~~r~~a~ isit~ad~ by Lioei»ee~ an~lt~r u~a~~ x~~~~~ of e~t~ret~ covera s. At .~i~,~iis~r'soption, Licenses maybe rec~uired to provide certified it3surauce policy copies.

a0. Transfer.

A. Transfer by Licensor.

I.ic~ensor shall have the right to transfer ar assign this Licence or any of Licensor'srights or obligations hereunder to any person or legal entity.

B. Transfer by Licensee.

~ i~cns~e ~unt~~rt~~t~ds ~~d a~le~~~uT~d~dges Q at thy: ~xgtifs end ~iuxias set f~tfiti. its thisLr.~~ri : a~ persnttat ~~. .~~enset~ at~d_tYiat ~;i~~nsor has gr~t~ted'.this Cicerice inrel~ic~ on:the _:busz~te_ss skill, ~,nan~~al status, and pes•sonal c~;aracter of L' icensee~~~ ~~~er~s is an iudtki~laal~; and u~o~~ tie. v~rn~rs; ra~ccnt~rs} ~~~~tn~~s orst~ar~hc~lc~e~~ of Licensee (if'.t iaensee is ~i~ ~titity, such as;a }y~rt~e~~~pt:~o:~.~j~anY~r' ,poza# or~~ ("Entity;;)). Aceord7n~ly, ~~itlter La~i;it~ee X#car at~y'itn~tedtAte orm ute >siace~;ssor to any part of Lxcen~ee's rntorest in t13ie Lacea~? :~t~r yindividual or entity which directly ~r uxi~i~ctl~ owls an'.~#~uitY T~~ter~st: (as fiatterm is damned herein} in Licenses ox 'fide i icie a~e~ shall. Sell, assr~~,: ~s~er;,ec~~~ ey, ale ~gcs, rr~ortga~~ encu~►l~e~, grant ~ s urety ;yii~~est, sir ~iv~~a~ray; any~~rect ar z~tlzr~ct iztteres~'~. the :l:i nee dr u~y Intei~st in ~~eensee; e~ccept as~7TtlY1f+4~4t~ 13T '~~ti8 I:1C(:IEC~ All} '[k'llT'}2~bPZ~`ZJ ,S'dl~.s ~s:~~rs~n+~~z tra~~.~s~'er, c~riveyan~~,,~l~tig~,. mt~rtgag~ ,~r sr~ct~mbra~ce ~iy opexat~s~i a#' la~v or ofli~~w~~e;. of any:interest in t~i~_Lice~~e~+or any ~q~if~ TiiYex~st ~n ~:~ ss ~~i i~ aac~rrT~i~ce wii~tl~e provisions of thes Lioeuce, shat] tip ttuil ~x~:d ~oid:~~ .sl~all:;c vn~t~tzYk~ a breac~r

I S CAN2008

of this Licence, fox wluch Licensor may te~•minate without opportunity to cu~•e ~pursuftnt to pFu~gr~ph 12. D ~f t~~is C,icence. #.:

(1) for• die pu~•poses of ttus pat~agrapl~ J 0, tl~e term "equity In#et~ests" shall mean anyownership, ~nembeisl~ip, shares ar partnership i~~teeests in Licensee and Cite tinterests of any partner, whether general or limited, in any paz't~ership, withrespect to suol~ parh~eisliip, an:d o~ any shareholder, nieniber or owner of airycorporation or company with respect to such cor~axation ac company, whichpartnership, corporaiaon or catnpany is the Liceaasee he~•eunder ar whichparitnersltip, corporation ar company owns a direct ar indirc;ct beneficial interest inLicensee. Refe~~ences in this Lieeuoe to "publicly-traded Equity Interests" shallrneat~ any Equity Interests wiucl~ are leaded an a~iy securities exchange or arequoted iza any publication or electronic reporting service maintained by theNational Association ~f Securities Dealers, Izic. or any of its successors orapplicable secuc~tzes regulatory authorities in Canada.

(2) If Licensee is an Entity, Licensee represents that the F.,quity Literests in Licenseeare directly and {if a}~}~ticable) indirectly owned, as shown in Attachment "A,"

(3) In computing changes of Equity Interest, limited partners will uoi be distinguishedfrom genera) partners, and Lieensor's judgment will be final if there is anyquestion as to the definition of Equity Izatexest or as to the co~npuCatio~~ of relativeEquity In~xests, includn~g transfers of Equity Interests, the p~•iucigalconsiderations being:

(a) direct and indirect power to exercise control over the affairs of theLicensee;

(U} direct and indirect right to share in Licensee's profits; and

{c) amounts directly ar indirectly exposed at risk in the Licensee's business.

C. Transfer of Equity Interests Tha#Are Not Pabticly Traded.

(1) Except where otherwise pi~avided in this Licene~, Equity lnt~rests in the Licenseethat ale not publicly-traded may be transferred, issued, or eliminated withLicensox's prior writ#en consent, which will i~ot be unreasonably withheld,provided that after the transactioxr

(a) SO°10 or less of alI Equity Tncerests in Licensee will have changed handssince Licensee first became a party to this Licence, or

(b} 80°!0 or less of all Equity Interests in ~,icensee will have changed handsenure Licensee ~i~st became a party to this Licence, and na EquityInterests) will be held by other than those who held them wl~.en Licenseefirst became a pally to this I,icenee.

(2) In computing the ~rcentages referred to in paragraph 1d.C(1) above, a~mitedpartneA~s will not be distuaguished from general partners, and Licensor's judgmeizf

t 6 CAN2Q08

witi be final iftljere is any questio~l as io tine definition of "Equity Interests" ox asto the eontputatior~ of relative equity Interests, tl~e principal considerations beii~.g:

(aj direct and indirect power to exercise control aver the affairs of Licea~see;

(b) direct and indireel right to share ita Licensee's profits; and

(c} amou~~ts di~~ectly or indirectly exposed ai risk iii the Licensee's business.

D. Transfers of Public#y-Traded Equity Interests.

(t) ~'acc~~it as otherwise p~•avid~ct,in this Licence, publicly traded T~uity Interests iiiil~c ~ isensee may be tra~3:~F~~~ with~~ut Licenso~~'s consent but achy if:

{a) ~mnyediately lay ~~txe the ~~oposed transfer, the transferor owes less than25~~0 of the Equity If~teres~ cifLicensee; slid

{b) imtnadiately aft;• Lhe transfer, the transfez~ee wil! own less than 25°10 flf theL~quity Interest of Iaeensee; and

(c} the transfer is exempt from regist~~atio~t~ andlor p~~aspectus disclosure underapplicable securities taw.

{2) Public3y-trades P~uity Int~resCs may e traris~~rt'~d` wirl3 I~ie~~sc►~'.~ uvu#ginconseiat, i~~iic~i>may not be ~tsreasoi~ably vi~ttl~~~tti~ ~£th~t~~aiu~~~•is ~xerript.:~~~xtiregistration andlor prospectus disclosure under ~ppi~~ab~'~:se~u~~ties air:

(3} The chief fina~ eial of~e~r of Licensee shall certify a~lnu~ily to Licensor thatLiceiri~~ is in c~stxtglia~es with the provisions of this pa~a~ap#a 10,D. Suchcertification shall be delivered to T.icensor with the Annual rinancial Stateznc»tsreferred to in paragraph 8.D.

E. Trat►s~er of the Licence.

(1) Licensee, if a natural person, may with Licensor's conse~at, which will not beia~~rc~sona~rly v~itl he~d3.'tt ts~`~st"'t11C I tfi:~#t~~ lei: Li~~I.S.C~'.6 Sp0115+E:~ parent, sibling,niece, neplir+ xr,.:ziescendat~i#.t ~ spause's d~sr ciant;:~et~vided that;

(a} adequate pibvision is made fax the management of the Hotel; and

(b) ~lae trans£~x~e executes a view licence agreement for the unexpfr~d germ oft~°is: L~c~nc~,:. nn the stanc~a~zi ~rz» -then b~i~g: ased to licence aiew Hotels

der tie SXs~xn, ccgat the ~r.~s rshar~ed•tt~sreu~i~e~ slia~l be t'1ie-s~tne:~stlic~se contained. he'rep~ iri~liid~n~ ai~~+,.~ju~~r~en~s:t~a suer f~ ~s rtiaY h~v_~:b~~ ~nr~~le~ne~ted ~~tn tisi~e to titrie ~~c: ~c~arda~ac~ "4~vith t}i~ terms off' ~l sLicence; and

(c} L.ic.~~iS~~ guarar~te~s, in Licei is usual farm, the performance of thet~a~sf`cree's alilz~~~ie~ns undue tlie:newly executed licence agreement.

17 CAN2a08

(2) If Licensee is a natural peason, he may, without the consent of Lice»sor, uj~on 30days' prior wrii~en notice to Licensor, transfer the Licence to a u~rparatio~ientirely owned by l~in~, provided t}~at:

{a) adequate provision is ►Wade fnr the management of the ~-lotel; and

{b) the lY~t~Sf~t'~ ~7~~11C~S ~ lteW IIC~~XCe dgt~~t'iEnt fox the u~l~xpir~d term ofthis Lroeiee o~~the st~n;d~.rd f~rnz then Is..~ii~ ased to lic~ee:~e~?v Hotelsut~de~ tho- ~!stem;.'~exr~~t':t~e f ch~rged;tt~et~:~~.~li lie the s,~me'as those.e~iitaii~e~i:~ere~z~n ~f~tdin~.ai~y a~[,~:i~st~u~yits:to,suc}t fees ~s~~ay lave beefrite leni~ tad fim~ ii~tte t+~ t~~~e it ~cc~~tl~trti wifi~ the Eerni~> of ttis

{a) the Licensee gua►•antees, in Licer►sor's usual form, the performance of thenew licensee's obligations under the newly executed licence agreement.

(3) If Licensee is a natu~•al person, upon Licensee's death, the Licence will pass iuaccordance with Licensee's will, or, if I.icec~see dies uttestate, iii accordance wiil~the laws of intestacy govexz~ing the distribution of Lice~~see's estaie, provided that:

{a) adequate provision has been made for management of the Hotel; a nd

(b} Licensor gives written consent, wlizal~ consent will not be unreasonablywithheld; aazd

{c) the transferee is one or snore of dte decedent's spouse, pas~ents, siblings,nieces, nephews, descendants, or spouse's descendants and;

{d) Li ~zsc~e`s: h~e~x~ ar 'l~~ ̀~ >s prc~~~ptl~ ad~u~e La~~~sor ~i~d the trAr~sf~~i~pr~~~ptl~±;~xs~t~~a~.-fit n~vv t :c:~n~e~~~i ~»~iit for the u~is~~7i#ed i~erm ~fkhrs;L,i~3~c~; z~in tie s~Ca~idard. ft~~~i~ t~:~n beyng used to licence new Hotels u~~derthe System, except the fees charged thereunder shall be the same ascantatned herein including any adjustments to such fees as nay leave beenimplemented from tine to time in accordance with tue terms of thisLicence.

F. Transfers of Equity Internet in the Licence Upan Death oar To familyMembers.

{]) If`ari Equity ixrieres# is owned: by' a n~ti~tl pe~aor~, t~1~: u~y ~f~~er~,st. w~li ~aaupon'su~1~ p~~~nn!s de~.tkt, ~: ac~~rd~aee: with s~a~~.~ersa~!s wl}~ vr, ~f ~~Ycl~ perso;dies t~~est~te, ~~a:`acca~d~~ic~ wish the Iaws~c~~' ix~~est~ay gor~e~,~fng:t~ dis~rilsu~i~i~of such person's estate, provided that:

(a) adequate provision is made for management of tha Hotel; and

(b) Licensor gives w~ittien consent, which consent will not be unreasonablywithheld; ayad

18 CAN2Q08

(e) the trat~sferee<s..one oi~ inQr~ of tiie d~cei~tiiLL'.;~ spouse, pare~ifis, siblings,niece.~,..te~ite`~s,;descezu~al~~~noc:s~ause~~,d~ e~dauisand;

(d) # ixs r :&ssiaines, in ~.~'i~i~~ on :a rontii~t~iug: :~s~is, tl~e decedent'sguar~nTe~;;:~any, ofthe ~iceits~~'.s oblga~i~~s:her~u~~d~r.

G. Pzopos+ed Transfer of Equtty Interests.

If ~ .proposed trarisfi~r' ~rf axe dui y Ii hest in the ~i~.~rsee xu~u~res re~stra ionandlax prospe~i~ts ~1i~a1.a"sure ~t~d~r anY apps oable ~e~urit~es lavv,;~,rcer~see: skailt

(1) RecJuest tli~ Licensor's cc~3is~tat: at 1 s~45 days before tlae proposed effective dateof the registration or pras~ieclu~ dis~lo~ur~; aad

(2~ Aecosnpany such request with one payment of a nau ►•efundable fee cif $25, 00;and

{3) 1~~t~t~ur:~ts: ~ceusor ~'nr ex~aanses inea~xed by Licensor in ct~i~irection with revie~~aft ~~~~~t~~'ials conc~tviit~$ the proposed xegistration a~td/or p~trspectus disclasiiir~,including without limitation, legal fees ar~.d travel expenses; ar►d

(4) A:~rae iri v~rici~g,; ar~d ~tl parti~~pant~ iii ~e ~Srapi~sed t ai~sfe~ s~~7~t rore~i.~a~~r~~ end/~~ ~,~os~sa~ius cliscl~su~~~:.~e~tirc~ctin~~ts area 3n: wstt~r~~, to E'~~lly~~c en~~xs~'jr ~,~ec~isa:~ ~. r~n~~~etio~: ifh size .r~giscratii~ri antilz~r js ̀ gs~~ctus~isct~s~ure ~i~~r~~ish dxe I~ce~~.~~r;at[ in£axs~aliori .~~u~str.~":t~~ ~u~~~,sar;:avaid auyit~p~i~tst~n::of .Ia ~~x~ai'~ part~~ j~atic~zt i~~, ~r era ~ors~iag ttie tsar .~fer, ~~i~ci tis~. ti ctv~~rk~s vnt~+: a~ su#1~►tmz coed' by ~:i~~~ss~:

k~. Chat►ge of Ownerehi~

(l) This T~icence is nat transferable. T.f Liceris~a {ij::~~ves.an rsff~r io ~rur~laase: or'lease the Hotel or any portion thereof, (si) d ies ~'o s~~I or I~,sc~ tt~ce ~-~i~:t~~ or artyporliax~ ~tiei~ea#~ ~ ~r} ruishes t~ ~:sr~rv~y th~;T-Iote~,'Hotei sties ttr ~ti~ Equity Iart~tes~.in the k~~tek, Licensee shall.~iv~.gi~nnpt vut-ii~~n notice t~ ~~et~~~Ya Li~svr~ s~~tutTie:,rl~ntity of the ptas~ectve 4r~ij~sferee, ~t~~~lia.~z• cyk ~~ss~ :at~d t1te~Y~rt~s andc~~`~l t ons ~f the cs i~~eyae.~e~ i~tuluc~ing a rp~y a~' a~~y ~xa~c~s~'a~r merit and ailother information with respect thereto, whxc3~ t~xea~sor ~~y ~r.,~sei~tably z~quire.

(2) LJt~de~t 1 ~ p~~avr~ t%~iq ~~`t~ri~ Lic~►i~~, ~~) any Transfer of ~c tity Interests {oil~li~i ~ er►~ ittc~:T~ans~'ec:~ ~~ {a1~'T~~dt~sfer of all ox a subs t ~l part of the Motels~r:I~otel s~~~ (~f.ihe-~atet tier ~-i~tet>.s~te: s;nwned directly or indirectly by Licenseeor by an individual or Entity that owns any E,~uity Interest iii ~Y;ceias~e), to a yewowner who desires to continue to operate the Hotel as a Halide Inns' or Hol tryInn ~x~ress~ l _at~l'rand, shall oonstituts a change o~ ownership requiringsubmittal of att a~5plic~t#avn for a new licence.

(3} ~;~;censor sl~atl :~srocess such ch~i~~~~ of ovunet~hYp appti~a~oi~ tit ~c~prd~~~ ~r tlzLicensC~r's >:tixe3~: ~c~~~~t ~ca~~dt3€~, cr~teKaa anti r ~iarem~nfs rega~~'t~g des;.u~agr~l~n~;+af~tlxe ~I~~~1, c~ii~;i~~,~r~Cir~nal ~'brliti~s an~k+c~pa6~t~;es, priox=8'us#~ess

19 CAN2Q08

dealings, u~arket feasibility and other factors dec~ned relevant by Lice~~sor. If suchchange of ownership application is appiroved, '~x~sez~s~at^ urtd:'~ . uew awnar shalt,upaxs sunexi~r ;of the t~~~, eki#~~' itrto a n~~I Ti~ei~c~ ~g;~eeinent. The newlie~nce ag~eement,shall a~i L~e~i~sot's then curre~i'~o1~sn ~iicl`.eontatT~-I:Eice~sorxsthen cui7~en~ terms {except for dur~titon), and if .~~~Iica~~e, the ~3et~ C~cez~ceagreement wilt contain speai~ed upgrading and ocher regairemeirts.

(4j I~~ chan~~ c~f2i~i~r,~~~, apP~caf on fur fhb .proposed nom i~~vi er is not ~p~s~cs~edby L.ice~s~r t~~~d t13~ ~~~~ an~e:of't~i~ k~~tet, I-~atet she, rnr any Fyuity 1~teres~ intli~. l3~te~ :~r ~:ice~see i~ tl~~ proposer: new ow~~er occurs, then this Licence shallterminate pursuant to paragraph 12,D hereof and I~icensar shall be ei~tiiled eo al!of its ,remedies.

I. Trans~cr of Beat Estate.

Yf the real property used in the operation of the ~-Totel is owned directly orindirectly by Licensee or by an individual or Entity that owns aa~y Equity Interestin licensee and Licensee, ox that individual or Entity proposes to tra~xsfer all or asubstantial part of such prope~~ty to a third party, such Yrai~sfer shall constitute at~axis~'er under the provisions of this L~Ge»~e kejui~`uTg an appli ~tc►n ~`pr a newlicence agree~nei~t, unless Licensee r ~i~r~ Lfr.`~ ~si~r's peior wxitten, ec~i~sent forthe traxlsaction.

J. Management of the lintel.

Licensee must at all times retain snd exercise direct managernenfi control aver theatef's ~u~{nos t~i~nsee shall rio4 ~ntez i~f~x airy gases.:~~(ilag~ment:agreerr~erit;:

o~° otiaei s~i~ii~ar ar~ang~~~it for tlie -~pe~a~~on o€ tl~~ ~it~t ~r any p~~-thereti(ic~clvdirrg vv~thotit l~ itat`ion, fci~i~ ~ir~dl~sr be~?er~e s~~rv~ ~'acil~t~e~) ~v~t~ ~~iy:iiid~.vi~itaai: o~ E1itiLy tS~~sex tl~~tn ' ~ensee, without the prior written consent ofLicensor.

11. Expro~riatlon, Demolition and Casualty.

A, Expropriation or Demolition.

Lice~~e: shy l,. a~. the _ sliest .po~sit5le t"it~~, give I.:ice~i~or. hall entice of any,.pro o~ed;~e~€pxoprit~tio~~ ter de~mc ~;C1~n:: If .~~~snsor ackr~d~~~dges: that t ae Hotel ara sii~is~~sfiz~l ~~t 'thex~f is ta. -lie ,taken, Licensor will give due and promptconsideration, without any oBligation, to transferring the Licence to a nearbyloc~~iz~n s~l~etecl by _I>ic~risee and approved by Licensor as pxa~zptl~ asreascir~~Iy ~pta~sb[e and i~.a~y event wtkiin four ►nantY~s of the exprc~pr'sa,oyi ordeFrialit~ort;~ prove led ~Itat;J,%rensee has prop ptl~ filed an a}~pt~c~t~an to trap sfer~Ia~ I;~cenc~: to sual ;new:locat`tan: If the new lts~ea~aon is approved k~.y License r.; andthe ixansfer authorized by Licensor, and if Licensee opens a new t~tei at the newlaca~%art ~.`.~cct~~'da~ice with Licensor's specl~i~a~i~ns r~vlthin two years of theclosing of;tt~e Hater the new hotel will the~zcae~oz~r b~:de~zned to ire the Hotellicensed uridet"this Licence. If an ~x~ro~~[at~~~t: or demolition t~tces pXaee and anew hotel noes. not, for whatever re . ~, ~i~oiri~: the Hotel under ti~is Licence in

20 CAN2008

sir ~t acrx rdance with .il is parag~a~t~ (oi~ if it is r~asana~ly ~~t dent to Licens e•t~l at such wilt be tlae cash}, tine ~;tc~»;c~ will texsnzt~t~ fo3rtltvv%~;~ upou iiptiirethereof by ~.iaensor to Licensee.

B. Casualty. t

IF the Hotel is dan3aged by fire of other c u~►ty, L1s~~,s .: 1I ~e ~st~~~~I~:repair the da~~~e. 'tf`the '.cl~r~Ya~~ or xe~~it ~equ~i`~s ~iasi~r~: t1xc. ~~ot~~,..~.iGe~~s~ewill immedsae~ly ~c~~fy L'ices~~ai' we~i .~r~pa~x o►~ r~bt~~i the H~ iii ~~t a'~ca~~d~~swith Licensor's standards; will cominenae x~ct~~~sfi!'u~tii~xa withxi~ foul ~ic~i tbs aclos~~~; .~% 11 expeditiously c~s~~~inue ;aia an, ~rt~ta~eerru~c~ `;Iz~sts< v+?~`k!s s s~'rec4~~3~tructl,Qu and v~ 11 reopen the I~iot~1 ft~r co3t~tt~uaus° l~ci~ i€~ess o ra#~ot~s asst~t7i~;~. pt'~~'t~a~ilC,~bu~,~~a:;~t~y.~vea~t vt~~l~ftt.24 ni~at~~Iss ~f~e~.slasFi~ t~ftlr~ Ho~e1.),~tva~.g Lz~ensar;aciiple advanc:~.~totice of'~l~~tdt~>.p~'ret~~.~~ti~~,~, Ii`it~c i~~~e! fis~ ~~at'r~o~~~~~t1 ~~ ~Ccorz~~~c,~ ° itb ibis ~~~ag~r~pl~, the;T~t~e~i vri~1 ~Csrt~i~riit~ ter~~i~3ateuji~xa .t~c~tsc~ thercc?~' b~ ~cc~s~sax io ~ir.~i~s~e: ~tot,~wttista~~di~~g .~uyt#riii~. ~1s~.Ii~r~it~ t~ t15~ ~a~ts~~:,; tIU~►n~ tI~: b`~~ri~ the C~otel is closed, Licensee shall pay -Lice~isor a monthly rvyAlCy of ̀2°~o of Grass iZnoi~ Roy? ~ i~zised o~ tt~e ~►vera~~:aaaariihly GrosR Ro~~ns Rev~t~~a~ r tti~ ~~ d~t~~ 1~ r~o~tl~s~ ~aa~r to the tl~te:o`cl~s~n~ ox i~ tb~ ~~tc1 had eat ti t Y~ ilia stern Cap 12 ~nc~~ l~~,, t~ ts~ iii the ,.av~r~~e ri~~nthly ~rass.Itrt3~3s ~t y~nu~ °~'or ~~ ~~xiod tiar~a~~ wliii~li i~~~: motel lt~sl~eez~ in ope~ata+o~i;~ tie Systeia~._Sa~d payment s~aIl i?e 'sn 3ieu of ~il:vtli~r ~y~t~axtfees:::u~xd~r paragra~ih 3C ~~ihxs I~i+~eer[ .

'die ;icence may be replaced by a new ficence agreement as ~1'(3Y1d~(~ in~ar~,~rap~l~ t 0 and the .L ce~ti~e may I~rsninate as provri~ed iii tUis parag~a~ l~ 11without liquidated damages.

C. No Extensions of Term.

Nothing in,this paragraph it wilt extend the Licence Term but Licensee shall notbe requ~rctt't~ t~iali~ ~~~y ~ay~nents pursuant to p~cagra~~b 3.0 (1) and (3), ~tceptas p~wt~I4 i m .pat~~~i~7h ;~ x.13 :~bov~, :far petit .~ls; during which the Hutcl` isclosed key r~as~~.o' ~c~ir~ip~~a~;on;:dezric~lition or casualty.

12. Termination.

A. Expiration of Term.

'I~i s T.:~cc~r~ee vvi11 •axp re wi}taut nat~e ten ~1t}~ years from the ~3ate of thet~~rcning a~'` 1;h~. Stt#±e~ si~k~~~~t tc> caul er ten~}nation as set forth hire%n. 'i'hisI> ~z~~: ~s ~xr~ re~o~u~b~e, acid ~:,icai e aclu~av~tT~dges:and ~~a~ee~~i~,a1 i~tiis~~.ia~ cecci~n#'~t~ it~in ~:i~erit~~e. abs~lutei~ ~o tights a~ ̀ Liee~s~e rene~ra~ ~oltow~~~g tli~;exp~rat~.or~ of tie L~c,~~nr~ terms: `t`}ie p~rtie~ r~ci~~ nice i~►~ d~~f gutty af`as ertaYning can ~g~ ca ~a iiasrir ti~~su]t from pxeit~atu~re ~+e~irtinai`s~tin n~' t1 ~.~i~~~ .a~tti I~a~e proved .for liquid d : i~iita~~s vv~;i~l~ r~ ~~~n~ :tite~~ test~Sfitli8~~ 8S: t0~ fTi~: t~9i32#gL~ ~'t5Tx1~ ~~91T1. t}~ .~+i~C~213S~~11Ce~3 1~1'WI7~fC~as they ATCprovided.

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II. Termination by Licensee nn Advance Naticc.

~ i~er~see quay terminate ~l ~ Licence as pi~vtc~d iii. pa~a~~apf~.3.~, by givinb a#te~::12 but less tha~~ l S u~ontis.= advance ~1afi~e to l~cen~o~r acear~x~anied by alump sum liquidated damages payment ~epr~fi~nt~ttg ~ gexeial ~~-est~~naie of ~i~e:damages suffered by Licensor but r~crt as a ~~~a1ty or x~x i~t~ a~' a~~~ c~Y~.pay~i~~tis ~e~t~ia~~ under ti~~ 1,st~tir~e, ~gii~l t~.t~~~ Y~~I ~~ all:ar~oiu~~ts ~~~~~i~~%!.undet~ p~~~~~t~~S3~ 3G ~r~r-. the 1~ ~le~da~ ii~~it~3s of ~p~rrn~~i~v~cdln~`t~~e »oi"ree:or ii' ~~e ~~t~1 has =tae~~~ in ~i~r~rato~ ~~ec 1~~ Syst~fn ~c~r I~ss ~I~~~ 12 yne~i~~tas, tl~egreater of (i) IZ tones tide monthly: ~~+~~~~ of ~uc~. a ~ua~~s fcs~ ~a p~ io;~ duri~~g`wlzici~ the Hotel has ~ieen in opera~v7~ :gin #fie ~ys{~~x+;: or (~~~: I2 tirnr~ suej~amounts as ace due for the one tnonth preceding the termination.

C. Termination by Licensor on Advance Notice.

(I) Tip aecordauice with notice from Licensor to Licensee, this Licenco will terminate(without any further notice unless ret{uued by law), provided that:

(a} the notice is mailed at least 30 days (ox longer, if requited by law} inadvance of tke termination dale; and

(b) the notice reasonably identifies ore or more breaches of tl~ Licensee'sobligations; and

(c) the breaches} are not futly remedied within the time period specified intl~e notioe.

(2) If Licensee shall have eiiga~ed in a violation of this Licence, for which a noticeof termination was given and termination failed co take effect because the defaultwas rr~n~di~ d ui il~~ lz~►~ pzeced~ng: ~2 uutzit~.c, the :period ~sven ~ remedyd~fautts r~l~ ~~ and to t1~e ~~e~~t p~ tt~! ~ ~~p~lx~t~i~ law, t~~ea~ter be 14toys in~teatl<a~ 30 :{~~~vxc~et~ hau+~tiei,. ~f~lxere trove beet.tv~ro or ~.inre ~u n~t?onsof ti e ~,xcencs in t~ pzeced~ng tiu!el~+~. onths for wb.ich notices of ter~ninadonwere green .:t~:pan the x~e~i u~oiaf o~n, tf and to the extent permitted by applicablelaw, t~3e~ ~;znersce. may bet ri~wafetl. y t:>icensor immediately upon notice}.

(3) In any judicial ptbceeding iii which the val ~i#y of terrt~i~ at_ ci ~. is at issty~~T~icensor will not be limited to the reasons set fio~rtl . in any ~aot~ce; sent uxzder tTi sP~~'~P~

(4} Licensor's notice of termination ar suspension of services shall not relieveLicensee of its obligations under this Licence.

D. Immediate Termination by Licensor.

't"his Licence may be tsrsninated by Licensor immediately (or at the earliest timepermitted by applicable law) if

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(I) (a) Licenses ar any guarantor of Lice~~see's o~li~at~oaas hereunder makes or sdeen~ed to have made a general assignment for the benefit oi' ot'editors u~xder tl~eBankruptcy and Ie~sol~vency ,A.et (the "AcY"), or if a petition is filed againstLicensee under tie Acl; ar rf Liceiis~e shall be declz~rad ox adjudicated bankrupt,or if an application is made in resp~cfi of Licensee under the Companies' CreditorsArrangement Act, or if a Jiquidatar, Trustee in bankruptcy, custodian, r~eeiver,receiver and Zna~iaget~, moderator, or airy oilier o~rcer with siinitar powers shall l~appointed of ar for Licensee, or if Lieexisee shall ooxnmit any act of bankruptcy oa~institute proceedings to be adjudged ba~~laupt or insolvent or consents to theinsfiituiion of such appointment ar proceedings, as• if Licensee admits in writing aninability to pay debts generally as f1~ey become due or becomes nit "insolventperson" as that term is defied in the Aet; or

{b) L~xcers~e or any such guarantor sl~il t~It~:any earporRte or other action toau~l c~r't~::Auy of il~e ac.~:zc~zis set ~~►~th ~bav~ iii paragiap~i (a); or

(c) an attaclttnent ar executiaia ce~nains o~n ai! or a substantial part of the Hotelox o£ Licensee's ar any such gua~~ntor's assets far 30 days; ar

(d) ~#cciisee a~ ~y surd g~~~~ntor €ails, ~v~tli Yt +6~ ~ia~+~ of Yee entry df a ~i~~I~~d~~;r~~t ag~ar~~s~ .Ia~~ns~e rn ~~~t~ ~nat.~~; ~xuee~iiig ~~~,UQ~, ~o~isci~ax'~,~,'V~E&iii Qp P~t!C1:3~ ~E'l~~tlt~$1lt~il~~.t'fI` ~Q S~cl~ E~CL~~11C1{Jl~ P~ 1.~ ~f"1'~a~spealed, to discharge the judgn~er►t ~vtt~iia 3Q .dais ~~ ~ ~a~al.:~dversedecision in the appeal; ar

(2) Licensee voluntarily ar involu~atarily loses possession or the right to possession ofall or a significant part of the Hotel, except as otherwise pibvided in paragragtt11; or

(3) License, ox any entity or individual having a direct or indirect ownership in i~contests in any court or proceeding I.~icensor's ow~.errship of the System or anypaid, of it, or ;the valiclit~ of any of the `1V~ai` ;trade-maxks ar other iniell~taalpt~~aerty assac~ale~ with ~icensor's business; off:

(4) A breacta of pat~agraph 9 or paragraph 10 occurs; or

{5) Licensee fails to continue to identify tEze Hotel to the public as a System hotel,engages in at~y actzon that violates ~,icensar's proprietary rig~ats n~ider paraga~h 7or ceases to operate the Hotel as a System hotel; or

(6) Any :aft an is taken toward ~sssolv~~~g or laqutdat tip Li~ez~s~ ~r any, guarantor:her~unc~er, if it is an Entity, except fi~~.: any ~a~~ ~~tittns :xesultzr~ frc~u~. tt~ dr~tliof a partner; or

(7) Licensee (or any principal shareholder, owner, member or partner of Licensee asthe case may be) is, or is discovered to have been, convicted of an indictableoffence (or any other offence if it is Likely to adversely reflect upon or affect theHotel, the System or Licensor in any way); ax

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{8) Licensee maintains false books at~d records of account or submits false r~po~~ts orinfornnation to Lice~~sor; or

{9} Licensee knowingly fails to com}~ly wittz the requirements of the Licence and/orthe Manual on sateCy, security, or privacy foa• its guests at the Hotel, oX on the ~`reputation of the maaagenient, employees ar operafion of the Hotel, and such `~aiiure u~ay significantly adversely zeflect upon or affect the Hotel, the System orLicensor, its parents, subsidiu7cs and affiliates in any way. ,

{10) A breach o~Paragraph 14N occurs.

~. lle~identification of Hotel Unon Termination.

Licensee will take w4aatever action is necessary to assure that na use is made ofany part of the System at ar in connection witlt the Hotel after the Licence Tercisends. This will involve, araosxg other things, retuning to I.zcensor tl~e Manual andal! athca• materials pibprietary to Licensor, ceasing tl~e use of any of I.icensar'sixade~~narks, physical c~ai~es of distinctive System featuxes of the Hotel,i~icludie~~ removal of the primary freestanding sign down to the sfructt~ral steel,and alt other actions required to preclade any possibility of confusion on the partof the pubic and to ensure that the I3oYe1 is na longer using all or any part of theSystem or otherwise holding itself out to the public as a T~oliday I~3n or HolidayInn ~xpr~ss hotel. Anything not done by Licensee in this regard within 30 daysafter termination, may be done at Licensee's expense by Licensor or its agentswho may enter upon the premises of the Motel for that pus~ose.

F. Payment of Liquidated Damages.

If the Lic ~ ce teriuivatss pi~rsu~;t to ~ar~g~ap~ : 2.0 or 1: ,t.~ above, LrC~nsee willpromptly. ay ~.ice~tsor (as isqu"►~tafied daiz~ag~s''~or the pret~~ature:~ferm~~t%ai only,representing a genuine pre-estimate of the damages suffered by the Licensor, andnot as a penalty nor as damages for breaching the Licence nor in Lieu of arty otl~rpayment} a lunr►p sum equal to the total amounts required under paragraph 3.0 (1),(3) and (4) during the 36 calendar niond~s of operation preceding the ternunationoz such shaY~ter period as equals the unexpired Licence Term at the time of thetermination; or if the Hotel has not bsen in operation in the System for 3G months,the greater of:

(I) 36 tunes the monthly average of such amounts for the period duping ~a+hieh theHotel has been in operation in the System, or

{2) 36 times such amounts as are due for the one month preceding such terminatiotL

13. YYeCatYanship Of Parties.

A. No Agency Relationship.

Licensee is an independent contracwr. Neither party is the legal representativenor agent of, or has the power to obligate (ar has the right to diz~ect or supervise

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Yte dazlY; ~iz~s; ~~} t~~ o~~~ for~:any ~u~ se v~l~~tsne've~: T:;~c~ts~r ~r►d~it~nsee:expressly ~e#tnavui~d}~e ~liat ~~: relatsansk~~~ ~nkea~detl lad ~3~~zai ~s ~: b~s~~i~essxe~~~o~shi~ based eut~ret.~ on au~l'cirriinis~xaT~~d day tine express ~rov~s~c~~~s 4f ~~ sLiceiyce and that na trust, pactnerstup, joint venture, agency, fiduciary or zemp[oyinent rs3ationsiiip is intended or created by Beason of this Licence.

B. Licensee's Notiecs to Public Concerning Independent Status.

Licensee w~11 take>suulZ-steps; as ~~e necessary ~tzci.such sfeps: as L i~sor mayfrair~ time,. b fim~ reas~na~ l~ regti~~t to itt~tt~ii~: the cba~cs of a ctaim beingmade against Licensor for siiytbiug that oceans at the I-iotel or• for acts, a~nissio~iso~• obligations of Lacensee ar anyone associated or affiliated with Licensee ar theHotel, Such steps may, fox example, it~~ltad~ g vzng notice in guest ro~n~s; ~~blierooms and advertisements and o~~ busin~;ss forms and ststionei~y, or o~i~~~ printedcar e1' tunic Ana#er ~l, ~n ng clear tt~: ih~ ~~tb~ic that Licensor is:r►c~t ihe: tswiie 'orcaper~tor of ire ~3z tel: atsd: is nat ac un~"UIe fui ~r3~~t happ:~~~s a~ t~~ I~~t~l;C~~i~ssrequu~eci b~ l~~v►v, .Lcen~s~,vxll ii~t use Lice►~.sor's name, the Marks or a~iyathex trademarks, service marks ar otE~er ii~tellectuat property owned or licensedby Licensor or any of its affiliates, or any sim.itar word in its cvrparate,partnership or business or trade name, nor authorize or permit st~eh use byanyone else. Licensee will not use Licensor's name, the Marks or any ochertrademarks, service mar~Cs or other intellectual property owned or licensed byLicensor or any of its affiliates to incur any obligation or indabted~aess on behalfof Lzcensar.

Licensee shall not register Licensor°s name, the Marks or any other trsdemaxks,service marks or other intellectual property owned or licensed by Licensor ar anyof its affiliates as part of any Internet doxnau~ name ar Unifozm Resource Locatcx•~L~R~~~ a~~~: ~n~y not d►~~a3~ a~~ u~~~ny of the M~r~s or otl~er i~t~tell~~ttta[.:pr.~ap~rty~r ,g~ifs related to t~i~ ~~stiecr~ i~t~ r~~tneetion with air ~* web sit$ ~icet~e~ she1~`.notpzoi ioc~,, ci ~tt~tain; tm~i »~x~ nr';b~ xes~~~tis bye far an.~ vcte€~ ~~t~ xis coi~n~f .awil ~Ix~ ~Tot~t ~v~ tQ~a~:tt~epric~r u~',t~t0i3'8~~~'~3V81 Of.~.,1~.Y~SL~C~:~11LI 1~~~?X9L'OYL~t~ ~3Licensor, any such web site shop e~ii~~pl~+ with a~i cif I~~c~zs~a~t's ~e6 sitsrequirements as set forth in the Manual o~• otherwise.

14. Miscellaneous.

A. Severabiiity and Interpretatiob.

The remedies provided in this Licence are aot exclusive. In the even,# anypx~su~~ion of Chis Lzoence is held to be:a' zSfatceabk~, -v~aid' c~~ ~tt~id~bl~:,~s lcti~g-.eciritz~ry to the law or pu~tie }~ot~o~r of ally. j ~x~sdteYion ~n~ to exgt~ise.authority hereunder, all remaining ~re~vxsft~ns ~balt i~~v~i~~et~ss.:rt~r~ti~t~e in ~uilforce at~d°'e~t'~~, uaaless de~~~tn~:::~.f ~h~ pxovis c ~{s) deed uiienfotcea~lo, ,vaiclar vo~datl~ a'~~pairs the cansideratac~r for this I;icenc~ in a ~t~iyn~~ v~I~ict~frustrates the purpose of tk~e partses or makes perfornnance commerciallyimpracticable. In the event and provision o#'this Licence requires interpretation,such interpretation shall be based on the reasonable intention of the parties in thecontext of this transaction without inter~rreting any provision in favour o~ or

25 CAN2008

~:

against, an~r party hereto by reason of the draftsmanship of the party or itspositian relative to the other party.

B. Binding Effect.~:.

This Licence shall became valid when executed and accepi~d by Licensor. it shallbe : ~ov~€~ ed .acid: cta[iSt~'~:~Ed uritl'er3. and zn ~eco~'danee wxUr,, tie la ~vs of. i~~e<proviu ~ w~tic~ tl~~ }~~o~el as aacated anal tY~~ t~v~s ~o-f tada applicable tl~~eiix.:Tn entering into this Licence, Licensee ~tclutav~ilecl s Eki~t t~ .l~s sought;.voluirtarily accepted and become associated vc+ith Licensor, who is headquarteredin Atianfia, Georgia. Notwifhsta~~ding the above choice o~ law designation, anysuits concerning this Licence n ay be {but are nit required to be) filed an the Stateof Cieor~ia. Nothing i~a this Licence restricts or is intended ro restrict venue to aforum outside the province in which the I~Iotel is located with respect to a claimotha~wise enforceable under applicable franoliise legislation.

C. ~xelusrve Bene~~

Tf~is Lice~~ce is exo(usively for the be~~efit of the parties he~~eto, sRid it may notg ive rise to liability to a third party. No agreeix~ent between Licensor a~~d anyoneelse is for the benef t of Licensee.

D. En#ire Agrcemcnt.

'~''l ~ is the ~rit~'ire agreement bettiv+~ei; the::~artfes` pe~tainiixg to the l~c~~ssing of theHiit~I and sup~rs;~tes;. all prevcci neg~ltaYson~ end ag~een~ents between the~~rki ~ettainizig: to the licensing of tie Hot~I as a ~o:lid~y Inn,::ar ~IoI'cifay .Tyi»~Xpt~ss-rand ~~oup hotel, as specified u, this ~:i r~> ~x~~pt~a~ ~~r~ide~t ~t~ ~~sAgxeement, there axe no conditions, red res~~utationa,, ~v~x~~taf~es, ueulerkak :t~~s .pxornises, inducements or agreements wli~ether direct, indirect, collateral, expressor implied made by Licensor w Licensee. No change in this Licence will be validunless in writing signed by bath parties. No failure to require strict pe~~formancear to exercise any right or remedy hereu~ider will preclude requiring strictperformance or exercising any right ox re.~nedy in the future.

E. Licensor Withhold~Ong Consent.

Licensor'$ consent, whenever required, may be withheld if any breach byLicensee exists under this Licence. Approvals and eansents by Licensor will notbe effective unless evidenced by a writing duty executed on behalf of Licensor.

F. Notices.

Notices will be ~f~'ective hereunder when and onty when they are redaced towriting and delivered personally ar mailed by Federal Express or comparableovernight or express delivery service, by documented facsimile transmission or byceefificd or• zegt~teit~rl:rnail to the ~ppt~opr~at~ ~aaL at tf~ address, herd r setforth, or to sz~ah ~aerson and at such address ~ tray subsequC~it~~ be files gtt~ti~ul;byone party to the other.

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