Document Reference (page and paragraph) Entire Instrument. D.F. No. Annexed as Part 2

Transcription

1 Land Title Act Form C (Section 233) Province of British Columbia GENERAL INSTRUMENT - PART 1 (This area for Land Title Office use) Page 1 of 4-02Q pages 1. Application: (Name, address, phone number and signature of applicant, applicant's solicitor or agent) GREG UMBACH, c/o BLAKE, CASSELS & GRAYDON LLP, Barristers & Solicitors, Suite 2600, 595 Burrard Street, P.O. Box 49314, Vancouver, B.C., V7X 1L3 ( ) Solicitor for applicant 2. Parcel Identifier(s) and Legal Description(s) of Land:* (PID) (Legal Description) SEE SCHEDULE 3. Nature of Interest:* Description Priority Agreement granting Mortgage LB as modified by and Assignment of Rents LB as modified by Priority over Mortgage LB transferred to CA and Assignment of Rents LB transferred to CA Document Reference (page and paragraph) Entire Instrument Person Entitled to Interest TRANSFEREE (a) Terms: Part 2 of this instrument consists of (select one only)filed Standard Charge Terms D.F. No. (b) Express Charge Terms X Annexed as Part 2 (c) Release There is no Part 2 of this instrument A selection of (a) includes any additional or modified terms referred to in item 7 or in a schedule annexed to this instrument. If (c) is selected, the charge described in item 3 is released or discharged as a charge on the land described in item Transferor(s):* BC ), West Hastings Street, Vancouver, BC V6E 3X2 507Sfi540.8.'i0756.S40.9

2 GENERAL INSTRUMENT - PART 1 Page 2 Transferee(s):(including postal address(es) and postal code(s))* ROMSPEN INVESTMENT CORPORATION, (Inc. No. A ), 162 Cumberland Street, Suite 300, Toronto, ON M5R 3N5 Additional or Modified Terms: N/A Execution(s):** This instrument creates, assigns, modifies, enlarges, discharges or governs the priority of the interest(s) described in Item 3 and the Transferor(s) and every other signatory agree to be bound by this instrument, and acknowledge(s) receipt of a true copy of the filed standard charge terms, if any. Officer Signature(s) Execution Date Party(ies) Signature(s) (Name, address and occupation) SERVICES -UM1TEDCMLS FINANCIAL LTD. by its authorized signatories: Name: (as to both signatures) Name: OFFICER CERTIFICATION: Your signature constitutes a representation that you are a solicitor, notary public or other person authorized by the Evidence Act, R.S.B.C. 1996, c. 124, to take affidavits for use in British Columbia and certifies the matters set out in Part 5 of the Land Title Act as they pertain to the execution of this instrument. * If space insufficient, enter "SEE SCHEDULE" and attach schedule in Form E. ** If space insufficient, continue executions on additional page(s) in Form D 'I

3 Land Title Act Form D EXECUTIONS CONTINUED Page 3 Officer Signature(s) Execution Date Y M D Party(ies) Signature(s) (Name, address and occupation) 11 ROMSPEN INVESTMENT CORPORATION by its authorized signatories: Name: (as to both signatures) Name: OFFICER CERTIFICATION: Your signature constitutes a representation that you are a solicitor, notary public or other person authorized by the Evidence Act, R.S.B.C. 1996, c. 124, to take affidavits for use in British Columbia and certifies the matters set out in Part 5 of the Land Title Adas they pertain to the execution of this instrument. * If space insufficient, enter "SEE SCHEDULE" and attach schedule in Form E. ** If space insufficient, continue executions on additional page(s) in Form D. 5Q?5654fe8S

4 Land Title Act Form E SCHEDULE Page 4 Enter The Required Information In The Same Order As The Information Must Appear On The Freehold Transfer Form, Mortgage Form Or General Document Form Parcel A Lands: Parcel Identifier: Block 38 District Lot 490 Osoyoos Division Yale District Plan 125 Except Plan H750 Parcel B Lands: Parcel Identifier: Parcel Identifier: Parcel Identifier: Parcel Identifier: Block 34 District Lot 490 Osoyoos Division Yale District Plan 125 Block 35 District Lot 490 Osoyoos Division Yale District Plan 125 District Lot 902 Osoyoos Division Yale District Except Plans B5979, 26312, 35106, and H783 District Lot 1800 Osoyoos District Yale District Except: (1) South 10 Chains (2) Plans 20595, 21887, 24539, and KAP58324 Parcel C Lands: Parcel Identifier: Lot 1 District Lots 220, 902 and 2897 Osoyoos Division Yale District Plan Parcel D and E Lands: The Parcel D and E Lands are currently described as: No Parcel Identifiers District Lots 5351, 5352 and Block C of District Lot 2897, 5351 and 5352, Osoyoos Division Yale District containing 61.9 hectares &S

5 -5- PART2 PRIORITY INTERLENDER AGREEMENT THIS AGREEMENT dated for reference the 615 th day of April. 2Q44rJanuary BETWEEN: AND: AND: ROMSPEN INVESTMENT CORPORATION ("Romspen") PONDEROSA SERVICES LTD., as trustee for PONDEROSA FUND (the "Fund") RECITALS: rcmt,s"vcmls FINANCIAL LTD. rcmts'n ' A. The Borrowers are or will be indebted to Romspen and the Fund and each lender holds or will hold, collectively, security over the Property. B. Pursuant to a Loan Servicing Agreement, dated for reference April 6, 2011, CMLS was appointed as Mortgage Administrator to service the Fund Loan, and holds or will hold legal title to the Fund Security as nominee of the Fund. C. The Borrowers have advised the lenders that the Borrowers wish to file the Subdivision Plan subdividing the Lands into six parcels. D. The parties are entering into this Agreement to confirm the priorities of their respective security both before and following the registration of the Subdivision Plan and to confirm the rights and obligations of parties. NOW THEREFORE in consideration of the sum of ten dollars ($10.00) and other good and valuable consideration now paid by each party to the other the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Definitions - Section Headings Where used herein or in any amendment hereto, unless the context otherwise requires, each of the words and phrases set out in Schedule A shall have the meaning set forth therein, and such meanings shall be deemed to include the singular or the plural as the context requires. 5<W5654k»

6 -6- Section headings are included for reference only and are not intended to be used to interpret the provisions of this Agreement. 2. Fund Deposit Romspen acknowledges that Romspen shall have no claim against or interest in the Fund Deposit, held by CMLS, as security in part for the Fund Loan and for the purposes of this Agreement, the Fund Deposit shall not form part of the Property. 3. Priorities before the Filing of the Subdivision Plan Until the Borrowers register the Subdivision Plan at the LTO: a) The Fund subordinates and postpones the Fund Indebtedness and the Fund Security to the Romspen Indebtedness and the Romspen Security so that the Romspen Security shall be a first priority lien and charge against the Land and Property for the full amount of the Romspen Indebtedness in full priority to the Fund Security; b) All rents, revenue, income, cash-flow and other proceeds arising from or relating to the Property shall not be applied to any payment on account to the Fund Indebtedness and the Fund shall not accept any payment on account of the Fund Indebtedness which the Fund knows or reasonably ought to know are payments made from rent, revenue income cash-flows and other proceeds arising or relating to the Property and if such payments are received, the Fund shall immediately pay such amounts to Romspen; and c) Subject to Section 2, all monies received by the Fund in payment of the Fund Indebtedness shall be received and held by the Fund in trust for Romspen as security for the Romspen Indebtedness until the Romspen Indebtedness is repaid in full. 4. Priorities Between the Parties after the Filing of the Subdivision Plan After the Borrower files the Subdivision Plan at the LTO and creates six new parcels: a) The priorities between the parties set out in Section 3 of this Agreement shall cease and have no further effect; b) The Fund subordinates and postpones the Fund Indebtedness and the Fund Security to the Romspen Indebtedness and the Romspen Security so that the Romspen Security shall be a first priority lien and charge against Parcel 1, Parcel 2, Parcel 3 and Parcel 4 for the full amount of the Romspen Indebtedness in full priority to the Fund Security; c) All rents, revenue, income, cash-flow and other proceeds arising from or relating to Parcel 1, Parcel 2, Parcel 3 and Parcel 4 together with any 'l0.S

7 -7- personal property of the Borrower used in relation to those properties will not be applied to any payment on account of the Fund Indebtedness and the Fund shall not accept any payment on account of the Fund Indebtedness which the Fund knows or reasonably ought to know are payments made from rent, revenue income cash- flows and other proceeds arising or relating to Parcel 1, Parcel 2, Parcel 3 and Parcel 4 and any related personal property of the Borrower used in connection with those properties and if any such payments are received, the Fund shall immediately pay such amount to Romspen; d) Romspen subordinates and postpones the Romspen Indebtedness and the Romspen Security to the Fund Indebtedness and the Fund Security so that the Fund Security shall be a first priority lien and charge against Parcel 5 and Parcel 6 for the full amount of the Fund Indebtedness in full priority to the Romspen Security in respect of security over Parcel 5 and Parcel 6: and e) All rents, revenue, income, cash-flow and other proceeds arising from or relating to Parcel 5 and Parcel 6 together with any personal property of the Borrower used in relation to those properties will not be applied to any payment on account of the Romspen Indebtedness and Romspen shall not accept any payment on account of the Romspen Indebtedness which Romspen knows or reasonably ought to know are payments made from rent, revenue income cash-flows and other proceeds arising or relating to Parcel 5 and Parcel 6 and any related personal property of the Borrower used in connection with those properties and if any such payments are received, Romspen shall immediately pay such amount to Fund. f) Notwithstanding 4(e) above, it is agreed between Romspen and the Fund that all rents, revenue, income, cash-flow and other proceeds arising from or relating to the Property or any part of it shall be attributed to Parcel 1, Parcel 2, Parcel 3 or Parcel 4 or all of them, until the Romspen Indebtedness is fully repaid and all obligations of the Borrower to Romspen under the Romspen Loan are satisfied such that Romspen shall receive all payments of such proceeds arising from the Land in priority to the Fund. Provided that the Fund and CMLS consent to the registration of a restrictive covenant against the title to Lot 5 and Lot 6 when such lots are created, which will restrict the development of Lot 5 and Lot 6 until all other portions of the Land are developed, this paragraph 4(f) shall not apply to the proceeds of the sale of Lot 5 and Lot 6 whether by foreclosure, auction, private sale or otherwise and such proceeds of sale shall be treated in accordance with the priorities set out herein as though they arose from Lot 5 and Lot 6 directly. 5. Total Aggregate Advances The priorities set out in this Agreement shall apply to all advances made bv Romspen under the Romspen Loan. Notwithstanding any provision hereof. Romspen shall have sole discretion to make advances in accordance with terms of the governing documents of the V1Qt#

8 -8- Romsnen Loan provided that, after a total of $ has been advanced under the Romsoen Loan. Romspen shall only make further advances for the purpose of (i ) paving for work to be completed as itemized bv Michael Bernier of Bernier Cost Management in the latest cost consultant report issued to Romspen as of the date of such intended advance: or (ii) paving for anv cost incurred bv Romspen or under its direction bv its consultants, agents or advisors, to preserve or protect the Romspen Security, the Land, the Property or anv portion thereof. Such limitation shall not apply to anv cost or expense incurred bv Romspen and added to the Romspen Loan for the purpose of enforcing Romspen's rights under the Romspen Security or other documents, agreements or instruments arising under the Romspen Loan or to the payment of accrued interest under the Romspen Loan. r-golf Course Lease The Fund subordinates and postpones the Fund Indebtedness and the Fund Golf Course Lease Mortgage to the Romspen Indebtedness and the Romspen Golf Course Lease Mortgage and agrees with Romspen that the Romspen Golf Course Lease Mortgage shall be a first priority lien and charge against the Golf Course Lease for the full amount of the Romspen Indebtedness in full priority to the Fund Security notwithstanding that the Golf Course Parcel has not at this time been created in the LTO and the Golf Course Lease has not been registered at the LTO. The Fund further agrees to cooperate with Romspen in registering the Romspen Golf Course Lease Mortgage in priority to the Fund Golf Course Lease Mortgage when the Golf Course Lease is registered at the LTO. 1_ L (h-consents and Execution of Plans Subject to Romspen's review and approval of the Subdivision Plan in its sole discretion, both Romspen and the Fund mutually covenant and agree that they shall, on request, execute the Subdivision Plan together with any other documents that may be reasonably required by the District of Peachland or any provincial authority in connection with the subdivision of the Lands. The Fund hereby irrevocably agrees that with respect to any matter relating to the Land and Property which requires the consent or approval of the Fund, it shall not give or withhold such consent or approval, as the case may be, without the prior consent of Romspen. It shall be reasonable for Romspen to withhold consent under this paragraph if the subject of such consent conflicts with Romspen's exercise of its rights under the Romspen Loan or in the opinion of Romspen, such consent or approval is reasonably likely to materially and adversely affect the completion of the development on the Land or the Property or Romspen's right to receive payment from the Borrower or negatively affect the value of the Romspen Security in any way as determined by Romspen. The Fund further irrevocably agrees that no such consent or approval shall create or be conditioned on additional obligations of the Borrower. L ^Development of Parcel 5 and Parcel 6 Romspen shall have unfettered discretion to consent or withhold consent to the further subdivision of Parcel 5 and Parcel 6 and the Fund irrevocably agrees that it will not permit 9

9 -9- or attempt to develop Parcel 5 or Parcel 6 in any manner without the prior consent of Romspen which may be arbitrarily withheld. If the Borrower or the Fund wishes to subdivide or develop in any way, all or a portion of Parcel 5 or Parcel 6 for any purpose whatsoever (the "Development Parcel") and if both the Fund and Romspen consent to the subdivision and creation of the Development Parcel, then, when the Development Parcel is created or when any development of Parcel 5 or Parcel 6 is commenced or upon any default by the Fund under this Agreement: a) The Fund will subordinate and postpone the Fund Indebtedness and the Fund Security to the Romspen Indebtedness and the Romspen Security so that the Romspen Security shall be a first priority lien and charge against the Development Parcel for the full amount of the Romspen Indebtedness in full priority to the Fund Security; b) All rents, revenue, income, cash-flow and other proceeds arising from or relating to the Development Parcel and any personal property of the Borrowers used in connection with the Development Parcel shall not be applied to any payment on account to the Fund Indebtedness and the Fund shall not accept any payment on account of the Fund Indebtedness which the Fund knows or reasonably ought to know are payments made from rent, revenue income cash-flows and other proceeds arising or relating to the Development Parcel and related personal property of the Borrowers and if such payments are received, the Fund shall immediately pay such amount to Romspen; and c) Subject to Section 2, all monies received by the Fund in payment of the Fund Indebtedness from the Development Parcel shall be received and held by the Fund in trust for Romspen as security for the Romspen Indebtedness until the Romspen Indebtedness is repaid in full. SL iv. Standstill The Fund agrees that it shall not take any Enforcement Action under or in respect of the Fund Loan, the Fund Indebtedness or Fund Security with respect to all or any part of the Property for the first 12 months from the date hereof unless: a) Romspen has commenced an action of foreclosure over the Property in the Supreme Court of British Columbia; or b) Romspen is fully repaid; and after 12 months from the date hereof unless: a) Romspen has commenced an action of foreclosure, appointed a receiver or receiver manager or, without limitation, taken other proceedings in any court in respect of the Property or the Borrower; or #7-5654&rS

10 - 10- b) Romspen is fully repaid. The Fund shall not challenge, contest or bring into question the validity, priority or perfection of the Romspen Security or any Enforcement Action taken by Romspen against the Borrower or any guarantor of the Borrower. The Fund hereby agrees that it shall not at any time while the Romspen Loan remains outstanding: a) initiate, support or encourage any proposal or similar proceeding under the Companies' Creditors Arrangement Act or Bankruptcy and Insolvency Act in respect of the Borrower or any guarantor of the Borrower or, for 12 months from the date any such proceeding is initiated, oppose any position taken by Romspen in the course of such proceedings; b) apply to a Court to review the reasonableness or necessity of any action taken by a receiver appointed by Romspen; c) object to or oppose any application by Romspen to a Court for the conduct of sale of the Property or appointment of a Receiver or monitor over the Borrower or any guarantor of the Borrower; d) oppose the sale or other disposal of the Land and Property by Romspen, provided that this subparagraph shall not apply with respect to Parcel 5 and Parcel 6 except in the event of a revision of priorities contemplated in paragraph 7 hereof; e) oppose or object to any settlement or adjustment by Romspen of any claim under any insurance policy applicable to the Land or the Property and the application of any insurance proceeds by Romspen to the Romspen Indebtedness or otherwise; f) make any claim against Romspen for any act taken or not taken by Romspen to enforce the Romspen Security or collect on the Romspen Indebtedness; g) object to or oppose or make any claim of priority over any protective disbursement made by Romspen to protect the Land or Property or any cost oveitun advance made by Romspen; and h) increase the principal amount of the Fund Loan, increase the interest rate payable on the Fund Loan, reduce the term of the Fund Loan or alter the Fund Loan in any way to make the terms more onerous on the Borrowers. 10. Or-Discharge of Security The Fund agrees to discharge the Fund Security from any portion of the Property sold or transferred by Romspen in the course of an Enforcement Action by Romspen or in the &t

11 -11 - normal course of the development of the Land provided the net proceeds (after deduction for commissions, legal fees and closing costs and reduction for any vendor financing) of such sale are credited toward the Romspen Indebtedness. Notwithstanding the foregoing, this paragraph shall not apply to Parcel 5 and Parcel 6 except in the event of a revision of priorities contemplated under paragraph 7 hereof #7-Exclusive Rights of Romspen Notwithstanding any other provision hereof, Romspen shall have the exclusive right to: a) take action with respect to the sale or other disposition of the Property; b) obtain conduct of any judicial sale of all or a portion of the Property; c) determine to accept a transfer in lieu of foreclosure of all or a portion of the Property; d) enforce any rights accruing to Romspen by reason of the Romspen Security without interference from the Fund and to provide instructions to any receiver or monitor appointed over the Borrower or the Property; e) to grant or refuse to grant any consents, approvals or waivers in respect of the Borrower or the Property; f) make protective disbursements or make cost overrun advances as Romspen may deem appropriate which sums shall be secured by the Romspen Security and take priority over the Fund Security and Fund Indebtedness in accordance with this Agreement, provided that this subparagraph shall not apply with respect to Parcel 5 and Parcel 6 except in the event of a revision of priorities contemplated under paragraph 78 hereof r-Assignment by Romspen or the Fund Romspen and the Fund each agree that each shall not sell, transfer, assign, alienate or otherwise dispose of any interest in their respective loans to any persons, corporations or entities except in accordance with terms and conditions which are expressly subject to all the terms of this Agreement and concurrently with any such sale, transfer, assignment, alienation or other disposition from time to time the selling party shall cause the purchaser to enter into an agreement in which the purchaser agrees to be bound by and observe all the terms and conditions of this Agreement. Notwithstanding the foregoing, Romspen may grant security in the Romspen Loan or the Romspen Security in the usual course of its business without prior consent or notice to the Fund or any assumption covenant by the secured party. 13. LSr-Acknowledgement by CMLS CMLS hereby acknowledges the priorities, rights and obligations granted herein, and agrees to execute all such documents required to give effect to the terms and conditions

12 -12- hereof. The Fund confirms that CMLS will be exercising the standard of care required by it under the Loan Servicing Agreement by executing and delivering a registrable form of this Agreement and hereby requests CMLS to execute and deliver this Agreement in registrable form ^r-Further Assurances The parties agree to execute and deliver new documentation as necessary to give effect to the provisions of this Agreement in order to allow the provisions of this Agreement to be registered at the LTO and any other public record which either party in its discretion considers necessary or desirable from time to time Entire Agreement This Agreement and all schedules thereto contains the whole of the agreement between the parties hereto and there are no collateral or precedent conditions, warranties, agreements, representations, promises, undertakings or inducements, whether oral or written, that are not specifically set forth herein, and no modification, amendment or variation hereof shall be effective or binding on the parties hereto unless agreed to in writing by all of them I- t-no Waiver The waiver by any part of the breach of any term, covenant or condition herein contained shall not constitute a wavier of such term, covenant or condition, except in respect of the particular breach giving rise to such waiver. No terms, covenant or condition of this Agreement is deemed to have been waived by any party hereto unless such waiver is given in writing by that party Severability All the sections, paragraphs, sentences, clauses and parts of this Agreement are distinct and severable, and if any of the same shall be held illegal or void, the validity or legality of the remainder of this Agreement shall not be affected. 18. Survival of Covenants and Warranties The covenants, warranties and representations of Romspen contained in this Agreement shall survive the execution and delivery of this Agreement and shall continue in full force and effect for the benefit of the Fund until the Fund Indebtedness has been repaid in full ^

13 The covenants, representations and warranties of the Fund contained in this Agreement shall survive the execution and delivery of this Agreement and shall continue in full force and effect for the benefit of Romspen until the Romspen Indebtedness has been repaid in full. 19. M^Governing Law This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein and the parties hereto irrevocably attorn to the jurisdiction of the courts of this Province sitting at Vancouver, British Columbia. 20. ^.--Successors This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, personal representatives, successors and assigns including any successors by amalgamation and any appointed receivers or trustees in bankruptcy Counterparts This Agreement may be executed in counterparts and all counterparts so executed will constitute one Agreement binding on the parties effective upon execution by all of the parties TvTime Is of the Essence Time is of the essence of this Agreement and every part hereof. fthe remainder of this paee left intentionally blankl

14 - 14- IN WITNESS WHEREOF each of the parties have executed this Agreement as of the date first above written. ROMSPEN INVESTMENT CORPORATION Per: Authorized Signatory PONDEROSA FUND, by its trustee, PONDEROSA SERVICES LTD. Per: Authorized Signatory CMLS FINANCIAL LTD. Per: Authorized Signatory TS

15 SCHEDULE A Definitions "Borrowers" means, the LP and the LP's Trustee. "Development Parcel" has the meaning set out in Section to this Agreement. "Enforcement Action" means the commencement of a foreclosure, the appointment or obtaining of the appointment of a receiver, a manager, or receiver manager of all or any part of the Property or the appointment of any person, corporation or entity having similar powers of the aforesaid commencing, giving notice of or making any demand for payment, the provision of any notice to enforce security, the taking of any action or proceeding seeking payment of or recovery of all or any part of any indebtedness or damages in lieu thereof, the accepting of a transfer of any property in lieu of foreclosure and/or the exercise of any rights or remedies available to a creditor under its security or otherwise at law or in equity including without limitation any bankruptcy proceedings, or the exercise of any rights or remedies available to a debtor in law or in equity. "Fund" means Ponderosa Services Ltd. as trustee for the Ponderosa Fund and CMLS collectively. "Fund Assignments" means the assignment of rights under contract, assignment of permits, assignment of proceeds under a joint venture agreement with Westbank First Nation from the Borrowers to CMLS, notices of which were filed pursuant to the Personal Property Security Act (British Columbia) as amended. "Fund Assignment of Rents" means the assignment of rents from the LP's Trustee to CMLS, registered over titles to Parcel A, Parcel B and Parcel C at the LTO under registration No. *.-LB transferred to CA "Fund Golf Course Lease Mortgage" means the mortgage of the Golf Course Lease from the LP's Trustee to CMLS. "Fund Deposit" means the sum of monies deposited by the Borrower, with CMLS from time to time as security for the Fund Loan, notice of which was filed pursuant to the Personal Property Security Act (British Columbia) as amended. "Fund GSA" means the general security agreement from the Borrowers to CMLS securing personal property of the Borrowers notice of which was filed pursuant to the Personal Property Security Act (British Columbia) as amended. "Fund Indebtedness" means all existing and future indebtedness and all other obligations and liabilities owing by the Borrowers to the Fund from time to time pursuant to the Fund Loan and together with all interest thereon. "Fund Loan" means a loan from the Fund to the Borrowers of not less than $10,560,000 and not more than $4^540^)0^

16 - 16- "Fund Mortgage" means a mortgage of land from the LP's Trustee to CMLS registered over titles to Parcel A, Parcel B and Parcel C at the LTO and registered under No. *tlb transferred to CA "Fund Security" means the Fund Mortgage, the Fund Assignment of Rents, the Fund GSA, the Fund Assignments and all other collateral security required under the Fund Loan or the loan agreement between the Fund and the Borrowers dated April as such mav be amended, restated or replaced. "Golf Course Lease" means the interests of the Borrowers (as tenant) in a lease over the Golf Course Parcel. "Golf Course Parcel" means the lands identified as the Parcel E Lands on the map attached as Schedule C. "Land" means the interest of the Borrowers in Parcel A, Parcel B, and Parcel C prior to the filing of the Subdivision Plan and the interests of the Borrowers in Parcels 1, Parcel 2, Parcel 3, Parcel 4, Parcel 5 and Parcel 6 following the registration of the Subdivision Plan. "LP" means Treegroup Founders Limited Partnership. "LP's Trustee" means B.C. Ltd. "LTO" means the land title office located in Kamloops, British Columbia. "Parcel A, Parcel B and Parcel C" mean those properties located in the District of Peachland and more particularly described in Schedule B attached hereto. "Parcel 1, Parcel 2, Parcel 3, Parcel 4, Parcel 5 and Parcel 6" mean the interests of the Borrowers in those properties referred to as 1, 2, 3, 4, 5 and 6 on the Subdivision Plan after the same has been filed at the LTO. "Property" means the personal property of the Borrowers and the Land and the interests of the Borrowers in the Golf Course Lease. "Romspen" means Romspen Investment Corporation. "Romspen Loan" means the loan made to the Borrowers by Romspen in an amount of $41,000,000. "Romspen Assignment of Rents" means the assignment of rents registered over titles to Parcel A, Parcel B and Parcel C at the LTO under registration No. LB amended by a modification registered under registration No., "Romspen Assignments" means the assignment of rights under contract, assignment of permits, assignment of proceeds under a joint venture agreement with Westbank First Nation, notices of which were filed pursuant to the Personal Property Security Act (British Columbia) as amended

17 - 17- "Romspen GSA" means the general security agreement securing personal property of the Borrower notice of which was filed pursuant to the Personal Property Security Act (British Columbia) as amended. "Romspen Golf Course Lease Mortgage" means the mortgage of the Golf Course Lease. "Romspen Indebtedness" means all existing and future indebtedness and all other obligations and liabilities owing by the Borrowers to Romspen from time to time pursuant to the Romspen Loan and together with all interest thereon. "Romspen Mortgage" means a mortgage of land registered over titles to Parcel A, Parcel B and Parcel C at the LLO and registered under No. LB amended by a modification registered under registration No. "Romspen Security" means the Romspen Mortgage, Romspen Assignment of Rents, Romspen GSA and Romspen Assignments. "Subdivision Plan" means a subdivision plan substantially in the form of the plan attached as Schedule D to this Agreement creating Parcel 1, Parcel 2, Parcel 3, Parcel 4, Parcel 5 and Parcel 6 or as otherwise agreed by the parties subject to Romspen's approval set out in paragraph (\L of this Agreement. #07#

18 - 18- SCHEDULE B PRE-SUBDIVISION LEGAL TITLES Referenced to the map attached as Schedule "C" hereto. Parcel A Lands: Parcel Identifier: Block 38 District Lot 490 Osoyoos Division Yale District Plan 125 Except Plan H750 Parcel B Lands: 1. Parcel Identifier: Block 34 District Lot 490 Osoyoos Division Yale District Plan Parcel Identifier: Block 35 District Lot 490 Osoyoos Division Yale District Plan Parcel Identifier: District Lot 902 Osoyoos Division Yale District Except Plans B5979, 26312, 35106, and H Parcel Identifier: District Lot 1800 Osoyoos District Yale District Except: (1) South 10 Chains (2) Plans 20595, 21887, 24539, and KAP58324 Parcel C Lands: Parcel Identifier: Lot 1 District Lots 220, 902 and 2897 Osoyoos Division Yale District Plan Parcel D and E Lands: The Parcel D and E Lands are currently described as: No Parcel Identifiers District Lots 5351, 5352 and Block C of District Lot 2897, 5351 and 5352, Osoyoos Division Yale District containing 61.9 hectares r

19 - 19- SCHEDULE C PRE-SUBDIVISION MAP J Crown land AqulsSlon Boundary { "1 Parcel A Lands (Highway Access Land Boundary) TO Existing Residential j j Parcel 9 Lands {Sun Holdings Land Bcmrulary) I t Parcel C Lands (Ort^nal G«li Course - Owned) 1 Crown Land (Parcel D Lands - WFN Joint Vtfftlufe) SiSS Crown Land (Parcel E Lands - Oolf Cswrso) j? ) Foundafs Paren* Parcel vjvjj Wlnory Land Lake Okanagan existing V; Residential 5^56540^

20 -20- SCHEDULE D SUBDIVISION PLAN 3Q356S4&&50756S40.9