Le Chateau Inc. has entered into an agreement with a corporation controlled by Herschel Segal, for a financing of $1.7 million. The financing will provide the company with additional capital and financing flexibility, with proceeds being used primarily for working capital purposes. The financing is in the form of a secured loan which bears a variable rate of interest equal to the lesser of (i) the prime rate of the Royal Bank of Canada multiplied by two and (ii) 7.5%. The loan is repayable at maturity on July 14, 2017. The loan will be secured by all the company's property and will be subordinated in terms of ranking and repayment to the company's $80.0 million revolving credit facility. The transaction was approved by all of the disinterested directors of the Company and is exempt from the requirement to obtain minority shareholder approval under the related party transaction rules of applicable securities legislation.