COVE WAREHOUSES LTD.LETTER OF INTENT

DATE: _________, 2014

BETWEEN: [NAME OF PURCHASER(S)]_________________________

(the “Purchaser”)

AND: COVE WAREHOUSES LTD. (the “Vendor”)

This Letter of Intent will confirm the intentions, subject to section 3, of the Purchaser and the Vendor in respect of the sale and purchase of the Property (as defined in section 2), free and clear of all liens, charges and encumbrances except any permitted encumbrances contemplated in the Purchase Agreement (as defined in section 3).

1. BASIC TERMS

The basic terms of this Letter of Intent are:

(a) Address of Purchaser: ________________________________________________________________________________

Attention: _________________________Telephone: _________________________Email Address: _________________________

(b) Address of Vendor: #619 718 – 333 Brooksbank AvenueNorth Vancouver, BC V7J 3S8

Attention: Brian OkeEmail Address: covewarehouses@aol.com

Cushman & Wakefield Ltd.Pacific Centre, PO Box 10023 Suite 700, 700 West Georgia Street Vancouver, BC V7Y 1A1 (604) 683 3111 Tel (604) 683 0432 Fax www.cushmanwakefield.com

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(c) Brokerage: Cushman & Wakefield Ltd.

Address of Brokerage: P.O. Box 10023, Pacific CentreSuite 700, 700 West Georgia StreetVancouver, British ColumbiaV7Y 1A1

Attention: David Canning & Brad Newman-Bennett

Telephone: (604) 683-3111Fax No.: (604) 683-0432Email Address: david.canning@ca.cushwake.com

brad.newman-bennett@ca.cushwake.com

(d) Lands:

Municipal Address & Legal Description:

238 – 250 E Esplanade, North VancouverPID: 010-442-715Legal: Lot 1 Block 167 District Lot 274

Plan 16255

266 – 296 E Esplanade, North VancouverPID’S: 015-087-484, 015-087-506

015-087-514, 015-087-522015-087-531, 015-087-549

Legal: Lots 33, 34, 35, 36,37, 38, Block 167 District Lot 274 Plan 878

350 – 354 E Esplanade, North VancouverPID: 009-098-321Legal: Lot B Block 172 District Lot 274

Plan 11369

366 – 374 E Esplanade, North VancouverPID’S: 014-835-754, 014-835-762Legal: Lots 18, 19 Block 172 District Lot

274 Plan 1346

(e) Sale Price: __________ Dollars ($_____), being the total price for the Property (as defined in section 2)

(f) Deposits:

Initial Deposit: __________ Dollars ($_____)

Additional Deposit: __________ Dollars ($_____)

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(the Initial Deposit and the Additional Deposit are together referred to as the “Deposit”)

(g) Deposit To Be Paid In Trust To:

Cushman & Wakefield Ltd. (the “Deposit Holder”)

(h) Completion Date: _____ days after the satisfaction or waiver of all conditions precedent in the Purchase Agreement (or, if such day is not a business day, then the next following business day) or such other date as the Vendor and the Purchaser may mutually agree upon in writing

(i) Acceptance Date: _________, 2014

(j) Negotiation End Date: _________, 2014 (or such later date as the parties may agree in writing)

(k) Purchaser’s Condition Waiver Date:

_____ days after the execution of the Purchase Agreement by the Purchaser and the Vendor

(l) Agency Disclosure: The Vendor and the Purchaser acknowledge having received, read and understood the brochure published by the British Columbia Real Estate Association entitled Working With a REALTOR®.

The Vendor’s designated agent(s) are David Canning & Brad Newman-Bennett. The Vendor has an agency relationship with such licensee’s who are licensed in relation to Cushman & Wakefield Ltd. and are acting solely on behalf of the Vendor.

The Purchaser’s designated agent is ________________________________________. The Purchaser has an agency relationship with such licensee who is licensed in relation to _________________________ and is acting solely on behalf of the Purchaser.

Any reference in this Letter of Intent to a basic term shall be construed to include the provision set forth above as well as any additional provisions of this Letter of Intent where the basic term is more fully set forth.

2. PROPERTY

The “Property”, as that term is used in this Letter of Intent, shall mean all of the Vendor’s right, title and interest in the Lands, including all of the Vendor’s right, title and interest in all buildings, structures and improvements thereon (collectively the “Building”), in all service contracts, equipment leases and other agreements related thereto which under their terms can be assigned to and assumed by the Purchaser (collectively the “Contracts”), in all leases, offers to lease and other agreements in the

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nature of a tenancy or a right to occupy premises (including every addendum, amendment, extension, renewal or supplement thereto or thereof) (collectively, the “Leases”) and in all chattels, tools, equipment, furniture and other personal property owned by the Vendor, located on the Lands and used solely or primarily in connection with the operation of the Lands and the Building (the “Equipment”).

3. ENTRANCE INTO AGREEMENT

Forthwith after the execution of this Letter of Intent by the Vendor and the Purchaser, the Vendor and the Purchaser will begin negotiations with the intention of entering into an agreement (the “Purchase Agreement”) in respect of the sale and purchase of the Property. The Agreement will contain, together with other provisions, provisions in respect of the matters referred to in this Letter of Intent and be in a form and contain terms, conditions, representations and warranties acceptable to the Vendor and the Purchaser and their respective solicitors. The parties agree to negotiate in good faith exclusively with one another with respect to the terms and conditions of the Purchase Agreement up to the close of business on the Negotiation End Date. The initial draft of the Purchase Agreement will be prepared by the Purchaser’s solicitor.

4. SALE PRICE

The Purchase Agreement shall provide that the Sale Price for the Property will be paid by the Purchaser to the Vendor as follows:

(a) by payment of the Initial Deposit by the Purchaser to the Deposit Holder forthwith upon the execution by the Vendor and the Purchaser of the Purchase Agreement, to be deposited and held by the Deposit Holder in trust in an interest bearing account as a stakeholder on behalf of the parties, pending completion of the sale and purchase of the Property or other termination of the Purchase Agreement;

(b) by payment of the Additional Deposit by the Purchaser to the Deposit Holder forthwith upon the satisfaction or waiver of all of the Purchaser’s Conditions (as defined in Schedule A), to be deposited and held by the Deposit Holder in trust in an interest bearing account as a stakeholder on behalf of the parties, pending completion of the sale and purchase of the Property or other termination of the Purchase Agreement; and

(c) by payment of the balance of the Sale Price, subject to adjustment as provided for in the Purchase Agreement, by payment of such amount by the Purchaser to the Vendor on the Completion Date in accordance with the provisions of the Purchase Agreement.

The Deposit will be credited to the Sale Price and will be paid to the Vendor if the sale and purchase is completed in accordance with the terms of the Purchase Agreement. The Deposit paid, together with all interest accrued thereon, will be forfeited to the Vendor as liquidated damages, without prejudice to any other right or remedy of the Vendor, if the Purchaser is in default of its obligation to complete the sale and purchase of the Property under the Purchase Agreement, or will be paid in full to the Purchaser, without prejudice

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to any other right or remedy of the Purchaser, in the event that the Purchaser elects to terminate the Purchase Agreement due to the Vendor being in default of its obligation to complete the sale and purchase of the Property under the Purchase Agreement.

5. CONDITIONS PRECEDENT

The Purchase Agreement shall provide that the obligation of the parties to complete the purchase of the Property on the Completion Date will be subject to and conditional upon the conditions precedent set out in Schedule A attached hereto being satisfied or waived by the appropriate party within the time or times specified in Schedule A.

6. PURCHASER’S DUE DILIGENCE

All materials in the Vendor’s possession have been provided in the Virtual Data Room. The Purchaser shall maintain the confidentiality of all such documents and instruments so delivered, and shall return all copies of the same to the Vendor forthwith if the conditions precedent set out in the Purchase Agreement are not satisfied or waived within the time or times provided therein or if the Purchaser fails to complete its purchase of the Property.

7. LEASING BY THE VENDOR

The Purchaser acknowledges that in the period after the execution of this Letter of Intent by the Vendor and the Purchaser and up to the date of the satisfaction or waiver of the Purchaser’s Conditions (as defined in Schedule A), the Vendor will be carrying on its leasing program for the Property in the ordinary course of its business. The Purchase Agreement shall provide that the Vendor will not enter into any binding commitments with tenants or prospective tenants for the Property after the satisfaction or waiver of the Purchaser’s Conditions without the Purchaser’s prior written approval, such approval not to be unreasonably withheld.

8. COMPLETION DATE

The Purchase Agreement shall provide that the sale and purchase of the Property will be completed on the Completion Date.

9. NO FURTHER DEALING

In consideration of the Purchaser undertaking investigations with respect to the Property, the Vendor agrees that, following the execution of this Letter of Intent by both parties and until the Negotiation End Date, it will not authorize or permit any of its employees or agents to, directly or indirectly, negotiate with or offer the Property for sale to any third party.

10. CONFIDENTIALITY CLAUSE

The terms of this Letter of Intent and its existence shall be kept strictly confidential between the Purchaser, the Vendor, their advisors, creditors, regulators, shareholders and parties who have the right to consent to the transaction contemplated herein or to give approval to the Purchaser’s financing of the transaction. If any such person is required by law to disclose the terms of this Letter of Intent to persons other than those identified above, all other parties shall be notified immediately.

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11. TERMINATION

If the Purchase Agreement has not been settled and executed by the parties by the Negotiation End Date, then this Letter of Intent shall expire and neither party shall have any obligation or liability to the other party hereunder except in respect of a breach or default of section 3, 9 or 10.

12. TIME

Time shall be of the essence hereof.

13. ADDITIONAL CLAUSES

The additional clauses (if any) set out in Schedule B attached hereto are incorporated into and form part of this Letter of Intent as fully as if they were set forth in the main body of this Letter of Intent.

14. EXECUTION BY ELECTRONIC MEANS

This Letter of Intent may be executed by the parties and transmitted by fax or other electronic means and if so executed and transmitted this Letter of Intent will be for all purposes as effective as if the parties had delivered an executed original Letter of Intent.

15. NON-BINDING AGREEMENT

The Vendor and the Purchaser acknowledge that this Letter of Intent, although entered into in good faith by both parties, does not constitute a legally binding agreement between them other than the obligations as set out in sections 3, 9 and 10. The terms of an agreement for the sale of the Property from the Vendor to the Purchaser will be governed solely by the Purchase Agreement when the same has been fully executed by the parties.

This Letter of Intent is open for acceptance by the Vendor until but not after 5:00 p.m. Vancouver time on the Acceptance Date.

The Purchaser has executed this Letter of Intent this _______ day of __________, 2014.

PURCHASER:

[NAME OF PURCHASER(S)]____________________________

Per: (Authorized Signatory)

(Name & Title)

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VENDOR’S ACCEPTANCE

The Vendor hereby confirms its agreement to the intentions set out in this Letter of Intent.

IN WITNESS WHEREOF the Vendor has executed this Letter of Intent this _______ day of __________, 2014.

VENDOR:

COVE WAREHOUSES LTD.

Per: (Authorized Signatory)

(Name & Title)

SCHEDULE A

CONDITIONS PRECEDENT

1. PURCHASER’S CONDITIONS

The Purchase Agreement shall provide that the obligation of the Purchaser to complete the purchase of the Property on the Completion Date is subject to and conditional upon the following conditions precedent (the “Purchaser’s Conditions”) being satisfied or waived not later than 5:00 p.m. (Vancouver time) on the Purchaser’s Condition Waiver Date, namely:

(a)

(b)

If the Purchaser fails to notify the Vendor in writing of the satisfaction or waiver of all of the Purchaser’s Conditions by the time specified above, the Purchase Agreement will be null and void and the Deposit Holder shall be irrevocably directed by the Vendor and the Purchaser to forthwith repay the Initial Deposit and accrued interest to the Purchaser and thereafter neither party will have any further obligations to the other under the Purchase Agreement, except for the obligation of the Purchaser to maintain the confidentiality of all disclosed documents and instruments delivered to it, to return all copies of such documents and instruments and to indemnify the Vendor and/or tenants of the Lands or Building for any damage caused by the Purchaser in connection with its due diligence investigations.

2. VENDOR’S CONDITIONS

The Purchase Agreement shall provide that the obligation of the Vendor to complete the sale of the Property on the Completion Date is subject to and conditional upon the following conditions precedent (the “Vendor’s Conditions”) being satisfied or waived not later than 5:00 p.m. (Vancouver time) on that day which is thirty (30) days after the execution of the Purchase Agreement by both parties, namely:

(a) the Vendor shall have obtained the approval of its board of directors and its shareholders to the completion of the sale of the Property pursuant to the terms of the Purchase Agreement.

If the Vendor fails to notify the Purchaser in writing of the satisfaction or waiver of all of the Vendor’s Conditions by the time specified above, the Purchase Agreement will be null and void and the Deposit Holder will be irrevocably directed by the Vendor and the Purchaser to forthwith repay the Initial Deposit and accrued interest to the Purchaser and thereafter neither party will have any further obligations to the other under the Purchase Agreement, except for the obligation of the Purchaser to maintain the confidentiality of all disclosed documents and instruments delivered to it, to return all copies of such documents and instruments and to indemnify the Vendor and/or tenants of the Lands or Building for any damage caused by the Purchaser in connection with its due diligence investigations.

SCHEDULE B

ADDITIONAL CLAUSES

1. ENVIRONMENTAL REPORTS. The Purchase Agreement shall provide that any environmental reports (the “Environmental Reports”) concerning the Property which are delivered to the Purchaser pursuant to the Purchase Agreement will be provided to the Purchaser on the basis that the Vendor is not making any representations or warranties as to the accuracy of the Environmental Reports, that the Vendor shall not have any liability for any errors or inaccuracies in the Environmental Reports and that the Purchaser is relying on its own investigations to satisfy itself as to the environmental condition of the Property.

2. AS IS/WHERE IS. The Purchase Agreement shall provide that the Vendor is selling the Property to the Purchaser strictly on an “as is, where is” basis and, accordingly, although the Vendor will be required to disclose all information in its possession or control with respect to the physical status or condition of the Property, the Purchase Agreement shall not contain any representations or warranties from the Vendor in respect of the physical status or condition of the Property.

C5075/0000/00057931 145911/350943DOCS 11535633v5