Le Chateau Inc. has entered into an agreement with a corporation controlled by Herschel Segal, the founder of Le Chateau and a Director and majority shareholder of the Company, for long-term financing of $10.0 million. This loan will provide the Company with additional capital and financing flexibility, with proceeds being used primarily for working capital purposes and towards the Company's new concept store renovation program. The financing is in the form of a secured loan which bears a variable rate of interest equal to the lesser of the prime rate of the Royal Bank of Canada multiplied by two and 7.5%.

The loan is repayable at maturity on January 31, 2020, and may be prepaid, in whole or in part, at any time. 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.