CO-TENANCY AND TRUST AGREEMENT

THIS AGREEMENT IS MADE AS OF THE		DAY OF 				, 2009
(“Date of the Agreement”).

BETWEEN:

			xxxxxxxxx
			An individual residing in the Province of Ontario
			Address: xxxxxxxxx
			(Hereinafter referred to sometimes as “xxxxx”
			and sometimes as the “Trustee”)			
OF THE FIRST PART
-	and –

			xxxxxxx
			An individual residing in the Province of Ontario
			Address: XXXXX
			(Hereinafter referred to sometimes as “XXX”)
OF THE SECOND PART

WHEREAS the parties wish to enter into an agreement in connection with the purchase, maintenance, development and operation of certain real property.

AND WHEREAS it is understood and agreed that XXXX have contributed time, effort and expense in locating and acquiring the subject property and in arranging and sponsoring the venture as hereinafter defined.

AND WHEREAS it is understood, agreed and intended that XXXX shall be responsible for the day to day management and operation of the property and the venture as herein more specifically outlined.

AND WHEREAS it is understood and agreed that XXX has or shall contribute the initial funds required to purchase the subject property including all related transaction costs as herein set out.

AND WHEREAS Quentin, Laura and XXX are hereinafter sometimes referred to jointly as the “Co-Tenants” and individually as a “Co-Tenant”.

AND WHEREAS XXXX are hereinafter sometimes referred to as the “Trustee”.

AND WHEREAS the Trustee shall act as trustee, in whose name certain real property and other assets as hereinafter described shall be held and administered for the beneficial ownership of the Co-Tenants and / or for such other parties as may be determined from time to time.

AND WHEREAS the Co-Tenants have or shall cause the Trustee to acquire legal title to the said real property.

AND WHEREAS the parties wish to record the terms and conditions on which their relationship herein is to be governed.

AND WHEREAS that relationship shall take the form of what shall be referred to herein as a co-tenancy (the “Co-Tenancy”).

AND WHEREAS the parties have entered into the Co-Tenancy arrangement and this Agreement with the intention of making the venture profitable.

AND WHEREAS the parties hereto understand, represent and agree that any investment is speculative in nature and real estate investment is no different and that every investor should consult with their own independent financial and legal advisors with experience and competence in real estate, tax and accounting matters.

AND WHEREAS no party makes any guarantee or representation to the others and no party puts any reliance upon the others in connection with the financial viability or profitability of the Co-Tenancy.
							
NOW THEREFORE this agreement witnesses that in consideration of the mutual covenants and agreements hereinafter contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto covenant and agree each with the other as follows. 

ARTICLE ONE - FORMATION AND STRUCTURE

1.1	Establishment of the Co-Tenancy

The parties hereto agree to join forces as Co-Tenants subject to the terms and conditions of this Agreement. By this Agreement, the Co-Tenants have formed:

_____________________________________ CO-TENANCY

the “Co-Tenancy” concerning the property municipally known as 										 and legally described as 																			being 					 residential rental units (the “Property”) and the Assets as described in paragraph 1.3.

1.2	Title

Title to the Property shall be registered in the name of ____________________________. Neither Party shall in any manner dispose of title to the Property either by way of conveyance, transfer, sale, assignment, mortgage, hypothecation, charge, lien or otherwise nor, cause any document to be registered against title to the Property, other than notice of this Agreement, without the written agreement of all of the parties hereto or in accordance with the decision making provisions as set out in Article 3.2 hereunder.

1.3	Assets

(a)	The Co-Tenants agree that the assets of the Co-Tenancy shall be the Property and any and all bank accounts, records, personal property and other assets as it may create, establish and acquire from time to time (the “Assets”).

(b)	Any Assets held in the name of the Trustee in addition to the Property shall be assets administered by the Trustee for the beneficial ownership and enjoyment of the Co-Tenants.

(c)	In the event of sale or transfer by any or all of the Co-Tenants of their respective interest in the Property or in the Co-Tenancy, then any Assets or proceeds which are for any reason retained in the name of the Trustee and are not paid out to the respective Co-Tenants pursuant to the provisions of this Agreement, shall continue to be administered by the Trustee as trustee for the Co-Tenants for as long as the Co-Tenants jointly elect.

1.4	Tenancy-in-Common

(a)	The Property and all Assets of the Co-Tenancy shall be owned beneficially by the Co-Tenants as tenants-in-common. Unless this Agreement otherwise provides, and in recognition of the of the Parties’ financial contributions and efforts incurred, all revenues and benefits derived from, and all obligations and liabilities incurred in respect of the Property and the Co-Tenancy shall be shared by the Co-Tenants on the basis of their respective percentage participation in the Co-Tenancy  (which shall hereinafter be referred to as the “Co-Tenants’ Percentage Participation” or “Interest”).

(b)	The Co-Tenants shall be tenants-in-common with respect to their interest in the Property and the Co-Tenancy, each interest being an undivided interest in the following proportions:

	XXXX: 	 	50%	
	XXX:	   			50%

or in such other proportions as the Co-Tenants may from time to time mutually agree in writing. It is acknowledged and understood that such interests are in accordance with and pursuant to the initial financial contributions outlined in Article 4.1 hereunder and in recognition of the efforts and costs incurred by XXXX in securing, arranging and sponsoring the investment and the services provided by XXXX in the operation and management of the Assets and the Co-Tenancy.

1.5	Proportionate Liability

(a)	Unless this Agreement provides otherwise, the Co-Tenants shall be responsible for the liabilities and obligations of the Co-Tenancy in accordance with their respective proportionate Percentage Participation. It is specifically understood that such responsibility among the Co-Tenants shall at all times be several and not joint and the Co-Tenants agree to indemnify and save each other harmless from claims made by third parties against any one of them (in relation to the liabilities of the Co-Tenancy) which exceed that Co-Tenant’s proportionate Percentage Participation of said liabilities. Specifically, and without limitation, it is understood and agreed that each of the Co-Tenants shall be responsible in proportion to their respective Percentage Participation in connection with any mortgage liability on the Property and, to that extent, shall indemnify and save harmless all other Co-Tenants from any personal liability incurred by them in excess of their proportionate Percentage Participation by reason of any personal guarantee having been provided thereon.

(b)	In the event that a Co-Tenant incurs liability or an obligation without the prior unanimous written consent of the other Co-Tenants or not pursuant to the terms of this Agreement, that Co-Tenant shall lose the right of indemnity or contribution from the other Co-Tenants and shall be solely responsible for satisfying that liability or obligation.

1.6	Relationship of the Co-Tenants

The Co-Tenants acknowledge that their intention is that no partnership or agency relationship is created by virtue of the entering into of this Agreement. Nothing contained in this Agreement shall be deemed to constitute any Co-Tenant’s interests in the Property or the Assets, and / or between the Co-Tenants as being a partnership or agency relationship, notwithstanding that the income and expenditures therefrom are divisible between the Co-Tenants in their proportionate Percentage Participation. No Co-Tenant shall be or be deemed to be the partner, agent or legal representative of any of the other Co-Tenants nor is there any relationship whereby either could be held liable for any act or omission of the other. No Co-Tenant shall have any authority to act for the others or to incur any obligation on behalf of the others or of the Co-Tenancy unless such a right is expressly provided to the Co-Tenant in this Agreement.

1.7	Objective of the Co-Tenancy and Purpose

The purpose of the Co-Tenancy is to acquire and manage the Property with long term rental income on a profitable basis.

1.8	No Encumbrance

No Co-Tenant shall sell, transfer, assign, pledge, hypothecate, mortgage, or in any other manner encumber his or her Interest in the Property or the Co-Tenancy except as specifically provided in this Agreement without the written consent of the other Co-Tenants.

1.9	Competition

Each Co-Tenant shall have the absolute right to engage in any other business and other venture including, without limitation, the ownership, improvement and operation of other real estate and whether or not competitive with the objects of the Co-Tenancy, without consulting the other Co-Tenants and without in any way being accountable to the Co-Tenancy or the other Co-Tenants. No Co-Tenant shall have any interest in any other property owned by the other Co-Tenant(s) or in any other business ventures engaged in by the other Co-Tenant(s), unless the parties agree in writing to the contrary on a specific case by case basis.

1.10	Term of the Co-Tenancy

The term of the Co-Tenancy shall start as of the Date of this Agreement and shall continue, unless sooner terminated in accordance with the terms herein or by mutual agreement between all of the Co-Tenants, for so long as the Co-Tenants or any of their heirs, executors, administrators, successors or permitted assigns hold any interest in or have any obligations relating to the Property or the Co-Tenancy.

ARTICLE TWO - TRUSTS

2.1	Establishment

(a)	The Co-Tenants, for the ease of conveyancing, managing and administering the Property and any other Assets, have requested the Trustee and the Trustee has agreed, to hold the Property and any other Assets in trust for the Co-Tenants in their proportionate Percentage Participation.

(b)	The Trustee will continue to hold title to the Property and the Assets as bare trustee for the beneficial ownership of the Co-Tenants.

(c)	The Trustee hereby accepts the trusts as herein set out and agrees to be bound by them and further agrees to make, do, execute or cause to be made, done and executed all such further and other lawful acts, deeds, declarations, things and assurances whatsoever as any of the Co-Tenants might reasonably request provided that such requests do not conflict with the provisions or intent of this Agreement. Unless otherwise mutually agreed in writing, the Co-Tenants each and individually do hereby irrevocably nominate, constitute and appoint the Trustee as his true and lawful attorney for him and in his name and on his behalf to execute and do all such deeds, acts, assurances, conveyances, transfers, mortgages, charges, covenants, agreements, instalments, documents and things as shall be required by the Trustee and as the Trustee shall see fit or as the Co-Tenants may jointly direct, for all or any purpose as contemplated by this Agreement.

(d)	The Trustee hereby declares and acknowledge that he holds the Property and the Assets in trust for the beneficial ownership, use and enjoyment of the Co-Tenants, and that he has no right, title or interest in this Agreement or in the Property or the Assets save as the trustee for the Co-Tenants on whose behalf he is acting and save as beneficial owner as the same is hereinafter specified.

2.2	Borrowing Money

The Trustee is hereby empowered to borrow money as necessary for the purpose of the Co-Tenancy, or for the purpose of the Co-Tenants in relation to the Property or the Assets, and to secure the same by way of a mortgage, charge, debenture or other encumbrance or security, against the Property or the Assets held by the Trustee, provided that any such borrowing will only be undertaken in a fashion consistent with the provisions of this Agreement.

2.3	Costs

Administrative Costs incurred by the Trustee as trustee shall be deemed a cost of the Co-Tenancy. For the purposes of this article, Administrative Costs shall mean costs which do not arise from or are not in the nature of trade. The Trustee shall not be entitled to any other payment or compensation as Trustee under this Agreement.

ARTICLE THREE – GOVERNANCE

3.1	Duties of the Co-Tenants

(a)	The Co-Tenants shall devote effort and finances and as much time to the Co-Tenancy as is reasonably necessary in order to carry out the provisions of this Agreement. The Co-Tenants together shall provide for the orderly management and operation of the Property and the Co-Tenancy and are together responsible in every way for the Co-Tenancy, the Property and all related agreements and commitments. The Co-Tenants shall, as regards the operation of the Property and the Co-Tenancy, at all times act in a reasonable and professional manner and in a manner consistent with the best interests of the Property and the Co-Tenancy even though the same may not be consistent with the interests of any particular  Co-Tenant or Co-Tenants.

(b)	The Co-Tenants shall be responsible for the establishment and development of all operating standards, policies and procedures. The implementation of these, however, shall be the responsibility of the Operations Manager, it being understood and agreed that the Operations Manager is authorized and obligated to exercise a reasonable degree of discretion in that regard.

3.2	Decision Making

(a)	All decisions, transactions and courses of action taken by the Trustee with respect to the Property or other Assets held by the Trustee shall only be taken with the prior approval of the Co-Tenants as set out in this article. Co-Tenants shall act reasonably and prudently in a business-like manner and in a manner consistent with the objective of the Co-Tenancy.

(b)	The Co-Tenants shall be entitled to make decisions by voting in accordance with their respective proportionate Percentage Participation, each percentage point of ownership entitling the Co-Tenant to one vote. If the proportionate Percentage Participation shall change according to the provisions of this Agreement, the number of votes shall change accordingly.

(c)	The voting and approval rights referred to in this article shall at all times be vested in the Co-Tenants. Any decision or action taken by the Co-Tenants in a manner which is consistent with the provisions of this Agreement in relation to the Property and other Assets, in relation to the Co-Tenancy or in relation to the trust which is created by this Agreement, shall be valid and binding upon all parties.

(d)	Unless otherwise provided in this Agreement, all other decisions or actions taken with respect to this Agreement, the Trustee, the Co-Tenancy or the Property or with the delegation or implementation of decisions or with the management or disposition of any of the foregoing [including, without limitation, any sale of the entire Property or of a One Hundred Percent (100%) interest in the Assets of the Co-Tenancy] shall, unless otherwise provided by this Agreement, require consent in the form of a simple majority of the total vote of the Co-Tenants cast as set out in articles 3.2 (b) and 3.2 (c) herein.

3.3	Meetings of the Co-Tenants

(a)	The Co-Tenants will discuss and meet from time to time as is deemed appropriate in order to carry out the business of the Co-Tenancy.

(b)	In the event that any Co-Tenant deems it necessary, such Co-Tenant may convene a formal meeting of the Co-Tenants. Such formal meeting shall be convened at the request of any Co-Tenant upon at least seven (7) business days’ notice unless such notice is waived in writing by all of the Co-Tenants. Any such notice of meeting shall include an agenda of the business to be introduced together with relevant background information and materials. The Co-Tenants present shall represent and vote their respective Interest. Minutes shall be kept of all formal meetings by the Operations Manager.

(c)	For clarity, it is agreed that Co-Tenants may, but shall not be obligated, to call formal meetings as above outlined, for decision-making purposes and that the only requirement that must be satisfied in order to validate decisions made by the Co-Tenants shall be that the decisions were supported by or were based upon the required number of votes or upon the required consents as set out in this article for the type of decision made.

3.4	Operations Manager

The Co-Tenants hereby create the position of operations manager (“Operations Manager”) and appoint XXXX to be the Operations Manager to conduct the day-to-day affairs of the Property and the Co-Tenancy.

3.5	Delegation of Authority and Management

Without in any way diminishing their ultimate responsibility and authority, the Co-Tenants may, in writing, delegate duties to the Operations Manager or any other person and may cancel or amend previously delegated duties in any way the Co-Tenants deem appropriate. The Co-Tenants hereby delegate to the Operations Manager the duties of the Operations Manager itemized in this Agreement. It is hereby acknowledged by all Co-Tenants that they retain to themselves and do not by this Agreement or otherwise delegate the following duties:

(a)	appointment of Operations Manager;

(b)	decision making authorities otherwise provided in this Agreement;

(c)	approval of all reports, budgets and financial statements presented by the Operations Manager, property manager, auditor or other party;

(d)	any mortgaging or re-mortgaging of the Property;

(d)	approving or disapproving of any sale, transfer, conveyance, assignment or other disposition of the Property;

(d)	approving or disapproving of capital improvements to the Property outside of the scope of the operating plan as defined herein;

(g)	reporting to Co-Tenants; and

(h)	any matters not in the ordinary course of business.

3.6	Duties of the Operations Manager

The acts of the Operations Manager shall bind the Co-Tenants and the Co-Tenancy when such acts are within the Operation Manager’s authority. In addition to the duties delegated to the Operations Manager elsewhere in this Agreement and from time to time in writing by the Co-Tenants, the Operations Manager is hereby delegated the following duties:

(a)	the Operations Manager shall implement the operating standards, policies and procedures established by the Co-Tenants at all times being authorized and required, in that regard, to exercise a reasonable and prudent amount of discretion and shall serve at the pleasure of the Co-Tenants;

(b)	the Operations Manager shall appoint, supervise and, if necessary replace, a property manager, leasing agent and any other professional support person or firm the Operations Manager deems appropriate for the proper operation and management of the Property and the Co-Tenancy;

(c)	the Operations Manager shall, both personally and together with the appointed property manager or other professional support person or firm, diligently attend to the following:

(i)	collection of rents and issuance of tenant receipts;
(ii)	ensuring the enforcement of tenant lease obligations;
(iii)	ensuring the quick response to any tenant enquiries and requirements;
(iv)	implementing an efficient and prudent process for the leasing of vacant units and the recruiting and selection of new tenants;
(v)	ensuring compliance with the Tenant Protection Act and Human Rights Code;
(vi)	ensuring the security of the Property;
(vii)	striving to ensure that all suites are fully tenanted and rents optimally priced at all times
(viii)	reporting to the Co-Tenants any issues or problems with the Property which may be deemed out of the ordinary;
(ix)	arranging, at the expense of the Co-Tenancy, all appropriate and necessary insurance, repairs and maintenance and the prompt payment thereof as these become due and payable;
(x)	enlisting qualified, competent and competitively priced contractors and tradespeople to perform the necessary repairs and maintenance to the Property;
(xi)	reporting to the Co-Tenants any maintenance or repair requirements which may be deemed out of the ordinary; and
(xii)	performing other acts, duties and responsibilities as would a prudent owner;

(d)	the Operations Manager shall report in writing to the Co-Tenants not less frequently than quarterly with respect to the operations and management of the Co-Tenancy and the Property, provided that any material changes or events in the operation of the Co-Tenancy shall be reported immediately;

(e)	the Operations Manager shall, at the expense of the Co-Tenancy, at all times during the term hereof, cause accurate books and records of account to be maintained in which shall be entered all matters relating to the Co-Tenancy, including all income, expenditures, assets, and liabilities. The Co-Tenants shall have free access at all reasonable times to inspect, examine and copy such books of account and the Operations Manager agrees to furnish the correct information, accounts and statements of all such transactions without any concealment or suppression;

(f)	the Operations Manager shall cause to be prepared, at the expense of the Co-Tenancy, annual financial statements ("Financial Statements") including a balance sheet and income statement, on an accrual basis, within ninety (90) days of the fiscal year end, suitable for the preparation of Co-Tenants’ Canadian Income Tax Returns. The Co-Tenants shall appoint a qualified accountant to assist and advise the Operations Manager from time to time with the administration of the aforesaid statements, records and books of account;

(g)	from time to time the Operations Manager shall prepare plans and operating budgets (the “Operating Plan”) which shall include projections for anticipated advisable repairs, revenue, expense and residual monthly cash balances. The Operating Plans and updates thereto shall be submitted to the Co-Tenants for review and approval. If after approval thereof, the Operations Manager learns of any material event or circumstance which could lead to a variance of more than 10% in either the revenues, the expenses or the residual monthly cash balances, then the Operations Manager shall notify the Co-Tenants and seek instructions as to desired changes in the course of actions;

(h)	the Operations Manager is (i) authorized to make expenditures within the scope of the Operating Plan and (ii) authorized to make expenditures, not within the scope of the Operating Plan, if these do not, in total, exceed the sum of $ _______________ in any 12 month period;

(i)	except where specifically provided to the contrary in this Agreement or in writing by the Co-Tenants, the Operations Manager shall perform those duties deemed appropriate by the Operations Manager for the proper management and operations of the Co-Tenancy and the Property;

(j)	the Operations Manager shall devote such time and attention as may be reasonably required in the discharge of the duties outlined herein; and

(k)	the Operations Manager shall maintain ongoing contact with the Co-Tenants and shall consult with the Co-Tenants with respect to the duties and decision making matters outlined herein.

3.7	Remuneration of the Operations Manager

The Operations Manager shall be reimbursed for reasonable out-of-pocket expenses incurred in the normal course of duties but shall not otherwise receive any further fee or compensation for his services rendered, it being understood and agreed that his Percentage Participation in the Co-Tenancy as herein outlined is full and fair compensation for such services.

3.8	        Co-Tenants May Do Business with the Co-Tenancy

Each Co-Tenant shall give notice in advance to the other Co-Tenants of his or her interest, or the interest of any affiliates, in any other business or undertaking (“Related Supplier”) which proposes to enter into any business transaction with the Co-Tenancy. Each Co-Tenant understands that the conduct of the business of the Co-Tenancy may involve business dealings with Related Suppliers. Co-Tenants may engage in or possess any interest in any Related Supplier including, but not limited to, the ownership, financing, leasing, operation, management, syndication, brokerage or development of the Property or the Co-Tenancy and no other Co-Tenant shall have any right by virtue of this Agreement in and to such Related Supplier or the income or profits derived therefrom.

3.9	Scope of Authority and Indemnification

No Co-Tenant shall enter into any commitment binding upon the Co-Tenancy or the Property except for:

(a)	actions expressly provided for in this Agreement;

(b)	actions expressly provided for by the Co-Tenants together from time to time;

(c)	actions by the Co-Tenants and the Operations Manager within the scope of their authority and as provided in this Agreement; and

(d)	actions by the property manager within the scope of its authority.

Each Co-Tenant (the “Co-Tenant in Breach”) shall indemnify and hold harmless the other Co-Tenants from and against any and all claims, demands, losses, damages, liabilities and other proceedings, judgments and awards, and costs and expenses (including but not limited to legal fees) arising directly or indirectly, in whole or in part, out of any breach of this provision by such Co-Tenant in Breach.

3.10	Indemnity of the Operations Manager

The Co-Tenants agree to indemnify and save harmless the Operations Manager from claims made against him by third parties, provided such third party liability was incurred within the scope of the Operations Manager’s authority as provided herein and provided also that the liability was not incurred by any gross negligence or fraud on the part of the Operations Manager. In that regard, the Co-Tenants shall be responsible in accordance with their respective Percentage Participation.

ARTICLE FOUR - FINANCING THE CO-TENANCY

4.1	Initial Financial Contributions

(a)	The Co-Tenants have made or shall forthwith make initial cash contributions (“Initial Financial Contributions”) to the Co-Tenancy in total to satisfy the sum of:

	(i)	the closing costs to purchase the Property including legal and conveyancing costs, land transfer tax, closing adjustments, financing fees, inspection charges, appraisal and engineering fees and all other costs either due on closing to purchase the Property or paid out in connection with the intended purchase on behalf of the Co-Tenancy prior to closing;

	(ii)	a reserve fund in the amount of $ __________________ deemed sufficient by the Co-Tenants to be held by the Co-Tenancy and used as deemed necessary by the Co-Tenants.

(b)	Each of the Co-Tenants has made or shall forthwith make initial cash contributions (“Initial Financial Contributions”) to the Co-Tenancy to satisfy the requirements of the immediately preceding article as follows:

	XXXX:	$2.00
	XXX:			$ ______________

It being understood and agreed that, as part of the Initial Financial Contribution made by ____________________________ in the total above indicated, he has previously paid the sum of $ _________________________ towards the deposit on the purchase of the Property and he has previously paid the sum of $ _____________________________ for other costs in connection with the intended purchase of the Property, making his total Initial Financial Contribution the amount above indicated.

4.2	Additional Financial Contributions

(a)	It is the intention of the Co-Tenants that all initial cash requirements of the Co-Tenancy be satisfied through the Initial Financial Contributions. However, as part of the Operating Plan, the Operations Manager shall from time to time suggest and the Co-Tenants will establish the necessary working capital of the Co-Tenancy. Such working capital shall be maintained in order to meet the costs and expenses of the Co-Tenancy.

(b)	To the extent that the Co-Tenancy requires funds in addition to the Initial Financial Contributions as a result of a deficiency in the working capital or otherwise, either initially or later, and to the extent that the same cannot be raised by borrowing from banks or other financial institutions, the Co-Tenants hereby agree to make such additional cash contributions ("Additional Financial Contributions") as are specified by the Operations Manager from time to time in the same percentages as their Interests in order to enable the Co-Tenancy to carry out the purpose of this Agreement.

(c)	Notice by the Operations Manager to the Co-Tenants requesting Additional Financial Contributions (the “Cash Call”) can be overruled by a majority decision of the Co-Tenants.

(d)	Each Co-Tenant shall have thirty (30) days (“Date of First Default”) from the date of the Cash Call (“Date of Cash Call”) by the Operations Manager to contribute the Additional Financial Contributions.

(e)	If any Co-Tenant (“Defaulting Co-Tenant”) fails to meet a Cash Call by the Date of First Default, then the other Co-Tenants (“Contributing Co-Tenants”) shall forthwith have the right to advance the Additional Financial Contributions on behalf of the Defaulting Co-Tenant.

(f)	If the cash offered by the other Co-Tenants is more than the Cash Call, then the Operations Manager shall decide on the amounts that each Contributing Co-Tenant shall be allowed to contribute.
(g)	If insufficient funds (the difference being the “Cash Call Shortfall”) are offered by the Co-Tenants, the Operations Manager is hereby authorized by the Co-Tenants to forthwith take any or all of the following steps:

	(i)	seek and allow an outside party (also called a “Contributing Investor”) to contribute the Cash Call Shortfall, or any part thereof. If such outside party, through his actions as Contributing Investor, assumes or is entitled to assume an Interest in the Property or the Co-Tenancy, then such party, as a prerequisite to assuming such Interest, shall execute this Agreement and all such other documents as may be reasonably requested by the Operations Manager;

	(ii)	seek and commit to loans which the Defaulting Co-Tenant is to be held responsible;

	(iii)	take whatever other steps he deems necessary and appropriate.

(h)	The Contributing Co-Tenant shall have a lien or charge on the Interest of the Defaulting Co-Tenant. If the Defaulting Co-Tenant shall remain in default (“Default”) in payment of monies for a period of sixty (60) days (“Date of Second Default”) from the Date of Cash Call, then the Interest of the Defaulting Co-Tenant shall be dealt with as specified in paragraph 4.3.

(i)	Any income or cash surplus otherwise to be distributed to the Defaulting Co-Tenant, shall first be distributed to the Contributing Co-Tenant.

(j)	On the Date of First Default, the Defaulting Co-Tenant’s right to vote shall devolve to the Contributing Co-Tenant. The Defaulting Co-Tenant shall then have no vote and no say and shall have no part of the management of the Co-Tenancy or the Property.

(k)	Any Defaulting Co-Tenant agrees to indemnify and hold harmless the other Co-Tenants from all costs, expenses and damages incurred by the other Co-Tenants as a result of the failure of that Defaulting Co-Tenant’s to satisfy a Cash Call.

(l)	For a Defaulting Co-Tenant to meet a Cash Call after the Date of First Default and before the Date of Second Default, that Co-Tenant must pay to the Co-Tenancy or, if there is a Contributing Co-Tenant, to that Contributing Co-Tenant, the amount of the Cash Call plus interest at the rate of the Royal Bank of Canada Prime plus five (5) percentage points, calculated as at the date of the Cash Call.

(m)	The Contributing Co-Tenant may provide written notice from time to time to the Operations Manager and to the Defaulting Co-Tenant of outstanding advances made by the Contributing Co-Tenant and of any accrued interest thereon. Unless the Defaulting Co-Tenant is able to demonstrate within thirty (30) days of receipt of such notice that the amounts shown on the notice are incorrect, then the amounts shown in the Contributing Co-Tenant’s notice shall be deemed correct for all purposes hereof.

(n)	If and when the failure to meet a Cash Call is remedied in full as specified in this section, the Defaulting Co-Tenant shall be forthwith reinstated in full and any liens or charges shall be discharged at the expense of the Defaulting Co-Tenant.

4.3	Default on Cash Call

(a)	In the case of default, the Contributing Co-Tenant, in his sole discretion, shall opt for either the cash settlement (“Cash Settlement”) or the equity settlement (“Equity Settlement”) as defined below by notifying the Defaulting Co-Tenant and all other Co-Tenants of his decision within thirty (30) days. If the Contributing Co-Tenant fails to make such notification in the prescribed time allotted, the Operations Manager is hereby irrevocably authorized to make the decision on the Contributing Co-Tenant’s behalf.

(b)	The Defaulting Co-Tenant specifically, absolutely and irrevocably authorizes and appoints the Contributing Co-Tenant as his lawful agent and attorney to do or cause to be done all acts or things, and to execute and deliver all documentation necessary or desirable in order to give effect to the provisions of this section.

4.4	Cash Settlement

In the Cash Settlement option, the Defaulting Co-Tenant shall pay to the Contributing Co-Tenant the sum of:

(a)	the Defaulting Co-Tenant’s share of the Cash Call;

(b)	a fee for arranging the required cash (the “Arranging Fee”) calculated as 20% of the Defaulting Co-Tenant’s share of the Cash Call and deemed to have been incurred on the date that the Defaulting Co-Tenant’s share of the Cash Call was met by the Contributing Co-Tenant;

(c)	interest on any outstanding portion of the Cash Call and Arranging Fee calculated at Royal Bank of Canada Prime plus five (5) percentage points calculated and payable monthly from the date the Cash Call was met by Contributing Co-Tenant; and

(d)	interest on outstanding interest at the said rate

where all monies in addition to the Cash Call are liquidated damages and not a penalty.

4.5	Equity Settlement

In the Equity Settlement option, the monies advanced by the Contributing Co-Tenant plus any fees or expenses incurred by Contributing Co-Tenant shall be deemed to have been advanced for the purpose of the purchase of a portion of the Defaulting Co-Tenant’s Interest ("Equity Settlement Portion" as defined in this section).  The Defaulting Co-Tenant’s Interest will thus be reduced by the Equity Settlement Portion and the Equity Settlement Portion will be added to the Contributing Co-Tenant’s Interest.  The Defaulting Co-Tenant’s Cash Call and all related expenses will be deemed to have been paid in full.  The Equity Settlement Portion percent shall be the greater of (a) or (b) as set out hereunder:

(a)	twenty percent (20%) of the Defaulting Co-Tenant’s Interest; or

(b)	the percent calculated according to the following procedure up to a maximum of 100%:

				(i)	two; TIMES
			(ii)	the Defaulting Co-Tenant’s share of the Cash Call; DIVIDED BY
		(iii)	the product of the Defaulting Co-Tenant’s Investor Percentage Participation times the total Initial Financial Contribution.

	4.6	Indemnity for Third Party Liabilities

Each Co-Tenant agrees that in the event that a third party requires that the Co-Tenants be jointly and severally liable for any obligations arising in the course of pursuing the Co-Tenancy undertakings or related activities, (the "Co-Tenancy Undertakings"), the respective liability of each of the Co-Tenants, as between themselves, shall be limited to their respective Percentage Participation of the total liability for which the Co-Tenants are required to become jointly and severally liable.  Each Co-Tenant (herein called the "Indemnifying Co-Tenant") agrees to indemnify and save harmless the other Co-Tenants (herein called the "Indemnified Co-Tenants") to the extent of that portion of all monies which the Indemnified Co-Tenants may be required to pay or liability to which they have or may become subject by reason of any such joint and several liability or by reason of any actions, proceedings, liability, claims, damages, costs and expenses in relation thereto or arising therefrom, which is in excess of the Co-Tenant Percentage Participation of the total liability for which the Co-Tenants are required to become jointly and severally liable and which has been paid by the Indemnified Co-Tenant. In the event that any Indemnified Co-Tenant shall pay an "Excess," defined as monies paid pursuant to any demand from any third person in excess of his Percentage Participation, the other Co-Tenants shall, in accordance with their respective Percentage Participation, forthwith upon demand pay to the Indemnified Co-Tenant all of the Excess so paid by the Indemnified Co-Tenant.

4.7	Failure to Indemnify

If any Co-Tenant fails to pay such Excess upon demand by the Indemnified Co-Tenant within thirty (30) days, then the Indemnified Co-Tenant shall be entitled to the remedies as defined under paragraph 4.2.

ARTICLE FIVE - TRANSFER OF OWNERSHIP

5.1	Right of First Refusal

The Co-Tenants agree that there shall be a right of first refusal arrangement.

(a)	In consideration of the execution of this Agreement, the receipt and sufficiency of which is hereby acknowledged, each Co-Tenant as grantor ("Grantor"), grants to any and all other Co-Tenants as grantee ("Grantee"), a right of first refusal to acquire the Grantor's Interest, or any portion thereof, on the terms set out in this section.

(b)	"First Refusal Offer" means any offer or agreement to sell, purchase, lease, transfer, assign, pledge, mortgage, hypothecate or in any other way to convey or dispose (such action being a "Disposition") either directly or indirectly, all or any portion of a Co-Tenant’s Interest.

(c)	The Grantor shall not permit a Disposition of the Property until he has first offered to Grantee the right to acquire all or any portion of the Grantor's Interest contained in the First Refusal Offer on the identical terms and conditions set out therein.  Upon receipt of any First Refusal Offer, the Grantor shall immediately deliver to the Grantee a complete and true originally-executed copy thereof.

(d)	Upon delivery by the Grantor to the Grantee of the First Refusal Offer, the Grantee shall have five (5) days to advise the Grantor whether he elects to acquire the Interest contained in the First Refusal Offer on the same terms and conditions set out therein.  If the Grantee does not advise the Grantor in writing within the required time, the Grantee shall be deemed to have rejected such offer.

(e)	If the Grantee does not elect to acquire the Interest, the Grantor may then proceed with the Disposition of his Interest, but only as contained in the First Refusal Offer.  If the terms and conditions of the First Refusal Offer are at any time changed in any way following the Grantee's rejection or deemed rejection of the First Refusal Offer, the Grantor shall not permit a Disposition unless he has first complied on all such occasions with the requirements of this Section.

(f)	If the Grantee does not elect to acquire the Interest and the transaction contemplated by the First Refusal Offer does not close, the Grantee's right of first refusal shall survive. 

(g)	The Grantor agrees to require as a condition of any First Refusal Offer that the purchaser of the Interest shall agree in writing directly with all other Parties to this Agreement to be bound by this Agreement.  All Parties hereby agree that said purchaser shall not receive good title until he has first executed this Agreement and any other documents as may be reasonably required.

(h)	If the Grantee advises the Grantor that he elects to acquire the Interest, then the transaction shall close in accordance with the First Refusal Offer.

(i)	If the First Refusal Offer contains any conditions which are required to be waived or met by the intended purchaser, the Grantor shall also provide to the Grantee, promptly upon the waiving or meeting of such conditions, evidence ("Evidence") that the purchaser's conditions have been waived or met.  The five-day period of clause (d) of this Section commences when the First Refusal Offer and the Evidence have both been delivered to the Grantee.

5.2	Buy-Sell

The Parties hereby agree that there shall be a buy-sell arrangement.

(a)	Any Co-Tenant ("Offeror") shall at any time be entitled to give notice ("Offer") to any other Co-Tenant or Co-Tenants ("Offeree") to unconditionally:
	
	(i)	buy a “Purchased Interest” as defined in this subsection from the Offeree; or alternatively
	(ii)	sell the Offeror's Purchased interest to the Offeree.

		“Purchased Interest” is a specified percent of the vendor’s Interest, where the percent is the same whether the vendor is the Offeror or the Offeree. The said percent may be any percent less than or equal to one hundred percent.

	(b)	The Offeree shall have the right to elect either (a)(i) or (a)(ii) above.  The Offer must be for a specified purchase price which shall be at the same rate for either a purchase or a sale.  The Offer shall be irrevocable by the Offeror for a period of thirty (30) days from the date of its delivery to the Offeree.  The Offer shall state a place of closing ("Place of Closing") and a closing date ("Date of Closing") which shall be thirty (30) days after acceptance of the Offer if such is a business day, or otherwise the next business day.

(c)	The Offeree shall be entitled, at any time during the period of thirty (30) days following the delivery of the Offer, to give the Offeror a written notice electing to accept either:

(i)	the Offer to purchase mentioned in subsection (a)(i), in which case the Offeror will purchase the Offeree's Purchased Interest; or

	(ii)	the Offer to sell mentioned in subsection (a)(ii), in which case the Offeror will sell his Purchased Interest to the Offeree.

	Upon delivery of such notice, the Offeror and the Offeree shall be bound to complete such purchase and sale in accordance with such terms.  If the Offeree shall fail to give such notice within the said period, he shall be conclusively deemed to have accepted the Offer of the Offeror to purchase mentioned in subsection (a)(i) and (c)(i) and shall be bound to sell his Purchased Interest to the Offeror in accordance with the terms of the Offer.

(d)	From and after the closing of the purchase and sale contemplated by this Section, the purchasing party ("Purchasing Party") shall assume all indebtedness or obligations to third parties which the selling party ("Selling Party") properly incurred in connection with the Co-Tenancy Undertaking.

(e)	If the Selling Party is not represented at the Place of Closing at the Date of Closing, or is represented but fails for any reason to deliver to the Purchasing Party the required documents, then the Purchase Price for the Purchased Interest shall be deposited by the Purchasing Party into a special account at the main Toronto branch of The Royal Bank of Canada with interest for the account of the Purchasing Party.  Such deposit shall constitute valid and effective payment of the Purchase Price for the Purchased Interest to the Selling Party.

(f)	If the Purchase Price for the Purchased Interest is deposited pursuant to the subsection above, then from and after the date of such deposit, and even though the appropriate documents and assignments evidencing the purchase and sale of the Purchased Interest have not been delivered to the Purchasing Party, the purchase of the Purchased Interest shall be deemed to have been fully completed and all right, title, benefit, and interest, both at law and in equity, in and to the Purchased Interest shall be conclusively deemed to have been transferred and assigned to and become vested in the Purchasing Party and all right, title, benefit and interest, both at law and in equity, of the Selling Party, or of any transferee, assignee or any other person having any interest, legal or equitable, therein or thereto shall cease and determine, provided, however, that the Selling Party shall be entitled to receive the Purchase Price so deposited without interest upon delivery to the Purchasing Party of the appropriate documents duly executed and required by the Purchasing Party.

(g)	The Selling Party hereby irrevocably constitutes and appoints the Purchasing Party as his true and lawful attorney-in-fact and agent for, in the name of and on behalf of the Selling Party to execute and deliver in the name of the Selling Party all such assignments, transfers, deeds and instruments as may be necessary effectively to transfer and assign the Purchased Interest, or any part thereof, to the Purchasing Party, or his nominee.  Such appointments and power of attorney shall not be revoked by the insolvency, bankruptcy or winding up of the Selling Party who hereby ratifies, confirms and agrees to ratify and confirm all that the Purchasing Party may lawfully do or cause to be done by virtue of this provision.  The Selling Party hereby irrevocably consents to any transfer of the Purchased Interest or any part thereof made pursuant to these provisions.

(h)	If the Purchasing Party fails to close at the Date of Closing, then thirty (30) days later the Purchasing Party shall be obligated to sell his Interest to the Selling Party for 80% of the Purchase Price as set out in this Section in the Offer with the 20% reduction being liquidated damages and not a penalty.

5.3	Forced Listing and Sale

	Any Co-Tenant ("Selling Investor") may have the Property appraised, at his own expense, by a qualified appraiser ("Appraiser") acceptable to the Operations Manager, such approval not to be unreasonably withheld. If the Appraiser’s report is acceptable to the Operations Manager, such approval not to be unreasonably withheld, and if the appraised value of the Property exceeds by twenty-five (25%) percent the sum of the initial purchase price plus all expenses to the date of closing inclusive of all closing expenses which shall include for the purposes of this calculation a deemed six percent (6%) real estate commission ("Adjusted Value"), then the Selling Investor may direct in writing to the other Co-Tenants that the Property be forthwith placed on the market for sale, using an MLS Realtor chosen in the exclusive discretion of the Operations Manager. In the event that any other Co-Tenants do not wish to sell, they shall give notice to the Selling Investor within thirty (30) days stating their intention to buy the Selling Investor's Interest and, within a further ninety (90) days, pay to the Selling Investor his pro-rata share of the Adjusted Value.

	5.4	Transfers Upon Bankruptcy, Disability or Death

In the event that a Co-Tenant (“Insolvent Co-Tenant”)

(a)	becomes bankrupt or insolvent or takes the benefit of an Act now or hereafter in force for bankrupt or insolvent debtors;

(b)	makes an assignment for the benefit of creditors or a bulk sale other than a bulk sale that was consented to or did not require a consent;

(c)	a receiver-manager is appointed to control the conduct of the assets and business of a Co-Tenant or seizes the assets of the Co-Tenant;

(d)	makes a proposal to creditors under the Bankruptcy and Insolvency Act or the Companies Creditors Arrangement Act;

(e)	becomes a patient in a psychiatric facility and becomes certified as not competent to manage his or her property under the Mental Health Act; or

(f)	dies or becomes missing for a period of twelve (12) consecutive months (in which event that Co-Tenant shall be presumed dead)

then, in the event of such occurrence, any other Co-Tenant or Co-Tenants may, by written notice delivered in accordance with the provisions herein, elect to purchase the Interest of the Insolvent Co-Tenant at a price equal to the fair market value as at the date of the occurrence of any event of bankruptcy, as above defined, the date the Co-Tenant becomes a patient in a psychiatric facility or becomes certified as not competent to manage his or her property under the Mental Health Act, the date of death or presumption of death, determined by appraisal.

5.5	Transfers under the Family Law Act

If, at any time while this Agreement is in effect, an order is made by a court of competent jurisdiction pursuant to the provisions of the Family Law Act (Ontario), the Succession Law Reform Act (Ontario) or the Divorce Act (Canada) (in each case, as amended or replaced from time to time), or equivalent legislation in other jurisdictions (an "Order"), and such Order purports to determine the entitlement of the spouse, former spouse or dependant of an individual Co-Tenant to a payment in respect of the net family property of such individual Co-Tenant or to support from such individual Co-Tenant (the "Selling Party"), and the Selling Party shall not have produced evidence reasonably satisfactory to the other Co-Tenants within five (5) calendar days of the date on which such Order is made, that the claims of such spouse, former spouse or dependant to such payment or support can be settled without in any way, directly or indirectly, affecting, encumbering or interfering with the Interest of the Selling Party, then the Selling Party shall, on or before the expiration of such period of five (5) calendar days, give written notice (a "Triggering Notice") to the other Co-Tenants of the existence of such Order. The other Co-Tenants shall have the right but not the obligation (the "Purchase Option"), exercisable by written notice to the Selling Party within one hundred and twenty (120) calendar days after the delivery of the Triggering Notice, to purchase at a price determined pursuant to appraisal, all, but not less than all, of the Interest owned by the Selling Party. If such Selling Party shall fail to deliver a Triggering Notice on a timely basis, the other Co-Tenants may exercise their right to purchase all of the Interest owned by the Selling Party by written notice to the Selling Party within one hundred and twenty (120) calendar days after the other Co-Tenants have received actual knowledge of the existence of such Order.

5.6	Breach

If a Co-Tenant fails to advance monies to the Co-Tenancy, as required by this Agreement, or encumbers the Property, save as expressly permitted, or fails to remove a lien from the Property or otherwise be in default under this Agreement, the same shall constitute default. A Co-Tenant not in default may, by written notice delivered personally, to the Co-Tenant in default, specify details of the default and require they be cured within thirty (30) days.

The Co-Tenant not in default shall, if the event or events of default are not cured within the time limited, have the option to purchase all of the Interest of the Co-Tenant in default at a price equal to the fair market value as at the date of delivery of the written notice which price, failing agreement between them, shall be determined by appraisal.

The option of the Co-Tenant not in default may be exercised by written notice delivered personally to the Co-Tenant in default within thirty (30) days of the expiration of the period limited to cure the event or events of default and the transaction of sale and purchase shall be completed within thirty (30) days thereafter. The purchase price, subject to usual adjustments, shall be paid by cash.

5.7	Appraisal

(a)	Where the value of a Co-Tenant’s Interest in the Co-Tenancy is to be determined under this Agreement by its fair market value, and specifically with reference to paragraphs 5.3, 5.4 and 5.5 herein, the same shall be determined by the accountant then appointed by the Co-Tenants to be the accountant of the Co-Tenancy.

(b)	In determining fair market value of a Co-Tenants Interest in the Co-Tenancy, the accountant shall take into consideration:

	(i)	the fair market value, of all Assets and liabilities of the Co-Tenancy and all entries in the books of account of the Co-Tenancy, but good will shall be ignored; and

	(ii)	the fair market value of the Property as determined by appraisal.

(c)	The Investors involved in the buy sell transaction shall agree on who the appraiser shall be, failing such agreement within 5 business days, the appraiser shall be appointed by the accountant.

(d)	The date at which the determination of fair market value is to be made shall be the date at which the right or option to purchase a Co-Tenant’s Interest in the Co-Tenancy first arises.

(e)	The fair market value of any Co-Tenant’s interest in the Property shall be equal to the fair market value of the Property as determined by the appraisal, multiplied by the proportion that the Co-Tenant’s interest is of the entire Property.

(f)	The accountant and the appraiser shall have access to all books of account, records, vouchers, cheques, papers and documents of each of the Co-Tenants which may relate to the Property or the Co-Tenancy. Each Co-Tenant shall cooperate with the accountant and the appraiser for the purpose and provide to them all information and documents requested by them. In the determination of an appraisal, the appraiser shall have regard to all relevant considerations including historic and potential performance and shall make all proper and necessary allowances for contingent or other liabilities, but shall make no allowances for goodwill. The appraiser shall have the right to retain the experts as he may deem necessary to assist him in making his appraisal. Where the subject of an appraisal is the value of a Co-Tenants interest in the Property, the appraiser shall first determine the fair market value of the whole Property.

(g)	The fair market value determined in the foregoing manner shall be conclusive on the Co-Tenants and judgement on them may be entered in any court having jurisdiction. The costs and expenses of the determination, including the fees of the accountant and the appraiser, shall be borne by (i) the Co-Tenant who has initiated a forced listing pursuant to Article 5.3 or (ii) the Co-Tenant in respect of whom an event of bankruptcy or of default has occurred. 

5.8	Guarantees

If, on the sale of any Interest, the vendor shall be contingently liable or responsible as guarantor of any indebtedness, liability or obligation of the Co-Tenancy or the Property, the purchaser of such Interest shall use his best efforts to secure the release of the vendor from any and all such guarantees, failing which the purchaser shall deliver indemnities and security therefor to the vendor as the vendor may reasonably require.

5.9	Indebtedness

If, on the date of closing of any Interest:

(a)	the vendor is indebted to the Co-Tenancy or any other Party, the purchaser shall pay on the date of closing to the Co-Tenancy or such other Party such amount of the purchase price as will discharge such indebtedness owing by the vendor;

(b)	a purchaser is indebted to the vendor, then the amount of such indebtedness shall at the option of the vendor be payable on the date of closing;

(c)	the Co-Tenancy is indebted to the vendor, then such indebtedness immediately prior to sale shall be added to the purchase price payable for the Interest and shall be payable in the same manner as the payment terms of the purchase price for the Interest provided however that the vendor shall deliver to the purchaser a valid assignment of such indebtedness.

5.10	Non Arm's Length Sale

Upon written approval by all the Co-Tenants, such approval not to be unreasonably withheld, any Co-Tenant shall be entitled to sell transfer, assign, or otherwise dispose of any or all of his Interest to (i) a direct family member (ii) a wholly owned corporation or (iii) any other person, corporation, trust or other entity deemed non arm’s length. In the event of such disposition, the disposing Co-Tenant shall remain fully liable and bound by the provisions of this Agreement.

5.11	Ordinary Course of Business

If a valid notice pursuant to this Agreement has been made, until the sale of any Interest contemplated herein is completed, neither of the Co-Tenants shall do or cause or permit anything to be done affecting the Property or the Co-Tenancy, except in the ordinary course of business of the Co-Tenancy.

5.12	Resignation

On completion of any sale required under this Agreement of all the Interest of a Co-Tenant, that Co-Tenant shall retire from the Co-Tenancy and shall execute any and all documents necessary to give effect thereto including all documentation required to remove any interest he has in the Property or the Co-Tenancy.

ARTICLE SIX- ACCOUNTING AND DISTRIBUTIONS

6.1	Location and Rights of Inspection

The Co-Tenancy’s books and records of account shall be kept at all times at the place or places selected by the Operations Manager from time to time.  Any Co-Tenant or his authorized representative shall have the right ("Right of Inspection") to inspect, examine and copy the books, records, files, securities and other documents of the Co-Tenancy at reasonable times at his own expense.

6.2	Bank Accounts

A bank account shall be maintained with a Canadian Chartered Bank and such account shall be the account of the Co-Tenancy. All monies and credit received at any time by the Operations Manager, the Trustees or by the Co-Tenancy shall be deposited into such account, and all payments required or to be made by the Operations Manager, the Trustees or by the Co-Tenancy shall be made by cheque or electronic debit drawn on the same account. Unless otherwise agreed or specified in writing by the Co-Tenants, the Operations Manager shall have signing authority for such account.

6.3	Expenses

Expenses payable or paid, and losses, costs, damages and liabilities incurred by the Co-Tenancy shall be:

	(a)	first, paid from receipts of the Co-Tenancy;

	(b)	secondly, paid by each Co-Tenant in the same proportion as his or her Interest.

6.4	Allocations and Distributions

After allowing for reserves as deemed prudent by the Co-Tenants for operating losses, capital improvements and working capital (currently deemed to be $ __________________________), cash available for distribution, after payment of all expenses of the Co-Tenancy, shall, unless otherwise determined by the Co-Tenants, be distributed monthly in accordance with the following priorities:

(a)	if it is rental income surpluses or funds realized through increased mortgaging, pro-rata on each Co-Tenants’ Percentage Participation; and

(b)	if it is capital appreciation surpluses realized through sale, except as herein otherwise provided, in the following order:

	(i)	firstly, Initial Financial Contributions shall be repaid;
	(ii)	secondly, Additional Financial Contributions shall be repaid;
(ii)	thirdly, the balance shall be distributed pro-rata in accordance with the Co-Tenants’ Percentage Participation.

ARTICLE SEVEN - GENERAL PROVISIONS

7.1	Complete Agreement

This Agreement constitutes the entire agreement between the Co-Tenants and supersedes all agreements, representations, warranties, statements, promises and understandings, oral or written, with respect to the subject matter hereof, and no Co-Tenant shall be bound by nor charged with any oral or written agreements, representations, warranties, statements, promises or understandings not specifically set forth in this Agreement or the Schedules thereto.

7.2	Amendment

This Agreement may not be amended, altered or modified except by a written agreement signed by all of the Co-Tenants.

7.3	Addresses

All notices under this Agreement shall be in writing and shall be delivered to the Parties at the addresses set out on page one of this Agreement by (i) hand delivery (including delivery by a commercial courier service) (ii) facsimile transmission or (iii) prepaid registered mail.

7.4	Effective Date

All notices are deemed to have been received (i) if by hand delivery, on the date of delivery (ii) if by facsimile transmission, on the date of transmission and (iii) if by prepaid registered mail, three full business days after mailing.  If a mail strike or other postal disruption occurs anywhere in Canada anytime during the said three-day period, then the mail method of delivery is not permitted and one of the other methods must be employed.

7.5	Deemed Receipt

Valid delivery and receipt shall be deemed to have occurred in cases of (i) rejection or other refusal by the intended recipient to accept or (ii) inability to deliver because of changed address of which no notice was given as provided in the following section.

7.6	Change of Address

By giving to the other Co-Tenants at least five (5) days' written notice, the Co-Tenants shall have the right from time to time to change their respective address to any address within Canada.

7.7	Validity

In the event that any provision of this Agreement shall be held to be invalid or unenforceable, the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Agreement.

7.8       Currency

Unless otherwise specified, all references herein to currency shall be references to currency of Canada.

7.9	Survival of Rights

This Agreement shall be binding upon and enure to the benefit of the Co-Tenants, their heirs, executors, legal representatives and permitted successors or assigns.

7.10	Governing Law

This Agreement has been entered into in the Province of Ontario and all questions with respect to this Agreement and the rights and liabilities of the Co-Tenants shall be governed by the laws of that Province.

7.11	Time

Time shall be and remain of the essence.

7.12	Further Assurances and Documents

Each Co-Tenant agrees that he will and his heirs, executors, administrators, successors and permitted assigns shall do all acts and things and to make, execute and deliver such written instruments, as shall from time to time be reasonably required in order to carry out the terms, provisions and intentions of this Agreement.

	7.13	Headings not Part of this Agreement

	Headings have been inserted for reference only and shall have no effect whatsoever on the meaning, construction or interpretation of the provisions hereof.

	7.14	Gender

	The masculine shall include the feminine and the neuter and the singular shall include the plural and vice-versa, unless the context otherwise requires.

	7.15	Disputes

	In the event that any dispute, whether based on contract, tort, statute or other legal or equitable theory should arise out of or be related to this Agreement or any subsequent agreement between the Co-Tenants, the Co-Tenants agree to use the following procedure as a condition precedent to either party pursuing other available remedies:

(a)	a meeting shall be promptly held between the Co-Tenants to attempt in good faith to negotiate a resolution to the dispute;

(b)	if within thirty (30) days after such meeting, the Co-Tenants have not succeeded in negotiating a resolution of the dispute, they agree to submit the dispute to mediation and to bear equally the cost of mediation;

(c)	the parties will jointly appoint a mutually acceptable mediator, seeking assistance from their solicitors or a qualified appointing agency, if they have been unable to agree upon such appointment within twenty (20) days from the conclusion of the negotiation period.

7.16	Additional Remedies

The rights and remedies of the Parties shall not be mutually exclusive, that is, the exercise of one or more of the provisions of this Agreement shall not preclude the exercise of any other provisions. Each of the Parties confirms that damages at law may be an inadequate remedy for a breach or threatened breach of any provisions of this Agreement, the respective rights and obligations shall be enforceable by specific performance, injunction or other equitable remedy, but nothing contained in this agreement shall limit or affect any rights or rights at law or by statute or otherwise of any party aggrieved as against the other for breach or threatened breach of any provision, it being the intention of this paragraph to make clear the agreement of the Parties that the respective rights and obligations of the Parties shall be enforceable in equity as well as at law or otherwise.

7.17	Business Day

Business day shall be any day other than Saturday, Sunday or any day on which the principal banker of the Co-Tenancy is not open for business in the ordinary course.

	7.18	Counterpart

	This Agreement may be executed in counterpart in the same form and such parts so executed shall together form one original agreement and such parts shall be read together and construed as if all Parties had executed one agreement and that all counterparts shall be deemed dated the Date of Agreement.

	7.19	Waiver

	No waiver by any Party of any breach of any condition, covenant or agreement hereof shall constitute a waiver of any other condition, covenant or agreement hereof.

7.20	Attorney

	Whenever pursuant to this Agreement a Co-Tenant acquires a right including but not limited to the transfer of an Interest to his name, or as he may direct, each Co-Tenant hereby irrevocably appoints the purchaser as his attorney to transfer all or any of the Interest beneficially owned directly or indirectly by such Co-Tenant and to execute all documents and assurances as may be necessary to give effect to such right or transfer with full power of substitution in the premises, and each of the Co-Tenants hereby agrees to save and hold harmless such attorney with respect thereto, provided that the attorney shall have acted in good faith.

	7.21	Decision to Invest

	The Co-Tenants confirm that their respective decisions to invest in this Co-Tenancy was made on the basis of:

	(i)	the facts of the property which the Co-Tenants hereby confirm that they have independently verified;
	(ii)	the provisions of this Agreement which the Co-Tenants hereby confirm that they fully understand; and
	(iii)	the advice received by the Co-Tenants from their own chosen professional and personal advisors, competent in the Co-Tenant’s opinion to offer said advice and totally independent of the other Co-Tenants.

	7.22	Independent Legal Advice

	The Co-Tenants hereby acknowledge that they have been afforded the opportunity to obtain independent legal advice and are executing this Agreement of their own volition.

	7.23	Truth in Substance and in Fact

	The Co-Tenants hereby irrevocably and mutually acknowledge and declare that the statements contained in the recitals to this Agreement are true in substance and in fact.

	IN WITNESS WHEREOF the Parties have hereto affixed their hands and seals as of the Date of this Agreement.

SIGNED, SEALED & DELIVERED	)
in the presence of	)
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