OFFERING MEMORANDUM. No. These securities do not trade on any exchange or market.

Transcription

1 The information contained in this Offering Memorandum is intended only for the persons to whom it is transmitted for the purposes of evaluating the securities offered hereby. Prospective investors should only rely on the information in this Offering Memorandum. No persons are authorized to give any information or make any representation in respect of the Issuers or the securities offered herein and any such information or representation must not be relied upon. No securities regulatory authority or regulatory has assessed the merits of these securities or reviewed this Offering Memorandum. Any representation to the contrary is an offence. The information disclosed on this page is a summary only. Purchasers should read the entire Offering Memorandum for full details about the Offering. This is a risky investment. See Item 10 - Risk Factors. OFFERING MEMORANDUM Continuous Private Placement Offering May 17, 2017 Currently Listed or Quoted: Reporting Issuer: SEDAR Filer: Securities Offered: PULIS REAL ESTATE TRUST (the Trust ) and PULIS REAL ESTATE LP 2 (the Partnership ) (collectively, the Issuers ) Suite 200A, 1 Nelson Street W., Brampton, Ontario L6X 3E4 Tel: Fax: inquiry@pulisinvestments.com No. These securities do not trade on any exchange or market. No. Yes, but only as required pursuant to section 2.9 of National Instrument Prospectus Exemptions. The Issuers are not reporting issuers and do not file continuous disclosure documents on SEDAR that are required to be filed for reporting issuers. THE OFFERINGS Trust Units of the Trust and LP Units of the Partnership. Price per Security: The price per Trust Unit or LP Unit is $105. Minimum/Maximum Offering: Minimum Subscription Amount: Payment Terms: Proposed Closing Date: Purpose: Tax Consequences: Selling Agents: Resale Restrictions: Purchaser s Rights: There is no minimum offering. You may be the only purchaser. The maximum amount of funds to be raised under the Offerings is $50,000,000. Funds available under the Offerings may not be sufficient to accomplish our proposed objectives. $5,040, unless waived. Personal cheque, certified cheque, bank draft or wire transfer. The Offerings may be closed in one or more Closings on one or more dates as determined by the Administrator. The Partnership intends to acquire a portfolio of Properties located primarily in Ontario, and to a lesser extent in British Columbia, Alberta, Saskatchewan. The activities of the Trust are limited to investing in the Partnership. Investors that desire to invest through Deferred Plans will be required to invest in the Trust (which will in turn invest in the Partnership), whereas investors that do not need to invest through Deferred Plans may prefer to invest directly into the Partnership. See Item 8 - Canadian Federal Income Tax Consequences and Deferred Plan Eligibility and consult your own tax advisors. There are important tax considerations relating to the ownership of these securities. All investors will be responsible for the preparation and filing of their own tax returns in respect of this investment. See Item 8 - Canadian Federal Income Tax Consequences and Deferred Plan Eligibility. The Issuers may retain agents to sell Trust Units and LP Units. The Issuers may pay Selling Commissions in an amount up to 10% of the Gross Proceeds of the Offerings for Trust Units or LP Units sold by agents. The Issuers may also pay the Marketing Fee of up to 2% and a Trailer Fee of up to 1% of Gross Proceeds of the Offerings. See Item 9 - Compensation Paid to Sellers and Finders. You will be restricted from selling your Trust Units and LP Units for an indefinite period. There will be no market for the Trust Units and LP Units. See Item 12 Resale Restrictions. You have two Business Days to cancel your agreement to purchase Trust Units or LP Units. If there is a misrepresentation in this Offering Memorandum, you have the right to sue either for damages or to cancel your agreement. See Item 13 - Purchasers Rights. CAL01: : v13

2 TABLE OF CONTENTS ITEM 1 - USE OF AVAILABLE FUNDS Available Funds Use of Available Funds Reallocation Working Capital Deficiency ITEM 2 - STRUCTURE OF THE ISSUERS Structure of the Issuer The Trust and Trustee Management of the Trust Administrator The Partnership Management of the Partnership General Partner Conflicts of Interest Policies ITEM 3 - BUSINESS OF THE ISSUERS Business of the Trust Business of the Partnership Development of Business Current and Target Properties Hayden Street Property Acquisition York Road Property Acquisition King Street Property Acquisition Investment Philosophy Investment Mandate Investment Strategy Investment Process Disposition Guidelines Debt Financing Cash Flow Payments Property Management Approvals and By-Laws Long-Term Objectives Short-Term Objectives Insufficient Funds ITEM 4 - MATERIAL AGREEMENTS Declaration of Trust Partnership Agreement Funding Agreement Transfer Agent Agreement Third Party Administrator - Pinnacle Fund Agreement Administration Agreement Distribution Reinvestment Plan Hayden Street Property Acquisition Agreement Hayden Street Property Credit Facility Agreement York Road Property Acquisition Agreement York Road Property Credit Facility Agreement King Street Property Acquisition Agreement King Street Property Credit Facility Agreement ITEM 5 - DIRECTORS, MANAGEMENT, PROMOTERS AND PRINCIPAL HOLDERS Compensation and Securities Held Management Experience Penalties, Sanctions and Bankruptcy ITEM 6 - CAPITAL STRUCTURE Capital Long-Term Debt Securities Prior Sales ITEM 7 - DESCRIPTION OF UNITS Terms of Trust Units Terms of LP Units Subscription Procedure ITEM 8 - CANADIAN FEDERAL INCOME TAX CONSEQUENCES AND DEFERRED PLAN ELIGIBILITY Income Tax Consequences Relating to the Trust Eligibility for Investment in Trust Units by Deferred Plans Income Tax Consequences Relating to the Partnership LP Units are Not Eligible for Deferred Plans ITEM 9 - COMPENSATION PAID TO SELLERS AND FINDERS ITEM 10 - RISK FACTORS ITEM 11 - REPORTING OBLIGATIONS ITEM 12 - RESALE RESTRICTIONS General Restricted Period Manitoba Resale Restrictions ITEM 13 - PURCHASERS RIGHTS Two Day Cancellation Right Statutory Rights of Action in the Event of a Misrepresentation Rights of Purchasers in Alberta Rights of Purchasers in British Columbia Rights of Purchasers in Saskatchewan Rights of Purchasers in Manitoba Rights of Purchasers in Ontario Rights of Purchasers in Québec Rights of Purchasers in Nova Scotia Rights of Purchasers in New Brunswick Rights of Purchasers in Newfoundland and Labrador, Northwest Territories, Nunavut, Yukon or Prince Edward Island ITEM 14 - FINANCIAL STATEMENTS... F-1 ITEM 15 - DATE AND CERTIFICATE... C-1 EXHIBIT A SUBSCRIPTION AGREEMENT... A-1 EXHIBIT B MARKETING MATERIALS... B-1 2

3 FORWARD-LOOKING STATEMENTS Certain information regarding the Issuers set forth in this Offering Memorandum, including the Issuers future plans and business, contains forward-looking statements that involve substantial known and unknown risks and uncertainties. The use of any of the words anticipate, believe, continue, estimate, expect, intend, plan, potential, predict, project, seek or other similar words, or statements that certain events or conditions may, might, could, should or will occur are intended to identify forward looking statements. Such statements represent the Issuers internal projections, estimates or beliefs concerning, among other things, future growth, results of operations, business opportunities, future expenditures, plans for and results of business prospects and opportunities. These statements are only predictions and actual events or results may differ materially. Although that the expectations reflected in the forward-looking statements are reasonable, future results, levels of activity, performance or achievement cannot be guaranteed since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Issuers actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Issuers. Forward-looking statements included in this Offering Memorandum include, but are not limited to, statements with respect to: use of proceeds of the Offering; the business to be conducted by the Issuers; the ability to make and the timing and payment of distributions; payment of fees; the Issuers business objectives; projections relating to increased values of the Properties, targeted rates of return and CAP Rates; treatment under governmental regulatory regimes and tax laws; financial and business prospects and financial outlook; timing of dissolution of the Issuers; possibility of extension of the dissolution date of the Issuers; results of operations, the timing thereof and the methods of funding; intentions or expectations about the Issuers purchasing (or otherwise investing in), renovating, upgrading, and repositioning of the Properties including the Hayden Street Property, York Road Property and King Street Property; and the nature of the operations and business outlook of any Properties and the Issuers, including intentions and strategies for purchasing (or otherwise investing in), renovating, upgrading, and repositioning of the Properties, ongoing rental and management of the Properties portfolio, sources of funds, forecasts of capital expenditures, including the proposed management and investment strategy for the Hayden Street Property, York Road Property and King Street Property. These forward-looking statements are subject to numerous risks and uncertainties, including but not limited to the risks discussed under Item 10 - Risk Factors and other factors, many of which are beyond the control of the Issuers. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward-looking statements contained in this Offering Memorandum are based on a number of assumptions, including those relating to: the Issuers business strategy and operations; the ability of the Issuers to achieve or continue to achieve their business objectives; the Issuers expected financial performance, condition and ability to generate distributions; the Partnership, including its business strategy, operations, financial performance, condition and ability to generate distributions; factors and outcomes associated with the real estate sector in Ontario, Saskatchewan, Alberta and British Columbia, including competition and competitive conditions; concentration in a single industry (being the real estate business in Ontario, Saskatchewan, Alberta and British Columbia); possibility of substantial redemptions of securities; taxation of the Issuers; the impact on the Issuers of future changes in applicable legislation; application of legislation and regulations applicable to the Issuers; and availability of and dependence upon certain key employees of the General Partner. Although the forward-looking statements contained in this Offering Memorandum are based upon assumptions believed to be reasonable, the Issuers cannot assure investors that actual results will be consistent with these forward-looking statements. The Issuers have included the above summary of risks related to forward-looking information provided in this Offering Memorandum in order to provide investors with a more complete perspective on the Issuers current and future operations and such information may not be appropriate for other purposes. The Issuers actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Issuers will derive therefrom. These forward-looking statements are made as of the date of this Offering Memorandum and the Issuers disclaim any 3

4 intent or obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable laws. DOCUMENTS INCORPORATED BY REFERENCE Any documents of the type referred to in National Instrument Prospectus Exemptions to be incorporated by reference in an Offering Memorandum, including any marketing materials that are effective after the date of this Offering Memorandum and before the termination of the Offerings, are deemed to be incorporated by reference in this Offering Memorandum. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Issuers at Suite 200A, 1 Nelson Street W., Brampton, Ontario L6X 3E4. Any statement contained in this Offering Memorandum or in a document incorporated or deemed to be incorporated by reference herein is deemed to be modified or superseded for the purposes of this Offering Memorandum to the extent that a statement contained herein or in any other subsequently filed document which also is, or is deemed to be, incorporated by reference herein, modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement is not deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded is not deemed, except as so modified or superseded, to constitute a part of this Offering Memorandum. Information contained or otherwise accessed through the Issuers website or any website does not form part of this Offering Memorandum or the Offerings. GLOSSARY OF TERMS The following terms and abbreviations used throughout this Offering Memorandum have the following meanings: Acquisition Fee means an acquisition fee of 1.0% of the total purchase price of each of the Properties acquired by the Partnership and which is paid to the General Partner upon completion of the purchase of each of the Properties; Adjusted Net Operating Income means the remainder of the Net Operating Income of the Partnership, for the preceding 12-month period, after increasing Net Operating Income by the amount paid for the Properties repairs, improvements and renovations; Administration Agreement means the agreement, dated as of February 6, 2015, between the Administrator, the Trustee, and the Trust as amended, supplemented or amended and restated from time to time; Administrator means Pulis Real Estate Adminco Inc., as administrator of the Trust under the Administration Agreement, or such other person properly appointed as administrator of the Trust pursuant to the Declaration of Trust; affiliate has the meaning ascribed thereto in the Securities Act; Applicable Laws means all applicable provisions of law, domestic or foreign, including the Securities Act; Approvals means any directive, order, consent, exemption, waiver, consent order or consent decree of or from, or notice to, action by or filing with, any Governmental Authority; annuitant means the annuitant of a registered retirement income fund or registered retirement savings plan, the subscriber of a registered education savings plan the holder of a register disability savings plan or the holder of a tax-free savings account, as applicable; 4

5 associate has the meaning ascribed thereto in the Securities Act; Auditors means BDO Canada LLP or such other firm of chartered accountants as may be appointed as auditor or auditors of the Issuers from time to time; Available Funds means, at any time, the Gross Proceeds of the Offerings less any Selling Commissions and the expenses of the Offerings; Business Day means a day which is not a Saturday, Sunday or statutory holiday in the City of Brampton, in the Province of Ontario; CAP Rate means the capitalization rate of a property. Investors, lenders and real estate appraisers use the CAP Rate to estimate the purchase price for different types of income producing properties. A given market s CAP Rate is determined by evaluating the financial data of similar properties which have recently sold in such market. The CAP Rate calculation incorporates a property s selling price, gross rents, non-rental income, vacancy levels and operating expenses. CAP Rates are typically low during times of high demand for purchasing multi-family properties and, typically, high during times of low demand. CAP Rates often fluctuate with perceived shifts in the attractiveness of real estate investing in a particular geographic area; Cash Flow of the Trust means the cash flow of the Trust calculated in accordance with the Declaration of Trust and means the amount so calculated; Closing means a closing of the Offering; Counsel means a law firm (who may be counsel to the Administrator) acceptable to the Trustee; CRA means the Canada Revenue Agency; Declaration of Trust means the Declaration of Trust dated as of February 6, 2015, as amended effective May 17, 2017, as may be further amended, between Computershare Trust Company of Canada as Trustee, the Administrator, and the Trust Unitholders governing the business and affairs of the Trust, and as may be amended, supplemented or restated from time to time, a copy of which is available for examination at the offices of the Issuers; Deferred Plan means a trust governed by a registered retirement savings plan, registered retirement income fund, registered education savings plan, registered disability savings plan or tax-free savings account; discretion means sole, absolute and unfettered discretion; Distributable Cash means with respect to a particular period, the amount by which the Partnership s cash on hand or to be received in respect of that period (excluding any proceeds from any Financing) exceeds: (a) (b) (c) (d) unpaid administration expenses of the Partnership including any unpaid amounts with respect to the General Partner Fees; amounts required for the business and operations of the Partnership, including operating expenses and capital expenditures; amounts required in order to meet all debts, liabilities and obligations in respect of any Financing, including reserves to ensure compliance with agreements to which the Partnership is subject; and any amounts which the General Partner in its Discretion determines is necessary to satisfy the Partnership s current and anticipated requirements of the Partnership and its commitments and anticipated commitments, debts, liabilities and obligations and to comply with applicable laws; 5

6 Distribution Payment Date means, in respect of a Distribution Period, on the tenth Business Day immediately following the end of the Distribution Period or such other date determined from time to time by the Administrator in the case of the Trust, or the General Partner, in the case of the Partnership; Distribution Period means each quarterly period ending on March 31, June 30, September 30 and December 31, or such other periods as may be determined from time to time by the Administrator, from and including the first day thereof and to and including the last day thereof; Distribution Record Date means the last Business Day of each Distribution Period, or such other date determined from time to time by the Administrator in the case of the Trust, or the General Partner, in the case of the Partnership; DRIP means a distribution reinvestment plan. See Item Distribution Reinvestment Plan ; DRIP Enrollment Form The enrollment form indicating that the Trust Unitholder or Limited Partner elects to participate in the DRIP (which may be included in the investor s subscription agreement); DRIP Unit Price A price per Trust Unit or LP Unit equal to the most recent subscription price per Trust Unit or LP Unit that such units were offered to investors for purchase; Eligible Holder means Trust Unitholders or Limited Partners (as applicable) who are Canadian residents. EMD means a person or company registered as an exempt market dealer pursuant to NI ; Extraordinary Resolution means a resolution proposed to be passed as a special resolution at a meeting of Trust Unitholders (including an adjourned meeting) duly convened for that purpose and held in accordance with the provisions of the Declaration of Trust and passed by more than 66⅔% of the votes cast on such resolution by Trust Unitholders represented in person or by proxy at the meeting or a written resolution in one or more counterparts signed by Trust Unitholders holding in the aggregate 66⅔% or more of the votes attaching to the Trust Units; Fair Market Value of the Partnership means the fair market value of Partnership, including capital received for the issuance of LP Units, and, when the reference so requires, of investments, determined by reference to IAS 40 and by the most recent fair market valuation conducted by an independent third-party selected by the General Partner in its sole discretion (or, if the applicable Property was acquired by the Partnership after the most recent annual valuation prepared for the Partnership, then the value shall be any valuation thereof obtained by the General Partner) less all liabilities, costs, and expenses accrued or payable of every kind and nature, and distributions due but not yet paid or made; Fair Market Value of the LP Unit at a particular time, means the amount of the Fair Market Value of the Partnership divided by the number of issued and outstanding LP Units at that time; Fair Market Value of the Trust mean the fair market value of the Trust s investment in the Partnership plus the value of the Trust s investment assets and the Trust s other assets, less all liabilities, costs, and expenses accrued or payable of every kind and nature, and distributions due but not yet paid or made; Fair Market Value of the Trust Units at a particular time, means the amount of the Fair Market Value of Trust divided by the number of issued and outstanding Units at that time; Financing means any credit facility granted or extended to or for the benefit of, or investment by way of debt in, the Partnership whereby or pursuant to which money, credit or other financial accommodation has been or may be provided, made available or extended to the Partnership by way of borrowed money, the purchase of debt instruments or securities, bankers acceptances, letters of credit, overdraft or other forms of credit and financial accommodation, and includes any and all trust deeds, indentures, mortgages, bonds or debentures (whether issued and delivered as security or sold to a purchaser), security agreements and other deeds, instruments or documents in respect thereof; 6

7 Fiscal Year means a fiscal year of the Trust (or portion thereof), which ends on December 31 in each calendar year, except in the case of a deemed year end on the dissolution of the Trust; Funding Agreement means the agreement entered into between the Trust and the Partnership which provides that the Partnership will pay all costs, fees, Selling Commissions and expenses incurred by the Trust in connection with the Trust Offering; General Partner means Pulis Real Estate GP2 Inc., a corporation established under the laws of the Province of Ontario, or any successor or permitted assignee thereof; General Partner Fees means the Management Fee, Acquisition Fee and the Incentive Fee; Governmental Authority means (i) any nation, province, territory, state, county, city or other jurisdiction; (ii) any federal, provincial, territorial, state, local, municipal, foreign or other government; (iii) any governmental or quasi-governmental authority of any nature (including any agency, branch, department, board, commission, court, tribunal or other entity exercising governmental or quasi-governmental power); (iv) anybody exercising, or entitled or purporting to exercise, any administrative, executive, judicial, legislative, regulatory or taxing authority or power; or (v) any official of the foregoing; Gross Proceeds means, at any time, the aggregate gross proceeds of the Trust Offering or the Partnership Offering, as applicable; GST means any applicable Canadian federal or provincial goods and services tax or harmonized sales tax; Hayden Street Property means the real property described as PT LT 14, CON 6 Barton, AS IN HL & HL272886; Hamilton, with a street address of: Hayden Street, Hamilton, Ontario, Canada. See also Item Hayden Street Property Acquisition ; Hayden Street Property Acquisition Agreement means the purchase and sale agreement dated December 5, 2015, as may be subsequently amended from time to time, between the Partnership, as buyer, and an arm s length seller, whereby the Partnership acquired the Hayden Street Property, as more particularly described under Item Hayden Street Property Acquisition and Item 4.8 Hayden Street Property Acquisition Agreement ; Incentive Fee means an amount equal to 7.0% of the Adjusted Net Operating Income to be paid in Trust Units, from the previous Fiscal Year; include, including and includes mean include, without limitation, including, without limitation and includes without limitation, respectively; Income of the Trust for any taxation year of the Trust means the net income for the year determined pursuant to the provisions of the Tax Act (other than subsection 104(6) and paragraph 82(1)(b)) having regard to the provisions thereof which relate to the calculation of income of a trust, and taking into account such adjustments thereto as are determined by the Administrator in respect of dividends received from taxable Canadian corporations, amounts paid or payable by the Trust to Trust Unitholders and such other amounts as may be determined in the discretion of the Administrator; provided, however, that capital gains and capital losses shall be excluded from the computation of net income; Initial Trust Unit means the one Trust Unit issued to Brian Pulis upon settlement of the Trust; Insider of the Trust means a person who would be an insider of the Trust as defined in Regulation 4803(1) of the Tax Act if the references therein to corporation were read as references to the Trust; Issuers means, collectively, the Trust and the Partnership; 7

8 King Street Property means the real property described as PT LT 33, Con 3 Saltfleet, as in HL232934, except HL285458, HL317477, HL & HS322115; HAMILTON PIN No (LT) with a street address of: 2200 King Street East, Hamilton, Ontario, Canada. See also Item King Street Property Acquisition ; King Street Property Acquisition Agreement means the purchase and sale agreement dated January 6, 2017, as may be subsequently amended from time to time, between the Partnership, as buyer, and an arm s length seller, whereby the Partnership acquired the King Street Property, as more particularly described under Item King Street Property Acquisition and Item 4.12 King Street Property Acquisition Agreement ; Limited Partner means any person who is admitted to the Partnership as a limited partner for as long as they are a registered holder of at least one LP Unit; LP Unit means a limited partnership unit representing a beneficial interest in the Partnership issued from time to time in accordance with the Partnership Agreement and having the rights, privileges, restrictions and conditions set out in the Partnership Agreement; LP Unit Redemption Price has the meaning ascribed thereto under Item 4.2 Partnership Agreement LP Unit Redemptions (Cash and LP Units) ; Management Fee means the management fee of 1.5% of Fair Market Value of the Partnership payable by the Partnership to the General Partner, estimated and payable quarterly. See Item Partnership Agreement Fees of General Partner ; Marketing Fee means the fee, up to a maximum of 2% of the Gross Proceeds raised in the Offerings, payable by the Trust for marketing services to marketing agents, including Pinnacle Wealth Brokers Inc.; Maximum Offering means the maximum offering of Trust Units and LP Units having an aggregate purchase price of $50,000,000; Net Operating Income means the Partnership s operating income, for the preceding Fiscal Year, after credit losses and operating expenses (management, legal, accounting, insurance, janitorial, repairs, maintenance, supplies, utilities, property taxes) are deducted, but before amortization of loan payment, income taxes, capital expenditures, principal and interest, or depreciation are deducted; Net Realized Capital Gains of the Trust for any taxation year of the Trust shall be determined as the amount, if any, by which the aggregate of the capital gains of the Trust for the year exceeds: (i) (ii) (iii) the aggregate of the capital losses of the Trust for the year; any capital gains which are realized by the Trust as a result of a redemption of Trust Units; and the amount determined by the Administrator in respect of any net capital losses for prior taxation years which the Trust is permitted by the Tax Act to deduct in computing the taxable income of the Trust for the year; NI means National Instrument Registration Requirements, Exemptions and Ongoing Registrant Obligations ; Non-Registered Unitholder means beneficial holders of Trust Units or LP Units who hold such units through an intermediary such as a financial institution, broker or nominee; Non-Resident means a Person who is not a resident of Canada and a partnership that is not a Canadian partnership, for purposes of the Tax Act; 8

9 OBCA means the Business Corporations Act (Ontario), as amended from time to time; Offerings means, collectively, the Trust Offering and the Partnership Offering; Offering Memorandum means this offering memorandum of the Issuers as the same may be amended, supplemented or replaced from time to time; Ordinary Resolution a resolution proposed to be passed at a meeting of Trust Unitholders or Limited Partners, as applicable, (including an adjourned meeting) duly convened and held and passed by more than 50% of the votes cast on such resolution by Trust Unitholders or Limited Partners, as applicable, represented in person or by proxy at the meeting or a written resolution in one or more counterparts signed by Trust Unitholders or Limited Partners, as applicable, holding in the aggregate 50% or more of the votes attaching to the Trust Units; Participant means an Eligible Holder who has elected, in accordance with the terms of the DRIP, to participate in the DRIP and includes both Registered Participants and Non-Registered Participants; Partnership means Pulis Real Estate LP 2, a limited partnership established under the laws of the Province of Ontario, or any successor or permitted assignee thereof; Partnership Act means the Limited Partnerships Act (Ontario) as amended and in force from time to time; Partnership Agreement means the amended and restated limited partnership agreement dated June 20, 2014, as amended effective May 17, 2017, as may be further amended, respecting the Partnership, between Pulis Real Estate GP2 Inc. (as General Partner), Pulis Real Estate Trust (as a Limited Partner) and the Limited Partners, as may be further amended, supplement or restated from time to time, a copy of which is available for examination at the offices of the Issuers; Partnership Offering means the private placement of the LP Units by the Partnership under this Offering Memorandum; Permitted Investments means all property, assets and rights which may be held from time to time by a mutual fund trust under the provisions of subsection 132(6) of the Tax Act, including without limitation: (i) (ii) (iii) (iv) (v) (vi) (vii) the initial contribution made to the Trust by the initial Trust Unitholder; all funds realized from the sale of Trust Units; securities in the capital of corporations and interests in limited partnerships or trusts, including without limitation the Partnership; debt or debt instruments issued by any issuer; rights in and to any real property, provided it is capital property; any proceeds of disposition of any of the foregoing property; and all income, interest, profit, gains and accretions and additional rights arising from or accruing to such foregoing property or such proceeds of disposition; Person means any individual, company, corporation, limited partnership, general partnership, firm, joint venture, syndicate, trust, joint stock company, limited liability company, association, bank, pension fund, business trust or other organization, whether or not a legal entity, and any government agency or political subdivision thereof or any other form of entity or organization; 9

10 Properties means real properties, including, residential real estate properties, single family houses, row houses, townhouses, condominium properties, multiplexes, apartment buildings and mixed-use commercial/residential buildings; Proportionate Interest of any amount at any time, means a fraction equal to the number of LP Units of which a limited partner is the registered holder at that time divided by the total number of issued and outstanding LP Units at that time; Proposed Amendments means all specific proposals to amend the Tax Act that have been publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof; pro rata share of any particular amount in respect of a Trust Unitholder at any time shall be the product obtained by multiplying the number of Trust Units that are outstanding and owned by that Trust Unitholder at such time by the amount obtained when the particular amount is divided by the total number of all Trust Units that are issued and outstanding at that time; Pulis Parties means the General Partner, any affiliates and subcontractors of the General Partner, the Administrator, and any directors, officers, employees and individual shareholders of the foregoing, and Pulis Party means any one of them; Redemption Notes means promissory notes issued to Trust Unitholders or Limited Partners as payment for the redemption price for Trust Units or LP Units in the circumstances where Trust Units or LP Units are not redeemed for cash; Registered Participant means a Participant who is a registered holder of Trust Units or LP Units at any time and from time to time, as shown on the register maintained by or on behalf of the Trust or Partnership (as applicable) for outstanding Trust Units or LP Units (as applicable) and who has enrolled in the DRIP; registered disability savings plan has the meaning ascribed to it in the Tax Act; registered education savings plan has the meaning ascribed to it in the Tax Act; registered retirement income fund has the meaning ascribed to it in the Tax Act; registered retirement savings plan has the meaning ascribed to it in the Tax Act; Securities Act means the Securities Act (Ontario), as amended from time to time, together with all regulations, rules, policy statements, rulings, notices, orders or other instruments promulgated thereunder; Selling Commissions means the commissions of up to 10% of the Gross Proceeds from the sale of the Trust Units or LP Units pursuant to the Offerings payable to parties who sell the Trust Units and who are entitled to receive such commissions under applicable securities laws. Where compensation is payable to an EMD, 2% shall be paid to the EMD and 8% shall be paid to the EMD dealing representative responsible for affecting the sale of the Trust Units or LP Units. See Item 9 - Compensation Paid to Sellers and Finders ; Special Resolution means: (i) (ii) a resolution approved through the votes cast in person or by proxy at a duly constituted meeting of Limited Partners or at any adjournment thereof called in accordance with the Partnership Agreement and representing 66⅔% or more of the votes attaching to the LP Units cast in person or by proxy; or a written resolution in one or more counterparts signed by Limited Partners holding in the aggregate 66⅔% or more of the votes attaching to the LP Units; 10

11 Subscription Agreement means a subscription agreement to be executed by each investor providing for the purchase by such investor of Trust Units or LP Units (as elected by the investor), in the form attached hereto as Exhibit A ; subsidiary has the meaning ascribed thereto in the Securities Act; Tax Act means the Income Tax Act (Canada) and the regulation thereunder, as amended from time to time; tax-free savings account has the meaning ascribed to it in the Tax Act; Third Party Administrator means such Person as may from time to time be appointed by the Administrator to provide certain services to either or both the Trust and the Administrator; Trailer Fee means a fee of up to 1% of Gross Proceeds realized on the sale of Trust Units or LP Units by the EMD, dealer or dealing representative for Trust Units or LP Units outstanding after the fifth year of such Unitholder s Subscription payable by the Trust or Partnership to such dealer; Transfer Agent means such Person as may from time to time be appointed by the Trust to act as registrar and transfer agent of the Trust Units and by the Partnership to act as registrar and transfer agent of the LP Units, together with any sub-transfer agent duly appointed by the Transfer Agent; Trust means Pulis Real Estate Trust, a trust constituted by the Declaration of Trust, as the same may be amended, supplemented or restated from time to time; Trust Offering means the private placement of the Trust Units by the Trust under this Offering Memorandum; Trust Property, at any time, shall mean the Permitted Investments that are at such time held by the Trustee for the benefit of the Trust Unitholders and for the purposes of the Trust under the Declaration of Trust; Trust Unit means a trust unit of the Trust which represents an interest in the Trust as provided for in the Declaration of Trust and has the rights, privileges, restrictions and conditions set forth in the Declaration of Trust and shall not include fractional Trust Units; Trust Unitholders means at any time the Persons who are the holders of record at that time of one or more Trust Units, as shown on the registers of such holders maintained by the Transfer Agent on behalf of the Trust; Trust Unit Redemption Price has the meaning ascribed thereto under Item 4.1 Declaration of Trust - Trust Unit Redemptions (Cash and Trust Units) ; Trustee means a trustee of the Trust at that time so long as such person remains as trustee, which is currently Computershare Trust Company of Canada; Trustee Fees means the annual fee of $10,000 paid from the Trust to the Trustee, for acting as a Trustee of the Trust; Unit Certificate means a certificate evidencing one or more Trust Units or LP Units (as applicable), issued and certified in accordance with the provisions of the Declaration of Trust or the Partnership Agreement, as applicable; York Road Property means the real property described as 89 York - LTS 6 & 8 Plan; Dundas City of Hamilton and York - LTS 12 & 14 PT LTS 11 & 13 Plan 1458, AS IN HL219532; Dundas City of Hamilton; Hamilton (PIN ) LT, with a street address of: 89, York Road, Hamilton, Ontario, Canada. See also Item York Road Property Acquisition ; 11

12 York Road Property Acquisition Agreement means the purchase and sale agreement dated August 15, 2016, as may be subsequently amended from time to time, between the Partnership, as buyer, and an arm s length seller, whereby the Partnership acquired the York Road Property, as more particularly described under Item York Road Property Acquisition and Item 4.10 York Road Property Acquisition Agreement ; and $ means Canadian Dollars. 12

13 ITEM 1 - USE OF AVAILABLE FUNDS 1.1 Available Funds The Available Funds and funds which will be available to the Issuers upon completing of the Offerings are as follows: Assuming Minimum Offering Assuming Maximum Offering A. Amount to be raised by the Offerings Nil $50,000,000 B. Selling commissions and Fees (1) Nil $6,000,000 C. Estimated Offering costs (including legal, accounting, advertising, audit, etc.) (2) Nil $2,000,000 D. Fee to the Administrator and Trustee (3) Nil $10,500 E. Available Funds: E = A - (B+C+D) Nil $41,989,500 F. Additional sources of funding required Nil $0 G. Working capital deficiency (4) Nil $0 H. Total: H = (E+F) G Nil $41,989,500 Notes: 1. The Issuers may pay a Selling Commission, Marketing Fee and Trailer Fee to selling agents. See Item 9 - Compensation Paid to Sellers and Finders. The number in this row represents Selling Commissions equal to 10% of the Gross Proceeds and Marketing Fees equal to 2% of Gross Proceeds for an aggregate of 12%. The Issuers will also pay a Trailer Fee of up to 1% of Gross Proceeds realized on the sale of Trust Units and LP Units by the EMD, dealer or dealing representative for Trust Units or LP Units outstanding after the fifth year of such holder s subscription. If the Trailer Fee is included then Selling commissions and fees would total $6,500,000 and Available Funds (in rows E and H) would total $42,489, All expenses, fees and Selling Commissions related to the Offerings will be borne by the Partnership pursuant to the terms of the Funding Agreement. The estimated costs of the Offerings disclosed above are the aggregate of the costs estimated to be associated with the Trust Offering and the Partnership Offering. 3. The Administrator will receive an annual fee of $500 and the Trustee will receive an annual fee of $10,000 from the Trust. These costs will be borne by the Partnership pursuant to the Funding Agreement. The General Partner is entitled to the General Partner Fees from time to time. See Item 4.2 Partnership Agreement Fees of General Partner. 4. As of May 17, 2017, the Trust and Partnership did not have a working capital deficiency. 1.2 Use of Available Funds The Trust will use the Gross Proceeds from the sale of Trust Units to purchase LP Units of the Partnership. The Partnership will pay the costs and fees set out in Item Available Funds above for both of the Trust and the Partnership. The Partnership expects to use the Available Funds as follows: 13

14 Description of intended use of Available Funds listed in order of priority Assuming Minimum Offering Assuming Maximum Offering Acquire real estate assets in Ontario, Saskatchewan, Alberta and British Columbia and pay ongoing fees and expenses (including General Partner Fees and Trailer Fees) (1)(2)(3)(4)(5) Nil $41,989,500 Notes: 1. The Offering is a blind pool offering. Other than described in Item 3.4 Current and Target Properties, the specific Properties in which the Partnership will invest have not been identified as of the date of this Offering Memorandum. See Item 10 - Risk Factors. 2. In the conduct of its business, the Partnership estimates that it will incur expenses relating to investors relations, marketing, directors compensation, accounting, audit, EMD due diligence, office rental, insurance, legal and travel expenses (collectively operating and administration expenses ), all of which will be paid from funds raised from the Offerings until such time as the Partnership receives a positive return from the disposition of Properties acquired by it. The Partnership estimates that if the Maximum Offering amount is raised and the Partnership fully deploys the maximum amount of working capital in the acquisition of Properties, that these expenses will total approximately $2,000,000. The total amount of administration and operating costs that will be incurred by the Partnership and the Trust are dependent upon: (i) the funds raised under the Offerings; (ii) the number and nature of Properties acquired by the Partnership; and (iii) external factors which cannot be anticipated or controlled by the Partnership or the Trust. As a result the Partnership and the Trust are unable to accurately estimate these costs at this time. 3. The General Partner is entitled to be paid the General Partner Fees from the Partnership from time to time. The General Partner Fees are the Management Fee (which is equal to 1.5% of Fair Market Value of the Partnership payable by the Partnership to the General Partner, estimated and payable quarterly), the Incentive Fee (which is equal to 7.0% of the Adjusted Net Operating Income to be paid in Trust Units, from the previous Fiscal Year) and the Acquisition Fee (equal to 1.0% of the total purchase price of each of the Properties acquired by the Partnership and which is paid to the General Partner upon completion of the purchase of each of the Properties) and which will be paid, as applicable, from funds raised from the Offerings until such time as the Partnership receives a positive return from the disposition of Properties acquired by it. The Partnership owes the General Partner $170,000 representing Management Fees and Acquisition Fees accrued to date, which amount is unsecured, non-interest bearing and is due on demand. All of the outstanding shares of the General Partner are beneficially owned or controlled, directly or indirectly by Brian Pulis and Kyle Pulis. See Item Partnership Agreement - Fees of General Partner. 4. The Issuers will pay a Trailer Fee of up to 1% of Gross Proceeds realized on the sale of Trust Units and LP Units by the EMD, dealer or dealing representative for Trust Units or LP Units outstanding after the fifth year of such holder s subscription. See Item 9 - Compensation Paid to Sellers and Finders. 5. The Partnership intends to use the first $10,000,000 of the Available Funds of the Partnership Offering realized by the Partnership Offering to invest solely in real estate assets in Ontario. The Partnership intends to invest no more than 20% of the Available Funds of the Partnership Offering realized by the Partnership Offering in excess of $10,000,000 in real estate assets located outside of Ontario. To date, all of the real estate assets acquired by the Partnership are located in Ontario. See Item Current and Target Properties. 1.3 Reallocation The Issuers intend to spend the Available Funds as stated in accordance with the disclosure in this Offering Memorandum. The Issuers will only reallocate Available Funds if approved by an Ordinary Resolution of the Trust Unitholders and Limited Partners. 1.4 Working Capital Deficiency As of May 17, 2017, the Issuers did not have a working capital deficiency. 14

15 ITEM 2 - STRUCTURE OF THE ISSUERS 2.1 Structure of the Issuer The following diagram illustrates the organizational structure of the Issuers. Administrator (1) Trustee (2) Trust Unitholders (3) Trust Trust Units General Partner (4) LP Units Limited Partners (3) Partnership LP Units Properties (5) Notes: 1. Pulis Real Estate Adminco Inc. is the Administrator of the Trust. 2. Computershare Trust Company of Canada is the Trustee of the Trust. 3. Investors under the Trust Offering will be Trust Unitholders and investors under the Partnership Offering will be Limited Partners. All of the Gross Proceeds of the Trust Offering will be used to acquire LP Units from the Partnership, which will use such proceeds to acquire Properties. 4. Pulis Real Estate GP2 Inc. is the General Partner of the Partnership. 5. The Partnership intends to acquire a portfolio of Properties located primarily in Ontario, and to a lesser extent in British Columbia, Alberta, Saskatchewan. The Offering is a blind pool offering. Other than described in Item 3.4 Current and Target Properties, the specific Properties in which the Partnership will invest have not been identified as of the date of this Offering Memorandum or, to the extent identified, any acquisition thereof is too speculative or remote as of the date of this Offering Memorandum for description thereof in this Offering Memorandum. See Item 10 - Risk Factors. 2.2 The Trust and Trustee The Trust is an unincorporated, open-ended, limited purpose trust formed under the laws of the Province of Ontario formed as of February 6, 2015 pursuant to the Declaration of Trust, made between Pulis Real Estate Adminco Inc. (the Administrator ), as Administrator and Computershare Trust Company of Canada (the Trustee ), as trustee, 15

16 and governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein. The principal place of business of the Trust is Brampton, Ontario, Canada. A copy of the Declaration of Trust is available upon request at the offices of the Issuers. Other than the initial Trust Unit, the beneficial interests in the Trust are divided into one class of Trust Units, which may be issued in an unlimited number of series of Trust Units. Under the Maximum Offering, the Trust may issue up to 500,000 Trust Units or such other amount as may be required to reach $50,000,000. However, the Trust reserves the right to increase this amount or conduct other offerings of Trust Units from time to time. Upon each closing under the Trust Offering, the Trust will use the entire Gross Proceeds raised from the issuance of Trust Units to acquire LP Units of the Partnership. All expenses of the Trust Offering and the Partnership Offering will be borne by the Partnership pursuant to the Funding Agreement. The Trustee, Computershare Trust Company of Canada, is a full service federally regulated trust company with offices in Calgary, Edmonton, Vancouver and Toronto. The Trustee carries on the business of corporate trust and related activities. Its registered head office is located in Calgary and it is registered or otherwise qualified to carry on the business of a trust company in all provinces and territories of Canada. As trustee of the Trust, the Trustee has the full authority and responsibility to manage the business and affairs of the Trust, however it has delegated to the Administrator such general authority, including day to day management decisions and authority over the investment of the Trust s assets and the distribution of Trust Units. The Trustee will be paid a fee of $10,000 per year by the Trust for acting as trustee and will be entitled to reimbursement of all expenses of the Trust incurred by it. 2.3 Management of the Trust Administrator The Administrator is a corporation established under the federal laws of Canada. The Administrator is owned and controlled by Ontario Inc. (as to a 50% interest) and Ontario Inc. (as to a 50% interest). These corporations are solely owned corporations, controlled by Brian Pulis and Kyle Pulis, respectively. See Item 5 - Directors, Management, Promoters and Principal Holders. As manager of the Trust, the Administrator has been given the full authority and exclusive responsibility to direct the day-to-day undertaking, operations and affairs the Trust pursuant to the Administration Agreement. The Administrator may delegate certain of these duties from time to time. In the event that the Administrator is unable or unwilling to perform its obligations under the Administration Agreement, the Trustee shall either perform all obligations of the administrator thereunder or shall be entitled to engage another person that is duly qualified to perform such obligations. 2.4 The Partnership The Partnership is a limited partnership established under the laws of the Province of Ontario on June 30, It was registered under the Limited Partnerships Act on June 30, 2014 in Ontario, upon filing of the Partnership certificate. The Partnership s head office is located in Brampton, Ontario. The Partnership was established to carry on a real estate investment and development business. The limited partners of the Partnership are the Trust and other Limited Partners that acquire LP Units under the Partnership Offering or otherwise from time to time. 2.5 Management of the Partnership General Partner The General Partner of the Partnership is Pulis Real Estate GP2 Inc., a corporation established under the laws of the Province of Ontario. The General Partner is owned and controlled by Ontario Inc. (as to a 50% interest) and Ontario Inc. (as to a 50% interest). These corporations are solely owned corporations, controlled by Brian Pulis and Kyle Pulis, respectively. See Item 5 - Directors, Promoters and Principal Holders. 16

17 The General Partner has, to the exclusion of the Limited Partners, the sole power and exclusive authority to manage the business and affairs of the Partnership, to make all decisions regarding the business of the Partnership and to bind the Partnership. The General Partner is to exercise its powers and discharge its duties honestly, in good faith and in the best interests of the Limited Partners and the Partnership and shall, in discharging its duties, exercise the degree of care, the diligence and the skill that a reasonably prudent Administrator of a partnership would exercise in similar circumstances. Certain restrictions are imposed on the General Partner and certain actions may not be taken by it without the approval of the Limited Partners by Special Resolution. The General Partner cannot dissolve the Partnership or wind up its affairs except in accordance with the provisions of the Partnership Agreement. Pursuant to the General Partner s constating documents, bylaws and the OBCA, any resolution of the directors of the General Partner must be passed: (i) at a meeting of the directors of the General Partner, by a majority of the directors entitled to vote on that resolution at such meeting; or (ii) in writing by all the directors entitled to vote on that resolution at a meeting. Currently, the board of directors of the General Partner contains two independent directors, being Jason Priest and Peter VanSickle. See Item 5 - Directors, Promoters and Principal Holders. 2.6 Conflicts of Interest Policies The Trust and Partnership have each adopted a Conflict of Interest Policy (respectively the Trust Conflict of Interest Policy and the Partnership Conflict of Interest Policy ) pursuant to which, in order to proceed, all matters that involve a Conflict of Interest Matter must be unanimously approved by the independent directors of the Administrator or General Partner with respect to Conflict of Interest Matter involving the Trust or Partnership, as applicable. For the purposes of the Conflict of Interest Policies, a Conflict of Interest Matter means a situation where a reasonable person would consider a person, or an entity related to the person, to have an interest that may conflict with the person s ability to act in good faith and in the best interests of the Trust or Partnership, as applicable. In the case of Conflicts of Interest Matters involving the Trust, the Administrator must refer all Conflict of Interest Matters to the independent directors of the Administrator. Similarly, in the case of Conflicts of Interest Matters involving the Partnership, the directors of the General Partner must refer all Conflict of Interest Matters to the independent directors of the General Partner of the General Partner. As of the date of this Offering Memorandum, Jason Priest and Peter VanSickle are each considered independent directors of the Administrator and General Partner because they only act as directors of those entities and otherwise do not have a material relationship with the Trust, Administrator, General Partner or Partnership. See Item Management Experience. The Partnership Conflict of Interest Policy provides that the independent directors of the General Partner must review and provide their decision to the directors of the General Partner on any Conflict of Interest Matter referred to the independent directors of the General Partner for review. Similarly, pursuant to the Trust Conflict of Interest Policy, the independent directors of the Administrator must review and provide their decision to the directors of the Administrator on any Conflict of Interest Matter referred to the for review. The independent directors of the General Partner may provide standing instructions (being written approvals or recommendations) to the directors of the General Partner that permit the Partnership or the General Partner to proceed with a proposed action relating to a Conflict of Interest Matter on an ongoing basis. Similarly, the independent directors of the Administrator may act in the same manner with respect to a proposed action relating to a Conflict of Interest Matter on an ongoing basis in relation to the Trust. The independent directors of the General Partner and independent directors of the Administrator may seek the advice of legal counsel, accountants, financial advisors, investment bankers or other advisors and is entitled to rely on such advice for the purposes of providing their decision to the directors of the General Partner or to the directors of the Administrator as the case may be. 17

18 Any Conflict of Interest Matter involving the Partnership that is not approved by the independent directors of the General Partner shall not be authorized to proceed. Similarly, any Conflict of Interest Matter involving the Trust that is not approved by the independent directors of the Administrator shall not be authorized to proceed. If, in relation to a Conflict of Interest Matter, there are no independent directors of the Administrator or independent directors of the General Partner, then the Trust or the Partnership, as the case may be, will not proceed on a matter that has a Conflict of Interest. Annually, the Partnership and the Trust will provide to the Limited Partners and the Trust Unitholders, along with their respective audited annual financial statements, a report of both the independent directors of the General Partner and the independent directors of the Administrator regarding their review and approval of any Conflict of Interest Matters during the fiscal year to which the financial statements relate. 3.1 Business of the Trust ITEM 3- BUSINESS OF THE ISSUERS The Trust s primary purpose and sole business is to acquire LP Units in the Partnership, with the objective of generating returns to Trust Unitholders. Upon each closing under the Trust Offering, the Trust will use the entire Gross Proceeds raised from the issuance of Trust Units to acquire LP Units of the Partnership. All expenses of the Trust Offering and the Partnership Offering will be borne by the Partnership pursuant to the Funding Agreement. In effect, the Trust allows investor to invest through Deferred Plans indirectly into the Partnership (see Item 8.2 Eligibility for Investment in Trust Units by Deferred Plans ). Consequently, investors that purchase Trust Units should also review this Offering Memorandum with respect to the Partnership. 3.2 Business of the Partnership The Partnership was formed to: (a) (b) (c) acquire a portfolio of Properties, which may include residential real estate properties, single family houses, row houses, townhouses, condominium properties, multiplexes, apartment buildings and mixed-use commercial/residential buildings located primarily in Ontario and, to a lesser extent, in British Columbia, Alberta and Saskatchewan; acquire a portion of the Properties on a buy and hold basis, whereby the Partnership will acquire Properties that are under-valued and/or under-utilized for the purposes of repositioning these Properties within the market for future sale to third party purchasers; and engage in any other lawful activities permitted under applicable law that the General Partner determines, in its sole discretion, to be necessary or advisable in furtherance of the foregoing. The Partnership intends to invest, directly or indirectly, in Properties located primarily in Ontario and, to a lesser extent, in British Columbia, Alberta and Saskatchewan. The Partnership will exercise control (directly or indirectly) over each Property acquired by the Partnership and Brian Pulis and/or Kyle Pulis will be actively involved in the management of each Property. 3.3 Development of Business The Issuers are in a start-up phase of development and has not carried out any commercial activities prior to the Offerings. Since formation, the Issuers have been engaged in activities in preparation for the Offerings, which have included, among other things: putting in place a management team; engaging professional advisors and preparing the Offering Memorandum and the agreements discussed in this Offering Memorandum and acquiring the Properties described in Item 3.4 Current and Target Properties. 18

19 3.4 Current and Target Properties The Issuers are conducting the Offering and the Partnership is seeking to acquire or otherwise invest in Properties located primarily in Ontario and, to a lesser extent, in British Columbia, Alberta and Saskatchewan. The Offering is a blind pool offering. Other than as set out in this Item 3.4 Current and Target Properties, the specific Properties in which the Partnership will invest have not been identified as of the date of this Offering Memorandum. See Item 10 - Risk Factors. For information concerning the Property investment strategy of the Partnership, see Item 3.7 Investment Strategy. See Item 3 - Business of the Issuers for a description of the Issuers and see Item 1 - Use of Available Funds for a description of the anticipated use of the proceeds of the Offering. As of the date of this Offering Memorandum, the Partnership has purchased three properties in Hamilton Ontario, being the Hayden Street Property, located at Hayden Street (See Item Hayden Street Property Acquisition and Item 4.8 Hayden Street Property Acquisition Agreement ), the York Road Property, located at 89, York Road (See Item York Road Property Acquisition and Item 4.10 York Road Property Acquisition Agreement ) and the King Street Property located at 2200 King Street East (See Item King Street Property Acquisition and Item 4.12 King Street Property Acquisition Agreement ) Hayden Street Property Acquisition The Partnership, as buyer, entered into the Hayden Street Property Acquisition Agreement with a seller (who is at arm s length to the Issuers and their affiliates) to acquire the Hayden Street Property for an aggregate purchase price of $3,332,000 (subject to adjustment pursuant to the Hayden Street Property Acquisition Agreement). In connection with the acquisition, the Partnership did not acquire any employees, marketing systems, sales forces, customers, operating rights, production techniques or trade names from the seller. The Partnership completed the acquisition of Hayden Street Property on April 25, The total acquisition costs for the Hayden Street Property are as follows: Hayden Street Property Acquisition Costs (1)(2)(3) Amount Purchase price for the Hayden Street Property (1)(2) $3,332,000 Fees to the Hayden Street Property lender $78,500 Fees and charges relating to Hayden Street Property Credit Facilities (e.g., prepaid interest, lender legal fees, insurance costs and other expenses incurred) $10,000 Due Diligence Charges (e.g., appraisals, surveys, engineering, inspection reports) $7,345 Title/Escrow Charges (e.g., escrow agent s fee, title insurance, transfer taxes) $48,529 Accounting and Legal Fees (estimate) $5,602 Acquisition Fee payable $32,000 APPROXIMATE TOTAL: (2)(3) $3,513,976 Notes: (1) Represents the purchase price of $3,332,000. (2) This amount does not represent the carrying amount for the Hayden Street Property in the Carve-Out Financial Statements for that Property. Reference should be made to the most recent Carve-Out Statement of Financial Position of the Hayden Street Property and the notes thereto, contained in this Offering Memorandum for further details on the carrying value of the Property. See Item 14 Financial Statements. (3) Does not include renovation costs incurred following the Hayden Street Property acquisition. See Item Hayden Street Property Acquisition Investment Analysis and Strategy. 19

20 The Hayden Street Property (Current Property) The Hayden Street Property was built in the mid 1960 s. Located at Hayden Street, Hamilton, Ontario, in the Greeningdon community, the Hayden Street Property is within walking distance of the intersection of Mohawk Road and Upper James Street, a large commercial hub in Hamilton and is only a short drive to the Lincoln Alexander Parkway, a major arterial road that runs through Hamilton and connects to both Highway 403 and Queen Elizabeth Way. There are a number of large shopping plazas, entertainment plazas and community centres within one kilometer of the property and access to public transportation is less than a one kilometer walk away. Under the Hayden Street Property Acquisition Agreement, the Partnership purchased the entire Hayden Street Property apartment complex, surrounding real estate, the seller s right, title and interest as landlord under all existing leases related to 34 units within the apartment complex, and all tangible and intangible personal property located on the premises. The Hayden Street Property complex, in its entirety, consists of two three-storey apartment buildings, covering approximately two acres with 34 apartment units, a density of approximately 17 units per acre and 40 uncovered parking spaces. The buildings are concrete construction with a brick exterior and each has storage units and a laundry room available for use by building tenants. The Hayden Street Property offers different two-bedroom floor plans, consisting of: UNIT TYPE % OF UNITS NO. OF UNITS SQUARE FOOTAGE 2 Bedrooms / 1 Bath 100% Totals/Averages 100% At the time the Hayden Street Property was acquired, unit amenities included private balconies, laminate countertops, wooden cabinetry and linoleum flooring. However, the Partnership is renovating the units as described below. Common amenities include storage units, laundry rooms and 40 uncovered parking spaces. Heating and hot water is provided by the Hayden Street Property. Electricity (including that associated with cooling) is provided by individual electricity meters associated with each unit and is paid for by the tenants, except for the electricity used in the common areas of the buildings, which is paid by the Hayden Street Property. The cost of gas, water, sewer charges, and trash collection is paid by the Hayden Street Property. Historically (prior to the strategic renovations and improvements discussed below), the Hayden Street Property paid approximately $9,000 per month, on average, for these services (including electricity in the common areas). While rental/occupancy rates fluctuate, approximately 100% of the 34 units in the Hayden Street Property were rented as of May 17, However, after completing the acquisition of the Hayden Street Property, subject to applicable landlord tenant law, the Partnership intends to ultimately vacate all of the property s existing tenants in order to allow for strategic renovations and improvements. The Partnership will comply with applicable law in vacating any tenants and may need to wait for ordinary-course lease expirations or negotiate lease terminations in order to vacate all units. As a result, the renovations to the Hayden Street Property may be staged over time, although the Partnership s intention is to complete the renovations as soon as they are legally practicable. Renovations and improvements may consist of, among other things: replacing and updating apartment unit flooring, bathtubs, countertops, cabinetry, sinks, doors and other hardware and the installation of new appliances and other improvements such as dishwashers, crown moulding and recessed lighting. Prior to the Partnership vacating all Hayden Street Property tenants and performing strategic improvements and renovations, the various apartment units in the Hayden Street Property complex rented in the range of $760 - $890 per month. Following completion of the strategic renovations and improvements, the Partnership intends to reposition the Hayden Street Property and increase rents by at least 50%, subject to economic conditions, by leasing the renovated apartment units to a different demographic of tenant (see Item Hayden Street Property Acquisition Investment Analysis and Strategy ). Any changes in rent must comply with rent control legislation in Ontario. This legislation is expected to have a manageable impact on the Partnership s operations because there are minimal restrictions on increasing the rent of vacated units. In addition, where extra expenses have been incurred as a result of a renovation of that unit the landlord may also be entitled to a greater increase in rent for such unit. However, occupied units are subject to a cap 20

21 on rent increases equal to a guideline amount for every 12 months (currently 1.5% in 2017), subject to certain exceptions. While the rental rates realized by the Partnership are expected to increase over the historical rental rates of the property, there are risk factors that may affect such increases. Furthermore, as all of the tenants will be vacated, and rents changed, there is no assurance that the Partnership will achieve a similar occupancy rate to that of the historical occupancy rate of the Hayden Street Property. See Item 10 Risk Factors and Item 10 Risk Factors Rent Controls. Readers are cautioned that the historical rent, vacancy, expense, cost and other financial information concerning the Hayden Street Property disclosed in this Offering Memorandum is based upon the information provided to the Partnership by the seller and is based upon the seller s use of the property. As the Partnership intends to vacate all apartment units in the property and reposition the property by performing significant renovations and improvements in order to lease the property to a new demographic of tenants, the future rents, vacancy, expense, cost and other financial information concerning the Hayden Street Property is expected to be materially different than the historical information disclosed herein. See Forward Looking Statements. Due Diligence on the Hayden Street Property As contemplated in the Hayden Street Property Acquisition Agreement, the Partnership (as buyer) conducted, a title review and other due diligence on the Hayden Street Property, including economic feasibility, zoning, the local government comprehensive plan, redevelopment potential, structural components of any improvements, governmental restrictions and requirements, availability of utilities, concurrency issues, physical condition, subsoil conditions, environmental matters, and such other matters as may be of concern to the buyer). Hamilton, Ontario Hamilton is a city in southern Ontario, located approximately 75 kilometers southwest of Toronto (the largest city in Ontario), at an elevation between approximately 75 meters and 324 meters. It is a port city located at the centre of a densely populated and industrialized region at the west end of Lake Ontario known as the Golden Horseshoe and has a humid-continental climate, which is considered moderate compared with most of Canada. (source: More than 747,545 people reside within the Hamilton metropolitan area, which includes the City of Hamilton, the City of Burlington and the Town of Grimsby. As of 2016 (when the last census was conducted in Canada), approximately 536,917 of those residents lived in the City of Hamilton, making it the largest municipal district in the metropolitan area. Burlington is the next largest with a population of approximately 183,314, with the Town of Grimsby being the third largest, with a population of approximately 27,314. Between 2011 and 2016 the population of the Hamilton metropolitan area grew at a steady pace of approximately 3.7% (approximately 26,492 residents). The population grew approximately 5.0% in Canada as a whole for the same period (source: Statistics Canada Census Data 2016). Hamilton was first incorporated as a city in 1846 and features a rich cultural heritage and vibrant, welcoming neighborhoods. ( One in four people in Hamilton was born outside of Canada and between 3,000 and 4,000 immigrants land in Hamilton every year, adding to existing diversity. As an important centre for secondary and post-secondary education, Hamilton is also home to about 5,000 international students (source: Hamilton has several post-secondary institutions that have created numerous direct and indirect jobs in education and research. One of the largest institutions is McMaster University, which moved to the city in 1930 and today has around 30,000 enrolled students, of whom almost two-thirds come from outside the immediate Hamilton region (source: McMaster University is ranked 4th in Canada and 94th in the world by Times Higher Education Rankings and has a well-known medical school (source: World University Rankings Times Higher Education. Times Higher Education. Retrieved 12 January 2016). 21

22 Physically defined by unique geographical features like the Niagara Escarpment and Hamilton Harbour, the municipality has a broad mix of urban centres and sprawling farmland ( Hamilton has a wide range of museums, libraries, entertainment venues, recreational facilities, parks and conservations areas ( including the Royal Botanical Gardens, the Canadian Warplane Heritage Museum, the Bruce Trail, The Canadian Football Hall of Fame and Tim Horton Field, which is home to the Canadian Football League s Hamilton Tiger-Cats (source: Employment in Hamilton Hamilton is one of Canada s major cities and is one of Ontario s most economically diverse. Home to the Port of Hamilton (the busiest of all the Canadian Great Lakes ports), John C. Munro International Airport (one of Canada s largest courier and cargo airports, generating more cargo flights than any other airport in Canada), proximity to national rail lines and easy access to major 400 Series of Highways and multiple international border crossings, Hamilton has long been cited as a key gateway for goods movement through southern Ontario ( The most important economic activity in Ontario is manufacturing, and the Toronto Hamilton region is the most highly industrialized section of the country. With 60% of Canada s steel being produced in Hamilton, the city has become known as the Steel Capital of Canada (source: In 2012 and 2013, Site Selection Magazine out of Atlanta, Georgia and the Calgary-based Real Estate Investment Network (REIN) ranked Hamilton as the best place to the invest in Canada and Ontario respectively ( Hamilton is well-known for producing steel, but the industry and job market are changing. Today, major industries in Hamilton include manufacturing, clean-technology, bioscience, medical and agriculture and transportation/goods movement ( ( In recent years, the city has made a concerted effort to attract new employers to the downtown core. Those efforts have especially succeeded in expanding the city s high-tech and research sectors, with the 2009 opening of McMaster Innovation Park home to several laboratories specializing in everything from life sciences to industrial engineering and the development of the Hamilton Health Sciences network ( As of February 2017, the unemployment rate in Hamilton was 5.9%. ( Hamilton repeatedly ranks well below national and provincial averages for unemployment and among the strongest-growing economies in the province of Ontario. The Conference Board of Canada consistently ranks Hamilton as the most diverse economy in the country, with the city having repeatedly been a top investment choice for real estate experts and corporate site selectors ( Small and medium-sized businesses have been the engine of local job growth in the Hamilton economy, built on the foundations of innovation and entrepreneurialism, but creative industries continue to be a key growth sector for the city ( The top employers in Hamilton include: Hamilton Health Sciences Corp McMaster University City of Hamilton Hamilton-Wentworth District School Board 22

23 ArcelorMittal Dofasco Inc. (source: The Real Estate Market in Hamilton One of the clearest signs of Hamilton s renaissance has been the rising real estate prices across the city, among the best performance of any city in Canada, especially in areas of the lower city where housing values were depressed for many years. This gives a big economic boost to existing homeowners and the real estate industry and construction/renovation industries. As the price of low-rise homes in the Toronto area has soared, house prices in nearby communities like Hamilton, Barrie and Guelph have also been driven up, According to CMHC, Hamilton is the Ontario market that s most sensitive to housing prices within the Greater Toronto Area. The report estimates that a 1% change in GTA house prices could increase or decrease Hamilton prices by 2% after three years (source: According to the Canada Mortgage and Housing corporation (the CMHC ), the price of an existing home in Hamilton has increased by about 14% since In 2015 the average price of an existing home was $447,000. As of September 2016, that price had increased to approximately $511,000. Abdul Kargbo, CMHC senior market analyst for Hamilton also expects rental vacancy to decrease even further as interest rates increase and potential homebuyers choose to continue to rent rather than buy (source: The ReMax 2017 Housing Market Outlook Report says Hamilton-Burlington will lead the country in price growth again this year, at 11%, after being tops in Canada in 2016, with 20% year-over-year price gains. Transportation upgrades and strong consumer confidence are among the reasons for such growth in Hamilton. According to the 2016 CMHC rental report, occupancy rates continue to tighten in the Hamilton market, especially in one and two bedroom units. Strong demand also continues to push average rents upwards across all unit types. (source: CMHC Rental Market Report 2016 Hamilton CMA). Investment Analysis & Strategy The Partnership believes that due to the low purchase price, the high occupancy and ongoing demand for property units, combined with strong market fundamentals, the Hayden Street Property is a highly opportunistic investment property. Following upgrade and refurbishment of the Hayden Street Property, the Partnership intends to increase rents. By capitalizing on the potential for operational upside over the current management, which includes the lowering of expenses and increasing rents over time and doing strategic renovations and improvements to both the exterior and interior of the building, the Partnership believes it can increase the annual net operating income of the property by approximately $212,837, which should increase the overall value of the property by approximately $4,032,965, assuming the assumptions and risk factors set out in Forward Looking Statements. However, there is no assurance that such increase in value will be achieved. See Forward Looking Statements. Any renovation and improvement plans for the Hayden Street Property will likely evolve as the Partnership becomes more familiar with the property. The transition to the Hayden Street Property s new value may take an estimated four years. The Partnership anticipates that the value of the Hayden Street Property will increase incrementally as the inherited tenants vacate, and the units are renovated and then re-rented at the new market rents. Once the Hayden Street Property conversion is complete, the Partnership anticipates replacing the financing used to purchase the property and complete the renovations with a less expensive long term conventional mortgage. The Partnership expects that by the time the refinancing occurs, the Hayden Street Property will have seen a significant rise in value, thereby permitting the Partnership to extract most of its original investment upon the refinancing. 23

24 Doing so will permit the Partnership to enjoy the ownership of the property, with cash flowing at an anticipated 7.6% CAP Rate (based on the assumptions and risk factors set out in Forward Looking Statements, although there is no assurance such CAP Rate will be achieved), and little to no money of the Partnership s original investment remaining in the property York Road Property Acquisition The Partnership, as buyer, entered into the York Road Property Acquisition Agreement with a seller (who is at arm s length to the Issuers and their affiliates) to acquire the York Road Property for an aggregate purchase price of $3,900,000 (subject to adjustment pursuant to the York Road Property Acquisition Agreement). In connection with the acquisition, the Partnership did not acquire any employees, marketing systems, sales forces, customers, operating rights, production techniques or trade names from the seller. The Partnership completed the acquisition of the York Road Property on October 14, The total estimated acquisition costs for the York Road Property are approximately as follows: York Road Property Acquisition Costs (1)(2)(3) Amount Purchase price for the York Road Property (1)(2) $3,900,000 Fees to the York Road Property lender $90,000 Fees and charges relating to York Road Property Credit Facilities (e.g., prepaid interest, lender legal fees, insurance costs and other expenses incurred) $10,000 Due Diligence Charges (e.g., appraisals, surveys, engineering, inspection reports) $10,000 Title/Escrow Charges (e.g., escrow agent s fee, title insurance, transfer taxes) $65,000 Accounting and Legal Fees (estimate) $7,500 Acquisition Fee payable $39,000 APPROXIMATE TOTAL: (2)(3) $4,121,500 Notes: (1) Represents the purchase price of $3,900,000. (2) This amount does not represent the carrying amount for the York Road Property in the Carve-Out Financial Statements for that Property. Reference should be made to the most recent Carve-Out Statement of Financial Position of the York Road Property and the notes thereto, contained in this Offering Memorandum for further details on the carrying value of the Property. See Item 14 Financial Statements. (3) Does not include renovation costs to be incurred following the York Road Property acquisition. See Item York Road Property Acquisition Investment Analysis and Strategy. The York Road Property The York Road Property was built in the mid 1960 s. Located at 89, York Road, Hamilton, Ontario, in the quiet bedroom community of Dundas, the York Road Property is a five-minute drive from west Hamilton and numerous commercial shopping and entertainment plazas and is only a short walk from downtown Dundas, which is home to numerous food and entertainment options. The York Road Property is located approximately three kilometers from the Lincoln Alexander Parkway, a major arterial road that runs through Hamilton and connects to both Highway 403 and Queen Elizabeth Way and is only a short bike or bus ride from McMaster University. Nearby parks include the Dundas Driving Park and the Dundas Driving Park Pool. Under the York Road Property Acquisition Agreement, the Partnership purchased the entire York Road Property apartment complex, surrounding real estate, the seller s right, title and interest as landlord under all existing leases related to 30 units within the apartment complex, and all tangible and intangible personal property located on the premises. The York Road Property complex, in its entirety, consists of two three-storey apartment buildings, covering approximately two acres with 30 apartment units, a density of approximately 15 units per acre and 34 uncovered parking spaces. The buildings are concrete construction with a stone exterior and each has storage units and a laundry room available for use by building tenants. The York Road Property offers different two-bedroom floor plans, consisting of: 24

25 UNIT TYPE % OF UNITS NO. OF UNITS SQUARE FOOTAGE 2 Bedrooms / 1 Bath 100% Totals/Averages 100% At the time the York Road Property was acquired, unit amenities included, laminate countertops, wooden cabinetry and linoleum flooring. However, the Partnership is renovating the units as described below. Common amenities include storage units, laundry rooms and 34 uncovered parking spaces. Heating and hot water is provided by the York Road Property. Electricity (including that associated with cooling) is provided by individual electricity meters associated with each unit and is paid for by the tenants, except for the electricity used in the common areas of the buildings, which is paid by the York Road Property. The cost of gas, water, sewer charges, and trash collection is paid by the York Road Property. Historically (prior to the strategic renovations and improvements discussed below), the York Road Property paid approximately $9,000 per month, on average, for these services (including electricity in the common areas). While rental/occupancy rates fluctuate, approximately 95% of the 30 units in the York Road Property were rented as of May 17, However, after completing the acquisition of the York Road Property, subject to applicable landlord tenant law, the Partnership intends to vacate all of the property s existing tenants in order to allow for strategic renovations and improvements. The Partnership will comply with applicable law in vacating any tenants and may need to wait for ordinary-course lease expirations or negotiate lease terminations in order to vacate all units. As a result, the renovations to the York Road Property may be staged over time, although the Partnership s intention is to complete the renovations as soon as they are legally practicable. Renovations and improvements may consist of, among other things: replacing and updating apartment unit flooring, bathtubs, countertops, cabinetry, sinks, doors and other hardware and the installation of new appliances and other improvements such as dishwashers, crown moulding and recessed lighting. Prior to the Partnership vacating all York Road Property tenants and performing strategic improvements and renovations, the various apartment units in the York Road Property complex rented in the range of $800 - $1,150 per month. Following completion of the strategic renovations and improvements, the Partnership intends to reposition the York Road Property and increase rents by at least 50%, subject to economic conditions, by leasing the renovated apartment units to a different demographic of tenant (see Item York Road Property Acquisition Investment Analysis and Strategy ). Any changes in rent must comply with rent control legislation in Ontario. This legislation is expected to have a manageable impact on the Partnership s operations because there are minimal restrictions on increasing the rent of vacated units. In addition, where extra expenses have been incurred as a result of a renovation of that unit the landlord may also be entitled to a greater increase in rent for such unit. However, occupied units are subject to a cap on rent increases equal to a guideline amount for every 12 months (currently 1.5% in 2017), subject to certain exceptions. While the rental rates realized by the Partnership are expected to increase over the historical rental rates of the property, there are risk factors that may affect such increases. Furthermore, as all of the tenants will be vacated, and rents changed, there is no assurance that the Partnership will achieve a similar occupancy rate to that of the historical occupancy rate of the York Road Property. See Item 10 Risk Factors and Item 10 Risk Factors Rent Controls. Readers are cautioned that the historical rent, vacancy, expense, cost and other financial information concerning the York Road Property disclosed in this Offering Memorandum is based upon the information provided to the Partnership by the seller and is based upon the seller s use of the property. As the Partnership intends to vacate all apartment units in the property and reposition the property by performing significant renovations and improvements in order to lease the property to a new demographic of tenants, the future rents, vacancy, expense, cost and other financial information concerning the York Road Property is expected to be materially different than the historical information disclosed herein. See Forward Looking Statements. Due Diligence on the York Road Property As contemplated in the York Road Property Acquisition Agreement, the Partnership (as buyer) conducted, a title review and other due diligence on the York Road Property, including economic feasibility, zoning, the local 25

26 government comprehensive plan, redevelopment potential, structural components of any improvements, governmental restrictions and requirements, availability of utilities, concurrency issues, physical condition, subsoil conditions, environmental matters, and such other matters as may be of concern to the buyer). Hamilton, Ontario Please see Item Hayden Street Property Acquisition Hamilton, Ontario above for a description of Hamilton, Ontario. Investment Analysis & Strategy The Partnership believes that due to the low purchase price, the high occupancy and ongoing demand for property units, combined with strong market fundamentals, the York Road Property is a highly opportunistic investment property. Following upgrade and refurbishment of the property, the Partnership intends to increase rents at the York Road Property. By capitalizing on the potential for operational upside over the current management, which includes the lowering of expenses and increasing rents over time and doing strategic renovations and improvements to both the exterior and interior of the building, the Partnership believes it can increase the annual net operating income of the property by approximately $192,458, which should increase the overall value of the property by approximately $3,400,508, assuming the assumptions and risk factors set out in Forward Looking Statements. However, there is no assurance that such increase in value will be achieved. See Forward Looking Statements. Any renovation and improvement plans for the York Road Property will likely evolve as the Partnership becomes more familiar with the property. The transition to the York Road Property s new value may take an estimated four years. The Partnership anticipates that the value of the York Road Property will increase incrementally as the inherited tenants move out naturally, and the units are renovated and then re-rented at the new market rents. Once the York Road Property conversion is complete, the Partnership anticipates replacing the financing used to purchase the property and complete the renovations with a less expensive long term conventional mortgage. The Partnership expects that by the time the refinancing occurs, the York Road Property will have seen a significant rise in value, thereby permitting the Partnership to extract most of its original investment upon the refinancing. Doing so will permit the Partnership to enjoy the ownership of the property, with cash flowing at an 7.6% CAP Rate (based on the assumptions and risk factors set out in Forward Looking Statements, although there is no assurance such CAP Rate will be achieved), and little to no money of the Partnership s original investment remaining in the property King Street Property Acquisition The Partnership, as buyer, entered into the King Street Property Acquisition Agreement with a seller (who is at arm s length to the Issuers and their affiliates) to acquire the King Street Property for an aggregate purchase price of $3,600,000 (subject to adjustment pursuant to the King Street Property Acquisition Agreement). In connection with the acquisition, the Partnership did not acquire any employees, marketing systems, sales forces, customers, operating rights, production techniques or trade names from the seller. The Partnership completed the acquisition of the King Street Property on February 15, The total estimated acquisition costs for the King Street Property are approximately as follows: 26

27 King Street Property Acquisition Costs (1)(2)(3) Amount Purchase price for the King Street Property (1)(2) $3,600,000 Fees to the King Street Property lender $78,785 Fees and charges relating to King Street Property Credit Facilities (e.g., prepaid interest, lender legal fees, insurance costs and other expenses incurred) $37,017 Due Diligence Charges (e.g., appraisals, surveys, engineering, inspection reports) $15,000 Title/Escrow Charges (e.g., escrow agent s fee, title insurance, transfer taxes) $71,600 Accounting and Legal Fees (estimate) $6,788 Acquisition Fee payable $36,000 APPROXIMATE TOTAL: (2)(3) $3,845,190 Notes: (1) Represents the purchase price of $3,600,000. (2) This amount does not represent the carrying amount for the King Street Property in the Carve-Out Financial Statements for that Property. Reference should be made to the most recent Carve-Out Statement of Financial Position of the King Street Property and the notes thereto, contained in this Offering Memorandum for further details on the carrying value of the Property. See Item 14 Financial Statements. (3) Does not include renovation costs incurred following the King Street Property acquisition. See Item King Street Property Acquisition Investment Analysis and Strategy. The King Street Property The King Street Property was built in the mid 1960 s and is located at 2200 King Street East, Hamilton, Ontario, in the community of Glenview West. The neighbourhood of Glenview West is characterized predominantly by residential uses of varied density, interspersed with commercial and institutional uses. The King Street Property is located on arterial route, which is host to numerous amenities, including, among others, Shoppers Drug Mart, Bionome Spa, Metro, and Brock University. Glenview West has good accessibility, with transit buses running along arterial routes King Street East, Cochrane Road and Parkdale Avenue South. In addition, Glenview West is in relative proximity to the Red Hill Valley Parkway, which provides access to the greater Southern Ontario area at large. Nearby parks include Red Hill Bowl, Montgomery Park and Rosedale Park. Under the King Street Property Acquisition Agreement, the Partnership purchased the entire King Street Property apartment complex, surrounding real estate, the seller s right, title and interest as landlord under all existing leases related to 32 units within the apartment complex, and all tangible and intangible personal property located on the premises. The King Street Property complex, in its entirety, consists of one four-storey apartment building, covering approximately 0.58 acres with 32 apartment units, a density of approximately units per acre and 32 uncovered parking spaces. The building is concrete construction with a brick exterior and has storage units and a laundry room available for use by building tenants. The King Street Property offers different one-bedroom and twobedroom floor plans, consisting of: UNIT TYPE % OF UNITS NO. OF UNITS SQUARE FOOTAGE 2 Bedrooms + Den / 1 Bath 18.75% Bedrooms / 1 Bath 25% Bedroom / 1 Bath 56.25% Totals/Averages 100% At the time the King Street Property was acquired, unit amenities included, laminate countertops, wooden cabinetry and linoleum flooring. However, the Partnership is renovating the units as described below. Common amenities include storage units, laundry rooms and covered and uncovered parking spaces. Heating and hot water is provided by the King Street Property. Electricity (including that associated with cooling) is provided by individual electricity meters associated with each unit and is paid for by the tenants, except for the electricity used in the common areas of the buildings, which is paid by the King Street Property. The cost of gas, 27

28 water, sewer charges, and trash collection is paid by the King Street Property. Historically (prior to the strategic renovations and improvements discussed below), the King Street Property paid approximately $4,000 per month, on average, for these services (including electricity in the common areas). While rental/occupancy rates fluctuate, approximately 85% of the 32 units in the King Street Property were rented as of May 17, However, after completing the acquisition of the King Street Property, subject to applicable landlord tenant law, the Partnership intends to vacate all of the property s existing tenants in order to allow for strategic renovations and improvements. The Partnership will comply with applicable law in vacating any tenants and may need to wait for ordinary-course lease expirations or negotiate lease terminations in order to vacate all units. As a result, the renovations to the King Street Property may be staged over time, although the Partnership s intention is to complete the renovations as soon as they are legally practicable. Renovations and improvements may consist of, among other things: replacing and updating apartment unit flooring, bathtubs, countertops, cabinetry, sinks, doors and other hardware and the installation of new appliances and other improvements such as dishwashers, crown moulding and recessed lighting. Prior to the Partnership vacating all King Street Property tenants and performing strategic improvements and renovations, the various apartment units in the King Street Property complex rented in the range of $700 - $900 per month. Following completion of the strategic renovations and improvements, the Partnership intends to reposition the King Street Property and increase rents by at least 50%, subject to economic conditions, by leasing the renovated apartment units to a different demographic of tenant (see Item King Street Property Acquisition Investment Analysis and Strategy ). Any changes in rent must comply with rent control legislation in Ontario. This legislation is expected to have a manageable impact on the Partnership s operations because there are minimal restrictions on increasing the rent of vacated units. In addition, where extra expenses have been incurred as a result of a renovation of that unit the landlord may also be entitled to a greater increase in rent for such unit. However, occupied units are subject to a cap on rent increases equal to a guideline amount for every 12 months (currently 1.5% in 2017), subject to certain exceptions. While the rental rates realized by the Partnership are expected to increase over the historical rental rates of the property, there are risk factors that may affect such increases. Furthermore, as all of the tenants will be vacated, and rents changed, there is no assurance that the Partnership will achieve a similar occupancy rate to that of the historical occupancy rate of the King Street Property. See Item 10 Risk Factors and Item 10 Risk Factors Rent Controls. Readers are cautioned that the historical rent, vacancy, expense, cost and other financial information concerning the King Street Property disclosed in this Offering Memorandum is based upon the information provided to the Partnership by the seller and is based upon the seller s use of the property. As the Partnership intends to vacate all apartment units in the property and reposition the property by performing significant renovations and improvements in order to lease the property to a new demographic of tenants, the future rents, vacancy, expense, cost and other financial information concerning the King Street Property is expected to be materially different than the historical information disclosed herein. See Forward Looking Statements. Due Diligence on the King Street Property As contemplated in the King Street Property Acquisition Agreement, the Partnership (as buyer) conducted, a title review and other due diligence on the King Street Property, including economic feasibility, zoning, the local government comprehensive plan, redevelopment potential, structural components of any improvements, governmental restrictions and requirements, availability of utilities, concurrency issues, physical condition, subsoil conditions, environmental matters, and such other matters as may be of concern to the buyer). Hamilton, Ontario Please see Item Hayden Street Property Acquisition Hamilton, Ontario above for a description of Hamilton, Ontario. Investment Analysis & Strategy 28

29 The Partnership believes that due to the low purchase price, the high occupancy and ongoing demand for property units, combined with strong market fundamentals, the King Street Property is a highly opportunistic investment property. Following upgrade and refurbishment of the property, the Partnership intends to increase rents at the King Street Property. By capitalizing on the potential for operational upside over the current management, which includes the lowering of expenses and increasing rents over time and doing strategic renovations and improvements to both the exterior and interior of the building, the Partnership believes it can increase the annual net operating income of the property by approximately $215,734, which should increase the overall value of the property by approximately $3,540,000, assuming the assumptions and risk factors set out in Forward Looking Statements. However, there is no assurance that such increase in value will be achieved. See Forward Looking Statements. Any renovation and improvement plans for the King Street Property will likely evolve as the Partnership becomes more familiar with the property. The transition to the King Street Property s new value may take an estimated four years. The Partnership anticipates that the value of the King Street Property will increase incrementally as the inherited tenants move out naturally, and the units are renovated and then re-rented at the new market rents. Once the King Street Property conversion is complete, the Partnership anticipates replacing the financing used to purchase the property and complete the renovations with a less expensive long term conventional mortgage. The Partnership expects that by the time the refinancing occurs, the King Street Property will have seen a significant rise in value, thereby permitting the Partnership to extract most of its original investment upon the refinancing. Doing so will permit the Partnership to enjoy the ownership of the property, with cash flowing at an 7.4% CAP Rate (based on the assumptions and risk factors set out in Forward Looking Statements, although there is no assurance such CAP Rate will be achieved), and little to no money of the Partnership s original investment remaining in the property. 3.5 Investment Philosophy The Partnership believes that research combined with professional management expertise is the cornerstone to a superior real estate investment program. The Partnership aims to create value by investing in Properties that the General Partner identifies as having the potential to create value by: (a) (b) (c) (d) purchasing undervalued, undermanaged or underutilized Properties from third-party vendors; performing strategic renovations and other capital improvements to the Properties, if required, to improve marketability, rental income and occupancy levels thereby causing forced appreciation; refinancing Properties (where appropriate) to realize immediate market value gains; and redeploy funds to acquire additional Properties. The Partnership intends to operate pursuant to the following principles: (a) (b) (c) (d) that well-located Properties in areas with solid economic fundamentals have historically appreciated in value over time; that the current low interest rate environment enables real estate owners to obtain historically low financing; that when total income from a Property meets or exceeds the Property carrying costs, there is an opportunity to gain positive leverage which increases the overall return on equity invested; that the current low financing costs provide investment opportunity in real estate with attractive leveraged yields that are not available from many other investment alternatives; and 29

30 (e) that real estate investment is also likely to provide an opportunity for greater returns through leveraged capital appreciation. The Partnership also believes that Properties may still be acquired at attractive prices as a result of market inefficiencies, sub-optimal management practices or incompatibility with a current owner s investment strategy. The Partnership believes that value can be found in many types of Properties. In addition to individual single family homes, row houses and townhouses, the Partnership intends to consider and acquire mid-rise, high-rise, and townhome complex Properties that will generally contain 30 or more units. By providing experienced management, the Partnership anticipates to increase the profitability of these Properties over time. The Partnership believes that the increased value can be realized through a variety of techniques such as strategic renovations, restructuring, refinancing, re-branding and decorating, implementing tenant-centric property management practices, re-leasing, renegotiating existing leases, change of use or capital improvements, or market repositioning. The Trust and Partnership are targeting annualized returns of 10%. However, such targeted returns are not guaranteed and are subject to performance assumptions and risk factors, which may cause actual results to vary materially. Excess cash flow will be re-invested into the Portfolio, utilized to pay down any Financing on the Properties and/or distributed to Investors. The return on an investment in the Trust Units and LP Units is not comparable to the return on an investment in fixed-income securities. Cash distributions are not guaranteed and are not fixed obligations of the Issuers. See Forward-looking Statements and Item 10 Risk Factors. 3.6 Investment Mandate The Partnership will focus on acquiring Properties which may be purchased for less than what the General Partner believes is the intrinsic or potential value of such Properties. The General Partner will endeavour to identify Properties that fall in between the market segment occupied by individual real estate investors and the market segment occupied by pension funds, REITs and public real estate companies. The Partnership believes there is an opportunity to purchase Properties in this niche before they come to market, at valuations below those that would be paid in an open bidding process, or when analysis suggests an undervaluation. Canadian real estate markets are continually reviewed to assess the potential for new opportunities by the General Partner. Economic fundamentals are the key drivers to the selection of areas and Properties by the Partnership. As the Partnership s available funds grow, the Partnership anticipates that its real estate portfolio will be expanded to include Properties that can benefit from economies of scale and Properties that fit within the General Partnership s investment philosophy. 3.7 Investment Strategy The Partnership intends to make acquisitions that represent an opportunity to establish and improve the overall quality of the Properties portfolio, minimize and mitigate the risk(s) associated with any investment and enhance the sustainability of the long term investment strategy of the Partnership. The Partnership intends to focus on acquiring Properties which it believes are operating below their potential realizable value. The General Partner will be tasked with identifying Properties for possible acquisition in growth markets and aggressively manage and reposition those Properties with the view to preserving Partnership capital, and enhancing the potential for increased income and capital gains. The Partnership aims to hold each Property for at least five years, and potentially much longer if appropriate. 30

31 The Partnership intends to focus on acquiring Properties located primarily in Ontario and reposition such Properties where opportunities exist. This will allow the Partnership to capitalize on operational efficiencies and further increase its presence and critical mass in these markets. The Partnership intends to use the first $10,000,000 of the Available Funds to invest solely in Properties located in Ontario. The Partnership intends to invest no more than 20% of the Available Funds in excess of $10,000,000 in Properties located outside of Ontario, in areas such as British Columbia, Alberta and Saskatchewan, in the General Partner s discretion. To date, all of the real estate assets acquired by the Partnership are located in Ontario. See Item Current and Target Properties. The General Partner will be tasked with working to capitalize on market inefficiencies by combining a serviceoriented tenant-centric focus with undervalued assets. The Partnership may also expand, renovate or take advantage of the development opportunities presented by a Property to enhance the return on Partnership capital while retaining a diversified portfolio and conservative risk profile as a whole. Multi-tenant residential properties reduce the risk of vacancies and are more likely to provide consistent cash flow while preserving invested capital whereas single family properties provide the highest potential for significant capital appreciation. While it is not the primary focus of the Partnership, the General Partner may purchase mixed commercial/residential buildings from time to time to provide diversification should such building(s) ultimately enhance the performance of the Properties. Consistent cash flow creates the ability to pay interest on the debt incurred to purchase Properties. Excess cash flow will be re-invested into the Portfolio, utilized to pay down any Financing on the Properties and/or distributed to Investors. Cash distributions are not guaranteed or assured. See also Item 10 Risk Factors. 3.8 Investment Process The Partnership intends to use the Available Funds and the proceeds from periodic remortgaging of its Properties and positive cash flow to acquire assets and manage/operate the portfolio of Properties. The Partnership will purchase Properties at prices and on terms negotiated with vendors. In some cases the Partnership might acquire an investment under an agreement initiated by the General Partner or parties associated with the General Partner, or its nominee, with arm s length third party vendors, which agreement will be assigned to the Partnership who will reimburse any deposits and due diligence or other out-of-pocket expenses incurred by the General Partner before the assignment. From time to time, there may be a fee charged for property assignments by agents. In addition to the above, the Partnership may also purchase Properties from the officers and directors of the General Partner or from corporations associated with such parties at a price equal to the average of the value established by a certified appraisal obtained from an independent appraiser with respect to the investment in question and a single market valuation obtained from an independent realtor or realtors with respect to the Property. The General Partner will identify and evaluate potential acquisitions. When the General Partner decides that an acquisition is worth considering, the General Partner will perform a thorough analysis that may make use of due diligence tools and sources of information, as appropriate, such as a building inspection report, a building valuation, an environmental assessment report (phase one and/or phase two), a fire prevention report, and possibly others. The General Partner may obtain independent property, environmental and structural reports even if not required by lenders. After the purchase of a Property, the General Partner intends to implement a value enhancement process that consists of value-increasing and revenue augmentation activities including strategic capital improvements and the implementation of value-added tenant services. 31

32 The Partnership may enter into one or more joint ventures with strategic partners, including with affiliates of the General Partner. Investments with joint venture partners may involve carried interests and/or fees payable to such joint venture partners, as the General Partner may deem appropriate, in its sole discretion. Any joint venture contemplated by the Partnership will be reviewed and shall only proceed if approved by the board of directors of the General Partner, which shall require the approval of both independent members of the board of directors of the General Partner. The Partnership intends to focus on achieving operational cost savings. The Properties will be monitored by the General Partner on a constant basis to gauge the effectiveness of the management process on cash flows and tenant satisfaction. As well, through analysis of market rental rates, the General Partner will determine where capital expenditures will permit the largest increase in rents and when a Property s rate of return has been maximized. The Partnership can then decide whether to re-deploy capital into opportunities that will provide increased returns. 3.9 Disposition Guidelines The Partnership may sell a Property when it determines that the associated capital can be more efficiently deployed. This is an ongoing monitoring process, where economic, political and demographic trends are taken into account. The Partnership may also sell Properties to the officers and directors of the General Partner or to corporations or limited partnerships associated with such parties at a price equal to the average of the value established by a certified appraisal obtained from an independent appraiser with respect to the Property in question and a single market valuation obtained from an independent realtor or realtors with respect to the Property. The Partnership may, at its discretion and without notice to the Limited Partners, reallocate the Partnership s assets to new projects recommended by the General Partner, or allocate cash flows from the Partnership s assets to alternative near-cash short-term investment vehicles Debt Financing The Partnership may finance a part of the purchase price and the operating cost of any of the Properties it acquires. The Partnership may refinance any acquisition financing where more favourable financing becomes available from third party lenders such as banks, trust companies, mortgage syndicates or other providers of mortgage funding. The Partnership expects that generally any mortgage loan and/or credit facility charging a Property will not exceed 85% of the appraised value of the Property, although occasionally higher leverage may be desired or assumed from the seller. On a fund-level basis, the total mortgage and/or credit facility amounts outstanding may not exceed 75% of the fund s gross asset value. As of April 30, 2017, the total mortgage and/or credit facility amounts represent 63.2% of gross asset value. Additional funds may be required for the property management reserve account which may be required by the applicable lenders. The Partnership will typically finance new acquisitions with mortgages and/or credit facilities with two or three-year terms and variable interest rates, but take on longer-term mortgages and/or credit facilities through any subsequent refinancing. Vendor take-back financing may be used to facilitate the sale of Properties in some instances. Any financing offered will be registered on title to the Property being sold, have a maturity not exceeding five years, and a loan-to-value ratio of no more than 85%. The aggregate value of vendor take-back financing outstanding will not exceed 20% of the total assets of the Partnership Cash Flow Payments The Partnership will apply cash flow toward the operating expenses, provision of reasonable reserves for working capital, renovations and upgrades to Properties, and the payment of interest and annual principal payments on the mortgage loans and/or credit facilities in respect of the Partnership s Properties Property Management 32

33 Unless the General Partner assumes the responsibility, the Partnership will engage one or more licensed (where required) property management companies to manage its Properties. The General Partner, at its discretion, may contract with a party related to the General Partner to provide management and or renovations services with respect to one or more of the Properties. Fees paid to such a party will be at industry standard management rates Approvals and By-Laws Should the Partnership acquire a Property and elect to stratify title to such a Property, the conversion of that Property into individually titled condominiums will require approval of the Planning and Building Departments of the municipality in which the Property is located. An architectural report would be obtained to outline any building code deficiencies of the respective Property. Building permits are then obtained to resolve these building code deficiencies. Once the building code requirements have been met, then a municipal inspector will grant a building permit. After the final approval is given by the inspector, a strata plan will be drawn up by a surveyor and that plan is used to create separate title to the units comprising the Property. Stratification of a Property could be completed within months of the property acquisition date Long-Term Objectives The Issuers long-term objectives include conducting the Offerings, including the issue and sale of Trust Units and LP Units (for a breakdown of anticipated costs see Item 1.1 Funds ). All of the Gross Proceeds of the Trust Offering will be used to acquire LP Units from the Partnership and the fees and expenses of both Issuers will be borne by the Partnership pursuant to the Funding Agreement. Accordingly, the Trust will act as a Limited Partner of the Partnership and the objectives of the Trust will be achieved through the Partnership. The Partnership plans to purchase Properties located primarily in Ontario and, to a lesser extent, in British Columbia, Alberta and Saskatchewan and thereafter the Partnership s objective is to maximize long-term results, while continuing to reinvest operating profits in Properties to preserve the Partnership s assets. The Partnership will acquire Properties as long as the relevant market and investment fundamentals allow for appropriate returns to be generated. By combining a service-oriented focus with acquiring undervalued assets, the Partnership expects to increase the cash flow from its Portfolio thereby providing an increasing rate of return to its Limited Partners. Toward these ends the Partnership intends: (a) (b) (c) (d) (e) to improve the overall value of the Partnership by acquiring revenue producing Properties that add value to the overall Portfolio; to operate and maintain the Properties with the intention of creating profitability on a sustainable basis; to engage in activities to increase the value and returns of the Properties; to reinvest operating profits and the proceeds of any refinancing of the Properties acquired by the Partnership in the furtherance of the business objectives of the Partnership; to enhance return on capital and yield through limited investment in real estate development opportunities; 33

34 (f) (g) (h) (i) (j) to provide an investment which has the likely probability of long-term capital appreciation; to preserve the value of the Trust Units and LP Units; to improve the overall value of the Partnership s enterprise through the effective management of the Partnership s business and finances and value added improvements to its Properties; to maintain a private structure that is not subject to the volatility of the public equity and debt markets; and to maintain a cost structure aligned solely with the interests of smaller retail investors. The Partnership s business strategy anticipates that the Partnership will be able to increase the revenue from and/or the value of Properties it acquires. Achieving these goals will depend in part on successfully consolidating functions and integrating operations, procedures and personnel required in the operation and management of the Properties in a timely and efficient manner. Failure to achieve one or more of those goals may result in the Partnership not achieving the anticipated benefits of acquiring and owning Properties. See Item 10 - Risk Factors. No particular costs are attributable to the achievement of the foregoing objectives. If any of the above-listed events do not occur and it results in the Trust s long-term objectives not being met, it could have an adverse effect on your investment in the Trust. See Item 10 - Risk Factors Short-Term Objectives The Issuers objectives during the next 12 months are: What we must do and how we will do it Target Completion Date Cost to Complete Raise up to $50,000,000 through the Offerings (1) Ongoing $7,010,500 Renovate, upgrade, and reposition the Hayden Street Property (2) Ongoing $750,000 Renovate, upgrade, and reposition the York Road Property (3) Ongoing $750,000 Renovate, upgrade, and reposition the King Street Property (4) Ongoing $750,000 The Partnership will continue seeking the acquisition of a portfolio of Properties located primarily in Ontario, and to a lesser extent in British Columbia, Alberta, Saskatchewan. and pay ongoing fees and expenses (5)(6) 34 Ongoing Cost cannot be determined until new target Properties are identified Notes: 1. All expenses, fees and Selling Commissions related to the Trust Offering will be borne by the Partnership rather than the Trust pursuant to the terms of the Funding Agreement. The estimated Offering costs disclosed above is the aggregate of the costs estimated to be associated with the Trust Offering and the Partnership Offering. See Item 1.1 Funds ) 2. See Item Hayden Street Property Acquisition. 3. See Item York Road Property Acquisition. 4. See Item King Street Property Acquisition. 5. The General Partner is entitled to be paid the General Partner Fees from the Partnership from time to time. The General Partner Fees are the Management Fee (which is equal to 1.5% of Fair Market Value of the Partnership payable by the Partnership to the General Partner, estimated and payable quarterly), the Incentive Fee (which is equal to 7.0% of the Adjusted Net Operating Income to be paid in Trust Units, from the previous Fiscal Year) and the Acquisition Fee (equal to 1.0% of the total purchase price of each of the Properties acquired by the Partnership and which is paid to the General Partner upon completion of the purchase of each of the Properties) and which will be paid, as applicable, from funds

35 raised from the Offerings until such time as the Partnership receives a positive return from the disposition of Properties acquired by it. The Partnership owes the General Partner $0 representing Management Fees and Acquisition Fees accrued to date, which amount is unsecured, non-interest bearing and is due on demand. All of the outstanding shares of the General Partner are beneficially owned or controlled, directly or indirectly by Brian Pulis and Kyle Pulis. See Item Partnership Agreement - Fees of General Partner. The Issuers will pay a Trailer Fee of up to 1% of Gross Proceeds realized on the sale of Trust Units and LP Units by the EMD, dealer or dealing representative for Trust Units or LP Units outstanding after the fifth year of such holder s subscription, payable by the Issuers to such dealer. 6. The time and cost to complete this event cannot be confirmed until the General Partner identifies suitable Properties to acquire. The Offering is a blind pool offering. Other than as set out in this Item 3.4 Current and Target Properties, the specific Properties that the Partnership will seek to acquire have not been identified as of the date of this Offering Memorandum. See Item 10 Risk Factors Insufficient Funds The proceeds of the Offerings may not be sufficient to accomplish all of the Issuers proposed objectives and there is no assurance that alternative financing will be available. See Item 10 - Risk Factors. ITEM 4 - MATERIAL AGREEMENTS The following is a summary of each material agreement with respect to the Issuers, which are available on request at the offices of the Issuers at 1 Nelson Street W., Suite 200A, Brampton, Ontario L6X 3E4, Tel: , Attention: Brian Pulis. 4.1 Declaration of Trust The Trust is an unincorporated open-ended, limited purpose, commercial trust governed by the laws of the Province of Ontario and created by the Declaration of Trust. Following the completion of the requirements under the Tax Act, it is intended that at all times the Trust qualify as a mutual fund trust. See Item 8.1 Income Tax Consequences Relating to the Trust. The Declaration of Trust, which is dated as of February 6, 2015, as may be amended, contains the terms and conditions governing the relationship between the Trustee, as trustee, and the Trust Unitholders, as beneficiaries of the Trust Property. The following is a summary of certain provisions of the Declaration of Trust. The summary does not purport to be complete and is subject to the more detailed provisions of the Declaration of Trust. Prospective subscribers should review the complete text of the Declaration of Trust, a copy of which is available from the Issuers. Purpose of the Trust The Trust was created primarily for the purpose of investing its funds in LP Units and Permitted Investments, provided, however, that the Trust will not undertake any activity, or acquire or retain or hold any investment, that would result in the Trust not being considered a mutual fund trust for the purposes of the Tax Act or that would result in the Trust being a SIFT trust for the purposes of the Tax Act. Trust Units The beneficial interests in the Trust are represented by one class of trust units described as Trust Units issuable in series. Each holder of a Trust Unit shall be entitled to the rights and be subject to the limitations, restrictions and conditions pertaining to the Trust Units as set out in the Declaration of Trust and the interest of each Unitholder shall be determined by the number of Trust Units registered in the name of such holder. 35

36 Each Trust Unit outstanding from time to time represents an equal undivided beneficial interest in the net asset of the Trust and each Unitholder shall be entitled to a Proportionate Share of (i) all distributions respecting the Trust Units, when and as declared, and (ii) the proceeds of liquidation of the Trust Property, after satisfaction of all liabilities of the Trust. All Trust Units will rank among themselves equally and rateably without discrimination, preference or priority. Each Trust Unit entitles the holder to one vote at all meetings of Unitholders and for written resolutions of Unitholders if any. Except as set out in the Declaration of Trust, the Trust Units have no conversion, retraction or redemption or pre-emptive rights. The Initial Trust Unit does not have voting rights and does not participate in distributions from the Trust (whether of income of the Trust, Net Realized Capital Gains or other amounts) and does not participate in any net assets of the Trust in the event of termination or winding-up of the Trust, except that the Initial Trust Unit may receive the amount of its initial contribution. At any time following the issuance of one or more additional Trust Units, the Trust may redeem the Initial Trust Unit for a purchase price of $ and, upon the completion of such purchase and sale, the Initial Trust Unit shall be cancelled and shall no longer be outstanding. Trustee Subject to any restrictions set out in the Declaration of Trust, the Trustee has, without further or other action or consent, and free from any power or control on the part of the Trust Unitholders, full, absolute and exclusive power, control and authority over the Trust Property and over the affairs of the Trust to the same extent as if the Trustee was the sole and absolute beneficial owner of the Trust Property in its own right, to do all acts and things as in its sole discretion are necessary or incidental to, or desirable for, carrying out the purposes of the Trust created under the Declaration of Trust. Subject to limitations, the Trustee may delegate any of those duties of the Trustee granted or reserved to it under the Declaration of Trust that it deems appropriate. The Trustee has and may from time to time exercise the power and authority to, among other things: (a) (b) (c) the Trustee may exercise from time to time in respect of the Trust Property and the investments and affairs of the Trust any and all rights, powers and privileges that could be exercised by a legal and beneficial owner thereof; the Trustee has, without further or other action or consent, and free from any power of control on the part of the Trust Unitholders, full, absolute and exclusive power, control and authority over the Trust Property and over, and management of, the affairs of the Trust to the same extent as if the Trustee were the sole and absolute beneficial owner of the Trust Property in its own right, to do all such acts and things as in its sole judgment and discretion are necessary or incidental to, or desirable for, carrying out the trust created under the Declaration of Trust. In construing the provisions of the Declaration of Trust, presumption shall be in favour of the granted powers and authority to the Trustee. The enumeration of any specific power or authority in the Declaration of Trust shall not be construed as limiting the general powers or authority or any other specified power or authority conferred herein on the Trustee. To the maximum extent permitted by law the Trustee shall, in carrying out investment activities, not be in any way restricted by the provisions of the laws of any jurisdiction limiting or purporting to limit investments which may be made by trustees; except as expressly prohibited by law, the Trustee may grant or delegate to any person (including the Administrator) the authority and the powers of the Trustee under the Declaration of Trust as the Trustee may in its discretion deem appropriate, necessary or desirable to carry out and effect the actual management and administration of the duties of the Trustee under the Declaration of Trust, without regard to whether the authority is normally granted or delegated by trustees; and 36

37 (d) the Trustee is authorized to execute and deliver the Administration Agreement and to appoint the Administrator to act for and on behalf of the Trust in accordance with those powers and authorities granted to the Administrator under the terms of such agreement, and the Trustee may delegate to such person (and in addition to those matters, if any, specifically granted or delegated to the Administrator in the Declaration of Trust) all of those duties of the Trustee under the Declaration of Trust that the Trustee deem appropriate. The Trustee may grant broad discretion to the Administrator to administer and manage the day-to-day operations of the Trust, to act as agent for the Trust, to execute documents on behalf of the Trust, and to make decisions on behalf of the Trust. The Administrator has the powers and duties as may be expressly provided for in the Declaration of Trust and in the Administration Agreement and may be given, without limitation, the power to further delegate management and administration of the Trust, as well as the power to retain and instruct such appropriate experts or advisors to perform those duties and obligations which it is not best suited to perform. Trust Expenses and Trustee Fees The Trustee is entitled to reimbursement from the Trust of any of its expenses incurred in acting as Trustee. The Trustee on behalf of the Trust may pay or cause to be paid reasonable expenses incurred in connection with the administration and management of the Trust, including without limitation fees and expenses of the Administrator pursuant to the Administration Agreement, auditors, lawyers, appraisers and other agents, consultants and professional advisers employed by or on behalf of the Trust and the cost of reporting or giving notices to Trust Unitholders. All costs, charges and expenses properly incurred by the Trustee on behalf of the Trust shall be payable out of the Trust Property. The Trustee on behalf of the Trust may pay or cause to be paid brokerage commissions at prevailing rates in receipt of the acquisition and disposition of any securities acquired or disposed of by the Trust to brokers. Trust Unit Distributions The Trustee, with the assistance of the Administrator, may on or before each Distribution Record Date, declare payable to the holders of Trust Units on such Distribution Record Date all or any part of the Cash Flow of the Trust for the Distribution Period which includes such Distribution Record Date. The Trustee intends to allocate, distribute and make payable to Trust Unitholders all of the Income of the Trust, Net Realized Capital Gains and any other applicable amounts so that the Trust will not have any liability for tax under Part I of the Tax Act in any taxation year and such amounts will be due and payable to Unitholders of record immediately before the end of December 31 in each year, in accordance with the Declaration of Trust. If the Trustee determines that the Trust does not have sufficient cash to make the full amount of the distribution which has been declared, the Trustee has the option to pay equivalent distributions in the form of the pro rata share issuance of additional Trust Units or fractions of Trust Units. Further, the Trust Unitholder may elect to receive all Trust cash distributions in Trust Units pursuant to the DRIP. See Item 4.7 Distribution Reinvestment Plan. Trust Unit Redemptions (Cash and Trust Units) Trust Units are redeemable at any time on demand by a Trust Unitholder on delivery to the Trust of a duly completed and properly executed notice requesting redemption specifying the number of Trust Units to be redeemed and enclosing any Unit Certificate(s). Upon receipt by the Administrator of a redemption notice from the Trust Unitholder, the Trust Unitholder is entitled to receive: (a) within 12 months from the date of the Unit Certificate representing the Trust Units to be redeemed (the Issuance Anniversary ), a price per Trust Unit to be redeemed that shall be equal to 94% of the Fair Market Value of the Trust Units to be redeemed; 37

38 (b) (c) (d) within two years of the Issuance Anniversary, a price per Trust Unit to be redeemed that shall be equal to 96% of the Fair Market Value of the Trust Units to be redeemed; within three years of the Issuance Anniversary, a price per Trust Unit to be redeemed that shall be equal to 98% of the Fair Market Value of the Trust Units to be redeemed; at any time following the 3rd Issuance Anniversary, a price per Trust Unit to be redeemed that shall be equal to the Fair Market Value of the Trust Units to be redeemed; as determined by the Administrator or Trust within 30 business days of receipt of the redemption notice, having reference to Fair Market Value of the Trust (the Trust Unit Redemption Price ). The Trust Unit Redemption Price will be paid by cheque, drawn on a Canadian chartered bank or a trust company in lawful money of Canada, payable to or to the order of the redeeming Unitholder. The Trust Unit Redemption Price payable in respect of the Trust Units surrendered for redemption shall be satisfied by way of a cash payment on the last day of the Fiscal Year in which the Trust Units were tendered for redemption. The Trust shall not be required to make a payment in cash of the Trust Unit Redemption Price with respect to Trust Units tendered to for redemption pursuant to a Redemption Notice if: (a) (b) (c) the redemption of Trust Units will result in the Trust losing its status as a mutual fund trust for the purposes of the Tax Act; or the total amount payable by the Trust pursuant to the above in respect of such Trust Units and all other Trust Units tendered for redemption in the same Fiscal Year exceeds the greater of $100,000 or 5% of the Fair Market Value of the Trust per Fiscal Year or, in the case of Trust Unitholders who have held their Trust Units for at least five years, the greater of $100,000 or 10% of the Fair Market Value of the Trust per Fiscal Year (the Annual Limit ), provided that the Administrator may, in its sole discretion, waive such limitation in respect of all Trust Units tendered for redemption in any Fiscal Year. Trust Units tendered for redemption in any Fiscal Year in which the total amount payable by the Trust exceeds the Annual Limit will be redeemed for cash on a pro-rata basis up to the Annual Limit and, unless any applicable regulatory approvals are required, by a distribution, of Redemption Notes, for the balance; or in the Administrator s opinion (in its sole discretion), the Trust has insufficient liquid assets to fund such redemptions or that the liquidation of assets at such time would be to the detriment of the remaining holders of Trust Units or the Trust generally. If, as a result of the foregoing limitations, a Trust Unitholder is not entitled to receive cash upon the redemption of some or all of the Trust Units tendered for redemption, then the Trust Unit Redemption Price to which the Trust Unitholder would otherwise be entitled, is to be paid and satisfied by the delivery to holders of Trust Units tendered for redemption of a distribution in specie of Redemption Notes (subject to any applicable regulatory approvals). In such circumstances, the Trust will issue a cheque to the Trust Unitholder for the amount (if any) that is not subject to limitation or it will distribute Redemption Notes in satisfaction of the redemption price or portion thereof that is subject to limitation. No fractional Redemption Notes in integral multiples of less than the applicable Trust Unit Redemption Price are to be distributed and where the number of such Redemption Notes to be received by a Trust Unitholder includes a fraction or multiple less than the applicable Trust Unit Redemption Price, the Trust shall issue a cheque to the Trust Unitholder for such amount. Any Redemption Notes which may be received as a result of a redemption of Trust Units will not be qualified investments for Deferred Plans and will have adverse tax consequences if held by a Deferred Plan. Investors should contact their own tax advisors prior to redeeming. Redemption Notes are promissory notes, issued in series or otherwise, by the Trust have the following terms and conditions: 38

39 (a) (b) (c) (d) unsecured and bearing interest from and including the issue date of each such note at 5%, payable annually in arrears (with interest after as well as before maturity, default and judgment, and interest on overdue interest at such rate); subordinated and postponed to all senior indebtedness and which may be subject to specific subordination and postponement agreements to be entered into by the Trustee or Administrator with holders of senior indebtedness; subject to earlier prepayment without penalty, being due and payable on the third anniversary of the date of issuance (i.e. each Redemption Note has a term of three years); and subject to the other standard terms and conditions as would be included in a promissory note of this kind, as may be approved by the Administrator. Transfer of Trust Units The right to transfer Trust Units is restricted such that no Trust Unitholder shall be entitled to transfer Trust Units to any person unless the transfer has been approved by the Administrator and the Administrator has the power to restrict the transfer of the Trust Units on the books of the Trust without liability to Trust Unitholders or others who are thereby restricted from making a transfer. Trust Units are transferable on the register or one of the branch transfer registers only by the Trust Unitholders of record thereof or their executors, administrators or other legal representatives or by their agents or attorneys duly authorized in writing, and only upon delivery to the Trust or to the Transfer Agent of the certificate therefor, properly endorsed or accompanied by a duly executed instrument of transfer or power of attorney and accompanied by all necessary transfer or other taxes imposed by law, together with such evidence of the genuineness of such endorsement, execution and authorization and other matters that may reasonably be required by the Transfer Agent, and no transfer of Trust Units shall be effective or shall be in any way binding upon the Trust until the transfer has been recorded on the register or one of the branch transfer registers maintained by the Transfer Agent. Upon such delivery the transfer shall be recorded on the register or branch transfer registers and a new certificate for the Trust Units shall be issued to the transferee and a new certificate for the balance of Trust Units not transferred shall be issued to the transferor. Any person becoming entitled to any Trust Units as a consequence of the death, bankruptcy or mental incompetence of any Trust Unitholder, or otherwise by operation of law, shall be recorded as the holder of such Trust Units (and shall receive a new certificate therefor upon submission of the existing certificate for cancellation) only upon production of satisfactory evidence, but until such record is made the Trust Unitholder of record shall continue to be and be deemed to be the holder of such Trust Units for all purposes whether or not notice of such death or other event has been given. Restrictions on Non-Resident Ownership It is in the best interest of Trust Unitholders that the Trust always qualifies as a mutual fund trust under the Tax Act and in order to ensure the maintenance of such status: (a) if determined necessary or desirable by the Trustee or the Administrator, in their sole discretion, the Trust may from time to time, among other things, take all necessary steps to monitor the activities of the Trust and ownership of the Trust Units. If at any time the Trustee or the Administrator become aware that the activities of the Trust and/or ownership of the Trust Units by Non-Residents may threaten the status of the Trust under the Tax Act as a mutual fund trust, the Trust, by or through the Administrator on the Trust s behalf, is authorized to take such action as may be necessary in the opinion of the Administrator to maintain the status of the Trust as a mutual fund trust including, without limitation, the imposition of restrictions on the issuance by the Trust of Trust Units or the transfer by any Trust Unitholder of Trust Units to a Non-Resident and/or require the sale of Trust Units by Non-Residents on a basis determined by the 39

40 Administrator and/or suspend distribution and/or other rights in respect of Trust Units held by Non-Residents transferred contrary to the foregoing provisions or not sold in accordance with the requirements thereof; (b) (c) (d) in addition, the Transfer Agent may, if determined appropriate by the Administrator, establish operating procedures for, and maintain, a reservation system which may limit the number of Trust Units that Non-Residents may hold, limit the transfer of the legal or beneficial interest in any Trust Units to Non-Residents unless selected through a process determined appropriate by the Administrator, which may either be a random selection process or a selection process based on the first to register, or such other basis as determined by the Administrator. The operating procedures relating to such reservation system shall be determined by the Administrator. Such operating procedures may, among other things, provide that any transfer of a legal or beneficial interest in any Trust Units contrary to the provisions of such reservation system may not be recognized by the Trust; unless and until the Administrator has been required to do so under the terms of the Declaration of Trust, the Administrator shall not be bound to do or take any proceeding or action with respect to a Non-Resident acquiring Trust Units by virtue of the powers conferred on it hereby. The Administrator is not required to actively monitor the foreign holdings of the Trust. The Administrator is not liable for any violation of the non-resident ownership restriction, which may occur during the term of the Trust; and the Administrator has the sole right and authority to make any determination required or contemplated with respect the residency requirements and restrictions of the Trust. The Administrator shall make all determinations necessary for the administration of the provisions of the Declaration of Trust governing the residency requirements and, without limiting the generality of the foregoing, if the Administrator considers that there are reasonable grounds for believing that a contravention of the non-resident ownership restriction has occurred or will occur, the Administrator shall make a determination with respect to the matter. Any such determination shall be conclusive, final and binding except to the extent modified by any subsequent determination by the Administrator. Repurchase or Retraction of Trust Units There are no conversion, retraction, redemption or pre-emptive rights attaching to the Trust Units. Meetings of Trust Unitholders Notice of all meetings of Trust Unitholders shall be given by unregistered mail, postage prepaid, addressed to each Trust Unitholder at the Trust Unitholder s last address on the books of the Trust, mailed at least 21 days and not more than 50 days before the meeting. Quorum At any meeting of the Trust Unitholders, a quorum consists of two or more persons present in person either holding personally or representing as proxies in aggregate not less than 5% of the outstanding Trust Units. Voting Rights of Unitholders Only Trust Unitholders of record shall be entitled to vote and each Trust Unit shall entitle the holder or holders of that Trust Unit on a poll vote at any meeting of Trust Unitholders to the voting rights set out in the Declaration of Trust. 40

41 Removal of Trustee The Trust Unitholders may remove any Trustee from office, by Extraordinary Resolution at a meeting of Trust Unitholders called for that purpose. Notice of such removal shall be provided to the Trustee no less than 15 days prior to the effective date of the removal unless otherwise agreed to in writing. A vacancy created by the removal of the Trustee may be filled by Ordinary Resolution at the meeting of Trust Unitholders at which the Trustee is removed or, if not so filled, shall be filled by the Administrator. No vacancy of the office of the Trustee shall operate to annul the Declaration of Trust or affect the continuity of the Trust. The Administrator may fill a vacancy of the Trustee without the approval of the Trust Unitholders. Limitation on Non-Resident Ownership In order for the Trust to maintain its status as a mutual fund trust under the Tax Act, the Trust must not be established or maintained primarily for the benefit of non-residents of Canada within the meaning of the Tax Act. The Trustee may take any action it considers necessary to ensure that the Trust maintains its status as a mutual fund trust as defined in the Tax Act. SIFT Trust The Trustee may take any action it considers necessary to ensure that the Trust is not, and does not become, a SIFT trust as defined in the Tax Act. Amendments to the Declaration of Trust The Declaration of Trust may by amended by the Trustee with respect to certain enumerated items, including amendments necessary in order for the Trust to continue to qualify as a mutual fund trust under the Tax Act or to not qualify as a SIFT trust. All other amendments may be made by Special Resolution. Term of Trust The Trust shall continue for a term ending on the earlier of December 31, 2050 and the date which is one day prior to the date, if any, the Trust would otherwise be void by virtue of any applicable rule against perpetuities then in force in Ontario. The Trustee will start winding-up the affairs of Trust not more than two years prior to the end of the term of Trust. Financial Year End The fiscal year end of the Trust is December Partnership Agreement The Partnership Agreement, which is dated as of June 20, 2014, as may be amended, contains the terms and conditions governing the relationship between the General Partner and the Limited Partners of the Partnership (including the Trust, as a Limited Partner). All of the outstanding shares of the General Partner are beneficially owned or controlled, directly or indirectly by Brian Pulis and Kyle Pulis. For information with respect to the management of the General Partner, see Item 2.5 Management of the Partnership The General Partner and Item 5.1 Compensation and Securities Held The General Partner. The following is a summary of certain provisions of the Partnership Agreement of the Partnership. The summary does not purport to be complete and is subject to the more detailed provisions of the Partnership Agreement. 41

42 Prospective subscribers should review the complete text of the Partnership Agreement, a copy of which is available from the Issuers. Duties of the General Partner The General Partner has: (a) (b) (c) unlimited liability for the debts, liabilities and obligations of the Partnership; subject to the terms of the Partnership Agreement, and to any applicable limitations set forth in the Partnership Act and applicable similar legislation, the full and exclusive right, power and authority to manage, control, administer and operate the business and affairs and to make decisions regarding the undertaking and business of the Partnership; and the full and exclusive right, power and authority to do any act, take any proceeding, make any decision and execute and deliver any instrument, deed, agreement or document necessary for or incidental to carrying out the business of the Partnership. An action taken by the General Partner on behalf of the Partnership is deemed to be the act of the Partnership and binds the Partnership. Notwithstanding any other agreement the Partnership or the General Partner may enter into, all material transactions or agreements entered into by the Partnership must be approved by the board of directors of the General Partner. Distributions General Partner shall make distributions of Distributable Cash to the Limited Partners in accordance with their Proportionate Interest, for each Distribution Period. If the calculation of Distributable Cash is less than zero, then the General Partner will not make any distribution to the Limited Partner. Fees of General Partner The Partnership shall, during the term of the Partnership, distribute to the General Partner, an amount to be calculated on an annual basis, determined as follows: (a) (b) (c) the Management Fee, which is a quarterly fee to be paid in advance and estimated and calculated as an amount equal to 1.5% of the Fair Market Value of the Partnership on the last date of each Fiscal Year (if such amount is negative, the Management Fee shall be zero); the Acquisition Fee, which is an amount equal to 1.0% of the acquisition price of the Properties acquired by the Partnership, excluding costs of acquisition (including but not limited to taxes and legal costs) in the relevant Fiscal Year, payable upon closing of the purchase of the Property; and the Incentive Fee, which is an amount equal to 7.0% of the Adjusted Net Operating Income. The Incentive Fee shall be paid by the purchase of Trust Units by the Partnership on behalf of the General Partner. Fees payable by the Partnership to the General Partner are subject to applicable GST (and may be subject to applicable HST in part) and will be deducted as an expense of the Partnership in the calculation of the net profits of the Partnership. Expenses of the General Partner The General Partner will be reimbursed by the Partnership for all corporate expenses incurred by the General Partner in carrying out its obligations or duties under the Partnership Agreement. The General Partner shall calculate the 42

43 corporate expenses for each month and by the 15 th day of the month following the end of such month (or on such other basis as the General Partner determine) the General Partner will invoice the Partnership for such expenses, such invoice to include details of the services provided for that period, plus GST and HST, as applicable. Such amounts shall be paid by the Partnership not later than 30 days after receipt of such invoice. LP Unit Redemptions (Cash and LP Units) LP Units are redeemable at any time on demand by a Limited Partner on delivery to the Partnership of a duly completed and properly executed notice requesting redemption specifying the number of LP Units to be redeemed and enclosing any Unit Certificate(s). Upon receipt by the General Partner of a redemption notice from the Limited Partner, the Limited Partner is entitled to receive: (a) (b) (c) (d) within 12 months from the date of the Unit Certificate representing the LP Units to be redeemed (the Issuance Anniversary ), a price per LP Unit to be redeemed that shall be equal to 94% of the Fair Market Value of the LP Units to be redeemed; within two years of the Issuance Anniversary, a price per LP Unit to be redeemed that shall be equal to 96% of the Fair Market Value of the LP Units to be redeemed; within three years of the Issuance Anniversary, a price per LP Unit to be redeemed that shall be equal to 98% of the Fair Market Value of the LP Units to be redeemed; at any time following the 3rd Issuance Anniversary, a price per LP Unit to be redeemed that shall be equal to the Fair Market Value of the LP Units to be redeemed; as determined by the General Partner or Partnership within 30 business days of receipt of the redemption notice, having reference to Fair Market Value of the Partnership (the LP Unit Redemption Price ). The LP Unit Redemption Price will be paid by cheque, drawn on a Canadian chartered bank or a trust company in lawful money of Canada, payable to or to the order of the redeeming Limited Partner. The LP Unit Redemption Price payable in respect of the LP Units surrendered for redemption shall be satisfied by way of a cash payment on the last day of the Fiscal Year in which the LP Units were tendered for redemption. The Partnership may, in its discretion, deduct and retain from the redemption proceeds of a LP Unit all costs to the Partnership associated with the redemption, including costs of liquidation of portfolio assets, up to a maximum amount equal to 2% of the Fair Market Value of the LP Units being redeemed. Trust Units redeemed at the Trust level will indirectly bear the effect of any such redemption deduction by the Partnership. The Partnership shall not be required to make a payment in cash of the LP Unit Redemption Price with respect to LP Units tendered to for redemption pursuant to a Redemption Notice if, in the General Partner s opinion (in its sole discretion), the Partnership has insufficient liquid assets to fund such redemptions or that the liquidation of assets at such time would be to the detriment of the remaining holders of LP Units or the Partnership generally, or if the total amount payable by the Partnership pursuant to the above in respect of such LP Units and all other LP Units tendered for redemption in the same Fiscal Year exceeds the greater of $100,000 or 5% of the Fair Market Value of the Partnership per Fiscal Year or, in the case of Limited Partners who have held their LP Units for at least five years, the greater of $100,000 or 10% of the Fair Market Value of the Partnership per Fiscal Year (the Annual Limit ), provided that the General Partner may, in its sole discretion, waive such limitation in respect of all LP Units tendered for redemption in any Fiscal Year. LP Units tendered for redemption in any Fiscal Year in which the total amount payable by the Partnership exceeds the Annual Limit will be redeemed for cash on a pro-rata basis up to the Annual Limit and, unless any applicable regulatory approvals are required, by a distribution, of Redemption Notes, for the balance. If, as a result of the foregoing limitations, a holder of LP units is not entitled to receive cash upon the redemption of some or all of the LP Units tendered for redemption, then the LP Unit Redemption Price to which the holder of LP 43

44 Units would otherwise be entitled, is to be paid and satisfied by the delivery to holders of LP Units tendered for redemption of a distribution in specie of Redemption Notes (subject to any applicable regulatory approvals). In such circumstances, the LP will issue a cheque to the holder of LP Units for the amount (if any) that is not subject to limitation or it will distribute Redemption Notes in satisfaction of the redemption price or portion thereof that is subject to limitation. No fractional Redemption Notes in integral multiples of less than the applicable LP Unit Redemption Price are to be distributed and where the number of such Redemption Notes to be received by a holder of LP Units includes a fraction or multiple less than the applicable LP Unit Redemption Price, the LP shall issue a cheque to the holder of LP Units for such amount. Any Redemption Notes which may be received as a result of a redemption of LP Units will not be qualified investments for Deferred Plans and will have adverse tax consequences if held by a Deferred Plan. Investors should contact their own tax advisors prior to redeeming. Redemption Notes are promissory notes, issued in series or otherwise, by the Partnership having the following terms and conditions: (a) (b) (c) (d) unsecured and bearing interest from and including the issue date of each such note at 5%, payable annually in arrears (with interest after as well as before maturity, default and judgment, and interest on overdue interest at such rate); subordinated and postponed to all senior indebtedness and which may be subject to specific subordination and postponement agreements to be entered into by the General Partner with holders of senior indebtedness; subject to earlier prepayment without penalty, being due and payable on the third anniversary of the date of issuance (i.e. each Redemption Note has a term of three years); and subject to the other standard terms and conditions as would be included in a promissory note of this kind, as may be approved by the General Partner. Meetings The General Partner may call a general meeting of Limited Partners at a time and a place as it deems appropriate in its absolute discretion for the purpose of considering any matters set forth in the notice of meeting. Consents without Meeting The General Partner may secure the consent or agreement of any Limited Partner to any matter requiring consent or agreement in writing, and the consents or agreements in writing may be used in conjunction with votes given at a meeting of Limited Partners or without a meeting of Limited Partners to secure the necessary consent or agreement to the matter. Place of Meeting Meetings of Limited Partners will be held in the City of Brampton, Ontario, or at such other place as the General Partner may designate. Notice of Meetings Notice of any meeting of Limited Partners is to be given to each Limited Partner not less than seven days (but not more than 45 days) prior to such meeting, and to be valid for the purposes hereof, must state: (e) the time, date and place of such meeting; and 44

45 (f) in general terms, the nature of the business to be transacted at the meeting in sufficient detail to permit a Limited Partner to make a reasoned decision thereon. Quorum At any meeting of the Limited Partners, a quorum is two or more individuals present in person either holding personally or representing as proxies not less in aggregate than 5% of the votes attached to all outstanding LP Units. In the event of such quorum not being present at the appointed place on the date for which the meeting is called within 30 minutes after the time fixed for the holding of such meeting, the meeting, if called by request of Limited Partners, shall be terminated and, if otherwise called, shall stand adjourned to such day being not less than seven days later and to such place and time as may be appointed by the chair of the meeting. If at such adjourned meeting a quorum as above defined is not present, the Limited Partners then present either personally or by proxy shall form a quorum, and any business may be brought before or dealt with at such an adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling the same. Resolutions Binding Any resolution passed in accordance with the Partnership Agreement is binding on all Partners and their respective heirs, executors, administrators, successors and assigns, whether or not the Limited Partner was present or represented by proxy at the meeting at which the resolution was passed and whether or not the Limited Partner voted against the resolution. Powers Exercisable by Special Resolution The following powers are only exercisable by Special Resolution passed by the Limited Partners: (a) (b) (c) (d) (e) (f) dissolving the Partnership, except as otherwise provided for in the Partnership Agreement; removing the General Partner and electing a new general partner; the sale of all or substantially all of the assets of the Partnership; amending, modifying, altering or repealing any Special Resolution previously passed by the Limited Partners; amending the Partnership Agreement; and determining to reconstitute the Partnership. Removal of General Partner The General Partner may not be removed as general partner of the Partnership, except as follows: (a) (b) (c) the occurrence of any of the following events which has not been cured by the General Partner within 30 days of the occurrence thereof: the passing of any resolution of the directors or shareholders of the General Partner requiring or relating to the bankruptcy or the making of any assignment for the benefit of creditors of the General Partner (or the commencement of any act or proceeding in connection with any of the foregoing which is not contested in good faith by the General Partner); or the appointment of a receiver of all or substantially all of the assets and undertakings of the General Partner; or 45

46 (d) the occurrence of any gross negligence, wilful misconduct or fraud on the part of the General Partner, and the passing of a Special Resolution for the removal of the General Partner. Upon the occurrence of any of the preceding events and the passing of a Special Resolution for the removal of the General Partner, the General Partner shall be removed as the General Partner of the Partnership effective upon the appointment of a new general partner and acceptance of such appointment. Any such action by the Limited Partners for removal of the General Partner must also provide for the election and succession of a new general partner. As a condition precedent to the resignation or removal of the General Partner, the Partnership will pay all amounts payable by the Partnership to the General Partner pursuant to the Partnership Agreement accrued to the date of resignation or removal subject to any claims or liabilities of the General Partner to the Partnership. Voluntary Withdrawal of General Partner The General Partner has agreed not to voluntarily withdraw as general partner, provided that the General Partner may withdraw if such withdrawal is approved by a Special Resolution, after which time the General Partner may withdraw as such by giving 90 days notice. Transfer of General Partner Interest The General Partner may transfer all, but not less than all, of its general partner interest in the Partnership: (a) (b) (c) (d) without the approval of the Limited Partners: in connection with the General Partner s merger or amalgamation with or into another entity; or to the purchaser of all or substantially all of its assets; or if such transfer is approved by a Special Resolution; in all cases provided that such transferee assumes the rights and duties of the General Partner and agrees to be bound by the provisions of the Partnership Agreement, as general partner. Transfer to New General Partner On the admission of a new general partner to the Partnership on the resignation or removal of the General Partner, the resigning or retiring General Partner will do all things and take all steps to transfer the administration, management, control and operation of the business of the Partnership and the books, records and accounts of the Partnership to the new general partner and will execute and deliver all deeds, certificates, declarations and other documents necessary or desirable to effect such transfer in a timely fashion. In addition, the resigning or retiring General Partner will, at the cost of the Partnership, transfer title to the Partnership s property to such new general partner and will execute and deliver all deeds, certificates, declarations and other documents necessary or desirable to effect such transfer in a timely fashion. On the resignation or removal of the General Partner, the Partnership will release and hold harmless the General Partner resigning or being removed, from any costs, expenses, damages or liabilities suffered or incurred by the General Partner as a result of or arising out of events which occur in relation to the Partnership after such resignation or removal. 4.3 Funding Agreement The Partnership and the Trust have entered into the Funding Agreement pursuant to which the Partnership has agreed to pay all costs of the Trust and all costs, fees and Selling Commissions associated with the Offerings. As a result, the costs of the Partnership and the Trust are combined and allocated to all of the Limited Partners (including the Trust) of the Partnership pro rata. 46

47 4.4 Transfer Agent Agreement Computershare Trust Company of Canada (which is also the Trustee of the Trust) has been appointed the registrar and transfer agent of the Trust Units and LP Units pursuant to a Transfer Agreement. 4.5 Third Party Administrator - Pinnacle Fund Agreement Pinnacle Canada Fund Administration Ltd. (the Third Party Administrator ) has been retained to provide fund accounting and record keeping services to both the Trust and the Partnership. The fees for such services provided will be paid by the Trust or the Partnership, as applicable. The Third Party Administrator is not related to or affiliated with Pinnacle Wealth Brokers Inc., the Trust or the Partnership. 4.6 Administration Agreement The Trust has retained the Administrator to provide certain investment management and ancillary services, as set out in the Administration Agreement, including sourcing, evaluation and management of investments. All of the outstanding shares of Administrator are beneficially owned or controlled, directly or indirectly by Brian Pulis and Kyle Pulis. For information with respect to the management of the Administrator, see Item 2.3 Management of the Trust Administrator and Item 5.1 Compensation and Securities Held The Trust. This summary does not purport to be complete and is subject to the more detailed provisions of the Administration Agreement. Prospective subscribers may review the complete text of the Administration Agreement, a copy of which is available on request at the offices of the Issuers, 1 Nelson Street W., Suite 200A, Brampton, Ontario L6X 3E4, Tel: , Attention: Brian Pulis. Fees and Expenses Paid to the Administrator The Administrator shall be reimbursed by the Trust for all corporate expenses incurred by the Administrator in carrying out its obligations or duties under the Administration Agreement. The Administrator shall be entitled to the payment of a fee from the Trust for the services provided by the Administrator in the amount of $ per year plus applicable GST. Common expenses of the Trust will be allocated to each series of Trust Units based on respective Fair Market Value of the Trust Units. Expenses specific to a series of Trust Units will be allocated to and deducted from the Fair Market Value of the Trust Units of that series only. Powers and Duties of the Administrator As manager of the Trust, the Administrator has been given the full authority and exclusive responsibility to direct the day-to-day undertaking, operations and affairs of the Trust without limitation, the following: (a) (b) (c) (d) (e) undertake any matters required by the terms of the Declaration of Trust to be performed by the Trustee, which are not otherwise delegated and generally provide all other services as may be necessary or as requested by the Trustee for the administration of the Trust; prepare or cause to be prepared all returns, filings and documents and make all determinations necessary for the discharge of the Trustee s obligations under the Declaration of Trust; the retention and monitoring, on behalf of the Trustee, of the transfer agent and other organizations serving the Trust; the authorization and payment on behalf of the Trust of operation expenses incurred on behalf of the Trust and the negotiation of contracts with third party providers of services (including, but not limited to, transfer agents, legal counsel, auditors and printers); the provision of office space, telephone, office equipment, facilities, supplies and executive, secretarial and clerical services; 47

48 (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) (p) (q) (r) dealing with: (i) banks and other institutional lenders, including, without limitation, in respect of the maintenance of bank records and the negotiation and securing of bank financing or refinancing of one or more credit or debt facilities, or other ancillary facilities; (ii) any and all other arrangements for the borrowing of funds in any manner whatsoever; and (iii) the grant or issue of covenants, guarantees and/or security of any nature whatsoever to ensure or secure any such facilities or other arrangements, in respect of the Trust or any entity in which the Trust holds any direct or indirect interest and any amendment, deletion or supplement thereto or termination thereof, including without limitation the execution and delivery of all agreements, indentures and other documents giving effect thereto; prepare or cause to be prepared and deliver or cause to be delivered to Trust Unitholders, annual audited financial statements of the Trust, as well as relevant tax information; prepare and submit all income tax returns and filings to the Trustee in sufficient time prior to the dates upon which they must be filed so that the Trustee has a reasonable opportunity to review them, execute them and return them to the Administrator, and arrange for their filing within the time required by applicable tax law; administer on behalf of the Trust such distribution reinvestment plans and other similar plans as the Trust may establish from time to time; compute, determine and make on the Trust s behalf distributions to Trust Unitholders of distributions properly payable by the Trust; ensure compliance by the Trust with all applicable securities legislation; prepare on behalf of the Trust any circular or other disclosure document required under applicable securities legislation with respect to an offer to acquire securities of another person or in response to an offer to purchase Trust Units; prepare and arrange for the distribution of all materials (including notices of meetings and information circulars) in respect of all general and/or special meetings of Trust Unitholders pursuant to the Declaration of Trust; prepare or cause to be prepared and provide or cause to be provided to Trust Unitholders on a timely basis all information to which Trust Unitholders are entitled under the Declaration of Trust and under applicable laws, including information or proxy circulars, notices, financial reports and tax information relating to the Trust; take all steps necessary to complete the issuance of securities of the Trust, including the preparation of any prospectus or comparable document; attend to all administrative and other matters (including making determinations) arising in connection with any redemptions of Trust Units; ensure that the Trust elects in the prescribed manner and within the prescribed time under subsection 132(6.1) of the Tax Act to be a mutual fund trust within the meaning of that act since inception, and assuming the requirements for such election are met, monitor the Trust s status as such a mutual fund trust and provide the Trustee with written notice when the Trust ceases or is at risk of ceasing to be such a mutual fund trust; undertake, manage and prosecute any and all proceedings from time to time before or in respect of governmental authorities on behalf of the Trust; and 48

49 (s) promptly notify the Trustee of any event that might reasonably be expected to have a material adverse effect on the affairs of the Trust. The Administrator may delegate certain of these duties from time to time. Powers and Duties of the Trustee The Trustee retains the power and authority set out below: (a) (b) (c) to effect payments of distributions to Trust Unitholders, including receiving funds and mailing cheques to Trust Unitholders; to delegate any or all of the management and administrative powers and duties of the Trustee; and to enter into and perform the obligations of the Trust under the Administration Agreement, and any amendments to the Administration Agreement. Standard of Care of the Administrator The Administrator must exercise the powers and discharge the duties of its office honestly, in good faith and in the best interests of the Trust and in connection therewith must exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. 4.7 Distribution Reinvestment Plan The Issuers have each established a DRIP, which is a distribution reinvestment plan for the purposes of offering Eligible Holders a convenient method to reinvest distributions on Trust Units or LP Units (as applicable) declared and payable to them. Features Under the DRIP, a Participant may purchase additional Trust Units or LP Units with the cash distributions paid on the eligible Trust Units or LP Units which are registered in the name of the Registered Participant or held in a Non- Registered Participant s account maintained pursuant to the DRIP. The price at which Trust Units or LP Units will be issued from treasury under the DRIP will be calculated by reference to the DRIP Unit Price. No commissions, service charges or brokerage fees are payable by Participants in connection with the DRIP. Distributions in respect of whole and fractional Trust Units or LP Units (up to six decimal places) purchased under the DRIP will be credited to a Participant s account and will be automatically invested under the DRIP in additional Trust Units or LP Units until such time as the Participant s participation in the DRIP is terminated. The Trust or the Partnership shall determine the number of Trust Units or LP Units (as applicable) available to be issued under the DRIP at any time. Participation and Enrollment in the DRIP Provisions of the DRIP apply to all Participants, but are subject to the administrative practices and requirements of intermediaries through whom Trust Units or LP Units are held by Non-Registered Unitholders. Those administrative practices and requirements may vary, and Non-Registered Unitholders should contact their intermediary to determine the requirements of such intermediary regarding participation in the DRIP. In order to be eligible to participate in the DRIP, a holder must be an Eligible Holder. An Eligible Holder who is a registered holder of Trust Units or LP Units of record may enrol in the DRIP at any time by duly completing and returning a DRIP Enrollment Form to the Trust or Partnership (as applicable) by Close of Business on the fifth 49

50 Business Day prior to a Distribution Record Date for it to be effective on such Distribution Payment Date. Any DRIP Enrollment Form received after such time will be applied to the next applicable Distribution Record Date. Eligible Holders who are Non-Registered Unitholders may request enrollment in the DRIP through such broker or investment dealer. Once a Participant has enrolled in the DRIP, participation continues automatically unless terminated in accordance with the terms of the DRIP. Once a Participant is enrolled, on each Distribution Payment Date, the Trust or Partnership shall promptly pay to the account of the Participants, all cash distributions paid on their Trust Units or LP Units (as applicable), which shall be immediately applied to purchase additional Trust Units or LP Units from treasury (with no action upon the part of the holder) at the then applicable DRIP Unit Price as determined by the Trust or Partnership. The Trust or Partnership shall retain such portion of the cash concurrently with the issuance of additional Trust Units or LP Units from treasury to the Participants. If any Trust Units or LP Units are held by a non-resident of Canada, such holder is not eligible to participate in the DRIP. Upon ceasing to be a resident of Canada, a Participant shall forthwith notify the Trust or Partnership (as applicable) of same and shall automatically be deemed to cease to be a Participant as of the date the Participant ceased to be a resident of Canada. A DRIP Enrollment Form may be obtained from the Trust any time upon written request addressed to the Trust. No interest will be paid to Participants on any funds held for investment under the DRIP. Transfer of Participation Rights The right to participate in the DRIP may not be transferred by a Participant. Termination of Participation Participation in the DRIP may be terminated by a Registered Participant once per calendar year, effective as of the first Distribution Record Date of the following year by notice in writing to the Trust or Partnership (as applicable). Non-Registered Participants can terminate their participation in the DRIP by notifying the broker or other investment dealer with whom they hold their Trust Units or LP Units. Following such termination, a certificate for the number of whole Trust Units or LP Units issued to the Registered Participant under the DRIP will be issued to, and in the name of, such Participant, together with a cheque for the value of any remaining fraction of a Trust Unit or LP Unit (as applicable) held for the account of such Participant. The amount of the payment for any such fraction will be determined by the prevailing DRIP Unit Price on the day of termination. If the notice of termination is received by the close of business on the last Business day of the calendar year, termination of the Participant s participation in the DRIP will be effective in respect of the next Distribution Record Date of the following year. Otherwise, the termination will be effective in respect of the next succeeding year. For greater certainty, termination by a Participant will not prevent such Participant from participating in the DRIP at a later date. No termination requests will be processed between a Distribution Record Date and the related Distribution Payment Date. Normally, a certificate will be sent to a Participant within three weeks of receipt by the Issuers of a Participant s termination request. After termination of participation in the DRIP, all subsequent distributions will be paid to the former Participant in cash in the usual manner. 50

51 Amendment, Suspension or Termination of the DRIP The Issuers reserve the right to amend, suspend or terminate the DRIP at any time, but such action has no retroactive effect that would prejudice the interest of the Participants. Participants will be sent written notice of any such amendment, suspension or termination. In the event of suspension or termination of the DRIP by the Issuers, no investment in additional Trust Units or LP Units on behalf of Participants will be made on the Distribution Payment Date immediately following the effective date of such suspension or termination. Any Trust Unit distribution or LP Unit distribution subject to the DRIP and paid after the effective date of any such suspension or termination will be remitted by the Issuers to the Participants in cash only, in the usual manner. Rules and Regulations The Issuers may from time to time adopt rules and regulations to facilitate the administration of the DRIP. The Issuers also reserves the right to regulate and interpret the DRIP as they deem necessary or desirable to ensure the efficient and equitable operation of the DRIP. Proration in Certain Events The Issuers reserve the right to determine, promptly following each Distribution Record Date, the amount of new equity, if any, to be made available under the DRIP on the Distribution Payment Date to which such record date relates. No assurances can be made that new Trust Units or LP Units will be made available under the DRIP on a regular basis, or at all. If on any Distribution Payment Date the Issuers determine not to issue any equity through the DRIP, or the availability of new Trust Units or LP Units is prorated in accordance with the terms of the DRIP, or for any other reason a distribution cannot be reinvested under the DRIP, in whole or in part, then Participants will be entitled to receive from the Trust the full amount of the regular distribution for each Trust Unit or LP Unit (as applicable) in respect of which the distribution is payable but cannot be reinvested under the DRIP in accordance with the applicable election. Price of Trust Units or LP Units On each Distribution Payment Date, the Issuers shall promptly pay to the account of the Participants, all cash distributions paid on their Trust Units or LP Units, which shall be immediately applied to purchase additional Trust Units or LP Units from treasury (with no action upon the part of the Trust Unitholder or Limited Partner) at the then applicable DRIP Unit Price as determined by the Trust or Partnership (as applicable). The Issuers shall retain such portion of the cash concurrently with the issuance of additional Trust Units or LP Units from treasury to the Participants. Costs There shall not be any commissions, service charges or brokerage fees payable in connection with the issuance of Trust Units or LP Units under the DRIP. All administrative costs of the DRIP shall be borne by the Issuers. Reports Registered Participants An account will be maintained by the Issuers for each Participant with respect to purchases of Trust Units or LP Units under the DRIP for the account of such Participant. An unaudited statement of account regarding purchases under the DRIP will be sent on an annual basis to each Participant who is a registered holder of Trust Units or LP 51

52 Units. These statements of account are a Participant s continuing record of purchases of Trust Units or LP Units made on behalf of such Participant pursuant to the DRIP and should be retained for income tax purposes. Trust Unitholders and Limited Partners are responsible for calculating and monitoring their own adjusted cost base in Trust Units or LP Units for income tax purposes, as certain averaging rules may apply and such calculations may depend on the cost of other Trust Units or LP Units held by such holder. Non-Registered Participants Non-Registered Unitholders who have enrolled in the DRIP may receive statements of account from their intermediary in accordance with the intermediary s administrative practices. Such statements will constitute such Non-Registered Unitholder s continuing record of the date and valuation of the acquisition of Trust Units or LP Units issued pursuant to the DRIP and should be retained for income tax purposes. Non-Registered Unitholders should contact their intermediary to determine the procedures for requesting current statements. No Certificates No certificates representing Trust Units or LP Units issued pursuant to the DRIP will be provided to Participants, unless requested by the Participant. Withdrawals Registered Participants Trust Units or LP Units purchased under the DRIP will be issued to the Participants and evidenced on the register of Trust Units or LP Units. Certificates for such Trust Units or LP Units will not be issued to Participants unless specifically requested in writing. A Participant that is a registered holder of Trust Units or LP Units may request a certificate for any number of Trust Units or LP Units held by the Participant without terminating participation in the DRIP in writing from the Trust. Normally, a certificate will be sent to a Participant within three weeks of receipt by the Issuers of a Participant s request. Any remaining Trust Units or LP Units will continue to be held for the Participant s account under the DRIP. Non-Registered Unitholders Investors who have enrolled in the DRIP should contact their intermediary to determine the procedures for withdrawing their participation in the DRIP. Responsibilities of the Issuers The Issuers shall not be liable for any act, or any omission to act, in connection with the operation of the DRIP including, without limitation, any claims for liability: (a) (b) relating to the prices at which Trust Units or LP Units are purchased or sold for the Participant s account and the times such purchases are made; and arising in connection with income taxes (together with any applicable interest and/or penalties) payable by Participants in connection with their participation in the DRIP. Participants should recognize that the Issuers cannot assure a profit or protection against a loss on the Trust Units or LP Units purchased or sold under the DRIP. 52

53 Compliance with Laws The operation and implementation of the DRIP is subject to compliance with all applicable legal requirements, including obtaining all appropriate regulatory approvals and exemptions from registration and prospectus requirements. The Issuers may limit the Trust Units or LP Units issuable under the DRIP in connection with discretionary exemptive relief relating to the DRIP granted by any securities regulatory authority. Notices All notices required to be given under the DRIP shall be sent to a Participant at the address shown on the records of the Trust or at a more recent address as furnished by the Participant or the Participant s investment dealer, as the case may be. Notices to the Issuers shall be sent to: Suite 200A, 1 Nelson Street W., Brampton, Ontario L6X 3E4, Tel: , Attention: Brian Pulis, inquiry@pulisinvestments.com. 4.8 Hayden Street Property Acquisition Agreement The Hayden Street Property Acquisition Agreement is dated as of December 5, 2015 and is between the Partnership and a seller who is at arm s length to the Issuers and their affiliates. The Partnership acquired the Hayden Street Property pursuant to the Hayden Street Property Acquisition Agreement for a purchase price of $3,332,000 (subject to any adjustments for property taxes and other closing adjustments) on April 25, See Item Hayden Street Property Acquisition. 4.9 Hayden Street Property Credit Facility Agreement In connection with the acquisition of the Hayden Street Property, the General Partner entered into a credit facility agreement, as borrower, with an arm s length lender, in respect of two credit facilities, with the following terms: Facility 1 - Variable rate business loan of up to $2,300,000 or up to a max of 70% loan-to-value ratio of the purchase price or appraised value, whichever is lower, to be used in connection with the purchase of the Hayden Street Property; Facility 2 - renovation loan of up to $1,400,00 to be used in connection with renovating the Hayden Street Property; the total loan amount of both Facility 1 and Facility 2 shall not exceed 65% loan-to-value ratio of the as-completed appraised value; interest rate for both facilities is set at Minimum Lending Rate % ( Minimum Lending Rate was at 3.85% at the time the General Partner entered into the credit facility agreement, and refers to the annual rate of interest which the lender establishes as the reference rate of interest to determine interest rates it will charge at such time for demand loans in Canadian dollars and which it refers to as its special rate of interest, such rate to be adjusted automatically and without the necessity of any notice to the Borrower upon each change to such rate); two-year term; interest-only payments payable monthly in arrears, with both facilities being open for prepayment; secured by: o a collateral mortgage which is a first ranking charge on the Hayden Street Property, securing an amount of $3,700,000; o variable rate business loan agreement for an amount of $2,300,000; 53

54 o variable rate business loan agreement for an amount of $1,400,000; o o o o o o o o postponement and subordination of all shareholder s and non-arm s length creditor s, to include a postponement of the right to receive any payments of both principal and interest under the said loans, except as otherwise contemplated within the credit facility agreement; a first ranking general assignment of rents and leases; general security agreement representing a first position fixed and floating charge over the Hayden Street Property and its associated assets (and a subordinate fixed and floating charge over all of the assets and undertakings of the General Partner subsequent only to presently existing charges); joint and several undertaking by the General Partner and guarantors (being Kyle Pulis and Brian Pulis) agreeing to complete the project and to fund, from resources outside the project, all cost overruns in excess of the aggregate costs set out in the project budget as approved by the lender and any deficiencies as provided for in the credit facility agreement as soon as such cost overruns or deficiencies arise or are identified, with the General Partner not being eligible for further draws until such cost overruns or deficiencies are funded; joint and several personal guarantee and postponement of claim for an amount of $3,700,000 signed by Kyle Pulis and Brian Pulis; guarantee and postponement of claim for an amount of $3,700,000 signed by the General Partner; assignment of all renovation contracts, planning approvals, permits and licenses, development agreements and contracts, project plans and specifications and certificates, engineers and land surveyors contracts, in each case, to the extent assignable, in favour of the lender; and assignment of all insurance policies with respect to the Hayden Street Property and the General Partner s rights therein and all proceeds and benefits therefrom in favour of the lender; customary covenants in favour of the lender, including, among other things, restrictions on change of control of the General Partner (as borrower), insurance coverage, receiver rights and a debt service coverage ratio of at least 1.25:1 (tested annually), calculated as net operating income plus depreciation and interest which apply (which show on the income statement), divided by total principal plus interest payments due under all long term debt; and customary events of default (the occurrence of which will allow the lender to demand payment of all amounts owing or realise upon its security). In connection with the credit facilities for the Hayden Street Property, the General Partner also paid commitment and processing fees of $35,000 and is required to pay an annual administration fee of $500 for review and monitoring. There is also a $500 monthly late reporting fee, should the General Partner fail to provide required reporting and a $500 discharge fee for each discharge provided York Road Property Acquisition Agreement The York Road Property Acquisition Agreement is dated as of August 15, 2016 and is between the Partnership and a seller who is at arm s length to the Issuers and their affiliates. The Partnership acquired the York Road Property 54

55 pursuant to the York Road Property Acquisition Agreement for a purchase price of $3,900,000 (subject to any adjustments for property taxes and other closing adjustments) on October 14, See Item York Road Property Acquisition York Road Property Credit Facility Agreement In connection with the acquisition of the York Road Property, the General Partner entered into a credit facility agreement, as borrower, with an arm s length lender, in respect of two credit facilities, with the following terms: Facility 1 - Variable rate business loan of up to $2,850,000, to be used in connection with the purchase of the York Road Property; Facility 2 renovation loan of up to $1,050,000, to be used in connection with renovating the York Road Property; the total loan amount of both Facility 1 and Facility 2 shall not exceed 70% loan-to-value ratio of the as-completed appraised value; interest rate for both facilities is set at Minimum Lending Rate % ( Minimum Lending Rate was at 3.85% at the time the General Partner entered into the credit facility agreement, and refers to the annual rate of interest which the lender establishes as the reference rate of interest to determine interest rates it will charge at such time for demand loans in Canadian dollars and which it refers to as its special rate of interest, such rate to be adjusted automatically and without the necessity of any notice to the Borrower upon each change to such rate); two-year term, with two six-month extensions at the lender s discretion (subject to a 25 basis point renewal fee per extension); interest-only payments payable monthly in arrears, with both facilities being open for prepayment; secured by: o a collateral mortgage which is a first ranking charge on the York Road Property, securing an amount of $3,900,000; o variable rate business loan agreement for an amount of $2,850,000; o variable rate business loan agreement for an amount of $1,050,000; o o o o postponement and subordination of all shareholder s and non-arm s length creditor s, to include a postponement of the right to receive any payments of both principal and interest under the said loans, except as otherwise contemplated within the credit facility agreement; a first ranking general assignment of rents and leases; general security agreement representing a first position fixed and floating charge over the York Road Property and its associated assets; joint and several undertaking by the General Partner and guarantors (being Kyle Pulis and Brian Pulis) agreeing to complete the project and to fund, from resources outside the project, all cost overruns in excess of the aggregate costs set out in the project budget as approved by the lender and any deficiencies as provided for in the credit facility agreement as soon as such cost overruns or deficiencies arise or are identified, with the General 55

56 Partner not being eligible for further draws until such cost overruns or deficiencies are funded; o o o o joint and several personal guarantee and postponement of claim for an amount of $3,900,000 signed by Kyle Pulis and Brian Pulis; guarantee and postponement of claim for an amount of $3,900,000 signed by the General Partner; assignment of all renovation contracts, planning approvals, permits and licenses, development agreements and contracts, project plans and specifications and certificates, engineers and land surveyors contracts, in each case, to the extent assignable, in favour of the lender; and assignment of all insurance policies with respect to the York Road Property and the General Partner s rights therein and all proceeds and benefits therefrom in favour of the lender; customary covenants in favour of the lender, including, among other things, restrictions on change of control of the General Partner (as borrower), insurance coverage, receiver rights and a debt service coverage ratio of at least 1.25:1 (tested annually), calculated as net operating income plus depreciation and interest which apply (which show on the income statement), divided by total principal plus interest payments due under all long term debt; and customary events of default (the occurrence of which will allow the lender to demand payment of all amounts owing or realise upon its security). In connection with the credit facilities for the York Road Property, the Partnership also paid commitment fees of $35,000 and is required to pay an annual administration fee of $500 for review and monitoring. There is also a $500 monthly late reporting fee, should the General Partner fail to provide required reporting and a $500 discharge fee for each discharge provided King Street Property Acquisition Agreement The King Street Property Acquisition Agreement is dated as of January 6, 2017 and is between the Partnership and a seller who is at arm s length to the Issuers and their affiliates. The Partnership acquired the King Street Property pursuant to the King Street Property Acquisition Agreement for a purchase price of $3,600,000 (subject to any adjustments for property taxes and other closing adjustments) on February 15, See Item King Street Property Acquisition King Street Property Credit Facility Agreement In connection with the acquisition of the King Street Property, the General Partner entered into a credit facility agreement, as borrower, with an arm s length lender, in respect of two credit facilities, with the following terms: Facility 1 - Variable rate business loan of up to $2,507,000 or 69.95% of the purchase price or 78.85% of the appraised value, whichever is lower, to be used in connection with the purchase of the King Street Property; Facility 2 - renovation loan of up to $1,371,00 to be used in connection with renovating the King Street Property; the total loan amount of both Facility 1 and Facility 2 shall not exceed $3,878,500; 56

57 interest rate for both facilities is set at Prime Rate % calculated monthly not in advance but under no circumstances shall the interest rate be less than 5.05%. ( Prime Rate was at 2.7% at the time the General Partner entered into the credit facility agreement and means the annual rate of interest announced from time to time by Royal Bank of Canada during the period when interest based upon the Prime Rate accrues under the credit facility agreement, as a reference rate then in effect for determining interest rates on Canadian dollar commercial loans made in Canada); three-year term; interest-only payments payable monthly in arrears, with both facilities being open for prepayment after the first year of the term, on a scheduled payment date without penalty, after receipt of written notice not less than 60 days in advance; secured by: o o o o o o a first in priority mortgage and charge of the fee simple interest on the King Street Property; a first in priority general assignment of rents and/or leases; a first in priority general security agreement over all the General Partner s present and afteracquired personal property located on, related to, arising from or used or acquired in connection with the King Street Property; a first in priority specific assignment of any lease (including any guarantee and/or indemnity related thereto) required by the lender together with an acknowledgment of same by the tenant thereunder if so required by the lender; joint and several personal guarantee and postponement of claim from the Partnership, the General Partner, Kyle Pulis, Brian Pulis and Ontario Inc.; such further security as the lender may reasonably require. the credit facilities are cross defaulted with three other loans entered into between the lender and companies related to the General Partner; customary covenants in favour of the lender, including, among other things, restrictions on change of control of the General Partner (as borrower), insurance coverage and a right of first refusal in favour of the lender upon maturity and; and customary events of default (the occurrence of which will allow the lender to demand payment of all amounts owing or realise upon its security). In connection with the credit facilities for the King Street Property, the General Partner also paid a commitment fee of $38,785 and a processing fee of $38,785 and is required to pay a fee of $750 for each advance of funds under Facility 2. The lender may retain from the initial advance of funds an amount of $66,504 to be held in escrow as an interest reserve and the General Partner is also responsible for all of the lender s costs and expenses, including without limitation, all legal fees and disbursements and the cost of all reports, appraisals, inspections and investigations incurred by the lender in relation to the two credit facilities. 57

58 ITEM 5- DIRECTORS, MANAGEMENT, PROMOTERS AND PRINCIPAL HOLDERS 5.1 Compensation and Securities Held The Trust The following tables set out information about each of the Trustee and Administrator of the Trust and each person who, directly or indirectly, beneficially owns or controls 10% or more of any Trust Units: Name and municipality of principal residence Position held and date of obtaining that position (1) Compensation paid by the Trust For the year ended December 31, 2016 and the compensation anticipated to be paid in the year ended December 31, 2017 Number, type and percentage of securities of the Trust held after completion of the Minimum Offering Number, type and percentage of securities of the Trust held after completion of the Maximum Offering Computershare Trust Company of Canada Pulis Real Estate Adminco Inc. Trustee $10,000 (2) Nil Nil Administrator $500 (3) Nil Nil Brian Pulis, Brampton, Ontario Director and Chief Executive Officer $0 (4) Nil Nil Kyle Pulis, Brampton, Ontario Jason Priest Toronto, Ontario Peter VanSickle Oakville, Ontario Director, President and Secretary Independent Director of the Administrator Independent Director of the Administrator $0 (4) Nil Nil $0 (5) Nil Nil $0 (5) Nil Nil Notes: 1. Each of the Trustee and the Administrator has held this position since the establishment of the Trust effective on February 6, Computershare Trust Company of Canada will be paid an annual fee of $10,000 for acting as Trustee of the Trust and since the inception of the Trust has been paid $83, Pursuant to the Declaration of Trust, Computershare Trust Company of Canada will act as the transfer agent and registrar of the Trust and will be paid a fee of approximately $3.75 for each Trust Unit Certificate issued by the Trust. These costs will be borne by the Partnership pursuant to the Funding Agreement. 3. The Administrator receives $500 per year as the fee pursuant to the terms of the Administration Agreement and since the inception of the Trust has been paid nil. This cost will be borne by the Partnership pursuant to the Funding Agreement. 4. The Administrator is owned and controlled by Ontario Inc. (as to a 50% interest) and Ontario Inc. (as to a 50% interest). These corporations are solely owned corporations, controlled by Brian Pulis and Kyle Pulis, respectively. Brian Pulis and Kyle Pulis are not compensated for acting as directors and officers of the Administrator but would indirectly share in the nominal fees paid by the Trust to the Administrator through such share ownership. See Item Compensation and Securities Held The General Partner below for a summary of the fees that Brian Pulis and Kyle Pulis would indirectly share based on their beneficial ownership or control of the General Partner. 58

59 5. Jason Priest and Peter VanSickle will each be paid an annual fee of $9,000 for acting as independent directors of the General Partner. See Item Compensation and Securities Held The General Partner and see also Item Conflicts of Interest Policies. The General Partner The following tables set out information about each of the directors and executive officers of the General Partner and each person or entity who, directly or indirectly, beneficially owns or controls 10% or more of any voting shares of the General Partner or 10% or more of the LP Units: Name and municipality of principal residence Position held and date of obtaining that position Compensation paid by the General Partner or Partnership for the year ended December 31, 2016 and the compensation anticipated to be paid in the year ended December 31, 2017 Number, type and percentage of securities of the General Partner or Partnership held after completion of the Minimum Offering Number, type and percentage of securities of the General Partner or Partnership held after completion of the Maximum Offering Brian Pulis Brampton, Ontario Kyle Pulis Brampton, Ontario Jason Priest Toronto, Ontario Peter VanSickle Oakville, Ontario Pulis Real Estate Trust Brampton, Ontario Director and Chief Executive Officer Director, President and Secretary Independent Director of the General Partner Independent Director of the General Partner $60,000 (1) Nil 100 Common Shares, of the General Partner (3) $60,000 (1) Nil 100 Common Shares, of the General Partner (4) $9,000 (2) Nil Nil $9,000 (2) Nil Nil Limited Partner Nil Nil Note 5 Notes: 1. All of the outstanding shares of the General Partner are beneficially owned or controlled, directly or indirectly by Brian Pulis and Kyle Pulis. The General Partner is entitled to certain fees, including the Management Fee (which is equal to 1.5% of Fair Market Value of the Partnership payable by the Partnership to the General Partner, estimated and payable quarterly), the Incentive Fee (which is equal to 7.0% of the Adjusted Net Operating Income to be paid in Trust Units, from the previous Fiscal Year) and the Acquisition Fee (equal to 1.0% of the total purchase price of each of the Properties acquired by the Partnership and which is paid to the General Partner upon completion of the purchase of each of the Properties) pursuant to the Partnership Agreement, which will be paid, as applicable, from funds raised from the Offerings until such time as the Partnership receives a positive return from the disposition of Properties acquired by it. The Partnership owes the General Partner $0 representing Management Fees and Acquisition Fees accrued to date, which amount is unsecured, non-interest bearing and is due on demand. Brian and Kyle anticipate drawing $60,000 each from the $170,000. See Item Partnership Agreement - Fees of General Partner. Consequently, Brian Pulis and Kyle Pulis will indirectly share in those fees paid to the General Partner. 2. Jason Priest and Peter VanSickle will each be entitled to an annual fee of $9,000 for acting as independent directors of the General Partner. Since the inception of the Partnership, Jason Priest and Peter VanSickle have each received compensation of $6,750. See also Item Conflicts of Interest Policies. 3. The common shares are held by Ontario Inc., a holding company 100% solely owned by Brian Pulis. 4. The common shares are held by Ontario Inc., a holding company 100% solely owned by Kyle Pulis. 59

60 5. The Trust will acquire LP Units on each Closing under the Trust Offering, using all of the Gross Proceeds from such Closing. The ownership percentage of the Trust in the Partnership will depend upon the Gross Proceeds raised under the Trust Offering relative to the Gross Proceeds raised under the Partnership Offering. As of May 17, 2017, the Trust holds approximately 53% of the issued and outstanding LP Units with the remainder being held by investors that acquired LP Units. 6. The Partnership will reimburse the officers, directors and their affiliates for any expenses paid or incurred on behalf of the Partnership, including all reasonable travel, promotional and other business expenses incurred by them in the performance of their duties. 5.2 Management Experience The names, municipalities of residence, offices held with the Administrator and General Partner, and principal occupations of the director and officers of the Administrator and General Partner for the past 5 years are as follows: Name and Position Held Brian Pulis Director & Chief Executive Officer of the General Partner and Administrator Kyle Pulis Director, President & Secretary of the General Partner and Administrator Jason Priest Independent Director of the General Partner and Administrator Principal occupation and related experience Brian is the co-founder and President of Pulis Investments. Brian launched and ran several successful retail, service and investment companies before turning his attention in 2002 to building a solid-performing portfolio of multi-family residential properties in specific strategic markets in Ontario. With an instinct and passion for serving unmet needs, Brian focused on underserviced markets tremendous untapped opportunities. By delivering an unprecedented level of value to tenants in underserviced markets and maintaining a disciplined focus on multi-family residential properties, Brian s investment portfolio has consistently delivered value to stakeholders. Brian has received several accolades and awards over the years, most notably from the Real Estate Investment Network ( REIN ) where he is an active member, speaker and contributor as both a writer and an advisor. Brian also contributes regularly to other investment-related trade publications and shows. Kyle has over 14 years of senior-operations experience in real estate. Maximizing returns through superior strategies, efficiencies and tenant relations form the cornerstone of Kyle s leadership role as co-founder of Pulis Investments. With an eye for location and a knack for acquisition, Kyle many years of experience assist him in identifying and filling gaps in underserviced markets. An instinct for design and renovation allows him to take the lead in those markets with unique, desirable multifamily residential properties. Finally, his expert approach to project management, building efficiency and tenant relations gives him the wherewithal to maintain and grow that lead over time. Kyle is a member and a regular contributor of REIN (Real Estate Investment Network) and has been a member of the advisory board. In addition to being a frequent speaker at Real Estate Investing events. Kyle has also held a position on the Executive Board of the Brampton Downtown Development Corporation. Kyle holds an Honours Business Degree from Wilfrid Laurier University and actively served in the Canadian Armed Forces Reserves as recently as Jason has owned and managed J. Priest Investment Management Inc., a boutique portfolio management firm in Toronto, since A graduate of Acadia University, Jason began his career as a Financial Planner with one of Canada s largest insurance companies and quickly became a specialist in investments and financial markets. He earned his Canadian Investment Administrator (CIM) and Certified Financial Planner (CFP) designations in 2001, Derivatives Market Specialist (DMS) in 2003, became a Chartered Financial Analyst (CFA) in 2004 and obtained the Financial Risk Manager (FRM) designation in Mr. Priest is a member of the CFA Institute and the Global Association of Risk Professionals (GARP) and has extensive analytical and risk assessment experience. He serves as the Ultimate Designated Person and Chief Compliance Officer for J. Priest Investment Management Inc., a registered Portfolio Manager, Investment Fund Manager and Exempt Market Dealer. 60

61 Peter VanSickle Independent Director of the General Partner and Administrator 5.3 Penalties, Sanctions and Bankruptcy Peter G. VanSickle, BComm. FCIB, MBA (Financial Services). Peter has been the President of the Brampton Downtown Development Corporation, a not for profit corporation since He started his career with Ivanhoe Cambridge and was responsible for the development of a number of Regional Shopping Centres. He was responsible for land assembly and leasing activities. He worked for Hudson s Bay Co. in development and later moved to Bank of Montreal and was responsible for the Canadian Retail Branch Portfolio and was employed by Scotiabank for Real Estate Strategy He managed the design team responsible for the development of Roger s communications and has directed a number of retail design projects for major North American Retailers. Peter is the Past President of CoreNet a 5,000 member organization focussed globally on Corporate Real Estate matters. He is the Co-Chair of the Western GTA Summit a non-partisan entity dealing with transportation and development issues facing the region. There is no penalty or sanction that has been in effect during the last 10 years, and no cease trade order that has been in effect for a period of more than 30 consecutive days during the last 10 years, against the Trustee or any executive officer or director of the Issuers, Administrator or the General Partner or against an issuer of which any of the foregoing was an executive officer, director or control person at the time. No declaration of bankruptcy, voluntary assignment in bankruptcy, proposal under any bankruptcy or insolvency legislation, proceedings, arrangement or compromise with creditors or appointment of a receiver, receiver Administrator or trustee to hold assets, has been in effect during the last 10 years with regard to the Trustee or any executive officer or director of the Issuers, Administrator or the General Partner or any issuer of which any of the foregoing was an executive officer, director or control person at that time. 5.4 Loans There is no outstanding indebtedness between the Issuers, the Trustee, or individual officers or directors of the General Partner, Administrator or the Issuers. 6.1 Capital Trust Capital ITEM 6 - CAPITAL STRUCTURE The following table sets out the capitalization of the Trust as at May 17, Description of Security Number Authorized to be Issued Price Per Security Number Outstanding as at May 17, 2017 Number Outstanding After Minimum Offering Number Outstanding After Maximum Offering Initial Trust Unit 1 $100 1 (1) Nil 1 Trust Units Unlimited (2) $95 or $100 46,488 (3) Nil 500,000 Notes: 1. The Initial Trust Unit was issued to settle the Trust at a price of $100. Upon the issuance of additional Trust Units, the Initial Trust Unit ceased to have all rights to voting and participating in distributions and assets upon dissolution of the Trust and instead only carries the right to be redeemed for $100. At any time the Trust may redeem the Initial Trust Unit for a redemption price of $ Under the Maximum Offering, the Trust may issue up to 500,000 Trust Units or such other amount as may be required to reach $50,000,000. However, the Trust reserves the right to increase this amount or conduct other offerings of Trust Units from time to time. 61

62 3. The Trust has issued 11,459 Trust Units at a price of $95 per Trust Unit and 35,029 Trust Units at a price of $100 per Trust Unit for aggregate Gross Proceeds of $4,591,505. The Trust used all such Gross Proceeds to purchase 46,488 LP Units. Partnership Capital The following table sets out the capitalization of the Partnership as at May 17, Description of Security Number Authorized to be Issued Price Per Security Number Outstanding as at May 17, 2017 Number Outstanding After Minimum Offering Number Outstanding After Maximum Offering LP Units Unlimited (1) $95 or $100 86,998 (2) Nil 500,000 Notes: 1. Under the Maximum Offering, the Partnership may issue up to 500,000 LP Units or such other amount as may be required to reach $50,000,000.. However, the Partnership reserves the right to increase this amount or conduct other offerings of LP Units from time to time. 2. The Partnership has issued 22,652 LP Units at a price of $95 per LP Unit and 64,346 LP Units at a price of $100 per LP Unit for aggregate Gross Proceeds of $8,586,540. During that time, 11,459 LP Units were purchased by the Trust at a price of $95 per LP Unit and 35,029 LP Units were purchased by the Trust at a price of $100 per LP Unit for an aggregate price of $4,591,505 and investors purchased 11,193 LP Units at a price of $95 per LP Unit and 29,317 LP Units at a price of $100 per LP Unit for an aggregate price of $3,995,035. As of May 17, 2017, the Trust holds approximately 53% of the issued and outstanding LP Units with the remainder being held by investors that acquired LP Units. 6.2 Long-Term Debt Securities As of the date of this Offering Memorandum, neither the Trust nor the Partnership has any long-term debt obligations other than those obligations incurred, or to be incurred, in connection with the acquisition of the Hayden Street Property and the anticipated acquisition of the York Road Property, which is described below. Description of long-term debt Interest rate Repayment terms Amount outstanding as of the date of this Offering Memorandum Hayden Street Property credit facilities (1)(2) Minimum Lending Rate % per annum (3) Two year term with interest-only payments, payable monthly in arrears, with both facilities being open for prepayment (2) $3,700,000 (1) York Road Property credit facilities (4)(5) Minimum Lending Rate % per annum (6) Two year term with interest-only payments, payable monthly in arrears, with both facilities being open for prepayment (5) $3,900,000 (4) King Street Property credit facilities (7)(8) Prime Rate % calculated monthly (9) Three year term with interest-only payments, payable monthly in arrears, with both facilities being open for prepayment after the first year of the term, subject to certain conditions (8) $3,878,500 (7) Notes: (1) On March 28, 2016, the General Partner entered into two credit facilities with an arm s length lender whereby the General Partner can borrow up to $2,300,000, or up to a max of 70% loan-to-value ratio of the purchase price or 62

63 appraised value of the Hayden Street Property, whichever is lower, to be used in connection with the purchase of the Hayden Street Property and $1,400,000 to be used in connection with renovating the Hayden Street Property. As of the date of this Offering Memorandum, the General Partner has drawn down $2,300,000 and $282,157 on each of these credit facilities, respectively. For a description of how these debt obligations are secured, see Item 4.9 Hayden Street Property Credit Facility Agreement. (2) The Hayden Street Property credit facilities require interest-only payments, payable monthly in arrears, with both facilities being open for prepayment. The monthly amount due under Hayden Street Property credit facilities is approximately $10,965. Consequently, the total amount due within 12 months of the date of this Offering Memorandum is approximately $131,580 (based on monthly debt service payments of interest of $10,965 during the next 12 months). (3) Minimum Lending Rate was 3.85% at the time the General Partner entered into the credit facility agreement. See Item 4.9 Hayden Street Property Credit Facility Agreement. (4) On October 11, 2016, the General Partner entered into two credit facilities with an arm s length lender whereby the General Partner can borrow up to $2,850,000, to be used in connection with the purchase of the York Road Property and $1,050,000 to be used in connection with renovating the York Road Property. As of the date of this Offering Memorandum, the General Partner has drawn down $2,850,000 and nil on each of these credit facilities, respectively. For a description of how these debt obligations are secured, see Item 4.11 York Road Property Credit Facility Agreement. (5) The York Road Property credit facilities require interest-only payments, payable monthly in arrears, with both facilities being open for prepayment. The monthly amount due under York Road Property credit facilities is approximately $12,695. Consequently, the total amount due within 12 months of the date of this Offering Memorandum is approximately $152,340 (based on monthly debt service payments of interest of $12,695 during the next 12 months). (6) Minimum Lending Rate was 3.85% at the time the General Partner entered into the credit facility agreement. See Item 4.11 York Road Property Credit Facility Agreement. (7) On February 1, 2017, the General Partner entered into two credit facilities with an arm s length lender whereby the General Partner can borrow up to $2,507,000 or 69.95% of the purchase price or 78.85% of the appraised value of the King Street Property, whichever is lower, to be used in connection with the purchase of the King Street Property and up to $1,371,000 to be used in connection with renovating the King Street Property. As of the date of this Offering Memorandum, the General Partner has drawn down $2,507,500 and $0.00 on each of these credit facilities, respectively. For a description of how these debt obligations are secured, see Item 4.13 King Street Property Credit Facility Agreement. (8) The King Street Property credit facilities require interest-only payments payable monthly in arrears, with both facilities being open for prepayment after the first year of the term, on a scheduled payment date without penalty, after receipt of written notice not less than 60 days in advance. The monthly amount due under King Street Property credit facilities is approximately $16,322. Consequently, the total amount due within 12 months of the date of this Offering Memorandum is approximately $195,865 (based on monthly debt service payments of interest of $16,322 during the next 12 months). (9) Prime Rate was 2.70% at the time the General Partner entered into the credit facility agreement. See Item 4.13 King Street Property Credit Facility Agreement. 63

64 6.3 Prior Sales The Trust has issued the following Trust Units. Date of issuance Type of security issued Number of securities issued Price per security Total funds received February 6, 2015 Initial Trust Unit 1 (1) $100 $100 May 1, 2015 Trust Unit 3,119 $95 $296,305 July 13, 2015 Trust Unit 1,714 $95 $162,830 July 16, 2015 Trust Unit 110 $95 $10,450 November 6, 2015 Trust Unit 1,744 $95 $165,680 December 31, 2015 Trust Unit 2,866 $95 $272,270 February 12, 2016 Trust Unit 1,906 $95 $181,070 March 30, 2016 Trust Unit 4,228 $100 $422,800 April 29, 2016 Trust Unit 3,297 $100 $329,700 June 15, 2016 Trust Unit 3,989 $100 $398,900 August 5, 2016 Trust Unit 2,326 $100 $232,600 October 7, 2016 Trust Unit 2,454 $100 $245,400 October 21, 2016 Trust Unit 342 $100 $34,200 December 9, 2016 Trust Unit 1,885 $100 $188,500 December 29, 2016 Trust Unit 2,171 $100 $217,100 February 8, 2017 Trust Unit 2,823 $100 $282,300 April 24, 2017 Trust Unit 11,514 $100 $1,151,400 Notes: 1. The Initial Trust Unit was issued to settle the Trust at a price of $100. Upon the issuance of additional Trust Units, the Initial Trust Unit ceased to have all rights to voting and participating in distributions and assets upon dissolution of the Trust and instead only carries the right to be redeemed for $100. At any time the Trust may redeem the Initial Trust Unit for a redemption price of $ The Trust has issued 11,459 Trust Units at a price of $95 per Trust Unit and 35,029 Trust Units at a price of $100 per Trust Unit for aggregate Gross Proceeds of $4,591,505. The Trust used all such Gross Proceeds to purchase 46,488 LP Units. 64

65 The Partnership has issued the following LP Units. Date of issuance Type of security issued Number of securities issued (1) Price per security Total funds received (1) June 20, 2014 LP Unit 1 $100 $100 May 1, 2015 LP Unit 3,892 $95 $369,740 July 13, 2015 LP Unit 3,150 $95 $299,250 July 16, 2015 LP Unit 110 $95 $10,450 November 6, 2015 LP Unit 2,936 $95 $278,920 December 31, 2015 LP Unit 10,500 $95 $997,500 February 12, 2016 LP Unit 2,064 $95 $196,080 March 30, 2016 LP Unit 7,603 $100 $760,300 April 29, 2016 LP Unit 5,718 $100 $571,800 June 15, 2016 LP Unit 5,014 $100 $501,400 August 5, 2016 LP Unit 3,946 $100 $394,600 October 7, 2016 LP Unit 4,284 $100 $428,400 October 21, 2016 LP Unit 522 $100 $52,200 December 9, 2016 LP Unit 2,585 $100 $258,500 December 29, 2016 LP Unit 9,951 $100 $995,100 February 8, 2017 LP Unit 4,053 $100 $405,300 April 24, 2017 LP Unit 20,670 $100 $2,067,000 Note: 1. The Partnership has issued 22,652 LP Units at a price of $95 per LP Unit and 64,346 LP Units at a price of $100 per LP Unit for aggregate Gross Proceeds of $8,586,540. During that time, 11,459 LP Units were purchased by the Trust at a price of $95 per LP Unit and 35,029 LP Units were purchased by the Trust at a price of $100 per LP Unit for an aggregate price of $4,591,505 and investors purchased 11,193 LP Units at a price of $95 per LP Unit and 29,317 LP Units at a price of $100 per LP Unit for an aggregate price of $3,995,035. As of May 17, 2017, the Trust holds approximately 53% of the issued and outstanding LP Units with the remainder being held by investors that acquired LP Units. 7.1 Terms of Trust Units General ITEM 7 - DESCRIPTION OF UNITS The interest of each Trust Unitholder shall be determined by the number of Trust Units registered in the name of the Trust Unitholder. Other than the initial Trust Unit (which only carries the right to be redeemed for $100), each Trust Unit represents an equal undivided beneficial interest in any distribution from the Trust (whether of Income of the Trust, Net Realized Capital Gains or other amounts) and in any net assets of the Trust in the event of termination or winding-up of the Trust. All Trust Units shall rank among themselves equally and rateably without discrimination, preference or priority, whatever may be the actual date or terms of issue thereof. Each Trust Unit shall entitle the holder of record thereof to one vote at all meetings of Trust Unitholders or in respect of any written resolution of Trust Unitholders. Fractions of Trust Units shall not be issued, except pursuant to distributions of additional Trust Units to all Trust Unitholders pursuant to the Declaration of Trust. Fractions of Trust Units will not be entitled to vote at meetings of Trust Unitholders. The Trust is authorized to issue an unlimited number of Trust Units in any series. 65

66 The Trust Units do not represent a traditional investment and should not be viewed by investors as shares in the Trust. The Unitholders will not have the statutory rights normally associated with ownership of shares of a corporation including, for example, the right to bring oppression or derivative actions. The value per Trust Unit will not be a function of anticipated distributable income from the Trust and the ability of the Trust to effect longterm growth in the value of the Trust. Instead, the value per Trust Unit will be a function of the Trust s ability to generate income and effect long-term growth in the value of the Partnership and other entities now or hereinafter owned, directly or indirectly, by the Trust. See Item 10 - Risk Factors. Calculation of Fair Market Value As of 4:00 p.m. (Toronto time) on each date where a valuation is necessary, the Administrator shall determine the fair market value of the Trust (the Fair Market Value of the Trust ) and the Fair Market Value per Trust Unit. The Fair Market Value per Trust Unit shall be determined by dividing the Fair Market Value of the Trust by the number of Trust Units then outstanding. The Administrator has engaged the Third Party Administrator to calculate such fair market values in accordance with the provisions of the Declaration of Trust, which values also will be approved by the independent directors of the Administrator. The Third Party Administrator may determine such other rules as it deems necessary from time to time, which rules may deviate from Canadian generally accepted accounting principles, provided that such deviations are in the best interest of the Trust and are consistent with industry practices for issuers similar to the Trust. The Fair Market Value of the Trust as of any date will mean the fair market value of the Trust s investment in the Partnership plus the value of the Trust s investment assets and the Trust s other assets, less all liabilities, costs, and expenses accrued or payable of every kind and nature, including Management Fees, Performance Fees and distributions due but not yet paid or made. In determining the Trust s liabilities, the Administrator may estimate expenses of a regular or recurring nature in advance, and may accrue the same into one or more valuation periods, any such accrual to be binding and conclusive on all Trust Unitholders, irrespective of whether such accrual subsequently proves to have been incorrect in amount (in which case any adjustments shall be made in the valuation period when such error is recognized). The Fair Market Value of the Trust Units will increase or decrease proportionately with the increase and decrease in the Fair Market Value of the Partnership, and the fair market value per LP Unit shall be determined by dividing the Fair Market Value of the Partnership by the number of LP Units then outstanding. The fair market value of the Trust s investment in the Partnership will be calculated accordingly from time to time. See Item Terms of LP Units - Calculation of Fair Market Value. Distributions of Trust Units (Cash and Additional Trust Units) The Administrator may, on or before each Distribution Record Date, declare payable to the Trust Unitholders on such Distribution Record Date all or any part of the Cash Flow of the Trust for the Distribution Period. The Declaration of Trust provides that December 31 of each year, the Trust s income that has not otherwise been distributed will be payable for such amount that the Trust will not be liable for ordinary income taxes for such year. The Trustee, on behalf of the Trust, will review the Trust s distribution policy from time to time. The actual amount of cash, if any, distributed will be dependent on various economic factors and is at the discretion of the Trustee. It is currently intended that the Trust will make Distributions to Unitholders in the form of additional Trust Units or cash or a combination of Trust Units and cash, as determined by the Administrator in its sole discretion, from time to time. Any Trust Units issued to Trust Unitholders pursuant to a distribution in specie will be subject to resale and transfer restrictions and cannot be resold or transferred except as permitted by applicable securities laws. The Trust has established the DRIP, which is a distribution reinvestment plan for the purposes of offering Eligible Holders a convenient method to reinvest distributions on Trust Units declared and payable to them. See Item Distribution Reinvestment Plan. 66

67 Rights of Redemption Each holder of Trust Units shall be entitled to require the Trust, on the demand of such holder, to redeem all or any part of the Trust Units registered in the name of such holder at the Trust Unit Redemption Price. See Item Declaration of Trust Trust Unit Redemptions (Cash and Trust Units) for the specific terms of the rights of redemption. 7.2 Terms of LP Units The interest of each Limited Partner shall be determined by the number of LP Units registered in the name of the Limited Partner, subject to the rights, privileges, restrictions and conditions referred to in the Partnership Agreement. All LP Units shall rank among themselves equally and rateably without discrimination, preference or priority, whatever may be the actual date or terms of issue thereof. Each LP Unit shall entitle the holder of record thereof to one vote at all meetings of Limited Partners or in respect of any written resolution of Limited Partners. The Partnership is authorized to issue an unlimited number of LP Units. Each Limited Partner has voting rights proportionate to the number of LP Units held by such Limited Partner as at the record date in relation to the aggregate number of LP Units issued and outstanding as at the record date. The LP Units do not represent a traditional investment and should not be viewed by investors as shares in the Partnership. The Limited Partners will not have the statutory rights normally associated with ownership of shares of a corporation including, for example, the right to bring oppression or derivative actions. The value per LP Unit will not be a function of anticipated distributable income from the Partnership and the ability of the Partnership to effect long-term growth in the value of the Partnership. Instead, the value per LP Unit will be a function of the Partnership s ability to generate income and effect long-term growth in the value of the Partnership and other entities now or hereinafter owned, directly or indirectly, by the Partnership. See Item 10 - Risk Factors. Calculation of Fair Market Value The price or value of the LP Units issued to Limited Partners at the time of issuance will be determined with reference to the Fair Market Value of the Partnership and Fair Market Value of the LP Units. See Item Partnership Agreement. The General Partner has engaged the Third Party Administrator to calculate such fair market values in accordance with the provisions of the Partnership Agreement, which values also will be approved by the independent directors of the General Partner. The Third Party Administrator may determine such other rules as it deems necessary from time to time, which rules may deviate from Canadian generally accepted accounting principles, provided that such deviations are in the best interest of the Partnership and are consistent with industry practices for issuers similar to the Partnership. The Fair Market Value of the Partnership as of any date will mean the fair market value of Partnership, including capital received for the issuance of LP Units, and, when the reference so requires, of investments, determined by reference to IAS 40 and by the most recent fair market valuation conducted by an independent third-party selected by the General Partner in its sole discretion (or, if the applicable Property was acquired by the Partnership after the most recent annual valuation prepared for the Partnership, then the value shall be any valuation thereof obtained by the General Partner) less all liabilities, costs, and expenses accrued or payable of every kind and nature, and distributions due but not yet paid or made. The valuation procedures will vary depending on the increase in valuation of the Properties in a given Fiscal Year. If the Property has experienced an increase of up to 20% of its base purchase price or immediately previous accredited appraisal then a realtor may confirm in writing the fair market value of the Property. If the Property has experienced an increase of more than 20% of its base purchase price or immediately previous accredited appraisal then an appraisal from an accredited appraiser will be obtained in writing. The fair market value of the LP Units will increase or decrease proportionately with the increase and decrease in the Fair Market Value of the Partnership, and the fair market value per LP Unit shall be determined by dividing the Fair Market Value of the Partnership by the number of LP Units then outstanding. 67

68 Distributions of LP Units (Cash and Additional LP Units) The General Partner will make distributions of Distributable Cash to the Limited Partners in accordance with their Proportionate Interest, for each Distribution Period. If the calculation of Distributable Cash is less than zero, then the General Partner will not make any distribution to the Limited Partners. The General Partner will distribute Distributable Cash to the Partners whose names appear on the Register on the record date for which such distribution is being made. Distributions made under the Partnership Agreement will be net of any tax required by law to be withheld by the General Partner on behalf of the Partnership. The General Partner will not make distributions to the Limited Partners, to the extent that, to the General Partner s knowledge, they would cause the adjusted cost base of the Limited Partners LP Units to become negative for purposes of the Tax Act. Any amount paid to the Limited Partners in excess of the Limited Partners adjusted cost base, or any amount determined, at the discretion of the General Partner to be paid to a Limited Partners otherwise than as a Distribution, shall be an advance on the Limited Partners entitlement, if any, to receive a distribution after the particular Fiscal Year of the Partnership ends, and shall be repayable in the event that the Partnership s income for the year is less than the aggregate amount of such advances. The Partnership has established the DRIP, which is a distribution reinvestment plan for the purposes of offering Eligible Holders a convenient method to reinvest distributions on LP Units declared and payable to them. See Item Distribution Reinvestment Plan. Rights of Redemption Each holder of LP Units shall be entitled to require the Partnership, on the demand of such holder LP Units, to redeem all or any part of the LP Units registered in the name of such holder at the LP Unit Redemption Price. See Item Partnership Agreement - LP Unit Redemptions (Cash and LP Units) for the specific terms of the rights of redemption. 7.3 Subscription Procedure Subscriptions for Trust Units or LP Units may be placed by investors through registered dealers in the Offering jurisdictions, as may be required or permitted by applicable securities laws. Prospective investors who wish to subscribe for Trust Units or LP Units must complete, execute and deliver the Subscription Agreement which accompanies this Offering Memorandum, including all applicable exhibits and/or schedules thereto to the Issuers or an agent and tender the purchase price in a manner acceptable to the Issuers. Subscriptions will be processed on the first business day of each month and on such other days as the Issuers may permit (each, a Subscription Date ). A fully completed subscription agreement and subscription proceeds must be received by the Issuers no later than 4:00 p.m. (Toronto time) at least two business days prior to the relevant Subscription Date in order for the subscription to be accepted as at that date; otherwise the subscription will be processed as at the next Subscription Date. Funds received before a Subscription Date will be held in a segregated account in trust for the investor. The Issuers have established a DRIP that provides for the automatic reinvestment of distributions into Trust Units or LP Units (as applicable). If you want to register in the DRIP you may do so at the time of your subscription for Trust Units or LP Units or at a later time. See Item Distribution Reinvestment Plan for further information. The Offering price is $105 per Trust Unit or LP Unit, unless waived. All subscriptions for Trust Units or LP Unit are subject to acceptance or rejection by the Issuers and the right is reserved to reject any subscription. All subscriptions for Trust Units or LP Units are to be forwarded by dealers, without charge, the same day that they are received, to the Issuers. The decision to accept or reject any subscription for Trust Units or LP Units will be made promptly. In the event that a subscription for Trust Units or LP Units is rejected, all money received with the subscription will be returned immediately to the subscriber without interest or deduction. 68

69 An investor will become a Trust Unitholder or Limited Partner (as applicable) following the acceptance of a Subscription Agreement by the Issuers and the issuance of Trust Units or LP Units (as applicable) to such investor. If a subscription is withdrawn or is not accepted by the Issuers, all documents will be returned to the investor within 30 days following such withdrawal or rejection without interest or deduction. Neither the Issuers, the Trustee, Administrator, the General Partner nor any other Pulis Party or any affiliate or associate of the foregoing is responsible for, and undertakes no obligation to, determine the general investment needs and objectives of a potential investor and the suitability of the Trust Units or LP Units having regard to any such investment needs and objectives of the potential investor. ITEM 8 - CANADIAN FEDERAL INCOME TAX CONSEQUENCES AND DEFERRED PLAN ELIGIBILITY 8.1 Income Tax Consequences Relating to the Trust You should consult your own professional advisors to obtain advice on the income tax consequences that apply to you. All investors will be responsible for the preparation and filing of their own tax returns in respect of this investment. The following, as of the date of this Offering Memorandum, describes the principal Canadian federal income tax considerations generally applicable under the Tax Act to a person who acquires Trust Units pursuant to this Offering Memorandum and who, for purposes of the Tax Act, is or is deemed to be a resident of Canada (or if the person is a partnership, is a Canadian partnership for purposes of the Tax Act), deals at arm s length and is not affiliated with the Trust or the Trustee and holds the Trust Units as capital property (all for purposes of the Tax Act). Generally, Trust Units will be considered to be capital property to a Trust Unitholder provided that the Trust Unitholder does not hold the Trust Units in the course of carrying on a business and has not acquired them in one or more transactions considered to be an adventure in the nature of trade. Certain Trust Unitholders who might not otherwise be considered to hold their Trust Units as capital property may, in certain circumstances, be entitled to have them treated as capital property by making the irrevocable election permitted by subsection 39(4) of the Tax Act. This summary is not applicable to a Trust Unitholder (i) that is a financial institution (as defined in the Tax Act for purposes of the mark-to-market rules), (ii) that is a specified financial institution (as defined in the Tax Act), (iii) an interest in which is a tax shelter investment (as defined in the Tax Act) or (iv) to whom the functional currency reporting rules in section 261 of the Tax Act apply. In addition, this summary does not address the deductibility of interest by a Trust Unitholder who has borrowed money to acquire Trust Units. This summary is based upon the facts set out in this Offering Memorandum, the provisions of the Tax Act in force as of the date of hereof, all Proposed Amendments and the Trust s understanding of the current administrative policies and assessing practices of the Canada Revenue Agency ( CRA ) publicly available prior to the date of this Offering Memorandum. This summary is not exhaustive of all possible Canadian federal income tax considerations, and does not take into account or anticipate any changes in the law, other than the Proposed Amendments, whether by legislative, governmental or judicial action, nor does it take into account provincial, territorial or foreign tax considerations, which may differ significantly from those discussed herein. There can be no assurance that the Proposed Amendments will be enacted in the form publically announced or at all. This summary is of a general nature only and is not exhaustive of all possible Canadian federal income tax considerations applicable to an investment in Trust Units. The income and other tax consequences of acquiring, holding or disposing of Trust Units will vary depending on an investor s particular circumstances including the province or territory in which the investor resides or carries on business. This summary is not intended to be, nor should it be construed to be, legal or tax advice to any particular purchaser of Trust Units. Consequently, prospective purchasers should seek independent professional advice regarding the tax consequences of investing in the Trust Units, based upon their own particular circumstances. As noted, this summary does not address any Canadian federal income tax considerations applicable to non-residents of Canada, and non-residents should consult their own tax advisors regarding the tax consequences of 69

70 acquiring, holding and disposing of Trust Units. All payments to non-residents of Canada of distributions on the Trust Units will be net of any applicable withholding taxes. Status of the Trust Mutual Fund Trust This summary is based on the assumption that the Trust will qualify as a unit trust and a mutual fund trust, as these terms are defined in the Tax Act, from the beginning of its first taxation year and will thereafter continuously qualify as a unit trust and a mutual fund trust at all relevant times. The qualification of the Trust as a mutual fund trust from the beginning of its first taxation year requires that the Trust elect to be deemed to be a mutual fund trust from the date it is established and that certain factual conditions generally be met throughout its existence. The Trust has advised that it has made such an election and that the ongoing requirements will be satisfied so that the Trust will so qualify. If the Trust were not to qualify as a mutual fund trust, the income tax considerations described herein would, in some respects, be materially different. This summary also assumes that the Trust will at no time be a SIFT trust as defined in the Tax Act. If the Trust is a SIFT trust, then there may be adverse tax consequences. One of the conditions for a trust to be a SIFT trust is that investments in the trust must be listed or traded on a stock exchange or other public market, which includes a trading system or other organized facility on which securities that are qualified for public distribution are listed or traded, but does not include a facility that is operated solely to carry out the issuance of a security or its redemption, acquisition or cancellation by the issuer. The Trust intends that the Trust Units will not be listed or traded on a stock exchange or other public market. Based on this and assuming the Trust Units will not otherwise be listed or traded on such a system or facility, the Trust should not be a SIFT trust. Taxation of the Trust The Tax Act requires that the Trust compute its income or loss for a taxation year as though it were an individual resident in Canada. The taxation year of the Trust is the calendar year. In each taxation year, the Trust will be subject to tax under Part I of the Tax Act on its taxable income for the year, including income allocated to it by the Partnership and net realized taxable capital gains less the portion thereof that it deducts in respect of the amounts paid or payable in the year to Trust Unitholders and is otherwise deductible under the Tax Act. An amount will not be considered to be payable to a Trust Unitholder in a taxation year unless the Trust Unitholder is entitled in that year to enforce payment of the amount. In computing its income, the Trust may deduct reasonable administrative costs, interest and other expenses incurred by it for the purpose of earning income. Each year, the Trust intends to make sufficient distributions of its net income for tax purposes and net realized taxable capital gains so that the Trust will generally not be liable in that year for income tax under Part I of the Tax Act (other than such tax on Net Realized Capital Gains that will be recoverable by the Trust in respect of such year by reason of the capital gains refund mechanism). Losses incurred by the Trust cannot be allocated to Trust Unitholders but may be deducted by the Trust subject to and in accordance with the Tax Act. Taxation of the Partnership The Partnership is not itself liable for income tax, however, it is required to compute its income or loss for each of its fiscal periods as if it were a separate person resident in Canada. The fiscal period of the Partnership ends on December 31 of each year. In computing its income or loss the Partnership will be entitled to deduct expenses incurred by it in the fiscal period in which they are incurred to the extent such expenses are reasonable in amount and their deduction is permitted by the Tax Act. In some cases, outlays and expenses may have to be capitalized and added to the cost amount of its property. 70

71 Taxation of Trust Unitholders Distributions A Trust Unitholder will generally be required to include in income for a particular taxation year the portion of the net income of the Trust for a taxation year, including the taxable portion of Net Realized Capital Gains, that is paid or payable to the Trust Unitholder in the particular taxation year, whether that amount is received in cash, additional Trust Units, Redemption Notes, in specie distributions or otherwise. Income of a Trust Unitholder from the Trust Units will generally be considered to be income from property. Any loss of the Trust for purposes of the Tax Act cannot be allocated to, or treated as a loss of, a Trust Unitholder. Provided that appropriate designations are made by the Trust, such portion of (i) the net realized taxable capital gains of the Trust, and (ii) taxable dividends received or deemed to be received by the Trust on shares of taxable Canadian corporations, as is paid or becomes payable to a Trust Unitholder will effectively retain their character and will be treated as such in the hands of the Trust Unitholder for purposes of the Tax Act. Such dividends will be subject, inter alia, to the gross-up and dividend tax credit provisions in respect of individuals, the refundable tax under Part IV of the Tax Act applicable to private corporations and subject corporations (as defined under the Tax Act), and the deduction in computing taxable in respect of dividends received by taxable Canadian corporations. An additional 10⅔% tax will be payable by Trust Unitholders that are Canadian-controlled private corporations in certain circumstances. The non-taxable portion of any Net Realized Capital Gains of the Trust that is paid or payable to a Trust Unitholder in a taxation year (currently being one-half thereof) will not be included in computing the Trust Unitholder s income for the year. Any other amount in excess of the net income of the Trust that is paid or payable to a Trust Unitholder in that year will not generally be included in the Trust Unitholder s income for the year. However, where such an amount is paid or payable to a Trust Unitholder (other than as proceeds in respect of the redemption of Trust Units), the Trust Unitholder will be required to reduce the adjusted cost base of the Trust Units by that amount, except to the extent that the amount represents the Trust Unitholder s share of the non-taxable portion of the Net Realized Capital Gains of the Trust for the year, the taxable portion of which was designated by the Trust in respect of the Trust Unitholder. To the extent that the adjusted cost base of a Trust Unit would otherwise be a negative amount, the negative amount will be deemed to be a capital gain and the adjusted cost base of the Trust Unit to the Trust Unitholder will then be nil. Trust Units issued to a Trust Unitholder as a non-cash distribution of income will have a cost amount equal to the amount of such income and will be averaged with the adjusted cost base of all other Trust Units held by the Trust Unitholder at that time as capital property in order to determine the adjusted cost base of each Trust Unit. Disposition of Trust Units On the disposition or deemed disposition of a Trust Unit, whether on a redemption or otherwise, the Trust Unitholder will realize a capital gain (or a capital loss) equal to the amount by which the Trust Unitholder s proceeds of disposition exceed (or are less than) the aggregate of the adjusted cost base of the Trust Unit and any reasonable costs of disposition. Proceeds of disposition will not include an amount payable by the Trust that is otherwise required to be included in the Trust Unitholder s income, including any capital gain realized by the Trust as a result of a redemption which has been designated pro rata by the Trust to the redeeming Trust Unitholder. The adjusted cost base of a Trust Unit to a Trust Unitholder will include all amounts paid or payable by the Trust Unitholder for the Trust Unit, with certain adjustments. The cost to a Trust Unitholder of additional Trust Units received in lieu of a cash distribution of income will be the amount of income distributed by the issue of those Trust Units. For the purpose of determining the adjusted cost base to a Trust Unitholder of Trust Units, when a Trust Unit is acquired, the cost of the newly-acquired Trust Unit will be averaged with the adjusted cost base of all of the Trust Units owned by Trust Unitholder as capital property immediately before that acquisition. A consolidation of Trust Units following a distribution paid in the form of additional Trust Units will not be regarded as a disposition of Trust Units. The redemption of Trust Units in consideration for cash or Redemption Notes, whether issued by the Trust, or the Partnership, as the case may be, will be a disposition of such Trust Units for proceeds of disposition equal to the 71

72 amount of such cash or the Fair Market Value of such notes, less any portion thereof that is considered to be a distribution out of the income of the Trust. Where Trust Units are redeemed and the redemption price is paid by the delivery of Trust Property to the redeeming Trust Unitholder, the proceeds of disposition to the Trust Unitholder of the Trust Units will be equal to the Fair Market Value of the Trust Property so distributed less any gain realized by the Trust in connection with the disposition of those Trust Property to the extent designated pro rata by the Trust to a redeeming Trust Unitholder. Where any income or capital gain realized by the Trust in connection with the distribution of Trust Property on the redemption of Trust Units has been designated by the Trust to a redeeming Trust Unitholder, the Trust Unitholder will be required to include in income the income or taxable portion of the capital gain so designated. The receipt of Trust Property in substitution for Trust Units may result in a change in the income tax characterization of distributions. Holders of Redemption Notes received on a redemption of Trust Units generally will be required to include in income, interest that is received or receivable (depending on whether the holder is an individual, corporation or trust) on such Redemption Notes. The cost to a Trust Unitholder of any Trust Property distributed to a Trust Unitholder by the Trust will be deemed to be equal to the Fair Market Value of such property at the time of distribution less, in the case of notes, any accrued interest thereon. Trust Unitholders should consult with their own tax advisors as to the consequences of receiving Trust Property on a redemption. Trust Unitholders are advised to consult their own tax advisors prior to exercising their redemption rights. Capital Gains and Capital Losses One-half of any capital gain (a taxable capital gain ) realized by a Trust Unitholder on a disposition or deemed disposition of Trust Units and the amount of any net taxable capital gains designated by the Trust in respect of a Trust Unitholder will be included in the Trust Unitholder s income as a taxable capital gain. One-half of any capital loss realized by a Trust Unitholder on a disposition or deemed disposition of Trust Units may generally be deducted only from taxable capital gains of the Trust Unitholder in accordance with the provisions of the Tax Act. A Trust Unitholder that is a Canadian-controlled private corporation as defined in the Tax Act may be liable to pay a refundable tax of 10⅔% on certain investment income, including taxable capital gains. Alternative Minimum Tax In general terms, net income of the Trust paid or payable to a Trust Unitholder who is an individual that is designated as net taxable capital gains or eligible dividends and capital gains realized on the disposition of Trust Units may increase the Trust Unitholder s liability for alternative minimum tax. 8.2 Eligibility for Investment in Trust Units by Deferred Plans Provided the Trust qualifies as a mutual fund trust within the meaning of the Tax Act, the Trust Units, when issued, will be a qualified investment under the Tax Act for Deferred Plans and, as such, any distributions paid or payable on Trust Units or gains realized upon a disposition or deemed disposition of Trust Units will not be taxable to Deferred Plans. Generally, if the Trust does not qualify or ceases to qualify as a mutual fund trust at any time, the Trust Units will not be, or will cease to be, qualified investments for Deferred Plans at that time. The Redemption Notes which may be delivered to Trust Unitholders on an in specie redemption of Trust Units will not be qualified investments for Deferred Plans. Where a Deferred Plan acquires a Redemption Note or a Trust Property that is not a qualified investment, or acquires or holds a Trust Unit that is not, or that ceases to be, a qualified investment, adverse tax consequences may arise to the Deferred Plan and the annuitant under the Deferred Plan. Accordingly, Deferred Plans that propose to invest in Trust Units should consult their own tax advisors before deciding to purchase Trust Units and again before deciding to exercise their redemption rights attached to such Trust Units. If at any time the Trust Units are a prohibited investment for a Deferred Plan, the annuitant may be subject to adverse tax consequences. Generally, Trust Units should not be a prohibited investment under the Tax Act for an Deferred Plan provided that the annuitant deals (i) at arm s length with the Trust, and (ii) does not have a 72

73 significant interest in the Trust. Generally, an annuitant will not have a significant interest in the Trust or any corporation, partnership or trust that does not deal at arm s length with the Trust, provided the annuitant, or the annuitant together with persons and partnerships with whom the annuitant does not deal at arm s length, does not own (nor is deemed to own pursuant to the Tax Act), directly or indirectly, 10% or more of the issued Trust Units or of the shares of or interests in any corporation, partnership or trust that does not deal at arm s length with the Trust (all for purposes of the Tax Act). Accordingly, prospective purchasers should consult with their own tax advisors as to whether Trust Units would be a prohibited investment under the Tax Act in their particular circumstances. 8.3 Income Tax Consequences Relating to the Partnership You should consult your own professional advisors to obtain advice on the income tax consequences that apply to you. All investors will be responsible for the preparation and filing of their own tax returns in respect of this investment. The following is a fair summary of the principal Canadian federal income tax considerations of acquiring, holding and disposing of LP Units generally applicable to an investor (who acquires LP Units under this Offering Memorandum) who is an individual, other than a trust, and who, for the purposes of the Tax Act is, or is deemed to be, a resident of Canada, deals at arm s length with the Partnership and is not affiliated with the Partnership, holds the LP Units as capital property and has not made a foreign currency reporting election under the Tax Act. Generally, LP Units will be considered to be capital property to an investor provided the investor does not hold the LP Units in the course of carrying on a business and has not acquired the LP Units in one or more transactions considered to be an adventure in the nature of trade. This summary assumes that at all material times no interest in any investor will be a tax shelter investment as defined in the Tax Act, that LP Units will not be acquired with financing for which recourse is, or is deemed to be, limited for purposes of the Tax Act and that no more than 50% of the LP Units will be held by financial institutions as defined in the Tax Act. Financing is deemed to be limited recourse for purposes of the Tax Act unless: (i) bona fide arrangements were made in writing at the time the financing was obtained providing for repayment within a reasonable period, not exceeding 10 years; (ii) interest is payable at least annually at a rate that is not less than the rate prescribed under the Tax Act; and (iii) interest is paid no later than 60 days after the end of each taxation year. If an interest in an investor becomes a tax shelter investment, an investor finances an acquisition of LP Units with limited recourse financing or if more than 50% of the LP Units are held by financial institutions there may be adverse tax consequences to the Partnership and its members. This summary assumes that at all material times the Partnership will not be a SIFT partnership as defined in the Tax Act. If investments in the Partnership are listed or traded on a stock exchange or other public market then the Partnership, if it holds one or more non-portfolio properties, as defined in the Tax Act, may be a SIFT partnership and the Canadian federal income tax considerations described below will be materially different. This summary also assumes that the LP Units will not be listed or traded on a stock exchange or other public market for the purposes of the Tax Act. This summary is based upon the facts set out in this Offering Memorandum, the provisions of the Tax Act in force as of the date hereof, all Proposed Amendments and the Partnership s understanding of the current administrative policies and assessing practices of the Canada Revenue Agency publicly available prior to the date hereof. This summary is not exhaustive of all possible Canadian federal income tax considerations and, except for the Proposed Amendments, does not take into account or anticipate any changes in the law, whether by legislative, governmental or judicial action, nor does it take into account provincial, territorial or foreign tax considerations, which may differ significantly from those discussed herein. There can be no assurance that the Proposed Amendments will be enacted in the form publically announced or at all. This summary is of a general nature only and is not exhaustive of all possible Canadian federal income tax considerations applicable to an investment in LP Units. The income and other tax consequences of acquiring, holding or disposing of LP Units will vary depending on an investor s particular circumstances including the province or territory in which the investor resides or carries on business. This summary is not intended to be, nor should it be construed to be, legal or tax advice to any particular purchaser of LP Units. Consequently, prospective 73

74 purchasers should seek independent professional advice regarding the tax consequences of investing in the LP Units, based upon their own particular circumstances. As noted, this summary does not address any Canadian federal income tax considerations applicable to nonresidents of Canada, and non-residents should consult their own tax advisors regarding the tax consequences of acquiring, holding or disposing of LP Units. All payments to non-residents of Canada or distributions on the LP Units will be net of any applicable withholding taxes. References to income or loss in this summary mean income or loss as determined for purposes of the Tax Act. Computation of Income The Partnership is not itself generally liable for income tax. However, the Partnership must compute its income or loss for each fiscal period as though it was a separate person resident in Canada and file an annual information return. The fiscal period of the Partnership ends on December 31 each year. Subject to the comments below, each Limited Partner will be required to include (or be entitled to deduct) in computing his income (or loss), his share of the income (or loss) of the Partnership allocated to him pursuant to the Partnership Agreement for the fiscal period of the Partnership ending in the Limited Partner s taxation year, regardless of whether such income has been distributed to him. The income of the Partnership as determined for purposes of the Tax Act may differ from its income as determined for accounting purposes and may not be matched by cash distributions. In computing the income or loss of the Partnership, deductions may be claimed in respect of reasonable administrative costs, interest and other expenses incurred by the Partnership for the purposes of earning income, subject to the relevant provisions of the Tax Act. Losses allocated by the Partnership to a Limited Partner are deductible only to the extent the Limited Partner has an at-risk amount within the meaning of the Tax Act. Losses from the Partnership that are not deductible by a Limited Partner because they exceed the Limited Partner s at-risk amount at the particular time generally may be carried forward indefinitely and may be deducted against income only to the extent the Limited Partner has an atrisk amount in a subsequent year. In general, a Limited Partner s at-risk amount will be the adjusted cost base of his LP Units at the relevant time (plus, where that time is the end of the Partnership s fiscal period, income allocated to the Limited Partner for that fiscal period), less any amounts owing by the Limited Partner (or to a person or partnership that does not deal at arm s length with the Limited Partner) to the Partnership (or to a person or partnership that does not deal at arm s length with the Partnership) and less any amount or benefit provided to the Limited Partner (or to a person or partnership that does not deal at arm s length with the Limited Partner) for the purpose of protecting the Limited Partner against any loss the Limited Partner may sustain as a consequence of being a member of the Partnership or holding or disposing of an LP Unit. Subject to the comments above, a Limited Partner may apply his share of losses allocated to him by the Partnership to reduce net income for the relevant taxation year and, to the extent such losses exceed net income for the year, they may generally be applied in the three previous taxation years or the 20 subsequent taxation years. Disposition of LP Units A disposition or deemed disposition by an investor of his LP Units should generally result in a capital gain (or capital loss) to the investor to the extent the proceeds of disposition of such LP Units, net of reasonable disposition costs, exceed (or are exceeded by) the adjusted cost base of the LP Units. In general, the adjusted cost base of a Limited Partner s LP Units at a particular time will be equal to the subscription price of the LP Units, plus income of the Partnership that has been allocated to the Limited Partner for completed fiscal periods, minus losses of the Partnership allocated to the Limited Partner for completed fiscal periods and minus distributions received by the Limited Partner from the Partnership. Under the Tax Proposals, where a Limited Partner disposes of all of its LP Units in a fiscal period of the Partnership, any income or loss allocated to the Limited Partner for such fiscal period will be taken into account in determining the adjusted cost base of the Limited Partner s LP Units. Losses which are not deductible because a Limited Partner does not have a sufficient at-risk amount will not reduce the adjusted cost base of LP Units. 74

75 If a Limited Partner disposes of LP Units and a person who is exempt from tax under the Tax Act, or who is a nonresident of Canada for purposes of the Tax Act, directly or indirectly through a partnership or a trust of which a tax exempt person or non-resident is a member or a beneficiary, as the case may be, acquires the LP Units as part of a transaction or event, or series of transactions or events, then the gain may be taxed as ordinary income of the Limited Partner. If, at the end of any fiscal period of the Partnership, the deductions in computing the adjusted cost base of a Limited Partner s LP Units exceed the subscription price and additions in computing such adjusted cost base, such negative amount will be deemed to be a capital gain of the Limited Partner from a disposition of the LP Units and the adjusted cost base of the Limited Partner s LP Units will be nil at the beginning of the next fiscal period of the Partnership. Capital Gains and Losses One-half of the capital gain realized by a holder from a disposition or deemed disposition of LP Units must be included in computing the holder s income as a taxable capital gain. One-half of a capital loss realized in a taxation year from a disposition or deemed disposition of LP Units will be deductible as an allowable capital loss against taxable capital gains realized in that year, and to the extent such allowable capital losses exceed taxable capital gains in the year, may be applied in the three previous taxation years or any subsequent taxation year, subject to certain restrictions contained in the Tax Act. A holder may be liable to pay alternative minimum tax as a result of realizing a capital gain. 8.4 LP Units are Not Eligible for Deferred Plans The LP Units will not constitute a qualified investment for the purposes of the Tax Act for Deferred Plans and, in order to avoid adverse tax consequences, should not be acquired by such plans. ITEM 9 - COMPENSATION PAID TO SELLERS AND FINDERS The Issuers may retain agents to effect sales of the Trust Units and LP Units. Commissions of up to 10% of the Gross Proceeds from the sale of the Trust Units and LP Units pursuant to the Offerings are payable to parties who sell the Trust Units or LP Units and who are entitled to receive such commissions under applicable securities laws ( Selling Commissions ). Where Selling Commissions are payable by the Trust to EMDs, 2% shall be paid to the EMD and 8% shall be paid to the EMD dealing representative responsible for affecting the sale of the Trust Units. Selling Commissions will only be paid in respect of LP Units sold by agents and no Selling Commissions will be paid for LP Units purchased by the Trust. The Issuers will pay a fee of up to a maximum of 2% of the Gross Proceeds raised in the Offerings (the Marketing Fee ) for marketing services to marketing agents, including Pinnacle Wealth Brokers Inc. The maximum of the Selling Commissions and Marketing Fee payable under the Maximum Offering is $6,000,000 assuming that $50,000,000 is raised from a combination of sales of Trust Units and LP Units. The Issuers will pay a Trailer Fee of up to 1% of Gross Proceeds realized on the sale of Trust Units and LP Units by the EMD, dealer or dealing representative for Trust Units or LP Units outstanding after the fifth year of such holder s subscription, payable by the Issuers to such dealer. The EMDs and dealers appointed by the Issuers to sell Trust Units and LP Units may be reimbursed for reasonable expenses incurred in connection with the Offerings. All expenses of the Offerings, including the Selling Commissions and Marketing Fees and the Trailer Fee, will be borne by the Partnership pursuant to the Funding Agreement. See Item 4.3 Funding Agreement. 75

76 ITEM 10 - RISK FACTORS An investment in the Trust is speculative and contains certain risks. Prospective investors should carefully consider, among other factors, the matters described below, each of which could have an adverse effect on the value of the Trust Units. As a result of these factors, as well as other risks inherent in any investment, there can be no assurance that the Issuers will meet their business objectives. The Issuers returns may be unpredictable and, accordingly, the Trust Units and LP Units are not suitable as the sole investment vehicle for an investor or for an investor that is looking for a predictable source of cash flow. An investor should only invest in the Issuers as part of an overall investment strategy. Based on, among others, the factors described below, the possibility of partial or total loss of capital will exist and investors should not subscribe unless they can readily bear the consequences of such loss. No assurance of Investment Return An investment in the Trust and Partnership requires a long-term commitment, with no certainty of return. Investments made by the Trust and the Partnership, may not generate current income. The success of the Trust, accordingly, a return on investment for a purchaser of Trust Units of LP Units, is entirely dependent upon the success of the Partnership s real estate investment strategy. There is no assurance or guarantee that the Trust and, correspondingly, the Trust Unitholders and Limited Partners will earn a return on their investment. Trust Unitholders and Limited Partners could lose the entire amount of their investment. The Trust and Partnership are targeting annualized returns of 10%. However, such targeted returns are not guaranteed and are subject to performance assumptions and risk factors, which may cause actual results to vary materially. Excess cash flow will be re-invested into the Portfolio, utilized to pay down any Financing on the Properties and/or distributed to Investors. The return on an investment in the Trust Units and LP Units is not comparable to the return on an investment in fixed-income securities. Cash distributions are not guaranteed and are not fixed obligations of the Issuers. Short Operating History The past performance of any of the Pulis Parties in the real estate investment business in Ontario, Saskatchewan, Alberta and British Columbia should not be construed as a guarantee or expectation of future results of any investment in the Issuers. Accordingly, there is no operating history upon which to base an evaluation of the Issuers or their business or prospects. The Issuers are in the early stages of their business and therefore are subject to the risks associated with early stage entities, including start-up losses, uncertainty of revenues, markets and profitability, the need to raise additional funding, the evolving and unpredictable nature of their business and the ability to identify, attract and retain qualified personnel. There can be no assurance that the Issuers will be successful in doing what they are required to do to overcome these risks. No assurance can be given that the Issuers business activities will be successful. Total loss of an investment in Trust Units or LP Units is possible. The Partnership has no operating history and its operating policies and strategies are untried. The Partnership will be dependent upon the experience and expertise of the General Partner in administering its day-to-day operations. The General Partner and its affiliates have experience investing in and managing real estate-related assets; however, there can be no assurance that the General Partner will be able to implement successfully the strategies that the Partnership intends to pursue. Past Performance not a Predictor of Future Results The track record of senior management does not imply or predict (directly or indirectly) any level of future performance of the General Partner or the Partnership. Management s performance and the performance of the Partnership is dependent on future events and is, therefore, inherently uncertain. Past performance cannot be relied upon to predict future events for a variety of factors, including, without limitation, varying business strategies, different local and national economic circumstances, different supply and demand characteristics relevant to buyers and sellers of assets, varying degrees of competition and varying circumstances pertaining to the capital markets. 76

77 Restrictions on Redemption and Transfer; Illiquidity of Trust Units It is intended that the Trust will continue for an indefinite term. As a result, a Trust Unitholder will have limited sources of liquidity for its Trust Units. Trust Unitholders should be aware that redemption rights in their favour are subject to significant limitations and restrictions. There will be no public market for the Trust Units and an application for listing of the Trust Units on a stock exchange will not be made. Trust Units are highly illiquid investments and should only be acquired by investors able to bear the economic risk of an investment in the Trust Units for an indefinite period of time. The Trust Units are being sold on a private placement basis in reliance upon exemptions from prospectus requirements of applicable securities laws and therefore are subject to significant statutory restrictions on transfer or sale. The Trust Units will be subject to hold periods under applicable securities legislation and, as the Trust is currently not a reporting issuer in any province or territory in Canada, the hold periods may never expire. Additionally, Trust Unitholders will not be permitted to transfer or sell their Trust Units without the consent of the Trustee, which may be withheld in the Trustee s sole discretion, and may be subject to the satisfaction of certain other conditions, including the provision of an opinion of counsel that such a transfer would not subject the Trust or the Trust Unitholders to any regulatory or tax burdens or result in violation of any applicable law or governmental regulation. Investments in the Trust should be considered long-term in nature. Restrictions on redemption and transfer; Illiquidity of LP Units It is intended that the Partnership will continue until December 31, As a result, a Limited Partners will have limited sources of liquidity for its LP Units. Limited Partners should be aware that redemption rights in their favour are subject to significant limitations and restrictions. There will be no public market for the LP Units and an application for listing of the LP Units on a stock exchange will not be made. LP Units in the Partnership are highly illiquid investments and should only be acquired by investors able to bear the economic risk of an investment in the LP Units for an indefinite period of time. The LP Units are being sold on a private placement basis in reliance upon exemptions from prospectus requirements of applicable securities laws and therefore are subject to significant statutory restrictions on transfer or sale. The LP Units will be subject to hold periods under applicable securities legislation and, as the Partnership is currently not a reporting issuer in any province or territory in Canada, the hold periods may never expire. Additionally, Limited Partners will not be permitted to transfer their LP Units without first offering to sell the subject LP Units to the General Partner in accordance with the Partnership Agreement, subject to certain exceptions, including the provision of an opinion of counsel that such a transfer would not subject the Partnership or the Limited Partners to any regulatory or tax burdens or result in violation of any applicable law or governmental regulation. Investments in the Partnership should be considered long-term in nature. Distribution of Income The Trust will distribute Trust income and Trust capital gains for each taxation year, so that Trust income and Trust capital gains may be taxable to Trust Unitholders and the Trust will not have any obligation to pay tax under the Tax Act. Payment of distributions is intended to be made in cash, but the Trust may, in certain circumstances, make distributions by distributing additional Trust Units. See Item Declaration of Trust. In addition, The General Partner will make distributions to the Limited Partners. In the event that the Issuers do not make cash distributions, then investors will have to rely solely on the redemption of their Trust Units or LP Units to obtain a cash return on their investment. The return on an investment in the Trust Units and LP Units is not comparable to the return on an investment in fixed-income securities. Cash distributions are not guaranteed and are not fixed obligations of the Issuers. Nature of Trust Units Each Trust Unit represents an equal undivided beneficial interest in the Trust. The Trust Units do not represent debt instruments and there is no principal amount owing to Trust Unitholders under the Trust Units, and the Trust Units are not insured against loss through the Canadian Deposit Insurance Corporation. 77

78 Nature of LP Units Each LP Unit represents an equal undivided beneficial interest in the Partnership. The LP Units do not represent debt instruments and there is no principal amount owing to Limited Partners under the LP Units, and the LP Units are not insured against loss through the Canadian Deposit Insurance Corporation. Trust Units are intended to be held by Taxable and Tax Exempt Investors The Trust Units are intended to be held by taxable and tax exempt investors. Taxable investors may be subject to tax as a result of holding Trust Units. The Trust intends to make all taxable income of the Trust payable to Trust Unitholders each year and to distribute such income by distributing cash or Trust Units. In addition, income allocated by the Trust to Trust Unitholders may exceed the amount payable to them on a redemption of their Trust Units. Investors should consult their own tax advisors respecting the tax consequences of owning the Trust Units. Mutual Fund Trust Status To qualify as a mutual fund trust (as that term is defined in the Tax Act), among other things, the sole undertaking of the Trust must be the investing of its funds in property (other than certain real property or interests in real property), the Trust must comply on a continuous basis with certain requirements relating to maintaining a diversity of investments, the qualification of the Trust Units for distribution to the public, the number of Trust Unitholders and the dispersal of ownership of Trust Units and the Trust must not be reasonably considered to have been established or maintained primarily for the benefit of non-residents of Canada. If the Trust fails or ceases to qualify as a mutual fund trust, there may be adverse tax consequences to the Trust and Trust Unitholders. Eligibility of Trust Units for Investment by Deferred Plans If the Trust fails or ceases to qualify as a mutual fund trust the Trust Units may not be or may cease to be qualified investments for Deferred Plans which will have adverse tax consequences to Deferred Plans and their annuitants. If the Trust Units are or become a prohibited investment for trusts governed by the Deferred Plans, adverse tax consequences may result to the holder of the Deferred Plans. Trust Property or Redemption Notes received as a result of a distribution or redemption of Trust Units may not be a qualified investment for Deferred Plans, which may give rise to adverse consequences to a Deferred Plan or the annuitant thereunder. Tax Treatment of Trust Units and Trust Unitholders Canadian federal or provincial income tax legislation may be amended, or their interpretation changed, so as to alter fundamentally the tax consequences of holding or disposing of Trust Units or the investments held by the Trust. The alternative minimum tax could limit tax benefits available to Trust Unitholders. There is no assurance that income tax laws or administrative practices of tax officials in the various jurisdictions of Canada will not be changed in a manner which will adversely alter the tax treatment of Trust Unitholders. Tax Characterization of Trust Income and Trust Capital Gains The designation of income or gains realized by the Trust to Trust Unitholders, including the designation of gains realized on the disposition of investments as capital gains will depend largely on factual considerations. The Trust will endeavor to make appropriate characterizations of income or gains realized by the Trust for purposes of designating such income or gains to Trust Unitholders based on information reasonably available to it. However, there is no certainty that the manner in which the Trust characterizes such income or gains will be accepted by the CRA. If it is subsequently determined that the Trust s characterization of a particular amount was incorrect, Trust Unitholders might suffer material adverse tax consequences as a result. 78

79 SIFT Status If investments in the Trust are listed or traded on a stock exchange or other public market, the Trust may be taxable as a SIFT trust under the Tax Act, which will have adverse tax consequences to the Trust Unitholders and the Trust and the Canadian federal income tax considerations of investing in the Trust will be materially different from those described herein. Tax Aspects relating to LP Units Canadian federal and provincial tax aspects should be considered prior to investing in the LP Units (see Item 8 - Canadian Federal Income Tax Consequences and Deferred Plan Eligibility ). The return on a Limited Partner s investment in LP Units may be affected by changes in Canadian tax laws. The discussion of income tax considerations in this Offering Memorandum is based upon current income tax laws and regulations. There can be no assurance that (a) tax laws, regulations or judicial or administrative interpretations will not be changed, (b) applicable tax authorities will not take a different view as to the interpretation or the application of tax laws and regulations than the Partnership or than as set out in this Offering Memorandum, (c) applicable tax authorities will not challenge allocations by the Partnership of income, losses, gains or deductions or disallow certain deductions against income, or (d) the facts upon which the tax discussions set out in this Offering Memorandum are materially correct. Any of the preceding may fundamentally alter, in a negative way, the tax consequences to investors of holding or disposing of LP Units. If an interest in a Limited Partner is or becomes a tax shelter investment, if a Limited Partner finances the acquisition of its LP Units with limited recourse financing, or if more than 50% of the LP Units are held by financial institutions for the purposes of the Tax Act, there may be adverse tax consequences to all Limited Partners and the Partnership. If investments in the Partnership are listed or traded on a stock exchange or other public market and the Partnership holds one or more non-portfolio properties, as defined in the Tax Act, then the Partnership may be a SIFT Partnership and the Canadian federal income tax considerations will be materially different than those described herein. The discussion of certain Canadian federal income tax considerations contained in this Offering Memorandum is provided for information purposes only and is not a complete analysis or discussion of all potential tax considerations that may be relevant to the acquisition of LP Units. Prospective investors are urged to consult their own tax advisors, prior to investing in the Partnership, with respect to the specific tax consequences to them from the acquisition of LP Units. Rent Controls Rent control risk is the risk of the implementation or amendment of new or existing legislative rent controls in the markets the Issuers operate, which may have an adverse impact on the Issuers operations. All of the Issuer s real estate assets are currently located in Ontario, which has rent control legislation. Under that rent control legislation, commonly known as rent de-control, a landlord is entitled to increase the rent for existing tenants once every 12 months by no more than the guideline amount established by regulation. For the calendar year 2017, the guideline amount has been established at 1.5% (2.0% for 2016). Further details on Ontario s annual rent increase guidelines can be found at This adjustment is meant to take into account the income of the building, the municipal and school taxes, the insurance bills, the energy costs, maintenance and service costs. Landlords may apply to the Ontario Rental Housing Tribunal for an increase above the guideline amounts if annual costs for heat, hydro, water or municipal taxes have increased significantly, or if building security costs have increased. When a unit is vacated, however, the landlord is entitled to lease the unit to a new tenant at any rental amount, after which annual increases are limited to the applicable guideline amount. The landlord may also be entitled to a greater increase in rent for a unit under certain circumstances, including, for example, where extra expenses have been incurred as a result of a renovation of that unit. 79

80 Properties Have Not Been Identified; Appropriate Properties May Not Be Available; Investment of Available Funds May Be Delayed There can be no assurance that the Partnership will identify Properties that meet its investment criteria that the Partnership will be successful in acquiring or improving Properties that may be identified, or that any such Properties will produce a return on the Partnership s investment. The Partnership intends to focus its efforts on areas in which it might acquire Properties primarily located in Ontario, Saskatchewan, Alberta and British Columbia; however, there is no assurance that the Partnership will acquire any specific assets or Properties, or, if it does, what the terms of such acquisitions might include. The Partnership expects to engage in a number of acquisitions, sales, exchanges, developments, improvements, and dispositions of Properties and loans. There is no firm information available with respect to the future assets of the Partnership that an investor can evaluate when determining the merits of the Partnership. Moreover, because the General Partner has not yet identified the Partnership s Properties to be acquired, the General Partner will have broad authority to invest the net proceeds of the Offerings in whatever assets the General Partner deems appropriate. The General Partner will have great latitude in determining the types of assets it may decide are proper investments for the Partnership. No assurance can be made that the General Partner s decisions in this regard will result in a profit for the Partnership. Risks Associated with the Hayden Street Property, York Road Property and King Street Property The acquisition of the Hayden Street Property, York Road Property and King Street Property entails risks that these properties will fail to perform in accordance with expectations. It is not possible to manage all risks associated with such acquisitions in the terms and conditions contained in commercial agreements pertaining to such acquisition. The Hayden Street Property, York Road Property and King Street Property may be subject to unknown, unexpected or undisclosed liabilities that may materially and adversely affect their operations and financial condition and results. The representations and warranties, if any, given by the vendors may not adequately protect against these liabilities and any recourse against third parties may be limited by the financial capacity of such third parties. The Hayden Street Property, York Road Property and King Street Property may not achieve anticipated occupancy levels and the estimates of costs and benefits of renovations for a these properties may prove inaccurate or may not have the intended results. There is no assurance that the Partnership will be able to increase the rents in the Hayden Street Property, York Road Property and King Street Property as described herein. Moreover, the Hayden Street Property, York Road Property and King Street Property may not meet expectations of operational or financial performance due to unexpected costs associated with repositioning such property, as well as the general investment risks inherent in any real estate investment. Blind Pool Offering and Undetermined Property Acquisitions The Offering is a blind pool offering. Other than described in Item 3.4 Current and Target Properties, the specific Properties in which the Partnership will invest have not been identified as of the date of this Offering Memorandum. While the Issuers anticipates that the General Partner will be able to identify and complete the purchase of Properties there is no assurance that it will be able to do so. The Partnership s Investment in Debt Secured by Real Property The Partnership may acquire debt interests which are secured by real property for the purposes of foreclosing and acquiring the real property. In addition to the risks of borrower default, the collateral may be mismanaged or otherwise decline in value during periods in which the Partnership is seeking to obtain control of the underlying real estate. In addition, borrowers may contest enforcement of foreclosure or other remedies, seek bankruptcy protection against such enforcement and/or bring claims for lender liability in response to actions to enforce mortgage obligations. If any of the above occurred, the Partnership s ability to obtain such real property will be affected. As a lender, the Partnership may also be subject to penalties for violations of state usury limitations, which penalties may be triggered by contracting for, charging or receiving usurious interest. 80

81 Properties Will Be Subject to Environmental Risks The Partnership s operating costs may be affected by the obligation to pay for the cost of complying with existing environmental laws, ordinances and regulations, as well as the cost of complying with future legislation with respect to its assets. In the due diligence process, to the extent the General Partner deems the same appropriate, efforts will be made by the General Partner to identify potential environmental liabilities prior to acquisition of assets, including identification of hazardous substances or wastes, contaminants, pollutants or sources thereof. These efforts may or may not include the performance of Environmental Site Assessments or Phase I reviews. In the event environmental contamination is discovered, the cost of investigations, remediation and removal of substances may be substantial and the presence of such substances may affect the Partnership s ability to sell such Property. Some environmental laws create a lien on the contaminated site in favor of the government for damages and the costs it incurs in connection with the contamination. In addition, the Partnership may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination. Concentration of Investments The Trust s investments will be limited to that of a single business (being the Partnership) operating in a single industry (being the real estate investment business in Ontario, Saskatchewan, Alberta and British Columbia). Concentration of the Trust s and Partnership s investments in such a manner involves greater risk to an investor in Trust Units or LP Units than the exposure generally associated with more diversified investment funds, and may result in greater fluctuations in returns. Lack of Geographic Diversification and Concentration of Risk in Ontario The Partnership s success is dependent upon the general economic conditions in the geographic areas in which a substantial number of Properties are located. The Partnership intends to focus its real estate holdings primarily within Ontario. In particular, the Partnership intends to use the first $10,000,000 of the Available Funds of the Partnership Offering realized by the Partnership Offering to invest solely in real estate assets in Ontario. The Partnership intends to invest no more than 20% of the Available Funds of the Partnership Offering realized by the Partnership Offering in excess of $10,000,000 in real estate assets located outside of Ontario in areas such as British Columbia, Alberta and Saskatchewan. To date, all of the real estate assets acquired by the Partnership are located in Ontario. See Item Current and Target Properties. The Partnership will therefore be subject to any adverse economic, political or business developments in those areas, including natural hazard risks, which may adversely affect the value of the Partnership assets. In particular, investors under the Offerings will be primarily exposed to the economic conditions of the Ontario real estate market. Real Estate is Illiquid and Value is Dependent on Conditions Beyond the Partnership s Control Real estate investments are relatively illiquid. The ability of the Partnership to vary its investments in response to changes in economic and other conditions will be limited. Further, no assurances can be given that the Fair Market Value of any assets acquired by the Partnership will not decrease in the future. The underlying value of the assets and the Partnership s income and ability to make distributions to Limited Partners are dependent upon the ability of the General Partner to manage the assets in a manner sufficient to achieve a return in excess of operating expenses Revenues may be adversely affected by adverse changes in national or local economic conditions, changes in interest rates and in the availability, cost and terms of financing, costs and terms of development, the impact of present or future environmental legislation and compliance with environmental laws, changes in real estate tax rates and other operating expenses, adverse changes in governmental rules and fiscal policies, civil unrest, acts of God, including earthquakes, hurricanes and other natural disasters (which may result in uninsured losses), acts of war, acts of terrorism, adverse changes in zoning laws, and other factors which are beyond the control of the Partnership. Reliance on Administrator All decisions with respect to the Trust Property and the operations of the Trust are expected to be made exclusively by the Trustee, which has delegated that authority to the Administrator pursuant to the Administration Agreement. 81

82 Trust Unitholders will have no right to make any decisions with respect to the Trust s business and affairs. No prospective investor should purchase a Trust Unit unless such prospective investor is willing to entrust all aspects of the management of the Trust to Administrator. Dependence on Key Personnel The success of the Trust will depend in large part upon the services of key personnel employed by the Partnership. The loss of any of these individuals, for any reason, could have a material adverse effect on the prospects of the Partnership and, as a result, the Trust. Failure to retain or to attract additional key employees with necessary skills could have a material adverse impact upon the Partnership s growth and profitability. The contributions of these individuals to the immediate future operations of the Partnership is likely to be of central importance and the loss of any one of these individuals could have a material adverse effect on the business of the Partnership and, as a result, the Trust. There can be no assurance that such personnel will remain with the Partnership. Termination of the Trust Although the Trust is expected to continue until 2050, Trust Unitholders may, by Extraordinary Resolution, vote to terminate the Trust at any meeting of Trust Unitholders duly called by the Trustee or the Trust Unitholders for the purpose of considering termination of the Trust, following which the Trustee will commence winding-up of the Trust. Such Extraordinary Resolution may contain directions to the Trustee as the Trust Unitholders determine, including a direction to distribute the securities held by the Trust, in specie. If the termination occurs earlier than the term of the Trust, the Trust may not have been in existence for the period of time necessary to achieve the business objectives of the Trust. Leverage of the Trust The Trust may borrow or incur indebtedness for any purpose, including for the purposes of acquiring investments, distributing Trust income or Trust capital gains or redeeming Trust Units. The requirement to repay principal and pay the associated debt service costs could impair the Trust s ability to make distributions to Trust Unitholders, particularly if the value of the Trust s investments decline and/or the Trust is unable to liquidate some or all of its investments to refinance any such borrowings. If the Trust is unable to generate sufficient cash flow to meet principal and interest payments on its indebtedness, the ability of the Trust to make distributions would be impaired and the value of the Trust Units could be significantly reduced or even eliminated. In addition, if the borrowings are used to acquire investments, the interest expense and banking fees incurred in respect of any such loans may exceed the incremental capital gains and tax benefits generated by the investments. There can be no assurance that the borrowing strategy (if any) employed by the Trust will enhance returns. Risks Relating to Redemption If holders of a substantial number of Trust Units exercise their redemption rights, the number of Trust Units outstanding could be significantly reduced. In any such circumstance, the Trustee may at any time terminate the Trust without the approval of the Trust Unitholders if, in the opinion of the Trustee, it is no longer economically feasible to continue the Trust or the Trustee determines that it would be in the best interests of Trust Unitholders to terminate the Trust. Redemption Notes Any Redemption Notes which may be received as a result of a redemption of Trust Units or LP Units will not be qualified investments for Deferred Plans. Liability for Return of Distributions Generally, the Trust Unitholders do not have personal liability for the obligations of the Trust. However, under applicable law, Trust Unitholders could be required to return distributions previously made by the Trust if it is determined that such distributions were wrongfully made or in certain other circumstances under the terms of the 82

83 Declaration of Trust. Where a Trust Unitholder has received the return of all or part of the amount contributed to the Trust, the Trust Unitholder is nevertheless liable to the Trust or, where the Trust is terminated, to its creditors for any amount, not in excess of the amount returned with interest, necessary to discharge the liabilities of the Trust to all creditors who extended credit or whose claims otherwise arose before the return of the contribution. Additionally, Trust Unitholders may have to return all or a portion of distributions made to them to the extent the Trust has an obligation to withhold any amounts from such distribution for tax purposes. Dilution/Concentration The Trust and Partnership are each authorized to issue an unlimited number of Trust Units and LP Units (as applicable). Any issuance of additional Trust Units or LP Units may have a dilutive or concentrative effect on the value of Trust Units or LP Units. Investors who invest after a particular Property is acquired will be entitled to receive the same distributions as an investor who invested before such Property was acquired and will therefore be entitled to the equivalent benefits or disadvantages as each other Trust Unitholder or Limited Partner (as applicable). Additional Limited Partners The Trust is not the only Limited Partner in the Partnership. The Partnership is seeking additional investments by Persons other than the Trust directly into the Partnership. The direct investment by Persons other than the Trust may dilute the Trust s interest in the Partnership. Recourse to the Trust s Assets The Trust s assets, including any investments made by the Trust and any capital held by the Trust, are available to satisfy all liabilities and other obligations of the Trust. If the Trust itself becomes subject to a liability, parties seeking to have the liability satisfied may have recourse to the Trust s assets generally and not be limited to any particular asset, such as the investment giving rise to the liability. Indemnification The Trustee, each former Trustee and each officer of the Trust and each former officer of the Trust is entitled to indemnification and reimbursement out of the Trust Property, except under certain circumstances, from the Trust. Such indemnification obligations could decrease the returns which would otherwise be available to the Trust Unitholders. Effect of Expenses on Returns Although the Partnership has agreed to bear all costs and expenses related to the activities and business of the Trust, the Trust generally remains responsible to pay the same. Accordingly, if the Partnership were to fail or refuse to pay any such costs or expenses, the Trust would remain liable to pay the same, and if it were to do so, such costs and expenses would reduce, and could eliminate, the actual returns to the Trust Unitholders. Possible Conflicts of Interest It is possible that conflicts of interest may arise among the General Partner, affiliates of the General Partner and the Partnership, which may result in decisions that do not fully reflect the best interests of all Partners. Under the terms of the Partnership Agreement, the management responsibility of the Partnership and its assets is vested solely in the General Partner of the Partnership. An investor acquiring Trust Units or LP Units will have little or no voice or vote in the management and other operational decisions of the Partnership, including, without limitation, decisions to acquire, maintain, market, sell or otherwise dispose of property and assets, decisions regarding distributions to the Partners, or entering into certain related (or affiliate) transactions with the General Partner or its affiliates. In addition, the General Partner Fees payable to the General Partner and the other fees payable to parties related to the General Partner as described herein may create an incentive for the General Partner to acquire Properties that are riskier or more speculative than might otherwise be made with a lesser incentive to achieve high returns. In the event certain additional services, goods or products provided to the Partnership by one or more affiliates of the 83

84 General Partner or the members of the General Partner, such affiliates would be entitled to receive certain fees from the Partnership. While the compensation payable to the General Partner, or its affiliates, for services performed for the Partnership may be reasonable based on established commercial practices, it will not be the result of arm s length negotiations. The General Partner, on behalf of the Partnership, will be vested with the authority to amend or modify such agreements. The principals and affiliates of the General Partner and Administrator may have interests and businesses which are competitive to those of the Partnership. There may be occasions when the Pulis Parties encounter conflicts of interest in connection with the Issuers activities. There may be conflicts in allocating business opportunities among the Partnership and other Pulis Parties. In a bankruptcy proceeding, it is possible that the Trust s interests may be subordinated or otherwise adversely affected by virtue of the involvement or actions of such other participants. In order to mitigate this risk, the Trust and Partnership have adopted Conflicts of Interest Policies which require conflicts of interest to be approved by independent directors. See Item Conflicts of Interest Policies. No Obligation to Devote Full Time Efforts The General Partner will devote such time as it believes, in its discretion, is necessary to carry out the operations of the Partnership. Moreover, officers and employees of the General Partner and its affiliates are not obligated to devote full time efforts to the Partnership s efforts, and they may have conflicts in their allocation of time between the Partnership and other unrelated activities. The Partnership s Success is Dependent on Key Personnel The Partnership believes that its success will depend to a significant extent upon the experience of key management personnel of the General Partner. The continued service of some of these key management personnel cannot be guaranteed. However, while the General Partner believes that it could replace these key personnel, the loss of any such persons or the loss of all of such persons at a single point in time could have a material adverse effect on the operations of the Partnership through a diminished ability to obtain investment opportunities and to structure and execute the Partnership s potential investments and business plan. In addition, the Partnership may not successfully recruit additional personnel and any additional personnel that are recruited may not have the requisite skills; knowledge or experience necessary or desirable to enhance the incumbent management. Joint Ventures The Partnership may enter into one or more joint ventures with strategic partners, including with affiliates of the General Partner. Investments with joint venture partners may involve carried interests and/or fees payable to such joint venture partners, as the General Partner may deem appropriate, in its sole discretion. Any joint venture contemplated by the Partnership will be reviewed and shall only proceed if approved by the board of directors of the General Partner, which shall require the approval of both independent members of the board of directors of the General Partner. Non-Performing Loans; Foreclosure Real estate loans acquired by the Partnership (if any) may be nonperforming for a wide variety of reasons. Such nonperforming real estate loans may require a substantial amount of workout negotiations and/or restructuring, which may entail, among other things, a reduction in the interest rate and a write-down of the principal of such loan. However, even if a restructuring were successfully accomplished, a risk exists that, upon maturity of such real estate loan, replacement takeout financing will not be available. It is possible that the Partnership may find it necessary or desirable to foreclose on collateral securing one or more real estate loans it originated or purchased. The foreclosure process can be lengthy and expensive. Borrowers often resist foreclosure actions by asserting numerous claims, counterclaims and defenses against the holder of a real estate loan including lender liability claims and defenses, even when such assertions may have no basis in fact, in an effort to prolong the foreclosure process. In some jurisdictions, foreclosure actions can take several years or more to conclude and borrowers may file for bankruptcy protection at any time, staying the foreclosure action and further delaying the foreclosure process. 84

85 Foreclosure litigation tends to create a negative public image of the underlying collateral and may disrupt ongoing leasing and management of the underlying collateral. Risks of Leverage The General Partner has the right to borrow and to pledge and encumber the Properties to secure a working capital line of credit. The use of leverage exposes the Partnership to certain risks including interest charges and the possible loss of the Properties if the Partnership is unable to pay such indebtedness on a timely basis or comply with the terms of any loan documents evidencing such indebtedness. Any such financing will likely place limits and restrictions on the Partnership s discretion in conducting business. Risks Relating to Redemption of LP Units If holders of a substantial number of LP Units exercise their redemption rights, the number of LP Units outstanding could be significantly reduced and the Partnership may not be able to meet its investment objectives. The Risk of Uninsured Losses will be Borne by the Partnership The Partnership expects to maintain insurance coverage against liability to third parties and property damage as is customary for similar businesses, insofar as the General Partner deems the same necessary or appropriate, in its sole discretion. There can be no assurance that insurance will be available or sufficient to cover all such risks. Insurance against certain risks may be unavailable or commercially infeasible. Uninsured losses will be borne by the Partnership. Investments Longer Than Term The General Partner intends that Properties will either be disposed of prior to dissolution or be suitable for in-kind distribution at dissolution. However, the Partnership may have to sell, distribute or otherwise dispose of Properties at a disadvantageous time as a result of dissolution. Securities Regulatory Risks In the ordinary course of business, the Issuers may be subject to ongoing reviews by the securities regulators, who have broad powers to pass, interpret, amend and change the interpretation of securities laws from time to time and broad powers to protect the public interest and to impose terms, conditions, restrictions or requirements regarding registration under securities laws. Further, the securities regulators have the authority to retroactively deny the benefit of an exemption from prospectus or registration requirements otherwise provided for in the securities laws where the regulator considers it necessary to do so to protect investors or the public interest. It is possible that securities matters may be reviewed and challenged by the securities authorities. If such challenge were to succeed, it could have a material adverse effect on the Issuers. There is no assurance that applicable securities laws or the securities regulators interpretation thereof or the practices of the securities regulators will not be changed or reinterpreted in a manner that adversely affects the Issuers. Lack of independent counsel representing Trust Unitholders The Trust has consulted with and retained for its benefit legal counsel to advise them in connection with the formation and terms of the Trust and the offering of Trust Units. Trust Unitholders have not, however, as a group been represented by independent legal counsel. Therefore, to the extent that the Trust Unitholders could benefit by an independent review, such benefit will not be available unless individual Trust Unitholders retain their own legal counsel. Information technology governance and security, including cyber security In the ordinary course of the Trust s and Partnership s business, the Trust and Partnership collect, store, process and/or transmit sensitive data belonging to subscribers, Trust Unitholders, holders of LP Units, partners, vendors, 85

86 employees and contractors, as well as, proprietary business information and intellectual property of the Trust and Partnership. The secure processing, maintenance and transmission of this information is critical to the business of the Trust and Partnership. The Trust and Partnership have implemented a secure operating framework which includes policies and governance, prevention and detection technologies, backup and recovery processes and other procedures and technology in the protection of their data, software and infrastructure assets from loss, theft, unauthorized access, vandalism, cyber-attacks, or events such as power outages or surges, floods, fires or other natural disasters. The Trust and Partnership have also implemented a major incidence process whereby breaches or unauthorized access to their systems are assessed and reported based on established communication protocols. Despite such security measures, data, systems and infrastructure may be vulnerable to cyber-attacks or breached due to employee error, malfeasance or other disruptions. These security breaches could materially compromise information, disrupt business operations or cause the Trust or Partnership to breach obligations, thereby exposing the Trust and Partnership to liability, reputational harm and/or significant remediation costs. A theft, loss, corruption, exposure, fraudulent use or misuse of information whether by third parties or as a result of employee malfeasance could result in significant remediation and other costs, fines, litigation or regulatory actions against the Trust or Partnership, as well as, cause reputational harm, negatively impact the Trust or Partnership s competitive position and affect financial results. The Trust and Partnership are increasingly relying on third party data storage providers, including cloud storage solution providers, resulting in less direct control over data and system processing. Such third parties may also be vulnerable to security breaches for which the Trust or Partnership may not be indemnified and which could cause materially adverse harm to the Trust s or Partnership s reputation and competitive position or affect the Trust s or Partnership s financial results. Disclosure of Personal Information Investors are advised that their names and other specified information, including the number and aggregate value of the Trust Units and LP Units owned: (i) will be disclosed to the relevant securities regulatory authorities and may become available to the public in accordance with the requirements of applicable securities and freedom of information laws and the investor consents to the disclosure of such information; (ii) is being collected indirectly by the applicable securities regulatory authority under the authority granted to it in securities legislation; and (iii) is being collected for the purposes of the administration and enforcement of the applicable securities legislation. The foregoing list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Issuers. Prospective investors should read this entire Offering Memorandum and consult their own counsel and financial advisors before deciding to invest in the Trust. Neither the Issuers, the Trustee, the General Partner, Administrator nor any other Pulis Party or any affiliate or associate of the foregoing is responsible for, and undertakes no obligation to, determine the general or specific investment needs and objectives of a potential investor and the suitability of the Trust Units or LP Units having regard to any such investment needs and objectives of the potential investor. ITEM 11 - REPORTING OBLIGATIONS The Trust will send to Trust Unitholders within 90 days of the Fiscal Year end and, in any event, on or before any earlier date prescribed by Applicable Laws, annual financial statements of each of the Trust and Partnership for the Fiscal Year ended immediately prior to such period. The Trustee will, within the time frame required under the Tax Act, forward to each Trust Unitholder who received distributions from the Trust in the prior calendar year, such information and forms as may be needed by the Trust Unitholder in order to complete its income tax return in respect of the prior calendar year under the Tax Act and equivalent provincial legislation in Canada. The Partnership will send to Limited Partners within 90 days of the Fiscal Year end and, in any event, on or before any earlier date prescribed by Applicable Laws, annual financial statements of each of the Partnership and Trust for the Fiscal Year ended immediately prior to such period. 86

87 The General Partner will, within the time frame required under the Tax Act, forward to each Limited Partner who received distributions from the Partnership in the prior calendar year, such information and forms as may be needed by the Limited Partner in order to complete its income tax return in respect of the prior calendar year under the Tax Act and equivalent provincial legislation in Canada. The Issuers will make reasonably available to Trust Unitholders and Limited Partners such other information as required by applicable securities laws for a non-reporting issuer that distributes securities using the offering memorandum exemption (including audited annual financial statements, annual notices of use of proceeds and notices of certain key events, if and when applicable). Generally, disclosure documents will be considered to have been made reasonably available if the documents are mailed to Trust Unitholders and Limited Partners, or if they receive notice that the disclosure documents can be viewed on a public website of the Issuers or a website accessible by all Trust Unitholders and Limited Partners (such as a password-protected website). None of the Issuers is a reporting issuer or equivalent under the securities legislation of any jurisdiction. Accordingly, the Issuers are not subject to the continuous disclosure requirements of a reporting issuer under securities legislation. Other than the documents described above, we are not required to send you any documents on an annual or ongoing basis. The Issuers will deliver to prospective investors certain documents, including this Offering Memorandum, a subscription agreement and any updates or amendments to the Offering Memorandum required by law, from time to time by way of facsimile or . In accordance with the terms of the subscription agreement provided to prospective investors, delivery of such documents by or facsimile shall constitute valid and effective delivery of such documents unless the Issuers receive actual notice that such electronic delivery failed. Unless the Issuers receive actual notice that the electronic delivery failed, the Issuers are entitled assume that the facsimile or and the attached documents were actually received by the prospective investor and the Issuers will have no obligation to verify actual receipt of such electronic delivery by the prospective investor General ITEM 12 - RESALE RESTRICTIONS The Trust Units and LP Units will be subject to a number of resale restrictions, including restrictions on trading. Until the restriction on trading expires, you will not be able to trade the Trust Units or LP Units unless you comply with an exemption from the prospectus requirements under securities legislation. Additionally, investors will not be permitted to transfer their Trust Units or LP Units without the consent of the Trustee or General Partner (as applicable) Restricted Period Unless permitted under securities legislation, a holder cannot trade the Trust Units or LP Units before the date that is four months and a day after the date the Trust or Partnership (as applicable) becomes a reporting issuer in any province or territory in Canada. Since the Issuers are not reporting issuers in any province or territory, the applicable hold period may never expire, and if no further exemption may be relied upon and if no discretionary order is obtained, this could result in an investor having to hold the Trust Units or LP Units acquired under the Offerings for an indefinite period of time Manitoba Resale Restrictions In addition to the above, for subscribers resident in Manitoba, unless permitted under securities legislation, a holder must not trade the Trust Units or LP Units without the prior written consent of the regulator in Manitoba, unless: (a) the Trust or Partnership (as applicable) has filed a prospectus with the regulator in Manitoba with respect to the Trust Units or LP Units (as applicable) and the regulator in Manitoba has issued a receipt for that prospectus, or 87

88 (b) the holder has held the Trust Units or LP Units for at least 12 months. The regulator in Manitoba will consent to such a trade if the regulator is of the opinion that to do so is not prejudicial to the public interest. The Administrator must approve of any proposed disposition of Trust Units and the General Partner must approve any proposed disposition of LP Units. It is the responsibility of each individual holder to ensure that all forms required by the applicable securities legislation are filed as required upon disposition of the Trust Units or LP Units. The foregoing is a summary only of resale restrictions relevant to an investor of the securities offered hereunder. It is not intended to be exhaustive. All investors under this Offering should consult with their legal advisors to determine the applicable restrictions governing resale of the securities purchased hereunder including the extent of the applicable hold period and the possibilities of utilizing any further statutory exemptions or obtaining a discretionary order. ITEM 13 - PURCHASERS RIGHTS If you purchase Trust Units or LP Units you will have certain rights, some of which are described below. For information about your rights you should consult a lawyer Two Day Cancellation Right You can cancel your agreement to purchase these Trust Units or LP Units. To do so, you must send a notice to us by midnight on the second business day after you sign the agreement to buy the Trust Units or LP Units (as applicable) Statutory Rights of Action in the Event of a Misrepresentation Securities legislation in certain of the provinces of Canada provides purchasers with a statutory right of action for damages or rescission in cases where an offering memorandum or any amendment thereto contains an untrue statement of a material fact or omits to state a material fact that is required to be stated or is necessary to make any statement contained therein not misleading in light of the circumstances in which it was made (a misrepresentation ). These rights, or notice with respect thereto, must be exercised or delivered, as the case may be, by purchasers within the time limits prescribed and are subject to the defences and limitations contained under the applicable securities legislation. Purchasers of Trust Units or LP Units resident in provinces of Canada that do not provide for such statutory rights will be granted a contractual right similar to the statutory right of action and rescission described below for purchasers resident in Ontario and such right will form part of the subscription agreement to be entered into between each such purchaser and the Issuers in connection with these Offerings. The following summaries are subject to the express provisions of the securities legislation applicable in each of the provinces of Canada and the regulations, rules and policy statements thereunder. Purchasers should refer to the securities legislation applicable in their province along with the regulations, rules and policy statements thereunder for the complete text of these provisions or should consult with their legal advisor. The contractual and statutory rights of action described in this Offering Memorandum are in addition to and without derogation from any other right or remedy that purchasers may have at law Rights of Purchasers in Alberta If you are a resident of Alberta, and if there is a misrepresentation in this Offering Memorandum, you have a statutory right to sue: (a) the Issuers to cancel your agreement to buy these securities, or 88

89 (b) for damages against the Issuers, every person who was a director or acting in a similar capacity of the Issuers at the date of this Offering Memorandum and every other person who signed this Offering Memorandum. This statutory right to sue is available to you whether or not you relied on the misrepresentation. However, there are various defences available to the persons or companies that you have a right to sue. In particular, they have a defence if you knew of the misrepresentation when you purchased the securities. Additionally, if you elect to exercise a right of rescission against the Issuers, you will have no right of action against the persons described in (b) above. If you intend to rely on the rights described in (a) or (b) above, you must do so within strict time limitations. You must commence your action to cancel the agreement within 180 days after the date that you purchased the securities. You must commence your action for damages within the earlier of 180 days after you first had knowledge of the facts giving rise to the cause of action and three years after the day you purchased the securities Rights of Purchasers in British Columbia If you are a resident of British Columbia, and if there is a misrepresentation in this Offering Memorandum, you have a statutory right to sue: (a) (b) the Issuers to cancel your agreement to buy these securities, or for damages against the Issuers, every person who was a director or acting in a similar capacity of the Issuers at the date of this Offering Memorandum and every other person who signed this Offering Memorandum. This statutory right to sue is available to you whether or not you relied on the misrepresentation. However, there are various defences available to the persons or companies that you have a right to sue. In particular, they have a defence if you knew of the misrepresentation when you purchased the securities. Additionally, if you elect to exercise a right of rescission against the Issuers, you will have no right of action against the persons described in (b) above. If you intend to rely on the rights described in (a) or (b) above, you must do so within strict time limitations. You must commence your action to cancel the agreement within 180 days after the date that you purchased the securities. You must commence your action for damages within the earlier of 180 days after you first had knowledge of the facts giving rise to the cause of action and three years after the day you purchased the securities Rights of Purchasers in Saskatchewan If you are a resident of Saskatchewan and if there is a misrepresentation in this Offering Memorandum, or any amendment thereto, you have a statutory right to sue: (a) (b) the Issuers to cancel your agreement to buy these securities, or for damages against the Issuers, every promoter of the Issuers, every person who was a director or acting in a similar capacity of the Issuers at the date of this Offering Memorandum, every person whose consent has been filed respecting the offering but only with respect to reports, opinions and statements made by that person, and every other person who signed this Offering Memorandum. These statutory rights to sue are available to you whether or not you relied on the misrepresentation. However, there are various defences available to the persons or companies that you have a right to sue. In particular, they have a defence if you knew of the misrepresentation when you purchased the securities. Additionally, if you elect to exercise a right of rescission against the Issuers, you will have no right of action against the persons described in (b) above. 89

90 If you intend to rely on the rights described in (a) or (b) above, you must do so within strict time limitations. You must commence your action to cancel the agreement within 180 days after the date that you purchased the securities. You must commence your action for damages within the earlier of one year after you first had knowledge of the facts giving rise to the cause of action and six years after the day you purchased the securities Rights of Purchasers in Manitoba If you are a resident of Manitoba, and if there is a misrepresentation in this Offering Memorandum, you have a statutory right to sue: (a) (b) the Issuers to rescind your agreement to buy these securities, or for damages against the Issuers, every person who was a director or acting in a similar capacity of the Issuers at the date of this Offering Memorandum and every other person who signed this Offering Memorandum. These statutory rights to sue are available to you whether or not you relied on the misrepresentation. However, there are various defences available to the persons or companies that you have a right to sue. In particular, they have a defence if you knew of the misrepresentation when you purchased the securities. Additionally, if you elect to exercise a right of rescission against the Issuers, you will have no right of action against the persons described in (b) above. If you intend to rely on the rights described in (a) or (b) above, you must do so within strict time limitations. You must commence your action to rescind the agreement within 180 days after the date that you purchased the securities. You must commence your action for damages within the earlier of 180 days after you first had knowledge of the facts giving rise to the cause of action or 2 years after the day you purchased the securities Rights of Purchasers in Ontario If you are a resident of Ontario, and if there is a misrepresentation in this Offering Memorandum, a purchaser who purchases a security offered by this Offering Memorandum during the period of distribution has, without regard to whether the purchaser relied on the misrepresentation, the following rights: (a) (b) the purchaser has a right of action for damages against the Issuers, or where the purchaser purchased the securities from a person or the Issuers referred to in clause (a), the purchaser may elect to exercise a right of rescission against the person or the Issuers, in which case the purchaser has no right of action for damages against such person or the Issuers. The Issuers will not be held liable under this paragraph if the subscriber purchased the securities with the knowledge of the misrepresentation. In an action for damages, the Issuers will not be liable for all or any portion of such damages that it proves do not represent the depreciation in value of the securities as a result of the misrepresentation relied upon and in no case will the amount recoverable under this paragraph exceed the price at which the securities were sold to the subscriber. If you intend to rely on the rights described in (a) or (b) above, you must do so within strict time limitations. You must commence your action to cancel the agreement within 180 days after the date that you purchased the securities. You must commence your action for damages within the earlier of 180 days after you first had knowledge of the facts giving rise to the cause of action and three years after the day you purchased the securities Rights of Purchasers in Québec In addition to any other right or remedy available to you at law, if this Offering Memorandum is delivered to an investor resident in Québec and contains a misrepresentation, the investor will have: (1) statutory rights under 90

91 Québec legislation; or (2) contractual rights in circumstances where the Québec legislation does not provide such rights, as follows: (a) (b) a right of action for damages against the Issuers, every person acting in a capacity with respect to the Issuers which is similar to that of a director of officer of a company, any expert whose opinion, containing a misrepresentation, appeared, with his consent, in this Offering Memorandum, the dealer (if any) under contract to the Issuers and any person who is required to sign the certificate of attestation in this Offering Memorandum; or a right of action against the Issuers for rescission of the purchase contract or revision of the price at which Trust Units or LP Units (as applicable) were sold to the investor. However, there are various defences available to the persons or companies that you have a right to sue. Among other defences, no person or company will be liable if it proves that: (a) (b) the investor purchased the Trust Units with knowledge of the misrepresentation; or in an action for damages, that they acted prudently and diligently (except in an action brought against the Issuers). No action may be commenced to enforce such a right of action: (a) (b) for rescission or revision of price more than three years after the date of the purchase; or for damages later than the earlier of: (i) (ii) three years after the purchaser first had knowledge of the facts giving rise to the cause of action, except on proof of tardy knowledge imputable to the negligence of the purchaser; or five years from the filing of this Offering Memorandum with the Autorité des marchés financiers de Québec Rights of Purchasers in Nova Scotia If you are a resident of Nova Scotia and if there is a misrepresentation in this Offering Memorandum, or any amendment thereto, you have a statutory right to sue: (a) (b) the Issuers to cancel your agreement to buy these securities, or for damages against the Issuers, every person who was a director or acting in a similar capacity of the Issuers at the date of this Offering Memorandum and every other person who signed this Offering Memorandum. These statutory rights to sue are available to you whether or not you relied on the misrepresentation. However, there are various defences available to the persons or companies that you have a right to sue. In particular, they have a defence if you knew of the misrepresentation when you purchased the securities. Additionally, if you elect to exercise a right of rescission against the Issuers, you will have no right of action against the persons described in (b) above. If you intend to rely on the rights described in (a) or (b) above, you must do so within strict time limitations. You must commence your action to cancel the agreement within 180 days after the date that you purchased the securities. You must commence your action for damages within the earlier of 180 days after you first had knowledge of the facts giving rise to the cause of action and three years after the day you purchased the securities. 91

92 13.10 Rights of Purchasers in New Brunswick If you are a resident of New Brunswick and if there is a misrepresentation in this Offering Memorandum, you have a statutory right to sue: (a) (b) the Issuers to cancel your agreement to buy these securities, or for damages against the Issuers or the seller. The Issuers will not be held liable under this paragraph if the subscriber purchased the securities with the knowledge of the misrepresentation. In an action for damages, the Issuers will not be liable for all or any portion of such damages that they prove do not represent the depreciation in value of the securities as a result of the misrepresentation relied upon and in no case will the amount recoverable under this paragraph exceed the price at which the securities were sold to the subscriber. Additionally, if you elect to exercise a right of rescission against the Issuers, you will have no right of action against the persons described in (b) above. If you intend to rely on the rights described in (a) or (b) above, you must do so within strict time limitations. You must commence your action to cancel the agreement within 180 days after the date that you purchased the securities. You must commence your action for damages within the earlier of one year after you first had knowledge of the facts giving rise to the cause of action and six years after the day you purchased the securities Rights of Purchasers in Newfoundland and Labrador, Northwest Territories, Nunavut, Yukon or Prince Edward Island If you are a resident of Newfoundland and Labrador, Northwest Territories, Nunavut, Yukon, or Prince Edward Island, and if there is a misrepresentation in this Offering Memorandum, you have a statutory right to sue: (a) (b) the Issuers to rescind your agreement to buy these securities, or for damages against the Issuers, every person who was a director or acting in a similar capacity of the Issuers at the date of this Offering Memorandum and every other person who signed this Offering Memorandum. These statutory rights to sue are available to you whether or not you relied on the misrepresentation. However, there are various defences available to the persons or companies that you have a right to sue. In particular, they have a defence if you knew of the misrepresentation when you purchased the securities. Additionally, if you elect to exercise a right of rescission against the Issuers, you will have no right of action against the persons described in (b) above. If you intend to rely on the rights described in (a) or (b) above, you must do so within strict time limitations. You must commence your action to rescind the agreement within 180 days after the date that you purchased the securities. You must commence your action for damages within the earlier of 180 days after you first had knowledge of the facts giving rise to the cause of action or 3 years after the day you purchased the securities. 92

93 ITEM 14 FINANCIAL STATEMENTS [Remainder of page is intentionally blank. The financial statements for the Trust, Partnership and General Partner follow] F-1

94 F-2 Pulis Real Estate Trust Financial Statements For the year ended December 31, 2016

95 Pulis Real Estate Trust Financial Statements For the year ended December 31, 2016 Contents Independent Auditor's Report 2 Financial Statements Statement of Financial Position 3 Statement of Comprehensive Income 4 Statement of Changes in Net Assets Attributable to Holders of Redeemable Units 5 Statement of Cash Flows 6 Notes to Financial Statements 7-15 F-3

96 IBDO Tel: Fax: Toll-Free: BOO Canada LLP 3115 Harvester Road, Suite 400 Burlington ON L7N 3N8 Canada Independent Auditor's Report To the Unitholders of Pulis Real Estate Trust We have audited the accompanying financial statements of Pulis Real Estate Trust (the "Trust"), which comprise the statement of financial position as at December 31, 2016, and the statements of comprehensive income, changes in net assets attributable to holders of redeemable units and cash flows for the yea r then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial st atements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Trusfs preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial st atements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as at December 31, 2016, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards. Chartered Professional Accountants, Licensed Public Accountants Burlington, Ontario March 28, BOO c anada LLP. a Canad1an hmlled hab1hty partnership. IS a member of BOO International L1m1ted. a UK company hm1ted by guarantee. and forms part or the mternat1onal BOO network of mdependent member firms. F-4

97 Pulis Real Estate Trust Statement of Financial Position December $ $ Assets Current Cash Investment in Pulis Real Estate LP 2 Subscriptions receivable Total assets 2 71,725 2,697, , , ,400 2,915, ,502 Liabilities Current Due to Pulis Real Estate LP 2 (Note 6) 217, ,125 Net assets attributable to holders of redeemable units (Note 7) 2,697, ,377 Number of redeemable units outstanding (Note 7) 32,151 9,554 Net assets attributable to holders of redeemable units per unit (Note 7) Approved on behalf of the Trust by the Administrator Pulis Real Estate Adminco Inc. "Brian Pulis" The accompying notes are an integral part of these financial statements. 3 F-5

98 Pulis Real Estate Trust Statement of Comprehensive Income For the year ended December $ $ Rental income allocated from Pulis Real Estate LP 2 110,584 - Expenses allocated from Pulis Real Estate LP 2 Professional fees 131,795 85,852 Accounting and administration fees Management fees 86,052 80,539 10,214 Selling 69,024 80,220 Interest expense 53,485 - Legal fees 50,388 - Property management fees 38,938 - Property taxes 29,711 - Property maintenance fees 10,558 - Repairs and service 10,266 - Utilities 9,625 - Directors' fees 9,480 6,264 Insurance 4,933 - Other expenses ,436 Bank charges Total expenses 585, ,986 Loss before fair value gain on investment properties allocated from Pulis Real Estate LP 2 (475,393) (205,986) Fair value gain on investment properties allocated from Pulis Real Estate LP 2 698,917 - Increase (decrease) in net assets attributable to holders of redeemable units 223,524 (205,986) Increase (decrease) in net assets attributable to holders of redeemable units per unit (Note 8) (21.56) The accompying notes are an integral part of these financial statements. 4 F-6

99 Pulis Real Estate Trust Statement of Changes in Net Assets Attributable to Holders of Redeemable Units For the year ended December $ $ Net assets attributable to holders of redeemable units, 445,377 - beginning of year Capital transactions Issuance of redeemable units 2,250, ,535 Issuance costs allocated from Pulis Real Estate LP 2 (221,267) (256,172) 2,029, ,363 Increase (decrease) in net assets attributable to holders of redeemable units Net assets attributable to holders of redeemable units, end of year 223,524 (205,986) 2,697, ,377 The accompying notes are an integral part of these financial statements. 5 F-7

100 Pulis Real Estate Trust Statement of Cash Flows For the year ended December $ $ Cash flow from investing activity Investment in Pulis Real Estate LP 2 (2,250,270) (907,535) Cash flow from financing activities Issuance of redeemable units 2,250, ,535 Subscriptions receivable (53,700) (163,400) Advance from (repayments to) Pulis Real Estate LP 2 (18,023) 235,125 2,178, ,260 Net increase (decrease) in cash during the year (71,723) 71,725 Cash, beginning of year 71,725 - Cash, end of year 2 71,725 The accompying notes are an integral part of these financial statements. 6 F-8

101 Pulis Real Estate Trust Notes to Financial Statements December 31, General Business Description Pulis Real Estate Trust (the "Trust") is an unincorporated, open-ended trust established by the Trust's Declaration of Trust dated February 6, The Trust intends to be a "mutual fund trust" for the purposes of the Income Tax Act (Canada). The Trust was formed to raise funds pursuant to an offering (Note 5) for the purposes of acquiring units in Pulis Real Estate LP 2 (the "Partnership"), an Ontario limited partnership. The Partnership is considered a related party due to common officers and directors of the Administrator. The Partnership intends to invest in residential properties in Ontario, Saskatchewan, Alberta and British Columbia (the "Properties"). The Trustee of the Trust is Computershare Trust Company of Canada (the "Trustee"). The Administrator of the Trust is Pulis Real Estate Adminco Inc. (the "Administrator"). The proposed business of the Trust involves a high degree of risk and there is no assurance that the Trust will be able to raise the amount of funds to finance its activities as disclosed in Note 5. The address of the Trust is 1 Nelson Street West, Suite 200A, Brampton, Ontario, L6X 3E4. 2. Significant Accounting Policies Statement of Compliance These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). These financial statements were authorized for issue by the Administrator of the Trust on March 28, Basis of Measurement, Functional and Presentation Currency The financial statements have been prepared on a historical cost basis, except for investment in Pulis Real Estate LP 2 which is stated at fair value. The Trust s financial statements are presented in Canadian dollars, which is the Trust's functional and presentation currency. Critical Estimates and Judgements The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. The most significant estimates that the Trust is required to make relate to the fair value of the investment in limited partnership units. The fair value of the investments in limited partnership units is impacted by assumptions regarding local real estate market conditions; interest rates and availability of credit; costs and terms of financing; the impact of present or future legislation or regulation and other factors affecting the investment properties. These assumptions are limited by the availability of reliable comparable data, economic uncertainty, ongoing geopolitical concerns and uncertainty of predictions concerning the future events. Credit markets, equity markets and consumer spending are factors in the uncertainty inherent in such estimates and assumptions. Accordingly, by nature, estimates of fair value are subjective and do not necessarily result in precise determinations. Should the underlying assumptions change, the estimated fair value could change by a material amount. 7 F-9

102 Pulis Real Estate Trust Notes to Financial Statements December 31, Significant Accounting Policies (Continued) Critical Estimates and Judgements (continued) The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects that period, or in the period of the revision and future periods if the revision affects both current and future periods. Financial Assets and Financial Liabilities Recognition and Classification Financial assets and financial liabilities are initially measured at fair value and are subsequently accounted for based on their classification as described below. The classification depends on the purpose for which the financial instruments were acquired and their characteristics. Financial Assets Financial assets are classified into one of four categories: i) Held-to-maturity ( HTM ); ii) Fair value through profit or loss ( FVTPL ); iii) Loans and receivables; and iv) Available-for-sale ( AFS ). Financial Assets at Fair Value Through Profit or Loss A financial asset is classified at fair value through profit or loss if it is classified as held-for-trading or designated as such upon initial recognition. Financial assets are designated as at FVTPL if the Trust manages such assets and makes purchase and sale decisions based on their fair value in accordance with the Trust s risk management strategy. These instruments are accounted for at fair value with the change in the fair value recognized in the statement of comprehensive income during the period. Attributable transaction costs are recognized in the statement of comprehensive income when incurred. The Trust s investment in Pulis Real Estate LP 2 is classified as fair value through profit and loss. Loans and Receivables Loans and receivables are non-derivative financial assets and fixed or determinable payments that are not quoted on an active market. Loans and receivables are initially recognized at fair value and subsequently at amortized cost using the effective interest rate method. Transaction costs incurred to acquire loans and receivables financial instruments are included in the underlying balance. Impairment provisions are recognized when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Trust will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. On confirmation that the amounts receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision. The Trust has cash and subscriptions receivable classified as loans and receivables. The Trust does not classify any financial assets as held-to-maturity or available-for-sale. 8 F-10

103 Pulis Real Estate Trust Notes to Financial Statements December 31, Significant Accounting Policies (Continued) Financial Assets and Financial Liabilities (continued) Financial Liabilities Financial liabilities are classified into one of two categories: i) Fair value through profit or loss; and ii) Other financial liabilities. Financial Liabilities at Fair Value Through Profit or Loss (FVTPL) The Trust does not classify any financial liabilities as fair value through profit or loss. Other Financial Liabilities Other liabilities are accounted for at amortized cost using the effective interest rate method. Transaction costs are included in the underlying balance. The Trust s due to Pulis Real Estate LP 2 is classified as other financial liabilities. Determination of Fair Value The fair value of a financial instrument on initial recognition is the transaction price, which is the fair value of the consideration given or received. Subsequent to initial recognition, fair value is determined by management using available market information or other valuation methodologies. The fair value of the investment in Pulis Real Estate LP 2 is determined with reference to the underlying net asset value of the Partnership. Fair Value Hierarchy The Trust s investments held are each classified into one of three fair value levels. The three levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly; and Level 3: Inputs that are not based on observable market data. The Trust s investment in Pulis Real Estate LP 2 is classified as Level 3 at December 31, There were no transfer within levels of the hierarchy during the year aside from the investment in the Partnership. Derecognition The Trust derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or when it transfers the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. The Trust derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired. Offsetting Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Trust has a legal right to set off the recognized amounts and it intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. 9 F-11

104 Pulis Real Estate Trust Notes to Financial Statements December 31, Significant Accounting Policies (Continued) Redeemable Units The Trust's units are redeemable at the option of the holder and, therefore, are considered puttable instruments. Puttable instruments are required to be accounted for as financial liabilities, except where certain conditions are met, in which case, the puttable instrument may be presented as equity. The Trust's units did not meet the conditions for presentation as equity, and have therefore been presented as liabilities at the redemption amount. Costs incurred in connection with the offering of Trust units are reflected as a reduction of Net Assets Attributable to Holders of Redeemable Units. Net Assets Attributable to Holders of Redeemable Units per Unit The net assets attributable to holders of redeemable units per unit is calculated by dividing the net assets attributable to holders of redeemable units of a particular class of units by the total number of units of that particular class outstanding at the end of the year. Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units per Unit Increase (decrease) in net assets attributable to holders of redeemable units per unit is based on the increase (decrease) in net assets attributable to holders of redeemable units attributed to each class of units, divided by the weighted average number of units outstanding of that class during the year. Issuance Costs Issue costs associated with the offering have been recorded as a reduction of Net Assets Attributable to Holders of Redeemable Units during the year in which they were incurred. The amount represents a charge in connection with the offering and was paid out of the gross proceeds of the offering. Impairment of Financial Assets At each reporting date, the Trust assesses whether there is objective evidence that financial assets not carried at fair value through profit or loss are impaired. A financial asset or a group of financial assets is impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the asset, and that the loss event has impact on the future cash flows of the asset that can be estimated reliably. Objective evidence that financial assets are impaired can include significant financial difficulty of the borrower or issuer, default or delinquency by a borrower, restructuring of a loan or receivable by the Trust on terms that the Trust would not otherwise consider, indications that a borrower or issuer will enter bankruptcy, or other observable data relating to a group of assets such as adverse changes in the payment status of borrowers or issuers in the group, or economic conditions that correlate with defaults in the group. The Trust considers evidence of impairment for loans and receivables at both a specific asset and collective level. The Trust has no impairment loss from financial assets. Income Taxes The Trust qualifies as a mutual fund trust under the Income Tax Act (Canada). All of the Trust's net income for tax purposes and sufficient capital gains realized in any period are required to be distributed to unitholders such that no tax is payable by the Trust. As a result, the Trust does not record income taxes. Since the Trust does not record income taxes, the tax benefit of capital and non-capital losses has not been reflected in the statements of financial position as a deferred income tax asset. Income and Expenses The Trust has entered into a funding agreement with the Partnership whereby the Partnership has agreed to pay for all costs, fees and selling commissions associated with the offering of the Trust. All costs paid by the Partnership are allocated to the Trust s investment in the Partnership and are shown in the Statement of Comprehensive Income (Loss). The Trust records monthly, its proportionate share of the Partnership s income and expenses. 10 F-12

105 Pulis Real Estate Trust Notes to Financial Statements December 31, Significant Accounting Policies (Continued) Related Parties For the purpose of these financial statements, a party is considered related to the Trust if such party or the Trust has the ability to, directly or indirectly, control or exercise significant influence over the other entity's financial and operating decisions, or if the Trust and such party are subject to common significant influence. Related parties may be individuals or other entities. New Standards, Interpretations and Amendments Not Yet Effective The International Accounting Standards Board ( IASB ) or the International Financial Reporting Interpretations Committees ( IFRIC ) have issued a number of new or revised standards or interpretations that will become effective for future periods and have a potential implication for the Partnership. IFRS 9 Financial Instruments IFRS 9 Financial Instruments amends the requirements for classification and measurement of financial assets, impairment, and hedge accounting. IFRS 9 introduces an expected loss model of impairment and retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through profit or loss, and fair value through other comprehensive income (loss). The basis of classification depends on the entity s business model and the contractual cash flow characteristics of the financial asset. The effective date for IFRS 9 is January 1, The Partnership is in the process of evaluating the impact of the new standard. 3. Reconciliation of Level 3 Fair Value Measurements of Financial Assets Investments, beginning of year $ 445,377 $ - Limited partnership units purchased 2,250, ,535 Unrealized appreciation (depreciation) on limited partnership units 2,257 (462,158) Investments, end of year $ 2,697,904 $ 445,377 There were no transfers out of Level 3 for the years ending December 31, 2016 or F-13

106 Pulis Real Estate Trust Notes to Financial Statements December 31, Financial Instrument and Risk Management The Trust s planned operations will expose it to a variety of financial risks that arise as a result of its operating and financing activities including credit risk and liquidity risk. This note presents information about the Partnership's exposure to each of the above risks; the Trust s objectives, policies and processes for measuring and managing risks; and the Trust s management of capital. The Trust employs risk management strategies and policies to ensure that any exposure to risk is in compliance with the Partnership's business objectives and risk tolerance levels. While the Directors have the overall responsibility for the establishment and oversight of the Partnership's risk management framework, management has the responsibility to administer and monitor these risks. Credit Risk Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Trust. The Trust s credit risk is primarily attributable to its subscriptions receivable. Management believes such subscriptions receivable are subject to minimal credit risk. The risk has not changed from the previous year. Liquidity Risk Liquidity risk is the risk that the Trust will not be able to meet its financial obligations as they are due. The Trust is exposed to liquidity risk on its balance due to Pulis Real Estate LP 2 as well as cash redemptions of redeemable units. The Trust s approach to managing liquidity is to ensure it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Trust s reputation. The Trust s ongoing liquidity will be impacted by various external events and conditions. All financial liabilities are due within a year. Redeemable units are redeemable on demand at the holder s option. However, the Trust does not expect that the contractual maturity will be representative of the actual cash outflows, as holders of these instruments typically retain them for longer periods. The risk has not changed from the previous year. 5. Capital Management The Trust's capital is comprised of redeemable units. The Trust's capital management policy is to maintain a strong capital base that optimizes the Trust's ability to grow, maintain advisor and creditor confidence and to provide a platform to create value for its unitholders. The Trust intends to maintain a flexible capital structure to maximize its ability to pursue additional investment opportunities, which considers the Trust's early stage of development and the requirement to sustain future development of the business. The Trust will manage its capital structure and make changes to it in light of changes to economic conditions and the risk characteristics of the nature of the business. In order to maintain or adjust the capital structure, the Trust may from time to time issue units, seek debt financing and adjust its capital spending to manage its current and projected capital structure. The Trust does not have any specific capital requirements on the subscription and redemption of units, other than certain minimum subscription requirements. The Units are redeemable for cash equal to a pro-rata share of the Trust s net assets. 12 F-14

107 Pulis Real Estate Trust Notes to Financial Statements December 31, Due to Pulis Real Estate LP 2 The amounts due to Pulis Real Estate LP 2 represent subscriptions received in the Trust which are then invested in units of the Partnership. The amounts are unsecured, non-interest bearing and due on demand. 7. Redeemable Units The Declaration of Trust provides an unlimited number of trust units (the "Units") may be issued. Each Unit represents an equal undivided beneficial interest in any distributions of the Trust and in the net assets of the Trust in the event of termination or winding up of the Trust. Each Unit entitles the holder thereof to participate equally in the distributions and to one vote at all meetings of unitholders for each whole unit held. The issued Units are not subject to future calls or assessments. Each unitholder shall be entitled to require the Trust to redeem all or any part of their Units. The redemption price shall be valued at the fair market value of the Trust's investment in the Partnership plus the value of the Trust's investment assets and the Trust's other assets, less all liabilities, costs and expenses accrued or payable of every kind and nature, and distributions due but not yet paid or made ("Net Asset Value"), as determined by the Administrator or Trust within 30 business days of receipt of the redemption notice; calculated as follows: Within 12 months or the date of issue, 90% of the Net Asset Value per Unit; Within 24 months, and greater than 12 months of the date of issue, 92% of the Net Value per Unit; Within 36 months, and greater than 24 months of the date of issue, 94% of the Net Asset Value per Unit; Within 48 months, and greater than 36 months of the date of issue, 96% of the Net Asset Value per Unit; Within 60 months, and greater than 48 months of the date of issue, 98% of the Net Asset Value per Unit; and At any time following 60 months of the date of issue, an amount equal to the Net Asset Value per Unit. The Trust may be required to redeem up to $100,000 of Units in any given fiscal year, in the form of cash (the "Annual Limit"). The cash payment of the redemption shall occur on the last day of the fiscal year in which the Units were tendered for redemption. Subject to regulatory approval, the Trust may redeem Units in excess of the Annual Limit by distributing unsecured notes having an interest rate equal to 5% simple interest payable annually in arrears, subject to earlier prepayment without penalty, being due and payable on the third anniversary of the date of issuance. Offering The Trust has prepared an offering memorandum (the "Offering") for the offer of Units with up to an aggregate maximum gross proceeds of $50,000,000 and minimum gross proceeds of $250,000. The price per Unit shall be $95 up to and including the last day of February 2015, and a price per Unit of $100 on or after March 1, F-15

108 Pulis Real Estate Trust Notes to Financial Statements December 31, Redeemable Units (Continued) Offering (continued) The Trust reserves the right to pay finder's fees in an amount up to 10% of the gross proceeds of the offering provided that sales involving payment of finder's fees are conducted in accordance with National Instrument Registration Requirements, Exemptions and Ongoing Registrant Obligations. The Trust may also pay a marketing fee of up to 2% for marketing agents, including Pinnacle Wealth Brokers Inc., and a trailer fee of up to 1% of gross proceeds of the offering to exempt market dealers, dealer or dealing representative for Units outstanding after the fifth year of such Unit's issuance date. The offering may be closed in stages after the minimum offering is subscribed for. The first closing is expected to occur when the minimum offering is subscribed for, with other closings to occur thereafter from time to time. The net proceeds of the offering will be used to purchase units of the Partnership. The Partnership intends to invest in the Properties. Subsequent to year end, the Trust issued $282,300 in redeemable units. Administration Agreement The Trust and the Administrator entered into an agreement whereby the Administrator will perform management and administrative services on behalf of the Trust. The fee paid to the Administrator will be $500 per annum, and the Trust will be required to reimburse the expenses incurred by the Administrator in performing its functions. Trustee Fees The Trust will pay a fee of $10,000 per annum to the Trustee of the Trust, and the Trust will be required to reimburse the expenses incurred by the Trustee in performing its functions. In addition, the Trustee will act as transfer agent and registrar of the Trust and will be paid a fee of approximately $3.75 for each Unit certificate issued by the Trust. Funding Agreement The Trust has entered into a funding agreement with the Partnership, whereby the Partnership has agreed to pay for all costs, fees and selling commissions associated with the offering of the Trust. 14 F-16

109 Pulis Real Estate Trust Notes to Financial Statements December 31, Redeemable Units (Continued) Net Assets Attributable to Holders of Redeemable Units per Unit For financial statement purposes, the Trust follows International Financial Reporting Standards ("IFRS"), which requires the recognition of organizational and setup costs as an expense in the period incurred ("GAAP NAV"). For trading purposes, the Trust determines the net asset value per unit of its investments in accordance with the Trust s Offering Memorandum ("Pricing NAV"), which recognizes organizational and setup costs over a period of five years. A reconciliation of the net asset values calculated according to GAAP NAV and Pricing NAV is as follows: Pricing Net Asset Value per Unit $ $ Adjustment to NAV (2.50) (21.45) GAAP Net Asset Value per Unit $ $ A reconciliation of the Unit transactions for the Trust is as follows: Redeemable Units, beginning of year 9,554 - Issued 22,597 9,554 Redeemable Units, end of year 32,151 9, Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units per Unit The increase (decrease) in net assets attributable to holders of redeemable units per unit for the years ended December 31, 2016 and 2015 is calculated as follows: Increase (decrease) in net assets attributable to holders of redeemable units Weighted average number of redeemable units outstanding during the year Increase (decrease) in net assets attributable to holders of redeemable units per series 2016 $ 223,524 21,420 $ (205,986) 9,554 (21.56) 15 F-17

110 F-18 Pulis Real Estate LP 2 Financial Statements For the year ended December 31, 2016

111 Pulis Real Estate LP 2 Financial Statements For the year ended December 31, 2016 Contents Independent Auditor's Report 2 Financial Statements Statement of Financial Position 3 Statement of Comprehensive Income 4 Statement of Changes in Net Assets Attributable to Holders of Redeemable Units 5 Statement of Cash Flows 6 Notes to Financial Statements 7-18 F-19

112 IBDO Tel: Fax: Toll-Free: BDO Canada LLP 3115 Harvester Road, Suite 400 Burlington ON L7N 3N8 Canada Independent Auditor's Report To the Partners of Pulis Real Estate LP 2 We have audited the accompanying financial statements of Pulis Real Estate LP 2 (the "Partnership"), which comprise the statement of financial position as at December 31, 2016, and the statements of comprehensive income, changes in net assets attributable to holders of redeemable units and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Partnership's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as at December 31, 2016, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards. OtJO C~~"-~ LL-P Chartered Professional Accountants, Licensed Public Accountants Burlington, Ontario March 28, BOO Canada LLP, a Canadian limited liability partnership, is a member of BOO International Limited, a UK company limited by guarantee, and forms part of the international BOO network of independent member firms. F-20

113 Pulis Real Estate LP 2 Statement of Financial Position December $ $ Assets Current Cash Subscription receivable Accounts receivable Prepaid expenses and deposits 1,113,435 1,048, , ,195 9,533-36,268 50,000 1,376,338 1,403,280 Investment properties (Note 3) 9,395,000 - Total assets 10,771,338 1,403,280 Liabilities Current Accounts payable and accrued liabilities 241, ,337 Deferred revenue 44,770 - Due to related party - 296,096 Loans payable (Note 4) 5,362,157 - Total liabilities (excluding net assets attributable to holders of redeemable units) 5,648, ,433 Net assets attributable to holders of redeemable units (Note 8) 5,122, ,847 Net assets attributable to holders of redeemable units per unit (Note 8) Approved by its General Partner, Pulis Real Estate GP2 Inc. "Brian Pulis" Director The accompying notes are an integral part of these financial statements. 3 F-21

114 Pulis Real Estate LP 2 Statement of Comprehensive Income For the year ended December $ $ Rental income 209,966 - Expenses Professional fees 250, ,156 Accounting and administration fees 163,387 49,546 Management fees (Note 8) 152,920 22,013 Selling 131, ,885 Interest expense 101,552 - Legal fees 95,673 10,322 Property management fees 73,931 - Property taxes 56,413 - Property maintenance fees 20,047 - Repairs and service 19,492 - Utilities Directors' fees 18,275 18,000 13,500 Insurance 9,366 - Other expenses 1,182 50,508 Bank charges 1,063 Total expenses 1,112, ,930 Loss before fair value gain on investment properties (902,630) (443,930) Fair value gain on investment properties (Note 3) 1,327,035 - Increase (decrease) in net assets attributable to holders of redeemable units 424,405 (443,930) Increase (decrease) in net assets attributable to holders of redeemable units per unit (Note 9) (21.56) The accompying notes are an integral part of these financial statements. 4 F-22

115 Pulis Real Estate LP 2 Statement of Changes in Net Assets Attributable to Holders of Redeemable Units For the year ended December $ $ Net assets attributable to holders of redeemable units, beginning of year 959, Capital transactions Issuance of redeemable units 4,158,380 1,955,760 Issuance costs (420,119) (552,083) 3,738,261 1,403,677 Increase (decrease) in net assets attributable to holders of redeemable units 424,405 (443,930) Net assets attributable to holders of redeemable units, end of year 5,122, ,847 The accompying notes are an integral part of these financial statements. 5 F-23

116 Pulis Real Estate LP 2 Statement of Cash Flows For the year ended December $ $ Cash flow from operating activities Increase (decrease) in net assets attributable to holders of redeemable units 424,405 (443,930) Fair value gain on investment properties (1,327,035) - Changes in non-cash working capital items: Accounts receivable (9,533) - Prepaid expenses and deposits 13,732 - Accounts payable and accrued liabilities 94, ,337 Deferred revenue 44,770 - (759,100) (296,593) Cash flow from financing activities Issuance of redeemable units 4,158,380 1,955,760 Issuance costs (420,119) (247,682) Subscriptions receivable 88,093 (305,195) Repayments to related party (296,096) (8,306) 3,530,258 1,394,577 Cash flow from investing activities Purchase of investment properties (7,559,900) - Rehabilitation costs incurred on investment properties (508,065) - Proceeds from loans payable 5,432,157 - Financing fees (70,000) - Deposits - (50,000) (2,705,808) (50,000) Net increase in cash for the year 65,350 1,047,984 Cash, beginning of year 1,048, Cash, end of year 1,113,435 1,048,085 The accompying notes are an integral part of these financial statements. 6 F-24

117 Pulis Real Estate LP 2 Notes to Financial Statements December 31, General Business Description Pulis Real Estate LP 2 (the "Partnership") is a limited partnership formed under the laws of the Province of Ontario by certificate amended and restated on July 30, 2014 and governed by the Limited Partnership Agreement executed on June 20, The Partnership was formed for the purposes of investing directly or indirectly in residential properties in Ontario, Saskatchewan, Alberta and British Columbia (the "Properties"). The address of the Partnership is 1 Nelson Street West, Suite 200A, Brampton, Ontario, L6X 3E4. The general partner of the Partnership is Pulis Real Estate GP 2 Inc. (the "General Partner") and is responsible for the management, operation and administration of the affairs of the Partnership. 2. Significant Accounting Policies Basis of Presentation These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB ). These financial statements were authorized for issue by the General Partner of the Partnership on March 28, Basis of Measurement, Functional and Presentation Currency The financial statements have been prepared on a historical cost basis, except for investment properties which are stated at fair value. The financial statements are presented in Canadian dollars, which is the Partnership's functional currency. Critical Estimates and Judgements The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. The most significant estimates that the Partnership is required to make relate to the fair value of the investment properties. The estimates may include: assumptions regarding local real estate market conditions; interest rates and availability of credit; costs and terms of financing; the impact of present or future legislation or regulation and other factors affecting the investment properties. These assumptions are limited by the availability of reliable comparable data, economic uncertainty, ongoing geopolitical concerns and uncertainty of predictions concerning the future events. Credit markets, equity markets and consumer spending are factors in the uncertainty inherent in such estimates and assumptions. Accordingly, by nature, estimates of fair value are subjective and do not necessarily result in precise determinations. Should the underlying assumptions change, the estimated fair value could change by a material amount. 7 F-25

118 Pulis Real Estate LP 2 Notes to Financial Statements December 31, Significant Accounting Policies (Continued) Investment Properties Investment properties are properties held to earn rentals and are accounted for using the fair value model. Investment properties include rental properties and properties under development. The Partnership uses the asset purchase model whereby the cost of a purchased investment property is comprised of its purchase price and any directly attributable expenditures. Directly attributable expenditures include transaction costs such as due diligence costs, appraisal fees, environmental fees, legal fees, land transfer taxes and brokerage fees. Investment properties are appraised annually and are included in the Statement of Financial Position at their fair values. Fair values are either based on valuations prepared by external professional appraisers with sufficient experience with respect to both the location and the nature of the investment property and supported by market evidence or by the Partnership using similar assumptions and valuation techniques in its internal valuations as used by the external valuations professionals. Any gains or loss resulting from a change in the fair value of an investment property is immediately recognized. The Partnership utilizes the following approach in determining the fair value of the investment properties: Consideration of recent prices of similar properties within similar market areas, as adjusted, if necessary, for any differences in the nature, location or condition of the specific property as determined by the General Partner and/or by the most recent fair market valuation conducted by an independent third-party. Subsequent capital expenditures are capitalized to the investment property only when it is probable that future economic benefits of the expenditures will flow to the Partnership and the cost can be measured reliably. Investment property is reclassified to assets held for sale when criteria set out in IFRS 5, Non-current Assets Held For Sale and Discontinued Operations ( IFRS 5 ), are met. Investment property held for sale is classified as current assets in accordance with IFRS 5. Revenue Recognition Rental revenue includes rents from tenants under leases, property taxes and operating cost recoveries, parking income and incidental income. Rental revenue with respect to rents from tenants under lease is recognized on a straight-line basis over the term of the lease. Operating cost recoveries are recognized in the period that recoverable costs are chargeable to tenants. Deferred revenue relates to rental revenue received in advance and is deferred until the related services are rendered. Financial Assets and Financial Liabilities Recognition and Classification Financial assets and financial liabilities are initially measured at fair value and are subsequently accounted for based on their classification as described below. The classification depends on the purpose for which the financial instruments were acquired and their characteristics. 8 F-26

119 Pulis Real Estate LP 2 Notes to Financial Statements December 31, Significant Accounting Policies (Continued) Financial Assets and Financial Liabilities (continued) Financial Assets Financial assets are classified into one of four categories: i) Held-to-maturity ( HTM ); ii) Fair value through profit or loss ( FVTPL ); iii) Loans and receivables; and iv) Available-for-sale ( AFS ). Loans and Receivables Loans and receivables are non-derivative financial assets and fixed or determinable payments that are not quoted on an active market. Loans and receivables are initially recognized at fair value and subsequently at amortized cost using the effective interest rate method. Transaction costs incurred to acquire loans and receivables financial instruments are included in the underlying balance. Impairment provisions are recognized when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Partnership will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. On confirmation that the amounts receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision. The Partnership has cash, accounts receivable and subscription receivable classified as loans and receivables. The Partnership has no financial assets classified as held-to-maturity, fair value through profit or loss or available-for-sale. Financial Liabilities Financial liabilities are classified into one of two categories: i) Fair value through profit or loss; and ii) Other financial liabilities. Financial Liabilities at Fair Value Through Profit or Loss (FVTPL) No financial liabilities are classified as fair value through profit or loss. Other Financial Liabilities Other liabilities are accounted for at amortized cost using the effective interest rate method. Transaction costs are included in the underlying balance. The Partnership has accounts payable and accrued liabilities and loan payable that are classified as other financial liabilities. Derecognition The Partnership derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or when it transfers the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. The Partnership derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. Offsetting Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Partnership has a legal right to set off the recognized amounts and it intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. 9 F-27

120 Pulis Real Estate LP 2 Notes to Financial Statements December 31, Significant Accounting Policies (Continued) Redeemable Units The Partnership's units are redeemable at the option of the holder and, therefore, are considered puttable instruments. Puttable instruments are required to be accounted for as financial liabilities, except where certain conditions are met, in which case, the puttable instrument may be presented as equity. The Partnership's units did not meet the conditions for presentation as equity, and have therefore been presented as liabilities at the redemption amount. Costs incurred in connection with the offering of Partnership units are reflected as a reduction of Net Assets Attributable to Holders of Redeemable Units. Net Assets Attributable to Holders of Redeemable Units per Unit The net assets attributable to holders of redeemable units per unit is calculated by dividing the net assets attributable to holders of redeemable units of a particular class of units by the total number of units of that particular class outstanding at the end of the year. Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units per Unit Increase (decrease) in net assets attributable to holders of redeemable units per unit is based on the increase (decrease) in net assets attributable to holders of redeemable units attributed to each class of units, divided by the weighted average number of units outstanding of that class during the year. Issuance Costs Issuance costs associated with the offering have been recorded as a reduction of Net Assets Attributable to Holders of Redeemable Units during the year in which they were incurred. The amount represents a one-time charge in connection with the offering and was paid out of the gross proceeds of the offering. Impairment of Financial Assets At each reporting date, the Partnership assesses whether there is objective evidence that financial assets not carried at fair value through profit or loss are impaired. A financial asset or a group of financial assets is impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the asset, and that the loss event has impact on the future cash flows of the asset that can be estimated reliably. Objective evidence that financial assets are impaired can include significant financial difficulty of the borrower or issuer, default or delinquency by a borrower, restructuring of a loan or receivable by the Partnership on terms that the Partnership would not otherwise consider, indications that a borrower or issuer will enter bankruptcy, or other observable data relating to a group of assets such as adverse changes in the payment status of borrowers or issuers in the group, or economic conditions that correlate with defaults in the group. The Partnership considers evidence of impairment for loans and receivables at both a specific asset and collective level. The Partnership has no impairment loss from financial assets. Provisions Provisions are recognized when the Partnership has a present legal or constructive obligation as a result of a past event, it is probable that the Partnership will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. Where discounting is used, the increase in the provision due to passage of time is recognized as a financial cost and included in interest expense. 10 F-28

121 Pulis Real Estate LP 2 Notes to Financial Statements December 31, Significant Accounting Policies (Continued) Related Parties For the purpose of these financial statements, a party is considered related to the Partnership if such party or the Partnership has the ability to, directly or indirectly, control or exercise significant influence over the other entity's financial and operating decisions, or if the Partnership and such party are subject to common significant influence. Related parties may be individuals or other entities. New Standards, Interpretations and Amendments Not Yet Effective The International Accounting Standards Board ( IASB ) or the International Financial Reporting Interpretations Committees ( IFRIC ) have issued a number of new or revised standards or interpretations that will become effective for future periods and have a potential implication for the Partnership. IFRS 9 Financial Instruments IFRS 9 Financial Instruments amends the requirements for classification and measurement of financial assets, impairment, and hedge accounting. IFRS 9 introduces an expected loss model of impairment and retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through profit or loss, and fair value through other comprehensive income (loss). The basis of classification depends on the entity s business model and the contractual cash flow characteristics of the financial asset. The effective date for IFRS 9 is January 1, The Partnership is in the process of evaluating the impact of the new standard. 11 F-29

122 Pulis Real Estate LP 2 Notes to Financial Statements December 31, Investment Properties Changes to the carrying amounts of investment properties presented in the Statement of Financial Position can be summarized as follows: Balance, beginning of the year $ - $ - Acquisitions 7,559,900 - Rehabilitation costs 508,065 - Fair value adjustments 1,327,035 - Balance, end of year $ 9,395,000 $ - Acquisitions Acquisitions of investment properties completed during the year consist of the following: Region Property Type Ownership Interest Acquisition Cost (1) ($) Hamilton, Ontario Residential 100% 1,730,673 Hamilton, Ontario Residential 100% 1,730,673 Dundas, Ontario Residential 100% 1,999,034 Dundas, Ontario Residential 100% 2,099,520 Total $7,559,900 (1) At date of acquisition During the year ended December 31, 2016, the investment properties were valued by qualified external valuation professionals utilizing the market comparison method. The Partnership estimates the value of land based upon comparable market information. Subsequent to year end, the Partnership has entered into an agreement to purchase a property located in Hamilton, Ontario at a cost of $3,600, F-30

123 Pulis Real Estate LP 2 Notes to Financial Statements December 31, Loans Payable Loan payable, bearing interest at the FirstOntario Credit Union Limited s Minimum Lending Rate plus 1.15% per annum, repayable interest only monthly, due April 2018, secured by a first charge over the property, a general assignment of rents and leases, general security agreement, a guarantee and postponement of claim by the General Partner, and a guarantee and postponement of claim by the President and CEO of the General Partner $ 2,300,000 $ - Renovation loan payable, bearing interest at the FirstOntario Credit Union Limited s Minimum Lending Rate plus 1.15% per annum, repayable interest only monthly, due April 2018, secured by a first charge over the property, a general assignment of rents and leases, general security agreement, a guarantee and postponement of claim by the General Partner, and a guarantee and postponement of claim by the President and CEO of the General Partner 282,157 - Loan payable, bearing interest at the FirstOntario Credit Union Limited s Minimum Lending Rate plus 0.90% per annum, repayable interest only monthly, due on demand, secured by a first charge over the property, a general assignment of rents and leases, general security agreement, a guarantee and postponement of claim by the General Partner, and a guarantee and postponement of claim by the President and CEO of the General Partner 2,850,000 - Less: financing fees (70,000) - $ 5,362,157 $ - The Partnership has available a business loan facility up to a maximum of $1,050,000. There were no advances outstanding under this facility as at the year end. The business loan facility is secured by first charge over the property, a general assignment of rents and leases, general security agreement, a guarantee and postponement of claim by the General Partner, and a guarantee and postponement of claim by the President and CEO. The Partnership has available a renovation loan facility up to a maximum of $1,400,000, of which $1,117,843 remains undrawn at year end. The Partnership is subject to a financial covenant under its business loan facility regarding debt service coverage ratio. The Partnership is not in compliance of this covenant for the current year. FirstOntario Credit Union Limited has issued a tolerance letter to the Partnership with respect to this covenant stating that they are currently not prepared to exercise their right to recall the loan. 13 F-31

124 Pulis Real Estate LP 2 Notes to Financial Statements December 31, Financial Instrument and Risk Management The Partnership's planned operations will expose it to a variety of financial risks that arise as a result of its operating and financing activities including credit risk, liquidity risk and market risk (including interest rate risk and other market risk). This note presents information about the Partnership's exposure to each of the above risks; the Partnership's objectives, policies and processes for measuring and managing risks; and the Partnership's management of capital. The Partnership employs risk management strategies and policies to ensure that any exposure to risk is in compliance with the Partnership's business objectives and risk tolerance levels. While the General Partner has the overall responsibility for the establishment and oversight of the Partnership's risk management framework, management has the responsibility to administer and monitor these risks. Credit Risk Credit risk represents the financial loss that the Partnership would experience if a tenant failed to meets its obligations in accordance with the terms and conditions of the lease obligation and from cash held with banks and financial institutions. The Partnership believes that the concentration of credit risk is limited due to its broad tenant base. The Partnership has also established various internal controls, such as credit check and security deposits, designed to mitigate credit risk. The Partnership places its cash with high credit quality institutions and, therefore, the risk is minimal. Liquidity Risk Liquidity risk is the risk that the Partnership will not be able to meet its financial obligations as they are due. The Partnership is exposed to liquidity risk on its accounts payable and accrued liabilities, loans payable, and cash redemptions of redeemable units. The Partnership's approach to managing liquidity risk is continuously monitoring actual and projected cash flow to ensure it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Partnership s reputation. The Partnership s ongoing liquidity will be impacted by various external events and conditions. All financial liabilities are due within a year. Redeemable units are redeemable on demand at the holder s option. However, the Partnership does not expect that the contractual maturity will be representative of the actual cash outflows, as holders of these instruments typically retain them for longer periods. Real estate investments are relatively illiquid. This will tend to limit the Partnership s ability to sell components of its portfolio promptly in response to changing economic or investment conditions. If the Partnership was required to quickly liquidate its assets, there is a risk that it would realize sale proceeds of less than the current fair value of its real estate investments. There has been no change in liquidity risk from the prior year. Interest Rate Risk Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or fair values of financial instruments. It arises when the Partnership invests in interest-bearing financial instruments. As at December 31, 2016, the Partnership is exposed interest rate risk through its financial liabilities including loans payable which bear interest at a variable rate which may vary from time to time. 14 F-32

125 Pulis Real Estate LP 2 Notes to Financial Statements December 31, Financial Instrument and Risk Management (Continued) Environmental Risk The Partnership is subject to various federal, provincial, and municipal laws relating to environmental matters. Such laws provide a range of potential liability, including potentially significant penalties, and potential liability for the costs of removal or remediation of certain hazardous substances, however caused. The presence of such substances, if any, could adversely affect the Partnership s ability to sell or redevelop such real estate or to borrow using such real estate as collateral and, potentially, could also result in civil claims against the Partnership. The Partnership endeavours to seek indemnity from prior owners and would take legal steps to claim any costs arising from remediation from other responsible parties. 6. Related Party Transactions During the fiscal year ended December 31, 2016, the Partnership paid $65,500 ( $Nil) in property management fees, and $80,500 ( $Nil) in administration fees to companies controlled by directors of the General Partner. 7. Capital Management The Partnership defines capital that it manages as the aggregate of its redeemable units. The Partnership's capital management policy is to maintain a strong capital base that optimizes the Partnership's ability to grow, maintain advisor and creditor confidence and to provide a platform to create value for its unitholders. The Partnership intends to maintain a flexible capital structure to maximize its ability to pursue additional investment opportunities, which considers the Partnership's early stage of development and the requirement to sustain future development of the business. The Partnership has not made changes to the way it defines its capital. The Partnership will manage its capital structure and make changes to it in light of changes to economic conditions and the risk characteristics of the nature of the business. In order to maintain or adjust the capital structure, the Partnership may from time to time issue units, seek debt financing and adjust its capital spending to manage its current and projected capital structure. The Partnership does not have any specific capital requirements on the subscription and redemption of units, other than certain minimum subscription requirements. The units are redeemable for cash equal to a pro-rata share of the Partnership s net assets. 15 F-33

126 Pulis Real Estate LP 2 Notes to Financial Statements December 31, Redeemable Units As at December 31, 2016, the Partnership was authorized to issue an unlimited number of limited partnership units (the "Units"). The initial limited partner acquired 1 Unit for $100 and the General Partner acquired 1 Unit for $1 during the period ended December 31, Income or loss of the Partnership is allocated on a proportionate basis to the General Partner and to the limited partners. Net income or net loss of the Partnership shall be allocated to each unitholder of record on December 31 of each year of the Partnership. The General Partner shall make distributions of distributable cash to the limited partner unitholders ("Limited Partner") in accordance with their proportionate interest, on a quarterly basis subject to certain restrictions. If the calculation of distributable cash is less than zero, then the General Partner will not make any distribution to the Limited Partners. The right to transfer Units shall be restricted such that no Limited Partner shall be entitled to transfer Units to any person unless it first offers to sell its Units to the General Partner by written offer. The transfer or resale of Units (which does not include a redemption of Units) is also subject to restrictions under applicable securities legislation. Each unitholder shall be entitled to require the Partnership to redeem all or any part of their Units. The redemption price shall be valued at the fair market value of the Partnership, and, when the reference so requires, of investments, determined by reference to IAS 40 and by the most recent, annual fair market appraisal conducted by an independent, third-party appraiser selected by the General Partner in its sole discretion (or, if the applicable Property was acquired by the Partnership after the most recent annual appraisal prepared for by the Partnership, then the appraised value shall be any appraisal thereof obtained by the General Partner) less all liabilities, costs and expenses accrued or payable of every kind and nature, and distributions due but not yet paid or made ("Net Asset Value"), as determined by the General Partner in its sole discretion, within 30 business days of receipt of the redemption notice; calculated as follows: Within 12 months or the date of issue, 90% of the Net Asset Value per Unit; Within 24 months, and greater than 12 months of the date of issue, 92% of the Net Value per Unit; Within 36 months, and greater than 24 months of the date of issue, 94% of the Net Asset Value per Unit; Within 48 months, and greater than 36 months of the date of issue, 96% of the Net Asset Value per Unit; Within 60 months, and greater than 48 months of the date of issue, 98% of the Net Asset Value per Unit; and At any time following 60 months of the date of issue, an amount equal to the Net Asset Value per Unit. The Partnership may be required to redeem up to $100,000 of Units in any given fiscal year, in the form of cash (the "Annual Limit"). The cash payment of the redemption shall occur on the last day of the fiscal year in which the Partnership Units were tendered for redemption. Subject to regulatory approval, the Partnership may redeem Units in excess of the Annual Limit by distributing unsecured notes having an interest rate equal to 5% simple interest payable annually in arrears, subject to earlier prepayment without penalty, being due and payable on the third anniversary of the date of issuance. 16 F-34

127 Pulis Real Estate LP 2 Notes to Financial Statements December 31, Redeemable Units (Continued) Offering The Partnership prepared an offering memorandum (the "Offering") for the offer of Units with up to an aggregate maximum gross proceeds of $50,000,000 and minimum gross proceeds of $250,000. The price per Unit shall be $95 up to and including the last day of February 2016, and a price per Unit of $100 on or after March 1, The Partnership reserves the right to pay finder's fees in an amount up to 10% of the gross proceeds of the offering provided that sales involving payment of finder's fees are conducted in accordance with National Instrument Registration Requirements, Exemptions and Ongoing Registrant Obligations. The Partnership may also pay a marketing fee of up to 2% for marketing agents, including Pinnacle Wealth Brokers Inc., and a trailer fee of up to 1% of gross proceeds of the offering to exempt market dealers, dealer or dealing representative for Units outstanding after the fifth year of such Unit outstanding. The offering may be closed in stages after the minimum offering is subscribed for, with further closings to occur thereafter from time to time. Pulis Real Estate Trust (the "Trust") has prepared an offering to raise funds with the intent of acquiring Units in the Partnership. The Partnership is economically dependent on the Trust and the ability of the Trust to raise funds, and subsequently acquire additional Units of the Partnership. Subsequent to year end, the Partnership issued $405,300 in redeemable units. General Partner Fees The Partnership shall, during the term of the Partnership, distribute to the General Partner, an amount to be calculated on an annual basis, determined as follows: A quarterly fee to be paid in advance and calculated as an amount equal to 1.5% of the Net Asset Value of the Partnership, on the last date of each fiscal year (if such amount is negative, the fee shall be zero); An amount equal to 1.0% of the acquisition prices of the Properties acquired by the Partnership, excluding costs of acquisition (including but not limited to taxes and legal costs) in the relevant fiscal year, payable upon closing of the purchase of Property; and An amount equal to 7.0% of the net operating income of the Partnership plus amounts paid for the Properties repairs and maintenance to be paid by the purchase of Trust Units by the Partnership. Management fees of $152,920 ( $22,013) were incurred during the year. The Partnership will be responsible for all costs, charges and expenses directly reasonable and properly incurred by the General Partner, or incurred on behalf of the Partnership, in the performance of its duties of this agreement Funding Agreement The Partnership has entered into a funding agreement with the Trust whereby the Partnership has agreed to pay for all costs, fees and selling commissions associated with the offering of the Trust. 17 F-35

128 Pulis Real Estate LP 2 Notes to Financial Statements December 31, Redeemable Units (Continued) Net Asset Value per Unit For financial statement purposes, the Partnership follows International Financial Reporting Standards ("IFRS"), which requires the recognition of issuance costs directly in net assets attributable to holders of redeemable units ("GAAP NAV"). For trading purposes, the Partnership determines the net asset value per unit of its investments in accordance with the Partnership's Offering Memorandum ("Pricing NAV"), which recognizes issuance costs over a period of five years. A reconciliation of the net asset values calculated according to GAAP NAV and Pricing NAV is as follows: Pricing Net Asset Value per Unit $ $ Adjustment to NAV (4.15) (21.45) GAAP Net Asset Value per Unit $ $ A reconciliation of the Unit transactions for the Partnership is as follows: Redeemable Units, beginning of year 20,589 1 Issued 41,686 20,588 Redeemable Units, end of year 62,275 20, Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units per Unit The increase (decrease) in net assets attributable to holders of redeemable units per unit for the years ended December 31, 2016 and 2015 is calculated as follows: Increase (decrease) in net assets attributable to holders of redeemable units Weighted average number of redeemable units outstanding during the year Increase (decrease) in net assets attributable to holders of redeemable units per series 2016 $424,405 39,044 $ (443,930) 20,589 (21.56) 10. Comparative Amounts The comparative amounts presented in these financial statements have been reclassified to conform to the current year s presentation. 18 F-36

129 F-37 Pulis Real Estate GP2 Inc. Financial Statements For the year ended December 31, 2016

130 Pulis Real Estate GP2 Inc. Financial Statements For the year ended December 31, 2016 Contents Independent Auditor's Report 2 Financial Statements Statement of Financial Position 3 Statement of Changes in Shareholders' Equity 4 Statement of Comprehensive Income 5 Statement of Cash Flows 6 Notes to Financial Statements 7-12 F-38

131 IBDO Tel: Fax: Toll-Free: BOO Canada LLP 3115 Harvester Road, Suite 400 Burlington ON L7N 3N8 Canada Independent Auditor's Report To the Shareholders of Pulis Real Estate GP2 Inc. We have audited the accompanying financial statements of Pulis Real Estate GP2 Inc. (the "Corporation"), which comprise the statement of financial position as at Decem ber 31, 2016, and the statements of comprehensive income, changes in shareholders' equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Corporation's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Corporation as at December 31, 2016, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards. Chartered Professional Accountants, Licensed Public Accountants Burlington, Ontario March 28, BOO Canada LLP, a Canadian limited liability partnership, is a member of BOO International Limited, a UK company llmited by guarantee. and forms part of the mternat1onal BOO network of Independent member firms. F-39

132 Pulis Real Estate GP2 Inc. Statement of Financial Position December Assets Current Cash $ 28,538 $ 200 Accounts receivable Due from Pulis Real Estate LP 2 (Note 4) 5,600 22,013 $ 34,292 $ 22,213 Liabilities and Shareholders' Equity Current Income taxes payable $ 2,353 $ 3,412 Shareholders' equity Share capital (Note 6) Retained earnings 31,739 18,601 31,939 18,801 $ 34,292 $ 22,213 (Signed) "Brian Pulis", Director (Signed) "Kyle Pulis", Director The accompanying notes are an integral part of these financial statements. 3 F-40

133 Pulis Real Estate GP2 Inc. Statement of Changes in Shareholders' Equity For the year ended December Share capital Balance, beginning and end of year $ 200 $ 200 Retained earnings Balance, beginning of year 18,601 - Net and comprehensive income for the year 13,138 18,601 Balance, end of year 31,739 18,601 Total shareholders' equity $ 31,939 $ 18,801 The accompanying notes are an integral part of these financial statements. 4 F-41

134 Pulis Real Estate GP2 Inc. Statement of Comprehensive Income For the year ended December Management fee income (Note 4) $ 152,920 $ 22,013 Expenses Bank charges and other Management fees (Note 4) 137, ,429 - Income before income taxes 15,491 22,013 Income taxes (Note 5) Current 2,353 3,412 Net and comprehensive income for the year $ 13,138 $ 18,601 The accompanying notes are an integral part of these financial statements. 5 F-42

135 Pulis Real Estate GP2 Inc. Statement of Cash Flows For the year ended December Cash flows from operating activities Net and comprehensive income for the year $ 13,138 $ 18,601 Adjustments to reconcile net and comprehensive income to net cash provided by operating activities Income taxes (1,059) 3,412 Changes in non-cash working capital balances Accounts receivable (154) - Due from Pulis Real Estate LP 2 16,413 (22,013) Increase in cash during the year 28,338 - Cash, beginning of year Cash, end of year $ 28,538 $ 200 The accompanying notes are an integral part of these financial statements. 6 F-43

136 Pulis Real Estate GP2 Inc. Notes to Financial Statements December 31, General Business Description Pulis Real Estate GP2 Inc. (the "Corporation") was incorporated under the laws of the Province of Ontario on April 11, The Corporation was formed to operate as the general partner for Pulis Real Estate LP 2 (the "Partnership"). The address of the Corporation is 1 Nelson Street West, Suite 200A, Brampton, Ontario, L6X 3E4. 2. Significant Accounting Policies Statement of Compliance These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). These financial statements were authorized for issue by the Directors of the Corporation on March 28, Basis of Measurement, Functional and Presentation Currency The financial statements have been prepared on a historical cost basis. The financial statements are presented in Canadian dollars, which is the Corporation's functional currency. Critical Estimates and Judgements The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results may vary from these estimates. There are no estimates and assumptions that have a significant risk causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates will, by definition, seldom equal the actual results. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future years affected. Financial Assets and Financial Liabilities Recognition and Classification Financial assets and financial liabilities are initially measured at fair value and are subsequently accounted for based on their classification as described below. The classification depends on the purpose for which the financial instruments were acquired and their characteristics. F-44 7

137 Pulis Real Estate GP2 Inc. Notes to Financial Statements December 31, Significant Accounting Policies (Continued) Financial Assets and Financial Liabilities (continued) Financial Assets Financial assets are classified into one of four categories: i) Held-to-maturity ( HTM ); ii) Fair value through profit or loss ( FVTPL ); iii) Loans and receivables; and iv) Available-for-sale ( AFS ). Loans and Receivables Loans and receivables are non-derivative financial assets and fixed or determinable payments that are not quoted on an active market. Loans and receivables are initially recognized at fair value and subsequently at amortized cost using the effective interest rate method. Transaction costs incurred to acquire loans and receivables financial instruments are included in the underlying balance. Impairment provisions are recognized when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Corporation will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. On confirmation that the amounts receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision. The Corporation has cash, accounts receivable and due from Pulis Real Estate LP 2 classified as loans and receivables. The Corporation has no financial assets classified as held-to-maturity, fair value through profit or loss or available-for-sale. Financial Liabilities Financial liabilities are classified into one of two categories: i) Fair value through profit or loss; and ii) Other financial liabilities. Financial Liabilities at Fair Value Through Profit or Loss (FVTPL) The Corporation does not classify any financial liabilities as fair value through profit or loss. Other Financial Liabilities Other liabilities are accounted for at amortized cost using the effective interest rate method. Transaction costs are included in the underlying balance. The Corporation has taxes payable that are classified as other financial liabilities. Derecognition The Corporation derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or when it transfers the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. The Corporation derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. F-45 8

138 Pulis Real Estate GP2 Inc. Notes to Financial Statements December 31, Significant Accounting Policies (Continued) Financial Assets and Financial Liabilities (continued) Offsetting Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Corporation has a legal right to set off the recognized amounts and it intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. Share Capital and Dividends Common shares are classified as equity. Incremental costs directly attributable to the common shares are recognized as a deduction from equity, net of any tax effects. Dividends on common shares are recognized in the Corporation's, financial statements in the period in which the dividends are approved by the Board of Directors. Revenue Recognition Management fees are calculated as an amount equal to 1.5% of the net asset value ("NAV") of Pulis Real Estate LP 2, on the last date of its fiscal year, are payable to the Corporation quarterly. The Corporation is also entitled to a management fee related to the acquisition of properties by Pulis Real Estate LP 2, calculated as an amount equal to 1.0% of the acquisition price of the properties acquired excluding costs of acquisition (including but not limited to taxes and legal costs) and payable upon closing of the purchase of the property. The management fees are recognized by the Corporation as they are earned. Impairment of Financial Assets At each reporting date, the Corporation assesses whether there is objective evidence that financial assets not carried at fair value through profit or loss are impaired. A financial asset or a group of financial assets is impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the asset, and that the loss event has impact on the future cash flows of the asset that can be estimated reliably. Objective evidence that financial assets are impaired can include significant financial difficulty of the borrower or issuer, default or delinquency by a borrower, restructuring of a loan or receivable by the Corporation on terms that the Corporation would not otherwise consider, indications that a borrower or issuer will enter bankruptcy, or other observable data relating to a group of assets such as adverse changes in the payment status of borrowers or issuers in the group, or economic conditions that correlate with defaults in the group. The Corporation considers evidence of impairment for loans and receivables at both a specific asset and collective level. The Corporation has no impairment loss from financial assets. Income Taxes Income tax expense comprises of current and deferred taxes. Current taxes and deferred taxes are recognized in net income except to the extent that it relates to a business combination, or items recognized directly in equity or in comprehensive income. Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current year and any adjustment to income taxes payable in respect of previous years. Current income taxes are determined using tax rates and tax laws that have been enacted or substantively enacted by the year end date. F-46 9

139 Pulis Real Estate GP2 Inc. Notes to Financial Statements December 31, Significant Accounting Policies (Continued) Income Taxes (continued) Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability differs from its tax base, except for taxable temporary differences arising on the initial recognition of goodwill and temporary differences arising on the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit or loss. Recognition of deferred tax assets for unused tax losses, tax credits and deductible temporary differences is restricted to those instances where it is probable that future taxable profit will be available against which the deferred tax asset can be utilized. At the end of each reporting period, the Corporation reassesses unrecognized deferred tax assets. The Corporation recognizes a previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. The amount of the deferred tax asset or liability is measured at the amount expected to be recovered from or paid to the taxation authorities. This amount is determined using tax rates and tax laws that have been enacted or substantively enacted by the year end date and are expected to apply when the liabilities/(assets) are settled/(recovered). Related Parties For the purpose of these financial statements, a party is considered related to the Corporation if such party or the Corporation has the ability to, directly or indirectly, control or exercise significant influence over the other entity's financial and operating decisions, or if the Corporation and such party are subject to common significant influence. Related parties may be individuals or other entities. New Standards, Interpretations and Amendments Not Yet Effective The International Accounting Standards Board ("IASB") or the International Financial Reporting Interpretations Committees ("IFRIC") have issued a number of new or revised standards or interpretations that will become effective for future periods and have a potential implication for the Corporation. IFRS 9 - Financial Instruments IFRS 9 Financial Instruments amends the requirements for classification and measurement of financial assets, impairment, and hedge accounting. IFRS 9 introduces an expected loss model of impairment and retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through profit or loss, and fair value through other comprehensive income (loss). The basis of classification depends on the entity s business model and the contractual cash flow characteristics of the financial asset. The effective date for IFRS 9 is January 1, The Corporation is in the process of evaluating the impact of the new standard. IFRS 15 - Revenue from Contracts with Customers IFRS 15 is based on the core principle to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. IFRS 15 focuses on the transfer of control. IFRS 15 replaces all of the revenue guidance that previously existed in IFRSs. The effective date for IFRS 15 is January 1, The Corporation is in the process of evaluating the impact of the new standard. F-47 10

140 Pulis Real Estate GP2 Inc. Notes to Financial Statements December 31, Capital Management The Corporation's capital is comprised of shareholders' equity of $31,939 ( $18,801). The Corporation's capital management policy is to maintain a strong capital base that optimizes the Corporation's ability to grow, maintain advisor and creditor confidence and to provide a platform to create value for its unitholders. The Corporation intends to maintain a flexible capital structure to maximize its ability to pursue additional investment opportunities, which considers the Corporation's early stage of development and the requirement to sustain future development of the business. The Corporation has not made changes to the way it defines its capital. The Corporation will manage its capital structure and make changes to it in light of changes to economic conditions and the risk characteristics of the nature of the business. In order to maintain or adjust the capital structure, the Corporation may from time to time issue shares, seek debt financing and adjust its capital spending to manage its current and projected capital structure. The Corporation is not subject to externally imposed capital requirements. 4. Related Party Transactions During the year, the Corporation received management fee income of $152,920 ( $22,013) from the Partnership. The amount due from Pulis Real Estate LP 2 represent management fees owing from the Partnership. The amount is unsecured, non-interest bearing and due on demand. During the year, the Corporation paid management fees to companies under common control in the amount of $137,013 ( $Nil). 5. Income Taxes The difference between the Corporation's effective income tax rates and the amounts that would result from the application of the statutory income tax rates arises from the following: Income before income taxes $ 15,491 $ 22,013 Effective statutory combined rate 15.0 % 15.5 % Income taxes using the Company's statutory rate 2,324 3,412 Non-deductible amounts and other 29 - Income taxes $ 2,353 $ 3,412 F-48 11

141 Pulis Real Estate GP2 Inc. Notes to Financial Statements December 31, Share Capital Authorized Unlimited Issued number of common shares 200 Common shares $ 200 $ 200 F-49 12

142 44 8: 52 Hayden Street Carve-Out Schedule of Rental Income and Expenses For the nine months ended May 31, 2016 and 2015 and for the years ended August 31, 2015 and 2014 F-50

143 44 & 52 Hayden Street Carve-Out Schedule of Rental Income and Expenses For the nine months ended May 31, 2016 and 2015 and for the years ended August 31, 2015 and 2014 Contents Independent Auditor's Report 2 Financial Statements Carve-Out Schedule of Rental Income and Expenses 3 Notes to Carve-Out Schedule of Rental Income and Expenses 4 F-51

144 1800 Tel: Fa x: Toll -Free: BDO Canada LLP 3115 Harvester Road, Suite 400 Burlington ON L7N 3NB Canada Independent Auditor's Report To the General Partner of Pulis Real Estate LP2 We have audited the accompanying Carve-Out Schedule of Rental Income and Expenses of 44 & 52 Hayden Street for the year ended August 31, 2015, and a summary of significant accounting polides and other explanatory information in accordance with the basis of accounting outlined in Note 1. Management's Responsibility for the Carve Qut Schedule of Rental Income and Expenses Management is responsible for the preparation of the Carve-Out Schedule of Rental Income and Expenses in accordance with the basis of accounting in Note 1; this includes determining that the basis of accounting is an acceptable basis for the preparation of the Carve Out Schedule of Rental Income and Expenses in the circumstances, and for such internal control as management determines is necessary to enable the preparation of the Carve Out Schedule of Rental Income and Expenses that is free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on the Carve-Out Schedule of Rental Income and Expenses based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Carve-Out Schedule of Rental Income and Expenses is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Carve-Out Schedule of Rental Income and Expenses. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Carve-Out Schedule of Rental Income and Expenses, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the Carve-Out Schedule of Rental Income and Expenses in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates, if any, made by management, as well as evaluating the overall presentation of the Carve Out Schedule of Rental Income and Expenses. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. Basis for Qualified Opinion Due to the limited information available to the Partnership when it acquired the property we were unable to verify the completeness of the rental revenue, Accordingly, our verification of these revenues was limited to amounts recorded in the records of the entity. We were not able to determine whether any adjustments might be necessary to rental revenue and net and comprehensive for the year ended August 31, Qualified Opinion In our opinion, except for the matter described in the Basis for Qualified Opinion paragraph, the financial information in the Carve-Out Schedule of Rental Income and Expenses of 44 ft 52 Hayden Street for the year ended August 31, 2015 is prepared in all material respects in accordance with the basis of accounting in Note 1. Other Matters The amounts presented for the nine months ended May 31, 2016 and 2015 and for the year ended August 31,2014 have been derived from financial information from management which has not been audited or reviewed. Basis of Accounting Without modifying our opinion, we draw attention to Note 1 to the Carve-Out Schedule of Ren tal Income and Expenses of 44 &. 52 Hayden Street, which describes the basis of accounting. The Carve Out Schedule of Rental Income and Expenses is prepared to provide information to the General Partner of Real Estate LP2. As a result, the Carve Out Schedule of Rental Income and Expenses may not be suitable for another purpose, Chartered Professional Accountants, Licensed Public Accountants [3urlington, Ontario Oct ober 20, BOO Canada llp. a Canadian limited liability partnenhip. 1S a member of BOO Internallonai l lmlted. a UK (ofj"pany limited by guarantee, ilnd forms part of the mternatlonal BOO network of lndepeodent member firms. F-52

145 44 & 52 Hayden Street Carve-Out Schedule of Rental Income and Expenses For the nine months ended May 31, 2016 and 2015 and for the years ended August 31,2015 and 2014 Nine months Nine months Year Year ended ended ended ended May 31 May 31 August 31 August (Unaudited) (Unaudited) (Unaudited) Revenue Rental $ 222,756 $ 231,848 $ 309,130 $ 301,465 Expenses Insurance Realty taxes Utilities Repairs and manitenance 4,918 61,753 23,099 3,569 59,823 29,893 6,500 4,758 4,587 79,764 76,315 36,057 35,161 9,267 7,200 89,770 99, , ,263 Net income and comprehensive income $ 132,986 $ 132,063 $ 179,284 $ 178,202 3 F-53

146 44 & 52 Hayden Street Notes to Carve-Out Schedule of Rental Income and Expenses For the nine months ended May 31, 2016 and 2015 and for the years ended August 31, 2015 and Basis of Accounting and Reporting Entity 44 & 52 Hayden Street (the "Property") as presented in this carve-out schedule of rental income and expenses is not a legal entity and represents the investment property acquired by Pulis Real Estate LP2 on March 10, The two properties acquired represents 34 rental units located in Hamilton, Ontario. This carve-out schedule of rental income and expenses has been prepared on a carve-out basis from the information acquired and presents only the rental income and expenses directly associated with the Property. Management estimates, when necessary, have been used to prepare such allocations. This carve-out schedule of rental income and expenses have been prepared for the specific purpose of reporting on the revenue and expenses of the Property included in and for inclusion in the Offering Memorandum of the Fund. This carve-out schedule of rental income and expenses is not necessarily indicative of the results that would have been attained if the Property had been operating as a separate legal entity during the years presented, and therefore are not necessarily indicative of future operating results. The registered address of the Pulis Real Estate LP2 is 1 Nelson Street West, Suite 200A, Brampton, Ontario, L6X 3E4. The general partner of the Partnership is Pulis Real Estate GP 2 Inc. (the "General Partner") and is responsible for the management, operation and administration of the affairs of the Partnership. 2. Significant Accounting Polices Revenue Recognition Revenues from the Property represents rent earned from tenants under lease agreements. Expenses Expenses are recorded on an accrual basis. Income Taxes A provision for income taxes has not been made as the Property is not a legal entity. 4 F-54

147 F-55 89, 97 a: 99 York Road Carve-Out Schedule of Rental Income and Expenses For the six months ended June 30, 2016 (Unaudited - See Notice to Reader)

148 89,97 & 99 York Road Carve-Out Schedule of Rental Income and Expenses For the six months ended June 30, 2016 (Unaudited - See Notice to Reader) Contents Notice to Reader 2 Financial Statements Carve-Out Schedule of Rental Income and Expenses Note to Carve-Out Schedule of Rental Income and Expenses 3 4 F-56

149 18DO Tel: Fax: Toll-Free: BOO Canada LLP 3115 Harvester Road, Suite 400 Burlington ON L7N 3N8 Canada Notice to Reader To the General Partner of Pulis Real Estate LP2 On the basis of information provided by management, we have compiled the Carve-Out Schedule of Rental Income and Expenses of 89, 97 Ii 99 York Road for the six month period ended June 30, 2016_ We have not performed an audit or a review engagement in respect of this Carve-Out Schedule of Rental Income and Expenses and, accordingly, we express no assurance thereon. Readers are cautioned that these Carve-Out Schedule of Rental Income and Expenses may not be appropriate for their purposes. Chartered Professional Accountants, Licensed Public Accountants Burlington, Ontario October 20, Canada llp, it Canadian limited liability pilrtnership, is a member of BOO lnterniltional LImited. a UK company hmltt'd by Ijuarantee, and forms part of the Inlcrniltlooal 800 network of independent member flrms. F-57

150 89, 97 & 99 York Road Carve-Out Schedule of Rental Income and Expenses For the six months ended June 30, 2016 (Unaudited - See Notice to Reader) Revenue Rental Expenses Realty taxes Utilities $ 130,211 32,834 17,236 Net income and comprehensive income $ 50,070 80,141 3 F-58

151 89, 97 & 99 York Road Note to Carve-Out Schedule of Rental Income and Expenses For the six months ended June 30,2016 (Unaudited - See Notice to Reader) 1. Reporting Entity 89,97 & 99 York Road (the IIProperty") as presented in this carve-out schedule of rental income and expenses is not a legal entity and represents the proposed investment property to be acquired by Pulis Real Estate LP2 on October 14,2016. The two properties acquired represents 30 rental units located in Dundas, Ontario. This carve-out schedule of rental income and expenses has been prepared on a carve-out basis from the information acquired and presents only the rental income and expenses directly associated with the Property. Management estimates, when necessary, have been used to prepare such allocations. This carve-out schedule of rental income and expenses have been prepared for the specific purpose of reporting on the revenue and expenses of the Property included in and for inclusion in the Offering Memorandum of the Fund. Revenue from the Property represents rent earned from tenants under lease agreements. Expenses are recorded on an accrual basis. A provision for income taxes has not been made as the Property is not a legal entity. This carve-out schedule of rental income and expenses is not necessarily indicative of the results that would have been attained if the Property had been operating as a separate legal entity during the years presented, and therefore are not necessarily indicative of future operating results. The registered address of the Pulis Real Estate LP2 is 1 Nelson Street West, Suite 200A, Brampton, Ontario, L6X 3E4. The general partner of the Partnership is Pulis Real Estate GP 2 Inc. (the "General Partner") and is responsible for the management, operation and administration of the affairs of the Partnership. 4 F-59

152 ITEM 15 - DATE AND CERTIFICATE Dated: May 17, 2017 CERTIFICATE OF PULIS REAL ESTATE TRUST This Offering Memorandum does not contain a misrepresentation. PULIS REAL ESTATE TRUST, by its Administrator, PULIS REAL ESTATE ADMINCO INC. (Signed) Brian Pulis BRIAN PULIS Chief Executive Officer and Director (Signed) Kyle Pulis KYLE PULIS President, Acting Chief Financial Officer and Director BY THE BOARD OF DIRECTORS (Signed) Jason Priest JASON PRIEST (Signed) Peter VanSickle PETER VANSICKLE PROMOTERS (Signed) Brian Pulis (Signed) Kyle Pulis PULIS REAL ESTATE GP2 INC. BRIAN PULIS KYLE PULIS (Signed) Brian Pulis Chief Executive Officer C-1

153 Dated: May 17, 2017 CERTIFICATE OF PULIS REAL ESTATE LP2 This Offering Memorandum does not contain a misrepresentation. PULIS REAL ESTATE LP 2, by its General Partner, PULIS REAL ESTATE GP2 INC. (Signed) Brian Pulis BRIAN PULIS Chief Executive Officer and Director (Signed) Kyle Pulis KYLE PULIS President, Acting Chief Financial Officer and Director BY THE BOARD OF DIRECTORS (Signed) Jason Priest JASON PRIEST (Signed) Peter VanSickle PETER VANSICKLE PROMOTERS (Signed) Brian Pulis BRIAN PULIS (Signed) Kyle Pulis KYLE PULIS C-2

154 EXHIBIT A SUBSCRIPTION AGREEMENT [Remainder of page is intentionally blank] A-1

155 SUBSCRIPTION AGREEMENT TO: PULIS REAL ESTATE TRUST (the Trust ) PULIS REAL ESTATE LP 2 (the Partnership ) The undersigned (the Investor ) hereby irrevocably subscribes for and agrees to purchase the number of trust units of the Trust ( Trust Units ) or limited partnership units of the Partnership (the LP Units, and together with the Trust Units, the Offered Units ) set forth below for the aggregate subscription price set forth below (the Aggregate Subscription Price ), at a price of $105 per Offered Unit, upon and subject to the terms and conditions set forth in Terms and Conditions of Subscription for Offered Units that is attached following the Schedules hereof (collectively, the Subscription Agreement ). By executing this Subscription Agreement, the Investor consents to the collection, use and disclosure of the Investor s personal information in the manner described herein. In addition to this face page, the Investor must also complete the Schedules attached hereto, if applicable (see page 2 for instructions). Investor s Particulars (Name of Investor please print) By: (Signature of Investor) (Date) (Official Capacity or Title please print) (Please print name of individual whose signature appears above if different than the name of the Investor printed above.) (Investor s Address) (Telephone Number) ( Address) (Social Insurance No. / Business Identification No.) Number and Class of Offered Units (check and indicate number): Trust Units: LP Units : Aggregate Subscription Price: (minimum of $5,040) If the Investor is signing as agent for a principal and is not deemed to be purchasing as principal pursuant to NI (as defined herein) by virtue of being either (i) a trust company or trust corporation acting on behalf of a fully managed account managed by the trust company or trust corporation; or (ii) a person acting on behalf of a fully managed account managed by it, and in each case satisfying the criteria set forth in NI or Section 73.3 of the Securities Act (Ontario), complete the following to ensure that the applicable Schedules are completed in respect of such principal ( Disclosed Beneficial Purchaser ): (Name of Principal) (Principal s Address including postal code) (Principal s Telephone Number) Register the Offered Units as set forth below (if different than above): (Name) (Account reference, if applicable) (Address) (Principal s Address) Deliver the Offered Units as set forth below (if different than registration address): (Name) (Account reference, if applicable) (Contact Name) (Address) Additional Investor Information MUST BE COMPLETED BY ALL INVESTORS The Investor (check one) is or is not a registrant (as defined herein). The Investor (check one) is or is not an insider (as defined herein). If you selected is to either of the categories on the left, then state the number and class of Offered Units held prior to this subscription: Selection of Distributions Option: The Investor wishes to receive distributions in (check one): All cash - Direct Deposit ATTACH VOID CHEQUE All Offered Units - DRIP (Distribution Reinvestment Plan) Part cash and part Offered Units. % of total amount of distributions on the Offered Units should be in cash with the remainder in Offered Units. ACCEPTANCE: The Trust and the Partnership accept this Subscription Agreement, subject to the terms and conditions contained herein. PULIS REAL ESTATE TRUST Per: DATED this day of, 201. Authorized Signatory PULIS REAL ESTATE LP 2 Per: DATED this day of, 201. Authorized Signatory CAL01: : v3

156 INSTRUCTIONS The Investor must deliver a certified cheque or bank draft payable to Pulis Real Estate Trust (if subscribing for Trust Units) or to Pulis Real Estate LP 2 (if subscribing for LP Units) for the aggregate subscription price or payment of the same amount in such other manner as is acceptable to the Issuers and must complete and execute this Subscription Agreement and all applicable Schedules as described below: Offering Memorandum Exemption Schedules (a) (b) (c) Schedule 1 and 2 - All Investors subscribing under the offering memorandum exemption. Schedule 3 - Investors subscribing under the offering memorandum exemption that are resident in Alberta, Saskatchewan, Manitoba, Ontario (individuals or personal holdcos, family trusts, or similar entities) Northwest Territories, Nunavut, Yukon or Prince Edward Island whose acquisition cost exceeds $10,000. (i) (ii) (iii) Note: Investors using the relationship of close business associate or close personal friend to establish that they are eligible investors must also complete Schedule 7 and if the Investor is resident in Saskatchewan, then they must also complete Schedule 8. Note: Investors using the status of accredited investor to establish that they are eligible investors must also complete all applicable accredited-investor Schedules, which are Schedule 5 and Schedule 6. Note: If the Investor is subscribing for securities as an eligible investor or accredited investor then the person meeting with or providing information to the Investor must complete Schedule 10 in respect of such investor. Schedule 4 Alberta, Saskatchewan, Ontario, Quebec, New Brunswick or Nova Scotia Investors subscribing under the offering memorandum exemption that are individuals must complete both Appendices 1 and 2 of Schedule 4 and meet the investment limits specified therein, AND if the Investor is relying on advice from a portfolio manager, investment dealer or exempt market dealer (each a registrant ) in order to increase the Investor's investment limit to $100,000 in a 12-month period, then the dealing representative or advising representative of such registrant that provided such advice must complete section 2 of Appendix 2 of Schedule 4. If the individual is investing through a personal holding corporation, family trust or similar structure, then the principal(s) individuals, beneficial owners or trustees of the investor should complete the Schedule 3 and 4. Accredited Investor Exemption Schedules (d) (e) Schedule 5 All Investors subscribing under the accredited investor exemption. Schedule 6 All Investors subscribing under the accredited investor exemption who are individuals, (unless investing under category J.1 of accredited investor in which case Schedule 6 is not required) Family, Friends and Business Associates Exemption Schedules (f) (g) (h) Schedule 7 - All Investors subscribing under the family, friends and business associates exemption, and if the Investor is a close personal friend or close business associate then the questionnaire in Schedule 7 must be completed. Schedule 8 All Saskatchewan Investors that are relying on a close personal friend or close business associate relationship. Schedule 9 All Ontario Investors that are relying on the family, friends and business associates exemption. Note: Schedule 9 must be signed by all of the following:(i) the Investor; (ii) an executive officer of the Issuers other than the Investor; (iii) if the Investor is a person referred to under category B on Schedule 9, the director, executive officer or control person of the Issuers or an affiliate of the Issuers who has the specified relationship with the Investor; (iv) if the Investor is a person referred to under category (C), the director, executive officer or control person of the Issuers or an affiliate of the Issuers whose spouse has the specified relationship with the Investor; (v) if the Investor is a person referred to under paragraph 4(D) or (E), the director, executive officer or control person of the Issuers or an affiliate of the Issuers who is a close personal friend or a close business associate of the Investor; and (vi) the founder of the Issuers, if the Investor is a person referred to in category (F) or (G) other than the founder of the Issuers. Salesperson Schedule Must be completed for all Accredited Investors and Eligible Investors (i) Schedule 10 - If the Investor is subscribing for securities as an eligible investor or accredited investor then the person meeting with or providing information to the Investor must complete Schedule 10 in respect of such investor. 2

157 Schedule 1 All Offering Memorandum Investors SCHEDULE 1 RECEIPT OF OFFERING MEMORANDUM TO: Pulis Real Estate Trust (the Trust ) and Pulis Real Estate LP 2 (the Partnership ) In connection with the purchase of trust units of the Trust or limited partnership units of the Partnership (as applicable), the undersigned investor (the Investor ) hereby represents, warrants, covenants and certifies to the Trust and Partnership (collectively, the Issuers ) (and acknowledges that the Issuers and their counsel are entitled to rely thereon) that the Investor has received a copy of the Issuers offering memorandum dated May 17, Dated:, 201 Print name of Investor By: Signature Print name of Signatory (if different from Investor) Title Print name of Co-Investor By: Signature Print name of Signatory (if different from Co-Investor) Title S1-1

158 Schedule 2 All Offering Memorandum Investors SCHEDULE 2 OFFERING MEMORANDUM RISK ACKNOWLEDGEMENT TO: Pulis Real Estate Trust and Pulis Real Estate LP 2 (collectively, the Issuers ) I acknowledge that this is a risky investment. I am investing entirely at my own risk. No securities regulatory authority or regulator has evaluated or endorsed the merits of these securities or the disclosure in the Offering Memorandum. I will not be able to sell these securities except in very limited circumstances. I may never be able to sell these securities. The securities are redeemable, but I may only be able to redeem them in limited circumstances. I could lose all the money I invest. I am investing $ in total; this includes any amount I am obliged to pay in the future. I understand that the Issuers may pay up to % of this amount to as a fee or commission. I acknowledge that this is a risky investment and that I could lose all the money I invest. Date Signature of Investor Print Name of Investor Date Signature of Co-Investor Print Name of Co-Investor (if applicable) (if applicable) WARNING Sign 2 copies of this document. Keep one copy for your records. You have two business days to cancel your purchase. To do so, send a notice to Pulis Real Estate Trust stating that you want to cancel your purchase. You must send the notice before midnight on the 2 nd business day after you sign the agreement to purchase the securities. You can send the notice by fax or , or deliver it in person, to Pulis Real Estate Trust to the address shown below. Keep a copy of the notice for your records. PULIS REAL ESTATE TRUST and PULIS REAL ESTATE LP 2 Suite 200A, 1 Nelson Street W. Brampton, Ontario L6X 3E4 Phone: inquiry@pulisinvestments.com You are buying Exempt Market Securities They are called exempt market securities because two parts of securities law do not apply to them. If an issuer wants to sell exempt market securities to you: the issuer does not have to give you a prospectus (a document that describes the investment in detail and gives you some legal protections); and the securities do not have to be sold by an investment dealer registered with a securities regulatory authority or regulator. There are restrictions on your ability to resell exempt market securities. Exempt market securities are more risky than other securities. S2-1

159 Schedule 2 All Offering Memorandum Investors You will receive an offering memorandum Read the offering memorandum carefully because it has important information about the Partnership and its securities. Keep the offering memorandum because you have rights based on it. Talk to a lawyer for details about these rights. The securities you are buying are not listed The securities you are buying are not listed on any stock exchange and they may never be listed. You may never be able to sell these securities. The issuer of your securities is a non-reporting issuer A non-reporting issuer does not have to publish financial information or notify the public of changes in its business. You may not receive on-going information about this issuer. For more information on exempt market securities, call your local securities regulatory authority. If you live in: British Columbia: contact the British Columbia Securities Commission at (604) (outside the local area, call toll-free at ) or visit its website at Alberta: contact the Alberta Securities Commission at (403) or visit its website at Saskatchewan: contact the Saskatchewan Financial Services Commission at (306) or visit its website at Manitoba: contact the Manitoba Securities Commission at (204) or visit its website at Ontario: contact the Ontario Securities Commission at (416) or visit its website at Nova Scotia: contact the Nova Scotia Securities Commission at (902) or visit its website at New Brunswick: contact the Financial and Consumer Services Commission at (506) or visit its website at Newfoundland and Labrador: contact the Office of the Superintendent of Securities, Service Newfoundland and Labrador at (709) or visit its website at Prince Edward Island: contact the Office of the Superintendent of Securities, Consumer, Corporate and Insurance Services Division at (902) or visit its website at Northwest Territories: contact the Office of the Superintendent of Securities, Northwest Territories, Department of Justice at (867) or visit its website at Nunavut: contact the Nunavut Securities Office, Department of Justice at (867) or visit its website at Yukon: contact the Office of the Yukon Superintendent of Securities at (867) or visit its website at The Investor must sign 2 copies of this form. The investor and the issuer must each receive a signed copy. S2-2

160 Schedule 3 - All Offering Memorandum Investors resident in Alberta, Saskatchewan, Manitoba, Ontario, Northwest Territories, Nunavut, Yukon or Prince Edward Island whose acquisition cost exceeds $10,000 and Ontario investors that are individuals whose acquisition cost exceeds $10,000 (or, if subscribing through a personal holding corporation, family trusts or similar investor, then the principal(s) individuals, beneficial owners or trustees of the investor must complete the form). SCHEDULE 3 ELIGIBLE INVESTOR CERTIFICATION TO: Pulis Real Estate Trust (the Trust ) and Pulis Real Estate LP 2 (the Partnership ) In connection with the purchase of trust units of the Trust or limited partnership units of the Partnership (as applicable) (collectively, the Offered Units ), the undersigned subscriber (the Investor ) hereby represents, warrants, covenants and certifies to the Trust and Partnership (collectively, the Issuers ) (and acknowledges that the Issuers and their counsel are entitled to rely thereon) that: 1. The Investor is purchasing the Offered Units as principal for its own account or complies with the provisions of paragraph 3(e) of the Subscription Agreement; 2. The Investor is and will be at the Closing Time (as defined in the Subscription Agreement) an eligible investor within the meaning of National Instrument Prospectus Exemptions ( NI ) by virtue of satisfying the indicated criterion as set out below in this Schedule 3; 3. The Investor fully understands the meaning of the terms and conditions of the category of eligible investor applicable to it and confirms that it has reviewed and understands the definitions below in this Schedule 3 in respect of the category of eligible investor applicable to it and it has reviewed and understands the definition of net assets, if applicable, contained below; 4. The Investor was not created or used solely to purchase or hold securities as an eligible investor; and 5. Upon execution of this Schedule 3 by the Investor, this Schedule 3 shall be incorporated into and form a part of the Subscription Agreement and the Issuers and their counsel shall be entitled to rely thereon. Dated:, 2015 Print name of Investor By: Signature Print name of Signatory (if different from Investor) Title IMPORTANT: PLEASE INITIAL THE APPLICABLE PROVISION ON THE NEXT PAGES OF THIS SCHEDULE 3 S3-1

161 Schedule 3 - All Offering Memorandum Investors resident in Alberta, Saskatchewan, Manitoba, Ontario, Northwest Territories, Nunavut, Yukon or Prince Edward Island whose acquisition cost exceeds $10,000 SCHEDULE 3 (Continued) ELIGIBLE INVESTOR CERTIFICATION Categories of Eligible Investor Instructions: The Investor relying on eligible investor status, must initial beside the applicable portion of the definition below. In connection with the purchase of Offered Units by the Investor, the Investor (or the signatory on behalf of the Investor) certifies for the benefit of the Issuers that the Investor is an eligible investor within the meaning of National Instrument Prospectus Exemptions in the category indicated below: Initial (a) a person whose (i) net assets, alone or with a spouse, in the case of an individual, exceed $400,000, (ii) net income before taxes exceeded $75,000 in each of the 2 most recent calendar years and who reasonably expects to exceed that income level in the current calendar year, or (iii) net income before taxes, alone or with a spouse, in the case of an individual, exceeded $125,000 in each of the 2 most recent calendar years and who reasonably expects to exceed that income level in the current calendar year, (b) a person of which a majority of the voting securities are beneficially owned by eligible investors or a majority of the directors are eligible investors, (c) a general partnership of which all of the partners are eligible investors, (d) a limited partnership of which the majority of the general partners are eligible investors, (e) a trust or estate in which all of the beneficiaries or a majority of the trustees or executors are eligible investors, Note: If you initialled (b), (c), (d) or (e), then indicate the name and category of eligible investor (by reference to the applicable letter above) as follows (attach additional pages if required): (b) list all owners of voting securities (and % owned) and directors (c) list all partners (d) list all general partners (e) list all beneficiaries and trustees and executors Name and Title % of Category of Eligible Investor Securities S3-2

162 Schedule 3 - All Offering Memorandum Investors resident in Alberta, Saskatchewan, Manitoba, Ontario, Northwest Territories, Nunavut, Yukon or Prince Edward Island whose acquisition cost exceeds $10,000 (f) an accredited investor, Note: If you initialled (f), then Schedule 5 and Schedule 6 must be completed (and the Salesperson must complete Schedule 10) (g) a person described in Schedule 7 (family, friends and business associates); or Note: If you initialled (g), then Schedule 7 must be completed and Saskatchewan Investors relying on a close personal friend or close business associate relationship must complete Schedule 8 and all Ontario Investors must complete Schedule 9. (h) person that has obtained advice regarding the suitability of the investment and, if the person is resident in a jurisdiction of Canada, that advice has been obtained from an eligibility adviser. Note: If you initialled (h), then state the name, title and firm of the eligibility adviser. Name Title Firm For the purposes hereof: (i) eligibility adviser means (i) (ii) a person that is registered as an investment dealer or in an equivalent category of registration under the securities legislation of the jurisdiction of a purchaser and authorized to give advice with respect to the type of security being distributed, and in Manitoba, also means a lawyer who is a practicing member in good standing with a law society of a jurisdiction of Canada or a public accountant who is a member in good standing of an institute or association of chartered accountants, certified general accountants or certified management accountants in a jurisdiction of Canada provided that the lawyer or public accountant must not (A) (B) have a professional, business or personal relationship with the issuer, or any of its directors, executive officer, founders, or control persons, and have acted for or been retained personally or otherwise as an employee, executive officer, director, associate or partner of a person that has acted for or been retained by the issuer or any of its directors, executive officers, founders or control persons within the previous 12 months; (j) (k) net assets means the Investor s total assets minus all of the Investor s total liabilities. Accordingly, for the purposes of the net asset test, the calculation of total assets would include the value of an Investor s personal residence and the calculation of total liabilities would include the amount of any liability (such as a mortgage) in respect of the Investor s personal residence; person includes (i) (ii) (iii) (iv) an individual, a corporation, a partnership, trust, fund and an association, syndicate, organization or other organized groups of persons, whether incorporated or not, and an individual or other person in that person s capacity as a trustee, executor, administrator or personal or other legal representative; (l) spouse means, an individual who, (i) is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual, S3-3

163 Schedule 3 - All Offering Memorandum Investors resident in Alberta, Saskatchewan, Manitoba, Ontario, Northwest Territories, Nunavut, Yukon or Prince Edward Island whose acquisition cost exceeds $10,000 (ii) (iii) is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender, or in Alberta, is an individual referred to in paragraph (i) or (ii) above, or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta); and (m) subsidiary means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary. All monetary references are in Canadian Dollars. S3-4

164 Schedule 4 Alberta, Saskatchewan, Ontario, Quebec, New Brunswick or Nova Scotia investors subscribing under the offering memorandum exemption that are individuals or, if subscribing through a personal holding corporation, family trusts or similar investor, then the principal(s) individuals, beneficial owners or trustees of the investor must complete the form. SCHEDULE 4 OFFERING MEMORANDUM CERTIFICATION APPENDIX 1 TO SCHEDULE 4 Classification of Investors Under the Offering Memorandum Exemption Instructions: This Appendix 1 of Schedule 4 must be completed together with the Risk Acknowledgement Form (Schedule 1) and Appendix 2 to Schedule 4 by individuals purchasing securities under the exemption (the offering memorandum exemption) in subsection 2.9(2.1) of National Instrument Prospectus Exemptions (NI ) in Alberta, Saskatchewan, Ontario, Quebec, New Brunswick or Nova Scotia. How you qualify to buy securities under the offering memorandum exemption Initial the statement under A, B, C or D containing the criteria that applies to you. (You may initial more than one statement.) If you initial a statement under B or C, you are not required to complete A. A. You are an eligible investor because: Your initials Your net income before taxes was more than $75,000 in each of the 2 most recent calendar years, and you expect it to be more than $75,000 in this calendar year. (You can find your net income before taxes on your personal income tax return.) ELIGIBLE INVESTOR Your net income before taxes combined with your spouse's was more than $125,000 in each of the 2 most recent calendar years, and you expect your combined net income to be more than $125,000 in this calendar year. (You can find your net income before taxes on your personal income tax return.) Either alone or with your spouse, you have net assets worth more than $400,000. (Your net assets are your total assets, including real estate, minus your total debt including any mortgage on your property.) B. You are an eligible investor, as a person described in section 2.3 [Accredited investor] of NI or, as applicable in Ontario, subsection 7.3(3) of the Securities Act (Ontario), because: Your initials Your net income before taxes was more than $200,000 in each of the 2 most recent calendar years, and you expect it to be more than $200,000 in this calendar year. (You can find your net income before taxes on your personal income tax return.) ACCREDITED INVESTOR Your net income before taxes combined with your spouse's was more than $300,000 in each of the 2 most recent calendar years, and you expect your combined net income before taxes to be more than $300,000 in the current calendar year. Either alone or with your spouse, you own more than $1 million in cash and securities, after subtracting any debt related to the cash and securities. Either alone or with your spouse, you have net assets worth more than $5 million. (Your net assets are your total assets (including real estate) minus your total debt.) S4-1

165 Schedule 4 Alberta, Saskatchewan, Ontario, Quebec, New Brunswick or Nova Scotia investors subscribing under the offering memorandum exemption that are individuals or, if subscribing through a personal holding corporation, family trusts or similar investor, then the principal(s) individuals, beneficial owners or trustees of the investor must complete the form. C. You are an eligible investor, as a person described in section 2.5 [Family, friends and business associates] of NI , because: You are: 1) [check all applicable boxes] a director of the issuer or an affiliate of the issuer an executive officer of the issuer or an affiliate of the issuer a control person of the issuer or an affiliate of the issuer a founder of the issuer OR 2) [check all applicable boxes] a person of which a majority of the voting securities are beneficially owned by, or a majority of the directors are, (i) individuals listed in (1) above and/or (ii) family members, close personal friends or close business associates of individuals listed in (1) above a trust or estate of which all of the beneficiaries or a majority of the trustees or executors are (i) individuals listed in (1) above and/or (ii) family members, close personal friends or close business associates of individuals listed in (1) above Your initials FAMILY, FRIENDS AND BUSINESS ASSOCIATES You are a family member of [Instruction: Insert the name of the person who is your relative either directly or through his or her spouse], who holds the following position at the issuer or an affiliate of the issuer:. You are the of that person or that person's spouse. [Instruction: To qualify for this investment, you must be (a) the spouse of the person listed above or (b) the parent, grandparent, brother, sister, child or grandchild of that person or that person's spouse.] You are a close personal friend of [Instruction: Insert the name of your close personal friend], who holds the following position at the issuer or an affiliate of the issuer:. You have known that person for years. You are a close business associate of [Instruction: Insert the name of your close business associate], who holds the following position at the issuer or an affiliate of the issuer:. You have known that person for years. D. You are not an eligible investor. Your initials NOT AN ELIGIBLE INVESTOR You acknowledge that you are not an eligible investor. S4-2

166 Schedule 4 Alberta, Saskatchewan, Ontario, Quebec, New Brunswick or Nova Scotia investors subscribing under the offering memorandum exemption that are individuals or, if subscribing through a personal holding corporation, family trusts or similar investor, then the principal(s) individuals, beneficial owners or trustees of the investor must complete the form. APPENDIX 2 TO SCHEDULE 4 Investment Limits for Investors Under the Offering Memorandum Exemption Instructions: This Appendix 2 of Schedule 4 must be completed together with the Risk Acknowledgement Form (Schedule 2) and Appendix 1 to Schedule 4 by individuals purchasing securities under the exemption (the offering memorandum exemption) in subsection 2.9(2.1) of National Instrument Prospectus Exemptions (NI ) in Alberta, Saskatchewan, Ontario, Quebec, New Brunswick or Nova Scotia. SECTION 1 TO BE COMPLETED BY THE PURCHASER 1. Investment limits you are subject to when purchasing securities under the offering memorandum exemption You may be subject to annual investment limits that apply to all securities acquired under the offering memorandum exemption in a 12- month period, depending on the criteria under which you qualify as identified in Appendix 1 to Schedule 4. Initial the statement that applies to you. A. You are an eligible investor. Your initials As an eligible investor that is an individual, you cannot invest more than $30,000 in all offering memorandum exemption investments made in the previous 12 months, unless you have received advice from a portfolio manager, investment dealer or exempt market dealer, as identified in section 2 of this appendix, that your investment is suitable. Initial one of the following statements: ELIGIBLE INVESTOR You confirm that, after taking into account your investment of $ today in this issuer, you have not exceeded your investment limit of $30,000 in all offering memorandum exemption investments made in the previous 12 months. You confirm that you received advice from a portfolio manager, investment dealer or exempt market dealer, as identified in section 2 of this appendix that the following investment is suitable. You confirm that, after taking into account your investment of $ today in this issuer, you have not exceeded your investment limit in all offering memorandum exemption investments made in the previous 12 months of $100,000. B. You are an eligible investor, as a person described in section 2.3 [Accredited investor] of NI or, as applicable in Ontario, subsection 7.3(3) of the Securities Act (Ontario). Your initials ACCREDITED INVESTOR You acknowledge that, by qualifying as an eligible investor as a person described in section 2.3 [Accredited investor], you are not subject to investment limits. C. You are an eligible investor, as a person described in section 2.5 [Family, friends and business associates] of NI S4-3 Your initials

167 Schedule 4 Alberta, Saskatchewan, Ontario, Quebec, New Brunswick or Nova Scotia investors subscribing under the offering memorandum exemption that are individuals or, if subscribing through a personal holding corporation, family trusts or similar investor, then the principal(s) individuals, beneficial owners or trustees of the investor must complete the form. FAMILY, FRIENDS AND BUSINESS ASSOCIATES You acknowledge that, by qualifying as an eligible investor as a person described in section 2.5 [Family, friends and business associates], you are not subject to investment limits. D. You are not an eligible investor. Your initials NOT AN ELIGIBLE INVESTOR You acknowledge that you cannot invest more than $10,000 in all offering memorandum exemption investments made in the previous 12 months. You confirm that, after taking into account your investment of $ today in this issuer, you have not exceeded your investment limit of $10,000 in all offering memorandum exemption investments made in the previous 12 months. SECTION 2 TO BE COMPLETED BY THE REGISTRANT 2. Registrant information [Instruction: this section must only be completed if an investor has received advice from a portfolio manager, investment dealer or exempt market dealer concerning his or her investment.] First and last name of registrant (please print): Registered as: [Instruction: indicate whether registered as a dealing representative or advising representative] Telephone: Name of firm: [Instruction: indicate whether registered as an exempt market dealer, investment dealer or portfolio manager.] Date: S4-4

168 Schedule 5 All Accredited Investors SCHEDULE 5 ACCREDITED INVESTOR CERTIFICATION TO: Pulis Real Estate Trust (the Trust ) and Pulis Real Estate LP 2 (the Partnership ) In connection with the purchase of trust units of the Trust or limited partnership units of the Partnership (as applicable) (collectively, the Offered Units ), the undersigned subscriber (the Investor ) hereby represents, warrants, covenants and certifies to the Trust and Partnership (collectively, the Issuers ) (and acknowledges that the Issuers and their counsel are entitled to rely thereon) that: 1. The Investor is purchasing the Offered Units as principal for its own account or complies with the provisions of paragraph 3(e) of the Subscription Agreement; 2. The Investor is and will be at the Closing Time (as defined in the Subscription Agreement) an accredited investor within the meaning of National Instrument Prospectus Exemptions ( NI ) or Section 73.3 of the Securities Act (Ontario) by virtue of satisfying the indicated criterion as set out below in this Schedule 5; 3. The Investor fully understands the meaning of the terms and conditions of the category of accredited investor applicable to it and confirms that it has reviewed and understands the definitions below in this Schedule 5 in respect of the category of accredited investor applicable to it and, in particular, if the Investor is an accredited investor by virtue of satisfying paragraph (j), (j.1), (k) or (l) below in this Schedule 5, it has reviewed and understands the definitions of financial assets, related liabilities and net assets, as applicable, contained below; 4. The Investor was not created or used solely to purchase or hold securities as an accredited investor as described in paragraph (m) of the definition of accredited investor in NI or Section 73.3 of the Securities Act (Ontario) (paragraph (m) below in this Schedule 5); 5. If the Investor is an accredited investor by virtue of satisfying paragraph (j), (k) or (l) below in this Schedule 5, it acknowledges that it needs to complete Schedule 6 to the Subscription Agreement and upon execution of Schedule 6 by the Investor, Schedule 6 shall be incorporated into and form a part of the Subscription Agreement and the Issuers and their counsel shall be entitled to rely thereon; and 6. Upon execution of this Schedule 5 by the Investor, this Schedule 5 shall be incorporated into and form a part of the Subscription Agreement and the Issuers and their counsel shall be entitled to rely thereon. Dated:, 201 Print name of Investor By: Signature Print name of Signatory (if different from Investor) Title IMPORTANT: PLEASE INITIAL THE APPLICABLE ON THE NEXT PAGES OF THIS SCHEDULE 5 S5-1

169 Schedule 5 All Accredited Investors SCHEDULE 5 (Continued) ACCREDITED INVESTOR CERTIFICATION Categories of Accredited Investor Instructions: The Investor relying on accredited investor status, must initial beside the applicable portion of the definition below. In connection with the purchase of Offered Units by the Investor, the Investor (or the signatory on behalf of the Investor) certifies for the benefit of the Issuers that the Investor is an accredited investor within the meaning of National Instrument Prospectus Exemptions or Section 73.3 of the Securities Act (Ontario) in the category indicated below: Initial (a) (i) except in Ontario, a Canadian financial institution, or a Schedule III bank; (ii) in Ontario, a financial institution described in section 73.1(1) of the Securities Act (Ontario) as described below; (b) the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); (c) a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary; (d) (i) except in Ontario, a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer; (ii) in Ontario, a person or company registered under the securities legislation of a province or territory in Canada as an adviser or dealer, except as otherwise prescribed by the regulations; (e) an individual registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d); (e.1) an individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly registered solely as a representative of a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador); (f) the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada; (g) a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l île de Montréal or an intermunicipal management board in Québec; (h) any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government; (i) a pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada; S5-2

170 Schedule 5 All Accredited Investors (j) an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that, before taxes, but net of any related liabilities, exceeds $1,000,000; (note: see definition of financial assets below and complete Schedule 6) (j.1) an individual who beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $5,000,000; (note: see definition of financial assets below and you are not required to complete Schedule 6) (k) an individual whose net income before taxes exceeded $200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; (note: complete Schedule 6) (Note: if individual accredited investors wish to purchase through wholly-owned holding companies or similar entities, such purchasing entities must qualify under section (t) below, which must be initialled.) (l) an individual who, either alone or with a spouse, has net assets of at least $5,000,000; (note: complete Schedule 6 and note that your net assets are your total assets (including real estate) minus your total debt) (m) a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements; (n) an investment fund that distributes or has distributed its securities only to (i) a person that is or was an accredited investor at the time of the distribution, (ii) (iii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 and 2.19 of National Instrument , or a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 of National Instrument ; (o) an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt; (p) a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; (q) a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; (r) a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded; S5-3

171 Schedule 5 All Accredited Investors (s) an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function; (t) a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors; Note: If you initialled (t), then indicate the name and category of accredited investor (by reference to the applicable letter above) of each of the owners of interests (attach additional pages if required): Name Category of Accredited Investor (u) an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser; (v) a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor; or (w) a trust established by an accredited investor for the benefit of the accredited investor s family members of which a majority of the trustees are accredited investors and all of the beneficiaries are the accredited investor s spouse, a former spouse of the accredited investor or a parent, grandparent, brother, sister, child or grandchild of that accredited investor, of that accredited investor s spouse or of that accredited investor s former spouse. Note: If you initialled (w), then indicate the name and category of accredited investor (by reference to the applicable letter above) of each of the following (attach additional pages if required): Individual who established trust: Trustee Trustee Trustee Name Category of Accredited Investor For the purposes hereof: (a) affiliate means an issuer connected with another issuer because (i) (ii) (iii) one of them is the subsidiary of the other; each of them is controlled by the same person; or for the purposes of Saskatchewan securities law, both are subsidiaries of the same issuer; S5-4

172 Schedule 5 All Accredited Investors (b) (c) bank means a bank named in Schedule 1 or II of the Bank Act (Canada); Canadian financial institution means (i) (ii) an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act, or a bank, loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business in Canada or a jurisdiction of Canada; (d) consultant means, for an issuer, a person, other than an employee, executive officer, or director of the issuer or of a related entity of the issuer, that (i) (ii) (iii) is engaged to provide services to the issuer or a related entity of the issuer, other than services provided in relation to a distribution; provides the services under a written contract with the issuer or a related entity of the issuer; and spends or will spend a significant amount of time and attention on the affairs and business of the issuer or a related entity of the issuer and includes, for an individual consultant, a corporation of which the individual consultant is an employee or shareholder, and a partnership of which the individual consultant is an employee or partner; (e) control person has the same meaning as in securities legislation except in Manitoba, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island and Québec where control person means any person that holds or is one of a combination of persons that holds (i) (ii) a sufficient number of any of the securities of an issuer so as to affect materially the control of the issuer, or more than 20% of the outstanding voting securities of an issuer except where there is evidence showing that the holding of those securities does not affect materially the control of the issuer; (f) director means: (i) (ii) a member of the board of directors of a company or an individual who performs similar functions for a company, and with respect to a person that is not a company, an individual who performs functions similar to those of a director of a company; (g) eligibility adviser means (i) (ii) a person that is registered as an investment dealer or in an equivalent category of registration under the securities legislation of the jurisdiction of a purchaser and authorized to give advice with respect to the type of security being distributed, and in Manitoba, also means a lawyer who is a practicing member in good standing with a law society of a jurisdiction of Canada or a public accountant who is a member in good standing of an institute or association of chartered accountants, certified general accountants or certified management accountants in a jurisdiction of Canada provided that the lawyer or public accountant must not (A) have a professional, business or personal relationship with the issuer, or any of its directors, executive officer, founders, or control persons, and S5-5

173 Schedule 5 All Accredited Investors (B) have acted for or been retained personally or otherwise as an employee, executive officer, director, associate or partner of a person that has acted for or been retained by the issuer or any of its directors, executive officers, founders or control persons within the previous 12 months; (h) executive officer means, for an issuer, an individual who is (i) (ii) (iii) a chair, vice-chair or president, a vice-president in charge of a principal business unit, division or function including sales, finance or production, or performing a policy-making function in respect of the issuer; (i) financial assets means (i) (ii) (iii) cash, securities, or a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation; (j) financial institution described in section 73.1(1) of the Securities Act (Ontario) means: (i) (ii) (iii) a bank listed in Schedule I, II or III to the Bank Act (Canada); an association to which the Cooperative Credit Associations Act (Canada) applies or a central cooperative credit society for which an order has been made under subsection 473(1) of that Act; or a loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, a caisse populaire, financial services cooperative or credit union league or federation that is authorized by a status of Canada or Ontario to carry o business in Canada or Ontario, as the case may be; (k) founder means, in respect of an issuer, a person who, (i) (ii) acting alone, in conjunction, or in concert with one or more persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the issuer, and at the time of the trade is actively involved in the business of the issuer; (l) (m) (n) (o) (p) (q) foreign jurisdiction means a country other than Canada or a political subdivision of a country other than Canada; fully managed account means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client s express consent to a transaction; investment fund means a mutual fund or a non-redeemable investment fund; jurisdiction means a province or territory of Canada except when used in the term foreign jurisdiction; local jurisdiction means the jurisdiction in which the Canadian securities regulatory authority is situate; net assets means the Investor s total assets minus all of the Investor s total liabilities. Accordingly, for the purposes of the net asset test, the calculation of total assets would include the value of an Investor s personal residence and the calculation of total liabilities would include the amount of any liability (such as a mortgage) in respect of the Investor s personal residence; S5-6

174 Schedule 5 All Accredited Investors (r) non-redeemable investment fund means an issuer, (i) (ii) whose primary purpose is to invest money provided by its securityholders, that does not invest, (A) (B) for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is a mutual fund or a non-redeemable investment fund, or for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or a non-redeemable investment fund, and (iii) that is not a mutual fund; (s) person includes (i) (ii) (iii) (iv) an individual, a corporation, a partnership, trust, fund and an association, syndicate, organization or other organized groups of persons, whether incorporated or not, and an individual or other person in that person s capacity as a trustee, executor, administrator or personal or other legal representative; (t) (u) regulator means, for the local jurisdiction, the Executive Director as defined under securities legislation of the local jurisdiction; related liabilities means (i) (ii) liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or liabilities that are secured by financial assets; (v) (w) Schedule III bank means an authorized foreign bank named in Schedule III of the Bank Act (Canada); spouse means, an individual who, (i) (ii) (iii) is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual, is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender, or in Alberta, is an individual referred to in paragraph (i) or (ii) above, or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta); and (x) subsidiary means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary. All monetary references are in Canadian Dollars. S5-7

175 Schedule 6 All Individual Accredited Investors other than category J.1 SCHEDULE 6 INDIVIDUAL ACCREDITED INVESTOR FORM FORM F9 To be completed by individuals investing under categories (j), (k) or (l) of the definition of accredited investor in National Instrument Prospectus Exemptions or Section 73.3 of the Securities Act (Ontario), which are reproduced in Schedule 5 as paragraphs (j), (k) or (l), as applicable. Note that individuals investing under category (j.1) of the definition of accredited investor in National Instrument Prospectus Exemptions or Section 73.3 of the Securities Act (Ontario) do not need to complete this form. WARNING! This investment is risky. Don t invest unless you can afford to lose all the money you pay for this investment SECTION 1 TO BE COMPLETED BY THE ISSUER 1. About your investment Type of securities: Issuer: Purchased from: SECTIONS 2 TO 4 TO BE COMPLETED BY THE PURCHASER 2. Risk acknowledgement [Instruction: initial all boxes in Section 2] This investment is risky. Initial that you understand that: Your initials Risk of loss You could lose your entire investment of $. [Instruction: Insert the total dollar amount of the investment.] Liquidity risk You may not be able to sell your investment quickly or at all. Lack of information You may receive little or no information about your investment. Lack of advice You will not receive advice from the salesperson about whether this investment is suitable for you unless the salesperson is registered. The salesperson is the person who meets with, or provides information to, you about making this investment. To check whether the salesperson is registered, go to 3. Accredited investor status [Instruction: initial one or more boxes that apply] You must meet at least one of the following criteria to be able to make this investment. Initial the statement that applies to you. (You may initial more than one statement.) The person identified in section 6 is responsible for ensuring that you meet the definition of accredited investor. That person, or the salesperson identified in section 5, can help you if you have questions about whether you meet these criteria. Your initials Your net income before taxes was more than $200,000 in each of the 2 most recent calendar years, and you expect it to be more than $200,000 in the current calendar year. (You can find your net income before taxes on your personal income tax return.) Your net income before taxes combined with your spouse s was more than $300,000 in each of the 2 most recent calendar years, and you expect your combined net income before taxes to be more than $300,000 in the current calendar year. Either alone or with your spouse, you own more than $1 million in cash and securities, after subtracting any debt related to the cash and securities. S6-1

176 Schedule 6 All Individual Accredited Investors other than category J.1 Either alone or with your spouse, you have net assets worth more than $5 million. (Your net assets are your total assets (including real estate) minus your total debt.) 4. Your name and signature By signing this form, you confirm that you have read this form and you understand the risks of making this investment as identified in this form. First and last name (please print): Signature: Date: SECTION 5 TO BE COMPLETED BY THE SALESPERSON 5. Salesperson information [Instruction: The salesperson is the person who meets with, or provides information to, the purchaser with respect to making this investment. That could include a representative of the issuer or selling security holder, a registrant or a person who is exempt from the registration requirement.] First and last name of salesperson (please print): Telephone: Name of firm (if registered): SECTION 6 TO BE COMPLETED BY THE ISSUER 6. For more information about this investment PULIS REAL ESTATE TRUST AND PULIS REAL ESTATE LP 2 Suite 200A, 1 Nelson Street W. Brampton, Ontario L6X 3E4 Phone: inquiry@pulisinvestments.com For more information about prospectus exemptions, contact your local securities regulator. You can find contact information at Form instructions: 1. The information in sections 1, 5 and 6 must be completed before the purchaser completes and signs the form. 2. The purchaser must sign this form. Each of the purchaser and the issuer must receive a copy of this form signed by the purchaser. The issuer is required to keep a copy of this form for 8 years after the distribution. S6-2

177 Schedule 7 All Family, Friends and Business Associates SCHEDULE 7 FAMILY, FRIENDS AND BUSINESS ASSOCIATES In connection with the purchase of trust units of the Trust or limited partnership units of the Partnership (as applicable) (collectively, the Offered Units ), the undersigned subscriber (the Investor ) hereby represents, warrants, covenants and certifies to the Trust and Partnership (collectively, the Issuers ) (and acknowledges that the Issuers and their counsel are entitled to rely thereon) that the Investor is a person described in the category indicated below: Note: All Ontario Investors must also complete Schedule 9 and all Saskatchewan Investors relying on a close personal friend or close business associate relationship must also complete Schedule 8. Initial [INITIAL THE APPROPRIATE CATEGORY] (A) a director, executive officer or control person (as such terms are defined in NI and reproduced in Schedule 5 hereto) of the Issuers or of an affiliate of the Issuers; or (B) a spouse (as defined in Schedule 5 hereto), parent, grandparent, brother, sister, child or grandchild of any person referred to in subclause (A) above; or (C) a parent, grandparent, brother, sister, child or grandchild of the spouse of any person referred to in subclause (A) above; or (D) a close personal friend (within the meaning thereof as set out in the Companion Policy CP to NI ) of any person referred to in subclause (A) above and has described and certifies to the Issuers, the details of that relationship in the questionnaire below and, if the Investor is resident in Saskatchewan or is otherwise subject to the applicable securities laws of Saskatchewan, it has completed Schedule 8 hereto; or (E) a close business associate (within the meaning thereof as set out in Companion Policy CP to NI ) of any person referred to in subclause (A) above and has described and certifies to the Issuers, the details of that relationship in the questionnaire below and, if the Investor is resident in Saskatchewan or is otherwise subject to the applicable securities laws of Saskatchewan, it has completed Schedule 8 hereto; or (F) a founder (as such term is defined in NI and reproduced in Schedule 5 hereto) of the Issuers or a spouse, parent, grandparent, brother, sister, child, grandchild, close personal friend or close business associate of a founder of the Issuers and has described and certifies to the Issuers, the details of that relationship in the questionnaire below in this Schedule 7 and, if the Investor is resident in Saskatchewan or is otherwise subject to applicable securities laws of Saskatchewan and is relying on a close business associate or close personal friend relationship, the Investor has completed Schedule 8 hereto; or (G) a parent, grandparent, brother, sister, child or grandchild of the spouse of a founder of the Issuers; or (H) a person or company of which a majority of the voting securities are beneficially owned by, or a majority of the directors are, persons referred to in subparagraphs (A) to (G) above and in the case of subparagraphs (D), (E) and (F), has described, and certifies to the Issuers, the details of that relationship in the questionnaire below and, if the Investor is resident in Saskatchewan or is otherwise subject to the applicable securities laws of Saskatchewan, it has completed Schedule 8 hereto; or S7-1

178 Schedule 7 All Family, Friends and Business Associates (I) a trust or estate of which all of the beneficiaries or a majority of the trustees are persons described in subparagraphs (A) to (G) above and in the case of subparagraphs (D) (E) and (F), has described, and certifies to the Issuers, the details of that relationship in the questionnaire below and, if the Investor is resident in Saskatchewan or is otherwise subject to the applicable securities laws of Saskatchewan, it has completed Schedule 8 hereto. Note: For the purposes of categories (D), (E), (F), (H) and (I) above, a person is not a close personal friend solely because the individual is a relative or a member of the same organization, association or religious group or because the individual is a client, customer or former client or customer, nor is an individual a close personal friend as a result of being a close personal friend of a close personal friend of one of the listed individuals above, rather the relationship must be direct. A close personal friend is one who knows the director, executive officer, founder or control person well enough and has known them for a sufficient period of time to be in a position to assess their capabilities and trustworthiness. Further, for the purposes of categories (D), (E), (F), (H) and (I) above, a person is not a close business associate if the person is a casual business associate or a person introduced or solicited for purposes of purchasing securities nor is the individual a close business associate solely because the individual is a client, customer, former client or customer, nor is the individual a close business associate if they are a close business associate of a close business associate of one of the listed individuals above, rather the relationship must be direct. A close business associate is an individual who had sufficient prior dealings with the director, executive officer, founder or control person to be in a position to assess their capabilities and trustworthiness. Questionnaire To be completed by Investors to whom section (D), (E), (F), (H) or (I) applies or by Investors who are relying on a close personal friend or close business associate relationship. Name of director, trustee, executive officer, control person or founder of whom Investor is a close personal friend/close business associate Length of relationship Details of relationship or prior business dealings The undersigned understands that the Issuers are relying on this information in determining to sell securities to the undersigned in a manner exempt from the registration and prospectus requirements of applicable securities laws. Dated:, 20. Print name of Investor By: Signature Print name of Signatory (if different from Investor) Title S7-2

179 Schedule 8 All Saskatchewan Investors that are close personal friends or close business associates SCHEDULE 8 RISK ACKNOWLEDGEMENT CLOSE PERSONAL FRIENDS AND CLOSE BUSINESS ASSOCIATES The undersigned (the Investor ), a resident of Saskatchewan, hereby represents and warrants, as an integral part of the attached subscription agreement, that he, she or it in all respects acknowledges and understands the following. I acknowledge that this is a risky investment: FORM F5 I am investing entirely at my own risk. No securities regulatory authority has evaluated or endorsed the merits of these securities. I will not be able to sell these securities except in very limited circumstances. I may never be able to resell these securities. I could lose all the money I invest. I do not have a 2-day right to cancel my purchase of these securities or the statutory rights of action for misrepresentation I would have if I were purchasing the securities under a prospectus. I do have a 2-day right to cancel my purchase of these securities if I receive an amended offering document. I am investing $ [total consideration] in total; this includes any amount I am obliged to pay in future. I am a close personal friend or close business associate of [state name], who is a [state title founder, director, executive officer or control person] of [state name of issuer]. I acknowledge that I am purchasing based on my close relationship with [state name of founder, director, executive officer or control person] whom I know well enough and for a sufficient period of time to be able to assess his/her capabilities and trustworthiness. I acknowledge that this is a risky investment and that I could lose all the money I invest. WARNING Date Signature of Purchaser Print name of Purchaser Sign 2 copies of this document. Keep one copy for your records. S8-1

180 Schedule 8 All Saskatchewan Investors that are close personal friends or close business associates You are buying Exempt Market Securities. They are called exempt market securities because two parts of securities law do not apply to them. If an issuer wants to sell exempt market securities to you: the issuer does not have to give you a prospectus (a document that describes the investment in detail and gives you some legal protections), and the securities do not have to be sold by an investment dealer registered with a securities regulatory authority. There are restrictions on your ability to resell exempt market securities. Exempt market securities are more risky than other securities. You may not receive any written information about the issuer or its business. If you have questions about the issuer or its business, ask for written clarification before you purchase the securities. You should consult your own professional advisers before investing in the securities. The issuer of your securities is a non-reporting issuer. A non-reporting issuer does not have to publish financial information or notify the public of changes in its business. You may not receive ongoing information about this issuer. You can only sell the securities of a non-reporting issuer in very limited circumstances. You may never be able to sell these securities. The securities you are buying are not listed. The securities you are buying are not listed on any stock exchange, and they may never be listed. There may be no market for these securities. You may never be able to sell these securities. For more information on the exempt market, refer to the Saskatchewan Financial Services Commission s website at S8-2

181 Schedule 9 All Ontario Investors relying on the family, friends and business associates exemption SCHEDULE 9 RISK ACKNOWLEDGEMENT ONTARIO FAMILY, FRIENDS AND BUSINESS ASSOCIATES FORM F12 WARNING! This investment is risky. Don t invest unless you can afford to lose all the money you pay for this investment SECTION 1 TO BE COMPLETED BY THE ISSUER 1. About your investment Type of securities: Issuer: Purchased from: SECTIONS 2 TO 4 TO BE COMPLETED BY THE PURCHASER 2. Risk acknowledgement [Instruction: initial all boxes in Section 2] This investment is risky. Initial that you understand that: Your initials Risk of loss You could lose your entire investment of $. [Instruction: Insert the total dollar amount of the investment.] Liquidity risk You may not be able to sell your investment quickly or at all. Lack of information You may receive little or no information about your investment. Lack of advice You will not receive advice from the salesperson about whether this investment is suitable for you unless the salesperson is registered. The salesperson is the person who meets with, or provides information to, you about making this investment. To check whether the salesperson is registered, go to 3. Family, friend or business associate status [Instruction: initial one or more boxes that apply] You must meet at least one of the following criteria to be able to make this investment. Check and initial the statement that applies to you. Your initials A) You are: 1. [check all applicable boxes] a director of the issuer or an affiliate of the issuer an executive officer of the issuer or an affiliate of the issuer a control person of the issuer or an affiliate of the issuer a founder of the issuer OR S9-1

182 Schedule 9 All Ontario Investors relying on the family, friends and business associates exemption 2. [check all applicable boxes] a person of which a majority of the voting securities are beneficially owned by, or a majority of the directors are, (i) individuals listed in (1) above and/or (ii) family members, close personal friends or close business associates of individuals listed in (1) above a trust or estate of which all of the beneficiaries or a majority of the trustees or executors are (i) individuals listed in (1) above and/or (ii) family members, close personal friends or close business associates of individuals listed in (1) above B) You are a family member of [Instruction: Insert the name of the person who is your relative either directly or through his or her spouse], who holds the following position at the issuer or an affiliate of the issuer:. You are the of that person or that person s spouse. [Instruction: To qualify for this investment, the person listed above must be (a) your spouse or (b) your or your spouse s parent, grandparent, brother, sister, child or grandchild.] C) You are a close personal friend of [Instruction: Insert the name of your close personal friend], who holds the following position at the issuer or an affiliate of the issuer:. You have known that person for years. D) You are a close business associate of [Instruction: Insert the name of your close business associate], who holds the following position at the issuer or an affiliate of the issuer:. You have known that person for years. 4. Your name and signature By signing this form, you confirm that you have read this form and you understand the risks of making this investment as identified in this form. You also confirm that you are eligible to make this investment because you are a family member, close personal friend or close business associate of the person identified in section 5 of this form First and last name (please print): Signature: Date: SECTION 5 TO BE COMPLETED BY PERSON WHO CLAIMS THE CLOSE PERSONAL RELATIONSHIP, IF APPLICABLE 5. Contact person at the issuer or an affiliate of the issuer [Instruction: To be completed by the director, executive officer, control person or founder with whom the purchaser has a close personal relationship indicated under sections 3B, C or D of this form.] By signing this form, you confirm that you have, or your spouse has, the following relationship with the purchaser: [check the box that applies] family relationship as set out in section 3B of this form close personal friendship as set out in section 3C of this form close business associate relationship as set out in section 3D of this form First and last name of contact person (please print): S9-2

183 Schedule 9 All Ontario Investors relying on the family, friends and business associates exemption Position with the issuer or affiliate of the issuer (director, executive officer, control person or founder): Telephone: Signature: Date: SECTION 6 TO BE COMPLETED BY THE ISSUER 6. For more information about this investment PULIS REAL ESTATE TRUST AND PULIS REAL ESTATE LP 2 Suite 200A, 1 Nelson Street W. Brampton, Ontario L6X 3E4 Phone: inquiry@pulisinvestments.com For more information about prospectus exemptions, contact your local securities regulator. You can find contact information at Signature of executive officer of the issuer (other than the purchaser): Date: Form instructions: 1. The information in sections 1, 5 and 6 must be completed before the purchaser completes and signs the form. 2. The purchaser, an executive officer who is not the purchaser and, if applicable, the person who claims the close personal relationship to the purchaser must sign this form. Each of the purchaser, contact person at the issuer and the issuer must receive a copy of this form signed by the purchaser. The issuer is required to keep a copy of this form for 8 years after the distribution. 3. The detailed relationships required to purchase securities under this exemption are set out in section 2.5 of National Instrument Prospectus Exemptions. For guidance on the meaning of close personal friend and close business associate, please refer to sections 2.7 and 2.8, respectively, of Companion Policy CP Prospectus Exemptions. S9-3

184 Schedule 10 To be completed by salesperson for all eligible investors and accredited investors SCHEDULE 10 ACCREDITED / ELIGIBLE INVESTOR SUPPORTING CHECKLIST To be completed by the person meeting with or providing information to the investor (the Salesperson ) that is subscribing for securities as an accredited investor or eligible investor. The issuer is required to keep a copy of this form and any supporting documentation (if any was received) for 8 years after the distribution. 1. Investor Information Name of Investor: Name of Representative of Investor (for non-individual investors): Issuer: Security: 2. Salesperson Information Print first and last name of Salesperson: Date: 3. Support for Accredited Investor / Eligible Investor Status (a) (b) (c) Describe how the investor was identified or located: How long have you known the investor? Describe the details of your relationship with the investor or prior business dealings: (d) (e) (f) Indicate the category or categories of accredited investor or eligible investor that the investor certified apply to the investor in the investor s subscription agreement in the box on the right. Note: If the category of accredited investor is based on a financial threshold, then you must ask the investor whether the investor has net income before taxes, net assets or financial assets (as applicable) that exceed the applicable threshold and you must explain that: financial assets are cash and securities, after subtracting any debt related to the cash and securities. net assets are total assets (including real estate) minus the investor s total debt; and net income before taxes is available on the investor s tax returns. Did the investor appear to understand the category or categories of accredited investor or eligible investor that the investor certified apply to the investor, including, if applicable, the definition of net income, financial assets or net assets? Note: You must ask the investor questions regarding the investor s net income before taxes, net assets and/or financial assets (as applicable) to determine that the investor meets or exceeds the financial threshold in the applicable category of accredited investor or eligible investor. Do the investor s initial responses to the questions asked in part (e) seem reasonable, including whether the investor meets the category of accredited investor or eligible investor that the investor certified on the subscription agreement? Note: If no you must make further inquiries regarding the investor s financial circumstances and if the response to this part (f) remains no then you must complete part (g) to proceed with the subscription. Investor Category Note: indicate the paragraph(s) indicated on Appendix A to Schedule 3 or 4 of the investor s Subscription Agreement Yes No Note: If no then complete part (f). Yes No Note: If no then complete part (g). (g) If the response to the question in part (f) is no then you must ask the investor to show you supporting documentation to support the investor s status as an accredited investor or eligible investor and you must describe the supporting documentation below: S10-1

185 Terms and Conditions TERMS AND CONDITIONS OF SUBSCRIPTION FOR OFFERED UNITS Definitions 1. In this Subscription Agreement, unless the context otherwise requires: (a) (b) (c) (d) (e) Closing means the completion of the issue and sale by the Trust or Partnership (as applicable) and the purchase by the subscribers of Offered Units pursuant to the subscription agreements, substantially in the form of this Subscription Agreement, which may occur on one or more Closing Dates; Closing Date means such date or dates as the Issuers may determine. The Investor acknowledges that multiple Closings may occur with multiple subscribers; Closing Time means the closing time on the Closing Date as the Issuers may determine; Designated Jurisdictions means all of the provinces and territories of Canada to the extent that Investors are resident in those provinces and territories and such other jurisdictions as the Issuers may determine; insider means: (i) (ii) (iii) a director or officer of the Issuers; a director or officer of a person or company that is itself an insider or subsidiary of the Issuers; or a person that has: (A) beneficial ownership of, or control or direction over, directly or indirectly; or (B) a combination of beneficial ownership of and control or direction over, directly or indirectly, securities carrying more than 10% of the voting rights attached to all of the Issuers outstanding voting securities, excluding, for the purpose of the calculation of the percentage held, any securities held by the person or company as underwriter in the course of a distribution; (f) (g) (h) (i) Offered Units has the meaning ascribed thereto on the face page of this Subscription Agreement; Offering has the meaning ascribed thereto in subparagraph 2(a) hereof; registrant means a person registered or required to be registered pursuant to the securities laws applicable to such person; and Securities Commissions means the securities commissions or similar regulatory authorities in the Designated Jurisdictions. Terms of the Offering 2. The Investor acknowledges that: (a) (b) (c) (d) (e) this subscription is subject to rejection or allotment by the Issuers in whole or in part; and the Offered Units subscribed for by it hereunder form part of a larger issuance and sale by the Issuers of Offered Units (the Offering ); and the Offering is not subject to any minimum subscription level, as such, any funds invested will be available to the Issuers and will be paid to the Issuers on the Closing Date and need not be refunded to the Investor; and in the event that the Issuers reject the Subscription Agreement, the subscription proceeds will be promptly returned to the Investor at the address of the Investor set out on the face page hereof, without interest or deduction; and it acknowledges that: (i) the Issuers are not reporting issuers (or equivalent thereof) under the securities laws of any province or territory of Canada; (ii) there is no assurance that the Issuers will become a reporting issuer under the securities laws of any province or territory of Canada in the future and the Issuers have not made or 1

186 Terms and Conditions given any such assurances; (iii) the Offered Units will be subject to a hold period of four months and a day from the later of the applicable Closing Date and the date the Issuers become a reporting issuer under the securities laws of any province or territory of Canada (which it has no obligation to become), during which time the Investor may not trade the Offered Units without filing a prospectus or being able to rely on one of the limited exemptions from the requirement to file a prospectus under applicable securities laws; and (iv) any certificates or electronic records representing the Offered Units will bear a legend indicating that the resale of such securities is so restricted in the following form: UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF: [THE DISTRIBUTION DATE], AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY ; and (f) by executing this Subscription Agreement, the Investor agrees that if the Investor transfers such Offered Units during any applicable hold periods, the Investor will advise such transferee of the resale restrictions applicable to such Offered Units. Representations, Warranties and Covenants by Investor 3. The Investor (on its own behalf and, if applicable, on behalf of each person on whose behalf the Investor is contracting hereunder) represents, warrants and covenants to the Issuers and their counsel (and acknowledges that the Issuers and their counsel are relying thereon) that both at the date hereof and at the Closing Time: (a) Offering Memorandum Exemption: the Investor is a resident of a province or territory of Canada other than Quebec; and: (i) (ii) (iii) (iv) the Investor has received, reviewed and understands the Issuers confidential offering memorandum dated May 17, 2017, as updated, amended or restated from time to time prior to the date of this subscription (the Offering Memorandum ) it has completed and signed Schedule 1 in respect of acknowledging receipt of the Offering Memorandum. The Investor has reviewed and understands the, the disclosure set out under the heading Item 8 Risk Factors, and has had an opportunity to ask and have answered all questions which it wished to raise regarding the business and affairs of the Issuers, the nature of its activities, the proposed use of the Offering proceeds, the Offered Units and this Subscription Agreement; and other than the Offering Memorandum and the brochure attached thereto, the Investor has not received, requested and does not have any need to receive, any offering memorandum, or any other document describing the Issuers that has been prepared for delivery to and review by, prospective subscribers in order to assist it in making an investment decision in respect of the Units; and it has completed and signed two copies of the Risk Acknowledgement form attached as Schedule 2; and the Investor is resident in British Columbia or Newfoundland and Labrador; or the Investor is resident in Manitoba, Northwest Territories, Nunavut, Yukon or Prince Edward Island and either: (A) the acquisition cost to the Investor does not exceed $10,000; or (B) the Investor is an eligible investor as such term is defined in National Instrument Prospectus Exemptions and it was not created or used solely to purchase or hold securities as an eligible investor in NI , and it has concurrently executed and delivered Schedule 3 hereto and has initialled therein indicating that the Investor satisfies one of the categories of eligible investor set forth in such definition; or (v) the Investor is resident in Alberta, Saskatchewan, Ontario, Quebec, New Brunswick or Nova Scotia and either: (A) the Investor is not an individual; or 2

187 Terms and Conditions (B) the Investor is an individual; and (1) or the acquisition cost to the Investor does not exceed $10,000; or (2) the Investor is an eligible investor as such term is defined in National Instrument Prospectus Exemptions and it was not created or used solely to purchase or hold securities as an eligible investor in NI , and it has concurrently executed and delivered Schedule 3 hereto and has initialled therein indicating that the Investor satisfies one of the categories of eligible investor set forth in such definition, and in either case, the Investor has concurrently completed, executed and delivered, Schedule 4 and meets the investment limit described in Schedule 4; or (b) (c) (d) Accredited Investor Exemption: the Investor is a resident of Quebec or otherwise relying on the accredited investor exemption and it is an accredited investor, as such term is defined in NI or section 73.3 of the Securities Act (Ontario), and it was not created or used solely to purchase or hold securities as an accredited investor as described in paragraph (m) of the definition of accredited investor in NI , and it has concurrently executed and delivered Schedule 5 hereto and has initialled therein indicating that the Investor satisfies one of the categories of accredited investor set forth in such definition and, if the Investor is an individual (unless investing under category J.1 of accredited investor set forth in Appendix A to Schedule 5), has completed Schedule 6 hereto; or Family, Friends and Business Associates Exemption: the Investor is a resident of or otherwise subject to all applicable securities laws of a Province or Territory of Canada and it meets and has initialled one or more of the categories on Schedule 7 (including completing the questionnaire therein) and if the Investor is resident in Saskatchewan or is otherwise subject to the applicable securities laws of Saskatchewan, it has completed Schedule 8 hereto and in the case of an Investor resident in Ontario or otherwise subject to applicable securities laws of Ontario, then the Investor has completed and executed Schedule 9, which has also been completed and executed by the other persons specified therein; and No Undisclosed Beneficiaries and Jurisdiction: (i) (ii) unless it is purchasing pursuant to subparagraph 3(e) hereof, it is purchasing the Offered Units as principal for its own account, not for the benefit of any other person, for investment only and not with a view to the resale or distribution of all or any of the Offered Units, it is resident in or otherwise subject to applicable securities laws of the jurisdiction set out as the Investor s Address on the face page hereof and any act, solicitation, conduct or negotiation directly or indirectly in furtherance of such purchase and sale has occurred only in such jurisdiction; and the Investor does not act jointly or in concert with any other person or company for the purposes of acquiring securities of the Issuers; and (e) (f) Exempt Status of Disclosed Beneficial Purchaser: subject to securities laws applicable to the Investor, if it is acting as agent for one or more Disclosed Beneficial Purchasers, each of such Disclosed Beneficial Purchasers is purchasing as principal for its own account, not for the benefit of any other person, for investment only, and not with a view to distribution of all or any of the Offered Units, and each Disclosed Beneficial Purchaser complies with paragraph 3(a), 3(b) or 3(c) hereof as is applicable to it (including completion of applicable Schedules hereto). The agent further acknowledges that the Issuers are required by law to disclose to certain regulatory authorities the identity of each Disclosed Beneficial Purchaser for whom it may be acting, it and each Disclosed Beneficial Purchaser is resident in or otherwise subject to the securities laws of the jurisdiction set out as the Investor s Address and Principal s Address including postal code, respectively, on the face page hereof; and Risk Acknowledgment: it (and any Disclosed Beneficial Purchaser for whom it is acting) acknowledges that: (i) (ii) (iii) no securities commission or similar regulatory authority has reviewed or passed on the merits of the Offered Units; and there is no government or other insurance covering the Offered Units; and there are risks associated with the purchase of the Offered Units; and 3

188 Terms and Conditions (iv) (v) (vi) (vii) (viii) there are restrictions on the Investor s ability to resell the Offered Units and it is the responsibility of the Investor to find out what those restrictions are and to comply with them before selling such Offered Units; and the Issuers have advised the Investor that the Issuers are relying on an exemption from the requirements to provide the Investor with a prospectus and to sell securities through a person or company registered to sell securities under applicable securities laws and, as a consequence of acquiring Offered Units pursuant to this exemption, certain protections, rights and remedies provided by applicable securities laws, will not be available to the Investor; and the investment in the Issuers is a highly speculative investment and involves a high degree of risk of loss of the entire investment; and there is no guarantee that any gain will be realised from its investment in the Issuers; and without limitation, no representation, guarantee or warranty has been made or given to the Investor by the Issuers, their officers, agents or employees or any other person, expressly or by implication, as to: (A) (B) (C) the approximate or exact length of time that the Investor will be required to remain as an investor in the Issuers; the financial viability of the business of the Issuers; or the future profitability of the business of the Issuers; and (ix) it confirms that neither the Issuers nor any of its directors, trustees, officers, employees or representatives, has made any representations (oral or written) to the Investor: (A) (B) (C) that any person will resell or repurchase any of the Offered Units; that any person will refund the purchase price of the Offered Units; or as to the future price or value of the Offered Units; and (x) (xi) (xii) (xiii) (xiv) (xv) it has such knowledge of financial and business affairs as to be capable of evaluating the merits and risks of its investment and is able to bear the economic risk of loss of its investments; and except for this Subscription Agreement and the Offering Memorandum, it has not relied upon any oral or written representation as to fact or otherwise made by or on behalf of the Issuers; and the Issuers have not provided or purported to provide any or all of the information which may be required to evaluate and make an informed assessment of an investment in the Issuers and the Investor is responsible for making its own investigations in respect of all such matters; and its offer to subscribe for Offered Units has not been induced by any representations with regard to the present or future worth of the Offered Units; and it, either alone or together with the Investor s financial advisor, has sufficient financial knowledge and experience to evaluate the merit and risks of an investment in the Issuers on the basis of information presented to the Investor; and it understands, acknowledges and is aware that the Offered Units are being offered for sale only on a private placement basis and that the sale and delivery of the Offered Units is conditional upon such sale being exempt from the requirements under applicable securities laws as to the filing of a prospectus or upon the issuance of such orders, consents or approvals as may be required to permit such sale without the filing of a prospectus and, as a consequence: (i) it is restricted from using most of the civil remedies available under securities legislation; (ii) it may not receive information that would otherwise be required to be provided to it under securities legislation; and (iii) the Issuers are relieved from certain obligations that would otherwise apply under securities legislation; and 4

189 Terms and Conditions (xvi) (xvii) the Investor understands that no securities commission, stock exchange, governmental agency, regulatory body or similar authority has made any finding or determination or expressed any opinion with respect to the merits of investing in the Offered Units; and it is capable of bearing the economic risks of an investment in the Offered Units and the Investor s present financial condition is such that the Investor is under no present or contemplated future need to dispose of any of the Offered Units to satisfy any existing or contemplated undertaking, need or indebtedness; and (g) Restrictions on Resale: (i) (ii) (iii) (iv) it has been independently advised as to restrictions with respect to trading in the Offered Units imposed by applicable securities laws in the jurisdiction in which it resides or is otherwise subject, confirms that no representation (written or oral) has been made to it by or on behalf of the Issuers with respect thereto, acknowledges that it is aware of the characteristics of the Offered Units, the risks relating to an investment therein and of the fact that it will not be able to resell the Offered Units except in accordance with limited exemptions under applicable securities legislation and regulatory policy until expiry of the applicable restricted period and compliance with the other requirements of applicable law; and it agrees that any certificates representing the Offered Units will bear a legend, indicating, or such electronic records shall indicate, that the resale of such Offered Units is restricted; the Investor further acknowledges that it should and has had the opportunity to consult its own legal counsel in its jurisdiction of residence for full particulars of the resale restrictions applicable to it; and the Investor is aware that there is no market upon which the Offered Units trade and there is no assurance that the Offered Units will be listed and posted for trading on a stock exchange or dealer network in the future; and the Investor is aware it may be subject to certain escrow requirements of a stock exchange or applicable securities laws which restrict the trading in the Offered Units for directors, officers, insiders and their affiliates in the event that the Issuers becomes a reporting issuer or obtains a stock listing and the Investor agrees to be subject to such escrow requirements, as may be applicable; and it will not resell the Offered Units, except in accordance with the provisions of applicable securities legislation, regulations, rules, policies and orders and applicable stock exchange rules; and (h) No connection to U.S.: (i) (ii) (iii) (iv) it is aware that the Offered Units have not been and will not be registered under the United States Securities Act of 1933, as amended ( U.S. Securities Act ) or the securities laws of any state of the United States and that these securities may not be offered or sold, directly or indirectly, in the United States without registration under the U.S. Securities Act or compliance with requirements of an exemption from registration and the applicable laws of all applicable states and acknowledges that the Issuers have no present intention of filing a registration statement under the U.S. Securities Act in respect of any of the Offered Units; and the Offered Units have not been offered to the Investor in the United States, and the individuals making the order to purchase the Offered Units and executing and delivering this Subscription Agreement on behalf of the Investor were not in the United States when the order was placed and this Subscription Agreement was executed and delivered; and it is not a U.S. Person (as defined in Regulation S under the U.S. Securities Act, which definition includes, but is not limited to, an individual resident in the United States, an estate or trust of which any executor or administrator or trustee, respectively, is a U.S. Person and any partnership or corporation organized or incorporated under the laws of the United States) and is not purchasing the Offered Units on behalf of, or for the account or benefit of, a person in the United States or a U.S. Person; and it (and, if applicable, any Disclosed Beneficial Purchaser) undertakes and agrees that it will not offer or sell any of the Offered Units in the United States unless such securities are registered under the U.S. Securities Act and the securities laws of all applicable states of the United States or an exemption from such registration requirements is available and further that it will not resell the Offered Units except in 5

190 Terms and Conditions accordance with the provisions of applicable securities legislation, regulations, rules, policies and orders and stock exchange rules, as applicable; (i) Existence of Investor & Authority to Subscribe: (i) (ii) (iii) (iv) (v) (vi) (vii) if it is a corporation, partnership, unincorporated association or other entity, it has been duly incorporated, formed or created and is valid and subsisting under the laws of the jurisdiction of its incorporation, formation or creation and it has the legal capacity to enter into and be bound by this Subscription Agreement and it further certifies that all necessary approvals of directors, shareholders or otherwise have been given and obtained; and if an individual, it is of the full age of majority and is legally competent to execute this Subscription Agreement and take all action pursuant hereto; and this Subscription Agreement has been duly and validly authorized, executed and delivered by and constitutes a legal, valid, binding and enforceable obligation of the Investor; and in the case of the subscription by it for Offered Units acting as agent for a Disclosed Beneficial Purchaser, it is duly authorized to execute and deliver this Subscription Agreement and all other necessary documentation in connection with such subscription on behalf of such principal and this Subscription Agreement has been duly authorized, executed and delivered by or on behalf of, and constitutes a legal, valid, binding and enforceable agreement, of such principal; and the entering into of this Subscription Agreement and the completion of the transactions contemplated hereby do not and will not result in a violation of any of the terms or provisions of any law applicable to the Offered Units, and if the Investor is not a natural person, any of the Investor s constating documents, or any agreement to which the Investor is a party or by which it is bound; and no authorization, consent, order, approval or notice of any federal, provincial, territorial, municipal or foreign regulatory body or official must be obtained or given, and no waiting period must expire, in order that this Subscription Agreement and the transactions contemplated herein can be consummated by the Investor; and it acknowledges that the Issuers may complete additional financings in the future in order to develop the business of the Issuers and to fund its ongoing development; that there is no assurance that such financings will be available and, if available, on reasonable terms; any such future financings may have a dilutive effect on current securityholders, including the Investor; that if such future financings are not available, the Issuers may be unable to fund its ongoing development; and the lack of capital resources may result in the failure of its business venture; and (j) (k) (l) Further Assurances: if required by applicable securities laws, regulations, rules, policies or orders or by any securities commission, stock exchange or other regulatory authority, the Investor will execute, deliver, file and otherwise assist the Issuers in filing, such reports, undertakings and other documents with respect to the issue of the Offered Units including, without limitation, this duly completed and executed Subscription Agreement and all applicable Schedules; and Investor is not a Control Person: the acquisition of the Offered Units hereunder by the Investor will not result in the Investor becoming a control person, as defined under applicable securities laws; and Independent Legal Advice: (i) (ii) it acknowledges that the Issuers counsel is acting as counsel to the Issuers and not as counsel to the Investor; and the Investor acknowledges that it has had the opportunity to obtain independent legal, income tax and investment advice with respect to its subscription for the Offered Units and accordingly, has had the opportunity to acquire an understanding of the meanings of all terms contained herein relevant to the Investor for purposes of giving representations, warranties and covenants under this Subscription Agreement and the Issuers does not bear any responsibility whatsoever for any such matter; and 6

191 Terms and Conditions (m) Status under Tax Act: the Investor: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) is not a non-resident of Canada for purposes of the Income Tax Act (Canada), together with any and all regulations promulgated thereunder, as amended from time to time (the Tax Act ); and deals at arm s length, within the meaning of the Tax Act, with the Partnership and will continue to deal at arm s length with the Partnership at all material times; and it is not a tax shelter investment within the meaning of the Tax Act; and it has not financed its acquisition of Offered Units with a financing for which recourse is or is deemed to be limited within the meaning of the Tax Act and for the purposes hereof, limited recourse amount means the unpaid principal amount of any indebtedness for which recourse is limited, either immediately or in the future and either absolutely or contingently, and also includes any borrowing which is deemed to be a limited recourse amount. Borrowing will not be deemed to be a limited recourse amount if: bona fide arrangements, evidenced in writing, are made at the time the debt arose for the repayment by the borrower of the principal and interest on the debt within a reasonable period of time, not greater than 10 years; and the debt is not a part of a series of loans and repayments that ends more than 10 years after it begins; and interest on the debt is payable at least annually, and is actually paid no later than 60 days after the end of the borrower s taxation year, at a rate equal or greater than the lesser of: the prescribed interest rate for purposes of the Tax Act in effect at the time when the debt arose; and the prescribed interest rate for purposes of the Tax Act applicable from time to time during the term of the debt; will maintain the status set out in (i), (ii), (iii) and (iv) above during such time as the Offered Units are held; and (n) (o) Covenant of Investor Regarding No Market for Units: the Investor covenants and agrees not to take any actions or steps which are intended to or may result in there being any public market for the Units within the meaning of the Tax Act, including without limitation, any system that supports over-the-counter, private or other trading of the Offered Units; and Legitimate Source of Funds: the funds representing the Aggregate Subscription Price which will be advanced by the Investor to the Issuers hereunder will not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the PCMLA ) or the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (the PATRIOT Act ) and the Investor acknowledges that the Issuers may in the future be required by law to disclose the Investor s name and other information relating to this Subscription Agreement and the Investor s subscription hereunder, on a confidential basis, pursuant to the PCMLA or the PATRIOT Act. To the best of its knowledge: (a) none of the subscription funds to be provided by the Investor: (i) have been or will be derived from or related to any activity that is deemed criminal under the law of Canada, the United States of America, or any other jurisdiction; or (ii) are being tendered on behalf of a person or entity who has not been identified to the Investor; and (b) it shall promptly notify the Issuers if the Investor discovers that any of such representations ceases to be true, and to provide the Issuers with appropriate information in connection therewith. Closing 4. The Investor agrees that this Subscription Agreement (including applicable Schedules) and certified cheque or bank draft payable to Pulis Real Estate Trust or Pulis Real Estate LP 2 (as applicable) for the aggregate subscription price or payment of the same amount in such other manner as is acceptable to the Issuers shall be delivered to Pulis Real Estate Trust and Pulis Real Estate LP 2, Suite 200A, 1 Nelson Street W., Brampton, Ontario L6X 3E4 not later than 4:00 p.m. (Brampton time) on the day that is not less than two business days prior to the applicable Closing Date. The Investor 7

192 Terms and Conditions acknowledges and accepts that the conditions precedent to the closing of this Offering are for its benefit and that the Issuers may waive, in whole or in part, the completion or satisfaction of any of such conditions precedent on behalf of the Investor pursuant to section 11 hereof. 5. If this Subscription Agreement is rejected in whole or in part, the Investor acknowledges that the unused portion of the subscription amount will be promptly returned to it without interest or deduction. 6. The sale of the Offered Units pursuant to this Subscription Agreement will be completed at the Closing Time and the Closing Date(s). 7. The Trust shall be entitled to rely on delivery of a facsimile or electronically scanned (PDF) copy of executed Subscription Agreements, and acceptance by the Issuers of such facsimile or PDF subscriptions shall be legally effective to create a valid and binding agreement between the Investor and the Issuers in accordance with the terms hereof. In addition, this Subscription Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same document. If less than a complete copy of this Subscription Agreement is delivered to the Issuers at the Closing Time, the Issuers shall be entitled to assume that the Investor accepts and agrees with all of the terms and conditions of this Subscription Agreement on the pages not delivered at the Closing Time unaltered. General 8. The Investor agrees that the representations, warranties and covenants of the Investor herein will be true and correct both as of the execution of this Subscription Agreement and as of the Closing Time and will survive the completion of the issuance of the Offered Units. The representations, warranties and covenants of the Investor herein are made with the intent that they be relied upon by the Issuers and their counsel in determining the eligibility of a purchaser of Offered Units and the Investor agrees to indemnify and hold harmless the Issuers and its affiliates, shareholders, directors, trustees, officers, partners, employees and agents (including their respective legal counsel), from and against all losses, claims, costs, expenses and damages or liabilities which any of them may suffer or incur which are caused or arise from a breach thereof. The Investor undertakes to immediately notify the Issuers at Pulis Real Estate Trust and Pulis Real Estate LP 2, Suite 200A, 1 Nelson Street W., Brampton, Ontario L6X 3E4 inquiry@pulisinvestments.com of any change in any statement or other information relating to the Investor set forth herein which takes place prior to the Closing Time. 9. The Investor hereby irrevocably authorizes the Issuers, in their sole discretion: (a) to act as its representative at the Closing and to execute in its name and on its behalf all closing receipts and documents required; (b) to complete or correct any minor errors or omissions in any form or document, including this Subscription Agreement, provided by the Investor; (c) to receive on its behalf certificates representing the Offered Units purchased under this Subscription Agreement; and (d) to approve any opinions, certificates or other documents addressed to the Investor. This power of attorney is irrevocable, is coupled with an interest and has been given for valuable consideration, the receipt and adequacy of which is acknowledged. This power of attorney and other rights and privileges granted under this paragraph 9 will survive any legal or mental incapacity, dissolution, bankruptcy or death of the Investor. This power of attorney extends to the heirs, executors, administrators, other legal representatives and successors, transferees and assigns of the Investor. Any person dealing with the Issuers may conclusively presume and rely upon the fact that any document, instrument or agreement executed by the Issuers pursuant to this power of attorney is authorized and binding on the Investor, without further inquiry. The Investor agrees to be bound by any representations or actions made or taken by the Issuers pursuant to this power of attorney, and waives any and all defences that may be available to contest, negate or disaffirm any action of the Issuers taken in good faith under this power of attorney. 10. The Investor acknowledges that (on its own behalf and, if applicable, on behalf of any Disclosed Beneficial Purchaser): (a) (b) this Subscription Agreement and the Schedules hereto require the Investor to provide certain personal information to the Issuers. Such information is being collected by the Issuers for the purposes of completing the Offering, which includes, without limitation, determining the Investor s or any Disclosed Beneficial Purchaser s eligibility to purchase the Offered Units under applicable securities laws, preparing and registering certificates representing the Securities to be issued to the Investor, if applicable, and completing filings required by any stock exchange or securities regulatory authority; and the Investor s and, if applicable, any Disclosed Beneficial Purchaser s personal information may be disclosed by the Issuers to: (i) stock exchanges or securities regulatory authorities; (ii) the Issuers registrar and transfer agent; and (iii) any of the other parties involved in the Offering, including legal counsel, and may be included in record books in connection with the Offering, and by executing this Subscription Agreement, the Investor (on its own behalf and, if applicable, on behalf of any Disclosed Beneficial Purchaser) is deemed to be consenting to the 8

193 Terms and Conditions foregoing collection, use and disclosure of the Investor s and any Disclosed Beneficial Purchaser s personal information and to the filing of copies or originals of any of the documents as may be required to be filed with any stock exchange or Securities Commissions in connection with the transactions contemplated hereby. 11. The Investor (on its own behalf and, if applicable, on behalf of any Disclosed Beneficial Purchaser) hereby: (a) acknowledges that it has been notified by the Issuers of the delivery to the Securities Commissions of: (i) the full name, residential address, telephone number and address of the Investor; (ii) the date of distribution, number of securities purchased and total purchase price; and (iii) the exemption relied on (including if applicable, the name and position of the director, executive officer, control person or founder with whom the Investor claimed a relationship and whether the Investor is a director, officer, promoter or insider of the Issuers or a registrant); (b) acknowledges that this information is being collected by the Securities Commissions under the authority granted in securities legislation, that this information is being collected for the purposes of the administration and enforcement of the securities legislation of the local jurisdiction; (c) acknowledges that it has been notified by the Issuers of the title, business address and business telephone number of the public official in the local jurisdiction, as set out in this form; and (d) authorizes the indirect collection of the information by the Securities Commissions. Should the Investor have any questions or concerns with respect to the foregoing, the contact information of the public official in the local jurisdiction who can answer such questions or address such concerns about the Securities Commissions indirect collection of personal information is provided below: Alberta Securities Commission Suite 600, 250-5th Street SW Calgary, Alberta T2P 0R4 Telephone: (403) Toll free in Canada: Facsimile: (403) British Columbia Securities Commission P.O. Box 10142, Pacific Centre 701 West Georgia Street Vancouver, British Columbia V7Y 1L2 Toll free in Canada: Facsimile: (604) inquiries@bcsc.bc.ca The Manitoba Securities Commission St. Mary Avenue Winnipeg, Manitoba R3C 4K5 Telephone: (204) Toll free in Manitoba Facsimile: (204) Financial and Consumer Services Commission (New Brunswick) 85 Charlotte Street, Suite 300 Saint John, New Brunswick E2L 2J2 Telephone: (506) Toll free in Canada: Facsimile: (506) info@fcnb.ca Government of Newfoundland and Labrador Financial Services Regulation Division P.O. Box 8700 Confederation Building Office of the Superintendent of Securities Government of Yukon Department of Community Services 307 Black Street, 1st floor Box 2703, C-6 Whitehorse, Yukon Y1A 2C6 Telephone: (867) Facsimile: (867) Securities@gov.yk.ca Government of the Northwest Territories Office of the Superintendent of Securities P.O. Box 1320 Yellowknife, Northwest Territories X1A 2L9 Attention: Deputy Superintendent, Legal & Enforcement Telephone: (867) Facsimile: (867) Nova Scotia Securities Commission Suite 400, 5251 Duke Street Duke Tower P.O. Box 458 Halifax, Nova Scotia B3J 2P8 Telephone: (902) Facsimile: (902) Government of Nunavut Department of Justice Legal Registries Division P.O. Box 1000, Station 570 1st Floor, Brown Building Iqaluit, Nunavut X0A 0H0 Telephone: (867) Facsimile: (867) Ontario Securities Commission 20 Queen Street West, 22nd Floor Toronto, Ontario M5H 3S8 Telephone: (416) Toll free in Canada:

194 Terms and Conditions 2nd Floor, West Block Prince Philip Drive St. John's, Newfoundland and Labrador A1B 4J6 Attention: Director of Securities Telephone: (709) Facsimile: (709) Autorité des marchés financiers 800, Square Victoria, 22e étage C.P. 246, Tour de la Bourse Montréal, Québec H4Z 1G3 Telephone: (514) or Facsimile: (514) (For filing purposes only) Facsimile: (514) (For privacy requests only) (For corporate finance issuers); (For investment fund issuers) Facsimile: (416) Public official contact regarding indirect collection of information: Inquiries Officer Prince Edward Island Securities Office 95 Rochford Street, 4th Floor Shaw Building P.O. Box 2000 Charlottetown, Prince Edward Island C1A 7N8 Telephone: (902) Facsimile: (902) Financial and Consumer Affairs Authority of Saskatchewan Suite Saskatchewan Drive Regina, Saskatchewan S4P 4H2 Telephone: (306) Facsimile: (306) The Investor represents and warrants that it has the authority to provide the consents and acknowledgements set out in Section 10 and 11 on its own behalf and on behalf of all Disclosed Beneficial Purchasers. 13. The obligations of the parties hereunder are subject to acceptance of the terms of the Offering by any required regulatory approvals. 14. The Investor acknowledges and agrees that all costs incurred by the Investor (including any fees and disbursements of any special counsel retained by the Investor) relating to the sale of the Offered Units to the Investor shall be borne by the Investor. 15. The contract arising out of this Subscription Agreement and all documents relating thereto, which by common accord has been or will be drafted in English, shall be governed by and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein. The parties irrevocably attorn to the exclusive jurisdiction of the courts of the Province of Alberta. 16. This Subscription Agreement represents the entire agreement of the parties hereto relating to the subject matter hereof and there are no representations, covenants or other agreements relating to the subject matter hereof except as stated or referred to herein. 17. The terms and provisions of this Subscription Agreement shall be binding upon and enure to the benefit of the Investor and the Issuers and their respective heirs, executors, administrators, successors and assigns; and this Subscription Agreement shall not be assignable by any party without prior written consent of the other parties. 18. The Investor agrees that this subscription is made for valuable consideration and may not be withdrawn, cancelled, terminated or revoked by the Investor, on its own behalf and, if applicable, on behalf of others for whom it is contracting hereunder 19. Subject to section 9, neither this Subscription Agreement nor any provision hereof shall be modified, changed, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought. 20. The invalidity, illegality or unenforceability of any provision of this Subscription Agreement shall not affect the validity, legality or enforceability of any other provision hereof. 10

195 Terms and Conditions 21. The headings used in this Subscription Agreement have been inserted for convenience of reference only and shall not affect the meaning or interpretation of this Subscription Agreement or any provision hereof. 22. The covenants, representations and warranties contained herein shall survive the closing of the transactions contemplated hereby. 23. Time is of the essence hereof. 24. In this Subscription Agreement (including the Schedules attached hereto), references to dollar amounts are to Canadian dollars. 11

196 EXHIBIT B MARKETING MATERIALS [Remainder of page is intentionally blank] B-1

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204 HAYDEN PULIS INVESTMENTS ASSETS REPORT The Hayden Street Property was built in the mid 1960 s. Located at Hayden Street, Hamilton, Ontario, in the Greeningdon community, the Hayden Street Property is within walking distance of the intersection of Mohawk Road and Upper James Street, a large commercial hub in Hamilton and is only a short drive to the Lincoln Alexander Parkway, a major arterial road that runs through Hamilton and connects to both Highway 403 and Queen Elizabeth Way. There are a number of large shopping plazas, entertainment plazas and community centres within one kilometer of the property and access to public transportation is less than a one kilometer walk away. Hamilton, Ontario Hamilton is the ninth-largest regional economy in Canada. Not only does it offer a significant job market in administrative and industrial positions, it is home to a rapidly growing medical research sector that is looking to take the city by storm. Hamilton is upgrading its public transportation by adding a new rapid transit system and expanding its GO Transit services to Toronto. Hamilton is now a viable option for commuters to Toronto and the GTA especially given the cost of rental housing in Toronto. The Property The Hayden apartment complex consists of twin three-story brick buildings. Each building is comprised of 17 two-bedroom, one-bathroom units complete with private balconies for a total of 34 units. The property was acquired in April of 2016 for $3.3 Million.

205 HAYDEN SIMPLIFIED FINANCIAL MODEL PURCHASE PRICE: $3,320, Renovation Cost: $1,000, TOTAL COST: $4,320, DOWNPAYMENT: $996, MORTGAGE: $2,324, Renovation Cost: $1,000, RENT - YEAR 1 MAY JUNE JULY AUG SEPT OCT $25, $24, $23, $24, $25, $25, NOV DEC JAN FEB MAR APR $26, $26, $27, $27, $28, $29, RENT - YEAR 2 Year 1 Annual Total $314, ORIGINAL RENT $770.00/month POST RENO RENT $1,350.00/month MAY JUNE JULY AUG SEPT OCT $29, $30, $30, $31, $31, $32, NOV DEC JAN FEB MAR APR $33, $33, $34, $34, $35, $36, Year 2 Annual Total $394, ORIGINAL MAX INCOME $314, NEW VALUE $7,275, ( 5.25% CAP Rate Assumption ) 175% Max Income Appreciation POST RENO MAX INCOME $550, NET EQUITY APPRECIATION $2,955, RENT - YEAR 3 MAY JUNE JULY AUG SEPT OCT $36, $37, $ 37, $38, $ 38, $39, NOV DEC JAN FEB MAR APR Year 3 Annual Total $ 40, $ 40, $ 41, $ 41, $ 43, $ 44, $480, This model contains forward-looking information and is for illustrative purposes only and is not to be relied upon as a projection of actual financial performance of the asset. Rather, it simply demonstrates the potential changes to potential maximum income generation throughout the renovation process. In reality, the renovation of an asset does not occur in a linear or consistent manner. Vacancy rates (which are set at a rolling 3 units in this model) can fluctuate significantly, and the pace of renovation could occur more rapidly, or more slowly as a result. Future value projections are based on assumptions, including current appraisals for similar performing assets in the Hamilton market and may materially differ from actual future value. There is no assurance that the projections in this model will be realized and there are risk factors, including real estate and financing risks, that may cause actual results to vary materially from this model, which are summarized in the Offering Memorandum. This information is current to October 27, In certain Canadian jurisdictions (other than British Columbia, Alberta and Quebec) this brochure may be deemed to be an offering memorandum. If an offering memorandum contains a misrepresentation, you may have statutory rights to sue for damages or rescission of your investment depending on the law of your jurisdiction. These rights can be lost if your do not commence your claim within certain limitation periods. For more information regarding your rights, refer to the Offering Memorandum available from Pulis Investments and securities legislation and consult with a lawyer.

206 YORK ROAD PULIS INVESTMENTS ASSETS REPORT The York Road Property was built in the mid 1960 s. Located at 89, York Road, Hamilton, Ontario, in the quiet bedroom community of Dundas, the York Road Property is a five-minute drive from west Hamilton and numerous commercial shopping and entertainment plazas and is only a short walk from downtown Dundas, which is home to numerous food and entertainment options. The property is located approximately three kilometers from the Lincoln Alexander Parkway, a major arterial road that runs through Hamilton and connects to both Highway 403 and Queen Elizabeth Way and is only a short bike or bus ride from McMaster University. Nearby parks include the Dundas Driving Park and the Dundas Driving Park Pool. Hamilton, Ontario Hamilton is the ninth-largest regional economy in Canada. Not only does it offer a significant job market in administrative and industrial positions, it is home to a rapidly growing medical research sector that is looking to take the city by storm. Hamilton is upgrading its public transportation by adding a new rapid transit system and expanding its GO Transit services to Toronto. Hamilton is now a viable option for commuters to Toronto and the GTA especially given the cost of rental housing in Toronto.

207 PURCHASE PRICE: $3,900, Renovation Cost: $1,000, TOTAL COST: $4,900, DOWNPAYMENT: $975, MORTGAGE: $2,925, Renovation Cost: $1,000, YORK ROAD SIMPLIFIED FINANCIAL MODEL RENT - YEAR 1 MAY JUNE JULY AUG SEPT OCT $27, $26, $26, $25, $26, $26, NOV DEC JAN FEB MAR APR $27, $27, $28, $29, $29, $30, RENT - YEAR 2 Year 1 Annual Total $332, ORIGINAL RENT $930.00/month POST RENO RENT $1,500.00/month MAY JUNE JULY AUG SEPT OCT $30, $31, $31, $32, $33, $33, NOV DEC JAN FEB MAR APR $34, $34, $35, $35, $36, $37, Year 2 Annual Total $407, ORIGINAL MAX INCOME $379, NEW VALUE $7,300, ( 5.25% CAP Rate Assumption ) 61% Max Income Appreciation POST RENO MAX INCOME $612, NET EQUITY APPRECIATION $2,400, RENT - YEAR 3 MAY JUNE JULY AUG SEPT OCT $37, $38, $ 38, $39, $ 39, $40, NOV DEC JAN FEB MAR APR Year 3 Annual Total $ 42, $ 43, $ 45, $ 45, $ 45, $ 45, $499, This model contains forward-looking information and is for illustrative purposes only and is not to be relied upon as a projection of actual financial performance of the asset. Rather, it simply demonstrates the potential changes to potential maximum income generation throughout the renovation process. In reality, the renovation of an asset does not occur in a linear or consistent manner. Vacancy rates (which are set at a rolling 3 units in this model) can fluctuate significantly, and the pace of renovation could occur more rapidly, or more slowly as a result. Future value projections are based on assumptions, including current appraisals for similar performing assets in the Hamilton market and may materially differ from actual future value. There is no assurance that the projections in this model will be realized and there are risk factors, including real estate and financing risks, that may cause actual results to vary materially from this model, which are summarized in the Offering Memorandum. This information is current to October 27, In certain Canadian jurisdictions (other than British Columbia, Alberta and Quebec) this brochure may be deemed to be an offering memorandum. If an offering memorandum contains a misrepresentation, you may have statutory rights to sue for damages or rescission of your investment depending on the law of your jurisdiction. These rights can be lost if your do not commence your claim within certain limitation periods. For more information regarding your rights, refer to the Offering Memorandum available from Pulis Investments and securities legislation and consult with a lawyer.

208

209 Disclaimer This document is an interest seeking document only. IT IS NOT ADVICE. IT IS AN OPINION BY THE AUTHORS AND/OR PRESENTERS. No information, forward looking statements, or estimations represent any final determination. While every effort has been made to ensure accuracy in this presentation, numbers are subject to change and are not guaranteed. This document is for general information purposes only and is not to be construed as selling securities or real estate. While the information presented in this investor document has been researched and thought to be reasonable, in general, real estate investment is highly speculative, real estate values can go up but they can also go down, and thus PULIS INVESTMENTS, PARTNERS AND/OR THEIR AGENTS CANNOT AND DO NOT GUARANTEE ANY RATE OF RETURN OR INVESTED AMOUNT ORINVESTMENT TIMELINE. The reader acknowledges and agrees that Pulis Investments, their directors, officers, partners and/or their agents do not assume and hereby disclaim any liability to any party for any loss or damage caused by the use of the information contained herein or errors or omissions in the information contained in this investor document to make any investment decision in the venture referred to herein, whether such errors or omissions result from negligence, accident or any other cause. Targeted returns are not guaranteed and are subject to performance assumptions and risk factors, including real estate and financing risks that are summarized in the Offering Memorandum, which may cause actual results to vary materially. Any forwardlooking statements herein are subject to the assumptions and risk factors stated in the Offering Memorandum. Investors are required to conduct their own investigations, analysis, due diligence, draw their own conclusions, and make their own decisions. Any areas concerning taxes or specific legal or technical situations should be referred to lawyers, accountants, consultants, realtors, or other professionals licensed, qualified or authorized to render such advice. IN NO EVENT SHALL PULIS INVESTMENTS AND/OR THEIR AGENTS BE LIABLE TO ANY PARTY FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER ARISING OUT OF THE USE OF THE INFORMATION CONTAINED HEREIN EVEN IF PULIS INVESTMENTS AND/OR THEIR AGENTS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. PULIS INVESTMENTS, THEIR PARTNERS AND/OR ITS AGENTS SPECIFICALLY DISCLAIM ANY GUARANTEES, INCLUDING, BUT NOT LIMITED TO, STATED OR IMPLIED POTENTIAL PROFITS OR RATES OF RETURN OR INVESTMENT TIMELINES. This is not a solicitation for investments. Investments are sold only to investors that qualify under applicable prospectus exemptions. Please read disclosure and/or due diligence documents carefully. This offering is void where prohibited. Not every potentially interested party is eligible to invest. Minimum investment amounts and hold periods apply. E & OE.

210 The Multi-Family Advantage Building Valuation Not based on the Housing Real Estate Market Property Value is measured like a business Revenue - Expenses = Profit Easy to finance Economies of Scale

211 The Pulis Advantage

212 Experienced Management Brian Pulis Co-Founder and CEO Internal Operations, Finance, Sales & Marketing Successful Business Owner / since 1984 Accomplished Real Estate Investor & Business Coach Real Estate Investment Network (REIN) member & Advisor Numerous industry Awards: Michael Millenaar Memorial Leadership Award (2009) REIN Top Player Award (2010 & 2012) & Top Ten Award (2008) Kyle Pulis Co-Founder and President External Operations - Acquisitions, Project/Property Management Over 12 years of senior real estate experience Honours Business degree Wilfrid Laurier University Executive Board member -Brampton Downtown Development Corporation Canadian Army Reserves ( ) Real Estate Investment Network (REIN) member & Advisor

213 How We Keep It Simple 3 KEY DRIVERS 1. Focused model 2. Limited competition 3. No outsourcing Boots on the ground

214 Pulis Business Strategy Defining the ideal tenant profile Young professionals, years old Appreciative of modern and attractive living spaces Protective of credit

215 Pulis Business Strategy Identify Cities that will Experience Above-Average Growth Transition and redevelopment Strong GDP growth Net new jobs Increase in wages Strong political and economic synergies

216 Pulis Business Strategy Locate & acquire under-valued, under-managed multi-family properties Seminar graduates that realize managing tenants is a lot more difficult then expected Long time owners who have not made necessary improvements

217 Pulis Business Strategy Rehabilitate property Needs analysis to determine renovation plan Modern and attractive upgrades Crown molding, puck lights, laminate flooring Upgrade / repair building s mechanical system where needed

218 Pulis Business Strategy Maximize property Efficiency Needs assessment to increase building efficiency LED light fixtures, low flow toilets and water fixtures etc. Upgrade condition of windows, weather stripping and Boiler efficiency Can realize as much as 15% to 30% decrease in utility expenses

219 Implement Tenant Focused Management Pulis Business Strategy Employ a proactive approach to building maintenance Open good lines of communication with the tenants Clearly define expectations for both tenants and property management Have firm but fair policies and procedures

220 Pulis Business Strategy Re-finance & Re-invest cash After renovations are complete, assess the opportunity of refinancing the property and reinvesting the funds Are other projects available? How much money can be refinanced? Will this help generate a higher ROI?

221 Portfolio Assets HAYDEN, HAMILTON, ON (34 UNITS)

222 Portfolio Assets HAYDEN, HAMILTON, ON (34 UNITS)

223 Portfolio Assets YORK ROAD, HAMILTON, ON (30 UNITS)