CONFIDENTIAL OFFERING MEMORANDUM

March 16, 2010 The Issuer: GenCap Equity #12 Limited Partnership (the Partnership or the Issuer) 200, 3115 - 12th Street, N.E., Calgary, Alberta, T2E 7J2 Telephone: (403) 984-1290 Fax: (403) 266-0746 E-mail address: info@gencap.ca No. These securities do not trade on any exchange or market. No. No.

Currently listed or quoted: Reporting Issuer: SEDAR filer: The Offering: Securities Offered: Price per Security:

Class A Limited Partnership units (the Units). The price of the Units has been arbitrarily determined by the Issuer: Early Bird Special until April 30, 2010 Unit Price = $980.00. After April 30, 2010 Unit Price = $1,000.00.

Minimum Purchase:

Minimum subscription of $10,000.00 (10 Units) and increments of $1,000.00 (1 Unit) thereafter except at the discretion of the General Partner (Minimum Subscription through a Tax Free Savings Account is $5,000.00 (5 Units)). See Item 5.1 Terms of Securities. $0.00. As there is no minimum offering, you may be the only purchaser. $9,500,000.00 (9,500 Units), plus 10% (950 Units) over-allotment option. Funds available under the Offering may not be sufficient to accomplish our proposed objectives. Certified cheque, bank draft, money order or other form of guaranteed funds payable to Miller Thomson LLP (in trust), for GenCap Equity #12 Limited Partnership on the Closing Date. See Item 5.2 Subscription Procedure. Initial Closing Date is contemplated to be on March 26, 2010 with subsequent closing dates on such later dates as may be approved by the General Partner, in its sole discretion.

Minimum Offering: Maximum Offering: Payment Terms:

Proposed Closing Date(s):

Tax Consequences: Selling Agent:

There are important tax consequences to these securities. Consequences and RRSP Eligibility.

See Item 6 - Income Tax

The Partnership intends to retain the services of a selling agent, and, if an agent is duly engaged, a commission of up to eight (8%) percent. In addition, a management consulting fee of up to six (6%) percent and a marketing administration fee of up to two (2%) percent may be paid by the Partnership. See Item 7 Compensation Paid to Sellers and Finders. You will not be able to sell these securities except in very limited circumstances. You may never be able to resell these securities. See Item 10 - Resale Restrictions. You have 2 Business Days to cancel your agreement to purchase these securities. If there is a misrepresentation in this Offering Memorandum you have the right to sue either for damages or to cancel the agreement. See Item 11 Purchasers Rights.

Resale Restrictions: Purchasers Rights

No securities regulatory authority 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. You could lose all the money you invest. See Item 8 Risk Factors. This Offering Memorandum constitutes an offering of securities only in those jurisdictions and to those persons to whom they may be lawfully offered for sale. This Offering Memorandum is not, and under no circumstances is to be construed as, a prospectus or advertisement or a public offering of these securities. This Offering Memorandum is for the confidential use of only those persons to whom it is transmitted in connection with this Offering. By their acceptance of this Offering Memorandum, recipients agree that they will not transmit, reproduce or make available to anyone, other than their professional advisors, this Offering Memorandum or any information contained herein. No person has been authorized to give any information or to make any representation not contained in this Offering Memorandum. Any such information or representation which is given or received must not be relied upon
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TABLE OF CONTENTS

ITEM 1 1.1 1.2 1.3

USE OF AVAILABLE FUNDS ...................................................................................... 4

Available Funds........................................................................................................................................ 4 Use of Available Funds............................................................................................................................. 5 Reallocation ............................................................................................................................................. 6

ITEM 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7

BUSINESS OF THE PARTNERSHIP ............................................................................ 6

Structure................................................................................................................................................... 6 Business of the Partnership ....................................................................................................................... 7 Development of the Business .................................................................................................................. 10 Long-Term Objectives of the Partnership ................................................................................................ 10 Short Term Objectives of the Partnership ................................................................................................ 10 Insufficient Funds................................................................................................................................... 10 Material Agreements .............................................................................................................................. 11

ITEM 3 3.1 3.2 3.3 3.4

DIRECTORS, MANAGEMENT, PROMOTERS AND PRINCIPAL HOLDERS ......... 20

Compensation and Securities Held .......................................................................................................... 20 Management Experience......................................................................................................................... 21 Penalties, Sanctions and Bankruptcy ....................................................................................................... 22 Loans ..................................................................................................................................................... 22

ITEM 4 4.1 4.2 4.3

CAPITAL STRUCTURE .............................................................................................. 22

Partnership Capital ................................................................................................................................. 22 Long Term Debt ..................................................................................................................................... 23 Prior Sales .............................................................................................................................................. 23

ITEM 5 5.1 5.2 5.3 5.4 5.5

DESCRIPTION OF SECURITIES OFFERED .............................................................. 23

Terms of Securities................................................................................................................................. 23 Subscription Procedure ........................................................................................................................... 23 Admission of Additional Limited Partners............................................................................................... 24 Capital Contributions.............................................................................................................................. 24 Sale by Non-Registered Exempt Market Dealers after March 27, 2010 .................................................... 24

ITEM 6 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11

INCOME TAX CONSEQUENCES AND RRSP ELIGIBILITY ................................... 25

Canadian Federal Income Tax Considerations ......................................................................................... 25 Taxation of Distributions of Publicly Traded Partnerships and Trusts ...................................................... 26 Computation of Income of Limited Partners............................................................................................ 26 Proposed Loss Limitation Rule ............................................................................................................... 26 At-Risk Rules ......................................................................................................................................... 26 Adjusted Cost Base of Units ................................................................................................................... 27 Disposition of Units by Limited Partners................................................................................................. 27 Alternative Minimum Tax....................................................................................................................... 27 Dissolution of the Partnership ................................................................................................................. 28 Filing Requirements................................................................................................................................ 28 Eligibility for Investment ........................................................................................................................ 28

ITEM 7 ITEM 8 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10

COMPENSATION PAID TO SELLERS AND FINDERS ............................................ 28 RISK FACTORS........................................................................................................... 28

Highly Speculative ................................................................................................................................. 28 Limited Ability to Liquidate Investment.................................................................................................. 28 Default on Indebtedness.......................................................................................................................... 28 Potential for Conflict of Interest.............................................................................................................. 29 Risks of Real Property Development and Ownership............................................................................... 29 Rezoning May Be Unsuccessful .............................................................................................................. 29 Competition............................................................................................................................................ 29 Environmental Matters............................................................................................................................ 29 Financing ............................................................................................................................................... 29 General Real Estate Risks ....................................................................................................................... 29 - ii -

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8.11 8.12 8.13 8.14 8.15 8.16 8.17 8.18 8.19 8.20

Market Risks .......................................................................................................................................... 30 No Operating History.............................................................................................................................. 30 Reliance on Management........................................................................................................................ 30 Tax Aspects............................................................................................................................................ 30 Units Not Insured ................................................................................................................................... 30 Unit Price ............................................................................................................................................... 30 Lack of Independent Experts Representing the Unitholders ..................................................................... 30 Major Asset ............................................................................................................................................ 31 Debt Financing ....................................................................................................................................... 31 Interest Rate Fluctuations........................................................................................................................ 31

ITEM 9 ITEM 10 10.1 10.2

REPORTING OBLIGATIONS ..................................................................................... 31 RESALE RESTRICTIONS ........................................................................................... 31

Statutory Restrictions on Resale.............................................................................................................. 31 Contractual Resale Restrictions............................................................................................................... 31

ITEM 11 11.1 11.2 11.3 11.4

PURCHASERS RIGHTS............................................................................................. 32
Alberta and Saskatchewan ...................................................................................................................... 32 British Columbia .................................................................................................................................... 32 Manitoba ................................................................................................................................................ 33 Ontario................................................................................................................................................... 33

ITEM 12 ITEM 13 -

FINANCIAL STATEMENTS ....................................................................................... 34 DATE AND CERTIFICATE......................................................................................... 42

LEGAL DESCRIPTION OF LANDS OWNED BY 1312163 AB LTD. LEGAL DESCRIPTION OF THE OPTION LANDS MAPS AND INFORMATION ON THE PINE LAKE LANDS LIMITED PARTNERSHIP AGREEMENT PROJECT MANAGEMENT AGREEMENT SUBSCRIPTION AGREEMENT

SCHEDULE A SCHEDULE B SCHEDULE C SCHEDULE D SCHEDULE E SCHEDULE F

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NOTE REGARDING FORWARD LOOKING STATEMENTS

THIS OFFERING MEMORANDUM CONTAINS FORWARD-LOOKING STATEMENTS. THESE STATEMENTS RELATE TO FUTURE EVENTS OR THE CORPORATIONS FUTURE PERFORMANCE. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT ARE FORWARD LOOKING STATEMENTS. FORWARD LOOKING STATEMENTS ARE OFTEN, BUT NOT ALWAYS, IDENTIFIED BY THE USE OF WORDS SUCH AS MAY, WILL, SHOULD, EXPECT, PLAN, ANTICIPATE, BELIEVE, ESTIMATE, PREDICT, POTENTIAL, TARGETING, INTEND, COULD, MIGHT, CONTINUE, OR THE NEGATIVE OF THESE TERMS OR OTHER COMPARABLE TERMINOLOGY. THESE STATEMENTS ARE ONLY PREDICTIONS. IN ADDITION, THIS OFFERING MEMORANDUM MAY CONTAIN FORWARD-LOOKING STATEMENTS ATTRIBUTED TO THIRD PARTY INDUSTRY SOURCES. UNDUE RELIANCE SHOULD NOT BE PLACED ON THESE FORWARD-LOOKING STATEMENTS AS THERE CAN BE NO ASSURANCE THAT THE PLANS, INTENTIONS OR EXPECTATIONS UPON WHICH THEY ARE BASED WILL OCCUR. BY ITS NATURE, FORWARD-LOOKING INFORMATION INVOLVES NUMEROUS ASSUMPTIONS, KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES, BOTH GENERAL AND SPECIFIC, THAT CONTRIBUTE TO THE POSSIBILITY THAT THE PREDICTIONS, FORECASTS, PROJECTIONS AND OTHER FORWARD LOOKING STATEMENTS WILL NOT OCCUR AND MAY CAUSE ACTUAL RESULTS OR EVENTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SUCH FORWARD-LOOKING STATEMENTS. THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS OFFERING MEMORANDUM ARE EXPRESSLY QUALIFIED BY THIS CAUTIONARY STATEMENT. THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS OFFERING MEMORANDUM. THE CORPORATION IS NOT UNDER ANY DUTY TO UPDATE ANY OF THE FORWARD-LOOKING STATEMENTS AFTER THE DATE OF THIS OFFERING MEMORANDUM TO CONFORM SUCH STATEMENTS TO ACTUAL RESULTS OR TO CHANGES IN THE CORPORATIONS EXPECTATIONS EXCEPT AS OTHERWISE REQUIRED BY APPLICABLE LEGISLATION. THE RISKS AND UNCERTAINTIES ATTRIBUTABLE TO THESE FORWARD-LOOKING STATEMENTS MAY ADVERSELY AFFECT THE DISTRIBUTIONS TO BE MADE ON, OR THE RATE OF RETURN ON, THE UNITS. SOME OF THESE ARE DISCUSSED ITEM 8 RISK FACTORS. YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS, IN ADDITION TO THE OTHER INFORMATION PROVIDED HEREIN OR BY THE PARTNERSHIP.

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GLOSSARY OF TERMS
In this Offering Memorandum, unless the context otherwise requires, the following words and terms shall have the indicated meanings and grammatical variations of such words and terms shall have corresponding meanings: Accountants means an independent firm of Chartered Accountants appointed by the General Partner as accountants for the Partnership for the time being, whether or not such firm of chartered accountants is regularly retained by the General Partner or any affiliated entity. has the meaning defined in NI 45-106. means taking raw lands from unzoned, primary agricultural use, into complete residential and commercial developments, as set forth in section 2.2.1. means a budget prepared each year by the General Partner for the development of the Pine Lake Lands. means the principal bank of the General Partner, from time to time. means the business of the Partnership from time to time, including holding of the Lands, and holding, operating or disposing of, as the case may be, monies, assets and property received by the Partnership in the ordinary course of business. means any day other than a day which is a Saturday, a Sunday or a day on which banks in Calgary, Alberta are generally not open for business. means the certificate of limited partnership for the Partnership filed under the Partnership Act (Alberta) and all amendments thereto and renewals or replacements thereof. means the day or days upon which the Units are issued to the Subscribers pursuant to this Offering. means the Closing of the Offering, with the Initial Closing Date contemplated to be on March 26, 2010, with subsequent closing dates on such later dates as may be approved by the General Partner, in its sole discretion. in respect of any Unit means at any time the capital contributed or deemed to be contributed by the holder of such Unit, or by any predecessors in respect of such Unit, less distributions of Distributable Cash, as reflected in the Partnerships capital accounts as determined by the Accountants. means all costs related to GenCap Equity #12 Limited Partnerships Project, including land costs, offering costs, project soft and hard cost, marketing and financing costs. For greater certainty development costs is the amount of total cost used to determine the net profits of the Partnership. means all receipts received by the Partnership including the sale of any portion of the Pine Lake Lands and any financing proceeds, net of all allowable deductions relating to such receipts including, without limitation, sales and marketing, legal fees, appraisal fees and commitment fees less any amounts the General Partner deemed prudent to be held for future payments which may come due in relation to the working capital requirements and future operating expenses of the Partnership. means April 30, 2010. means a subscriber who acquires Units on or before April 30, 2010.

Accredited Investor(s) Added Value Concept Annual Budget Bank Business

Business Day Certificate of Limited Partnership Closing Closing Date

Contributed Capital

Development Costs

Distributable Cash

Early Bird Date Early Bird Purchaser

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Expenses

means all reasonable costs incurred by the General Partner or its designees or subcontractors in the performance of its duties under the Partnership Agreement, including costs and expenses of the directors, costs associated with the Business of the General Partner in acting as a general partner of the Partnership, including, without limitation, costs specifically incurred for the benefit of the Partnership, including salaries and benefits payable to employees of the General Partner and costs associated with the holding of Partners meetings and professional fees, but specifically excluding expenses of any action, suit or other proceeding in which, or in relation to which, the General Partner is adjudged to be in breach of any duty or responsibility imposed upon the General Partner under the Partnership Agreement. means any mortgage financing by the Partnership in respect of the Pine Lake Lands or any renewal, extension or increase in respect of such mortgage financing. means the Canadian generally accepted accounting principles consistently applied. means 1519848 Alberta Ltd., an Alberta corporation. means GenCap Equity Inc. in respect of any Fiscal Year, means, respectively, the amount of income or loss of the Partnership for such period determined by the General Partner in accordance with GAAP consistently applied, including the amount of gain or loss from the disposition of each capital property of the Partnership, and after deducting Expenses. means the Income Tax Act (Canada) and the regulations thereunder, as amended from time to time. means March 26, 2010, or such other date determined by the General Partner. means the Lands Owned by 1312163 AB Ltd. and the Option Lands, which, collectively, comprise the Project (as defined below), consisting of those lands more specifically set out in Schedule A, B and C hereto and any such additional lands as may be acquired by the General Partner on behalf of the Partnership from time to time. means the three (3) parcels of waterfront land currently owned by 1312163 AB Ltd. comprising of approximately 93.36 acres located in Pine Lake, Red Deer County, Alberta, as further described in Schedules A and C attached hereto. means all Persons who shall have been admitted to the Partnership as a limited partner of the Partnership and Limited Partner means any one of them. means 9,500 Units ($9,500,000), plus 10% (950 Units) over-allotment option at the discretion of the General Partner. means National Instrument 31-103 Registration Requirements. means National Instrument 45-102 Resale of Securities. means National Instrument 45-106 Prospectus and Registration Exemptions. means related Persons within the meaning of the Tax Act. means the offering of the Units described herein or in any amendment hereto. means this confidential offering memorandum dated March 16, 2010, including any amendment hereto. means the 40.38 acres of waterfront land which 1312163 AB Ltd. currently has an option to purchase, as legally described in Schedules B and C attached hereto.

Financing GAAP General Partner GenCap Equity Income or Loss

Tax Act Initial Closing Date Lands or Pine Lake Lands

Lands Owned by 1312163 AB Ltd. Limited Partners Maximum Offering NI 31-103 NI 45-102 NI 45-106 Non-Arms-Length Parties Offering Offering Memorandum Option Lands

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Ordinary Resolution

means a resolution approved by more than one-half of the votes cast by those Limited Partners who vote, and are entitled to vote, in person or by proxy on such resolution at a duly constituted meeting of the Limited Partners or at any adjournment thereof called in accordance with the Partnership Agreement or a written resolution signed in one or more counterparts by Limited Partners holding Units which, in aggregate, have attached thereto more than one-half of the total number of votes attaching to all Units which are entitled to vote on such resolution. means 10% (950 Units) additional Units that the General Partner may, in its sole discretion, issue under this Offering. means the General Partner and the Limited Partners and Partner means any one of them. means GenCap Equity #12 Limited Partnership, a limited partnership formed on February 26, 2010 pursuant to the Partnership Act (Alberta). means the limited partnership agreement dated effective as of February 26, 2010 setting out the manner in which the Partnership will be governed, to be entered into between the General Partner and each of the Limited Partners, as summarized in Item 2 Business of the Partnership. means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity however designated or constituted. means business of the Partnership to: (i) acquire the Lands; (ii) earn income from the sale of the Lands; (iii) increase the equity of the Limited Partners through Rezoning and applying the Added Value Concept to the Lands; and (iv) conduct any other business or activity incidental, ancillary or related thereto. means the General Partner or such successor, assignor or replacement project manager for the management of the Project pursuant to the provisions contained in the Project Management Agreement. means an agreement to be entered into between the Partnership and the Project Manager for the day-to-day management, operations, completion and sale of the Project. The General Partner, acting as Project Manager, in its sole discretion may subcontract or assign any of the rights, duties and obligations of the Project Manager to a third party. with respect to a Unit at any time means the proportion that (i) the balance at such time of the Contributed Capital in respect of such Unit, is to (ii) the aggregate balance of the Contributed Capital in respect of all Units outstanding at such time. means the register the General Partner shall prepare and maintain which shall include, without limitation, the names and addresses of the Limited Partners and the Units of the Limited Partners, as may be amended from time to time. means resident in Canada for the purposes of the Tax Act. means rezoning the Pine Lake Lands by the County from its current land use designation from agricultural to residential, recreational or commercial and any combination thereof, so that the Pine Lake Lands may be developed. means the Securities Act (Alberta), including the rules and regulations promulgated thereunder, as may be amended from time to time.

Over-Allotment Option Partners Partnership Partnership Agreement

Person

Project or Pine Lake Project

Project Manager

Project Management Agreement

Proportionate Interest

Register

Resident Rezone, Rezoning or Land Use Approvals Securities Act

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Special Resolution

means a resolution approved by not less than 65% of the votes cast by those Limited Partners who vote, and are entitled to vote, in person or by proxy, on such resolution at a duly constituted meeting of the Limited Partners or at any adjournment thereof called in accordance with the Partnership Agreement or a written resolution in one or more counterparts signed by Limited Partners holding Units which in aggregate have attached thereto not less than 65% of the total number of votes attaching to all Units which are entitled to vote on such resolution. means $1,000.00 per Unit (or $980.00 in the case of the Early Bird purchasers). For the purposes of the calculations in the Offering Memorandum the Subscription Price will mean $1,000.00 per Unit. means those Person(s) subscribing for Units pursuant to this Offering. means an agreement between the General Partner and each Limited Partner governing the subscription for Units in the Partnership pursuant to this Offering Memorandum and includes all the terms, conditions and exhibits attached thereto, as contained in Schedule F. means the Income Tax Act (Canada), as amended. means Class A Units offered by the Partnership pursuant to this Offering Memorandum. means 1312163 Alberta Ltd., the current owner of the 3 parcels of Land and the current optionee on the Option Land.

Subscription Price

Subscriber(s), Unitholder(s) or Class A Unitholder(s) Subscription Agreement

Tax Act Units 1312163 AB Ltd. or Vendor

In this Offering Memorandum, references to dollars and $ are to the currency of Canada, unless otherwise indicated. ITEM 1 USE OF AVAILABLE FUNDS

The following tables set forth the available funds from this Offering. The use of available funds reflects the intentions of the Issuer based on information presently available, on current circumstances and economics, and may be subject to change in the discretion of the Issuer. It is the current intention of the Partnership that the available funds of this Offering will be used to: (a) (b) pay the costs of this Offering, including any commission paid to a registered dealer, financial advisor or sales person; provide funds for the Partnership to acquire the Lands from 1312163 AB Ltd., as described in Section 2.2 Business of the Partnership, and pay the costs required to Rezone the Lands, including but not limited to: engineering, and planning services needed to obtain Area Structure Plan or Community Plan approvals and land use re-designation; and provide working capital to the Partnership to allow the General Partner and the Limited Partnership to complete their obligations.

(c)

The Issuer believes that the amount of $9,500,000.00 will be sufficient to accomplish its goals. However, the Issuer has put in place the Over-Allotment Option of an additional $950,000.00 that it may require in the event of any cost over-runs or time delays, that did not anticipate as of the date of this Offering Memorandum. The General Partner will have the right, in its sole discretion, to determine if the additional $950,000.00 will be raised. 1.1 Available Funds Assuming Minimum Offering A. B. Amount to be raised by the Offering Selling commissions and fees
(2)

Assuming Maximum Offering(1) $9,500,000.00 $760,000.00

$0.00 $0.00

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C.1 C.2 C.3 D E F G

Notes: (1) (2)

Marketing Administration Fees(3) Marketing Consultant Fees

(4)

$0.00 $0.00 $0.00 $0.00

(5)

$190,000.00 $570,000.00 $200,000.00 $7,780,000.00 $0.00 $0.00 $7,780,000.00

Estimated offering costs (eg. legal, accounting, audit) Available funds: D = A (B + C) Additional sources of funding required Working capital deficiency Total proceeds available: H = (D + E) F

$0.00 $0.00 $0.00

Not including the Over-Allotment Option and the calculations are based upon an issue price of $1,000.00 per Unit. The Partnership has not engaged a registered dealer to assist in the sale of this Offering. A registered dealer, financial advisor or sales person, however, may be engaged as an agent of the Partnership in connection with the distribution of the Units. A commission of up to 8% of the gross proceeds, expected to be up to $760,000.00 if the Maximum Offering is achieved, could be paid to agents/sales persons The Marketing Administration Fee of up to 2% of the gross proceeds, which could be $190,000.00 if the Maximum Offering is achieved, may be paid to certain registered dealer, financial advisor or sales person, at the discretion of GenCap Equity. See Section 2.7.6 The GenCap Equity Management Agreement. The Marketing Consulting Fee of up to 6% of the gross proceeds, expected to be $570,000.00 if the Maximum Offering is achieved, will be paid to GenCap Equity. The Marketing Consulting Fee covers management and administration of sales staff, training programs, on-going research and support for sales staff, providing direct administrative support to sales staff including but not limited to: financial planning offices general administration, assistance in organizing subscription documents, providing manpower support at all seminars and public forums (trade shows), providing for commission sales agents to give after sales service in the form of organizing client meetings to review progress, directing and answering client enquiries during and after the completion of the Offering, as well as any general management, administrative and client services support as specified by the Partnership. See Section 2.7.6 The GenCap Equity Management Agreement. While it is not contemplated that the Partnership will require any mortgage financing to acquire the Lands, mortgage financing may have to be used to complete the Partnerships obligations. In particular, mortgage financing may be used to lower carrying costs or to cover expenses, which will be paid back from funds raised under this Offering

(3)

(4)

(5)

1.2

Use of Available Funds Assuming Minimum Offering $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Assuming Maximum Offering $3,757,560.00 $3,157,660.00 $300,000.00 $188,000.00 $396,780.00 $7,780,000.00

Description of intended use of available funds listed in order of priority

Purchase of the Owned Lands(1) Purchase of the Option Lands(2) Engineering Expenses(3) Project Management Fee to the General Partner(4) Working Capital(5) Total
Notes: (1) (2) (3)

Funds applied to the Purchase Price of the Owned Lands. See Section 2.7.3 The Purchase and Sale Agreement. Funds applied to the Purchase Price of the Option Lands. See Section 2.7.4 The Purchase and Sale Agreement. The Engineering Expenses are those costs related to the Rezoning of the Pine Lake Lands which consist of obtaining area structure (community) plan approvals, land use re-designation, subdivision approvals and negotiating development agreement approvals of the Pine Lake Lands. The Partnership is responsible for the general and administrative costs incurred by the General Partner in addition to the Project Management Fee as set forth in the Management Agreement. See Section 2.7.6 The Project Management Agreement.

(4)

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(5)

The Working Capital will be used to cover any unforeseen contingencies expenses, such as any carrying costs of any mortgage financing. In addition, the Working Capital will be used to cover any added costs associated with the tasks required in Rezoning the Lands and in implementing the Added Value Concept not already covered in the Engineering Expenses calculations, as well as general and administrative costs for the ongoing operation of the Partnership.

1.3

Reallocation

The Partnership intends to use the available funds as stated. The Partnership will reallocate funds only for sound business reasons. ITEM 2 2.1 BUSINESS OF THE PARTNERSHIP Structure

GenCap Equity #12 is a limited partnership formed under the laws of the Province of Alberta on February 26, 2010 pursuant to the Partnership Act (Alberta) for the sole purpose of acquiring and Rezoning the Pine Lake Lands. The records, registered office of the Partnership is 3000, 700 9th Avenue S.W., Calgary, Alberta T2P 3V4. The business office of the Partnership is located at #200, 3115 12th Street N.E., Calgary, Alberta T2E 7J2. The affairs of the Partnership will be managed by the General Partner pursuant to the provisions of the Limited Partnership Agreement, a copy of which is attached to this Offering Memorandum as Schedule D. The Partnership is a newly formed partnership and has not conducted any business. The General Partner The General Partner was duly incorporated on February 23, 2010, under the Business Corporations Act (Alberta) to manage the business and affairs of the Partnership. The Partnership has been formed to: (i) acquire the Lands; (ii) earn income from the sale of the Lands; (iii) increase the equity of the Limited Partners through Rezoning the Lands; and (iv) conduct any other business or activity incidental, ancillary or related thereto (collectively referred to as the Project or the Pine Lake Project). Limited Partnership Structure The structure of the Partnership is as follows:

Figure 1 GenCap Equity #12 Limited Partnership Structure -64036261.11

2.2

Business of the Partnership

The Partnership was established to generate capital appreciation and profit through applying the Added Value Concept on Pine Lake Lands purchased by the Partnership up to the stage of Land Use (Rezoning) Approvals. The Added Value Concept is described in section 2.2.1. The Partnership does not currently own any properties. It intends to use the majority of the available funds of the Offering to acquire the Lands. The Partnership has no operating history except as described below. Either the Partnership or the General Partner will retain the services of GenCap Equity and any planning and engineering consultants it considers necessary to assist with the Business of the Partnership, especially in the application of the Added Value Concept. The General Partner, on behalf of the Partnership, may enter into a joint venture or other type of business relationship, with a planning or engineering company to achieve the Added Value Concept goal. In addition to the application of the Added Value Concept and any other activities set forth herein, the Partnership may be involved in: (a) (b) acquiring, holding, transferring, disposing of, investing in, and otherwise dealing with assets, and other interests or properties of whatever nature or kind of, or issued by, any entity; temporarily holding cash and other investments in connection with and for the purposes of the Partnerships activities, including paying liabilities of the Partnership (including marketing, administration and sales expenses), repayment of deposits on Lands acquired by the Partnership made by the General Partner or the Project Manager and/or its affiliates, paying any amounts required in connection with the redemption of Units and making distributions to Unitholders; disposing of any part of the Lands or mortgaging, pledging, charging, granting a security interest in or otherwise encumbering all or any part of the Lands; repurchasing or redeeming Units, subject to the provisions of the Limited Partnership Agreement and applicable law; carrying out any transactions, and entering into and exercising and performing any of the rights and obligations of the Partnership under any agreements entered into in connection with pursuing the business and purposes of the Partnership; and engaging in all activities ancillary or incidental to any of the activities set forth above.

(c) (d) (e)

(f)

Once Land Use Approvals have been obtained for the Lands, the Lands (or any portion thereof) may be sold to a third party purchaser and the profits divided as set forth in the Partnership Agreement, as further explained in this Offering Memorandum. 2.2.1 Added Value Concept The value of land adjacent to or in close proximity to a municipality or a recreational attraction such as a lake is subject to market and political forces that can transform the land from raw primary agricultural land to a residential, recreational, commercial, or industrial development. Resources used to implement the Added Value Concept include, but are not limited to: (a) (b) planning and engineering contractors that will draft the required pre-development plans and obtain approvals for statutory plans such as community (area structure) plans; and develop master plan community layouts for land use or rezoning approvals, which include taking into account offsite utilities and transportation considerations.

In the transformation from raw primary (agricultural) land to residential communities, commercial, recreational, or industrial developments, there are a number of stages which the lands go through in the pre-development process. Accomplishing each of these stages results in increased land value, hence the concept of Added Value. The magnitude of Added Value varies with market conditions. There are various stages of Pre-development in which land increases in value due to shortening the time frame to commence community development (residential or commercial). These stages are summarized as follows: (a) (b) Raw unzoned agricultural land; Area Structure Plan or Community Plan civic or municipal policy document outlining the skeleton or basis for future development; and

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(c)

Land Use, Rezoning and Outline Plans Rezoning allows for change of use on land (from agriculture to a specific application such as residential, industrial, recreational, or commercial use), where as an outline plan details the specific arrangement of the application (such as a street layout in a community). Usually, the two plans are overlaid one on top of another.

The Added Value Concept is illustrated in Figure 2. The Partnership will participate in the Added Value Concept up to the completion of the pre-development stage (through to the approval of land use (Rezoning)).

Figure 2 The Added Value Concept The Vendor has been working with Williams Engineering Canada Inc. (formerly A.D. Williams Engineering Inc.) and Al-Terra Engineering Ltd. since the summer of 2007 on the surveys, plans and reports that are required to complete the application for the subdivision of the Pine Lake Lands. It is estimated that the Vendor has spend approximately $165,000.00 on such engineering and planning reports which include, without limitation, Topographical Survey, Biophysical Report, outline Plan and Servicing Report, Preliminary Concept Plan and Sewer Treatment Study (the Engineering and Planning Reports). Accordingly, the Added Value Concept and process is well under way with the Pine Lake Lands. It is not the intention of the Partnership to participate in the development servicing stage of the Added Value Concept, as the intent of the Partnership is to utilize equity capital (the proceeds of the Offering) only to acquire the Lands and to take the Lands through to the Land Use Approval (or Rezoning) stage of the Added Value Concept. The Partnership would then have the option of selling all or portions of the Lands. The Partnership may choose to sell the Lands or take the Lands through the development servicing stage of the Added Value Concept, including securing development agreements and approvals for sub-division plans, utilizing its own financing sources and providing its own financial covenants and guarantees. 2.2.2 Valuation of Lands - Appraisal The Partnership will use the following in determining the Fair Market Value of the Lands: The General Partner will retain an independent third party real estate appraisal firm (the Appraisal). Copies of Appraisals will be available for viewing at the office of the Issuer: #220, 3115 12th Street N.E., Calgary, Alberta T2E 7J2. The Appraisal determines the market value of the Lands, based on certain critical assumptions. In the Appraisal, market value is defined as the most probable price which a property should bring in a competitive and open market as of the specified date under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (a) buyer and seller are typically motivated; (b) both parties are well informed or well advised and acting in what they consider their best interests; (c) a reasonable time is allowed for exposure in the open market;

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(d) payment is made in terms of cash in Canadian dollars or in terms of financial arrangements comparable thereto; and (e) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. In conducting its Appraisal, the General Partner or the Partnership will ensure that the third party appraiser will utilize the Direct Comparison Approach and the Subdivision Development Approach to estimate the market values of the components of the Lands. The steps for application of the Direct Comparison Approach (the value indicated by comparison to recent sales or offerings of similar properties) are: (a) search the market for recent sales or current offerings of properties that are similar to the one being appraised; (b) record pertinent information on each of the comparable properties; (c) compare each property to the one being appraised, making adjustments for such features as location, size (land and/or building), age, condition, quality, which would reflect value judgements made by participants in the market; and (d) reconcile the sales/listings information into an indicator of property value. 2.2.3 Strategic Location of the Lands The Partnership will be acquiring the Lands in the strategic location where it is believed that the Added Value Concept can be well utilized. The following section provide background on this strategic location. PINE LAKE, ALBERTA Location: SE of Red Deer, Alberta 1 hours from Calgary 1 hours from Edmonton hour from Red Deer

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Lake Information Pine Lake, located southeast of Red Deer, Alberta, is a small lake in a rich rolling agricultural area with a watershed of about 120 square kilometres. It is located in the Aspen Parklands Region of Alberta, rich in aspen woodlands. With just over 18 kilometres of shoreline this 6.5 kilometres long lake is a popular fishing and recreational boating destination. Average water depth is 12.2 meters. This beautiful lake is home to many summer and full time residents, cottages around the lake shore and is fed by streams and intermittent creeks during the spring runoff and after rain storms. Water level is maintained by aquifers and the natural water table. In the last 40 years, the average lake fluctuation from spring to fall has been 40 centimetres. The Pine Lake Lands The Pine Lake Lands consists of 4 parcels, approximately 133 acres in total, located at the south end of Pine Lake. The land contains over 1 kilometre of shoreline and boarders on Ghostpine Creek. Maps outlining the 4 parcels of land that make up the Pine Lake Project are attached hereto as Schedule C. 2.3 Development of the Business The Partnership is a newly formed limited partnership under the Partnership Act (Alberta). The Partnership was established to invest in the Pine Lake Lands and create value by applying the Added Value Concept on the Lands up to the stage of Land Use (Rezoning) Approvals. The Partnership intends to use the available funds from the Offering to acquire the Pine Lake Lands. While it is the intent of the Partnership to only use equity raised to purchase the Lands, the Partnership may use short-term debt financing or it might assume the mortgages of 1312163 AB Ltd. or execute vendor take back mortgages to complete the purchase of the Lands. The Partnership will use the available funds raised from the Offering to pay down debt or, if required, it may sell certain portion of the Lands to eliminate debt financing. In the event that the Partnership fails for any reason to pay costs, charges, expenses or liability associated with the Lands when the same becomes due and payable, the General Partner may, but is not obligated to, cover the shortfall. This debt will bear interest at commercially reasonable rate until repaid from funds raised. The General Partner will be entitled to register a security interest against the property of the Partnership as security for the above debt. 2.4 Long-Term Objectives of the Partnership The long-term objectives of the Partnership are to successfully complete the rezoning of the Lands using the Added Value Concept. Upon the successful Rezoning, the objective will be to sell the Lands to a third party purchaser to return the Contributed Capital to the Unitholders and divide the profits between the General Partner and all of the Unitholders as set forth in the Partnership Agreement. 2.5 Short Term Objectives of the Partnership What We Do and How We Do It Successfully complete the raising of the funds set out in the Offering Complete the purchase and transfer of title to the Lands Continue the engineering and planning required to Rezone the Lands 2.6 Insufficient Funds Target Completion Date or, if not known, Number of Months to Complete December 31, 2011 December 31, 2011 Ongoing, until the Land is successfully Rezoned

The available funds of the Offering may not be sufficient to accomplish all of the Issuers proposed objectives, in particular to acquire the Lands. In the event of a shortfall, the General Partner will attempt to acquire alternative financing, such as a mortgage on the Lands, to complete the transaction. There is no assurance that such alternative financing will be available.

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2.7 2.7.1

Material Agreements General

The following summarizes all material agreements and the material clauses therein, to which the Partnership or the General Partner is currently or proposed to be party to and any material agreements existing or proposed with a related party. Subscribers should have these agreements reviewed by their own independent legal advisors and should not rely solely on the following summary: (a) (b) The Partnership Agreement dated February 26, 2010 (see summary below in Paragraph 2.7.2 The Partnership Agreement); Purchase and Sale Agreement between the General Partner, on behalf of the Partnership, and 1312163 AB Ltd. dated February 26, 2010 to purchase the 3 parcels of land currently owned by 1312163 AB Ltd. (see summary below in Paragraph 2.7.3 The Purchase and Sale Agreement); Assignment and Assumption Agreement between the General Partner, on behalf of the Partnership, and 1312163 AB Ltd. and the Vendors (defined below) dated effective February 26, 2010 assuming 1312163 AB Ltd.s option to purchase the Option Lands (see summary below in Paragraph 2.7.4 The Option to Purchase Agreement); Project Management Agreement entered into between the Partnership and the General Partner dated February 26, 2010 for the day-to-day management, operations, completion and sale of the Project (see summary below in Paragraph 2.7.5 The Project Management Agreement); Management Agreement between the General Partner, on behalf of the Partnership, and GenCap Equity Inc. dated February 26, 2010 to manage the marketing and sales of the Units pursuant to the Offering and the administration for the Partnership and the Project (see summary below in Paragraph 2.7.6 The GenCap Equity Management Agreement). The Partnership Agreement

(c)

(d)

(e)

2.7.2

The Partnership Agreement creates the Partnership and is the definitive agreement through which the Limited Partners shall obtain their Units. The Partnership Agreement has an effective date of February 26, 2010, entered into, as between the General Partner and James Perks, as the initial limited partner (the Initial Limited Partner). A Certificate of Limited Partnership was filed on February 26, 2010, under the Partnership Act (Alberta). The right of the Partners to receive the allocations of profits and losses among the Partners, the issuance of Units and the requirements related to capital contributions, limitations on withdrawal from the Partnership, restrictions with respect to transfers of the Units, the management of the Partnership by the General Partner, the right of the Limited Partners to vote on or consent to certain matters with respect to the Partnership, the events causing the dissolution and liquidation of the Partnership, and the distribution of the Partnerships assets upon such dissolution, as well as additional terms and conditions of the Units and rights, powers, duties and obligations of the Limited Partners, are set forth in detail in the Partnership Agreement. Below is only a summary of certain provisions of the Partnership Agreement. That summary is qualified in its entirety by reference to the Partnership Agreement and the General Partner encourages all Limited Partners to fully review the Partnership Agreement, which is available for review by any Limited Partner or prospective Subscriber. All terms not defined in this section shall have the meaning attributed thereto in the Partnership Agreement (see Schedule D). Management The authority and power is vested in the General Partner to manage, control and operate the business and affairs of the Partnership, including all authority necessary or incidental to carry out the objects, purposes and business of the Partnership. Title to the Partnerships assets will generally, but not necessarily, be held in the name of the General Partner, for and on behalf of the Partnership. The General Partner is accountable to the Partnership as a fiduciary and consequently must exercise good faith and integrity in managing the business of the Partnership and act in utmost fairness towards the Partners. The General Partner is required to act with respect to the property of the Partnership for the benefit of the Partnership. The Partnership Agreement provides that the General Partner will not be liable for damages to the Partnership or the Partners for any mistakes or errors in judgement or any act or omission believed in good faith to be within the scope of authority conferred by the Partnership Agreement, except for gross negligence or wilful misconduct. The General Partner is entitled to be reimbursed by the Partnership for all reasonable costs and expenses incurred by the General Partner for the account of or on behalf of the Partnership. See below under Allocation of Income and

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Loss. In addition, the General Partner is entitled to be paid by the Partnership for services related to conducting the business of the Partnership. No Limited Partner is permitted to take part in the management of the business of the Partnership. The Partnership Act (Alberta) provides that in order to preserve its limited liability a Limited Partner must not take part in the control of the business of the Partnership. See below under Limited Liability of Limited Partners. Limited Partnership Units The Partnership is authorized to issue a maximum of 10,450 Units, inclusive of the 10% (950 Units) overallotment option, pursuant to the terms and conditions of the partnership Agreement. Each Unit will confer upon the owner the same rights and obligations as the ownership of any other Unit. Admission of Additional Limited Partners The Partnership Agreement provides for the admission of additional Partners, on subscription terms to be established by the General Partner, effective upon the filing and recording of an amendment to the Certificate of Limited Partnership. The General Partner may, in its discretion, refuse to accept a subscription for Units in whole or in part. Capital Contributions Each Partner, other than the Initial Limited Partner, will be required to contribute to the capital of the Partnership a $1,000.00 per Unit. It was determined by the General Partner that the Early Bird special of $980.00 per Unit would be extended from March 31, 2010, as set out in the Partnership Agreement, to April 30, 2010. A Notice to Amend the Certificate of Limited Partnership was filed with Alberta Registries on March 16, 2010 reflecting the extension of the Early Bird Date. In order to establish the Partnership, the Initial Limited Partner, was issued one Unit for the sum of $100. Upon one or more other Persons becoming Partners, the Initial Limited Partner will receive $100 back from the Partnership as a return of the Contributed Capital and the interest of the Initial Limited Partner in the Partnership will be cancelled. Financing Acquisition of Units Limited Partners may not finance any portion of the Subscription Price with borrowing that would be a limitedrecourse amount for purposes of the Tax Act. A 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 limitedrecourse amount if: (a) 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; (i) (ii) the debt may not be 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 borrowers taxation year, at a rate equal to or greater than the lesser of: (A) (B) Partners A Person who subscribes for or purchases a Unit does not become a Partner in the Partnership and is not entitled to any of the rights of a Partner or to share in any allocations or distributions, until that Person is accepted as a Partner by the General Partner and named in the Certificate of Limited Partnership with respect to the Partnership. The General Partner has agreed to cause the Certificate of Limited Partnership with respect to the Partnership to be amended from time to time as required to reflect the admission of additional and substituted Partners to the Partnership. the prescribed interest rate for tax purposes in effect at the time when the debt arose; and the prescribed interest rate for tax purposes applicable from time to time during the term of the debt.

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Allocation and Distributions of Income and Losses (a) Distributions of Distributable Cash shall be made by the Partnership from time to time at the discretion of the General Partner, but in any event all Distributable Cash shall be distributed at or prior to the dissolution of the Partnership. All distributions of Distributable Cash to the Partners shall be made in the following order of priority and in all cases without duplication: (i) (ii) First, payment of all interest and principal due under any Financings of the Partnership for the Project; Second, repayment of all Project Management Fees due to the General Partner pursuant to the terms and conditions of the Project Management Agreement, as provided for under this Agreement; Third, a cumulative amount of twelve (12%) percent per annum (the 12% Payment) shall be paid to the Class A Unitholders from the date of the issuance of the Unit until the earlier of either of the following: (A) (B) the return of their Contributed Capital; or March 31, 2013.

(b)

(iii)

In the event that subsection (b)(iii)(A) occurs, the 12% Payment shall be classified as an interest payment. In the event that subsection (b)(iii)(B) occurs, the General Partner shall have the option to classify the 12% Payment as either an interest payment or the return of Contributed Capital, whichever results in greater tax advantage, under the Tax Act, for the Class A Unitholders at the time of distribution. Also, in the event that subsection (b)(iii)(B) occurs and the 12% Payment is classified as a return of Contributed Capital, the Class A Unitholders shall still be entitled to a 12% interest Payment when the remainder of their Contributed Capital is returned to them, pursuant to this Agreement. The distribution to be made under this subsection shall occur one hundred and twenty (120) days after the earlier event set forth above; (iv) Fourth, one hundred (100%) percent to the Class A Unitholders until each of the Class A Unitholders has received cash, in an amount equal to their respective Contributed Capital (plus the additional 12% interest Payment, if applicable); Fifth, thereafter, either: (A) in the event that the Class A Unitholders have not had their Contributed Capital returned, as set forth in subsection (b)(iii)(B) on or before March 31, 2013, the balance of any Distributable Cash shall be distributed as follows: (I) fifty (50%) percent to the Class A Unitholders, to be shared among them in accordance with their Proportionate Interests, which shall be reduced by one (1%) percent for each $104,500 of Contributed Capital returned to the Class A Unitholders (not including the 12% Payment, if it is classified as the return of Contributed Capital); and fifty (50%) percent to the General Partner, which holds one (1) Class B Unit. The above percentage shall be increased by one (1%) percentage for each $104,500 of their Contributed Capital that is returned to the Class A Unitholders, as set forth in the above clause;

(v)

(II)

or: (B) in the event that the Class A Unitholders have had their Contributed Capital returned, as set forth in subsection (b)(iii)(B) on or before March 31, 2013, the balance of any Distributable Cash shall be distributed as follows: (I) One Hundred (100%) percent to the General Partner, which holds one (1) Class B Unit. - 13 4036261.11

In the event of the insolvency of the Partnership, Partners may in certain circumstances be required to repay certain of the distributions made to them by the Partnership. See Limited Liability of Partners. Limited Liability of Partners The General Partner has unlimited liability for the debts, liabilities and obligations of the Partnership to the extent that they exceed the assets of the Partnership. The liability of a Limited Partner with respect to activities of the Partnership is limited to the amount of Contributed Capital the Limited Partner contributes or agrees to contribute to the capital of the Partnership, the Limited Partners share of profits and other compensation by way of income and its share of the Partnerships other assets. The Partnership Act (Alberta) provides that in order to preserve its limited liability a Limited Partner must not take part in the control of the business of the Partnership. A Limited Partner may be held liable as a general partner if the Limited Partner is a party to a certificate under the Partnership Act (Alberta) which contains a false statement. In all cases other than the possible loss of the limited liability as outlined above, no Limited Partner will be obligated to pay any assessment on or with respect to the Units held or subscribed for by him other than the subscription price for such Units. However, the Limited Partners and the General Partner may be bound to return to the Partnership an amount distributed to them, together with interest, if, after the distribution, the assets of the Partnership do not exceed the liabilities of the Partnership. Transfer of Units A Unit may be transferred by the holder, subject to the terms of the Partnership Agreement and the right of first refusal provided therein, by executing and having the assignee execute and deliver to the General Partner a transfer form and any applicable fees together with his certificate evidencing his Unit(s). The assignee will not become a Partner until his name is entered in the Certificate of Limited Partnership with respect to the Partnership. No assignment of a fractional Unit may be made. The General Partner is prohibited from recording the transfer of less than one Unit. There is no market for the Units and there is no assurance that any market will develop. See Item 8 Risk Factors. Powers of the General Partner 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 Partners and the Partnership and shall, in discharging its duties, exercise the degree of care, skill and diligence that a reasonably prudent manager 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 Partners by Special Resolution. The General Partner cannot dissolve the Partnership, wind-up its affairs, or effect a sale or other disposition of its assets, except in accordance with the provisions of the Partnership Agreement. Under the Partnership Agreement, without the approval of the Limited Partners, the General Partner may: (a) to prepare the Annual Budget; (i) (ii) (iii) (iv) generally operate, manage, control and carry on the business of the Partnership; retain or act as Registrar and Transfer Agent in respect of the Units; retain the Accountants; engage such legal counsel and architects, engineers, planners, surveyors, tax advisors and such professional or other advisors, as the General Partner considers advisable in order to perform its duties hereunder; prepare and file, on behalf of the Partnership, the appropriate documentation pursuant to applicable securities legislation relating to the offer and sale of the Units; open and operate in the name of the Partnership or the General Partner a separate bank account in order to deposit and to distribute funds with respect to the Partnership; execute and carry out all agreements which require execution by or on behalf of the Partnership in order to complete the admission of the Unit holders as Limited Partners, and thereafter all other agreements which may from time to time require execution by or on behalf of the Partnership for any purpose whatsoever;

(v) (vi) (vii)

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(viii) (ix)

pay all taxes, fees and other expenses relating to the orderly operation of the business of the Partnership; commence or defend on behalf of the Partnership any and all actions and other proceedings brought by or against the Partnership, the Project or the Lands and to, in its discretion, settle on such terms as it deems advisable all such actions, and to consent to a judgment against the Partnership; determine and place, or cause to be placed, the amount and type of insurance coverage to be maintained, if available, in order to protect the General Partner and the Partnership and its business from all usual perils of the type covered for comparable property and in compliance with the requirements of the lenders of funds to the Partnership; determine the amount, if any, to be claimed by the Partnership in any year in respect of capital cost allowance and initial services incurred by the Partnership; hold the Partnership assets in the name of the Partnership or the General Partner or in the name of a nominee chosen by the General Partner; invest funds not immediately required for the business of the Partnership in short-term securities of, or guaranteed by, the government of Canada, the government of any Canadian province or a Canadian chartered bank; execute any and all other deeds, documents and instruments and do all acts as may be necessary or desirable to carry out the intent and purpose of this Agreement, including, without limitation, retaining any qualified Persons to carry out any of the foregoing and entering into, and performing on behalf of the Partnership or causing the Partnership to perform its obligations under such deeds, documents and instruments and in respect of any Financing or Sale; enter into leases or other similar agreements in respect of the Lands, in accordance with the Annual Budget; obtain and provide to the Limited Partners all financial and other statements as to the Partnership and its business as are required to complete filing of returns pursuant to the Tax Act; take all actions necessary and execute any and all documents and instruments in order to acquire the beneficial ownership of the Lands on behalf of the Partnership; borrow in the name of and on behalf of the Partnership from banks, financial institutions or other third parties and to grant charges, security interests or other encumbrances against the assets of the Partnership, including the Lands, as security therefore, for expenditures necessary for the efficient operation of the business of the Partnership, including if approved by a Special Resolution of the Partnership, for the purposes of refinancing all or part of any mortgage now or hereafter granted in respect of the Lands. The General Partner may also agree without any resolution to amend the terms of any mortgages against the Lands of the Partnership including, without limitation, extending the maturity or amending the interest rate thereof, so long as such amendment or extension is in the best interests of the Partnership; employ all Persons necessary for the conduct of the business of the Partnership; enter into a Project Management Agreement with Partnership to act as the Project Manager all aspects of the Project including the day-to-day management, operations, completion and sale of the Project. The General Partner, acting as Project Manager, in its sole discretion may subcontract or assign any of the rights, duties and obligations of the Project Manager to a third party; and to generally do all things ancillary to these purposes.

(x)

(xi) (xii) (xiii)

(xiv)

(xv) (xvi) (xvii) (xviii)

(xix) (xx)

(xxi)

The officers of the General Partner shall devote such time and effort to the Business as may be necessary to promote adequately the interests of the Partnership and the mutual interests of the Partners. Change, Resignation or Removal of General Partner The General Partner is entitled to resign as the General Partner of the Partnership at any time, provided the General Partner has provided ninety (90) days notice. In such case the resignation will be effective on the appointment of a

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new general partner. Upon bankruptcy, insolvency, dissolution, liquidation or winding up of the Partnership, the General Partner will be deemed to have resigned. The Partners are entitled to remove the General Partner by Special Resolution at any time where the General Partner is in default of a material obligation under the Partnership Agreement. Such a resolution may not be voted on by the General Partner, its affiliates, its associates or their directors and officers at any time where the General Partner is in default of a material obligation under the Partnership Agreement. Accounting and Reporting to the Limited Partners The Partnerships fiscal period will end on December 31. The General Partner will forward to the Partners an annual Notice to Reader financial statements of the Partnership together with a statement of Partnership income information return or other documents required by Canada Revenue Agency within ninety (90) days after the end of each calendar year. The cost of preparing all such reports will be a Partnership expense. Each Limited Partner will be solely responsible for filing its income tax returns and reporting its share of the Partnership income or loss. The General Partner must keep adequate books and records of the business of the Partnership. A Partner has the right to inspect the books and records of the Partnership in accordance with the Partnership Agreement. Notwithstanding the foregoing, a Limited Partner will not have access to any information which, in the reasonable opinion of the General Partner, should be kept confidential in the interests of the Partnership. As a result, the Limited Partner would not be provided access to information the disclosure of which, in the reasonable opinion of the General Partner, would be detrimental to the Partnership for competitive reasons. Meetings Meetings may be called at any time by the General Partner and the General Partner will call a meeting of the Limited Partners on receipt of a written request from the Limited Partners representing not less than 25% of the outstanding Units. Notice shall be mailed not less than ten (10) days or more than twenty-one (21) before each meeting. Meetings are to be held at a place reasonably designated by the General Partner. A Partner may attend a meeting of the Partnership in person or by proxy or, in the case of a corporation, by a representative. At any meeting of the Partnership, the presence in person or by proxy of the holders of the Units representing not less than 35% of the votes then attached to the outstanding Units shall be necessary to constitute a quorum. Voting Rights Each Partner is entitled to one vote for each Unit held. Restrictions on Certain Transactions by General Partner The General Partner may not take any action with respect to the Lands of the Partnership which is not for the benefit of the Partnership. Where services are supplied to the Partnership by the General Partner or an affiliate, the cost of such services to the Partnership shall not exceed the fair market value thereof. The Power of Attorney The Subscription and Power of Attorney Form and the Transfer Form required to be executed by a Subscriber or a transferee of a Unit, respectively, include an irrevocable power of attorney authorizing the General Partner on behalf of the Limited Partner to execute, under seal or otherwise, any instrument, deed or document required in carrying on the business of the Partnership as authorized by the Partnership Agreement, to attend to certain formalities required to record changes in the ownership of Units and amendments to the Partnership Agreement to maintain the good standing of the Partnership, to make elections or designations under tax statutes and to apply for government incentives. The power of attorney does not include the authority to transfer a Partners interest in Units (except where a Partner has become a non-resident of Canada) or to execute any proxy on behalf of any Partner or to vote on behalf of any Partner. Amendments The General Partner may, without prior notice to or consent from any Limited Partner, amend any provisions of the Partnership Agreement from time to time: (a) for the purpose of adding, amending or deleting provisions of the Partnership Agreement which addition, amendment or deletion is, in the opinion of counsel to the Partnership for the protection of or otherwise to the benefit of the Limited Partners; (i) to cure an ambiguity or to correct or supplement any provisions contained herein which, in the opinion of counsel to the Partnership, may be defective or inconsistent with any other provisions

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contained herein, provided the cure, correction or supplemental provision does not and will not adversely affect the interests of Limited Partners; (ii) to make such other provisions in regard to matters or questions arising under the Partnership Agreement which, in the opinion of counsel to the Partnership, do not and will not adversely affect the interests of the Limited Partners; or to make such amendments or deletions to take into account the effect of any change in, amendment of or repeal of any applicable legislation, which amendments, in the opinion of counsel to the Partnership, do not and will not adversely affect the interests of the Limited Partners.

(iii)

The Partnership Agreement may otherwise be amended in writing or at the initiative of the General Partner with the approval of the Limited Partners given by Special Resolution. Dissolution of the Partnership The Partnership will be dissolved upon any one of the following events or dates: (a) the passage of a Special Resolution approving the dissolution or winding-up of the Partnership where the General Partner consents to such dissolution; (i) (ii) (iii) December 31, 2018; the removal or resignation of the General Partner unless the General Partner is replaced as provided herein or in the resolution removing the General Partner; or the sale by the Partnership of all of its assets.

Distribution Upon Liquidation Upon dissolution of the Partnership, the assets of the Partnership will be liquidated and the proceeds distributed as follows: (a) to pay any costs involved in the sale of the assets of the Partnership; (i) (ii) (iii) (iv) Term The Partnership will carry on business until it is dissolved on December 31, 2018, or such other date as is provided for in the Partnership Agreement. 2.7.3 The Purchase and Sale Agreement Purchase and Sale Agreement between the General Partner, on behalf of the Partnership, and 1312163 AB Ltd. dated effective February 26, 2010, to purchase the Owned Lands. The Purchase Price for the Owned Lands is $3,757,560.00, plus GST if applicable, which is to be paid as follows: (a) (b) (c) (d) an initial deposit of $50,000.00 to be paid on or before April 1, 2010; a second deposit of $50,000.00 to be paid on or before April 15, 2010; partial payment of $1,785,750.00 to be paid on or before November 1, 2010 (Partial Payment of the Purchase Price), or such later date as agreed by the Vendor; and balance of the Purchase Price of $1,871,810 to be paid by way of cash and/or an assumption of the current mortgages registered against title. Currently there are three mortgages registered against the Option Lands, with the collective principal amount of $1,694,000.00 owing (the Mortgages). to pay off Financings; to pay all of the other liabilities of the Partnership as required by law (including expenses incurred in the winding up of the Partnership); to establish such reserves as the General Partner considers necessary for contingent liabilities; and to distribute the balance to the General Partner and to the Limited Partners in accordance with the Partnership Agreement.

(collectively the Deposits)

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Pursuant to the Purchase and Sale Agreement, the Partnership will assume the liabilities as mortgagee under the Mortgages effective February 1, 2010, including the monthly payments in the amount of $18,399.58 per month. The monthly mortgage payments are interest only payments and will not reduce the Purchase Price of the Owned Lands. Within Ten (10) business days of the date of the Purchase and Sale Agreement, the Vendor is to deliver to the Partnership all the Engineering and Planning Reports applicable to the Pine Lake Lands (defined above). The closing of the purchase and sale of the Owned Lands, and the transfer of title, shall occur upon the earlier of either the assumption of the Mortgages and payment of the Deposits and the Partial Payment of the Purchase Price or 14 days prior to the due date for any of the Mortgages (if they have not been assumed and can not be renewed). 2.7.4 The Option to Purchase Agreement 1312163 AB Ltd. executed an offer to purchase with Alexander L. Barker and Tracie Ann Barker (the Vendors) dated September 14, 2007, and amendment dated April 7, 2009 to acquire the Option Lands for the purchase price of $3,038,160.00 (the Option to Purchase Agreement). A deposit of $10,000 was paid on or before September 19, 2007 (the First Deposit). The second deposit of $240,000 was paid on November 30, 2007 (the Second Deposit). Pursuant to the Option to Purchase Agreement, 1312163 AB Ltd. has been making payments on the Vendors ATB Financial Mortgage Loans registered against the title to the land. This is to occur until either the Option Lands Closing Date (and the payments will be applied to the purchase price) or 1312163 AB Ltd. terminates the Option to Purchase Agreement as its due diligence condition is not waived (and the payments will be forfeited). These payments commenced on December 1, 2007 and are in the amount of $3,574.00 per month. As of the date of this Offering, approximately $92,940.00 has been paid (the Third Deposit). The purchaser will have until November 30, 2010 to conduct the required due diligence on the Option Lands, which includes the Rezoning and development applications. The closing date is set for November 30, 2010 (the Option Lands Closing Date). At anytime the purchaser may give the Vendors six (6) months notice to move the Option Lands Closing Date forward. On October 2, 2007 1312163 AB Ltd. registered a caveat against title notifying its purchasers interest. The General Partner, on behalf of the Partnership, will attend to the transfer of the caveat or, in the alternative, register a new caveat. 1312163 AB Ltd. and the General Partner, on behalf of the Partnership, and the Vendors have entered into an Assignment and Assumption Agreement dated effective February 26, 2010 (the Assignment Agreement). Pursuant to the Assignment Agreement the Partnership is to assume all of 1312163 AB Ltd.s obligations under the Option to Purchase Agreement, including the monthly payments. In addition, the Partnership is to reimburse 1312163 AB Ltd. for the three deposits that have been paid, all carrying costs, and any engineering and planning expenses, up to the date of the Assignment Agreement. The amount to be paid to 1312163 AB Ltd. shall be approximately $442,440 for the Assignment Agreement, of which $49,500.00 is attributed to the Engineering and Planning Reports that are allocated to the Lands (which have been completed up to the date of the Assignment Agreement) and $50,000.00 additional costs incurred by 1312163 AB Ltd. (up to the date of the Assignment Agreement). Accordingly, $342,920.00 will be applied to the reduction of the purchase price. Based upon the forgoing, the Partnership will be paying approximately $3,137,660.00, plus GST and any adjustments, if applicable, for the Option Lands. In the event that the Partnership has not raised enough funds by the Option Closing Date, the General Partner, on behalf of the Partnership, may look at either of the following options: extend the Option to Purchase Agreement with the Vendors and continue to make the monthly mortgage payments or obtain mortgage financing to close on the purchase. It is the Issuers intention to try and have the Option Lands Rezoned, or the Rezoning process well under way, by the time that it is required to close the purchase of the Option Lands. Notwithstanding the foregoing, if the General Partner can not negotiate an extension, then they will have to close on the purchase on the Option Lands Closing Date. 2.7.5 Project Management Agreement Project Management Agreement The Partnership has agreed to enter into a Project Management Agreement between the Partnership and the General Partner as Project Manager for the day-to-day management, operations, completion and sale of the Pine Lake Project (the Project Management Services).

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Project Management Services The Project Management Services include, without limitation: (i) (ii) (iii) complete the purchase of the Pine Lake Lands, including assisting with raising funds and obtaining mortgage financing, where required; defining the requirements of the Pine Lake Project; develop timeline objectives for accomplishing specific approvals required in connection with the Pine Lake Project, recognizing the indefinite nature of County approvals and natural market forces which would have an impact on approval timing; determine the required resources to undertake the process and obtain County approvals, including identifying both the required services, including without limitation, any engineering and planning services, as well as a selection of suitable candidates to conduct these services, and decisions with regards to which candidates to use; evaluate the performance of each service provider on an ongoing basis and provide a summary on a quarterly basis; providing day to day business supervision as required of any Key Personnel; approving of the annual budget, any marketing or research, as necessary and as required from time to time; accounting for all revenues and expenditures of the Business in accordance with generally accepted accounting principles; filing all income and sales tax returns and reports and tax withholdings under the Income Tax Act (Canada) and provincial taxing statutes and any amendments thereto; attending to all banking matters at any institutions where the Limited Partnership regularly banks; reviewing and forecasting certain aspects of the Business in order to maximize profitability; and such other services as may be reasonably incidental to the performance of its obligations hereunder.

(iv)

(v) (vi) (vii) (viii) (ix) (x) (xi) (xii)

The General Partner, acting as Project Manager, in its sole discretion may subcontract or assign any of the rights, duties, obligations or Project Management Services to a third party (see Schedule E). Project Management Fee A management fee for performing the above Project Management Services shall be to be paid by the Partnership to the General Partner in accordance with the Partnership Agreement. The fee will be $3,600.00 per month, plug GST if applicable. In addition, the General Partner shall be reimbursed for all out of pocket expenses. It is estimated that this fee will be approximately $188,000.00 (the Project Management Fee). The General Partner shall be responsible for its own legal, accounting or audit requirements, which shall be reimbursed by the Partnership. Purchase of the Pine Lake Lands In the event that the Class A Unitholders have not had all of their Contributed Capital returned to them on or before the date that the Limited Partnership is to be dissolved (December 31, 2018), then the General Partner shall be obligated to (provided that the General Partner has not been removed from being the general partner of the Partnership by the Limited Partners) purchase the Pine Lake Lands, or any portion of the Pine Lake Lands that have not been sold, from the Partnership. The Purchase Price for the lands shall be the Contributed Capital account for the Class A Unit Holders, plus ten (10%) percent. 2.7.6 The GenCap Equity Management Agreement

Pursuant to the GenCap Equity Management Agreement, GenCap Equity shall provide comprehensive management which shall include, without limitation:

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Administration of the Offering Memorandum With regards to the Offering Memorandum, GenCap Equity shall provide the management and administration of sales staff, training programs, on-going research and support for sales staff, providing direct administrative support to sales staff including but not limited to: assistance in organizing subscription documents, providing manpower support at all seminars and public forums (trade shows), providing for commission sales agents to give after sales service in the form of organizing client meetings to review progress, directing and answering client enquiries during and after the completion of the Offering, as well as any general management, administrative and client services support as specified by the General Partner or the Partnership. Project Management Services Support With regards to the Pine Lake Project, GenCap Equitys services shall include, without limitation assist the General Partner (Project Manager) with the management of the Partnership and the performance of the Project Management Services. GenCap Equity Management Fee In consideration for the services, GenCap Equity shall be paid the following fees: (a) (b) a management consulting fee of up to six (6%) percent of the gross proceeds raised under the Offering Memorandum; and a marketing administration fee of up to two (2%) percent, which shall (at the sole discretion of GenCap Equity) be allocated to certain agents or sales person,

In addition, GenCap Equity currently owns ten (10%) percent of the issued and outstanding shares of the General Partners and will be entitled to dividends, if any Distributable Cash is allocated to the General Partner, as set forth in the Partnership Agreement. ITEM 3 3.1 DIRECTORS, MANAGEMENT, PROMOTERS AND PRINCIPAL HOLDERS

Compensation and Securities Held

The following table sets out information about each of the directors and officers of the General Partner and each person who, directly or indirectly, beneficially owns or controls 10% or more of any class of the General Partners voting securities: Compensation Paid by the General Partner in the Most Recently Completed Financial Year and the Compensation Anticipated to be Paid in the Current Financial Year Nil(2) Number, Type and Percentage of Securities of the Issuer to be Held after Completion of the Minimum Offering(1) 1 Unit(3)(4) Number, Type and Percentage of Securities to be Held after Completion of the Maximum Offering(1) Nil(3)(4)

Name and Municipality of Principal Residence

Positions Held and the Date of Obtaining that Position

James Perks, Calgary, Alberta Thomas Tang, Calgary, Alberta Rodney Perks, Three Hills, Alberta Darren M. Smits Calgary, Alberta

President and Director of the General Partner, since February 23, 2010 Director of the General Partner since February 23, 2010 Secretary-Treasurer and Director of the General Partner since February 23, 2010 N/A

Nil(5)

Nil(6)

Nil(6)

Nil(7)

Nil(8)

Nil(8)

Nil

Nil(9)

Nil(9)

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Denis Morin, Calgary, Alberta Lloyd Brown, Calgary, Alberta Jason Johansen, Lethbridge, Alberta
Notes: (1)

N/A N/A N/A

Nil Nil Nil

Nil(10) Nil(11) Nil(12)

Nil(10) Nil(11) Nil(12)

The Shareholders of the General Partner will not be issued any Units of the Partnership, however they may subscribe for Units through this Offering at the same issue price offered to a Subscriber. (2) J. Perks will be compensated for his role as President and Director of the General Partner in the amount of $3,000 per month (plus tax, if applicable), which will be paid into 1183909 Alberta Ltd., which is controlled by J. Perks. (3) Initial Unit held by J. Perks, to be cancelled upon one or more Persons becoming Limited Partners of the Partnership. (4) J. Perks will not receive Units of the Partnership. J. Perks beneficially controls 20% of the issued and outstanding shares of 1312163 AB Ltd. and 18% of the issued and outstanding shares of the General Partner. 72% of the issued shares of the General Partner are held by JRDL Properties Ltd. 25% of the issued shares of JRDL Properties Ltd. are held by Gone Fishin Inc., the Shareholders of which are J. Perks (50%) and his wife Karen Pegler (50%). In addition J. Perks personally owns 5.55 % of the issued and outstanding shares of GenCap Equity. (5) T. Tang will be compensated $600 per month (plus tax, if applicable) for his role as Vice-President and Director of the General Partner. (6) T. Tang will not receive Units of the Partnership. T. Tang owns 88.88% of the issued and outstanding shares of GenCap Equity., which owns 10% of the issued and outstanding shares of the General Partner. (7) R. Perks will not be compensated for his role as Secretary-Treasurer and Director of the General Partner. However, he will be entitled to receive real estate commissions, payable by the General Partner, in the amount of $38,160.00 (1.272% of the Purchase Price of $3,000,000), for finding the Option Lands and negotiating the real estate purchase contracts with the original vendors. (8) R. Perks will not receive Units of the Partnership. R. Perks beneficially controls 20% of the issued and outstanding shares of 1312163 AB Ltd. and 18% of the issued and outstanding shares of the General Partner. 25% of the issued shares of JRDL Properties Ltd. are held by 545267 Alberta Limited, the Shareholders of which are R. Perks (50%) and his wife Doris Perks (50%). (9) D. Smits will not receive Units of the Partnership. D. Smits beneficially controls 10% of the issued and outstanding shares of 1312163 AB Ltd. and 9% of the issued and outstanding shares of the General Partner. 18% of the issued shares of the General Partner are held by AMC&F Holdings Inc. 50% of the issued shares of AMC&F Holdings Inc. are held by Darren M. Smits Professional Corporation, the sole shareholder of which is D. Smits (100%). (10) D. Morin will not receive Units of the Partnership. D. Morin beneficially controls 20% of the issued and outstanding shares of 1312163 AB Ltd. and 18% of the issued and outstanding shares of the General Partner. 25% of the issued shares of JRDL Properties Ltd. are held by Systemadex Creations Inc., the shareholders of which are Denis Morin (50%) and his wife Sylvie Pilon-Morin (50%). (11) L. Brown will not receive Units of the Partnership. L. Brown beneficially controls 20% of the issued and outstanding shares of 1312163 AB Ltd. and 18% of the issued and outstanding shares of the General Partner. 25% of the issued shares of JRDL Properties Ltd. are held by L&J Brown Ventures Inc., the shareholders of which are L. Brown (45%), his wife Jackie Chapman-Brown (35%) and his children, Eric Brown (10%) and Gregory Brown (10%). (12) J. Johansen will not receive Units of the Partnership. J. Johansen beneficially controls 10% of the issued and outstanding shares of 1312163 AB Ltd. and 9% of the issued and outstanding shares of the General Partner. 50% of the issued shares of AMC&F Holdings Inc. are held by J. Johansen.

3.2

Management Experience

The following table discloses the principal occupations of the directors and senior officers of the General Partner over the past five (5) years: Name James Perks Calgary, Alberta President and Director of the General Partner Principal Occupations and Related Experience J. Perks is the current Executive Director of Business Development, Canada for GenCap Equity Inc. J. Perks is also the President and Director of 1312163 AB Ltd. since April 2, 2007. J. Perks had been the President and Director of JRDL Properties Ltd. since October 1, 2004, a Calgary based development company specializing in development in the City of Calgary core. The company transitioned to raw land development in 2006. His experience includes the successful development and sales of exempt market securities related to real estate investment. J. Perks worked as a consultant with LLC Global Limited from January 1, 2001 to 2004. The Company aided in the development of emerging technologies and helped enterprises establish their global presence. Prior to this, he was a teacher and curriculum leader with the Calgary Board of Education. Also, since January 2009 J. Perks has been the Vice-President and a Director of GenCap Equity #11 Inc.

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Thomas Tang Calgary, Alberta Director of the General Partner

From May 2007 until present Mr. Tang has been the President for GenCap Equity Inc. Prior to that Mr. Tang was the Executive Director, Business Development for Genesis. Mr. Tang has 15 years experience with Genesis in the areas of equity investments, local land acquisition marketing in Canada and internationally in Asia. In the past 4 years he has lead over 120 professional consultants and raised over $88,000,000 for various Genesis projects. Mr. Tang also has 18 years experience as an information technologies management professional in Calgary through the major oil companies in the areas of project management, business & systems analysis, business information systems development and database modeling. Mr. Tang holds a Bachelor of Science degree (Computer Science and Pure Mathematics) and a Masters degree (Information System Management and Business Administration) from the University of Phoenix, Arizona. Also, since January 2009 T. Tang has been the President and a Director of GenCap Equity #11 Inc.

Rodney Perks Three Hills, Alberta Secretary-Treasurer and Director of General Partner,

R. Perks is currently the Vice President and Director of 1312163 AB Ltd. Also, since April 2, 2007. R. Perks has been the Director of JRDL Properties Ltd. since October 1, 2004, a Calgary based development company specializing in residential development in the Calgary city core. From June 1, 2005 until present, he has been a licensed realtor with Royal Lepage Country Realty located in Three Hills, Alberta, specializing in the Central Alberta Region. From July 1981 until September 1987 he worked as a licensed realtor with Century 21 Realty in the same area.

3.3

Penalties, Sanctions and Bankruptcy

None of the directors or officers of the Partnership or the General Partner have had any penalty or sanction in effect against them during the last ten (10) years and none of the directors or officers of the Partnership or the General Partner have had any 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 manager or trustee to hold assets, that has been in effect during the last ten (10) years. 3.4 Loans As of the date of this Offering Memorandum, there are no debentures, loans or other debt owing to or from any directors, managers, promoters or principal holders of the General Partner of the Partnership. ITEM 4 4.1 CAPITAL STRUCTURE

Partnership Capital The following table sets out the capital structure of the Partnership as at the dates indicated: Description of Security Class A Limited Partnership Units Number Authorized to be Issued 10,450 Number Outstanding as at February 26, 2010 1(1) Number Outstanding After Minimum Offering 1 Number Outstanding After Maximum Offering(2) 9,500

Notes: (1) (2) Initial Unit held by Mr. James Perks, to be cancelled upon one or more Persons becoming Limited Partners of the Partnership. Not Including the Over-Allotment Option.

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4.2

Long Term Debt Description of Security Agreement for Sale(1) Outstanding Purchase Price $7,246,425.00(2) Terms See Item 2.8 Material Agreements

Notes: (1) (2) See Item 2.8 Material Agreements. As may be necessitated from time to time, the General Partner may, on behalf of the Partnership, secure long-term debt from financial institutions or other third parties. The General Partner may secure any such borrowings by granting charges, security interests or other encumbrances as security for any debt, liability or obligation of the Partnership.

4.3

Prior Sales Date of Issuance February 26, 2010 Type of Security Issued Class A Limited Partnership Unit Number of Securities Issued 1(1) Price per Security $100 Total Funds Received $100

Note: (1) Initial Unit held by Mr. James Perks, to be cancelled upon one or more Persons becoming Limited Partners of the Partnership.

ITEM 5 5.1

DESCRIPTION OF SECURITIES OFFERED

Terms of Securities

The General Partner is authorized to raise capital for the Partnership in the amount of up to Nine Million, Five Hundred Thousand ($9,500,000) Dollars by Limited Partners acquiring up to 9,500 Class A Units, plus a 10% (950 Units) over-allotment option at a cost of $1,000 per Unit (subject to discounts for Early Bird Purchasers). The material terms, rights and obligations attaching to the Units are set out above under the heading Item 2 Business of the Partnership - Material Contracts. Potential investors are encouraged to review the Partnership Agreement, available by request to the General Partner, for a full description of the Units and the rights and limitations applicable to Limited Partners. 5.2 Subscription Procedure Subscribers wishing to subscribe for Units will be required to enter into a Subscription Agreement with the Issuer which will contain, among other things, representations, warranties and covenants by the subscriber that it is duly authorized to purchase the Units, that it is purchasing the Units as principal and for investment and not with a view to resale and as to its corporate or other status to purchase the Units and that the Issuer is relying on an exemption from the requirements to provide the Subscriber with a prospectus and as a consequence of acquiring the securities pursuant to this exemption, certain protections, rights and remedies, provided by applicable securities laws, including statutory rights of rescission or damages, will not be available to the Subscriber. Reference is made to the Subscription Agreement attached as Schedule F to this Offering Memorandum for the terms of these representations, warranties and covenants. In order to subscribe for Units, a purchaser must complete, execute and deliver the following documentation to GenCap #12 Limited Partnership (Attention: General Partner) at #200, 3115 12th Street , N.E., Calgary, Alberta, T2E 7J2: (a) one (1) completed and signed copy of the Subscription Agreement in the form set out in Schedule F to this Offering Memorandum (including any schedules attached thereto); (i) a certified cheque or bank draft in an amount equal to the Aggregate Subscription Amount (as set forth in the Subscription Agreement), payable to Miller Thomson LLP, in trust;

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(ii)

completed and executed copies of the appropriate investor qualification form(s). The appropriate form(s) to be completed depend on your place of residence and on the amount of your investment: if an accredited investor in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba or Ontario, a Representation Letter in the form attached to this Subscription Agreement as Schedule A (please initial the Appendix 1 to Schedule A as indicated); or if not an accredited investor, then Schedule B, complete with Appendix 1 and Appendix 2 to Schedule B.

(iii)

(iv)

Miller Thomson LLP, in trust, as legal counsel to the Partnership will hold the subscription funds in trust until a signed and dated Subscription Agreement is accepted by the General Partner on behalf of the Partnership and received by Miller Thomson LLP, in trust. Subject to applicable securities laws and the Purchasers two-day cancellation right, a subscription for Units, evidenced by a duly completed Subscription Agreement delivered to the Corporation shall be irrevocable by the Subscriber. See Item 11 - Purchasers Rights. Subscriptions for Units will be received, subject to rejection and allotment, in whole or in part, and subject to the right of the Issuer to close the subscription books at any time, without notice. If a subscription for Units is not accepted, all subscription proceeds will be promptly returned to the Subscriber without interest. It is expected that certificates representing the Units will be available for delivery within a reasonable period of time after the relevant closing date(s). The subscription funds will be held until midnight of the second Business Day subsequent to the date that each Subscription Agreement is signed by a Subscriber. 5.3 Admission of Additional Limited Partners The Partnership Agreement provides for the admission of additional Partners, on subscription terms to be established by the General Partner, effective upon the filing and recording of an amendment to the Certificate of Limited Partnership. The General Partner may, in its discretion, refuse to accept a subscription for Units in whole or in part. Pursuant to the Partnership Agreement, Limited Partners must: (i) not be a non-resident within the meaning of the Tax Act; (ii) be a Canadian or a Canadian-controlled entity within the meaning of the Investment Canada Act (Canada); (iii) not be an entity, an interest in which would be a tax shelter investment within the meaning of the Tax Act; (iv) if an individual, be at least 18 years of age, not bankrupt, and not under any other legal disability; (v) not have financed his acquisition of the Units with a borrowing or other indebtedness for which recourse is or is deemed to be limited for the purposes of Section 143.2 of the Tax Act; (vi) not be a partnership; and (vii) not be a financial institution as defined in subsection 142.2(1) of the Tax Act. If a Limited Partner becomes a non-resident, the General Partner may require such Limited Partner to sell his Units to Persons who are non non-residents at the Fair Market Value. A Person who subscribes for or purchases a Unit does not become a Partner in the Partnership and is not entitled to any of the rights of a Partner or to share in any allocations or distributions, until that Person is accepted as a Partner by the General Partner and named in the certificate filed under the Partnership Act (Alberta) with respect to the Partnership. The General Partner has agreed to cause the certificate filed under the Partnership Act (Alberta) with respect to the Partnership to be amended from time to time as required to reflect the admission of additional and substituted Partners to the Partnership. 5.4 Capital Contributions Each Partner, other than the Initial Limited Partner, will be required to contribute to the capital of the Partnership $1,000.00 per Unit ($980.00 if purchased on or before April 30, 2010). In order to establish the Partnership, the Initial Limited Partner was issued one Unit for the sum of $100. Upon one or more other Persons becoming Partners, the Initial Limited Partner will receive $100 from the Partnership as a return of his Contributed Capital and the interest of the Initial Limited Partner in the Partnership will be cancelled. No Limited Partner is entitled to withdraw any part of his Capital Contribution or to receive any distribution except as provided in the Partnership Agreement and permitted by law and no Limited Partner is entitled to interest on the amount of his Contributed Capital. 5.5 Sale by Non-Registered Exempt Market Dealers after March 27, 2010 The Units sold or issued after March 27, 2010 must be sold by an Exempt Market Dealer registered with the securities regulatory authority in the jurisdiction in which the Units were sold in accordance with National Instrument 31103 unless the Units are sold pursuant to a registration exemption in Alberta, British Columbia, Manitoba, the Northwest Territories, Nunavut and the Yukon Territory, as further described below.

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The sale of Units in Alberta, British Columbia, Manitoba, the Northwest Territories, Nunavut and the Yukon Territory pursuant to the following prospectus exempt distributions: i) the Accredited Investor, ii) family, friends and business associates, iii) offering memorandum and iv) minimum $150,000 purchase of a security in one transaction; may be sold by a dealer not registered as Exempt Market Dealer with a securities regulatory authority. A dealer relying on the registration exemption must: i) not be registered in any category of dealer registration with a securities regulatory authority in any jurisdiction, ii) not provide suitability advice about the trade to the Subscriber, iii) except in British Columbia, not otherwise provide financial services to the Subscriber, iv) not hold or have access to the Subscribers assets, v) provide the Subscriber the Risk Acknowledgement Form attached as Schedule C to the Subscription Agreement; and vi) file a dealer information report with the securities regulatory authority. Persons selling securities after March 27, 2010 who are not registered with a securities regulatory authority in accordance with NI 31-103 are prohibited from providing advice as to the suitability of this investment. Advice about the merits of this investment and whether these securities are suitable should be provided by a registered adviser or dealer. ITEM 6 INCOME TAX CONSEQUENCES AND RRSP ELIGIBILITY

You should consult your own professional advisers to obtain advice on the income tax consequences that apply to you. 6.1 Canadian Federal Income Tax Considerations In the opinion of Miller Thomson LLP, tax counsel for the Partnership, the following is, as of the date hereof, a summary of the principal Canadian federal income tax consequences pursuant to the Tax Act generally applicable to a prospective purchaser who acquires Units pursuant to this Offering Memorandum and who, for the purposes of the Tax Act and at all relevant times, is resident or deemed to be resident in Canada and who will hold the Units as capital property and who pay the subscription price in full when due. Provided that a prospective purchaser does not hold Units in the course of carrying on a business and has not acquired Units as an adventure or concern in the nature of trade, the Units will generally be considered to be capital property to such purchaser. Except as otherwise indicated, this summary assumes that the recourse for any borrowing or other financing by a Limited Partner of the subscription price for the Units is not limited and is not deemed to be limited within the meaning of the Tax Act. Limited Partners who intend to borrow to finance the purchase of Units should consult their own tax advisors. The income tax consequences to a prospective purchaser of Units will vary depending on a number of factors including whether the purchasers Units are characterized as capital property, the province or territory in which the purchaser resides, carries on business or has a permanent establishment, the amount that would be the purchasers taxable income but for the purchasers interest in the Partnership, and the legal characterization of the purchaser as an individual, corporation or trust. This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular purchaser of Units. It is impractical to comment on all aspects of federal income tax laws which may have relevance to any person (individual, trust or corporation) who acquires Units. Accordingly, each prospective purchaser of Units should obtain independent advice from a tax adviser who is knowledgeable in the area of income tax law regarding the income tax consequences of investing in the Partnership based on the purchasers own particular circumstances. This summary is based on the current provisions of the Tax Act, the Regulations, and the current published administrative practices of the CRA. This summary also takes into account all specific proposals to amend the Tax Act and Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (collectively, the Tax Proposals) including the Proposed Loss Limitation Rule (described below). This summary does not otherwise take into account or anticipate any changes in laws whether by judicial, governmental or legislative decision or action nor does it take into account other federal or any provincial, territorial or foreign tax legislation or considerations. There is no certainty that the Tax Proposals will be enacted in the form proposed, if at all. In addition to the assumptions and qualifications contained herein, this summary of the principal Canadian federal income tax consequences are based on the following assumptions: (a) the Limited Partner acquires Units pursuant to this Offering Memorandum and holds the Units as capital property for the purposes of the Tax Act; (i) (ii) all Partners of the Partnership are residents of Canada for purposes of the Tax Act; the Partnership will hold its interest in the Lands as inventory property for the purposes of the Tax Act; - 25 4036261.11

(iii) (iv) (v)

the Limited Partner deals at arms length and is not affiliated with the General Partner or the Partnership; the Units will not constitute tax shelter investments as defined by the Tax Act; and the Units and other investments in the Partnership will not be listed or traded on any stock exchange or other public market within the meaning of the Tax Act (see Item 6.2 - Taxation of Distributions of Publicly Traded Partnerships and Trusts below).

6.2

Taxation of Distributions of Publicly Traded Partnerships and Trusts

The Tax Act has been amended to subject certain publicly traded entities, including limited partnerships and trusts to tax and to change the tax consequences to investors holding such interests. This new tax (commonly known as the SIFT Tax) should not apply to the Partnership because the General Partner has advised counsel that the Units and any other securities issued by the Partnership are not proposed to be listed or traded on a stock exchange or other organized facility. If the SIFT Tax were to apply to the Partnership, the tax consequences to the Partnership and the Limited Partners would be materially, and in some respects, adversely, different from those described in this Offering Memorandum. The summary contained herein assumes that the Partnership will not be subject to the SIFT Tax. 6.3 Computation of Income of Limited Partners The Partnership itself is not a taxable entity. However, the income or loss of the Partnership will be computed as if the Partnership was a separate person resident in Canada and each Limited Partner will be required to include, in computing his, her or its income for a taxation year, his, her or its share of the Partnerships income or loss for the Partnerships fiscal period ending in, or at the end of, that taxation year, whether or not any cash or other property is distributed to the Limited Partner on account of the income for that year. Generally, the Limited Partners share of any income or loss of the Partnership from a particular source will retain its character and any provisions of the Tax Act applicable to that type of income will also apply to each Limited Partner. As the Partnership is assumed to be carrying on the Business of land development, the profits on sale of the developed lands will be considered income and not capital gain. Subject to the at-risk rules, and the Proposed Loss Limitation Rule (as discussed below), in computing his, her or its income for a taxation year, each Limited Partner will also be entitled to deduct his, her or its share of any business loss of the Partnership. To the extent that the share of such business loss exceeds the Limited Partners other income for that year, the loss may be carried back three years and forward twenty years to reduce the Limited Partners taxable income in those years. The Partnership Agreement provides for the allocation of the income or loss of the Partnership among the Partners for any Fiscal Year. See Paragraph 2.7.2 The Partnership Agreement. The profit or loss of the Partnership for accounting purposes may differ from the income or loss for federal income tax purposes. For example, amortization rates under generally accepted accounting principles may differ from capital cost allowance rates prescribed by the Tax Act, and certain items which are capitalized for accounting purposes may be deducted for income tax purposes. For this reason, cash distributions to a Limited Partner on account of his, her or its share of the Partnership profits may differ from income allocated to him, her or it for the purposes of the Tax Act. 6.4 Proposed Loss Limitation Rule Tax Proposals released by the Department of Finance on October 31, 2003 for public comment (the Proposed Loss Limitation Rule) will permit a taxpayer to deduct a loss from a business or property in a year only if, in that year, it is reasonable to expect that the taxpayer will realize a cumulative profit from that business or property for the period in which the taxpayer has carried on, and can reasonably be expected to carry on, that business or in which the taxpayer has held and can reasonably be expected to hold that property. For the purpose of this rule, profit is determined without reference to capital gains or capital losses. If enacted as proposed, the Proposed Loss Limitation Rule could limit the deductibility of expenses incurred by the Partnership and of losses realized by the Partnership and allocated to the Limited Partners. In the February 23, 2005 federal budget, the Department of Finance indicated that it has sought to respond to concerns raised about the Proposed Loss Limitation Rule by developing a more modest legislative initiative that will, at an early opportunity, be released for public comment. No such legislative initiative has been publicly released prior to the date of this Offering Memorandum. 6.5 At-Risk Rules The Tax Act contains at-risk rules which may, in certain circumstances, restrict the deduction of a Limited Partners share of losses of the Partnership to the Limited Partners at-risk amount. A Limited Partners at-risk amount - 26 4036261.11

will generally be the adjusted cost base of the Limited Partners Units immediately before the end of the Partnerships fiscal period, plus the Limited Partners share of any Partnership income for the fiscal period, less any amount owing by the Limited Partner to the Partnership or to persons who do not deal at arms length with the Partnership and any amount or benefit granted to reduce the impact, in whole or in part, of any loss the Limited Partner may sustain by virtue of being a member of the Partnership or of holding or disposing of the Units. The effect, if any, that the at-risk rules will have on Limited Partner deductions will depend on the pricing, financing and results of operations of any real estate properties acquired in the future. 6.6 Adjusted Cost Base of Units Generally, the cost to a Limited Partner of the Limited Partners Units will be the subscription price paid for such Units. The adjusted cost base of the Limited Partners Units at any time will be reduced by any losses of the Partnership allocated to the Limited Partner for fiscal periods ending before that time (in each case after taking into account the atrisk rules) and by the amounts distributed to the Limited Partner before such time. The adjusted cost base of a Limited Partners Units at any time will be increased by any income of the Partnership allocated to the Limited Partner in respect of such Units, including the full amount of any capital gain realized by the Partnership, for fiscal periods ending before that time. 6.7 Disposition of Units by Limited Partners Generally, a Limited Partner will realize a capital gain, (or a capital loss), equal to the amount by which the proceeds received or deemed to have been received on the disposition (including on a dissolution or termination of the Partnership) of a Unit exceed (or are exceeded by) the adjusted cost base of the Unit immediately before the disposition and any reasonable costs of disposition. The amount by which a Limited Partners adjusted cost base is negative at the time of the disposition will be included in computing the Limited Partners capital gain. One-half of a capital gain will be a taxable capital gain and must be included in computing income and one-half of a capital loss will be an allowable capital loss. A Limited Partner will be entitled to deduct against such taxable capital gain any allowable capital losses for the year and net capital losses from preceding years and the three following years in accordance with the detail rules in the Tax Act. Similarly, any allowable capital loss realized on the disposition of a Unit that cannot be deducted against taxable capital gains of the year can be carried back three years and forward indefinitely and deducted against taxable capital gains in accordance with the detailed rules in the Tax Act. A Limited Partner will be deemed to realize a capital gain if the adjusted cost base of the Limited Partners Unit is negative at the end of any taxation year of the Limited Partner. If the adjusted cost base of a partners Unit becomes negative and a capital gain is realized, the adjusted cost base of the partners Unit will be deemed to be nil at the beginning of the next taxation year of the Limited Partner. Should the adjusted cost base of a Limited Partners Unit be positive in a subsequent taxation year, then, to the extent that same partner has realized a deemed capital gain, the Limited Partner can elect to reduce the adjusted cost base of the Unit by the lesser of the adjusted cost base of the Unit and the amount of the deemed capital gain. The amount elected can be carried back to offset a deemed capital gain realized when the adjusted cost base of a Unit was negative. 6.8 Alternative Minimum Tax The Tax Act imposes an alternative minimum tax that may require an individual to pay a minimum federal income tax of 15% (prior to any surtax) on adjusted taxable income in excess of $40,000 if that amount exceeds the individuals federal tax otherwise payable for the taxation year. Adjusted taxable income is computed under specific rules that essentially disregard deductions for certain amounts that would otherwise be deductible in computing taxable income. A Limited Partners share of the losses allocated by the Partnership and the Limited Partners carrying charges will be added back in computing the adjusted taxable income of the Limited Partner. Similarly, 40% of the non-taxable portion of any capital gain arising upon a disposition by a Partnership of Units (including a disposition arising from a negative adjusted cost base of the Units) must be included in computing adjusted taxable income which effectively results in 80% of any such capital gain being included in computing adjusted taxable income. To the extent that the alternative minimum tax of an individual exceeds income tax otherwise payable for a particular taxation year, the difference may be deducted in the seven taxation years following that taxation year from the excess of the individuals tax otherwise payable over the individuals alternative minimum tax for any such taxation year. A Limited Partner that is a Canadian-controlled private corporation (as defined in the Tax Act) may be liable to pay an additional refundable tax of 6 2/3% on taxable gains A Limited Partner that disposes of his or her Units before the end of the Partnerships fiscal year end may, under the Partnership Agreement, be considered not to be a Partner for the purposes of allocating the income or loss of the Partnership for that period. Ceasing to be a Limited Partner before the end of Partnerships fiscal year may also result in certain adjustments to his or her adjusted cost base, and will adversely effect his or her entitlement to a share of the - 27 4036261.11

Partnerships losses and eligible expenditures. Therefore, a Limited Partners should seek tax advice before disposing of his or her units. 6.9 Dissolution of the Partnership Generally, upon the dissolution or termination of the Partnership, all property of the Partnership that is distributed to the Limited Partners will be deemed to have been disposed of by the Partnership at that time at its fair market value and acquired by the Limited Partners at a cost equal to the same amount. Each Limited Partner will also be deemed to have disposed of the Limited Partners Units at that time for proceeds of disposition equal to the amount of cash plus the fair market value of other property, if any, received on the dissolution or termination of the Partnership. In certain circumstances, the Tax Act generally permits the liquidation of the Partnership to occur on a tax-deferred basis. There can be no assurance that the dissolution or termination of the Partnership can be effected on a tax-deferred basis. 6.10 Filing Requirements A Limited Partner at any time in a fiscal period of the Partnership is required to make an information return in the prescribed form containing specified information for that year, including the income or loss of the Partnership in the names and shares of such income or loss of all the Limited Partners. The filing of an annual information return by the General Partner on behalf of the Limited Partners will satisfy this requirement and the General Partner has agreed to make such filings. The General Partner will also provide the Limited Partners with information relevant to the allocation of the Partnerships income earned. 6.11 Eligibility for Investment Not all securities are eligible for investment in a registered retirement savings plan (RRSP) and the securities offered hereunder are not eligible for investment in a RRSP. You should consult your own professional advisers to obtain advice on RRSP eligibility. ITEM 7 COMPENSATION PAID TO SELLERS AND FINDERS

The Partnership has not engaged a registered dealer to assist in the sale of this Offering. If permitted by applicable Securities Laws, a registered dealer, financial advisor or sales person, however, may be engaged as an agent of the Project Manager and the Partnership in connection with the distribution of the Units and be paid a commission of up to eight (8%) percent of the gross proceeds raised. In addition, under the current GenCap Equity Management Agreement, up to eight (8%) percent of the gross proceeds may be used as follows: 1) to pay a marketing administration fee of up to two (2%) of the gross proceeds raised; and 2) to pay a marketing consulting fee of up to six (6%) percent of the gross proceeds raised. ITEM 8 RISK FACTORS

There are certain risks inherent in an investment in the Units and in the activities of the Partnership which investors should carefully consider before investing in Units. The following is a summary only of the risk factors applicable following acquisition of the Lands. Prospective investors should review the risks relating to an investment in Units with their legal and financial advisors. 8.1 Highly Speculative The purchase of Units is highly speculative. A potential Subscriber should buy them only if it is able to bear the risk of the entire loss of its investment and has no need for immediate liquidity. An investment in the Units should not constitute a major portion of a Subscribers portfolio. 8.2 Limited Ability to Liquidate Investment An investment in Units of the Partnership is an illiquid investment. There is currently no market through which the Units may be sold. The Issuer is not a reporting issuer in any jurisdiction, and a prospectus has not qualified the issuance of the Units. Accordingly, Subscribers will be unable to sell the Units of the Partnership, subject to some limited exemptions. See Item 10 - Resale Restrictions. 8.3 Default on Indebtedness If the Partnership defaults in the repayment of indebtedness, the creditors holding such indebtedness will be entitled to exercise available legal remedies against the Partnership including recourse against property of the Partnership pledged as collateral. There is no assurance that there will be assets available to recover any portion of a Limited Partners investment.

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8.4

Potential for Conflict of Interest

Certain of the directors and officers of the General Partner are also directors and officers of other companies or are engaged and will continue to be engaged in activities that may put them in conflict with the business strategy of the Partnership. Consequently, there exists the possibility for such directors and officers to be in a position of conflict. All decisions to be made by such directors and officers involving the General Partner and the Partnership are required to be made in accordance with their duties and obligations to act honestly and in good faith with a view to the best interests of the General Partner and the Partnership. In addition, such directors and officers are required to declare their interests in, and such directors are required to refrain from voting on, any matter in which they may have a material conflict of interest. 8.5 Risks of Real Property Development and Ownership Real estate developments and investments are generally subject to varying degrees of risk depending on the nature of the property. Such risks include changes in general economic conditions (such as the availability and cost of mortgage funds), local conditions (such as the supply and demand for residential real estate in the area), government regulation (such as taxation of property and environmental legislation) and the attractiveness of properties to potential purchasers. In addition, each segment in the real estate development industry is capital intensive and is typically sensitive to interest rates. The income generated by the Project is dependent upon general economic conditions and, accordingly, the return to investors may be affected by changes in those conditions. The Partnership will be required to make certain significant expenditures in respect of its business including, but not limited to, the payment of property taxes, maintenance costs, mortgage payments, insurance costs and related charges which must be made regardless of whether or not a property is producing sufficient income to service such expenses. In addition, the Lands will be used as security to obtain financing for the purchase of the Lands as well as certain capital expenditures to be made by the Partnership. If the Partnership is unable or unwilling to meet the payment obligations on such loans, losses could be sustained as a result of the exercise by the lenders of their rights of foreclosure or sale. 8.6 Rezoning May Be Unsuccessful There is a real risk that the County may not approve the Rezoning of the Lands which will result in the failure of the Added Value Concept. If this occurs, there would be a limited market to sell the Lands. 8.7 Competition The Partnership competes with other investors, developers, and owners of properties for the development and sale of desirable real estate properties. Some of the properties of the competitors of the Partnership are newer, better located or better capitalized than the Project. Certain of these competitors have greater financial and other resources and greater operating flexibility than the Partnership. The existence of competing developers and owners could have a material adverse effect on the Project and could adversely affect the revenues or profitability of the Partnership and its ability to meet its debt obligations. 8.8 Environmental Matters In order to obtain financing for the purchase of a new property, the General Partner ordinarily arranges for an environmental audit to be conducted. Although such an audit provides both the Partnership and its lenders with some assurance, the Partnership may be subject to liability for undetected pollution or other environmental hazards on its properties against which it cannot insure, or against which it may elect not to insure where premium costs are disproportionate to the General Partners perception of relative risk. The General Partner is not aware of any material noncompliance with environmental laws with respect to the Project. The General Partner is also not aware of any claims in connection with the breach of environmental laws involving the Project. 8.9 Financing The General Partner will make substantial capital expenditures for the Rezoning, subdivision and development of the Project. Any funding required in excess of the proceeds of the Offering, will be obtained through third party financing, which may or may not be provided by a party related to the General Partner. The Partnerships ability to access additional capital will depend on its success in its business and the status of the capital markets at the time such capital is sought. Accordingly, there can be no assurance that capital will be available to the Partnership from any source or that, if available, it will be at prices or on terms acceptable to the Partnership. 8.10 General Real Estate Risks Various factors can affect the timing and profitability of real estate development and construction. While the General Partner has made certain plans for development of the Project, there is no assurance that such plans will be met on a timely basis or at all. There is also no assurance that the Project can be managed profitably. The market for residential

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and recreational property can be affected adversely by economic factors, which may be regional, national or international in scope. 8.11 Market Risks The economic performance and value of the Project will be subject to all of the risks associated with investing in real estate, including, but not limited to: 8.12 changes in the national, regional and local economic climate; local conditions, including an oversupply of properties like the Project, or a reduction in demand for properties like the Project; the attractiveness of all or parts of the Project to developers; competition from other available properties; and changes in laws and governmental regulations, including those governing usage, zoning, the environment and taxes.

No Operating History

The General Partner has been incorporated for the purpose of managing the business and affairs of the Partnership and as a new entity does not have a record of achievement to be relied upon. The Partnerships operations are subject to all the risks inherent in the establishment of a new business enterprise, including a lack of operating history. The Partnership cannot be certain that its investment strategy will be successful. The likelihood of success of the Partnership must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business and real estate investment and development. If the Partnership fails to address any of these risks or difficulties adequately, its business will likely suffer. Future revenues and profits, if any, will depend upon various factors, including the success, if any, of the development and marketability of the Project, government regulations and enforcement and general economic conditions. There is no assurance that the Partnership can operate profitably or that the Partnership will successfully implement its plans. 8.13 Reliance on Management Decisions regarding the management of the Partnerships affairs will be made exclusively by the officers and directors of the General Partner and not by the Limited Partners. Accordingly, investors must carefully evaluate the personal experience and business performance of the officers and directors of the General Partner. The General Partner may retain independent contractors, including GenCap Equity, to provide services to the Partnership. These contractors have no fiduciary duty to the Limited Partners and may not perform consistently with the fiduciary duty owed to Limited Partners by the General Partner. 8.14 Tax Aspects Canadian federal and provincial tax aspects should be considered prior to investing in the Units (see Item 6 Income Tax Consequences and RRSP Eligibility). The return on a Limited Partners investment is subject to 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 tax laws, regulations or judicial or administrative interpretations will not be changed in a manner which fundamentally alters the tax consequences to investors of holding or disposing of Units. 8.15 Units Not Insured The Partnership is not a member institution of the Canada Deposit Insurance Corporation and the Units offered pursuant to this Offering Memorandum are not insured against loss through the Canada Deposit Insurance Corporation. 8.16 Unit Price The offering price of the Units has been arbitrarily determined by the Issuer. The offering price is not an indication of the value of the Units or that any of the Units could be sold for an amount equal to the offering price or for any amount. 8.17 Lack of Independent Experts Representing the Unitholders Each of the Partnership and the General Partner has consulted with independent legal counsel regarding the formation and terms of the Partnership and the Offering of Units. The Unitholders have not, however, been independently represented. Therefore, to the extent that the Partnership, the Unitholders or this Offering could benefit by further

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independent review, such benefit will not be available. Each prospective investor should consult his own legal, tax and financial advisors regarding the desirability of purchasing Units and the suitability of investing in the Partnership. 8.18 Major Asset The Project represents the major asset of the Partnership and therefore the Partnerships financial performance is directly tied to the performance of this particular asset. The Partnership does not have a large portfolio of investments; therefore, its success is dependent on the success of the Project. 8.19 Debt Financing The Partnerships investment will be subject to the risks associated with debt financing, including the risk that mortgage indebtedness secured by the real property of the Partnerships investment will not be able to be refinanced or that the terms of refinancing will not be as favourable as the terms of existing indebtedness. 8.20 Interest Rate Fluctuations The Partnerships financing may from time to time include indebtedness with interest rates which may fluctuate over time and which will result in fluctuations in the Partnerships cost of borrowing. ITEM 9 REPORTING OBLIGATIONS

The Partnership is not a reporting issuer in any of the provinces or territories of Canada. The General Partner will provide the Limited Partners with annual Notice to Reader financial statements of the Partnership within ninety (90) days after the end of each Fiscal Year and a statement of Partnership income information return for the Canada Revenue Agency within ninety (90) days after the end of each calendar year. The cost of preparing all such reports and financial statements shall be borne by the Partnership. Each Limited Partner shall be solely responsible for filing its income tax returns and reporting its share of Partnership Income or Loss. ITEM 10 10.1 RESALE RESTRICTIONS

Statutory Restrictions on Resale

These securities will be subject to a number of resale restrictions, including a restriction on trading. Until the restriction on trading expires, Limited Partners will not be able to trade the securities unless they comply with an exemption from the prospectus and registration requirements under securities legislation. Unless permitted under securities legislation, Limited Partners cannot trade the securities before the date that is four months and a day after the date the Partnership becomes a reporting issuer in any province or territory of Canada. For Subscribers resident in Manitoba, unless permitted under securities legislation, you must not trade the Units without the prior written consent of the regulator in Manitoba unless the Partnership has filed a prospectus with the securities legislation in Manitoba with respect to the securities you have purchased and the regulator in Manitoba has issued a receipt for that prospectus, or you have held the securities for at least 12 months. The regulator in Manitoba will consent to your trade if the regulator is of the opinion that to do so is not prejudicial to the public interest. The Partnership is not a reporting issuer in any jurisdiction and does not intend to become a reporting issuer in any jurisdiction prior to the dissolution of the Partnership. As such the applicable hold period may never expire. The certificates representing the Units will be legended as follows: 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 (i) [the distribution date], and (ii) the date the issuer became a reporting issuer in any province or territory 10.2 Contractual Resale Restrictions Pursuant to the Partnership Agreement, Limited Partners must obtain consent from the General Partner to transfer, assign or grant a security interest in such Limited Partners Units. In order to be admitted as a Limited Partner, a purchaser, transferee, assignee or successor must: (a) elect to become a substituted Limited Partner by delivering a written notice of such election to the General Partner; (i) obtain consent from the General Partner which consent shall be in the General Partners sole judgment and discretion;

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(ii)

execute and acknowledge such instruments as the General Partner deems necessary or advisable to effect the admission of such purchaser, transferee, assignee or successor as a substitute Limited Partner, including without limitation the written acceptance and adoption by such Person of the provisions of the Partnership Agreement; and if requested by the General Partner, deliver an opinion of counsel satisfactory to the General Partner that such sale, transfer and assignment does not violate any applicable laws.

(iii) ITEM 11 -

PURCHASERS RIGHTS

A Subscriber to this Offering will have certain rights, some of which are described below. For information about their rights, a potential Subscriber should consult a lawyer. 11.1 Alberta and Saskatchewan If a Subscriber is a resident of Alberta or Saskatchewan, it will have the following rights. (a) Two Day Cancellation Right - A Subscriber can cancel its agreement to purchase the securities offered by this Offering Memorandum. To do so, a Subscriber must send a written notice to the General Partner by midnight on the 2nd Business Day after such Subscriber signs the agreement to buy the securities. (i) Statutory Rights in the Event of a Misrepresentation - If there is a misrepresentation in this Offering Memorandum a Subscriber has a statutory right to sue the Partnership: (A) (B) to cancel its agreement to buy the Units, or for damages against the Partnership.

This statutory right to sue is available to a Subscriber whether or not such Subscriber relied on the misrepresentation. However, there are various defences available to the Persons that a Subscriber has a right to sue. In particular, they have a defence if such Subscriber knew of the misrepresentation when it purchased the securities. If a Subscriber intends to rely on the rights described in (b)(i) or (ii) above, it must do so within strict time limitations. A Subscriber must commence its action to cancel the agreement within 180 days from the date of the transaction that gave rise to the cause of action. A Subscriber must commence its action for damages within the earlier of 180 days from the day that it first had knowledge of the facts giving rise to the cause of action or three years from the day of the transaction which gave rise to the cause of action. 11.2 British Columbia If a Subscriber is a resident of British Columbia, it will have the following rights. (a) Two Day Cancellation Right - A Subscriber can cancel its agreement to purchase the securities offered by this Offering Memorandum. To do so, a Subscriber must send a written notice to the General Partner by midnight on the 2nd Business Day after such Subscriber signs the agreement to buy the securities. (i) Contractual Rights in the Event of a Misrepresentation - If there is a misrepresentation in this Offering Memorandum, a Subscriber has a contractual right to sue the Partnership: (A) (B) to cancel its agreement to buy the Units, or for damages.

This contractual right to sue is available to a Subscriber whether or not it relied on the misrepresentation. However, in an action for damages, the amount a Subscriber may recover will not exceed the price that it paid for its Units and will not include any part of the damages that the Partnership proves does not represent the depreciation in value of the securities resulting from the misrepresentation. The Partnership has a defence if it proves that the Subscriber knew of the misrepresentation when it purchased the securities. If a Subscriber intends to rely on the rights described in (b)(i) or (ii) above, it must do so within strict time limitations. A Subscriber must commence its action to cancel the agreement within 180 days after the date of the transaction that gave rise to the cause of action. A Subscriber must commence its action for damages within the earlier of 180 days after learning of the misrepresentation and three years after the date of the transaction that gave rise to the cause of action. The Partnership acknowledges that the limitation period described above extends the limitation period provided by the Limitations Act (Alberta) and agrees to the extension.

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11.3

Manitoba If a Subscriber is a resident of Manitoba, it will have the following rights. (a) Two Day Cancellation Right - A Subscriber can cancel its agreement to purchase the securities offered by this Offering Memorandum. To do so, a Subscriber must send a written notice to the General Partner by midnight on the 2nd Business Day after such Subscriber signs the agreement to buy the securities. (i) Statutory Rights in the Event of a Misrepresentation - If there is a misrepresentation in this Offering Memorandum, a Subscriber has a statutory right to sue the Partnership: (A) (B) to cancel its agreement to buy the Units, or for damages.

This statutory right to sue is available to a Subscriber whether or not it relied on the misrepresentation. However, in an action for damages, the amount a Subscriber may recover will not exceed the price that it paid for its Units and will not include any part of the damages that the Partnership proves does not represent the depreciation in value of the securities resulting from the misrepresentation. There are various defences available to the persons or companies that a Subscriber has a right to sue. In particular, they have a defence if such Subscriber knew of the misrepresentation when it purchased the securities. If a Subscriber intends to rely on the rights described in (b)(i) or (ii) above, it must do so within strict time limitations, being in the case of rescission within 180 days after the day of the transaction that gave rise to the cause for rescission or in all other cases the Subscriber must commence its action before the earlier of: (i) 180 days after the day that the Subscriber first had knowledge of the facts giving rise to the cause of action; or (ii) two years after the day of the transaction that gave rise to the cause of action. 11.4 Ontario If this Offering Memorandum contains a misrepresentation, a Subscriber resident in Ontario who purchases Units hereunder during the period of distribution shall be deemed to have relied upon such misrepresentation, if it was a misrepresentation at the time of purchase, and has a right of action against the Partnership for damages or, while still the owner of Units, for rescission. This right of action is qualified as follows: (a) a Subscriber who elects to exercise a right of rescission against the Partnership will not have a right of action for damages against the Partnership; (i) (ii) an action for rescission must be commenced not later than 180 days after the date of the transaction that gave rise to the cause of action; an action for damages must be commenced not later than the earlier of (i) 180 days after the date that the Subscriber first had knowledge of the facts giving rise to the cause of action, and (ii) three years from the date of the transaction that gave rise to the cause of action; the Partnership will not be liable if it proves that the Subscriber purchased the Units with knowledge of the misrepresentation; in an action for damages, the Partnership will not be liable for all or any portion of the damages that it proves do not represent the depreciation in value of the Units resulting from the misrepresentation; and in no case will the amount recoverable exceed the price at which the Units were offered.

(iii) (iv)

(v)

The statutory rights of action described above are in addition to and without derogation from any other right or remedy that the purchaser may have at law. A Subscriber may have other rights in addition to those described above. For information about its rights, a potential Subscriber should consult a lawyer.

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ITEM 12 -

FINANCIAL STATEMENTS

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ITEM 13 -

DATE AND CERTIFICATE

Dated: March 16, 2010. THIS OFFERING MEMORANDUM DOES NOT CONTAIN A MISREPRESENTATION.

Signed: James Perks James Perks

Signed: Thomas Tang Thomas Tang

Signed: Rodney Perks Rodney Perks

ON BEHALF OF THE BOARD OF DIRECTORS OF THE GENERAL PARTNER

Signed: James Perks James Perks, President and Director

Signed: Thomas Tang Thomas Tang, Vice-President and Director

Signed: Rodney Perks Rodney Perks, Secretary-Treasurer and Director

ON BEHALF OF THE PROMOTERS

Signed: James Perks James Perks, Promoter

Signed: Thomas Tang Thomas Tang, Promoter

Signed: Rodney Perks Rodney Perks, Promoter

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SCHEDULE A LEGAL DESCRIPTION OF THE LANDS COMPRISING THE PROJECT [LAND CURRENTLY OWNED BY 1312163 AB LTD.]
PARCEL 1 PLAN 802NY LOT A EXCEPTING THEREOUT ALL MINES AND MINERALS PARCEL 2 ALL THOSE PORTIONS OF THE NORTH EAST QUARTER OF SECTION SIX (6) TOWNSHIP THIRTY SIX (36) RANGE TWENTY FOUR (24) WEST OF THE FORTH MERIDIAN, IN THE SAID PROVINCE NOT COVERED BY ANY OF THE WATERS OF DEVILS PINE LAKE AS SHOWN ON A PLAN OF SURVEY OF THE SAID TOWNSHIP SIGNED AT OTTAWA ON THE 24TH DAY OF JUNE A.D. 1893 CONTAINING (78.10) ACRES MORE OR LESS EXCEPTION THEREOUT: HECTARES (ACRES) MORE OR LESS A) ALL THAT PORTION OF THE SAID QUARTER SECTION LYING NORTH OF THE NORTHERLY SHORE LINE OF THE SAID LAKE AS SHOWN ON SAID PLAN OF SURVEY, CONTAINING 1.74 4.30 B) PLAN 0420171 SUBDIVISION 12.50 30.89 EXCEPTING THEREOUT ALL MINES AND MINERALS

PARCEL 3 PLAN 9521984 LOT 1 EXCEPTING THEREOUT ALL MINES AND MINERALS

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SCHEDULE B LEGAL DESCRIPTION OF THE LANDS COMPRISING THE PROJECT [OPTION LANDS]

MERIDIAN 4 RANGE 24 TOWNSHIP 36 SECTION 6 ALL THAT PORTION OF THE NORTH WEST QUARTER BOUNDED ON THE NORTH AND EAST BY THE SOUTH SHORE OF DEVILS PINE LAKE, AS SHOWN ON A PLAN OF SURVEY OF THE SAID TOWNSHIP DATED 24 JUNE A.D. 1893, AND WHICH PORTION LIES TO THE NORTH OF THE SURVEYED ROAD ACROSS THE SAID QUARTER SECTION AS SHOWN ON ROAD PLAN 4329BM CONTAINING 24.3 HECTARES (60 ACRES) MORE OR LESS EXCEPTING THEREOUT: A. 7.06 HECTARES (17.5 ACRES), MORE OR LESS, AS SHOWN SUBDIVIDED UNDER PLAN 6122 KS B. 0.328 HECTARE (0.81 OF AN ACRE) MORE OR LESS, FOR ROAD, AND 0.028 HECTARE (0.07 OF AN ACRE) MORE OR LESS, FOR EXTRA ROAD BOTH AS SHOWN ON ROAD PLAN 6107MC C. ALL THAT PORTION DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE NORTH BOUNDARY OF THE SAID QUARTER SECTION WHICH IS 497.65 FEET EAST OF THE NORTH WEST CORNER THEREOF THE SAID NORTH BOUNDARY HAVING AN ASSUMED BEARING OF NORTH 89 DEGREES 54.5 MINUTES EAST; THENCE ON A BEARING OF SOUTH 51 DEGREES 6 MINUTES EAST A DISTANCE OF 112.70 FEET;. THENCE ON A BEARING OF SOUTH 75 DEGREES AND 17 MINUTES EAST A DISTANCE OF 299.60 FEET THENCE ON A BEARING OF NORTH SS DEGREES 13.5 MINUTES EAST A DISTANCE . OF 232 FEET; THENCE ON A BEARING OF NORTH 4 DEGREES 24.5 M I N U T E S E A S T TO THE POINT OF INTERSECTION WITH THE SOUTH WEST BANK OF GHOSTPINE LAKE; THENCE NORTH WESTERLY ALONG THE SAID SOUTH WEST BANK TO THE NORTH BOUNDARY OF SECTION 6; THENCE WESTERLY ALONG THE SAID NORTH BOUNDARY TO THE POINT OF COMMENCEMENT CONTAINING0.502 HECTARES (1.24 ACRES) MORE OR LESS EXCEPTING THEREOUT ALL MINES AND MINERALS

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SCHEDULE C MAPS AND INFORMATION ON THE PINE LAKE LANDS

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SCHEDULE D LIMITED PARTNERSHIP AGREEMENT

GENCAP EQUITY #12 LIMITED PARTNERSHIP

LIMITED PARTNERSHIP AGREEMENT

Effective as of February 26, 2010

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TABLE OF CONTENTS ARTICLE 1 INTERPRETATION ........................................................................................................4

1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 5.1 5.2 5.3 5.4 5.5 5.6
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Definitions ................................................................................................................................................4 Schedules..................................................................................................................................................7 Quantity and Gender .................................................................................................................................7 Section Headings ......................................................................................................................................7 Section References ....................................................................................................................................7 Date for Actions........................................................................................................................................7 Statutes .....................................................................................................................................................7 Currency...................................................................................................................................................7 Formation of Partnership...........................................................................................................................7 Name ........................................................................................................................................................7 Term of the Partnership.............................................................................................................................7 Filing of Declarations................................................................................................................................7 Year End...................................................................................................................................................8 Business of the Partnership........................................................................................................................8 Title..........................................................................................................................................................8 Status of General Partner...........................................................................................................................8 Head Office, Mailing Address and Records/Registered Office....................................................................8 Change in General Partner.........................................................................................................................8 Status of Each Limited Partner ..................................................................................................................9 Sale by Non-Resident Limited Partner .......................................................................................................9 Compliance with Laws ..............................................................................................................................9 Project Management Fee ...........................................................................................................................9 Capital ....................................................................................................................................................10 Registrar and Transfer Agent...................................................................................................................10 Nature of a Unit ......................................................................................................................................10 Unit Certificates......................................................................................................................................10 Registered Holders of Units.....................................................................................................................10 Transfer of Units.....................................................................................................................................11 No Hypothecation of Unit(s) ...................................................................................................................12 Right of First Refusal ..............................................................................................................................12 Successors in Interest of Partnership........................................................................................................13 Sale of Units and Capital Contributions ...................................................................................................13 Initial Limited Partner .............................................................................................................................14 Determination of Income and Losses .......................................................................................................14 Allocation of Income and Losses .............................................................................................................14 Individual Contributed Capital Accounts .................................................................................................14 Withdrawal of Capital/Interest on Capital Contributions ..........................................................................14 Distributions of Distributable Cash ..........................................................................................................14 Distributions ...........................................................................................................................................16 Repayment..............................................................................................................................................16 Individuality of Limited Partners .............................................................................................................16 General Powers and Duties of the General Partner ...................................................................................16 Authority of the General Partner..............................................................................................................16 Limitations on Authority of the Limited Partners .....................................................................................16 Specific Powers.......................................................................................................................................16 Reimbursement of General Partner ..........................................................................................................18 Amendment to Limited Partnership Agreement........................................................................................18 D-1

ARTICLE 2 THE PARTNERSHIP ......................................................................................................7

ARTICLE 3 THE UNITS ...................................................................................................................10

ARTICLE 4 CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS....................................13

ARTICLE 5 THE GENERAL PARTNER..........................................................................................16

5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15

Amendments In Discretion of General Partner .........................................................................................18 Notice to Limited Partners.......................................................................................................................18 Limitation On Amendments ....................................................................................................................18 Power of Attorney...................................................................................................................................19 Duty of the General Partner and Degree of Care.......................................................................................19 Enforcement of Rights and Discharge of Duties by General Partner .........................................................20 Restrictions on Assignment by the General Partner ..................................................................................20 Voluntary Withdrawal or Resignation of the General Partner ...................................................................20 Release ...................................................................................................................................................20

ARTICLE 6 OBLIGATIONS OF PARTNERS ..................................................................................21

6.1 6.2 6.3 Unlimited Liability of the General Partner ...............................................................................................21 Limited Liability of Limited Partners.......................................................................................................21 Indemnity of Limited Partners .................................................................................................................21

ARTICLE 7 ADDITIONAL CAPITAL CONTRIBUTIONS..............................................................21

7.1 7.2 7.3 7.4 7.5 7.6 Additional Capital Contributions .............................................................................................................21 Deemed Capital Contribution ..................................................................................................................22 Purchase of Units Upon Default ..............................................................................................................22 Determination of Fair Market ..................................................................................................................22 Right of Sale upon Default ......................................................................................................................23 Limited Recourse ....................................................................................................................................23

ARTICLE 8 MEETINGS ...................................................................................................................23

8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10 8.11 8.12 8.13 Consents Without Meeting ......................................................................................................................23 Voting.....................................................................................................................................................23 Voting by Proxy......................................................................................................................................24 Form of Proxy.........................................................................................................................................24 Notice of Revocation of Proxy.................................................................................................................24 Notice of Meetings..................................................................................................................................24 Calling of Meetings.................................................................................................................................24 Procedures at Meetings............................................................................................................................25 Minutes of Meetings................................................................................................................................25 Powers Exercisable by Special Resolution ...............................................................................................25 Record Dates...........................................................................................................................................25 Chairman ................................................................................................................................................25 Conditions to Action by Limited Partners ................................................................................................26

ARTICLE 9 DISSOLUTION AND TERMINATION ........................................................................26

9.1 9.2 9.3 9.4 9.5 No Dissolution ........................................................................................................................................26 Dissolution and Termination....................................................................................................................26 Liquidating Trustee .................................................................................................................................26 Distributions Upon Dissolution................................................................................................................26 Distribution in Specie..............................................................................................................................27

ARTICLE 10 ACCOUNTING AND REPORTING............................................................................27

10.1 10.2 10.3 10.4 10.5 Books and Records..................................................................................................................................27 Annual Financial Information..................................................................................................................27 Other Information ...................................................................................................................................27 Goods and Services Tax Returns .............................................................................................................27 Retention of Accountants for the Partnership ...........................................................................................27

ARTICLE 11 GENERAL ...................................................................................................................27

11.1 11.2 11.3 Notice .....................................................................................................................................................27 Governing Law .......................................................................................................................................28 Entire Agreement ....................................................................................................................................28 D-2
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11.4 11.5 11.6 11.7

Severability.............................................................................................................................................28 Further Acts ............................................................................................................................................28 Assignment .............................................................................................................................................28 Counterparts............................................................................................................................................28

SCHEDULE A FORM OF TRANSFER SCHEDULE B FORM OF UNIT CERTIFICATE SCHEDULE C LEGAL DESCRIPTION OF THE LANDS

D-3
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LIMITED PARTNERSHIP AGREEMENT

THIS AGREEMENT is made effective as of the 26th day of February, 2010 (the Effective Date), AMONG: 1519848 ALBERTA LTD., a body corporate duly incorporated under the laws of the Province of Alberta with its offices at 200, 3115 12th Street N.E., Calgary, Alberta, T2E 7J2 (hereinafter referred to as the General Partner) OF THE FIRST PART AND: JAMES PERKS, an individual residing at 52 Sherwood Rise N.W., Calgary, Alberta, T3R 1P5 (hereinafter referred to as the Initial Limited Partner) OF THE SECOND PART AND: Each party who from time to time is accepted as a limited partner in GENCAP EQUITY #12 LIMITED PARTNERSHIP or who is a successor to any such person and who becomes a limited partner upon being registered as such under the Partnership Act (Alberta) (hereinafter called the Limited Partners) OF THE THIRD PART WHEREAS the General Partner and the Initial Limited Partner desire to form a limited partnership (the Partnership) under the Partnership Act (Alberta) (the Act) on the terms and conditions contained in this Agreement. NOW THEREFORE WITNESSETH that, in consideration of the covenants, representations and agreements herein contained, and other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto hereby agree as follows: ARTICLE 1 INTERPRETATION 1.1 Definitions As used herein, unless the context otherwise requires, the term: (a) (b) (c) Act means the Partnership Act (Alberta), as the same may be amended from time to time; affiliate has the meaning assigned to it by the Business Corporations Act, (Alberta), as same may be amended from time to time; Accountants means an independent firm of chartered accountants appointed by the General Partner as accountants for the Partnership for the time being, whether or not such firm of chartered accountants is regularly retained by the General Partner or any affiliated entity; Agreement means this agreement, including the Schedules to this agreement, as amended or supplemented from time to time, and herein, hereby, hereof, hereunder, hereto and similar expressions mean or refer to this agreement and not to any particular provision of this agreement; Annual Budget means a budget prepared each year by the General Partner for the Rezoning of the Lands; business day is a day other than a Saturday or Sunday on which chartered banks in the City of Calgary are normally open for the transaction of business;

(d)

(e) (f)

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(g)

Certificate means the certificate of limited partnership in respect of the Partnership filed pursuant to the Act, as amended in accordance with all notices to amend such certificate filed and recorded as aforesaid; Class A Unitholders means the Limited Partners holding Class A Units; Closing Date means the dates in which the Units are offered for sale by the Partnership as determined by the General Partner in its sole discretion; Contributed Capital in respect of any Unit means at any time the capital contributed or deemed to be contributed (including as contemplated by subsection 7.1(b) hereof) by the holder of such Unit, or by any predecessors in respect of such Unit, less distributions made to the Limited Partners, all as reflected in the Partnerships capital accounts as determined by the Accountants; Distributable Cash means all receipts received by the Partnership including the sale of any portion of the Lands and any financing proceeds, net of all allowable deductions relating to such receipts including, without limitation, sales and marketing, legal fees, appraisal fees and commitment fees less any amounts the General Partner deemed prudent to be held for future payments which may come due in relation to the working capital requirements and future operating expenses of the Partnership; Fair Market Value means the price which the Lands or the relevant Limited Partners Units, as the case may be, (the Relevant Lands) would bring if offered for sale in an open and unrestricted market between informed and prudent parties acting at arms length and under no compulsion to act, both parties having knowledge of the uses and purposes to which the Relevant Lands is adapted and for which it is capable of being used, taking into account and adjusting for, without limitation, (but without duplication with respect to any other provision of this Agreement) such matters as the terms (whether favourable or unfavourable) of any existing mortgages or other encumbrances affecting the Lands or if the same are to be assumed by the buyer and the amount, if any, of any prepayment bonus or penalty in respect of mortgages or encumbrances not assumed by the buyer and in the case of Lands, as determined in accordance with Article 7; Financing means any mortgage or debt financing by the Partnership in respect of the Lands or any renewal, extension or increase in respect of such mortgage or debt financing; Initial Limited Partner means James Perks of Calgary, Alberta; Limited Partners means all Persons who hold Units and Limited Partner means any one of them; Net Income and Net Losses in respect of any period means net income and net losses of the Partnership in respect of such period as determined in accordance with generally accepted Canadian accounting principles consistently applied; Non-Arms-Length Parties means related persons within the meaning of the Tax Act; Ordinary Resolution means a resolution approved by more than one-half of the votes cast by those Limited Partners who vote, and are entitled to vote, in person or by proxy on such resolution at a duly constituted meeting of the Limited Partners or at any adjournment thereof called in accordance with this Agreement or a written resolution signed in one or more counterparts by Limited Partners holding Units which, in aggregate, have attached thereto more than one-half of the total number of votes attaching to all Units which are entitled to vote on such resolution; Partner means any one of the Limited Partners or the General Partner and Partners means all of them; Partnership means the limited partnership provided for in this Agreement; Persons means and includes individuals, corporations, limited partnerships, general partnerships, joint stock companies or associations, joint ventures, associations, consortiums, companies, trusts, banks, trust companies or other entities and includes Non-Arms-Length Parties;

(h) (i) (j)

(k)

(l)

(m) (n) (o) (p)

(q) (r)

(s) (t) (u)

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(v)

Pine Lake Lands or Lands means the lands to be acquired by the Partnership, as legally described in Schedule C, and any such other lands as are duly acquired by the Partnership from time to time; Pine Lake Project means the acquisition, rezoning and sale (or development) of the Pine Lake Lands; Prime Rate means the prime rate of interest of the Royal Bank of Canada, Main Branch, Calgary, for Canadian dollar commercial loans in Canada as declared by the Bank of Canada from time to time, or such other major Canadian bank as the General Partner may select in its discretion; Prohibited Transactions shall mean any contracts between the General Partner and any nonarms-length party which have not been approved by ordinary resolution of the Limited Partners; Project shall have the meaning set forth in Section 2.6 of this Agreement; Project Manager means General Partner acting as project manager or such successor, assignor or replacement Project Manager for the day-to-day management, operations, completion and sale of the Project pursuant to the provisions contained in the Project Management Agreement; Project Management Agreement means an agreement to be entered into between the Partnership and the Project Manager for the day-to-day management, operations, completion and sale of the Project. The General Partner, acting as Project Manager, in its sole discretion may subcontract or assign any of the rights, duties and obligations of the Project Manager to a third party; Proportionate Interest with respect to a Unit at any time means the proportion that (i) the balance at such time of the Contributed Capital in respect of such Unit, is to (ii) the aggregate balance of the Contributed Capital in respect of all Units outstanding at such time, subject to the additional provisions of subsection 7.1(a); Register means the register of Partners maintained or caused to be maintained pursuant to Section 3.2; Rezoning Costs means all costs related to the Partnerships Project, including land costs, offering costs, project soft and hard cost, marketing and financing costs. For greater certainty Rezoning Costs is the amount of total costs used to determine the net profits of the Partnership; Sale means the sale or other disposition of all of the Lands or part thereof or interest therein, the receipt of compensation for the expropriation of the Lands or part thereof or interest therein and the recovery of damage awards or insurance proceeds not required to repair or reconstruct the damaged Lands (other than business interruption insurance proceeds) in respect thereof; Special Resolution means a resolution approved by not less than 65% of the votes cast by those Limited Partners who vote, and are entitled to vote, in person or by proxy, on such resolution at a duly constituted Limited Partners meeting or at any adjournment thereof called in accordance with this Agreement or a written resolution in one or more counterparts signed by Limited Partners holding Units which in aggregate have attached thereto not less than 65% of the total number of votes attaching to all Units which are entitled to vote on such resolution; Tax Act means the Income Tax Act (Canada), as amended from time to time; Taxable Income and Tax Losses means the amount of net income or net loss of the Partnership for a fiscal period determined in accordance with the provisions of the Tax Act; Transfer means the form of instrument of transfer substantially in the form attached hereto as Schedule A and which is approved from time to time by the General Partner; Unit or Units means the interest in the Partnership of a Limited Partner; and Unit Certificate means a certificate representing ownership of one of more Units and/or classes of Units, which certificate(s) shall be substantially in the form attached hereto as Schedule B or other such form as is approved from time to time by the General Partner.

(w) (x)

(y) (z) (aa)

(bb)

(cc)

(dd) (ee)

(ff)

(gg)

(hh) (ii) (jj) (kk) (ll)

Certain other words and phrases are defined hereinafter in this Agreement. D-6
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1.2

Schedules The following Schedules form part of this Agreement: Schedule A Schedule B Schedule C Form of Transfer Form of Unit Certificate Legal Description of the Lands

1.3

Quantity and Gender

Whenever the context of this Agreement requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and vice-versa. 1.4 Section Headings The Section headings have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this Agreement. 1.5 Section References Unless the contrary intention appears, references in this Agreement to an Article, Section, subsection, paragraph or Schedule by number or letter or both refer to the Article, Section, subsection, paragraph or Schedule, respectively, bearing that designation in this Agreement. 1.6 Date for Actions In the event that the date on which any action is required to be taken hereunder by any of the parties is not a business day in the place where the action is required to be taken, such action shall be required to be taken or the next succeeding day which is a business day in such place. 1.7 Statutes References in this Agreement to any statute or sections thereof shall include such statute as amended or substituted and any regulations promulgated thereunder form time to time in effect. 1.8 Currency Unless otherwise stated, all references in this Agreement to sum of money are expressed in lawful money of Canada. ARTICLE 2 THE PARTNERSHIP 2.1 Formation of Partnership The General Partner and the Limited Partners hereby form and enter into the Partnership, a limited partnership to be governed by the laws of the Province of Alberta and the terms and conditions of this Agreement. 2.2 Name The Partnership shall carry on business under the name: GenCap Equity #12 Limited Partnership, or such other name or names as the General Partner may determine from time to time, of which notice to amend the Certificate is filed and recorded pursuant to the Act. 2.3 Term of the Partnership The Partnership will carry on business until it is dissolved on December 31, 2018, or such other date as is provided for in Section 9.2. 2.4 Filing of Declarations The General Partner shall do all things and shall cause to be executed and filed such declarations, instruments and documents as may be required under the laws of the Province of Alberta to reflect the constitution of the Partnership and to preserve the name of the Partnership as a limited partnership, including the filing of a Certificate. The General Partner and each Limited Partner shall execute and deliver as promptly as possible any documents that may be necessary or desirable to accomplish the purposes of this Agreement or to give effect to the formation of the Partnership under applicable laws. The General Partner shall take all necessary actions on the basis of information available to it in order to maintain the status of the Partnership as a limited partnership. D-7
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2.5 2.6

Year End The fiscal year end of the Partnership shall be December 31st. Business of the Partnership The business of the Partnership shall be or is intended to be carried as follows: (a) The Partnership is formed to acquire the Lands, earn income from the rezoning and sale of the Lands, increase the equity of the Limited Partners through capital appreciation of the Lands, and conduct any other business or activity incidental, ancillary or related thereto (collectively referred to as the Project); acquiring for cash or otherwise any real and personal property, moveable or immoveable, rights or leases, undertakings, powers, privileges, licenses, concessions, which the General Partner may deem are appropriate to be acquired by the Partnership as being incidental to or ancillary to the business of the Partnership and any of its objects; borrowing, raising or securing the payment of money in such a manner as the General Partner may deem fit in their discretion (including but so as not to restrict the generality of the foregoing) by mortgage, charge, hypothecation or pledge of or upon all or any of the Partnerships real and personal property, both present and future in order to achieve the above objects, and to carry on the business of the Partnership; entering into any and all contracts and arrangements whatsoever for the purpose of achieving any of the above objects of the Partnership, and in the conduct of the business of the Partnership; and carrying on any trade or business whatsoever which, in the opinion of the Partners as determined by a resolution at a general or special meeting of the Partners, can be carried on lawfully and advantageously by the Partnership in connection with or ancillary to any of the above objects of the Partnership,

(b)

(c)

(d) (e)

together with any other all related activities and ancillary services as determined by the General Partner from time to time in its discretion. 2.7 Title The legal titles to the Lands shall, once duly acquired by the Partnership pursuant to the Agreement for Sale dated February 26, 2010 and the Assignment of the Agreement for Sale dated effective February 26, 2010, be held in the name of the General Partner for and on behalf of the Partnership. 2.8 Status of General Partner The General Partner covenants, represents and warrants to the Partnership and the Limited Partners that the General Partner: (a) (b) is a corporation duly incorporated and validly existing under the laws of the Province of Alberta; has the capacity and corporate authority to act as the General Partner and to perform its obligations under this Agreement, and such obligations do not and will not conflict with or breach its articles of incorporation, by-laws or any agreement by which it is bound; and will carry on no business other than for the purposes set forth herein.

(c) 2.9

Head Office, Mailing Address and Records/Registered Office

The head office and the mailing address of the Partnership is currently 200, 3115 12th Street N.E., Calgary, Alberta, T2E 7J2 or such other address as the General Partner may determine from time to time. The records/registered office is 3000, 700 9th Avenue S.W., Calgary, Alberta, T2P 3V4. 2.10 Change in General Partner The Partnership shall continue notwithstanding any dissolution, removal or replacement of the General Partner provided that: (a) the business is continued by a replacement or substitute general partner;

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(b) (c) 2.11

the replacement general partner and the Limited Partners consent by Ordinary Resolution to the said continuance; and all appropriate amendments to the Certificate and all other documents necessary to record the admission of the new general partner is filed pursuant to the Act. Each Limited Partner represents and warrants to each other Limited Partner and to the General Partner that such Limited Partner is: (i) (ii) (iii) not a non-resident within the meaning of the Tax Act; a Canadian or a Canadian-controlled entity within the meaning of the Investment Canada Act (Canada); and if an individual, of the age of at least 18 years, not bankrupt, and not under any other legal disability.

Status of Each Limited Partner (a)

(b)

Each Limited Partner covenants and agrees that he will not change his status or transfer his Unit(s) to any person, firm or corporation if such change or transfer will alter the status of the Partnership in relation to any of the statutes mentioned in (a) above or any similar statute affecting such status or in relation to the Act. Each Limited Partner covenants and agrees that he will promptly provide evidence to the General Partner upon request of his status under such statutes or any similar statute affecting the status of the Partnership or of any other matter which affects or may from time to time affect the status of the Partnership. Each Limited Partner shall notify the General Partner forthwith upon the occurrence of any event or the making of any order, decree or judgment by any court, agency, tribunal or other competent authority which affects or may affect the Limited Partners title to his Unit(s) or entitlement to distributions in respect of it/them, including without limitation any order, decree or judgment vesting in any other person any interest in such Unit(s), and the Limited Partner shall indemnify and hold the General Partner and the Partnership harmless from and against any claim, damage, loss, cost or expense that either or both may suffer or incur by reason of having, in good faith and without actual notice of such event, order, decree or judgment, paid any amount to the Limited Partner to which any other person was then entitled by virtue thereof.

(c)

(d)

2.12

Sale by Non-Resident Limited Partner

The General Partner may at any time by notice require a Limited Partner who becomes a non-resident as defined in the Tax Act to sell his Unit(s) to Persons who are not non-residents as so defined or who are non-Canadians for the purpose of the Investment Canada Act (Canada) to transfer their Units to residents of Canada. If a non-resident Limited Partner fails to transfer his, her or its Units to a resident of Canada who qualifies to hold Units under the terms of this Agreement within 30 days of the giving of a notice to such non-resident Limited Partner to transfer such Units, the General Partner shall be entitled to sell such Units on behalf of such non-resident Limited Partner on such terms and conditions as it deems reasonable and may itself become the purchaser of such Units. On any such sale by the General Partner, the price shall be the fair market value for such Units as determined by an independent appraiser appointed by the General Partner, whose appraisal shall be final and binding on the Partnership, the General Partner and the Limited Partner(s) so affected. The cost of such appraisal shall be borne by the Limited Partner(s) whose Units are sold by the General Partner and may be deducted from the proceeds of such sale together with any other expenses incurred in connection therewith. 2.13 Compliance with Laws Each Limited Partner shall, on request by the General Partner, immediately execute all certificates, instruments and documents necessary to comply with any law or regulation of any applicable jurisdiction in regard to the formation, continuance, operation or dissolution of the Partnership. 2.14 Project Management Fee The Partnership agrees to pay to the General Partner the Project Management Fee as per subsection 1.1(bb). The General Partner, acting as Project Manager, in its sole discretion may subcontract or assign any of the rights, duties and obligations of the Project Manager to a third party. D-9
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ARTICLE 3 THE UNITS 3.1 Capital The interests in the Partnership shall be divided into two classes of Units (those being Class A Units and Class B Units, the rights, terms and conditions of which are set forth in this Agreement. Unless otherwise approved by a Special Resolution, the maximum number of Units that may be issued are as follows: 10,450 Class A Units (9,500 plus a 10% over-allotment option); and 1 Class B Unit. The One (1) Class B Unit shall be issued to the General Partner only. The Class A Units shall be issued to the Initial Limited Partner and also to subscribers, who shall become Limited Partners, pursuant to the Partnerships Offering Memorandum, as amended or restated from time to time. 3.2 Registrar and Transfer Agent The General Partner shall act as registrar and transfer agent of the Partnership (Registrar and Transfer Agent) and shall maintain a register of Limited Partners showing therein the names of the Limited Partners, the number of Units held, the last address of the Limited Partners of which the General Partner has notice and any transfer of Units. 3.3 Nature of a Unit (a) Except as otherwise expressly provided herein, each Unit shall be equal to each other Unit and shall have the same rights and obligations with respect to all matters as each other Unit and no Unit shall have any preference, pre-emptive right, right of conversion, exchange, redemption or other right or priority in any circumstances over any other Unit. The Units have the rights to and the interest in allocations of Net Income, Net Losses, Taxable Income and Tax Losses and to distributions as provided for herein. Except as otherwise expressly provided herein each Unit carries at any time the right to one (1) vote in respect of all matters to be voted upon, in person or by proxy. No fractional Units are permitted to be issued or transferred.

(b) (c) 3.4

Unit Certificates

Subject to Section 3.5, the General Partner shall issue to each Limited Partner a Unit Certificate in the form set out in Schedule B attached hereto, or in such other form as may be approved from time to time by the General Partner specifying the class and number of Units held by such Limited Partner. Each Unit Certificate shall be signed manually by one officer or director of the General Partner. A Unit Certificate may be delivered to a Limited Partner entitled thereto by being mailed by prepaid post addressed to the addresses of such Limited Partners shown in the Register (or in the case of a Unit Certificate in the name of two or more persons, to the person whose name first appears on the Unit Certificate). 3.5 Registered Holders of Units Where a Unit is subscribed for by or assigned to two or more persons, or a Unit Certificate is in the name of two or more persons: (a) (b) (c) (d) the name of each person shall be shown on the Unit Certificate in respect of the Unit; the Unit shall be presumed by the Partnership to be held jointly with right of survivorship; the Unit Certificate shall be delivered to the person whose name appears first on the Register in respect of the Unit; amounts distributed by the Partnership in respect of the Unit may be sent to the person whose name appears first on the Register in respect of the Unit or to such one of them as the joint holders direct in writing, and any one of such persons may give effectual receipts for any monies or assets distributed in respect of the Unit with the other of such persons having no further recourse against the Partnership; and any one of such persons may vote in respect of the Unit as if that person were solely entitled thereto, but if more than one of such persons is present or is represented at a meeting, the person D-10
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(e)

whose name appears first on the Register in respect of the Unit shall alone be entitled to vote in respect thereof. 3.6 Transfer of Units (a) A Limited Partner may transfer his/her/its Unit(s) only upon compliance with the following terms and conditions: (i) the holder of record hereof or his agent duly authorized in writing shall deliver to the Registrar and Transfer Agent at its office a certificate evidencing the Unit accompanied by a duly executed instrument of transfer in the form annexed as Schedule A hereof or such other form as the General Partner may from time to time reasonably prescribe, together with such evidence of genuineness of each such endorsement, execution and authorization and of other matters as may reasonably be required by the Registrar and Transfer Agent; the transferee or assignee shall deliver to the Registrar and Transfer Agent at its office a declaration substantially in the form annexed as Schedule A hereof or such other form as the General Partner may from time to time reasonably prescribe; such other documents of title as are reasonably satisfactory to the General Partner have been produced; the transferee has executed a counterpart of this Agreement or otherwise agreed to be bound by its terms; a notice to amend the Certificate has been filed under the Act and any other relevant requirements under the Act have been complied with; evidence reasonably satisfactory to the General Partner has been produced to indicate that such transfer will not result in a lien, charge or execution upon or against the Lands, or any part thereof, or the Unit and that the Unit is free and clear of all encumbrances and claims; the provisions of all applicable securities legislation, as amended, have been complied with; the transferee has become responsible for all obligations of the transferor to the Partnership; the right of first refusal shall have been offered to the General Partner in accordance with Section 3.8 hereof and shall have been waived by the General Partner; and the transferor may be required to pay a transfer fee of $250.00 to the General Partner in connection with the transfer to pay such costs, expenses and disbursements, including legal fees, as are reasonably incurred by the Partnership in connection with the transfer of Units.

(ii)

(iii) (iv) (v) (vi)

(vii) (viii) (ix) (x)

(b)

Upon the foregoing conditions being met, the transfer shall be recorded in the Register and a new Unit Certificate, acknowledgement or deposit receipt for the Units so transferred shall be issued and delivered to the transferee upon delivery to and cancellation by the Partnership of the transferors Unit Certificate, acknowledgement or deposit receipt. In no event shall the consent of any Limited Partner (other than the transferor) be required to effect such transfer or the filing of a notice to amend the certificate under the Act, and any such transfer shall not cause a dissolution of the Partnership. In case of a transfer of less than all of the Units represented by any Unit Certificate, acknowledgement or deposit receipt, a new Unit Certificate, acknowledgement or deposit receipt for the balance of the Units retained by the transferor shall be issued and delivered to the transferor and in no event will fractional Units be issued or transferred. Except where specific provision has been made therefore in this Agreement, the Registrar and Transfer Agent shall not, nor shall the General Partner, and the Limited Partners, nor any mortgagee, be bound to see to the execution of any trust, express, implied or constructive, or any charge, pledge or equity to which any of the Units or any interest therein is subject, or to ascertain D-11

(c)

(d)

4036261.11

or enquire whether any sale or transfer of any such Units or interest therein by any Limited Partner or his personal representative is authorized by such trust, charge, pledge or equity, or to recognize any person having any interest therein, except for the person recorded as such Limited Partner. (e) No transfer shall relieve the transferor from any obligations to the Partnership existing, prior to the transfer being recorded. No assignment or transfer of a fraction of a Unit may be made or will be recognized or entered in the Register

3.7

No Hypothecation of Unit(s)

The Limited Partners shall not be permitted to transfer, pledge or hypothecate their Units or any beneficial interest therein. 3.8 Right of First Refusal (a) For the purposes of this Section 3.8, the term Bona Fide Offer means an offer received in good faith by any of the Limited Partners from a third party dealing at arms length with such Limited Partner, to purchase all of the Units in the Partnership beneficially owned or controlled by the Limited Partner in receipt thereof. In the event that any of the Limited Partners (hereinafter in this Section 3.8 referred to as the Seller) receives a Bona Fide Offer to purchase all of the Units beneficially owned or controlled by such Limited Partner which such Limited Partner desires to accept, then the Seller shall forthwith give notice in writing (hereinafter in this Section 3.8 referred to as the Notice of Sale) to the General Partner specifying therein the particulars of the Bona Fide Offer received by such Limited Partner including the number of Units which the Seller desires to sell, the name of the third party (hereinafter in this Section 3.8 referred to as the Proposed Purchaser) from whom the Seller has received the Bona Fide Offer, the selling price per Unit (hereinafter in this Section 3.8 referred to as the Selling Price) and the terms and conditions relating to the proposed sale to the Proposed Purchaser, such as the right to pay the Selling Price over a period of time (hereinafter in this Section 3.8 referred to as the Conditions). The Seller shall, if requested by the General Partner, provide the General Partner with a copy of the Bona Fide Offer. The Notice of Sale shall be deemed to be an offer by the Seller to sell Units to the General Partner. The General Partner may accept the offer with respect to the Units offered by indicating in writing to the Seller, within ten (10) days of receipt of the Notice of Sale, that the General Partner will purchase the Units offered in the Notice of Sale at the Selling Price and on the Conditions specified in the Notice of Sale and in the event no acceptance is received from the General Partner within such ten (10) day period, the offer to the General Partner shall be deemed to have been refused. If the General Partner does not purchase the Units covered by the Notice of Sale, then the Seller may, at any time and from time to time during the period of three (3) months next following the expiry of the time for acceptance of the Units offered in the Notice of Sale, sell such Units to the Proposed Purchaser at a price which is not less than the Selling Price and on Conditions not less favourable to the Seller than were specified in the Notice of Sale to the General Partner; if the Seller does not effect a sale to the Proposed Purchaser of the Units offered by the Notice of Sale during the said period of three (3) months as aforesaid, then the foregoing provisions hereof shall again apply thereto and so on from time to time. If the Notice of Sale given to the General Partner specified that all but not less than all of the Units covered by the Notice of Sale are to be purchased, the Seller shall not be bound to sell less than all such Units and any acceptance of the Notice of Sale by the General Partner for less than all of the Units covered by the Notice of Sale shall, in such circumstances be null and void and the Seller may at any time during the period of three (3) months following the last time for acceptance of any of the Units offered in the Notice of Sale, sell all but not less than all such Units to the Proposed Purchaser at a price which is not less than the selling Price and on terms and conditions not less favourable to the Seller, than were specified in the Notice of Sale to the General Partner; if the Seller does not effect a sale to the Proposed Purchaser of the Units offered by the Notice of Sale during the said period of three (3) months as aforesaid, then the foregoing provisions hereof shall again apply thereto and so on from time to time. D-12
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(b)

(c)

(d)

(e)

(f) (g)

With respect to each Notice of Sale hereunder, if accepted by the General Partner, the Seller shall be bound to sell at the Selling Price and on the Conditions covered by the said Notice of Sale. In the event that a Bona Fide Offer (hereinafter referred to as the Subsequent Bona Fide Offer) is received by any of the Limited Partners at a time after the Seller has delivered a Notice of Sale pursuant to a prior Bona Fide Offer received by such Limited Partner and before the expiration of any period allowed to the General Partner to accept or decline the offer contained in the Notice of Sale, as hereinbefore provided for, then such Subsequent Bona Fide Offer shall be deemed not to have been received by the Limited Partner so receiving same, until immediately after the closing of any transaction of purchase and sale arising from the Notice of Sale has been completed or if the General Partner has declined to purchase any or all of the Units offered by the Notice of Sale, as the case may be, until the expiration of the period for acceptance. The General Partner shall have the further right, to be exercised by notice in writing to the Seller within the time limited hereby for the acceptance of the Notice of Sale, to require the Seller to sell all but not less than all of the Units owned or controlled by the General Partner upon the same terms and Conditions as are contained in the Notice of Sale. If the General Partner exercises such right within the time limited therefore, the Seller shall not complete the sale of Units pursuant to the Notice of Sale unless all the Units of the General Partner, having exercised such right are also sold to the third party on the same terms and Conditions as are contained in the Notice of Sale with respect to the sale of the Sellers Units.

(h)

3.9

Successors in Interest of Partnership

The Partnership shall continue notwithstanding the incapacity, death, bankruptcy or insolvency of any Limited Partner. The Partnership shall be dissolved only in the manner provided for in this Agreement. Any person becoming entitled to any Units in consequence of the incapacity, death, bankruptcy or insolvency of any Limited Partner, or otherwise by operation of law, shall not be recorded as the Limited Partner and the holder of such Units and shall not receive a certificate, acknowledgement or deposit receipt therefore, except upon: (a) (b) (c) (d) production of the Unit Certificate, acknowledgement or deposit receipt previously issued to such incapacitated, deceased, bankrupt or insolvent Limited Partner; production of proper evidence of such entitlement; compliance with the provisions of Section 3.6 including the execution of a counterpart of this Agreement (or otherwise agreeing to be bound by the terms of this Agreement); and delivery of such other evidence as may be required by law. ARTICLE 4 CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS 4.1 Sale of Units and Capital Contributions (a) The General Partner is authorized to raise capital for the Partnership in the amount of up to 9,500 Units ($9,500,000.00), plus a 10% over-allotment option of $950,000.00 (950 Units), by Limited Partners acquiring up to 10,450 Class A Units for a purchase price of $1,000 per Unit ($980.00 if purchased on or before March 31, 2010). The General Partner is authorized to raise capital for the Partnership by the private placement offering of Class A Units and the admitting of subscribers for Class A Units as Limited Partners. The General Partner may, in its sole discretion, solicit or cause to be solicited, subscriptions from Limited Partners and determine the terms of subscription and the issuance of Limited Partner Units all pursuant to the terms and conditions of its Offering Memorandum, as amended or restated. Upon the acceptance by the General Partner of a subscription for Class A Units, and payment of the purchase price for such Class A Units, the General Partner shall cause the subscriber to be entered on the register as a Limited Partner and shall deliver to each subscriber a Class A Unit certificate specifying the number of Class A Units held by such subscriber. Limited Partners, other than the Initial Limited Partner, who shall subscribe for Class A Units, shall deliver to the General Partner at its principal office, a subscription agreement or such other form as the General Partner may reasonably require, completed and executed in a manner acceptable to the General Partner and its legal counsel, and such other instruments, agreements and documents as the General Partner and its legal counsel may reasonably require from time to time. Subscriptions may not be made and D-13
4036261.11

may not be accepted for fractions of Units. A person would become a Limited Partner upon the date on which that persons ownership of Class A Units in the Partnership is entered in the register; (b) (c) 4.2 The General Partner is authorized to issue to itself on behalf of the Partnership one (1) Class B Unit for the purchase price of One Hundred ($100.00) Dollars; and The capital of the Partnership shall, on the closing of the sale of all of the Units, be the aggregate amount of the Capital Contributions of the Limited Partners.

Initial Limited Partner

The Initial Limited Partner shall contribute $100.00 as the initial capital contribution to the Partnership for one (1) Class A Unit and such contribution is accepted by the General Partner. Upon one or more other persons becoming Limited Partners, the Initial Limited Partner shall be entitled to and shall receive payment from the Partnership of $100.00 as a return of the capital contributed by such Initial Limited Partner and the one (1) Class A Unit of the Initial Limited Partner shall be cancelled. 4.3 Determination of Income and Losses Net Income and Net Losses of the Partnership for each Fiscal Year shall be determined in accordance with generally accepted Canadian accounting principles and the Tax Act, as considered appropriate by the General Partner, and such determination shall be binding upon all of the Partners. The Partnership will, in computing its Taxable Income and Tax Losses for the purposes of the Tax Act, claim all expenses, deductions and reserves to the maximum extent permitted by the Tax Act, unless otherwise determined by the General Partner. 4.4 Allocation of Income and Losses (a) Taxable Income and Net Income of the Partnership in respect of any period shall be allocated at the end of such period in accordance with the formula provided in Section 4.3 relating to distributions by the Partnership; Tax Losses and Net Losses of the Partnership shall be allocated generally in the same manner as Taxable Income and Net Income, all as determined by the Accountants; and Notwithstanding the provisions of subparagraphs 4.4(a) and (b) above, if there shall be a change in the number of Units allocated to any one or more of the Limited Partners during a fiscal year, the General Partner shall allocate Taxable Income, Net Income, Tax Losses and Net Losses amongst those Limited Partners whose number of Units varied during the Fiscal Year taking into account the proportionate period of such Fiscal Year that such Limited Partners held differing numbers of Units. The General Partner shall make a similar equitable allocation of distributions in the event that the number of Units held by two or more Limited Partners varied between the times of distributions to be made in accordance with Section 4.7.

(b) (c)

4.5

Individual Contributed Capital Accounts

Individual Contributed Capital accounts shall be maintained by the Partnership for each Unit in which each Unit shall be credited with the capital contributed or deemed to be contributed in respect of such Unit (including amounts deemed to be contributed pursuant to Section 7.2) less all distributions, repayments and withdrawals of capital in respect of such Unit. The interest of a Limited Partner in the Partnership shall not terminate by reason of a negative balance in his capital account. 4.6 Withdrawal of Capital/Interest on Capital Contributions (a) (b) 4.7 No Limited Partner shall be entitled to withdraw any part of his capital or to receive any distribution, except as provided in this Agreement and except as permitted by law; and No Limited Partner shall be entitled to interest on the amount of his Contributed Capital to the Partnership, except as set forth in Section 4.7. Distributions of Distributable Cash shall be made by the Partnership from time to time at the discretion of the General Partner, but in any event all Distributable Cash shall be distributed at or prior to the dissolution of the Partnership. D-14
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Distributions of Distributable Cash (a)

(b)

All distributions of Distributable Cash to the Partners shall be made in the following order of priority and in all cases without duplication: (i) (ii) First, payment of all interest and principal due under any Financings of the Partnership for the Project; Second, repayment of all Project Management Fees due to the General Partner pursuant to the terms and conditions of the Project Management Agreement, as provided for under this Agreement; Third, a cumulative amount of twelve (12%) percent per annum (the 12% Payment) shall be paid to the Class A Unitholders from the date of the issuance of the Unit until the earlier of either of the following: (A) (B) the return of their Contributed Capital; or March 31, 2013.

(iii)

In the event that subsection 4.7(b)(iii)(A) occurs, the 12% Payment shall be classified as an interest payment. In the event that subsection 4.7(b)(iii)(B) occurs, the General Partner shall have the option to classify the 12% Payment as either an interest payment or the return of Contributed Capital, whichever results in greater tax advantage, under the Tax Act, for the Class A Unitholders at the time of distribution. Also, in the event that subsection 4.7(b)(iii)(B) occurs and the 12% Payment is classified as a return of Contributed Capital, the Class A Unitholders shall still be entitled to a 12% interest Payment when the remainder of their Contributed Capital is returned to them, pursuant to this Agreement. The distribution to be made under this subsection shall occur one hundred and twenty (120) days after the earlier event set forth above; (iv) Fourth, one hundred (100%) percent to the Class A Unitholders until each of the Class A Unitholders has received cash, in an amount equal to their respective Contributed Capital (plus the additional 12% interest Payment, if applicable); Fifth, thereafter, either: (A) in the event that the Class A Unitholders have not had their Contributed Capital returned, as set forth in subsection 4.7(b)(iii)(B) on or before March 31, 2013, the balance of any Distributable Cash shall be distributed as follows: (I) fifty (50%) percent to the Class A Unitholders, to be shared among them in accordance with their Proportionate Interests, which shall be reduced by one (1%) percent for each $104,500 of Contributed Capital returned to the Class A Unitholders (not including the 12% Payment, if it is classified as the return of Contributed Capital); and fifty (50%) percent to the General Partner, which holds one (1) Class B Unit. The above percentage shall be increased by one (1%) percentage for each $104,500 of their Contributed Capital that is returned to the Class A Unitholders, as set forth in the above clause;

(v)

(II)

or: (B) in the event that the Class A Unitholders have had their Contributed Capital returned, as set forth in subsection 4.7(b)(iii)(B) on or before March 31, 2013, the balance of any Distributable Cash shall be distributed as follows: (I) One Hundred (100%) percent to the General Partner, which holds one (1) Class B Unit.

In the event of the insolvency of the Partnership, Partners may in certain circumstances be required to repay certain of the distributions made to them by the Partnership. See Limited Liability of Partners.

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4.8

Distributions

All Distributable Cash from Financing and distributions of Distributable Cash shall be allocated and distributed within one hundred and twenty (120) days after receipt thereof by the Partnership. 4.9 Repayment (a) If, as determined by the Accountants, any Limited Partner has received by way of distribution an amount which is in excess of his entitlement (the Excess Amount), such Limited Partner shall forthwith reimburse the Partnership the Excess Amount upon notice by the General Partner (the Notice). If the Excess Amount is not repaid within 30 days from delivery of the Notice, the Limited Partner shall, in addition to his obligation to repay the Excess Amount, pay interest on the Excess Amount at the Prime Rate plus five (5%) percent per annum from the date of delivery of the Notice until repaid.

(b)

4.10

Individuality of Limited Partners

No Limited Partner shall be responsible for any of the losses of any other Limited Partner, nor share in the income or allocation of tax deductible expenses attributable to the Units of any other Limited Partner. ARTICLE 5 THE GENERAL PARTNER 5.1 General Powers and Duties of the General Partner Save as provided herein, the General Partner will have the sole authority to decide matters pertaining to the business and operations of the Partnership. Subject to any delegation of its powers properly authorized hereunder, the General Partner will control and have responsibility for the business of the Partnership and do or cause to be done in a prudent and reasonable manner any and all acts necessary, appropriate or incidental to the business of the Partnership. Subject as herein provided, the General Partner shall not cause the Partnership to take any actions enumerated in this Agreement which require the approval of the Limited Partners expressed by Ordinary Resolution or Special Resolution, as the case may be, without first having obtained such approval. The General Partner shall diligently enforce all obligations owing to the Partnership on behalf of each Limited Partner without further authorization therefor from each Limited Partner. 5.2 Authority of the General Partner The General Partner is exclusively authorized to manage, control, administer and operate the business of the Partnership, to manage all business for the Partnership and to act for and bind the Partnership. No person dealing with the Partnership is required to inquire into the authority of the General Partner to take any action or to make any decision on behalf of and in the name of the Partnership. Notwithstanding anything else herein, the General Partner shall not enter into any Prohibited Transactions. 5.3 Limitations on Authority of the Limited Partners While Limited Partners have voting rights with respect to certain matters, no Limited Partner may take part in the management or control of the business of the Partnership nor may any Limited Partner have the power to sign for or to bind the Partnership or to transact any business for the Partnership; however, a Limited Partner may from time to time examine into the state and progress of the business of the Partnership and the Project. Limited Partners shall comply with the provisions of the Act in force or in effect from time to time and shall not take any action which will jeopardize or eliminate the status of the Partnership as a limited partnership. 5.4 Specific Powers In addition to the powers and authorities possessed by the General Partners pursuant to the Act or conferred by law or elsewhere in this Agreement, it is acknowledged and agreed that the General Partner is authorized, at the appropriate time, on behalf of and without further authority from the Limited Partners: (a) (b) (c) (d)
4036261.11

to prepare the Annual Budget; to generally operate, manage, control and carry on the business of the Partnership; to retain or act as Registrar and Transfer Agent in respect of the Units; to retain the Accountants; D-16

(e) (f) (g) (h)

to engage such legal counsel and architects, tax advisors and such professional or other advisors, as the General Partner considers advisable in order to perform its duties hereunder; to prepare and file, on behalf of the Partnership, the appropriate documentation pursuant to applicable securities legislation relating to the offer and sale of the Units; to open and operate in the name of the Partnership or the General Partner a separate bank account in order to deposit and to distribute funds with respect to the Partnership; to execute and carry out all agreements which require execution by or on behalf of the Partnership in order to complete the admission of the Unit holders as Limited Partners, and thereafter all other agreements which may from time to time require execution by or on behalf of the Partnership for any purpose whatsoever; to pay all taxes, fees and other expenses relating to the orderly operation of the business of the Partnership; to commence or defend on behalf of the Partnership any and all actions and other proceedings brought by or against the Partnership, the Project or the Lands and to, in its discretion, settle on such terms as it deems advisable all such actions, and to consent to a judgment against the Partnership; to determine and place, or cause to be placed, the amount and type of insurance coverage to be maintained, if available, in order to protect the General Partner and the Partnership and its business from all usual perils of the type covered for comparable property and in compliance with the requirements of the lenders of funds to the Partnership; to determine the amount, if any, to be claimed by the Partnership in any year in respect of capital cost allowance and initial services incurred by the Partnership; to hold the Partnership assets in the name of the Partnership or the General Partner or in the name of a nominee chosen by the General Partner; to invest funds not immediately required for the business of the Partnership in short-term securities of, or guaranteed by, the government of Canada, the government of any Canadian province or a Canadian chartered bank; to execute any and all other deeds, documents and instruments and do all acts as may be necessary or desirable to carry out the intent and purpose of this Agreement, including, without limitation, retaining any qualified Persons to carry out any of the foregoing and entering into, and performing on behalf of the Partnership or causing the Partnership to perform its obligations under such deeds, documents and instruments and in respect of any Financing or Sale; to enter into leases or other similar agreements in respect of the Lands, in accordance with the Annual Budget; to obtain and provide to the Limited Partners all financial and other statements as to the Partnership and its business as are required to complete filing of returns pursuant to the Tax Act; to take all actions necessary and execute any and all documents and instruments in order to acquire the beneficial ownership of the Lands on behalf of the Partnership; to borrow in the name of and on behalf of the Partnership from banks, financial institutions or other third parties and to grant charges, security interests or other encumbrances against the assets of the Partnership, including the Lands, as security therefore, for expenditures necessary for the efficient operation of the business of the Partnership, including if approved by a Special Resolution of the Partnership, for the purposes of refinancing all or part of any mortgage now or hereafter granted in respect of the Lands. The General Partner may also agree without any resolution to amend the terms of any mortgages against the Lands of the Partnership including, without limitation, extending the maturity or amending the interest rate thereof, so long as such amendment or extension is in the best interests of the Partnership; to employ all Persons necessary for the conduct of the business of the Partnership; and

(i) (j)

(k)

(l) (m) (n)

(o)

(p) (q) (r) (s)

(t)

D-17
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(u)

to enter into a Project Management Agreement with Partnership to act as the Project Manager all aspects of the Project including the day-to-day management, operations, completion and sale of the Project. The General Partner, acting as Project Manager, in its sole discretion may subcontract or assign any of the rights, duties and obligations of the Project Manager to a third party; to generally do all things ancillary to these purposes.

(v) 5.5

Reimbursement of General Partner

The General Partner is entitled to reimbursement by the Partnership for all reasonable costs and expenses that are actually incurred by the General Partner, on behalf of the Partnership, including, without limiting the foregoing, fees and disbursements actually incurred in the formation of the Partnership and the acquisition, operation and management of the Lands, legal fees and disbursement accounts, accounting expenses, taxes, filing and reporting fees, consultation fees, advertising, travel expenses, printing and other fees and expenses incurred by it relating to the Partnership or for the purpose of maintaining its corporate existence provided always that all such costs and expenses for which the General Partner is seeking reimbursement were contemplated in the Annual Budget. 5.6 Amendment to Limited Partnership Agreement This Agreement may be amended in writing on the initiative of the General Partner with the approval of the Limited Partners given by Special Resolution provided that: (a) (b) (c) 5.7 this Section 5.6 may not be amended; this Agreement shall not be amended so as to provide for additional Capital Contributions from any Limited Partner without the approval of such Limited Partner; and this Agreement shall not be amended so as to adversely affect the rights of the General Partner or the Limited Partners without the consent of the majority of the class of Partners so affected.

Amendments In Discretion of General Partner

Notwithstanding Section 5.6, the General Partner may, without prior notice to or consent from any Limited Partner, amend any provisions of this Agreement from time to time: (a) for the purpose of adding, amending or deleting provisions of this Agreement which addition, amendment or deletion is, in the opinion of counsel to the Partnership for the protection of or otherwise to the benefit of the Limited Partners; to cure an ambiguity or to correct or supplement any provisions contained herein which, in the opinion of legal counsel to the Partnership, may be defective or inconsistent with any other provisions contained herein, provided the cure, correction or supplemental provision does not and will not adversely affect the interests of Limited Partners; to make such other provisions in regard to matters or questions arising under this Agreement which, in the opinion of counsel to the Partnership, do not and will not adversely affect the interests of the Limited Partners; or to make such amendments or deletions to take into account the effect of any change in, amendment of or repeal of any applicable legislation, which amendments, in the opinion of counsel to the Partnership, do not and will not adversely affect the interests of the Limited Partners.

(b)

(c)

(d)

5.8

Notice to Limited Partners

Limited Partners shall be notified of the full details of any amendments to this Agreement within thirty (30) days of the effective date of the amendment. 5.9 Limitation On Amendments Notwithstanding the foregoing or any other provisions to the contrary contained in this Agreement, no amendment of this Agreement shall be adopted if such amendment would: (a) (b) change the Partnership to a general partnership; change the liability of the General Partner or any Limited Partner; D-18
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(c) (d) (e) 5.10

allow any Limited Partner to take part in the daily management of the Partnership; change the business of the Partnership as set forth in Section 2.6; or change the right of a Limited Partner to vote at any meeting.

Power of Attorney

Each Limited Partner hereby irrevocably nominates, constitutes and appoints the General Partner, as his agent and true and lawful attorney to act on his behalf with full power and authority in his name, place and stead, in the form of subscription agreement and power of attorney distributed by the General Partner, to execute and record or file as and where required: (a) (b) (c) this Agreement, the Certificate, any amendment to the Certificate and any other instruments or documents required to continue and keep in good standing the Partnership as a limited partnership; any amendments to this Agreement and all instruments and any amendments to the Certificate required under the Act necessary to reflect any amendment to this Agreement; any instrument required in connection with the dissolution and termination of the Partnership in accordance with the provisions of this Agreement, including any elections under the Tax Act, as amended from time to time and under any similar legislation; the documents necessary to be filed with the appropriate governmental body or authority in connection with the business, Lands, assets or undertaking of the Partnership; the documents on behalf and in the name of the Partnership as may be necessary to give effect to the business of the Partnership; the documents on his behalf and in his name as may be necessary to give effect to the sale of a Unit or to give effect to the admission of a substitute Limited Partner; the documents on his behalf and in his name, or on behalf of the Partnership as applicable, as may be necessary to give effect to the sale of the Lands or any portion thereof; and all other instruments and documents on his behalf and in his name or in the name of the Partnership as may be deemed necessary by the General Partner to carry out fully this Agreement in accordance with its terms.

(d) (e) (f) (g) (h)

To evidence the foregoing, each Limited Partner, in executing a subscription or in executing the form of Transfer will have executed a power of attorney containing some or all of the powers set forth above. The power of attorney granted herein is irrevocable, is a power coupled with an interest, shall survive the death or disability of a Limited Partner and shall survive the assignment, to the extent of the obligations of a Limited Partner hereunder, by the Limited Partner of the whole or any part of the interest of the Limited Partner in the Partnership and extends to the heirs, executors, administrators, successors and assigns of the Limited Partner, and may be exercised by the General Partner on behalf of each Limited Partner in executing any instrument by listing all the Limited Partners executing such instrument with a single signature as attorney and agent for all of them. Each Limited Partner agrees to be bound by any representations and actions made or taken by the General Partner pursuant to such power of attorney and hereby waives any and all defences which may be available to negate or disaffirm the action of the General Partner taken in good faith under such power of attorney. 5.11 Duty of the General Partner and Degree of Care (a) The General Partner shall exercise the powers and discharge the duties of its office hereunder honestly, in good faith and in the best interests of the Limited Partners and in connection therewith shall exercise the degree of care, diligence and skill that a reasonably prudent person providing services of a similar nature would exercise in comparable circumstances. The General Partner shall be entitled to retain professional advisors and qualified agents, to assist it in the exercise of its powers and the performance of its duties hereunder and be reimbursed therefore. Notwithstanding any other provision of this Agreement, the Limited Partners acknowledge that the officers, directors or shareholders of the General Partner (collectively the Officers) may acquire, engage in or hold an interest (either alone or with others) in such other businesses, ventures, investments and activities (Other Business) as they consider appropriate whether or not similar to or competitive with the business of the Partnership and that neither the Partnership nor any D-19
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(b)

Partner shall have any right in or to the Other Business. The Officers need not offer or make available to the Partnership or any Partner any opportunity to acquire an interest in the Other Business. 5.12 Enforcement of Rights and Discharge of Duties by General Partner (a) The General Partner agrees to act with due diligence in enforcing all of the rights of the Partnership under all of the agreements of the Partnership, failing which the Limited Partners shall have the right, to be exercised by Special Resolution, to appoint an independent third party in the name of or on behalf of the Partnership to enforce any one or more of such agreements from time to time. Nothing contained in this Section shall in any way be construed to enable any Limited Partner to take part in the control of the management or business of the Partnership. In the event the General Partner omits, refuses or unduly delays in taking, or refrains from taking any action, or enforcing any right, which the Limited Partners believe, acting reasonably, is in the best interests of the Partnership or is required by applicable agreements or applicable law, the Limited Partners may by Special Resolution require the General Partner to take such action or enforce such right and nominate an independent third party to act in accordance with this subsection in the event the General Partner fails to do so. If the General Partner fails to act within ten (10) days from the date of the Special Resolution, then the Limited Partners may appoint an independent third party so nominated to take such action or enforce such right in the name and stead of the General Partner on behalf of the Partnership, and to the extent of such retainer the independent third party shall for all such purposes be deemed to be and shall have all the powers of the General Partner and the General Partner hereby irrevocably appoints such third party as its attorney for all such purposes as aforesaid. The Limited Partners shall be entitled to reimbursement from the General Partner for the costs of any such proceeding. The General Partner shall not be entitled to sell, assign or otherwise dispose of its interest in the Partnership to another person or entity in any manner whatsoever during the term of the Partnership unless the General Partner has received the approval of the Limited Partners to such assignment given by Special Resolution or the General Partner has made an assignment to an affiliated company. Notwithstanding any assignment by the General Partner of its interest in the Partnership as General Partner, the General Partner shall remain fully liable for all of its obligations in respect of the Partnership up to and including the effective date of such assignment including, without limitation, all of its obligations pursuant to this Agreement.

(b)

(c)

5.13

Restrictions on Assignment by the General Partner (a)

(b)

5.14

Voluntary Withdrawal or Resignation of the General Partner

The General Partner may not voluntarily withdraw or resign as the General Partner or voluntarily dissolve or liquidate itself, except upon ninety (90) days prior notice to the Limited Partners. Notwithstanding the foregoing, the General Partner shall not be entitled to withdraw or resign as general partner or voluntarily dissolve or liquidate itself unless prior thereto a substitute general partner for the Partnership is appointed by Ordinary Resolution of the Limited Partners and any declarations or other instruments required to be filed pursuant to the Act evidencing such fact have been filed. 5.15 Release Upon the removal, voluntary withdrawal, resignation or the deemed withdrawal of the General Partner, the Partnership and the Limited Partners shall release and hold harmless the General Partner from all actions, claims, costs, demands, losses, damages and expenses with respect to events which occur in relation to the Partnership after the effective time of such removal, withdrawal or resignation, and all amounts payable to the General Partner to the date of termination shall be paid.

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ARTICLE 6 OBLIGATIONS OF PARTNERS 6.1 Unlimited Liability of the General Partner The General Partner has unlimited liability for the debts, liabilities and obligations of the Partnership to the extent of its assets. 6.2 Limited Liability of Limited Partners Subject to the provisions of the Act and to any specific assumption of liability, the liability of each Limited Partner for the debts, losses and all other liabilities and obligations of the Partnership is limited to the amount of capital contributed or agreed to be contributed to the Partnership by him pursuant to the obligations set out or described in this Agreement together with his Proportionate Interest of the undistributed income of the Partnership. A Limited Partner shall have no further liability for such debts, losses or obligations and shall not be liable for any further calls, assessments or contributions to the Partnership. 6.3 Indemnity of Limited Partners The General Partner will indemnify and hold harmless each Limited Partner for any costs or damages incurred by the Limited Partner if his liability is not limited in the manner provided for in this Agreement, other than any liability caused by any act or omission of any Limited Partner, provided that the foregoing indemnification shall be restricted, in respect of each Limited Partner, to the amount in excess of the aggregate of the amounts referred to in Section 6.2. The General Partner will indemnify the Partnership for any damages incurred by the Partnership as a result of any breach by the General Partner of its standard of care set forth herein, including any legal expenses incurred by the Partnership in defending an action based in whole or in part upon an allegation that the General Partner has been guilty of such breach if such defence is substantially unsuccessful. If the General Partner settles any such action, the action will be deemed for the purposes of this Article to have been unsuccessfully defended unless the settlement is approved by a Special Resolution of the Limited Partners. ARTICLE 7 ADDITIONAL CAPITAL CONTRIBUTIONS 7.1 Additional Capital Contributions (a) If at any time the General Partner determines that the Partnership cannot meet its liabilities as they fall due, and the General Partner on behalf of the Partnership is unable or unwilling to borrow the necessary amounts after having received the approval by Special Resolution, the General Partner shall so notify the Limited Partners and shall forthwith call a meeting of the Limited Partners to consider the adoption of a plan of additional equity financing of the Partnership. If, at such meeting, the Limited Partners by Ordinary Resolution vote in favour of such plan the General Partner shall forthwith after the meeting give notice of such vote to any Limited Partner who was neither present in person nor represented by proxy at such meeting. Each Limited Partner shall thereafter contribute such amounts as the plan of additional equity financing requires, all in accordance with such plan. If a Limited Partner defaults in payment of any amount which such Limited Partner (hereinafter referred to as a Defaulting Partner) is required to contribute pursuant to subsection 7.1(a), then and in such event, the General Partner may give notice of such default to the Defaulting Partner. If such default continues for a period of three (3) business days after the sending of such notice, each Limited Partner not so in default (hereinafter a Contributing Partner) shall have the option (until such default is cured) to pay an amount equal to the proportion of the additional equity capital required thereby that the Proportionate Interest represented by the Units held by such Limited Partner at the time such equity is required is to the aggregate Proportionate Interests represented by all of the Units held by each Contributing Partner at such time, and the amount so paid shall be deemed to be a loan (a Contribution Loan) by the Contributing Partners to the Defaulting Partner bearing and accruing interest at a rate of ten (10%) percent per annum above the Prime Rate compounded monthly on the last day of each and every month and commencing to bear interest on the day the amount of the Contribution Loan is advanced by the Contributing Partners. For so long as the principal amount of any Contribution Loan or interest thereon shall remain unpaid by a Defaulting Partner, the Defaulting Partner shall not be entitled to any distributions. D-21
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(b)

(c)

All distributions to which a Defaulting Partner would, but for this provision, be entitled shall be made instead to the Contributing Partners to be credited to the payment of the principal of and interest on the Contribution Loan, to the extent such amounts remain unpaid. (d) The Defaulting Partner, as security for the amount of the Contribution Loan and interest calculated thereon at the rate provided for in subsection 7.1(b) and loaned or deemed loaned to the Defaulting Partner by the Contributing Partners, hereby pledges, assigns and sets over to the Contributing Partners the Defaulting Partners rights to distributions pursuant to Section 4.7, and the Defaulting Partners Units. All amounts so received by the Contribution Partners shall be applied first to payment of any interest on, and then to the principal of, such Contribution Loan.

7.2

Deemed Capital Contribution

Any additional capital contribution made pursuant to subsection 7.1(a) hereof in respect of a Unit shall at any time be deemed, for the purposes of the Contributed Capital and capital accounts in respect of such Unit, to be equal to the amount of such additional capital contribution. 7.3 Purchase of Units Upon Default (a) Upon the occurrence of a default by a Defaulting Partner pursuant to subsection 7.1(b), a Contributing Partner may elect, by notice to the General Partner, to acquire the Defaulting Partners Units. Upon the election of a Contributing Partner to acquire a Defaulting Partners Units in accordance with such Contributing Partners pro rata share of such Contribution Loan, the Contributing Partner shall acquire the Defaulting Partners Units at a purchase price equal to ninety (90%) percent of the Fair Market Value of such Partners Units less, without duplication, the Proportionate Amount of any liabilities incurred by the Partnership in respect of the Lands, including, but not limited to, any obligations or indebtedness of the Partnership secured by the Lands or any part thereof and less any claims or liabilities of the Defaulting Partner which are secured by or charged against the Defaulting Partners Units or distributions and less any amounts owed to the Contributing Partners in connection with Contribution Loans made or deemed to be made by the Contributing Partners to the Defaulting Partner pursuant to this Agreement. For greater certainty, in the event that more than one Contributing Partner elects to acquire a Defaulting Partners Units pursuant to subsection 7.3(a) above, such Units shall be allocated on a first come, first serve basis. A Contributing Partner who has elected to acquire a Defaulting Partners Units pursuant to subsection 7.3(a) above shall not be bound to complete such acquisition until the Fair Market Value of the Defaulting Partners Units has been determined in accordance with Section 7.4. The purchase price determined under Section 7.4 shall be payable in cash at closing, which shall be seven (7) business days from the date the Appraiser (as defined herein) provides the Defaulting Partner and the Contributing Partner or Partners with the Valuation pursuant to subsection 7.4(b). For the purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (i) Appraiser means a real estate appraiser or other qualified person carrying on the business of, or engaged in, appraising real estate in the jurisdiction or jurisdictions in which the Lands are located, who is at arms length with the General Partner and each Limited Partner, but who may be regularly retained by the General Partner or any Limited Partner, and who is appointed pursuant to subsection 7.4(b); Valuation means a certificate signed by an Appraiser setting forth the Fair Market Value of any Lands as at a specified date and stating that the value so set out represents the best estimate by such Appraiser of the Fair Market Value in terms of money (without deduction, except to the extent referred to below, of the amount secured by any encumbrance affecting such Lands) which such Lands would bring if exposed for sale in the open market in the course of an orderly sale, allowing a reasonable time to find a purchaser with knowledge of the uses to which such Lands is adapted and for which it is capable of being used. The certificate shall also contain a statement that the Appraiser D-22
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(b)

(c)

(d)

7.4

Determination of Fair Market (a)

(ii)

has reviewed any appropriate certificate of title or an opinion of counsel in respect thereof in order to inform himself as to encumbrances against such Lands, and that, to the extent relevant, the same have been taken into account in the market value arrived at. The report shall also contain the certificate of such Appraiser substantially to the effect that he personally inspected such Lands, to the best of his knowledge and belief the information and data used in such report are true and correct, that he has no contemplated, present or prospective interest in such Lands and neither his engagement to make such report nor his compensation in respect thereof is contingent upon the market value set forth in such report. (b) The Contributing Partner or Partners, when delivering the notice under subsection 7.3(a) electing to acquire the Defaulting Partners Units, or having elected to acquire such interest as provided therein, shall designate an Appraiser. Within ten (10) days after receipt of such notice of exercise, the Defaulting Partner shall designate in writing to the Contributing Partner or Partners, a second Appraiser. The two Appraisers so designated shall meet promptly to provide a Valuation of the Defaulting Partners Units. If the two Appraisers are unable to agree upon such Valuation within ten (10) days after the designation of the second Appraiser, the two Appraisers shall, within ten (10) days following such ten (10) days, name a third Appraiser who shall proceed promptly with the two Appraisers to provide such Valuation. The written decisions of any two of the three Appraisers providing the Valuation shall be conclusive and binding upon the Defaulting Partner and the Contributing Partner or Partners. If no two Appraisers agree on a Valuation, the written decision of the third Appraiser appointed shall be the Valuation. If the second or third Appraiser is not selected within either ten (10) day period set out above, upon application by either the Defaulting Partner or a Contributing Partner or Partners, a Justice of the Court of Queens Bench of Alberta shall designate the third Appraiser. If any Appraiser so designated fails for any reason to provide a Valuation, the person or persons so designating him shall designate another Appraiser to replace the Appraiser failing to act.

7.5

Right of Sale upon Default

Notwithstanding any other provision of this Agreement, no Limited Partner may sell, transfer or otherwise dispose of any of its Units or assign, mortgage or charge the same pursuant to Section 3.7 above if it is at that time a Defaulting Partner, unless prior to or concurrently therewith it ceases to be a Defaulting Partner. 7.6 Limited Recourse Notwithstanding anything contained in this Agreement, the recourse of each of the Limited Partners to recover any monetary amounts (including, without limitation, with respect to any liabilities, costs, claims, demands, damages, actions or obligations relating to or arising out of this Agreement) shall be limited and restricted to the rights of each of the Limited Partners to realize against another Limited Partners Units, including commencing and pursuing such legal action as is necessary to effect such realization, and none of the Limited Partners shall be entitled to, or seek to or effect any execution, garnishment or other process of realization (whether judicial or extra judicial) against or in respect of any Lands or assets of another Limited Partner other than the Units of such other Limited Partner. Without limiting the generality of the foregoing, all Transfers of a Limited Partners Units made pursuant to this Agreement are subject to this Section 7.6. ARTICLE 8 MEETINGS 8.1 Consents Without Meeting The General Partner may secure the consent or agreement of any Limited Partner in writing for any matter requiring such a consent or agreement as provided for in this Agreement and such consent or agreement may be used in the same manner as a proxy is used for shareholder meetings, in the case of corporations, for the purpose of a vote at a meeting of Limited Partners for that particular matter. 8.2 Voting Except as otherwise specified in this Agreement, on any question submitted to a meeting, each Limited Partner shall be entitled to cast one vote for each Unit held by him upon each matter presented for vote. Only Limited Partners of record shall be entitled to vote. Every question submitted to a meeting, unless otherwise specified, shall be decided by Ordinary Resolution, on a show of hands, unless a poll is demanded, in which case a D-23
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poll shall be taken. In the case of an equality of votes, the chairman of the meeting shall not have a casting vote and the resolution will be deemed to be defeated. A poll shall be taken on every Special Resolution at a meeting and, when requested by one or more Limited Partners, on any Ordinary Resolution. The General Partner, in its capacity as general partner, shall not have a vote at any meeting of Limited Partners; however, in the event that the General Partner is the owner of Units then for any poll taken at a meeting of the Limited Partners, the General Partner shall have a vote weighted and determined as aforesaid with respect to its Unit(s). Votes may be given in person or by proxy and a person appointed by proxy need not be a Limited Partner. No person other than the Limited Partner or a person appointed by proxy in respect thereof is entitled to a vote at a meeting of Limited Partners. At any meeting of the Limited Partners on a matter voted upon for which no poll is required or requested, a declaration made by the chairman of the meeting as to the voting on any particular resolution shall be conclusive evidence thereof. 8.3 Voting by Proxy At any meeting of Limited Partners, any holder of Units entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Registrar and Transfer Agent for verification prior to the time at which such vote shall be taken. When any Unit is held jointly by several persons, any one of them may vote at such meeting in person or by proxy in respect of such Unit, but if more than one of them shall be present at such meeting in person or by proxy and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Unit. A proxy purporting to be executed by or on behalf of a Limited Partner shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. 8.4 Form of Proxy The General Partner may solicit proxies from the Limited Partners without circulation of any information circular. Every proxy shall, as nearly as circumstances permit, be in the form or the effect as follows: I, of in the Province of being a Limited Partner of l Limited Partnership hereby appoint of in the Province of or failing him of in the Province of as my proxy to vote for me and on my behalf at the meeting of Limited Partners to be held on the day of , 20 and every adjournment thereof and every poll that may take place in consequence thereof. As witness my hand this day of , 20 . 8.5 Notice of Revocation of Proxy

A vote cast in accordance with the terms of a proxy shall be valid notwithstanding the previous death or insanity of the Limited Partner or revocation of the proxy or transfer of the Unit in respect of which the proxy was given provided that no notice in writing of such death, insanity, revocation or transfer shall have been received by the Registrar and Transfer Agent prior to the time fixed for the holding of the meeting or any adjournment thereof. 8.6 Notice of Meetings Notice of all meetings of the Limited Partners, stating the time, place and purpose of the meeting, shall be given by the General Partner to each Limited Partner at his registered address. Unless notice is waived or abridged by all of the Limited Partners, such notice shall be mailed at least ten (10) days and not more than twenty-one (21) days before the meeting and shall specify, in reasonable detail, all matters which are to be dealt with at the meeting. It will not be necessary for any such notice to set out the exact text of any resolution proposed to be passed at the meeting provided that the subject matter of any such resolution is fairly set out in the notice or schedule thereto. 8.7 Calling of Meetings Meetings of the Limited Partners may be called at any time by the General Partner and the General Partner will call a meeting of Limited Partners on receipt of a written request from the Limited Partners representing not less than twenty five (25%) percent of the outstanding Units (Requisitioning Limited Partner). Such request shall specify the purpose or purposes for which such meeting is to be called and shall include sufficient information to enable other Limited Partners to make a judgment on each matter to be considered at the meeting. If the General Partner fails or neglects to call such a meeting within thirty (30) days after receipt of the written request, then any Requisitioning Limited Partner may, at the expense of the Partnership, call the Meeting, and designate the place it is to be held. Subject to the foregoing, meetings are to be held at a place reasonably designated by General Partner. D-24
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Any meeting called by such Requisitioning Limited Partner shall be conducted in accordance with the provisions of this Agreement. The General Partner shall provide a copy of the register of Limited Partners to the Requisitioning Limited Partners upon request. 8.8 Procedures at Meetings Any officer or director of the General Partner may attend and take part in the discussions and proceedings at any meeting of Limited Partners. The General Partner shall have the right to authorize the presence of any person at any meeting of Limited Partners regardless of whether such person is a Limited Partner. With the approval of the General Partner, such persons shall be entitled to address the meeting. Any legal advisor of the General Partner or the Partnership may attend any meeting of Limited Partners and shall be entitled to address the meeting. The Limited Partners shall appoint from among themselves a chairman at any such meeting and all rules of procedure applicable to meetings of corporations that offer their securities to the public within the meaning of the Business Corporations Act (Alberta) shall apply to meetings of the Limited Partners. At any meeting of the Limited Partners, the presence in person or by proxy of the holders of Units representing not less than thirty-five per cent (35%) of the votes then attached to the outstanding Units shall be necessary to constitute a quorum for the transaction of business. If such quorum is not present on the date for which the meeting is called within one-half hour after the time fixed for the holding of such meeting, the meeting shall be adjourned, to be held at another time and day, not earlier than three (3) days and not later than twenty-one (21) days thereafter, at which adjourned meeting a quorum shall consist of the Limited Partners present in person or represented by proxy. Notice shall forthwith be given to all Limited Partners of the day, time and place of the adjourned meeting. Any business may be transacted at the adjourned meeting which might properly have been transacted at the original meeting. 8.9 Minutes of Meetings Minutes and proceedings of every meeting of the Partners shall be recorded by the General Partner. Minutes, when signed by the chairman of the meeting, shall be prima facie evidence of the matters therein stated. Until the contrary is proved, every meeting in respect of which minutes have been made will be taken to have been duly held and convened and all proceedings referred to in the minutes shall be deemed to have been duly passed. 8.10 Powers Exercisable by Special Resolution In addition to all other powers conferred upon them by this Agreement, the Limited Partners have the following powers which are only exercisable by Special Resolution: (a) (b) (c) 8.11 to authorize the dissolution of the Partnership as provided in Article 9; to authorize amendments to this Agreement as provided in Section 5.6; and to authorize the removal of the General Partner as general partner and/or to appoint a replacement general partner in the manner contemplated by Section 5.12.

Record Dates

For the purposes of determining the Limited Partners who are entitled to vote or act at any meeting or any adjournment thereof or who are entitled to participate in any distribution or for the purpose of any other action, the General Partner may from time to time cause the Register to be closed for such period not exceeding thirty (30) days, as the General Partner may determine; or without causing the Register to be closed, the General Partner may fix a date not more than thirty (30) days prior to the date of any meeting of the Limited Partners, distribution or other action as a record date, for the determination of Limited Partners entitled to vote at such meetings or any adjournment thereof or to receive such distribution or to be treated as Limited Partners of record for purposes of such other action, and any Limited Partner who was a Limited Partner at the time so fixed shall be entitled to vote at such meeting or any adjournment thereof or to receive such distribution, even though he has since that date disposed of his Unit, and no Limited Partner becoming such after that date shall be a Limited Partner of record for purposes of such other action. 8.12 Chairman The President of the General Partner, or in his absence any officer of the General Partner, shall be the chairman of all meetings. If no such person is present or all such persons refuse to act, those Limited Partners present in person or represented by proxy at the meeting shall choose, by Ordinary Resolution, some other person present to be chairman.

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8.13

Conditions to Action by Limited Partners

The right of the Limited Partners to vote to approve or initiate the taking of, or take any action (including any action requiring the approval by Special Resolution) shall not come into existence or be effective in any manner unless and until, prior to the exercise of any such right or the taking of any such action, the Partnership has received an opinion of counsel advising the Limited Partners as to the effect that the exercise of such rights or the taking of such actions may have on the limited liability of any Limited Partners (other than those Limited Partners who have initiated such action, each of whom expressly acknowledges that the exercise of such right or the taking of such action may subject each of such Limited Partners to liability as a general partner under the Act). If as a result of the foregoing such action may not be voted on by the Limited Partners without a risk of loss of limited liability to the Limited Partners, the General Partner may exercise any of the said rights, other than amendment of this Agreement or dissolution of the Partnership, without the approval of the Limited Partners. ARTICLE 9 DISSOLUTION AND TERMINATION 9.1 No Dissolution Notwithstanding any rule of law to the contrary, the Partnership shall not be terminated and dissolved except in the manner provided in this Agreement. Without limiting the generality of the foregoing, other than as set out in Section 9.2, the Partnership shall not be terminated or dissolved by the admission of any new Partner or by the withdrawal, removal, retirement, death, mental incompetence, insolvency, bankruptcy, liquidation, dissolution, winding up or other disability of a Partner. 9.2 dates: (a) (b) (c) (d) the passage of a Special Resolution approving the dissolution or winding-up of the Partnership where the General Partner consents to such dissolution; December 31, 2018; the removal or resignation of the General Partner unless the General Partner is replaced as provided herein or in the Special Resolution removing the General Partner; or the sale by the Partnership of all of its assets. Dissolution and Termination The Partnership created hereby shall be dissolved upon the occurrence of any of the following events or

Upon dissolution, this Agreement shall terminate, Taxable Income and Tax Losses shall be allocated, and the assets of the Partnership will be liquidated and distributed to the Partners, after payment of the obligations of the Partnership, in accordance with the provisions of this Agreement. Notwithstanding any rule of law or equity to the contrary, the Partnership shall not be dissolved nor this Agreement terminated for any other reason, except in the manner provided for herein. 9.3 Liquidating Trustee Upon dissolution of the Partnership, the liquidating trustee (which shall be the General Partner unless the General Partner is unable or unwilling to act, in which event the liquidating trustee shall be selected by Ordinary Resolution) shall proceed diligently to wind up the affairs of the partnership and distribute the assets of the Partnership in accordance with Section 9.4. Subject to Section 9.4, the liquidating trustee may manage, control and operate the business and affairs of the Partnership with all of the power and authority of the General Partner. The liquidating trustee shall be paid its reasonable fees and disbursements in carrying out its duties as such. Allocations and distributions shall continue to be made during the period of liquidation in the same manner as before dissolution. The liquidating trustee shall have full right and unlimited discretion to determine the time, manner and terms of any sale or sales of Partnership assets pursuant to such liquidation, having due regard to the activity and condition of the relevant market and general financial and economic conditions. 9.4 Distributions Upon Dissolution Upon dissolution of the Partnership, the liquidating trustee shall sell and liquidate the assets of the Partnership and distribute the proceeds as follows: (a) to pay any costs involved in the sale of the assets of the Partnership; D-26
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(b) (c) (d) (e) 9.5

to pay off all Financings; to pay all of the other liabilities of the Partnership as required by law (including the expenses incurred in the winding up of the Partnership); to establish such reserves as the General Partner considers necessary for contingent liabilities; and to distribute the balance to the General Partner and to the Limited Partners in accordance with the provisions of Section 4.7 hereof.

Distribution in Specie

Upon a Special Resolution of the Limited Partners, the Partnership may distribute its assets amongst the Partners pursuant to the provisions of Section 98(3) of the Tax Act, or its equivalent, or in any other such manner as may be determined by the Partnership. ARTICLE 10 ACCOUNTING AND REPORTING 10.1 Books and Records The General Partner will keep or cause to be kept on behalf of the Partnership books and records reflecting the assets, liabilities, income and expenses of the Partnership and a register listing all Limited Partners and the Units held by them. Such books, records and register will be made available for inspection by any Limited Partner or his duly authorized representatives (at the expense of such Limited Partner) upon reasonable notice during business hours at the offices of the General Partner. However, a Limited Partner will not have access to any information of the Partnership which, in the opinion of the General Partner, should be kept confidential in the interest of the Partnership, and each Limited Partner hereby waives any right, statutory or otherwise, to greater access to the books, records and registers of the Partnership than is permitted herein. 10.2 Annual Financial Information The General Partner will provide the Limited Partners with annual Notice to Reader financial statements of the Partnership within ninety (90) days after the end of each Fiscal Year and a statement of Partnership income information return for the Canada Revenue Agency within ninety (90) days after the end of each calendar year. The cost of preparing all such reports and financial statements shall be borne by the Partnership. Each Limited Partner shall be solely responsible for filing its income tax returns and reporting its share of Partnership Income or Loss. 10.3 Other Information The General Partner shall provide or cause to be provided to the Limited Partners such additional financial and other information as may be required from time to time under applicable legislation. 10.4 Goods and Services Tax Returns The General Partner shall file or cause to be filed all returns and information required to be filed in respect of goods and services taxes. 10.5 Retention of Accountants for the Partnership The appointment of accountants for the Partnership will be made by the General Partner in its sole and exclusive discretion provided only that such accountants shall be chartered accountants licensed to practice in Canada. ARTICLE 11 GENERAL 11.1 Notice Any notice or other document to be given by any party hereto to any other party hereto shall be in writing and may be given by personal delivery or by registered mail. (a) Any notice directed to the General Partner shall be addressed to it at: 200, 3115 12th Street N.E., Calgary, Alberta, T2E 7J2

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(b)

Any notice to be given to any Limited Partner shall be addressed to such Limited Partner at the latest address shown on the Register.

Any notice or other document aforesaid, if delivered, shall be deemed to have been given or made and received on the date on which it was delivered or, if mailed, shall be deemed to have been given or made and received on the fourth (4th) business day following the date on which it was mailed, provided that, for such purposes, no day during which there shall be a strike or other occurrence which shall interfere with the normal mail service shall be considered a business day. The parties hereto may change any address for notices hereunder, from time to time, by notice given in accordance with the foregoing. 11.2 Governing Law This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable thereto. 11.3 Entire Agreement This Agreement constitutes the entire agreement among the parties hereto with respect to all of the matters herein, and this Agreement shall not be amended except in accordance with the provisions of Article 5 hereof. 11.4 Severability Every provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality shall not affect the validity of the remainder of this Agreement. 11.5 Further Acts The parties hereto agree to execute and deliver such further and other documents and perform and cause to be performed such further and other acts and things as may be necessary or desirable in order to give full effect to this Agreement and every part hereof. 11.6 Assignment This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. 11.7 Counterparts This Agreement may be executed in several counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument, which shall be sufficiently evidenced by any such original counterpart. IN WITNESS WHEREOF the parties hereto have executed these presents as of the day and year first above written. 1519848 ALBERTA LTD. Per:

Initial Limited Partner

Witness

JAMES PERKS

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SCHEDULE A TO THE GENCAP EQUITY #12 LIMITED PARTNERSHIP AGREEMENT FORM OF TRANSFER
The undersigned, being a Limited Partner of GenCap Equity #12 Limited Partnership (the Partnership), hereby assigns and transfers to: _______________________________ (the Transferee) all of the undersigneds right, title and interest in and to _______________ Unit(s). The undersigned covenants and agrees to deliver to the General Partner or to the Registrar of the Partnership such documents, certificates, assurances and other instruments as the General Partner may require to effect this assignment and transfer and to continue and keep in good standing the Partnership as a limited partnership. The undersigned agrees that the power of attorney previously granted to the General Partner by the undersigned shall continue in full force and effect, and shall be irrevocable, until all certificates, all amendments to all certificates and all other instruments required to effect this transfer and to continue and keep in good standing the Partnership as a limited partnership have been delivered to the General Partner and have been recorded or filed as and where required to validly effect the transfer of the aforementioned Unit(s). If by an Individual: SIGNATURE GUARANTEED BY

Witness to Signature

Signature of Limited Partner

Name of witness (Please Print) If by a Corporation:

Name of Limited Partner (Please Print)

Name of Corporation (Please Print) (affix seal) Per: (Signature(s) of Officer(s) duly authorized to execute on behalf of Corporation

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The signatures shall, if required by the General Partner, be guaranteed by a Canadian chartered bank, a trust company qualified to carry on business in any Province of Canada, a member of The Investment Dealers Association of Canada or a member of any recognized stock exchange. The Transferee hereby accepts the above assignment and transfer. The Transferee acknowledges that he has received, reviewed and fully understands the agreement of limited partnership (the Partnership Agreement) dated February 26, 2010, as amended from time to time thereafter, and agrees to be bound by the terms of and as a party to the Partnership Agreement. The Transferee, if a corporation, or if the transferring Limited Partner is a corporation, hereby agrees to deliver such certified copies of resolutions, extracts of by-laws, constating documents or other documents as the General Partner may reasonably require. The Transferee hereby agrees to deliver such releases for income tax purposes, if any, as may from time to time be required by the General Partner. The Transferee hereby acknowledges that he will become a Limited Partner in respect of the Unit(s) being transferred upon all filings and recordings required by law to validly effect the transfer being duly made. The Transferee hereby represents and warrants that he or it: (a) has and will have the capacity and competence, and if a corporation, the necessary corporate authority, to enter into the Partnership Agreement and all other agreements contemplated hereby or thereby; is not a non-resident of Canada within the meaning of the Income Tax Act (Canada); is not a non-Canadian within the meaning of the Investment Canada Act (Canada), and

(b) (c)

shall, at the request of the General Partner, provide such evidence of his status as the General Partner may reasonably require. If by an Individual: SIGNATURE GUARANTEED BY

Witness to Signature

Signature of Transferee

Name of witness (Please Print) If by a Corporation:

Name of Transferee (Please Print)

Name of Corporation (Transferee) (Please Print) by: (Signature(s) of Officer(s) duly authorized to execute on behalf of Corporation

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SCHEDULE B TO THE GENCAP EQUITY #12 LIMITED PARTNERSHIP AGREEMENT FORM OF UNIT CERTIFICATE

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SCHEDULE C TO THE GENCAP EQUITY #12 LIMITED PARTNERSHIP AGREEMENT LEGAL DESCRIPTION OF THE LANDS
PARCEL 1 PLAN 802NY LOT A EXCEPTING THEREOUT ALL MINES AND MINERALS PARCEL 2 ALL THOSE PORTIONS OF THE NORTH EAST QUARTER OF SECTION SIX (6) TOWNSHIP THIRTY SIX (36) RANGE TWENTY FOUR (24) WEST OF THE FORTH MERIDIAN, IN THE SAID PROVINCE NOT COVERED BY ANY OF THE WATERS OF DEVILS PINE LAKE AS SHOWN ON A PLAN OF SURVEY OF THE SAID TOWNSHIP SIGNED AT OTTAWA ON THE 24TH DAY OF JUNE A.D. 1893 CONTAINING (78.10) ACRES MORE OR LESS EXCEPTION THEREOUT: HECTARES (ACRES) MORE OR LESS A) ALL THAT PORTION OF THE SAID QUARTER SECTION LYING NORTH OF THE NORTHERLY SHORE LINE OF THE SAID LAKE AS SHOWN ON SAID PLAN OF SURVEY, CONTAINING 1.74 4.30 B) PLAN 0420171 SUBDIVISION 12.50 30.89 EXCEPTING THEREOUT ALL MINES AND MINERALS

PARCEL 3 PLAN 9521984 LOT 1 EXCEPTING THEREOUT ALL MINES AND MINERALS

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PARCEL 4 MERIDIAN 4 RANGE 24 TOWNSHIP 36 SECTION 6 ALL THAT PORTION OF THE NORTH WEST QUARTER BOUNDED ON THE NORTH AND EAST BY THE SOUTH SHORE OF DEVILS PINE LAKE, AS SHOWN ON A PLAN OF SURVEY OF THE SAID TOWNSHIP DATED 24 JUNE A.D. 1893, AND WHICH PORTION LIES TO THE NORTH OF THE SURVEYED ROAD ACROSS THE SAID QUARTER SECTION AS SHOWN ON ROAD PLAN 4329BM CONTAINING 24.3 HECTARES (60 ACRES) MORE OR LESS EXCEPTING THEREOUT: A. 7.06 HECTARES (17.5 ACRES), MORE OR LESS, AS SHOWN SUBDIVIDED UNDER PLAN 6122 KS B. 0.328 HECTARE (0.81 OF AN ACRE) MORE OR LESS, FOR ROAD, AND 0.028 HECTARE (0.07 OF AN ACRE) MORE OR LESS, FOR EXTRA ROAD BOTH AS SHOWN ON ROAD PLAN 6107MC C. ALL THAT PORTION DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE NORTH BOUNDARY OF THE SAID QUARTER SECTION WHICH IS 497.65 FEET EAST OF THE NORTH WEST CORNER THEREOF THE SAID NORTH BOUNDARY HAVING AN ASSUMED BEARING OF NORTH 89 DEGREES 54.5 MINUTES EAST; THENCE ON A BEARING OF SOUTH 51 DEGREES 6 MINUTES EAST A DISTANCE OF 112.70 FEET;. THENCE ON A BEARING OF SOUTH 75 DEGREES AND 17 MINUTES EAST A DISTANCE OF 299.60 FEET THENCE ON A BEARING OF NORTH SS DEGREES 13.5 MINUTES EAST A DISTANCE . OF 232 FEET; THENCE ON A BEARING OF NORTH 4 DEGREES 24.5 M I N U T E S E A S T TO THE POINT OF INTERSECTION WITH THE SOUTH WEST BANK OF GHOSTPINE LAKE; THENCE NORTH WESTERLY ALONG THE SAID SOUTH WEST BANK TO THE NORTH BOUNDARY OF SECTION 6; THENCE WESTERLY ALONG THE SAID NORTH BOUNDARY TO THE POINT OF COMMENCEMENT CONTAINING 0.502 HECTARES (1.24 ACRES) MORE OR LESS EXCEPTING THEREOUT ALL MINES AND MINERALS

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SCHEDULE E PROJECT MANAGEMENT AGREEMENT

THIS AGREEMENT made effective the 26th day of February, 2010 (the Effective Date). BETWEEN: GENCAP EQUITY #12 LIMITED PARTNERSHIP, a limited partnership registered under the laws of the Province of Alberta (hereinafter called the Limited Partnership) AND: 1519848 ALBERTA LTD., a body corporate incorporated under the laws of the Province of Alberta (hereinafter called the Management Company) WHEREAS the Management Company is experienced in matters relating to project management and the Business of the Limited Partnership (as hereinafter defined); AND WHEREAS the Limited Partnership desires to retain the Management Companys management services upon the terms and conditions hereinafter set forth. IN CONSIDERATION of the covenants and agreements contained herein and other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged by each of the parties hereto), the parties hereto hereby agree as follows: ITEM 1 1.1 DEFINITIONS AND INTERPRETATION

Definitions - Where used in this Agreement or in any amendment or supplement hereto, unless the context otherwise requires, the following words and phrases shall have the meaning ascribed to them below: (a) (b) (c) Business means the business of the Limited Partnership in the broadest sense, including activities relating to the development of the Pine Lake Project; General Partner means 1519848 Alberta Ltd.; Key Personnel means the services performed by Key Personnel to be provided to the Limited Partnership during the term hereof for the Limited Partnerships Business which services shall be provided for by the Key Personnel to the Limited Partnership hereunder pursuant to the particular agreements which the Key Personnel have entered into with the Limited Partnership for the Limited Partnerships benefits; Key Personnel Services means the services of the Key Personnel to be provided to the Limited Partnership during the term hereof for the management, direction, leadership, strategic planning and business promotion of the Limited Partnership, which services shall be provided by the Key Personnel to the Limited Partnership hereunder pursuant to the particular agreements which the Key Personnel have entered into with the Management Company; Limited Partnership means GenCap Equity #12 Limited Partnership; Pine Lake Lands means the lands to be acquired by the Limited Partnership, as legally described in Schedule A attached hereto; Pine Lake Project means the acquisition, rezoning and sale or development of the Pine Lake Lands; Project Management Fee has the meaning set forth in clause 4.1; and Project Management Services means those services provided by the Management Company to the Limited Partnership, which include, without limitation, the following: E-1

(d)

(e) (f) (g) (h) (i)

4036261.11

(i) (ii) (iii)

complete the purchase of the Pine Lake Lands, including assisting with raising funds and obtaining mortgage financing, where required; defining the requirements of the Pine Lake Project; develop timeline objectives for accomplishing specific approvals required in connection with the Pine Lake Project, recognizing the indefinite nature of County approvals and natural market forces which would have an impact on approval timing; determine the required resources to undertake the process and obtain County approvals, including identifying both the required services, including without limitation, any engineering and planning services, as well as a selection of suitable candidates to conduct these services, and decisions with regards to which candidates to use; evaluate the performance of each service provider on an ongoing basis and provide a summary on a quarterly basis; providing day to day business supervision as required of any Key Personnel; approving of the annual budget, any marketing or research, as necessary and as required from time to time; accounting for all revenues and expenditures of the Business in accordance with generally accepted accounting principles; filing all income and sales tax returns and reports and tax withholdings under the Income Tax Act (Canada) and provincial taxing statutes and any amendments thereto; attending to all banking matters at any institutions where the Limited Partnership regularly banks; reviewing and forecasting certain aspects of the Business in order to maximize profitability; and such other services as may be reasonably incidental to the performance of its obligations hereunder.

(iv)

(v) (vi) (vii) (viii) (ix) (x) (xi) (xii) ITEM 2 2.1

AGREEMENT FOR MANAGEMENT SERVICES

Agreement to Provide Project Management Services- The Limited Partnership hereby engages and retains the Management Company to provide the Management Services, and the Management Company hereby agrees to provide the Project Management Services to the Limited Partnership upon the terms and conditions hereinafter set forth. The Management Company shall provide and perform the Project Management Services diligently and conscientiously to the best of its ability and to the General Partners reasonable satisfaction. Authority of Management Company - The Management Company shall have the authority to make the usual contracts necessary for managing the Business of the Limited Partnership in the ordinary course, including authority to order goods and services required for such Business affairs or make any applications on behalf of the Limited Partnership. Liability of Management Company - The Management Company shall not be liable to the Limited Partnership for any mistake or error in judgment, for any act or omission believed in good faith to be within the scope of authority conferred on the Management Company by this Agreement, or for any loss or damage incurred by the Limited Partnership relative to any operations carried out pursuant to this Agreement; provided that the Management Company shall be liable for any loss or damage to the Limited Partnership when such loss or damage is caused by the fraud, gross negligence or wilful misconduct of the Key Personnel. Indemnification - Subject to 2.3 above, the Limited Partnership shall indemnify and save harmless, the Management Company, its officers, directors, agents and employees against and from any claims, losses, liabilities or damages asserted by any person whomsoever as a result of the Management Company carrying out its duties under the term of this Agreement or the performance or non performance of this Agreement by the Limited Partnership, the Limited Partners or any independent contractors of the Limited Partnership. Additionally, if required by the Management Company, the Limited Partnership shall at its E-2

2.2

2.3

2.4

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own cost and expense, obtain and maintain in force certain public liability insurance with respect to the Pine Lake Project with the Management Company named as a co-insured under said insurance policy and the Limited Partnership shall provide a copy of said insurance policy to the Management Company evidencing the same. 2.5 Control by the Limited Partnership - Functions and duties to be exercised and carried on by the Management Company under the terms of this Agreement shall at all times be subject to the direction and control of the board of directors of the General Partner who may or may not be the Management Company, and nothing herein contained shall operate in any way to derogate from or prejudice the exercise of the powers and authority of the said board of directors, or to authorize the Management Company to do any acts or things which, according to law or must be done by the General Partner. Relationship of Parties - All individuals whose services are provided to the Limited Partnership hereunder shall be considered for all purposes to be employees or independent contractors of the Management Company, and not of the Limited Partnership. TERM OF AGREEMENT

2.6

ITEM 3 3.1

Term and Renewal - Unless otherwise terminated in accordance with the provisions hereof, the engagement and retainer of the Management Company by the Limited Partnership shall be continued hereunder until December 31, 2018, provided, however, that the term of engagement and retainer hereunder shall be automatically extended unless terminated by either party upon written notice to the other, to be received not less than 180 days prior to the end of the initial term of engagement and retainer hereunder or any extension of the term thereafter. PROJECT MANAGEMENT FEE

ITEM 4 4.1

Project Management Fee - In consideration for the provision of the Project Management Services by the Management Company hereunder, the Limited Partnership shall pay to the Management Company the Project Management Fee. The Limited Partnership shall pay the Project Management Fee to the Management Company pursuant to the amount of $3,600.00, plus GST if applicable. In addition, the Project management Company shall be reimbursed for any out of pocket expense, including, without limitation, any accounting or legal fees that it incurs as acting as the General Partner or Management Company for the Limited Partnership. The Management Company may require the payment of the costs representing the Project Management Fee on the dates that such costs are due to be paid by the Management Company for those providing persons services to the Management Company, provided that such payments are required no more frequently than weekly. TERMINATION OF ENGAGEMENT AND RETAINER

ITEM 5 5.1

Termination for Cause - Notwithstanding Section 3.1 hereof, the engagement and retainer of the Management Company by the Limited Partnership pursuant to this Agreement may be terminated by the Limited Partnership for cause at any time, without payment of any compensation either by way of anticipated earnings or damages of any kind. For the purposes hereof, the term cause shall include, but is not limited to: (a) (b) (c) fraud, felonious conduct or dishonesty of the Key Personnel; wilful misconduct or gross negligence by the Key Personnel in the performance of his duties hereunder; or breach by the Management Company of any material provision of this Agreement.

Any termination by reason of the foregoing shall not be in limitation of any other right or remedy that the Limited Partnership may have under this Agreement or otherwise. 5.2 Termination without Cause - The engagement and retainer of the Management Company pursuant to this Agreement may be terminated by the Limited Partnership without cause with the minimum of one hundred and eighty (180) days written notice by the Limited Partnership to the Management Company and with compensation due to the Management Company as liquidated damages in the sum equal to the previous years aggregate Project Management Fee. Notwithstanding the foregoing, the Agreement may be terminated at any time with the written consent signed by both parties. E-3
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ITEM 6 6.1

OBLIGATION TO PURCHASE THE PINE LAKE LANDS

In the event that the Class A Unitholders have not had all of their Contributed Capital (as defined in the Partnership Agreement of Limited Partnership, dated February 26, 2010, as amended) returned to them on or before the date that the Limited Partnership is to be dissolved (December 31, 2018), then the Management Company shall be obligated to (provided that the Management Company has not been removed from being the general partner of the Partnership by the Limited Partners) purchase the Pine Lake Lands, or any portion of the Pine Lake Lands that have not been sold, from the Partnership. The Purchase Price for the lands shall be the Contributed Capital account for the Class A Unit Holders, plus ten (10%) percent. CONFIDENTIALITY

ITEM 7 7.1

Management Companys Covenants - The Management Company acknowledges that in the course of its engagement and retainer hereunder it will have access to and be entrusted with information relating to the Limited Partnership and the Pine Lake Project which has not been disclosed to third parties (Confidential Information), including without limitation financial information, development information, studies, reports, marketing information and personnel information, the disclosure of which Confidential Information to competitors of the Limited Partnership or to the general public would be highly detrimental to the best interests of the Limited Partnership. The Management Company further acknowledges that the Confidential Information and the confidentiality thereof represent a material portion of the Business of the Limited Partnership. The Management Company therefore acknowledges and agrees that the right to maintain on a confidential basis the Confidential Information constitutes a proprietary right which the Limited Partnership is entitled to protect. Accordingly, the Management Company covenants and agrees with the Limited Partnership that except as required by the Limited Partnership or as required by law, the Management Company will not disclose any Confidential Information to any person nor use the same for any purposes other than those of the Limited Partnership at any time during or after the period of its engagement and retainer hereunder. Enforcement - The Management Company hereby agrees that all restrictions contained in Section 6.1 hereof are reasonable and valid. The Management Company acknowledges that a violation of any of the provisions of Section 6.1 hereof will result in immediate and irreparable damage to the Limited Partnership which would be difficult or impossible to quantify in terms of money damages, and the Management Company agrees that in the event of such violation the Limited Partnership shall, in addition to any other rights to relief, be entitled to equitable relief by way of temporary or permanent injunction and to such other relief as any court of competent jurisdiction may deem just and proper. If the Management Company is in breach of any of such restrictions, the running of the period of proscription shall be stayed and shall recommence upon the date the Management Company ceases to be in breach thereof, whether voluntarily or by injunction. Return of Information and Property - Upon termination of its engagement and retainer by the Limited Partnership for any cause or reason, the Management Company will promptly deliver to the Limited Partnership all books, documents, data, records, money, securities, reports, studies or other property belonging to the Limited Partnership or for which the Limited Partnership is liable to others, which are in the possession, charge, control or custody of the Management Company, and the Management Company shall not take or retain any documents or data, or any reproduction or excerpt of any document or data, containing or pertaining to any Confidential Information. GENERAL PROVISIONS

7.2

7.3

ITEM 8 8.1 8.2

Time - Time shall be of the essence of this Agreement. Further Assurances - Each of the parties hereto shall from time to time and at all times hereafter, without further consideration, do and perform all such further acts and things, and execute and deliver all such further agreements, assurances, deeds, documents and instruments as may be reasonably necessary to carry out the intent and purpose of this Agreement. Severability - If any provision of this Agreement is wholly or partially unenforceable for any reason, such enforceability shall not affect the enforceability of the balance of this Agreement, and all remaining provisions of this Agreement shall nevertheless be valid, enforceable, and carried into effect. All provisions E-4

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of this Agreement shall, if alternative interpretations are applicable, be construed so as to preserve the enforceability of same. 8.4 Survival of Covenants - The parties hereto agree that the covenants contained in Article 6 of this Agreement shall survive the termination of the engagement and retainer of the Management Company hereunder, regardless of the reason for such termination. Notices - Any and all notices and other communications provided for herein shall be given in writing by registered or certified mail, or actual delivery, which shall be addressed to either party hereto to its regular business address. Enurement - This Agreement shall be binding upon and enure to the benefit of the Management Company and the Limited Partnership and their respective successors and permitted assigns. Assignment - Except as otherwise provided for in this Agreement, this Agreement shall not be assigned by Management Company with the prior written consent of the Limited Partnership, except to an affiliate of the Management Company which does not require the Limited Partnerships prior written consent. Entire Agreement: Amendments - This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any and all agreements, either oral or in writing, between the parties hereto with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless the same be in writing and signed by the Management Company and the Limited Partnership. Waiver - No waiver of any provision of this Agreement shall be valid unless in writing and signed by the person or party granting such waiver. Either partys failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision as to any future violation thereof, nor prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted to the parties herein are cumulative and the waiver by a party of any single remedy shall not constitute the waiver of such partys right to assert all other legal remedies available to it under the circumstances. Headings - The headings in this Agreement are inserted for convenience only and are not to be considered in construction of the provisions hereof. Applicable Law - This Agreement shall be construed, interpreted and enforced in accordance with, and the respective rights and obligations of the parties shall be governed by, the laws of the Province of Alberta and the federal laws of Canada applicable therein, and each party hereby irrevocably and unconditionally submits to the jurisdiction of the courts of the Province of Alberta and all courts competent to hear appeals therefrom. Gender and Number - As used in this Agreement where appropriate, the masculine shall include the feminine, and vice versa, and the singular shall include the plural, and vice versa.

8.5

8.6 8.7

8.8

8.9

8.10 8.11

8.12

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8.13

Counterparts This Agreement may be executed in one or more counterparts, or by fax or electronic copy, all of which shall form one in the same Agreement.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as at the date set forth at the top of the first page hereof. GENCAP EQUITY #12 LIMITED PARTNERSHIP, by its General Partner, 1519848 Alberta Ltd. Per: 1519848 Alberta Ltd.

Per:

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SCHEDULE A TO THE PROJECT MANAGEMENT AGREEMENT BETWEEN GENCAP EQUITY #12 LIMITED PARTNERSHIP AND 1519848 ALBERTA LTD. THE PINE LAKE LANDS
PARCEL 1 PLAN 802NY LOT A EXCEPTING THEREOUT ALL MINES AND MINERALS PARCEL 2 ALL THOSE PORTIONS OF THE NORTH EAST QUARTER OF SECTION SIX (6) TOWNSHIP THIRTY SIX (36) RANGE TWENTY FOUR (24) WEST OF THE FORTH MERIDIAN, IN THE SAID PROVINCE NOT COVERED BY ANY OF THE WATERS OF DEVILS PINE LAKE AS SHOWN ON A PLAN OF SURVEY OF THE SAID TOWNSHIP SIGNED AT OTTAWA ON THE 24TH DAY OF JUNE A.D. 1893 CONTAINING (78.10) ACRES MORE OR LESS EXCEPTION THEREOUT: HECTARES (ACRES) MORE OR LESS A) ALL THAT PORTION OF THE SAID QUARTER SECTION LYING NORTH OF THE NORTHERLY SHORE LINE OF THE SAID LAKE AS SHOWN ON SAID PLAN OF SURVEY, CONTAINING 1.74 4.30 B) PLAN 0420171 SUBDIVISION 12.50 30.89 EXCEPTING THEREOUT ALL MINES AND MINERALS

PARCEL 3 PLAN 9521984 LOT 1 EXCEPTING THEREOUT ALL MINES AND MINERALS

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PARCEL 4 MERIDIAN 4 RANGE 24 TOWNSHIP 36 SECTION 6 ALL THAT PORTION OF THE NORTH WEST QUARTER BOUNDED ON THE NORTH AND EAST BY THE SOUTH SHORE OF DEVILS PINE LAKE, AS SHOWN ON A PLAN OF SURVEY OF THE SAID TOWNSHIP DATED 24 JUNE A.D. 1893, AND WHICH PORTION LIES TO THE NORTH OF THE SURVEYED ROAD ACROSS THE SAID QUARTER SECTION AS SHOWN ON ROAD PLAN 4329BM CONTAINING 24.3 HECTARES (60 ACRES) MORE OR LESS EXCEPTING THEREOUT: A. 7.06 HECTARES (17.5 ACRES), MORE OR LESS, AS SHOWN SUBDIVIDED UNDER PLAN 6122 KS B. 0.328 HECTARE (0.81 OF AN ACRE) MORE OR LESS, FOR ROAD, AND 0.028 HECTARE (0.07 OF AN ACRE) MORE OR LESS, FOR EXTRA ROAD BOTH AS SHOWN ON ROAD PLAN 6107MC C. ALL THAT PORTION DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE NORTH BOUNDARY OF THE SAID QUARTER SECTION WHICH IS 497.65 FEET EAST OF THE NORTH WEST CORNER THEREOF THE SAID NORTH BOUNDARY HAVING AN ASSUMED BEARING OF NORTH 89 DEGREES 54.5 MINUTES EAST; THENCE ON A BEARING OF SOUTH 51 DEGREES 6 MINUTES EAST A DISTANCE OF 112.70 FEET;. THENCE ON A BEARING OF SOUTH 75 DEGREES AND 17 MINUTES EAST A DISTANCE OF 299.60 FEET THENCE ON A BEARING OF NORTH SS DEGREES 13.5 MINUTES EAST A DISTANCE . OF 232 FEET; THENCE ON A BEARING OF NORTH 4 DEGREES 24.5 M I N U T E S E A S T TO THE POINT OF INTERSECTION WITHTHE SOUTH WEST BANK OF GHOSTPINE LAKE; THENCE NORTH WESTERLY ALONG THE SAID SOUTH WEST BANK TO THE NORTH BOUNDARY OF SECTION 6; THENCE WESTERLY ALONG THE SAID NORTH BOUNDARY TO THE POINT OF COMMENCEMENT CONTAINING 0.502 HECTARES (1.24 ACRES) MORE OR LESS EXCEPTING THEREOUT ALL MINES AND MINERALS

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SCHEDULE F SUBSCRIPTION AGREEMENT

GENCAP EQUITY #12 LIMITED PARTNERSHIP
The undersigned (hereinafter referred to as the Subscriber) hereby irrevocably subscribes for and agrees to purchase the number of Units (as defined herein) of the Limited Partnership as stated below for the aggregate subscription amount set forth below, representing a subscription price of $1,000.00 per Unit ($980.00 if purchased on or before April 30, 2010), subject to the terms and conditions set forth in Terms and Conditions of Subscription for Units of GenCap Equity #12 Limited Partnership (the Limited Partnership) attached hereto (together with this page and the attached Schedules and Appendices, the Subscription Agreement). Subscription funds must be delivered by bank draft or certified cheque made payable to Miller Thomson LLP, in Trust.
Number of Units: (Name of Subscriber - please print) Aggregate Subscription Amount: Per: Authorized Signature Subscribers Tax Information (Name of Subscriber - please print) Social Insurance Number Per: Authorized Signature Social Insurance Number If the Subscriber is not an individual, Name and Official Capacity or Title Business Number Subscribers Address If the Subscriber beneficially owns, directly or indirectly, any securities of the Limited Partnership, describe them below:

Type of Security Telephone Number Email Quantity Deliver the Securities as set forth below: Name Account Reference, if applicable

Register the Securities as set forth below: Name(s) Account Reference, if applicable

Address

Contact Name

Address

Address

By executing this Subscription, you are consenting (on your behalf and, if applicable, on behalf of the beneficial purchaser for whom you are contracting), to the collection, use and disclosure of personal information in the manner described in the in Section 7 of this Subscription. Acceptance: GenCap Equity #12 Limited Partnership hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement. DATED at _________________ in the Province of ___________________ this ____ day of _____________, 201___. GENCAP EQUITY #12 LIMITED PARTNERSHIP, by its General Partner 1519848 Alberta Ltd. Per: Subscription No:

________________

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Please make sure that your subscription includes: 1. one (1) signed copy of this Subscription Agreement; 2. a cheque or bank draft in an amount equal to the Aggregate Subscription Amount, payable to: Miller Thomson LLP, in trust; and 3. a properly completed and duly executed copy of the appropriate Schedule to the Subscription Agreement: (a) if an accredited investor in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba or Ontario, a Representation Letter in the form attached to this Subscription Agreement as Schedule A (please initial the Appendix 1 to Schedule A as indicated); or if not an accredited investor, then Schedule B, complete with Appendix 1 and Appendix 2 to Schedule B; and if the Units are being sold by a person not registered with an authorized security regulator in accordance with National Instrument 31-103 and the Units are being purchased after March 27, 2010, then Schedule C must be completed.

(b) (c)

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TERMS AND CONDITIONS OF SUBSCRIPTION FOR UNITS OF GENCAP EQUITY #12 LIMITED PARTNERSHIP 1. Definitions In this Agreement: (a) (b) (c) (d) (e) (f) (g) (h) (i) Accredited Investor has the meaning as more particularly set out in Appendix 1 of Schedule A attached hereto; Agreement or Subscription Agreement means this subscription agreement as may be amended from time to time; Business Day means a day on which Canadian chartered banks are open for the transaction of regular business in the City of Calgary, Alberta; Closing means the one or more closing(s) of the purchase and sale of the Offered Securities; Closing Date means the date on which an initial Closing of the sale of the Offered Securities takes place, or such other date or dates designated by the Limited Partnership; General Partner means 1519848 Alberta Ltd.; Limited Partner or Limited Partners means the limited partner(s) of the Partnership; Limited Partnership or Partnership means GenCap Equity #12 Limited Partnership, a limited partnership established under the laws of the Province of Alberta; Limited Partnership Agreement means the limited partnership agreement dated February 26, 2010 between 1519848 Alberta Ltd. (as the General Partner), James Perks (as the Initial Limited Partner) and the Limited Partners, as amended. NI 31-103 means National Instrument 31-103 Registration Requirements and Exemptions of the Canadian Securities Administrators; NI 45-106 means National Instrument 45-106 Prospectus and Registration Exemptions of the Canadian Securities Administrators; Offered Securities means the 9,500 Class A Units (Units) offered under this Offering, plus 10% over-allotment option of 950 Units; Offering means the aggregate offering of up to 10,450 Units, if the over-allotment option is exercised by the General Partner; Offering Jurisdictions means the Provinces or Territories of Canada in which Limited Partnership Units are offered for sale; Offering Memorandum means the amended confidential offering memorandum of the Limited Partnership dated March 16, 2010; Person means an individual, a firm, a limited partnership, a syndicate, a partnership, a trust, an association, an unincorporated organization, a joint venture, an investment club, a government or an agency political subdivision thereof and every other from of legal or business entity of whatsoever nature of kind; Purchased Securities means the Offered Securities purchased by the Subscriber, as set out on the front page of this Subscription Agreement; Securities Laws means the securities legislation and regulations of, and the instruments, policies, rules, orders, codes, notices and interpretation notes of the applicable securities regulatory authority or applicable securities regulatory authorities of, the Offering Jurisdictions; Subscriber means the signatory herein; Subscription Amount means those funds received by the Limited Partnership with respect to the Purchased Securities subscribed for under this Agreement; Subscription Price means $1,000.00 (CDN) per Unit ($980.00 if purchased on or before April 30, 2010); F-3
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(j) (k) (l) (m) (n) (o) (p)

(q) (r)

(s) (t) (u)

(v) (w) 2.

Tax Act means the Income Tax Act (Canada), as amended, re-enacted or replaced from time to time; and Unit(s) means one or more Class A limited partnership units in GenCap Equity #12 Limited Partnership.

Acknowledgements of Subscriber The Subscriber acknowledges that: (a) (b) this subscription for Units is subject to compliance with all relevant securities law requirements; the Subscriber is aware that the offer made by this subscription is irrevocable and requires acceptance by the General Partner and will not become an agreement between the Subscriber and the Limited Partnership until accepted by the General Partner on behalf of the Limited Partnership; the Subscriber is making the investment entirely at its own risk and has not received advice on the merits or suitability of this investment by the General Partner nor the Limited Partnership; no securities commission or similar regulatory authority has evaluated or endorsed the merits of the Purchased Securities and there is no government or other insurance covering the Purchased Securities; there are restrictions on his ability to resell the Purchased Securities and it is his responsibility to find out what those restrictions are and to comply with them before selling the Purchased Securities; the offering of the Units by the Limited Partnership is not underwritten and is not subject to any minimum subscription level. Therefore, any funds invested are available to the Limited Partnership and need not be returned to the Subscriber; no federal or provincial agency, governmental authority, regulatory body, stock exchange or other entity in Canada has either reviewed this Subscription Agreement, or any other documents which the Limited Partnership has provided or made available to the Subscriber, or made any finding or determination as to the merits of this investment, and no such agencies, governmental authorities, regulatory bodies, stock exchanges or other entities have made any recommendation or endorsement with respect to the Offered Securities; the Subscriber acknowledges that the sale of the Offered Securities has not been qualified for distribution under the securities legislation of any province or other jurisdiction, by way of prospectus or otherwise, and that the Subscriber is purchasing the Offered Securities pursuant to exemptions or orders contained in or issued under securities legislation and the Subscriber will not have the right to most of the civil remedies established by securities legislation; and the Subscriber has been informed that the Offered Securities sold to Subscribers resident in Alberta, British Columbia, Manitoba, the Northwest Territories, Nunavut or the Yukon Territory pursuant to the following prospectus exempt distributions: i) the accredited investor; ii) family, friends and business associates; iii) offering memorandum; and iv) minimum $150,000 purchase of a security in one transaction; may be sold by a person pursuant to a dealer registration exemption and the person may not be registered as Exempt Market Dealer with a Canadian securities regulatory authority in accordance with NI 31-103; and the person relying on the registration exemption must: i) not be registered in any category of dealer registration with a securities regulatory authority in any jurisdiction; ii) not provide suitability advice about the trade to the Subscriber; iii) except in British Columbia, not otherwise provide financial services to the Subscriber; iv) not hold or have access to the Subscribers assets; v) provide the Subscriber the risk disclosure in the form attached hereto at Schedule C; and vi) file a dealer information report with the securities regulatory authority.

(c) (d)

(e)

(f)

(g)

(h)

(i)

3.

Representations and Warranties of the Subscriber By executing this Agreement, the Subscriber represents, warrants and covenants to the Limited Partnership and the General Partner (and acknowledges that the Limited Partnership, the General Partner and their legal counsel are relying thereon) that: F-4

4036261.11

A. (a)

General he understands that there is no market for the Purchased Securities, that no market may develop, and that the Limited Partnership is not a reporting issuer, as defined under Securities Laws, and resale of the Purchased Securities is restricted; he is purchasing the Purchased Securities as principal for his own account, not for the benefit of any other person, and not with a view to resale or distribution; the Subscriber, if an individual, has attained the age of majority and is legally competent to execute this subscription and to take all actions required pursuant to its terms; the Subscriber, if a corporation, is duly incorporated and organized, is a valid and subsisting corporation and has the full corporate right, power and authority to execute and deliver this Agreement; if he is a resident of an Offering Jurisdiction and cannot otherwise satisfy any of the requirements set forth in this Section 3, he is acquiring the Purchased Securities pursuant to and in compliance with an exemption from the prospectus requirements of the Securities Laws of the jurisdiction in which he resides and will provide the General Partner and the Limited Partnership, on request, whether before or after the Closing Date, with evidence of such compliance; other than the Offering Memorandum, the receipt of which the Subscriber hereby acknowledges, the Subscriber has not (nor, if applicable, has any other person on whose behalf the Subscriber is contracting) received, nor does the Subscriber need to receive, any document purporting to describe the business and affairs of the Limited Partnership that has been prepared for delivery to and review by prospective investors so as to assist those investors to make an investment decision in respect of securities being sold in a distribution of securities of the Limited Partnership. The Subscriber acknowledges that he has read or has had the opportunity to read the Limited Partnership Agreement. The Subscribers decision to tender this offer and acquire the Purchased Securities has not been made as a result of any verbal or written representation as to fact or otherwise made by or on behalf of the General Partner or the Limited Partnership (other than the Offering Memorandum) or any other person and is based entirely upon the Offering Memorandum; he is capable of assessing the proposed investment in the Purchased Securities as a result of his financial or investment experience or as a result of advice received from a registered person other than the General Partner or the Limited Partnership or an affiliate thereof and he is able to bear the economic loss of the investment in the Purchased Securities; he is not a U.S. Person (as that term is defined in Rule 902 of Regulation S under the Securities Act of 1933, as amended, of the United States of America) and is not and will not be purchasing Offered Securities for the account or benefit of any U.S. Person and did not execute or deliver this Agreement in the United States of America; he acknowledges that no agency, governmental authority, securities commission or similar regulatory body, stock exchange or other entity has reviewed, passed on or made any finding or determination as to the merit for investment of the Purchased Securities nor have any such agencies or governmental authorities made any recommendation or endorsement with respect to the Purchased Securities; the General Partner has advised the Subscriber that the General Partner and the Limited Partnership are relying on an exemption from the requirements to provide the Subscriber with a prospectus and to sell the Purchased Securities through a person registered to sell securities under the Securities Laws and, as a consequence of acquiring securities pursuant to this exemption: (i) (ii) (iii) certain protections, rights and remedies provided by the Securities Laws, may not be available to the Subscriber, or others for whom he is contracting hereunder; the Subscriber, or others for whom he is contracting hereunder, may not receive information that would otherwise be required to be given under the Securities Laws; and the Limited Partnership is relieved from certain obligations that would otherwise apply under the Securities Laws of the Offering Jurisdictions; F-5

(b) (c) (d)

(e)

(f)

(g)

(h)

(i)

(j)

4036261.11

(k)

except as set out in this Agreement, no person has made to the Subscriber any written or oral representation: (i) (ii) (iii) (iv) that any person will resell or repurchase any of the Purchased Securities; that any person will refund the purchase price of the Purchased Securities; as to the future price or value of any of the Purchased Securities; or that any of the Purchased Securities will be listed and posted for trading on a stock exchange or that application has been made to list and post any of the Purchased Securities for trading on a stock exchange;

(l) (m) (n)

the Subscriber is a resident of the Offering Jurisdictions as set forth below under Purchasers Address; this Agreement has been duly and validly authorized, executed and delivered by and constitutes a legal, valid, binding and enforceable obligation of the Subscriber; if required by applicable securities legislation, policy or order, or securities commission or other regulatory authority, the Subscriber will execute, deliver, file and otherwise assist the Limited Partnership in filing, such reports, undertakings, and other documents with respect to the issue of Purchased Securities that may be required; the Subscriber (on its own behalf and, if applicable, on behalf of others for whom it is contracting hereunder) understands and acknowledges that the Purchased Securities will be subject to certain resale restrictions under applicable Securities Laws and the Subscriber (on its own behalf and, if applicable, on behalf of others for whom it is contracting hereunder) agrees to comply with such restrictions. In particular, the Subscriber further understands and acknowledges that the Partnership is not a reporting issuer in any Province in Canada and, therefore, the Purchased Securities will be subject to a statutory hold period which will be of an indefinite period (i.e., will not commence to be reduced) unless and until such time as the Partnership becomes a reporting issuer in a Canadian jurisdiction, and during such statutory hold period, none of the Purchased Securities may be resold except pursuant to a statutory exemption or a discretionary ruling issued by the securities commission in the Subscribers province of residence. Subscribers are advised to consult their own legal advisors in this regard. The Subscriber (on its own behalf and, if applicable, on behalf of others for whom it is contracting hereunder) acknowledges that it has been advised to consult its own legal advisors with respect to applicable resale restrictions and that it is solely responsible for complying with such restrictions (and neither the Partnership nor the General Partner are in any manner responsible for ensuring compliance by the Subscriber with such restrictions); the Subscriber is not a non-resident of Canada as that term is defined in the Tax Act; the Subscriber is able to bear the economic risk of loss of his investment and has the investment acumen to assess the securities being offered hereunder because of the Subscribers net worth and investment experience; the Subscriber has had the opportunity to consult his own independent professional advisors with respect to the income tax consequences of purchasing the Offered Securities; none of the Offered Securities are being purchased by the Subscriber with knowledge of any material fact about the Limited Partnership that has not been generally disclosed; and the Subscriber has had the opportunity to consult a professional advisor or a registered Exempt Market Dealer about the merits of this investment and whether these Offered Securities are a suitable investment. Offering Jurisdictions

(o)

(p) (q)

(r) (s) (t)

B.

If the Subscriber is resident in, or are otherwise subject to the Securities Laws of the Offering Jurisdictions, then: (a) he is either:

F-6
4036261.11

(i)

purchasing the Purchased Securities as principal for his own account and not for the benefit of any other Person and he has a NI 45-106 prospectus exemption available to him as set out in Schedule A or Schedule B; or subscribing for the Purchased Securities as agent for a beneficial principal disclosed on the execution page of this Agreement, and he is not an agent or trustee and each disclosed principal for whom he is acting has a NI 45-106 prospectus exemption available to him/her/it as set out in Schedule A or Schedule B and is purchasing as principal for his/her/its own account, and not for the benefit of any other Person, and

(ii)

he has concurrently executed and delivered a certificate in the form of the attached Schedule A or Schedule B, as applicable; (b) (c) the provisions of paragraph (a) of this subsection 3B will be true and correct both as of the date of execution of this Agreement and as of the Closing Date; and the Subscriber acknowledges and consents to the release by the Limited Partnership of certain information regarding the subscription, including the Subscribers name, address, telephone number and registration instructions, the number of Offered Securities purchased, the number of units held, his status as a Subscriber as represented in Schedule A or Schedule B hereto, and, if applicable, information regarding the beneficial ownership of the Subscriber or his principal, in compliance with the Securities Laws or as otherwise required by the law of the Limited Partnership and for the purposes of arranging for the preparation of the certificates representing the Purchased Securities. Power of Attorney In consideration of the General Partner, on behalf of the Partnership, accepting the subscription of the Subscriber and conditional thereon, the Subscriber hereby: (a) agrees to be bound as a limited partner in the Partnership by the terms of the Partnership Agreement, and the Subscriber expressly ratifies and confirms the power of attorney given to the General Partner in the Limited Partnership Agreement and as set out herein; and irrevocably nominates, constitutes and appoints the General Partner with full power of substitution as the Subscribers true and lawful attorney and agent, with full power and authority in the name, place and stead of the Subscriber and for the use and benefit of the Subscriber to do the following namely: (i) make, execute, swear to, sign, acknowledge, deliver and file, including filing for recording at the appropriate public offices, as and where required, any and all of the following: (A) the Limited Partnership Agreement and all declarations and other instruments necessary to form, qualify or continue and keep in good standing the Partnership as a limited partnership under the laws of the Province of Alberta; all instruments, declarations and certificates necessary to reflect any amendment to the Limited Partnership Agreement or to the constitution of the Partnership; and all conveyances, agreements and other instruments necessary or desirable to reflect the dissolution and termination of the Partnership, including cancellation of any certificates or declarations and the execution of any elections under subsection 98(3) of the Tax. Act, as may be amended or re-enacted from time to time, and any analogous Provincial legislation;

C.

(b)

(B)

(C)

(ii)

execute and file with any governmental body or instrumentality thereof of the Government of Canada, or a province or any other governmental authority having jurisdiction, any documents necessary to be filed in connection with the business, property, assets and undertaking of the Partnership; and execute and deliver all such other documents or instruments on behalf of and in the name of the Partnership and for the limited partners of the Partnership as may be deemed necessary or desirable by the General Partner to carry out fully the provisions of the Limited Partnership Agreement in accordance with its terms and conditions. F-7

(iii)

4036261.11

The powers of attorney granted in paragraphs 3C(a) and 3C(b) above are irrevocable, are powers coupled with an interest, shall survive the death, disability, incapacity, insolvency or other legal incapacity of the Subscriber and shall survive the assignment, to the extent of the obligations of the Subscriber under the Limited Partnership Agreement or hereunder, by the Subscriber of the whole or any part of the interest of the Subscriber in the Partnership, and extends to the heirs, executors, administrators, successors and permitted assigns of the Subscriber and may be exercised by the General Partner on behalf of the Subscriber in executing any instrument by listing thereon or referring to all of the limited partners of the Partnership executing such instrument, or otherwise indicating that it is executing such instrument on behalf of all of them, with a single signature as attorney and agent for all of them. The Subscriber hereby agrees to be bound by any representations and actions made or taken in good faith by the General Partner pursuant to the above power of attorney in accordance with the terms hereof and the Limited Partnership Agreement and the Subscriber hereby indemnifies and saves harmless, and waives any right of action or claim he may have against the General Partner and waives any and all defences which may be available to him to contest, negate or disaffirm any action of the General Partner taken in good faith under such power of attorney. 4. Legends For the purposes of complying with applicable Securities Laws, including National Instrument 45-102 Resale of Securities, the Subscriber understands and acknowledges that the certificates representing the Purchased Securities will bear the following legend: Unless permitted under securities legislation, the holder of this security must not trade the securities before the date that is 4 months and a day after the Partnership becomes a reporting issuer in any province or territory of Canada. 5. Contractual Resale Restrictions The Subscriber understands and acknowledges that pursuant to the Partnership Agreement, Limited Partners must obtain consent from the General Partner to transfer, assign or grant a security interest in such Limited Partners Units. In order to be admitted as a Limited Partner, a purchaser, transferee, assignee or successor must: (a) (b) (c) elect to become a substituted Limited Partner by delivering a written notice of such election to the General Partner; obtain consent from the General Partner which consent shall be in the General Partners sole judgment and discretion; execute and acknowledge such instruments as the General Partner deems necessary or advisable to effect the admission of such purchaser, transferee, assignee or successor as a substitute Limited Partner, including without limitation the written acceptance and adoption by such Person of the provisions of the Partnership Agreement; and if requested by the General Partner, deliver an opinion of counsel satisfactory to the General Partner that such sale, transfer and assignment does not violate any applicable laws.

(d) 6.

Representations and Warranties of the Limited Partnership The Limited Partnership represents and warrants to and for the benefit of the Subscriber (and acknowledges that the Subscriber is relying thereon) that: (a) (b) (c) the Partnership has been duly formed and is validly subsisting under the laws of the Province of Alberta; the General Partner has been duly incorporated and organized, and is a valid and subsisting corporation, under the-laws of the Province of Alberta; the General Partner, on behalf of the Partnership, has the full corporate right, power and authority to execute and deliver this Agreement and to authorize the issuance of the Offered Securities to the Subscriber;

F-8
4036261.11

(d)

all necessary corporate action will have been taken by the relevant Closing Date to authorize the issue and sale of, and the delivery of certificates representing, the Offered Securities and, upon payment of the requisite consideration for such Offered Securities, the Units will be validly issued as fully paid and non-assessable; this Agreement constitutes a binding obligation of the Limited Partnership enforceable in accordance with its terms; and the execution and delivery of, and the performance of the terms of the Agreement by the Limited Partnership, including the issue of the Purchased Securities described herein do not constitute a breach of, or default under, the constating documents of the Limited Partnership or any law, regulation, order or ruling applicable to the Limited Partnership or any agreement, contract or indenture to which the Limited Partnership is a party or by which it is bound.

(e) (f)

7.

Closing The initial closing of the Offered Securities will be completed at the offices of Miller Thomson LLP or the Limited Partnership in Calgary, Alberta at 4:00 p.m. (local time) (the Closing Time), on or before March 26, 2010 and subsequent closing shall occur on such other dates and times as may determined by the General Partner, in its sole discretion.

8.

Required Documents The Subscriber agrees to deliver to the Limited Partnership prior to the Closing Date: (a) (b) (c) (d) this duly completed and executed Agreement; a duly completed and executed Schedule A or Schedule B, as applicable; a certified cheque or bank draft payable to Miller Thomson LLP, in trust for the Subscription Amount; a duly completed and executed Schedule C, if the Units are being sold be a person not registered with an authorized security regulator in accordance with NI 31-103 and the Units are being purchased on or after March 28, 2010; and such other documents as may be requested as contemplated by Section 3 hereof. This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein. This Agreement shall be subject to the approval of all securities and regulatory authorities having jurisdiction. The Limited Partnership will have the right to accept or reject the Subscribers subscription in whole or in part at any time at or prior to the Closing. Notwithstanding the foregoing, the Subscriber acknowledges and agrees that the acceptance of this Agreement will be conditional, among other things, upon the sale of the Units to the Subscriber being exempt from any prospectus requirements of applicable Securities Laws. This Agreement may be executed in several counterparts each of which when so executed shall be deemed to be an original, and such counterparts shall constitute one and the same instrument and notwithstanding the date of execution shall be deemed to bear date as of the date of this Agreement. This Agreement shall be considered properly executed by any party if executed and transmitted by facsimile or executed, scanned and sent by electronic mail to the other party or its solicitors and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. The Subscriber agrees that the General Partner or the Limited Partnership will not be liable for any misrepresentation if the Subscriber purchased Offered Securities with knowledge of the misrepresentation; and in any event, in an action for damages, the General Partner or the Limited Partnership is not liable for all or any portion of such damages that do not represent the depreciation in value of Purchased Securities as a result of the misrepresentation relied upon. F-9

(e) 9. (a) (b) (c)

General Terms

(d)

(e)

4036261.11

(f)

The Subscriber agrees that in no case shall the General Partner or the Limited Partnership be liable for an amount recoverable as a result of a breach of the representations and warranties in this Agreement in excess of the price at which Purchased Securities were sold to the Subscriber. This 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. The Subscriber hereby consents to the collection, use and disclosure by the Limited Partnership and its authorized agents and representatives of the Subscribers personal information set forth herein (Personal Information) to enable the Limited Partnership to fulfill its regulatory and reporting requirements and recognizes that this disclosure may result in the disclosure of some or all of the Personal Information becoming public information and, without limiting the foregoing, consents to the disclosure of such Personal Information to the Limited Partnerships authorized agents and representatives; securities commissions and/or other regulatory agencies in any jurisdiction in which the rules and requirements of such body may require such reporting; or as may be required or permitted by law. In order to permit the Limited Partnership to comply with the requirements of Personal Information Protection and Electronic Documents (Canada) (PIPEDA), the Subscriber expressly consents to the disclosure by the Limited Partnership in any submission or filing that the Limited Partnership may be required to make with any applicable regulatory authority of any Personal Information. The funds representing the aggregate Subscription Price which will be advanced by the Subscriber to the Limited Partnership hereunder will not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) Act (Canada) (the PCMLA) and the Subscriber, acknowledges that the Limited Partnership may in the future be required by law to disclose the name of the Subscriber and other information relating to this Subscription Agreement and the subscription of the Subscriber hereunder, on a confidential basis, pursuant to the PCMLA. To the best of its knowledge (i) none of the subscription funds to be provided by the Subscriber: (A) 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 (B) are being tendered on behalf of a person or entity who has not been identified to the Subscriber; and (ii) it shall promptly notify the Limited Partnership if the Subscriber discovers that any of such representations ceases to be true, and provide the Limited Partnership with appropriate information in connection therewith. Should the Subscribers subscription payment be submitted to the Limited Partnerships lawyers, in trust or otherwise, then the Subscriber agrees that the solicitors shall have no accountability to the Subscriber, whatsoever, and acknowledges that the solicitors are merely recipients for the Limited Partnership and have no solicitors obligations of any nature to the Subscriber. The Subscriber agrees that submission of the payment to the solicitors in trust is to be deposited into the trust account of the Limited Partnership and shall be the property of the Limited Partnership at that point. The only duty the solicitors shall have to the Subscriber is to deliver the subscription agreement (as delivered) and the subscription monies to the Limited Partnership , all solely at the Limited Partnerships instruction, and the solicitors shall require no further instruction from the Subscriber in order to deliver the same to the Limited Partnership. Under no circumstances shall the Limited Partnerships solicitors be considered to be giving legal or other advice or services to the Subscriber and no communication between the Subscriber and such solicitors shall be considered advice (at the most only administrative subscription assistance on behalf of the Limited Partnership) but the Subscriber shall rely solely and exclusively on his own judgment and the advice of his own counsel. Time is of the essence hereof. 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.

(g)

(h)

(i)

(j)

(k)

(l) (m)

F-10
4036261.11

(n) (o)

The covenants, representations and warranties contained herein shall survive the closing of the transactions contemplated hereby. In this Subscription Agreement (including attachments), references to $ or Cdn. $ are to Canadian dollars.

F-11
4036261.11

SCHEDULE A CERTIFICATE TO: AND TO: GENCAP EQUITY #12 LIMITED PARTNERSHIP 1519848 ALBERTA LTD. (the General Partner)

In connection with the purchase by the undersigned or the disclosed principal, as the case may be (the Purchaser), of Units (the Purchased Securities) of GenCap Equity #12 Limited Partnership (the Limited Partnership), the undersigned hereby represents, warrants, covenants to and certifies to the General Partner, the Limited Partnership and their counsel (on behalf of itself or on behalf of the disclosed principal, as the case may be) that: 1. 2. 3. the Purchaser is resident in the Offering Jurisdictions or is subject to the Securities Laws of one of those provinces; the Purchaser is purchasing the Purchased Securities as principal for its own account; the Purchaser is (please initial the appropriate line): (a) ______________ an accredited investor within the meaning of National Instrument 45-106 Prospectus and Registration Exemptions, by virtue of satisfying the indicated criterion as set out in Appendix 1 to this certificate (YOU MUST ALSO INITIAL APPENDIX 1 TO THIS CERTIFICATE); or ______________ a subscriber purchasing the Purchased Securities for an aggregate acquisition cost of not less than $150,000 paid in cash at the time of the trade (other than a person created or used solely to purchase or hold securities in reliance on this exemption from the dealer registration requirement or the prospectus requirement);

(b)

4. the above representations, warranties and covenants will be true and correct both as of the execution of this certificate and as of the closing time of the purchase and sale of the Purchased Securities and will survive the completion of the issue of the Purchased Securities; and 5. the foregoing representations, warranties and covenants are made by the undersigned with the intent that they be relied upon in determining the suitability of the undersigned as a purchaser of the Purchased Securities and the undersigned undertakes to immediately notify the Limited Partnership of any change in any statement or other information relating to the Purchaser set forth herein which takes place prior to the closing time of the purchase and sale of the Purchased Securities. DATED at _____________ in the Province of _______________ this ____ day of _____________, 201__.

Print Name of Purchaser Per: Authorized Signature Title (if applicable) (please print name of individual whose signature appears above, if different from name of purchaser printed above)

F-12
4036261.11

Appendix 1 to Schedule A Accredited Investor - (as defined in National Instrument 45-106) means (Please initial the appropriate line): ________ ________ ________ (a) (b) (c) a Canadian financial institution, or an authorized foreign bank listed in Schedule III of the Bank Act (Canada), the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada), 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, a person or company registered under the securities legislation of a jurisdiction of Canada, as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador), an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada, as a representative of a person or company referred to in paragraph (d), the government of Canada or a jurisdiction of Canada, or any crown Limited Partnership, agency or wholly owned entity of the government of Canada or a jurisdiction of Canada, a municipality, public board or commission in Canada and a metropolitan community, school board, the Comit de gestion de la taxe scolaire de lile de Montral or an intermunicipal management board in Qubec, any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government, a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a pension commission or similar regulatory authority of a jurisdiction of Canada, an individual who, either alone or jointly with a spouse, beneficially owns, directly or indirectly, financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000, an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent years and who, in either case, reasonably expects to exceed that net income level in the current calendar year, an individual who, either alone or with a spouse, has net assets of at least $5,000,000, 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 (other than a person created or used solely to purchase or hold securities as an accredited investor),

________

(d)

________

(e)

________

(f)

________

(g)

________ ________

(h) (i)

________

(j)

________

(k)

________ ________

(l) (m)

F-13
4036261.11

________

(n)

an investment fund that distributes or has distributed its securities only to: (i) (ii) a person that is or was an accredited investor at the time of the distribution, a person that acquires or acquires or acquired securities in the circumstances referred to in sections 2.10 Minimum amount investment and 2.19 Additional investment in investment funds, or a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 Investment fund reinvestment,

(iii) ________ (o)

an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Quebec, the securities regulatory authority, has issued a receipt, a trust company or trust Limited Partnership 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 Limited Partnership, as the case may be, a person or company trading as agent on behalf of a fully managed account managed by that person, if that person (i) 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, and (ii) in Ontario, is purchasing a security that is not a security of an investment fund, 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, an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) and paragraph (i) in form and function, a person or company 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, an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser, or a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Quebec, the regulator as, (i) an accredited investor, or (ii) an exempt purchaser in Alberta or British Columbia under National Instrument 45-106 Prospectus and Registration Exemptions and confirmation of such status is being provided to the Limited Partnership.

________

(p)

________

(q)

________

(r)

________ ________

(s) (t)

________ ________

(u) (v)

NOTE: The purchaser should initial beside the portion of the above definition applicable to it/him/her. For the purposes hereof: (a) 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 (a) is engaged to provide services to the issuer or a related entity of the issuer, other than services provided in relation to a distribution, (b) provides the services under a written contract with the issuer or a related entity of the issuer, and (c) 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. control person has the meaning ascribed to that term in the securities legislation except in Manitoba, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island and Quebec where control person means any person that holds or is one of a combination of persons that holds (a) a sufficient number of any of the securities of an issuer so as to affect materially the control of the issuer, or (b) more than 20% of the outstanding voting F-14
4036261.11

(b)

securities of the issuer except where there is evidence showing that the holdings of those securities does not affect materially the control of the issuer. (c) Canadian financial institution means (a) 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 (b) 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. director means (a) a member of the board of directors of a company or an individual who performs similar functions for a company, and (b) with respect to a person that is not a company, an individual who performs functions similar to those of a director of a company. executive officer means, for an issuer, an individual who is (a) a chair, vice-chair or president, (b) a vice-president in charge of a principal business unit, division or function including sales, finance or production, (c) an officer of the issuer or any of its subsidiaries and who performs a policy-making function in respect of the issuer, or (d) performing a policy-making function in respect of the issuer. financial assets means 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. founder means, in respect of the issuer means a person who, (i) acting alone, in conjunction, or in concert with one or more other persons or companies, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the issuer, and at the time of the proposed trade, is actively involved in the business of the issuer.

(d)

(e)

(f) (g)

(ii) (h)

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 clients express consent to a transaction. investment fund means a mutual fund or a non-redeemable investment fund, and, for greater certainty in British Columbia, includes an employee venture capital corporation and a venture capital corporation as such terms are defined in National Instrument 81-106 - Investment Fund Continuous Disclosure. non-redeemable investment fund means an issuer: (i) (ii) those primary purpose is to invest money provided by its security holders, that does not invest, (i) 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 (ii) 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 that is not a mutual fund. liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or liabilities that are secured by financial assets. 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 (a) or (b), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta). F-15

(i)

(j)

(iii) (k) (i) (ii) (l) (i) (ii) (iii)

related liabilities means:

spouse means, an individual who:

4036261.11

(m)

subsidiary means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary.

Affiliates and Control 1. An issuer is considered to be an affiliate of another issuer if: (a) (b) 2. (a) one of them is the subsidiary of the other, or each of them is controlled by the same person. the first person, directly of indirectly, beneficially owns or exercises control or direction over securities of the second person carrying votes which, if exercised, would entitle the first person to elect a majority of the directors of the second person, unless that first person holds the voting securities only to secure an obligation; the second person is a partnership, other than a limited partnership, and the first person holds more than 50% of the interests of the partnership; or the second person is a limited partnership and the general partner of the limited partnership is the first person.

A person (first person) is considered to control another person (second person) if:

(b) (c)

F-16
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SCHEDULE B CERTIFICATE - OFFERING MEMORANDUM TO: AND TO: GENCAP EQUITY #12 LIMITED PARTNERSHIP 1519848 ALBERTA LTD. (the General Partner)

In connection with the purchase by the undersigned or the disclosed principal, as the case may be (the Purchaser), of Units (the Purchased Securities) of GenCap Equity #12 Limited Partnership (the Limited Partnership), the undersigned hereby represents, warrants, covenants to and certifies to the General Partner, the Limited Partnership and their counsel (on behalf of itself or on behalf of the disclosed principal, as the case may be) that: 1. the Purchaser: (a) (b) is resident in British Columbia, New Brunswick, Nova Scotia or Newfoundland and Labrador or is subject to the Securities Laws of one of those jurisdictions; and has received and reviewed the Offering Memorandum prepared in accordance with NI 45-106, is purchasing the Units as principal and has reviewed and duly completed the Risk Acknowledgement Form attached hereto as Appendix 1;

or: 2. the Purchaser: (a) (b) is resident in Alberta, Manitoba, Northwest Territories, Nunavut, Prince Edward Island, Quebec or Saskatchewan or is subject to the Securities Laws of one of those jurisdictions; is an eligible investor within the meaning of National Instrument 45-106 Prospectus and Registration Exemptions, by virtue of satisfying the indicated criterion as set out in Appendix 2 to this certificate (you must initial Appendix 2 to this Certificate) or the acquisition cost to the Purchaser does not exceed $10,000; and has received and reviewed the Offering Memorandum prepared in accordance with NI 45-106, is purchasing the Class A Units as principal and has reviewed and duly completed the Risk Acknowledgement Form attached hereto as Appendix 1;

(c)

3. the above representations, warranties and covenants will be true and correct both as of the execution of this certificate and as of the closing time of the purchase and sale of the Purchased Securities and will survive the completion of the issue of the Purchased Securities; and 4. the foregoing representations, warranties and covenants are made by the undersigned with the intent that they be relied upon in determining the suitability of the undersigned as a purchaser of the Purchased Securities and the undersigned undertakes to immediately notify the Limited Partnership of any change in any statement or other information relating to the Purchaser set forth herein which takes place prior to the closing time of the purchase and sale of the Purchased Securities. DATED at _________________ in the Province of ___________________ this ____ day of _____________, 201__.

Print Name of Purchaser Per: Authorized Signature Title (if applicable)

(please print name of individual whose signature appears above, if different from name of purchaser printed above)

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Appendix 1 to Schedule B FORM 45-106F4

RISK ACKNOWLEDGEMENT

I acknowledge that this is a risky investment. I am investing entirely at my own risk. No securities regulatory authority has evaluated or endorsed the merits of these securities or the disclosure in the Offering Memorandum. The person selling me these securities is not registered with a securities regulatory authority and has no duty to tell me whether this investment is suitable for me. I will not be able to sell these securities except in very limited circumstances. I may never be able to sell these securities. I could lose all the money I invest.

WARNING

I am investing $________________ in total; this includes any amount I am obliged to pay in future. GenCap Equity #12 Limited Partnership may pay up to l% of the proceeds under this offering as a fee or commission. In addition up to eight (8%) proceeds under this Offering may be paid as Marketing Administration Fees and Marketing Consulting Fees. I acknowledge that this is a risky investment and that I could lose all the money I invest. ______________________________ Date ______________________________ Signature of Purchaser ______________________________ Print Name of Purchaser Sign two (2) copies of this document. Keep one (1) copy for your records. You have two (2) business days to cancel your purchase

To do so, send a notice to GENCAP EQUITY #12 LIMITED PARTNERSHIP stating that you want to cancel your purchase. You must send the notice before midnight on the second (2nd) business day after you sign the agreement to purchase the securities. You can send the notice by fax or deliver it in person GENCAP EQUITY #12 LIMITED PARTNERSHIP at its business address. Keep a copy of the notice for your records. GENCAP EQUITY #12 LIMITED PARTNERSHIP #200, 3115 12th Street NE Calgary, Alberta T2E 7S7 Phone: (403) 265.8079 Fax: (403) 266.0746 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.

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You will receive an offering memorandum Read the Offering Memorandum carefully because it has important information about the issuer and its securities. Keep the offering memorandum because you have rights based on it. Talk to a lawyer for details about these rights. You will not receive advice You will not get professional advice about whether the investment is suitable for you. But you can still seek that advice from a registered adviser or investment dealer. In Alberta, Manitoba, Northwest Territories, Prince Edward Island, Quebec and Saskatchewan, to qualify as an eligible investor, you may be required to obtain that advice. Contact the Investment Dealers Association of Canada (website at www.ida.ca) for a list of registered investment dealers in your area. 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 will not receive ongoing information about this issuer. For more information on the exempt market, call your local securities commission. Alberta Securities Commission 4th Floor, Stock Exchange Tower 300-5th Avenue S.W. Calgary, Alberta T2P 3C4 Phone: (403) 297-6454 www.albertasecurities.com The Manitoba Securities Commission 1130 - 405 Broadway Winnipeg, Manitoba R3C 3L6 Phone: (204) 945-2548 www.msc.gov.mb.ca Ontario Securities Commission Suite 1903, Box 55, 20 Queen Street West Toronto, Ontario M5H 3S8 Phone: (416) 593-8314 www.osc.gov.on.ca Nova Scotia Securities Commission 2nd Floor, Joseph Howe Building 1690 Hollis Street Halifax, Nova Scotia B3J 3J9 Phone: (902) 424-7768 Fax: (902) 424-4625 Securities Commission of Newfoundland and Labrador PO Box 8700, 2nd Floor West Block Confederation Building St. Johns, Newfoundland and Labrador A1B 4J6 Phone: (709) 729-4189 Fax: (709) 729-6187 Government of Northwest Territories Department of Justice Securities Registry 1st Floor Stuart M. Hodgson Building 5009 49th Street Yellowknife, Northwest Territories X1A 2L9 Phone: (867) 920-3318 Fax: (867) 873-0243 British Columbia Securities Commission P.O. Box 1042 Pacific Centre 701 West Georgia Street Vancouver, BC V7Y 1L2 Phone: (604) 899-6500 www.bcsc.bc.ca Saskatchewan Securities Commission 800 - 1920 Broad Street Regina, Saskatchewan S4P 3V7 Phone: (306) 787-5645 New Brunswick Securities Commission Suite 606, 133 Prince William Street Saint John, New Brunswick E2L 2B5 Phone: (506) 658-3060 Fax: (506) 658-3059 Prince Edward Island Securities Office 95 Rochford Street, PO Box 2000 Charlottetown, Prince Edward Island C1A 7N8 Phone: (902) 368-4569 Fax: (902) 368-5283 Government of Yukon Department of Community Services Law Centre 3rd Floor 2130 Second Avenue Whitehorse, Yukon Y1A 5H6 Phone: (867) 667-5314 Fax: (867) 393-6251 Government of Nunavut Department of Justice Legal Registries Division PO Box 1000 Station 570 1st Floor, Brown Building Iqaluit, Nunavut X0A 0H0 Phone: (867) 975-6190 Fax: (867) 975-6194

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Appendix 2 to Schedule B Eligible Investor - (as defined in National Instrument 45-106) means (Please initial the appropriate line): (a) ______ ______ ______ ______ ______ ______ ______ ______ (b) (c) (d) (e) (f) (g) ______ ______ a person or company whose (i) (ii) (iii) net assets, alone or with a spouse, exceed $400,000; net income before taxes exceeded $75,000 in each of the two most recent years and who reasonably expects to exceed that income level in the current year; or net income before taxes combined with that of a spouse exceeded $125,000 in each of the two most recent years and who reasonably expects to exceed that income level in the current year;

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; a general partnership in which all of the partners are eligible investors; a limited partnership in which the majority of the general partners are eligible investors; a trust or estate in which either all of the beneficiaries or a majority of the trustees are eligible investors; an accredited investor; a person who is: (i) (ii) a director, executive officer or control person of the General Partner of the Limited Partnership, or of an affiliate of the General Partner of the Limited Partnership, a spouse, parent, grandparent; brother, sister or child of a director, executive officer or control person of the General Partner of the Limited Partnership, or of an affiliate of the General Partner of the Limited Partnership, a parent, grandparent, brother, sister or child of a spouse of a director, executive officer or control person of the General Partner of the Limited Partnership or of an affiliate of the General Partner of the Limited Partnership, a close personal friend of a director, executive officer or control person of the General Partner of the Limited Partnership, or of an affiliate of the General Partner of the Limited Partnership, a close business associate of a director, executive officer or control person of the General Partner of the Limited Partnership, or of an affiliate of the General Partner of the Limited Partnership, a founder of the General Partner of the Limited Partnership or a spouse, parent, grandparent, brother, sister, child, close personal friend or close business associate of a founder of the General Partner of the Limited Partnership, a parent, grandparent, brother, sister or child of the spouse of a founder of the General Partner of the Limited Partnership, a person or company of which a majority of the voting securities are beneficially owned by, or a majority of the directors are, persons or companies described in paragraphs (i) to (vii), A 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 eligible advisor.

______

(iii)

______

(iv)

______

(v)

______ ______ ______

(vi)

(vii) (viii)

______ ______ (h)

(ix)

A 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 eligible advisor.

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SCHEDULE C This Risk Acknowledgment must be completed by the Subscriber if the Purchased Securities are purchased on or after March 28, 2010 and are sold by a person not registered with an authorized security regulator in accordance with the registration requirements of National Instrument 31-103. Requirements and Exemptions Risk Acknowledgement Registration Exemption for Trades in Connection with Certain Prospectus-Exempt Distributions I acknowledge that: 1. 2. 3. 4. the person selling me these securities is not registered with a securities regulatory authority and is prohibited from telling me that this investment is suitable for me; the person selling me these securities does not act for me; this is a risky investment and I could lose all my money; and I am investing entirely at my own risk.

WARNING

Dated the ______ day of _________, 201__ _____________________________________ Signature of Subscriber _____________________________________ Print name of Subscriber Sign two (2) copies of this document. Keep one copy for your records.

National Instrument 45-106 Prospectus and Registration Exemptions may require you to sign an additional risk acknowledgement form. If you want advice about the merits of this investment and whether these securities are a suitable investment for you, contact a registered adviser or dealer.

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