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PARTNERSHIP AGREEMENT THIS PARTNERSHIP AGREEMENT (the "Agreement") made and entered into this day of (the "Execution Date"), AMONGST: Dragana Skobic of 11 Stockbridge Gans, Hamilton, ON L&J IR6, Canada, Brittany Madore of 123 Union St, Toronto, ON MON 3N4, Canada, and Ashley L'Anglais of 10 Smith Ave, Hamilton, ON LSL 5P1, Canada (individually the "Partner" and collectively the "Partners"). BACKGROUND: A. The Partners wish to associate themselves as partners in business. B. This Agreement sets out the terms and conditions that govern the Partners within the Partnership. IN CONSIDERATION OF and as a condition of the Partners entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows: Formation 1 . By this Agreement the Partners enter into a general partnership (the "Partnership") in accordance with the laws of The Province of Ontario. The rights and obligations of the Partners will be as stated in the applicable legislation of The Province of Ontario (the 'Act) except as otherwise provided in this Agreement. Name 2. The firm name of the Partnership will be: Business Law Inc. Purpose 3. The purpose of the Partnership will be: Legal Services. Page 1 of 15Term 4. The Partnership will begin on April 18th, 2022 and will continue until terminated as provided in Partner Contribution Description Agreed Value this Agreement. Cash: $50,000.00 Place of Business 5. The principal office of the business of the Partnership will be located at 201 Main St, Toronto, ON M4E 2W2, Canada or such other place as the Partners may from time to time designate. Time and effort: Website Dragana Skobic design, advertising/marketing. $65,000.00 Initial Capital Contributions with an approximate value of 6. Each of the Partners has contributed or will contribute to the capital of the Partnership, in cash or $15,000.00 property or in non-monetary contributions in agreed upon value, as follows (the "Initial Capital Contribution"): Cash: $50,000.00 Time and effort: Business Brittany Madore Management, with an $80,000.00 approximate value of $30,000.00 Cash: $50,000.00 Time and effort: Finances, with Ashley L'Anglais $65,000.00 an approximate value of $15,000.00 7. All Partners must contribute their respective Initial Capital Contributions fully by Ap 2022 Page 2 of 15 Page 3 of 15Additional Capital Financial Decisions 8. The capital contribution of a Partner comprises that Partner's Initial Capital Contribution and 13. Decisions regarding the distribution of profits, allocation of losses, and the requirement for any additional capital contribution (the "Additional Capital Contribution") made by that Partner Additional Capital Contributions as well as all other financial matters will be decided by a to the Partnership at a later date (together the "Capital Contribution"). No Partner will be majority vote of the Partners. required to make an Additional Capital Contribution. When the Partnership requires additional capital, each Partner will have the opportunity to make an Additional Capital Contribution in Profit and Loss proportion to that Partner's share of the total Capital Contributions to the Partnership. If an 14. Subject to any other provisions of this Agreement, the net profits and losses of the Partnership, individual Partner is unwilling or unable to meet the additional contribution requirement within a for both accounting and tax purposes, will accrue to and be borne by the Partners in equal reasonable period, as required by Partnership business obligations, then by a unanimous vote of proportions, unless an Additional Capital Contribution has been made which changed the Initial he Partners the remaining Partner may contribute in proportion to their existing Capital Capital Contribution proportions of the Partners in which case each Partner will share in the net Contributions to resolve the amount in default. profit and losses of the Partnership in proportion to the new Capital Contributions (the "Profit and Loss Distribution"). Any advance of money to the Partnership by any Partner in excess of the amounts provided for in this Agreement or subsequently agreed to as Additional Capital Contribution will be deemed a Compensation for Services Rendered debt owed by the Partnership and not an increase in Capital Contribution of the Partner. This 15. Partners may be compensated for services actually rendered as from time to time may be agreed liability will be repaid with interest at rates and times to be determined by a majority of the by unanimous consent of the Partners. Partners within the limits of what is required or permitted in the Act. This liability will not entitle the lending Partner to any increased share of the Partnership's profits nor to a greater Books of Account voting power. Such debts may have preference or priority over any other payments to Partners as 16. Accurate and complete books of account of the transactions of the Partnership will be kept in may be determined by a majority of the Partners. accordance with generally accepted accounting principles and at all reasonable times will be available and open to inspection and examination by any Partner. The books and records of the Withdrawal of Capital Partnership will reflect all the Partnership's transactions and will be appropriate and adequate for 10. No Partner will withdraw any portion of their Capital Contribution without the express written the business conducted by the Partnership. consent of the remaining Partners. Annual Report Capital Accounts 17. As soon as practicable after the close of each fiscal year, the Partnership will furnish to each 11. An individual capital account (the "Capital Accounts") will be maintained for each Partner and Partner an annual report showing a full and complete account of the condition of the Partnership. their Initial Capital Contribution will be credited to this account. Any Additional Capital This report will consist of at least the following documents: Contributions made by any Partner will be credited to that Partner's individual Capital Account. 1. a statement of all information as will be necessary for the preparation of each Interest on Capital Partner's income or other tax returns; 12. No borrowing charge or loan interest will be due or payable to any Partner on their agreed Capital Contribution inclusive of any agreed Additional Capital Contributions. b. a copy of the Partnership's federal income tax returns for that fiscal year; c. supporting income statement; Page 4 of 15 Page 5 of 15d. a balance sheet; considered reasonably necessary to keep the Partners informed of the business performance of the Partnership. C. a cash flow statement; 24. A Managing Partner can voluntarily withdraw from the position of Managing Partner or can be f. a breakdown of the profit and loss attributable to each Partner; and replaced by a majority vote of the remaining Partners. In the event of a withdrawal or removal of the Managing Partner from the position of Managing Partner or from the Partnership, the g. any additional information that the Partners may require. remaining Partners will have equal rights in the management of the Partnership until they appoint a successor Managing Partner. Banking and Partnership Funds 18. The funds of the Partnership will be placed in such investments and banking accounts as will be 25. The Managing Partner will not be liable to the remaining Partners for any action or failure to act designated by the Partners. All withdrawals from these bank accounts will be made by the duly resulting in loss or harm to the Partnership except in the case of gross negligence or wilful authorized agent or agents of the Partners as agreed by unanimous consent of the Partners. misconduct. Partnership funds will be held in the name of the Partnership and will not be commingled with those of any other person or entity. Contract Binding Authority 26. Each Partner will have authority to bind the Partnership in contract. Fiscal Year 19. The fiscal year will end on April 1 of each year. Meetings 27. Regular meetings of the Partners will be held monthly. Audit 20. Any of the Partners will have the right to request an audit of the Partnership books. The cost of 28. Any Partner can call a special meeting to resolve issues that require a vote, as indicated by this the audit will be borne by the Partnership. The audit will be performed by an accounting firm Agreement, by providing all Partners with reasonable notice. In the case of a special vote, the acceptable to all the Partners. Not more than one (1) audit will be required by any or all of the meeting will be restricted to the specific purpose for which the meeting was held. Partners for any fiscal year. 29. All meetings will be held at a time and in a location that is reasonable, convenient and practical Management considering the situation of all Partners. 21. All the Partners will be consulted and the advice and opinions of the Partners will be obtained as much as is practicable. However, the Managing Partner will have management and control of the Admitting a New Partner day-to-day business of the Partnership for the purposes stated in this Agreement. All matters 30. No new Partners may be admitted into the Partnership. outside the day-to-day business of the Partnership will be decided by a majority vote of the Partners. Voluntary Withdrawal of a Partner 31. Any Partner will have the right to voluntarily withdraw from the Partnership at any time. Written 22. Brittany Madore will be the Managing Partner. The term "Managing Partner" will also include notice of intention to withdraw must be served upon the remaining Partners at least six (6) any party subsequently appointed to that role. months prior to the withdrawal date. 23. In addition to day-to-day management tasks, the Managing Partner's duties will include keeping, 32. The voluntary withdrawal of a Partner will result in the dissolution of the Partnership. or causing to be kept, full and accurate business records for the Partnership according to generally accepted accounting principles and overseeing the preparation of any reports Page 6 of 15 Page 7 of 1533. A Dissociated Partner will only exercise the right to withdraw in good faith and will act to Distribution of Property on Dissolution of Partnership minimize any present or future harm done to the remaining Partners as a result of the 40. In the event of the dissolution of the Partnership, each Partner will share equally in any withdrawal. remaining assets or liabilities of the Partnership, unless an Additional Capital Contribution has been made which changed the Initial Capital Contribution proportions of the Partners in which Involuntary Withdrawal of a Partner case the Partners will share the assets or liabilities in proportion to their respective Capital 34. Events resulting in the involuntary withdrawal of a Partner from the Partnership will include but Contributions (the "Dissolution Distribution"). not be limited to: death of a Partner; Partner mental incapacity; Partner disability preventing reasonable participation in the Partnership; Partner incompetence; breach of fiduciary duties by a 41. Upon Dissolution of the Partnership and liquidation of Partnership Property, and after payment Partner, criminal conviction of a Partner; Expulsion of a Partner; Operation of Law against a of all selling costs and expenses, the liquidator will distribute the Partnership assets to the Partner; or any act or omission of a Partner that can reasonably be expected to bring the business following groups according to the following order of priority: or societal reputation of the Partnership into disrepute. in satisfaction of liabilities to creditors except Partnership obligations to current 35. The involuntary withdrawal of a Partner will result in the dissolution of the Partnership. Partners; 36. A trustee in bankruptcy or similar third party who may acquire that Dissociated Partner's interest in satisfaction of Partnership debt obligations to current Partners; and then in the Partnership will only acquire that Partner's economic rights and interests and will not acquire any other rights of that Partner or be admitted as a Partner of the Partnership or have the c. to the Partners according to the Dissolution Distribution described above. right to exercise any management or voting interests. 42. The claims of each priority group will be satisfied in full before satisfying any claims of a lower Dissociation of a Partner priority group. Any excess of Partnership assets after liabilities or any insufficiency in 37. Where the dissociation of a Partner for any reason results in the dissolution of the Partnership Partnership assets in resolving liabilities under this section will be shared by the Partners then the Partnership will proceed in a reasonable and timely manner to dissolve the Partnership, according to the Dissolution Distribution described above. with all debts being paid first, prior to any distribution of the remaining funds. Valuation and distribution will be determined as described in the Valuation of Interest section of this Valuation of Interest Agreement. 43. In the absence of a written agreement setting a value, the value of the Partnership will be based on the fair market value appraisal of all Partnership assets (less liabilities) determined in 38. The remaining Partners retain the right to seek damages from a Dissociated Partner where the accordance with generally accepted accounting principles. This appraisal will be conducted by dissociation resulted from a malicious or criminal act by the Dissociated Partner or where the an independent accounting firm agreed to by all Partners. An appraiser will be appointed within Dissociated Partner had breached their fiduciary duty to the Partnership or was in breach of this a reasonable period of the date of withdrawal or dissolution. The results of the appraisal will be Agreement or had acted in a way that could reasonably be foreseen to bring harm or damage to binding on all Partners. A withdrawing Partner's interest will be based on that Partner's the Partnership or to the reputation of the Partnership. proportion of the Dissolution Distribution described above, less any outstanding liabilities the withdrawing Partner may have to the Partnership. The intent of this section is to ensure the Dissolution survival of the Partnership despite the withdrawal of any individual Partner. 39. Except as otherwise provided in this Agreement, the Partnership may be dissolved only with the unanimous consent of all Partners. 44. No allowance will be made for goodwill, trade name, patents or other intangible assets, except where those assets have been reflected on the Partnership books immediately prior to valuation. Page 8 of 15 Page 9 of 15Good will Duty to Devote Time 45, The goodwill of the Partnership business will be assessed at an amount to be determined by 51. Each Partner will devote such time and attention to the business of the Partnership as the appraisal using generally accepted accounting principles. majority of the Partners will from time to time reasonably determine for the conduct of the Partnership business. Title to Partnership Property 46. Title to all Partnership Property will remain in the name of the Partnership. No Partner or group Actions Requiring Unanimous Consent of the Partners of Partners will have any ownership interest in such Partnership Property in whole or in part. 52. The following list of actions will require the unanimous consent of all Partners: Voting a. assigning cheque-signing authority; 47. Any vote required by the Partnership will be assessed where each Partner receives one vote carrying equal weight, unless an Additional Capital Contribution has been made which changed committing the Partnership to new liabilities or obligations totalling over $10,000.00 the Initial Capital Contribution proportions of the Partners in which case each Partner will have CAD, and voting strength in proportion to Capital Contributions. C. incurring single expenditures that exceed $10,000.00 CAD. Force Majeure 48. A Partner will be free of liability to the Partnership where the Partner is prevented from 53. Any losses incurred as a result of a violation of this section will be charged to and collected from executing their obligations under this Agreement in whole or in part due to force majeure, such the individual Partner that acted without unanimous consent and caused the loss. as earthquake, typhoon, flood, fire, and war or any other unforeseen and uncontrollable event where the Partner has communicated the circumstance of said event to any and all other Partners Forbidden Acts and taken any and all appropriate action to mitigate said event. 54. No Partner may do any act in contravention of this Agreement. Duty of Loyalty 55, No Partner may permit, intentionally or unintentionally, the assignment of express, implied or 49. No Partner will engage in any business, venture or transaction, whether directly or indirectly, apparent authority to a third party that is not a Partner in the Partnership. that might be competitive with the business of the Partnership or that would be in direct conflict of interest to the Partnership without the unanimous written consent of the remaining Partners. 56. No Partner may do any act that would make it impossible to carry on the ordinary business of the Any and all businesses, ventures or transactions with any appearance of conflict of interest must Partnership. be fully disclosed to all other Partners. Failure to comply with any of the terms of this clause will be deemed an Involuntary Withdrawal of the offending Partner and may be treated accordingly 57. No Partner may individually consent to a judgment against the Partnership. by the remaining Partners. 58. No Partner will have the right or authority to bind or obligate the Partnership to any extent with Duty of Accountability for Private Profits regard to any matter outside the intended purpose of the Partnership. 50. Each Partner must account to the Partnership for any benefit derived by that Partner without the consent of the other Partners from any transaction concerning the Partnership or any use by that 59. Any violation of the above Forbidden Acts will be deemed an Involuntary Withdrawal of the Partner of the Partnership property, name or business connection. This duty continues to apply to offending Partner and may be treated accordingly by the remaining Partners. any transactions undertaken after the Partnership has been dissolved but before the affairs of the Partnership have been completely wound up by the surviving Partner or Partners or their agent or agents. Page 10 of 15 Page 1 1 of 15Indemnification Governing Law and Jurisdiction 60. All Partners will be indemnified and held harmless by the Partnership from and against any and 66. This Agreement will be construed in accordance with and exclusively governed by the laws of all claims of any nature, whatsoever, arising out of a Partner's participation in Partnership affairs. The Province of Ontario. A Partner will not be entitled to indemnification under this section for liability arising out of gross negligence or wilful misconduct of the Partner or the breach by the Partner of any 67. The Partners submit to the jurisdiction of the courts of The Province of Ontario for the provisions of this Agreement. enforcement of this Agreement or any arbitration award or decision arising from this Agreement. Mediation and Arbitration Definitions 61. If any dispute relating to this Agreement between Partners, or between one or more Partners and 68. For the purpose of this Agreement, the following terms are defined as follows: the Partnership, is not resolved through formal discussion within 14 days from the date a dispute arises, the Partners agree to submit the issue first before a non-binding mediator and to an a. "Additional Capital Contributions" means Capital Contributions, other than Initial arbitrator in the event the mediation fails. The decision of the arbitrator will be binding on the Capital Contributions, made by Partners to the Partnership. Partners. Any mediator or arbitrator must be a neutral party acceptable to all Partners. The cost of any mediations or arbitrations will be shared equally by the Partners. b "Capital Contribution" means the total amount of cash or Property contributed to the Partnership by any one Partner. Liability 62. A Partner will not be liable to the Partnership, or to any other Partner, for any mistake or error in C. "Dissociated Partner" means any Partner who is removed from the Partnership judgment or for any act or omission done in good faith and believed to be within the scope of through a voluntary or involuntary withdrawal as provided in this Agreement. authority conferred or implied by this Agreement or the Partnership. d. "Expulsion of a Partner" can occur on application by the Partnership or another Liability Insurance Partner, where it has been determined that the Partner: 63. The Partnership may acquire insurance on behalf of any Partner, employee, agent or other person engaged in the business interest of the Partnership against any liability asserted against them or i. has engaged in wrongful conduct that adversely and materially incurred by them while acting in good faith on behalf of the Partnership. affected the Partnership's business; Life Insurance ii. has wilfully or persistently committed a material breach of this 64. The Partnership will have the right to acquire life insurance on the lives of any or all of the Agreement or of a duty owed to the Partnership or to the other Partners, whenever it is deemed necessary by the Partnership. Each Partner will cooperate fully Partners; or with the Partnership in obtaining any such policies of life insurance. iii. has engaged in conduct relating to the Partnership's business Amendments that makes it not reasonably practicable to carry on the business 65. This Agreement may not be amended in whole or in part without the unanimous written consent with the Partner. of all Partners. e. "Initial Capital Contribution" means Capital Contributions made by any Partner to acquire an interest in the Partnership. Page 12 of 15 Page 13 of 15f. "Operation of Law" means rights or duties that are cast upon a party by the law, without any act or agreement on the part of the individual including, but not limited IN WITNESS WHEREOF the Partners have duly affixed their signatures under hand and seal on this to, an assignment for the benefit of creditors, a divorce, or a bankruptcy. day of Miscellaneous 59. Time is of the essence in this Agreement. 70. This Agreement may be executed in counterpart. WITNESS: Dragana Skobic 71. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine gender include the feminine gender and vice versa. Words in the neuter WITNESS: Brittany Madore gender include the masculine gender and the feminine gender and vice versa. 72. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be WITNESS: Ashley L'Anglais reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result. 73. This Agreement contains the entire agreement between the parties. All negotiations and understandings have been included in this Agreement. Statements or representations which may have been made by any party to this Agreement in the negotiation stages of this Agreement may in some way be inconsistent with this final written Agreement. All such statements are declared to be of no value in this Agreement. Only the written terms of this Agreement will bind the parties. 74. This Agreement and the terms and conditions contained in this Agreement apply to and are binding upon the Partner's successors, assigns, executors, administrators, beneficiaries, and representatives. 75. Any notices or delivery required here will be deemed completed when hand-delivered, delivered by agent, or seven (7) days after being placed in the post, postage prepaid, to the parties at the addresses contained in this Agreement or as the parties may later designate in writing. 76. All of the rights, remedies and benefits provided by this Agreement will be cumulative and will not be exclusive of any other such rights, remedies and benefits allowed by law. Page 14 of 15 Page 15 of 15 02002-2022 Law Depot.ca