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Unformatted text preview: urisdictions where Units are offered for sale or where the Partnership
carries on business. The General Partner intends to maintain the registration of the Partnership as an extrajurisdictional limited partnership in any such jurisdiction and to maintain the accuracy of such filings.
The Partnership will seek, in the reasonable judgment of the General Partner, to obtain contractual protection
in favor of the Limited Partners and take any other reasonably available measures for the purpose of
preserving their limited liability. However, should limited liability protection be lost for any reason, the
Limited Partners may be considered to be general partners in the applicable jurisdictions by creditors and
others having claims against the Partnership.
If the Partnership is undercapitalized and is not successful in attracting further investments in Subsequent
Closings or if the Manager is unsuccessful in launching successor funds, the Partnership may be forced to
reduce the size of its operations, which could have an adverse impact on the ability of the General Partner
and/or the Manager to manage investments.
Legal, Tax and Regulatory Risks
Legal, tax and regulatory changes may occur during the term of the Partnership which could have an adverse
effect on the Partnership, its portfolio companies or the Limited Partners. Without limiting the generality of the
foregoing, the future of the law as it relates to the Environmental Sectors is not predictable and is therefore
uncertain. Further, there is no certainty that governments will enforce the environmental or other legislation
- 28 - that is currently in effect, or that future governments will not provide incentives to other sectors that compete
with the Environmental Sectors. See “Legal and Regulatory Considerations” and “Certain Canadian Federal
Income Tax Considerations”.
Defaulting Limited Partners
Limited Partners who fail to comply with a capital call may suffer significant financial consequences,
including forfeiture of their Units. CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the principal Canadian federal income tax considerations under the Income Tax
Act (Canada) (the “Tax Act”) generally applicable to Limited Partners who acquire Units pursuant to this
Offering Memorandum and who, for purposes of the Tax Act, are resident in Canada, hold their Units as
capital property, have invested for their own benefit and not as a trustee of a trust, and deal at arm’s length for
the purposes of the Tax Act and are not affiliated with the Partnership or the General Partner. The
determination of whether the Units are capital property to a Limited Partner will depend in part upon the
Limited Partner’s particular circumstances. Generally, Units will be considered capital property to a Limited
Partner if they are acquired by the Limited Partner for investment purposes and are not acquired to be held in
the course of carrying on a business of trading or dealing in securities or as part of an adventure in the nature
of trade. A person or partnership, an interest in which is a “tax shelter investment”, or a person whose Unit, if
acquired, would be a “tax shelter investment”, as such term is defined in the Tax Act, is not eligible to become
a Limited Partner in the Partnership and this summary is not applicable to such a person. This summary further
assumes that at all times all Limited Partners are resident in Canada. In addition, this summary assumes that
not more than 50% of the fair market value of all Units will be held by one or more “financial institutions”, as
that term is defined in the Tax Act.
This summary is based on the current provisions of the Tax Act and the regulations thereunder, specific
proposals to amend such provisions publicly announced by the Minister of Finance prior to the date hereof (the
“Tax Proposals”) and counsel’s understanding of the current administrative practices of the Canada Revenue
Agency. The summary does not otherwise take into account any changes in law, whether made by judicial,
governmental or legislative decision or action. Except as described below, this summary does not take into
account tax laws of any province or territory of Canada or any jurisdiction outside Canada, which may differ
from those discussed below.
Recently enacted provisions of the Tax Act (the “SIFT Rules”) impose a tax in respect of certain income
earned by certain publicly-traded trusts and limited partnerships (called “SIFT trusts” and “SIFT
partnerships”). Provided that Units or other investments in the Partnership are not listed or traded on a stock
exchange or other public market, the Partnership will not be subject to tax as a SIFT partnership. This
summary assumes that the Partnership will not at any time qualify as a SIFT partnership for the purposes of
the SIFT rules.
This summary is of a general nature and is not intended to be legal or tax advice to any particular
Limited Partner. Prospective Limited Partn...
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- Spring '14