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Unformatted text preview: ubsidiary. The Manager will provide certain management services to the Partnership including without limitation, research, due diligence and similar services, pursuant to a management agreement between the Manager and the Partnership. The Principals The principals consist of Andrew Heintzman, Stephen Griggs, Michael Curry, Alex Chamberlain, John A. Cook, and Michael de Pencier. Past Investments Investeco has approximately $28 million in committed capital for two existing private equity funds, Investeco Private Equity Fund, L.P. (“Fund I”), and Investeco Private Equity Fund II, L.P. (“Fund II”). These funds have invested in such companies as Enerworks Inc., Triton Logging Inc., Schneider Power Inc., Organic Meadow Inc., Horizon Distributors Ltd., Rowe Farms Limited, and Woodland Biofuels Inc. Management Fee The Partnership will initially pay to the Manager an annual management fee (the “Management Fee”) equal to 2% of Aggregate Capital Commitments plus applicable taxes. The Management Fee will be reduced to 1.75% of the Aggregate Capital Commitments at the end of the Commitment Period. Distributions Liquidated Portfolio Investments and any dividends, interest or other income generated in respect of a Portfolio Investment will generally be distributed as soon as practicable following receipt to all participating Limited Partners in proportion to their respective Unit Commitments, and to the General Partner, in the following order of priority: 1. First, to each participating Limited Partner until the aggregate proceeds distributed in respect of the Portfolio Investment and all previous liquidated Portfolio Investments in which each such participating Limited Partner has participated is equal the sum of the following: -2- i. the participating Limited Partner’s pro rata share (based on Unit Commitments) of the purchase price of each such Portfolio Investment (to the extent, if any, not previously distributed); ii. the participating Limited Partner’s pro rata share (based on Unit Commitments) of the purchase price of Portfolio Investments that have been written down (to the extent of the write down amount, as adjusted from time to time) and not accounted for in a previous distribution; and iii. a rate of return equal to 8% per annum, compounded annually, on the participating Limited Partner’s pro rata share (based on Unit Commitments) of the purchase price of each such Portfolio Investment calculated from the date that each such Portfolio Investment was originally entered into until the date of its liquidation (the “Priority Rate of Return”); 2. Second, to the General Partner until such time as the General Partner has received 20% of the sum of the distributions made in respect of the Priority Rate of Return relating to such Portfolio Investment and this paragraph (2); and 3. Thereafter, 80% to each such participating Limited Partner and 20% to the General Partner (such 20% amount, together with the amount payable to the General Partner pursuant to paragraph (2) above, being referred to as the “Carried Interest”). (See “Summary of the Partnership Agreement – Distributions” below). Term of the Partnership The Partnership will have a term ending on the date that is the first business day 10 years after the Initial Closing (unless wound-up earlier in accordance with the Partnership Agreement) and will be subject to two one-year extensions, each at the discretion of the General Partner, and three further one-year extensions, each with the approval of the Limited Partners holding a majority of the outstanding Units (for a total term of up to 15 years). Capital Commitments may not be called by the General Partner, except for certain fees and expenses and follow-on investments, after five years have passed following the date of the Initial Closing. Risk Factors Any investment in the Partnership is subject to a number of risks that should be considered before making an investment. (See for example “Risk Factors” and “Certain Canadian Federal Income Tax Considerations” below). Offering and Organizational Expenses The Partnerships will together reimburse the General Partner for offering and organizational expenses up to a maximum, in aggregate, of the lower of $750,000 and 0.75% of the sum of the Aggregate Capital Commitments of the Partnerships. Each partnership will reimburse its pro-rata share of such offering and organizational expenses based on each such partnership’s respective final unit commitments. Counsel to the Partnership Stikeman Elliott LLP Auditors PricewaterhouseCoopers LLP -3- GLOSSARY Unless otherwise indicated, all capitalized terms used in this Offering Memorandum have the following meanings: “Advisory Committee” means any committee that may be established by the General Partner to provide recommendations on the resolution of potential conflicts of interest, as more fully set forth below under “Summary of Partnership Agreement – Advisory Committee”. “Aggregate Capital Commitments” means the...
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