INVESTMENT POLICIES

Sector funds
Seed investment funds
Development projects

Sector funds

• Overall cpital outlays of the limited partnership in sector development funds must not exceed $85 million.

• The capital outlays of the limited partnership in a sector development fund are one dollar for every two dollars provided by other private investors. They are made at the same pace as the capital outlays from other investors. Calls are made based on the investment program carried out by the fund.

• Capital outlays of the limited partnership in a sector development fund must not exceed $10 million. However, this threshold does not limit the capital outlays of the other investors.

• The minimum capitalization of a sector development fund in which the limited partnership may invest is $30 million, of which the limited partnership will provide not more than $10 million and the balance of which must come from investors other than the limited partnership and other than the partners of FIER Partners. This minimum capitalization must be obtained through firm commitments by persons who have the financial capacity to honour them when the limited partnership agrees to invest in the sector development fund.

• A sector development fund must be created and managed in Quebec . It must commit to invest in Quebec an amount representing a minimum of three times FIER Parters' investment. Also, it must increase the hurdle rate by 1,5% should the investments in Quebec represent an amount that is below two times FIER Partners' investment.

• A sector development fund must not be a reporting issuer, in particular an organization that has made a public offering for the purposes of the Québec Securities Act.

• A sector development fund can not invest in another sector development fund.

Seed investment funds

• Overall capital outlays of the limited partnership in seed investment funds must not exceed $55 million.

• The capital outlays of the limited partnership in a seed investment fund are one dollar for every dollar provided by other investors. They are made at the same pace as the capital outlays from other investors. Calls are made based on the investment program carried out by the fund.

• Capital outlays of the limited partnership in a seed investment fund must not exceed $25 million. However, this threshold does not limit the capital outlays of the other investors. FIER Partners will always have a minority interest.

• The minimum capitalization of a seed investment fund in which the limited partnership may invest is:

  • Either $75 million excluding FIER Partners' investment. The fund will have to invest a minimum amount representing FIER Partners' investment into businesses among which it will initially have invested in at the seed stage.
    
    

    OR

  • Either $30 million including FIER Partners' investment. All of the initial investments of the fund will have to be completely dedicated to making investments into businesses that will be at the seed stage.

    This minimum capitalization must be obtained through firm commitments by persons who have the financial capacity to honour them when the limited partnership agrees to invest in the seed investment fund.

• The management team will have to demonstrate an acceptable and material financial commitment. It will also have to demonstrate its expertise and experience in the management of these types of funds including but not limiting in the development and value creation of businesses.

• A seed investment fund must be created and managed in Quebec . It must commit to invest in Quebec an amount representing a minimum of the highest between 1,5 times FIER Parters' investment and 1,5 times the amounts invested directly into the fund by the fiscalized funds.

• A seed investment fund must not be a reporting issuer, in particular an organization that has made a public offering for the purposes of the Québec Securities Act.

• A seed investment fund can not invest in another fund.

Development projects

• Overall capital outlays of the limited partnership in development projects must not exceed $30 million.

• The total participation of the limited partnership in a development project must neither be less than $5 million nor more than $20 million.

• The total participation of the limited partnership in a development project must correspond to approximatively 30%, and never exceed 50%, of the project's unsecured financing, including participations by government corporations.

• The participation of the limited partnership in the financing of development projects can consist of quasi-equity or equity capital.

• The limited partnership's investment in a development project must be made concurrently with the investments provided by the project partners based on the needs of the development project.

• A development project must offer the limited partnership a potential financial return compatible with the risks assumed and must be managed by a team with recognized skill and experience.

• Priority is given to regional development projects.