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No. Copy: _________________
Recipient _____________________________________
CONFIDENTIAL
Private Placement Memorandum
Dated September 27, 2006
$1,000,000,000
KNOWLEDGE UNIVERSE EDUCATION L.P.
KUE Management Inc.
Investment Units consisting of Common Limited Partner Units of
Knowledge Universe Education LP and Class A Ordinary Shares of
KUE Management Inc.
Knowledge Universe Education L.P. ("KUE," and, together with its subsidiaries, the "Company") is a
Cayman Islands exempted limited partnership. KUE Management Inc. is a Cayman Islands exempted
company and the sole general partner of KUE (the "General Partner"). KUE is the indirect controlling
stockholder of Knowledge Learning Corporation ("KLC"), the largest for-profit early childhood care and
education company in the U.S., which operates approximately 2,500 locations in 39 states.
We are offering investment units (the "Units"), each comprised of one Common limited partner unit
("Common LP Unit") in KUE and one Class A ordinary share of the General Partner ("Class A Share"), for
$1,000 per Unit. We are offering the Units on a strictly confidential basis pursuant to a private placement
with Goldman, Sachs & Co. and Credit Suisse acting as placement agents (the "Agents"), subject to
various conditions, exclusively to accredited investors. We intend to use the net proceeds from the sale
of the Units to expand operations, including through strategic acquisitions in the U.S. and internationally,
to develop new products and services, to repay certain existing indebtedness and for other corporate
purposes. We reserve the right to withdraw, cancel or modify the offer and to reject orders in whole or in
part. The offering is expected to be completed in one or more closings on or prior to March 31, 2007.
The Units and the underlying Common LP Units and Class A Shares have not been, nor will they
be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or
qualified under any applicable U.S. state statutes or laws of any non-U.S. jurisdiction. The Units
will be offered and sold under the exemption from registration provided by Section 4(2) of the
Securities Act and Regulation D and Regulation S promulgated under the Securities Act, and
other similar exemptions available pursuant to the laws of the states and other jurisdictions where
the offering will be made.
There is no public market for the Units and no such market is expected to develop in the future. There is
no obligation on the part of any person to register the Units or the underlying Common LP Units or Class
A Shares under the Securities Act or any state or non-U.S. securities laws other than in the limited
circumstances described in this Private Placement Memorandum.
Investing in the Units involves risks. You should read the section entitled "Risk Factors"
beginning on page 44 for a discussion of certain risk factors that you should consider before
investing in the Units.
Placement Agents
Goldman, Sachs & Co. Credit Suisse
Private Placement Memorandum dated September 27, 2006.
Table of Contents
1. EXECUTIVE SUMMARY 19
2. SUMMARY TERMS OF THE TRANSACTION 27
3. USE OF PROCEEDS 39
4. CAPITALIZATION 40
5. SUMMARY FINANCIAL DATA 42
6. RISK FACTORS 44
7. DISTRIBUTION POLICY 60
8. INDUSTRY OVERVIEW 61
9. KNOWLEDGE UNIVERSE EDUCATION ("KUE") 73
10. MANAGEMENT'S DISCUSSION AND ANALYSIS OF KLC's PRO FORMA RESULTS OF
OPERATIONS 75
11. THE OPERATING COMPANY ("KLC OPCO") 82
12. THE REAL ESTATE COMPANY ("KLC PROPCO") 100
13. k12 INC. ("k12") 106
14. THE STRUCTURE OF KUE AND THE GENERAL PARTNER 115
15. MANAGEMENT INCENTIVE PLANS AND EMPLOYMENT AGREEMENTS 131
16. RELATED PARTY TRANSACTIONS 133
17. ELIGIBLE INVESTORS 136
18. CERTAIN INCOME TAX CONSEQUENCES 140
19. APPENDICES 146
You should rely only on the information contained in this Private Placement Memorandum (this
"Memorandum") or to which we have referred you. We have not authorized anyone to provide you
with information that is different. This Memorandum may only be used where it is legal to sell the
Units. The information in this Memorandum may only be accurate on the date of this
Memorandum. No person has any obligation to update the statements and information contained
in this Memorandum.
NOTICE TO INVESTORS
THIS CONFIDENTIAL MEMORANDUM IS BEING FURNISHED ON A STRICTLY CONFIDENTIAL BASIS
SOLELY TO A LIMITED NUMBER OF SOPHISTICATED PROSPECTIVE INVESTORS FOR THE
PURPOSE OF PROVIDING CERTAIN INFORMATION REGARDING THE OFFERING OF THE UNITS. A
PROSPECTIVE INVESTOR MAY NOT DISTRIBUTE OR REPRODUCE THIS MEMORANDUM, OR
DISCLOSE ITS CONTENTS, TO ANY PERSON OTHER THAN PROFESSIONAL REPRESENTATIVES
OF THE INVESTOR IN CONNECTION WITH ITS CONSIDERATION OF THIS INVESTMENT. AS
CONTEMPLATED BY THE CONFIDENTIALITY AGREEMENTS BETWEEN THE INVESTORS AND
KUE, THIS MEMORANDUM AND ANY INFORMATION FURNISHED IN CONNECTION HEREWITH
(COLLECTIVELY, THE "COMPANY INFORMATION"), YOU ACKNOWLEDGE AND AGREE THAT (I) ALL
COMPANY INFORMATION IS CONFIDENTIAL; (II) YOU WILL NOT DISTRIBUTE OR REPRODUCE
THE COMPANY INFORMATION IN WHOLE OR IN PART AND WILL USE THE COMPANY
INFORMATION SOLELY TO EVALUATE AN INVESTMENT IN THE UNITS AND NOT FOR ANY OTHER
PURPOSE; (III) IN THE EVENT THAT YOU HAVE NO FURTHER INTEREST IN PARTICIPATING IN
THIS OFFERING, OR IF AT ANY TIME THE COMPANY SO REQUESTS (AT ITS DISCRETION), YOU
WILL PROMPTLY RETURN, DESTROY OR DELETE ALL COMPANY INFORMATION THAT YOU HAVE
RECEIVED AT THE EARLIEST OPPORTUNITY AS REQUESTED BY THE COMPANY; AND (IV) YOU
WILL NOT DISCLOSE TO ANY THIRD PARTY THE COMPANY INFORMATION THAT HAS BEEN
PROVIDED TO YOU. EACH PROSPECTIVE INVESTOR IS RESPONSIBLE FOR THE FEES OF ITS
OWN COUNSEL, ACCOUNTANTS AND OTHER ADVISORS.
THE UNITS OFFERED HEREBY AND THE COMMON LP UNITS AND CLASS A SHARES
REPRESENTED THEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES
ACT AND THE APPLICABLE STATE AND NON-U.S. SECURITIES LAWS PURSUANT TO
REGISTRATION OR AN EXEMPTION THEREFROM, AND THEN ONLY TO THE EXTENT PERMITTED
BY THE LIMITED PARTNERSHIP AGREEMENT OF KUE AND THE GOVERNING DOCUMENTS AND
AGREEMENT AMONG MEMBERS OF THE GENERAL PARTNER. ACCORDINGLY, INVESTORS
SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF AN
INVESTMENT IN THE UNITS OFFERED HEREBY FOR AN INDEFINITE PERIOD OF TIME.
THE STATEMENTS AND INFORMATION CONTAINED IN THIS MEMORANDUM HAVE BEEN
COMPILED AS OF THE DATE HEREOF (UNLESS OTHERWISE STATED HEREIN) FROM THE
COMPANY AND FROM OTHER SOURCES. NEITHER THE DELIVERY OF THIS MEMORANDUM NOR
ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT THE INFORMATION SET FORTH
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. NO PERSON HAS
ANY OBLIGATION TO UPDATE THE STATEMENTS AND INFORMATION CONTAINED HEREIN.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION
OF THE COMPANY, THE GENERAL PARTNER AND THE TERMS OF THE OFFERING, INCLUDING
THE MERITS AND RISKS INVOLVED. YOU ACKNOWLEDGE THAT (A) YOU HAVE NOT RELIED ON
THE AGENTS OR ANY PERSON AFFILIATED WITH THE AGENTS IN CONNECTION WITH YOUR
INVESTIGATION OF THE ACCURACY OF THE INFORMATION PROVIDED HEREIN OR YOUR
INVESTMENT DECISION AND (B) NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION CONCERNING THE COMPANY, THE GENERAL PARTNER OR
THE OFFERING OTHER THAN AS CONTAINED IN THIS MEMORANDUM AND INFORMATION GIVEN
BY DULY AUTHORIZED OFFICERS AND EMPLOYEES OF THE COMPANY IN CONNECTION WITH
YOUR EXAMINATION OF THE COMPANY, THE GENERAL PARTNER AND THE TERMS OF THIS
OFFERING, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE GENERAL
PARTNER OR THE AGENTS.
THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER BY ANY PERSON TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY UNITS OR COMPONENTS THEREOF IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFER OR
SOLICITATION.
THE UNITS AND COMPONENT SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF THE STATES OR ANY NON-U.S.
JURISDICTION AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH STATE AND NON-U.S.
LAWS. THE UNITS HAVE NOT BEEN RECOMMENDED, APPROVED OR DISAPPROVED BY THE
U.S. SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER FEDERAL, STATE OR NON-U.S.
SECURITIES COMMISSION OR REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING
AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE
ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
NEITHER THE GENERAL PARTNER NOR THE COMPANY IS REQUIRED TO REGISTER OR BE
REGULATED AS A MUTUAL FUND UNDER THE MUTUAL FUNDS LAW (2003 REVISION) OF THE
CAYMAN ISLANDS. NEITHER THE CAYMAN ISLANDS MONETARY AUTHORITY NOR ANY OTHER
GOVERNMENTAL AUTHORITY IN THE CAYMAN ISLANDS HAS PASSED JUDGMENT UPON OR
APPROVED THE TERMS OR MERITS OF THIS DOCUMENT. THERE IS NO INVESTMENT
COMPENSATION SCHEME AVAILABLE TO INVESTORS IN THE CAYMAN ISLANDS.
PROSPECTIVE INVESTORS SHOULD READ THIS ENTIRE MEMORANDUM CAREFULLY BEFORE
DECIDING WHETHER TO PURCHASE THE UNITS, AND PROSPECTIVE INVESTORS SHOULD
MAKE THEIR OWN INVESTIGATION OF THE INVESTMENT DESCRIBED HEREIN, INCLUDING THE
MERITS AND RISKS INVOLVED AND THE LEGALITY AND TAX CONSEQUENCES OF SUCH AN
INVESTMENT. PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THIS MEMORANDUM OR ITS
CONTENTS AS LEGAL, TAX, INVESTMENT OR OTHER ADVICE. PROSPECTIVE INVESTORS WILL
HAVE THE OPPORTUNITY TO ASK QUESTIONS AND RECEIVE ANSWERS AND ADDITIONAL
INFORMATION ABOUT THE COMPANY, THE GENERAL PARTNER AND THE UNITS TO VERIFY THE
INFORMATION CONTAINED HEREIN TO THE EXTENT REPRESENTATIVES OF THE COMPANY
POSSESS SUCH INFORMATION. EACH INVESTOR SHOULD MAKE ITS OWN INQUIRIES AND
CONSULT ITS OWN ADVISORS CONCERNING THE VARIOUS LEGAL, TAX AND ECONOMIC
CONSIDERATIONS RELATING TO ITS INVESTMENT.
THIS MEMORANDUM DOES NOT CONTAIN THE INFORMATION, INCLUDING FINANCIAL
STATEMENTS, THAT WOULD BE INCLUDED IN A REGISTRATION STATEMENT FILED WITH THE
U.S. SECURITIES AND EXCHANGE COMMISSION.
THIS MEMORANDUM CONTAINS PROJECTIONS FOR KLC AND K12 INC. THAT ARE BASED UPON
A NUMBER OF ASSUMPTIONS AND ESTIMATES THAT, WHILE PRESENTED WITH NUMERICAL
SPECIFICITY AND CONSIDERED REASONABLE BY MANAGEMENT WHEN TAKEN AS A WHOLE,
INHERENTLY ARE SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, COMPETITIVE AND OTHER
RISKS, UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE CONTROL
OF THE COMPANY, AND ARE BASED UPON SPECIFIC ASSUMPTIONS WITH RESPECT TO FUTURE
BUSINESS DECISIONS, SOME OR ALL OF WHICH WILL CHANGE. PROJECTIONS ARE
NECESSARILY SPECULATIVE IN NATURE AND IT CAN BE EXPECTED THAT ASSUMPTIONS
UNDERLYING THE PROJECTIONS WILL NOT PROVE TO BE VALID OR WILL VARY FROM ACTUAL
RESULTS. ACCORDINGLY, THE PROJECTIONS ARE ONLY AN ESTIMATE. ACTUAL RESULTS WILL
VARY FROM THE PROJECTIONS AND THE VARIATIONS MAY BE MATERIAL. CONSEQUENTLY,
YOUR RECEIPT OF THE PROJECTIONS SHOULD NOT BE REGARDED AS A REPRESENTATION BY
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THE COMPANY, ITS ADVISORS, THE AGENTS, OR ANY OTHER PERSON OF RESULTS THAT WILL
ACTUALLY BE ACHIEVED. PROSPECTIVE PURCHASERS OF THE UNITS ARE CAUTIONED NOT
TO PLACE UNDUE RELIANCE ON THESE PROJECTIONS.
THE INFORMATION PRESENTED HEREIN WAS PREPARED OR OBTAINED BY KUE AND IS BEING
FURNISHED SOLELY FOR USE BY PROSPECTIVE INVESTORS IN CONNECTION WITH THE
OFFERING. THE AGENTS HAVE NOT ASSUMED ANY RESPONSIBILITY FOR INDEPENDENT
VERIFICATION OF THE INFORMATION CONTAINED HEREIN OR OTHERWISE MADE AVAILABLE IN
CONNECTION WITH THE OFFERING OF SECURITIES AND MAKE NO REPRESENTATIONS OR
WARRANTIES AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. NOTHING
CONTAINED HEREIN IS, OR SHOULD BE RELIED ON AS, A PROMISE OR REPRESENTATION AS TO
THE FUTURE PERFORMANCE OF KUE.
NOTICE TO NON-U.S. INVESTORS
NOTICE TO RESIDENTS OF ARGENTINA
THIS MEMORANDUM HAS NOT BEEN APPROVED BY ANY SECURITIES REGULATOR IN
ARGENTINA AND DOES NOT ENABLE KUE, THE GENERAL PARTNER, OR ANY OTHER PARTY TO
MAKE A PUBLIC OFFERING OF THE UNITS. THIS MEMORANDUM HAS ONLY BEEN ADDRESSED
DIRECTLY TO THE PROSPECTIVE INVESTORS DESIGNATED AND IS INTENDED TO PROVIDE
INFORMATION AT THEIR REQUEST THIS MEMORANDUM SHOULD NOT BE CIRCULATED OR
MADE PUBLIC IN ANY WAY. INVESTORS PARTICIPATING IN THIS ISSUANCE FULLY
ACKNOWLEDGE THAT THEY HAVE BEEN INVITED PERSONALLY AND IN CONSIDERATION OF
THEIR SPECIAL POSITION AS SOPHISTICATED INVESTORS AND THAT THEY HAVE HAD ALL
PROPER AND DUE PERSONAL COUNSELING TO ADOPT ANY DECISION RELATED TO THIS
ISSUANCE. THE UNITS ARE NOT AUTHORIZED TO BE OFFERED PUBLICLY IN THE
ARGENTINEAN MARKET OR TO BE SOLD TO ANY INVESTOR IN ARGENTINA.
NOTICE TO RESIDENTS OF AUSTRALIA
THIS MEMORANDUM HAS NOT BEEN AND WILL NOT BE LODGED WITH THE AUSTRALIAN
SECURITIES AND INVESTMENTS COMMISSION. THE OFFER IS ONLY MADE TO THOSE
PERSONS TO WHOM DISCLOSURE IS NOT REQUIRED UNDER DIVISION 2 OF PART 6D.2 OR
PART 7.9 OF THE CORPORATIONS ACT 2001 AND DOES NOT PURPORT TO BE AN OFFER OF
INTERESTS FOR WHICH DISCLOSURE IS REQUIRED. IN ADDITION, KUE IS NOT A REGISTERED
SCHEME AS DEFINED IN THE CORPORATIONS ACT 2001. RESALE OF THE UNITS IN AUSTRALIA
WITHIN 12 MONTHS OF THE DATE OF ISSUE MAY REQUIRE THE SELLER TO COMPLY WITH THE
DISCLOSURE REQUIREMENTS OF DIVISION 2 OF PART 6D.2 OR PART 7.9 OF THE
CORPORATIONS ACT 2001.
NOTICE TO RESIDENTS OF BRAZIL
KUE IS NOT A PUBLICLY-HELD CORPORATION AND IS NOT LISTED WITH ANY STOCK
EXCHANGE, ORGANIZED OVER THE COUNTER MARKET OR ELECTRONIC SYSTEM OF
SECURITIES TRADING. LIKEWISE, THE UNITS HAVE NOT BEEN AND WILL NOT BE REGISTERED
WITH ANY SECURITIES EXCHANGE COMMISSION OR OTHER SIMILAR AUTHORITY, INCLUDING
THE BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (COMISSAO DE VALORES
MOBILARIOS-"CVM"). ANY PUBLIC OFFERING, AS DEFINED UNDER BRAZILIAN LAWS AND
REGULATIONS, OF THE UNITS IN BRAZIL IS NOT LEGAL WITHOUT SUCH PRIOR REGISTRATION
UNDER LAW NR. 6.385/76. SUBSEQUENT TRADING OF THE UNITS IN BRAZIL IS ALLOWED ONLY
BY MEANS OF PRIVATE TRANSACTIONS AND IS NOT SUBJECT TO REGISTRATION WITH THE
CVM TO THE EXTENT THAT SUCH TRADING DOES NOT QUALIFY AS A PUBLIC OFFERING. IT
SHOULD BE NOTED THAT A SELLER OF THE UNITS, HOWEVER, MAY BE ASKED BY THE
PURCHASER TO COMPLY WITH PROCEDURAL REQUIREMENTS TO EVIDENCE PREVIOUS TITLE
TO THE UNITS, AND MAY BE SUBJECT TO BRAZILIAN TAX ON CAPITAL GAINS WHICH MAY BE
WITHHELD FROM THE SALE PRICE. PERSONS WISHING TO OFFER OR ACQUIRE THE UNITS
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WITHIN BRAZIL SHOULD CONSULT WITH THEIR OWN COUNSEL AS TO THE APPLICABILITY OF
THESE REGISTRATION REQUIREMENTS OR ANY EXEMPTION THEREFROM.
THIS MEMORANDUM IS CONFIDENTIAL AND INTENDED SOLELY FOR THE USE OF THE
ADDRESSEE AND CANNOT BE DELIVERED OR DISCLOSED IN ANY MANNER WHATSOEVER TO
ANY PERSON OR ENTITY OTHER THAN THE ADDRESSEE.
NOTICE TO RESIDENTS OF CANADA
THIS MEMORANDUM CONSTITUTES AN OFFERING OF THE UNITS DESCRIBED HEREIN ONLY IN
THOSE JURISDICTIONS IN CANADA AND TO THOSE PERSONS WHERE AND TO WHOM THEY MAY
BE LAWFULLY OFFERED FOR SALE AND THEREIN ONLY BY PERSONS PERMITTED TO SELL
SUCH SECURITIES. THIS MEMORANDUM IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE
CONSTRUED AS, AN ADVERTISEMENT OR A PUBLIC OFFERING OF THE UNITS IN CANADA. NO
SECURITIES COMMISSION OR SIMILAR REGULATORY AUTHORITY IN CANADA HAS REVIEWED
OR IN ANY WAY PASSED UPON THIS MEMORANDUM OR THE MERIT OF THE UNITS AND ANY
REPRESENTATION TO THE CONTRARY IS AN OFFENCE UNDER APPLICABLE SECURITIES LAWS.
No dealer, salespersons or other individual has been authorized to give any information or to
make any representations not contained in this Memorandum in connection with the offer made
by this Memorandum and, if given or made, such information or representations must not be
relied upon as having been authorized by KUE or by the General Partner or by any placement
agent Neither the delivery of this Memorandum nor any sale made hereunder shall, under any
circumstances, create an implication that there has not been any change in the facts as set forth
in this Memorandum or in the affairs of KUE or the General Partner since the date hereof.
Resale Restrictions in Canada. THE DISTRIBUTION OF THE UNITS IN CANADA IS BEING MADE ON
A PRIVATE PLACEMENT BASIS. ACCORDINGLY, ANY RESALE OF THE UNITS MUST BE MADE IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS
REQUIREMENTS OF APPLICABLE SECURITIES LAWS. NEITHER KUE NOR THE GENERAL
PARTNER IS A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.
PURCHASERS OF THE UNITS ARE ADVISED TO SEEK LEGAL ADVICE PRIOR TO ANY RESALE OF
THE UNITS.
Enforcement of Legal Rights. THE GENERAL PARTNER IS A CAYMAN ISLANDS EXEMPTED
COMPANY AND KUE IS A CAYMAN ISLANDS EXEMPTED LIMITED PARTNERSHIP. THE
DIRECTORS, OFFICERS AND REPRESENTATIVES OF THE GENERAL PARTNER AND KUE MAY BE
LOCATED OUTSIDE CANADA AND, AS A RESULT, IT MAY NOT BE POSSIBLE FOR CANADIAN
PURCHASERS TO EFFECT SERVICE OF PROCESS WITHIN CANADA UPON THE GENERAL
PARTNER, KUE, OR THEIR DIRECTORS, OFFICERS OR REPRESENTATIVES. ALL OR A
SUBSTANTIAL PORTION OF THE ASSETS OF KUE, THE GENERAL PARTNER AND THEIR
DIRECTORS, OFFICERS OR REPRESENTATIVES MAY BE LOCATED OUTSIDE OF CANADA AND,
AS A RESULT, IT MAY NOT BE POSSIBLE TO SATISFY A JUDGMENT AGAINST SUCH PERSONS IN
CANADA OR TO ENFORCE A JUDGMENT OBTAINED IN CANADIAN COURTS AGAINST SUCH
PERSONS OUTSIDE OF CANADA.
Right of Action for Damages or Rescission. THE FOLLOWING SUMMARY IS SUBJECT TO THE
EXPRESS PROVISIONS OF THE SECURITIES ACT (ONTARIO), THE SECURITIES ACT (NEW
BRUNSWICK) AND THE SECURITIES ACT (NOVA SCOTIA) AND THE RULES AND REGULATIONS
THEREUNDER AND REFERENCE IS MADE THERETO FOR THE COMPLETE TEXT OF SUCH
PROVISIONS. THE SECURITIES ACT (ONTARIO) AND THE SECURITIES ACT (NEW BRUNSWICK)
PROVIDE CERTAIN PURCHASERS IN ONTARIO AND NEW BRUNSWICK, RESPECTIVELY, WITH A
STATUTORY RIGHT OF ACTION FOR DAMAGES OR RESCISSION AGAINST THE ISSUER WHERE
AN OFFERING MEMORANDUM CONTAINS A MISREPRESENTATION. THE SECURITIES ACT (NOVA
SCOTIA) PROVIDES PURCHASERS IN NOVA SCOTIA WITH A STATUTORY RIGHT OF ACTION FOR
DAMAGES AGAINST EVERY SELLER, EVERY DIRECTOR OF THE SELLER AT THE DATE OF THIS
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MEMORANDUM AND EVERY PERSON WHO SIGNED THE OFFERING MEMORANDUM OR A RIGHT
OF RESCISSION AGAINST EVERY SELLER WHERE AN OFFERING MEMORANDUM CONTAINS A
MISREPRESENTATION. SUCH PURCHASERS WHO PURCHASE A SECURITY OFFERED BY THE
OFFERING MEMORANDUM DURING THE PERIOD OF DISTRIBUTION ARE DEEMED TO HAVE
RELIED ON SUCH MISREPRESENTATION IF IT WAS A MISREPRESENTATION AT THE TIME OF
PURCHASE.
FOR PURCHASERS IN ONTARIO AND NOVA SCOTIA, THESE STATUTORY RIGHTS ARE
EXERCISABLE, IN THE CASE OF AN ACTION FOR RESCISSION, 180 DAYS AFTER THE DATE OF
THE TRANSACTION THAT GAVE RISE TO THE CAUSE OF ACTION OR, IN THE CASE OF ANY
ACTION, OTHER THAN AN ACTION FOR RESCISSION, THE EARLIER OF (I) 180 DAYS AFTER THE
PLAINTIFF FIRST HAD KNOWLEDGE OF THE FACTS GIVING RISE TO THE CAUSE OF ACTION AND
(II) THREE YEARS AFTER THE DATE OF THE TRANSACTION THAT GAVE RISE TO THE CAUSE OF
ACTION. NOTWITHSTANDING THE FOREGOING, IN NOVA SCOTIA, NO ACTION MAY BE
COMMENCED MORE THAN 120 DAYS AFTER THE DATE ON WHICH PAYMENT WAS MADE FOR
THE SECURITIES OR AFTER THE DATE ON WHICH THE INITIAL PAYMENT FOR THE SECURITIES
WAS MADE WHERE PAYMENTS SUBSEQUENT TO THE INITIAL PAYMENT ARE MADE PURSUANT
TO A CONTRACTUAL COMMITMENT ASSUMED PRIOR TO, OR CONCURRENTLY WITH, THE
INITIAL PAYMENT
FOR PURCHASERS IN NEW BRUNSWICK, THESE STATUTORY RIGHTS ARE EXERCISABLE, IN
THE CASE OF AN ACTION FOR RESCISSION, 180 DAYS AFTER THE DATE OF THE TRANSACTION
THAT GAVE RISE TO THE CAUSE OF ACTION OR, IN THE CASE OF ANY ACTION, OTHER THAN AN
ACTION FOR RESCISSION, THE EARLIER OF (I) ONE YEAR AFTER THE PLAINTIFF FIRST HAD
KNOWLEDGE OF THE FACTS GIVING RISE TO THE CAUSE OF ACTION AND (II) 6 YEARS AFTER
THE DATE OF THE TRANSACTION THAT GAVE RISE TO THE CAUSE OF THE ACTION.
THE RIGHTS DISCUSSED ABOVE ARE IN ADDITION TO AND WITHOUT DEROGATION FROM ANY
OTHER RIGHT OR REMEDY WHICH PURCHASERS MAY HAVE AT LAW AND ARE INTENDED TO
CORRESPOND TO THE PROVISIONS OF THE RELEVANT SECURITIES LEGISLATION AND ARE
SUBJECT TO THE DEFENCES CONTAINED THEREIN.
Canadian Federal Income Tax Considerations. THIS MEMORANDUM DOES NOT DISCUSS THE
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS RELEVANT TO A HOLDER OF THE UNITS
RESIDENT IN CANADA FOR PURPOSES OF THE INCOME TAX ACT (CANADA) (THE "ITA"). THE
RULES FOR THE TAXATION OF PARTNERS AND PARTNERSHIPS UNDER THE ITA ARE
EXTREMELY COMPLEX AND, ACCORDINGLY, PROSPECTIVE PURCHASERS OF THE UNITS WHO
ARE RESIDENT IN CANADA ARE STRONGLY ADVISED TO CONSULT WITH THEIR OWN TAX
ADVISORS PRIOR TO PURCHASING ANY UNITS.
Forward Looking Statements. CERTAIN STATEMENTS IN THIS MEMORANDUM CONSTITUTE
"FORWARD-LOOKING STATEMENTS." FORWARD-LOOKING STATEMENTS INCLUDE
STATEMENTS CONCERNING THE PLANS, OBJECTIVES, GOALS, STRATEGIES AND FUTURE
OPERATIONS AND PERFORMANCE OF KUE AND THE GENERAL PARTNER AND THE
ASSUMPTIONS UNDERLYING THESE FORWARD-LOOKING STATEMENTS. KUE AND THE
GENERAL PARTNER USE THE WORDS "ANTICIPATES," "ESTIMATES," EXPECTS," "BELIEVES,"
"INTENDS," "PLANS," "MAY," "WILL," "SHOULD," AND ANY SIMILAR EXPRESSIONS TO IDENTIFY
FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS INVOLVE
KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS THAT
COULD CAUSE ACTUAL RESULTS, PERFORMANCE AND ACHIEVEMENTS TO BE MATERIALLY
DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED
OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING
STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING PRESENT AND FUTURE
BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH KUE AND THE GENERAL PARTNER
WILL OPERATE IN THE FUTURE. AS A RESULT OF THESE RISK, UNCERTAINTIES AND
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ASSUMPTIONS, A PROSPECTIVE INVESTOR SHOULD NOT PLACE UNDUE RELIANCE ON THESE
FORWARD-LOOKING STATEMENTS. SEE "RISK FACTORS" IN THIS MEMORANDUM.
THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS
MEMORANDUM. NEITHER KUE NOR THE GENERAL PARTNER IS OBLIGED, AND DOES NOT
INTEND, TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A
RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. ALL SUBSEQUENT
WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO KUE, THE GENERAL
PARTNER, OR PERSONS ACTING ON THEIR BEHALF, ARE EXPRESSLY QUALIFIED IN THEIR
ENTIRETY BY THE CAUTIONARY STATEMENTS CONTAINED THROUGHOUT THIS MEMORANDUM.
Financial information. FINANCIAL INFORMATION CONTAINED IN THIS MEMORANDUM HAVE NOT
BEEN PREPARED IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING
PRACTICES, AND MAY DIFFER IN CERTAIN RESPECTS FROM THOSE ACCOUNTING PRINCIPLES
USED IN OTHER JURISDICTIONS, INCLUDING CANADA. PROSPECTIVE PURCHASERS SHOULD
CONDUCT THEIR OWN INVESTIGATION AND ANALYSIS OF THE BUSINESS, DATA AND
TRANSACTION DESCRIBED HEREIN AND CONSULT THEIR OWN FINANCIAL ADVISORS. SEE
"NON-GAAP FINANCIAL MEASURES" BELOW IN THIS MEMORANDUM.
Representations of Canadian Purchasers. EACH PURCHASER OF THE UNITS RESIDENT IN A
CANADIAN JURISDICTION WILL BE DEEMED TO HAVE REPRESENTED TO KUE AND THE
GENERAL PARTNER AND THE AGENTS WHO SELLS THE UNITS TO SUCH PURCHASER THAT: (A)
THE OFFER AND SALE OF THE UNITS WAS MADE EXCLUSIVELY THROUGH THIS MEMORANDUM
AND WAS NOT MADE THROUGH AN ADVERTISEMENT OF THE UNITS IN ANY PRINTED MEDIA OF
GENERAL AND REGULAR PAID CIRCULATION, RADIO, TELEVISION OR TELECOMMUNICATIONS,
INCLUDING ELECTRONIC DISPLAY, OR ANY OTHER FORM OF ADVERTISING IN CANADA; (B)
SUCH PURCHASER HAS REVIEWED AND ACKNOWLEDGES THE TERMS REFERRED TO ABOVE
UNDER "RESALE RESTRICTIONS IN CANADA"; (C) WHERE REQUIRED BY LAW, SUCH
PURCHASER IS PURCHASING AS PRINCIPAL FOR ITS OWN ACCOUNT AND NOT AS AGENT; AND
(D) SUCH PURCHASER OR ANY ULTIMATE PURCHASER FOR WHICH SUCH PURCHASER IS
ACTING AS AGENT IS ENTITLED UNDER APPLICABLE CANADIAN SECURITIES LAWS TO
PURCHASE SUCH UNITS WITHOUT THE BENEFIT OF A PROSPECTUS QUALIFIED UNDER SUCH
SECURITIES LAWS, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING: (I) SUCH
PURCHASER IS AN "ACCREDITED INVESTOR" AS DEFINED IN SECTION 1.1 OF NATIONAL
INSTRUMENT 45-106 ("NI 45-106"), OR FULFILLS THE REQUIREMENTS OF SECTION 2.10 OF NI 45-
106 (A "$150K PURCHASER") AND (II) IN THE CASE OF A PURCHASER RESIDENT IN ONTARIO,
SUCH PURCHASER, OR ANY ULTIMATE PURCHASER FOR WHICH SUCH PURCHASER IS ACTING
AS AGENT, IS AN "ACCREDITED INVESTOR" AS DEFINED IN NI 45-106, OR A $150K PURCHASER
WHO IS PURCHASING THE UNITS FROM A REGISTERED INVESTMENT DEALER WITHIN THE
MEANING OF SECTION 98 OF THE REGULATION TO THE SECURITIES ACT (ONTARIO).
IN ADDITION, EACH PURCHASER OF THE UNITS RESIDENT IN CANADA WILL BE DEEMED TO
HAVE REPRESENTED TO KUE, THE GENERAL PARTNER AND THE AGENTS FROM WHOM A
PURCHASE CONFIRMATION WAS RECEIVED, THAT SUCH PURCHASER: (A) HAS BEEN NOTIFIED
BY KUE AND THE GENERAL PARTNER (I) THAT KUE AND THE GENERAL PARTNER ARE
REQUIRED TO PROVIDE INFORMATION ("PERSONAL INFORMATION") PERTAINING TO THE
PURCHASER AS REQUIRED TO BE DISCLOSED IN SCHEDULE I OF FORM 45-106F1 UNDER NI 45-
106 (INCLUDING ITS NAME, ADDRESS, TELEPHONE NUMBER AND THE NUMBER AND VALUE OF
ANY UNITS PURCHASED), WHICH FORM 45-106F1 IS REQUIRED TO BE FILED BY KUE AND THE
GENERAL PARTNER UNDER NI 45-106; (II) THAT SUCH PERSONAL INFORMATION WILL BE
DELIVERED TO THE ONTARIO SECURITIES COMMISSION (THE "OSC") IN ACCORDANCE WITH NI
45-106; (III) THAT SUCH PERSONAL INFORMATION IS BEING COLLECTED INDIRECTLY BY THE
OSC UNDER THE AUTHORITY GRANTED TO IT UNDER THE SECURITIES LEGISLATION OF
ONTARIO; (IV) THAT SUCH PERSONAL INFORMATION IS BEING COLLECTED FOR THE
PURPOSES OF THE ADMINISTRATION AND ENFORCEMENT OF THE SECURITIES LEGISLATION
OF ONTARIO; AND (V) THAT THE PUBLIC OFFICIAL IN ONTARIO WHO CAN ANSWER QUESTIONS
6
ABOUT THE OSC'S INDIRECT COLLECTION OF SUCH PERSONAL INFORMATION IS THE
ADMINISTRATIVE ASSISTANT TO THE DIRECTOR OF CORPORATE FINANCE AT THE OSC, SUITE
1903, BOX 5520 QUEEN STREET WEST, TORONTO, ONTARIO M5H 3S8, TELEPHONE: (416) 593-
8086; AND (B) HAS AUTHORIZED THE INDIRECT COLLECTION OF THE PERSONAL INFORMATION
BY THE OSC. FURTHER, THE PURCHASER ACKNOWLEDGES THAT ITS NAME, ADDRESS,
TELEPHONE NUMBER AND OTHER SPECIFIED INFORMATION, INCLUDING THE NUMBER OF
UNITS IT HAS PURCHASED AND THE AGGREGATE PURCHASE PRICE PAID BY PURCHASER,
MAY BE DISCLOSED TO OTHER CANADIAN SECURITIES REGULATORY AUTHORITIES AND MAY
BECOME AVAILABLE TO THE PUBLIC IN ACCORDANCE WITH THE REQUIREMENTS OF
APPLICABLE LAWS. BY PURCHASING UNITS, THE PURCHASER CONSENTS TO THE
DISCLOSURE OF SUCH INFORMATION.
Language of documents if7 Canada. UPON RECEIPT OF THIS MEMORANDUM, EACH INVESTOR IN
CANADA HEREBY CONFIRMS THAT IT HAS EXPRESSLY REQUESTED THAT ALL DOCUMENTS
EVIDENCING OR RELATING IN ANY WAY TO THE SALE OF THE UNITS (INCLUDING FOR GREATER
CERTAINTY ANY PURCHASE CONFIRMATION OR ANY NOTICE) BE DRAWN UP IN THE ENGLISH
LANGUAGE ONLY. PAR LA RECEPTION DE CE DOCUMENT CHAQUE INVESTISSEUR CANADIEN
CONFIRME PAR LES PRESENTES QU'IL A E_XPRESSEMENT EXIGE QUE TOUS LES DOCUMENTS
FAISANT FOI OU SE RAPPORTANT DE QUELQUE MANIERE QUE CE SOIT A LA VENTE DES
VALEURS MOBILIERES DECRITES AUX PRESENTES (INCLUANT, POUR PLUS DE CERTITUDE,
TOUTE CONFIRMATION D'ACHAT OU TOUT AVIS) SOIENT REDIGES EN ANGLAIS SEULEMENT.
NOTICE TO RESIDENTS OF THE CAYMAN ISLANDS
CLASS A SHARES IN THE GENERAL PARTNER AND COMMON LP UNITS IN KUE MAY BE
BENEFICIALLY OWNED BY PERSONS RESIDENT, DOMICILED, ESTABLISHED, INCORPORATED
OR REGISTERED IN THE CAYMAN ISLANDS PURSUANT TO THE LAWS OF THE CAYMAN
ISLANDS. THE GENERAL PARTNER AND KUE, HOWEVER, WILL NOT UNDERTAKE BUSINESS
WITH THE PUBLIC IN THE CAYMAN ISLANDS OTHER THAN SO FAR AS MAY BE NECESSARY FOR
THE CARRYING ON OF THE BUSINESS OF, AS APPLICABLE THE GENERAL PARTNER OR KUE
EXTERIOR TO THE ISLANDS. "PUBLIC" FOR THESE PURPOSES DOES NOT INCLUDE ANY
EXEMPTED OR ORDINARY NON-RESIDENT COMPANY REGISTERED UNDER THE COMPANIES
LAW OR A FOREIGN COMPANY REGISTERED PURSUANT TO PART IX OF THE COMPANIES LAW
OR ANY SUCH COMPANY ACTING AS GENERAL PARTNER OF A PARTNERSHIP REGISTERED
PURSUANT TO SECTION 9(1) OF THE EXEMPTED LIMITED PARTNERSHIP LAW (2003 REVISION)
OR ANY DIRECTOR OR OFFICER OF SUCH PARTNERSHIP ACTING IN SUCH CAPACITY OR THE
TRUSTEE OF ANY TRUST REGISTERED OR CAPABLE OF REGISTRATION PURSUANT TO
SECTION 74 OF THE TRUSTS LAW (2001 REVISION).
NOTICE TO RESIDENTS OF CHINA
THE INFORMATION CONTAINED IN THIS MEMORANDUM WILL NOT CONSTITUTE AN OFFER TO
SELL ANY SECURITIES WITHIN THE PEOPLE'S REPUBLIC OF CHINA (WHICH, FOR SUCH
PURPOSES, DOES NOT INCLUDE THE HONG KONG OR MACAU SPECIAL ADMINISTRATIVE
REGIONS OR TAIWAN) (THE "PRC"). THIS MEMORANDUM AND THE INFORMATION CONTAINED
HEREIN HAVE NOT BEEN APPROVED BY ANY RELEVANT GOVERNMENTAL AUTHORITIES IN THE
PRC AND THE UNITS MAY NOT BE OFFERED FOR SALE IN THE PRC. PRC INVESTORS ARE
RESPONSIBLE FOR OBTAINING ALL RELEVANT GOVERNMENT REGULATORY
APPROVALS/LICENSES THEMSELVES, INCLUDING, BUT NOT LIMITED TO, ANY WHICH MAY BE
REQUIRED FROM THE STATE ADMINISTRATION OF FOREIGN EXCHANGE, THE CHINA BANKING
REGULATORY COMMISSION, AND/OR THE CHINA SECURITIES REGULATORY COMMISSION, AND
COMPLYING WITH ALL RELEVANT PRC REGULATIONS, INCLUDING, BUT NOT LIMITED TO, ANY
RELEVANT FOREIGN EXCHANGE REGULATIONS AND/OR FOREIGN INVESTMENT REGULATIONS.
7
NOTICE TO RESIDENTS OF FRANCE
THE COMPANY AND THE AGENTS HAVE NOT OFFERED OR SOLD AND WILL NOT OFFER OR
SELL, DIRECTLY OR INDIRECTLY, THE UNITS TO THE PUBLIC IN FRANCE, AND HAVE NOT
DISTRIBUTED OR CAUSED TO BE DISTRIBUTED AND WILL NOT DISTRIBUTE OR CAUSE TO BE
DISTRIBUTED TO THE PUBLIC IN FRANCE, THIS MEMORANDUM OR ANY OTHER OFFERING
MATERIAL RELATING TO THE UNITS. SUCH OFFERS, SALES AND DISTRIBUTIONS HAVE BEEN
AND SHALL ONLY BE MADE IN FRANCE TO (I) PROVIDERS OF INVESTMENT SERVICES RELATING
TO PORTFOLIO MANAGEMENT FOR THE ACCOUNT OF THIRD PARTIES, AND/OR (II) QUALIFIED
INVESTORS (INVESTISSEURS QUALIFIES), AND/OR (III) A RESTRICTED GROUP OF INVESTORS
(CERCLE RESTREINT D'INVESTISSEURS), ALL AS DEFINED IN, AND IN ACCORDANCE WITH,
ARTICLES L.411-1, L.411-2, D.411-1 AND D.411-2 OF THE FRENCH CODE MONETAIRE ET
FINANCIER.
NOTICE TO RESIDENTS OF GERMANY
THE UNITS HAVE NOT BEEN AND WILL NOT BE REGISTERED OR APPROVED FOR PUBLIC
OFFERING UNDER THE SECURITIES LAWS OF GERMANY. THIS MEMORANDUM HAS NOT BEEN
AND WILL NOT BE SUBMITTED TO THE FEDERAL FINANCIAL SERVICES SUPERVISORY
AUTHORITY (BUNDESANSTALT FOR FINANZDIENSTLEISTUNGSAUFSICHT) FOR APPROVAL AS A
PROSPECTUS AND NO PROSPECTUS HAS BEEN OR WILL BE PUBLISHED IN GERMANY.
THEREFORE, THE UNITS MAY BE OFFERED AND SOLD IN THE TERRITORY OF THE FEDERAL
REPUBLIC OF GERMANY ONLY IF (I) LESS THAN 20 UNITS ARE OFFERED IN GERMANY, (II) THE
PRICE PER OFFERED UNIT IS AT LEAST €200,000 FOR EACH OFFEREE, (III) THE OFFER IS TO A
"RESTRICTED CIRCLE OF PERSONS" AS THIS TERM IS INTERPRETED BY THE BAFIN AND THE
GERMAN COURTS, OR (IV) THE OFFER IS TO INVESTORS WHO PURCHASE OR SELL
SECURITIES OR INVESTMENTS (VERMOGENSANLAGEN) AS DEFINED IN THE GERMAN SALES
PROSPECTUS ACT (VERKAUFSPROSPEKTGESETZ) FOR THEIR OWN ACCOUNT OR THE
ACCOUNT OF THIRD PARTIES AS PART OF THEIR PROFESSION OR TRADE. THIS MEMORANDUM
AND ANY OTHER DOCUMENT RELATING TO THE UNITS, AS WELL AS INFORMATION CONTAINED
THEREIN, MAY NOT BE SUPPLIED TO THE PUBLIC IN GERMANY OR USED IN CONNECTION WITH
ANY OFFER FOR SUBSCRIPTION OR SALE OF THE UNITS TO THE PUBLIC IN GERMANY. THIS
MEMORANDUM AND OTHER OFFERING MATERIALS RELATING TO THE OFFER OF THE UNITS
ARE STRICTLY CONFIDENTIAL AND MAY NOT BE DISTRIBUTED TO ANY PERSON OR ENTITY
OTHER THAN THE RECIPIENTS HEREOF.
NOTICE TO RESIDENTS OF HONG KONG
WARNING
THE CONTENTS OF THIS MEMORANDUM HAVE NOT BEEN REVIEWED BY ANY REGULATORY
AUTHORITY IN HONG KONG. YOU ARE ADVISED TO EXERCISE CAUTION IN RELATION TO THE
OFFER. IF YOU ARE IN ANY DOUBT ABOUT ANY OF THE CONTENTS OF THIS MEMORANDUM,
YOU SHOULD OBTAIN INDEPENDENT PROFESSIONAL ADVICE.
NOTICE TO RESIDENTS OF ICELAND
THIS MEMORANDUM HAS BEEN ISSUED TO YOU FOR YOUR PERSONAL USE ONLY AND
EXCLUSIVELY FOR THE PURPOSES OF THE INVESTMENT SCHEME. ACCORDINGLY, THIS
MEMORANDUM MAY NOT BE USED FOR ANY OTHER PURPOSE NOR PASSED ON TO ANY OTHER
PERSON IN ICELAND. THE SECURITIES OFFERING DESCRIBED IN THIS MEMORANDUM IS AN
UNREGULATED INVESTMENT SCHEME. THE SECURITIES WHICH ARE THE OBJECT OF THIS
MEMORANDUM ARE NOT REGISTERED FOR PUBLIC DISTRIBUTION IN ICELAND WITH THE
FINANCIAL SUPERVISORY AUTHORITY PURSUANT TO THE ICELANDIC ACT ON SECURITIES
TRANSACTIONS NO. 33/2003 OR THE ICELANDIC ACT ON UCITS-FUNDS AND OTHER
INVESTMENT FUNDS NO. 30/2003 AND SUPPLEMENTARY REGULATIONS. THE UNITS MAY NOT
BE OFFERED OR SOLD BY MEANS OF THIS MEMORANDUM OR ANYWAY LATER RESOLD TO
8
OTHER THAN ENTITIES OR PERSONS DEFINED AS INSTITUTIONAL INVESTORS IN THE MEANING
OF ITEM NO. 7. IN ARTICLE 2 OF THE ICELANDIC ACT ON SECURITIES TRANSACTIONS AND THE
REGULATION OF THE TRANSACTIONS OF SECURITIES NO. 233/2003. ANY RESALE OF THE
UNITS IN ICELAND WILL NEED TO TAKE PLACE IN ACCORDANCE WITH THE PROVISIONS OF THE
ICELANDIC ACT ON SECURITIES TRANSACTIONS No. 33/2003 AS AMENDED AND ANY
APPLICABLE LAWS OR REGULATIONS OF ICELAND.
NOTICE TO RESIDENTS OF INDIA
THE ISSUANCE OF THE UNITS IS BEING MADE STRICTLY ON A PRIVATE PLACEMENT BASIS.
THIS MEMORANDUM IS NOT A PROSPECTUS OR A STATEMENT IN LIEU OF A PROSPECTUS. IT
IS NOT, AND SHOULD NOT BE DEEMED TO CONSTITUTE AN OFFER TO THE PUBLIC IN
GENERAL.
THE INFORMATION CONTAINED IN THIS MEMORANDUM IS BELIEVED BY THE COMPANY TO BE
ACCURATE IN ALL MATERIAL RESPECTS AS OF THE DATE HEREOF. THE COMPANY DOES NOT
UNDERTAKE TO UPDATE THIS MEMORANDUM TO REFLECT SUBSEQUENT EVENTS. THIS
MEMORANDUM HAS BEEN PREPARED TO PROVIDE GENERAL INFORMATION ON THE COMPANY
TO POTENTIAL INVESTORS EVALUATING THE PROPOSAL TO SUBSCRIBE FOR THE UNITS
COVERED BY THIS MEMORANDUM AND IT DOES NOT PURPORT TO CONTAIN ALL THE
INFORMATION THAT ANY SUCH POTENTIAL INVESTOR MAY REQUIRE. POTENTIAL INVESTORS
SHOULD CONDUCT THEIR OWN DUE DILIGENCE, INVESTIGATION AND ANALYSIS OF THE
COMPANY.
PRIOR TO APPLYING FOR THE UNITS, INVESTORS SHOULD VERIFY IF THEY HAVE THE
NECESSARY POWER AND COMPETENCE TO APPLY FOR THE UNITS UNDER THEIR
CONSTITUTIONAL DOCUMENTS AS WELL AS ALL RELEVANT LAWS AND REGULATIONS IN
FORCE IN INDIA. THEY SHOULD ALSO CONSULT THEIR OWN TAX ADVISORS ON THE TAX
IMPLICATIONS OF THE ACQUISITION, OWNERSHIP AND SALE OF THE UNITS, AND INCOME
ARISING THEREON.
ALTHOUGH THE INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM SOURCES
THAT ARE RELIABLE TO THE BEST OF THE AGENTS' KNOWLEDGE AND BELIEF, THE AGENTS
MAKES NO REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF ANY
INFORMATION CONTAINED HEREIN OR OTHERWISE PROVIDED BY THE AGENT. NEITHER THE
AGENTS NOR ANY OFFICER OR EMPLOYEE OF THE AGENTS ACCEPT ANY LIABILITY