Securities Law & Instruments

Headnote

Exemption from fees mandatedunder section 7.3 of Rule 45-501 Exempt Distributionsfor a distribution of limited partnership units effected onan exempt basis in reliance on section 2.3 of Rule 45-501.

Statutes Cited

Securities Act, R.S.O. 1990,c. S.5, as am., section 147.

Rules Cited

O.S.C. Rule 45-501 Exempt Distributions,sections 2.3 and 7.3.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990,CHAPTER S.5, ASAMENDED (the "Act")

AND

IN THE MATTER OF

RULE 45-501OF THE ONTARIOSECURITIES COMMISSION

("Rule 45-501")

AND

IN THE MATTER OF

EDGESTONE CAPITAL VENTURECO-INVESTMENT FUND-A, L.P. AND

EDGESTONE CAPITAL VENTURECO-INVESTMENT FUND-B, L.P.

ORDER

(Section 147 of the Act)

UPON the applicationof EdgeStone Capital Venture Co-Investment Fund-A, L.P. ("FundA") and EdgeStone Capital Venture Co-Investment Fund-B,L.P. ("Fund B"), the Ontario Securities Commission(the "Commission") has received a request for an orderpursuant to Section 147 of the Act that Fund A and Fund B (collectively,the "Funds") be exempt from the requirement to paycertain fees otherwise payable under Section 7.3 of Rule 45-501Exempt Distributions in connection with the issue andsale of limited partnership units of the Funds;

AND UPON the Funds havingrepresented to the Commission that:

1. Fund A and Fund B are limitedpartnerships formed under the laws of Ontario for the purposeof investing in co-investment opportunities presented to suchlimited partnerships by EdgeStone Capital Venture Fund ofFunds, L.P. (the "Venture F of F Fund") and EdgeStoneCapital Venture Fund, L.P. (the "Venture Fund").

2. The registered office ofeach of the Funds is located in Ontario.

3. The general partner ofFund A is an Ontario limited partnership ("Fund A GPLP"), the general partner of which is an Ontario corporation(the "Fund A GP"). The general partner of the VentureF of F Fund is an Ontario limited partnership, the generalpartner of which is an Ontario corporation (the "F ofF GP"). The general partner of Fund B (the "FundB GP") is an Ontario corporation and the general partnerof the Venture Fund (the "Venture GP") is an Ontariocorporation.

4. Each of the Fund A GP,the F of F GP, the Fund B GP and the Venture GP are whollyowned subsidiaries of EdgeStone Capital GP Holdco, Inc., anOntario corporation ("GP Holdco").

5. All of the limited partnershipsunits in the Fund A GP LP are held by the indirect shareholdersof GP Holdco, or their affiliates. On June 12, 2002, CanadaPension Plan Investment Board (the "Purchaser")purchased from each of Fund A and Fund B, respectively, limitedpartnership units of each of Fund A and Fund B, respectively.These trades (the "Distributions") were effectedon an exempt basis in reliance on Section 2.3 of Rule 45-501.

6. The investment by the Purchaserin Fund A and Fund B was structured as an investment in twolimited partnerships with similar investment objectives, ratherthan as an investment in a single limited partnership, inorder that one of the partnerships, namely Fund A, could qualifyas a "qualified limited partnership" under the IncomeTax Act (Canada). The other partnership (Fund B) willmake investments that cannot be made by a "qualifiedlimited partnership". Investments in "foreign property"(as defined in the Income Tax Act (Canada) cannot bemade by Fund A, but may be made by Fund B.

7. The Purchaser was requiredto purchase limited partnership units of both Fund A and FundB, and holds the same percentage limited partnership interestin both Fund A and Fund B.

8. The indirect shareholdersof GP Holdco or their affiliates hold, either directly orindirectly, the same economic interests in both Fund A andFund B.

9. The entities (namely, thePurchaser and the indirect shareholders of GP Holdco or affiliatesof such indirect shareholders) that hold, directly or indirectly,all of the partnership interests in Fund A hold, directlyor indirectly, all of the partnership interests in Fund B.

10. The total purchase pricethat the Purchaser agreed to pay for its investment in FundA and Fund B, in the aggregate, is Cdn $100,000,000. The Purchaseragreed to pay up to Cdn $100,000,000 of this amount for itsinvestment in Fund A (less the amount invested by the Purchaserin Fund B), and up to Cdn $30,000,000 for its investment inFund B. Proceeds paid by the Purchaser will only be allocatedto Fund B if required by Fund B to pay for an investment thatcannot be made by Fund A. The Purchaser's obligation to providefunds to Fund B is limited to the lesser of Cdn $30,000,000and the difference between Cdn $100,000,000 in the amountactually invested by Fund A. As the allocation of proceedspaid by the Purchaser between Fund A and Fund B depends onwhich of Fund A and Fund B requires the proceeds to make aparticular investment, the actual amount of proceeds thatwill be received by each of Fund A and Fund B will not beknown until the investment periods of both Funds expire (whichcould be as late as June, 2008).

11. Each of Fund A and FundB will be required to pay filing fees under Section 7.3 ofRule 45-501 in connection with the distribution by it to thePurchaser under Section 2.3 of Rule 45-501 at the time a Form45-501F1 is required to be filed in respect of such distribution,based on the maximum amount of proceeds that may be receivedby such Fund. In the case of Fund A, that maximum amount isCdn $100,000,000, and in the case of Fund B, that maximumamount is Cdn $30,000,000. Consequently, both partnershipsare required to pay fees at the time that Form 45-501F1'sare required to be filed by them in respect of the Distributions,calculated based on an aggregate amount of proceeds of Cdn$130,000,000, even though the aggregate amount of proceedsthat will be ultimately received by both Funds will not exceedCdn $100,000,000, in total.

AND UPON the Commissionbeing of the opinion that to do so would not be prejudicialto the public interest,

IT IS ORDERED, pursuantto Section 147 of the Act, that Fund B is exempt from the requirementto pay the fees applicable under Section 7.3 of Rule 45-501to the filing by Fund B of the Form 45-501F1 in respect of theDistributions, provided that Fund A pays the fees under Section7.3 of Rule 45-501 applicable to the filing by Fund A of a Form45-501F1 in respect of the Distributions, calculated on Cdn$100,000,000, the maximum amount of proceeds from the Distributionsthat may be received by Fund A and Fund B.

June 21, 2002.

"Robert W. Korthals"                    "HaroldP. Hands"