Exceptional Technologies Fund 5 (VCC) Inc.

November 10, 2006 16:15 ET

ExFund 5 to Call Shareholders' Meeting to Approve Plan of Liquidation, Delisting and Wind Up

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 10, 2006) - The directors of Exceptional Technologies Fund 5 (VCC) Inc. (the "Company") (TSX VENTURE:XF) have determined that the Company should proceed with a plan of liquidation involving the distribution, on a stepped basis, of the Company's investment assets to its shareholders. In addition, the directors of the Company have determined that it is in the best interests of shareholders of the Company to apply to delist the common shares of the Company from the TSX Venture Exchange and thereafter to voluntarily dissolve (collectively, the "Plan of Liquidation"). A meeting of shareholders to consider and approve the Plan of Liquidation, by "majority of the minority", is being set for Wednesday, December 20, 2006. An information circular providing further details of the Plan of Liquidation will be mailed to shareholders of the Company on or about November 20, 2006. In addition to shareholder approval, the Plan of Liquidation is also subject to such other approvals as may be required from the TSX Venture Exchange, the Administrator under the Small Business Venture Capital Act (British Columbia) ("SBVCA"), the manager of the Company (Discovery Capital Management Corp.), and any other applicable regulatory authority. Subject to obtaining the relevant approvals, the Manager has agreed to terminate its management agreement with the Company such that management fees would not be payable by the Company after December 31, 2006, and to waive payment of the severance fee for early termination of the management agreement (three times the annual management fee).

The Plan of Liquidation contemplates that the Company will apply for approval to have its registration cancelled under the SBVCA and pay a residual tax liability under the SBVCA (estimated to be approximately $21,000) for early termination of the Company's investment obligations thereunder. The Plan of Liquidation also contemplates the distribution of the portfolio assets of the Company, and/or the proceeds of the sale of those assets, to shareholders of the Company on a pro-rata basis.

If approved, the implementation of the Plan of Liquidation will of necessity be completed in stages, depending upon the timing of the Company's ability to liquidate its illiquid portfolio investments at prices which the Manager considers reasonable in the circumstances, and/or to make distributions in kind to shareholders of its liquid portfolio investments. Accordingly, it is not possible to predict the timing of completion of the Plan of Liquidation. However, to the extent practicable, it is the Manager's intention to complete the Plan of Liquidation on or before March 31, 2007 in order to minimize costs to the Company. If necessary to facilitate completion of the Plan of Liquidation on a timely basis, shareholders of the Company may receive beneficial ownership of residual interests in illiquid portions of the Company's investments in its portfolio investments ("Illiquid Security Interests"), subject to distribution of proceeds from those interests at a later date when they become liquid.

The Manager of the Company is a wholly owned subsidiary of Discovery Capital Corporation ("Discovery Capital") and will continue to be paid the management fee provided under the existing management contract with the Company until December 31, 2006. Discovery Capital owns a total of 903,193 common shares of the Company, representing approximately 15.2% of the 5,949,011 issued and outstanding common shares of the Company, and will receive its pro-rata share of all portfolio assets distributed. In addition, it is contemplated that the Manager would act as custodian (with payment of out-of-pocket costs only) of any Illiquid Security Interests until such time as they became liquid and were free of any re-sale restrictions.

There is no assurance that the proposed Plan of Liquidation will proceed as outlined in this news release.

Harry Jaako, President and Director

John McEwen, Secretary and Director

This news release includes statements about expected future events that are forward-looking in nature and subject to risks and uncertainties. Future events and results may vary substantially from what the Company currently foresees.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Discovery Capital Corporation
    Harry Jaako
    (604) 683-3000 ext. 105
    Discovery Capital Corporation
    John McEwen
    (604) 683-3000 ext. 106
    Discovery Capital Corporation
    Charles Cook
    (604) 683-3000 ext. 102
    (604) 662-3457 (FAX)
    Email: info@discoverycapital.com
    Website: www.discoverycapital.com