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PJDA/pm/877817/Legal – 2644317.7 (v7 clean)
No: _____________
IMPORTANT
No application has been made to any stock exchange to list the Shares on a stock exchange. Neither this Private Placement Memorandum nor its Supplement(s) has been registered or filed in any jurisdiction in connection with the offer of Shares.
__________________________________________________________________________________
PRIVATE PLACEMENT MEMORANDUM
relating to the offer and issue of Shares, which may be issued in multiple Classes referable to Segregated Portfolios, of:
GAA INVESTMENT FUNDS SPC LIMITED
(a segregated portfolio company with closed-‐‑ended segregated portfolios incorporated with limited liability under
the laws of the Cayman Islands)
Date: 28 August 2013
Legal – 2644317.7 (i)
NOTICE
BY ACCEPTING THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM THE RECIPIENT SHALL BE DEEMED TO HAVE AGREED TO THE TERMS OF THIS NOTICE. GAA INVESTMENT FUNDS SPC LIMITED (THE “COMPANY”) IS A SEGREGATED PORTFOLIO COMPANY THAT MAY FORM MULTIPLE SEGREGATED PORTFOLIOS EACH OF WHICH CONSTITUTES A SEPARATE SEGREGATED PORTFOLIO OF THE COMPANY (EACH, A “SEGREGATED PORTFOLIO”). INVESTORS MAY INVEST IN MORE THAN ONE SEGREGATED PORTFOLIO SUBJECT TO ANY RESTRICTIONS ATTACHED TO A PARTICULAR SEGREGATED PORTFOLIO. THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM, AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME (THE “PRIVATE PLACEMENT MEMORANDUM”), DESCRIBES CERTAIN FEATURES COMMON TO THE SEGREGATED PORTFOLIOS. SEPARATE CONFIDENTIAL SUPPLEMENTS TO THIS PRIVATE PLACEMENT MEMORANDUM (EACH, A “SUPPLEMENT”) WILL DESCRIBE THE STRATEGY, SPECIFIC TERMS OF, AND SPECIFIC RISKS ASSOCIATED WITH EACH SEGREGATED PORTFOLIO. THIS PRIVATE PLACEMENT MEMORANDUM MUST BE READ IN CONJUNCTION WITH THE APPLICABLE SUPPLEMENT.
THIS PRIVATE PLACEMENT MEMORANDUM IS DISTRIBUTED ON A CONFIDENTIAL BASIS IN CONNECTION WITH A PRIVATE OFFERING OF SHARES, NONE OF WHICH WILL BE ISSUED TO ANY PERSON OTHER THAN A PERSON TO WHOM THIS PRIVATE PLACEMENT MEMORANDUM IS SENT WITH THE CONSENT OF THE DIRECTORS OR THE INVESTMENT MANAGER. NO PERSON RECEIVING A COPY OF THIS PRIVATE PLACEMENT MEMORANDUM IN ANY TERRITORY MAY TREAT THE SAME AS CONSTITUTING AN INVITATION TO HIM, UNLESS IN THE RELEVANT TERRITORY SUCH AN INVITATION COULD LAWFULLY BE MADE TO HIM WITHOUT COMPLIANCE WITH ANY REGISTRATION OR OTHER LEGAL REQUIREMENTS OR WHERE SUCH REGISTRATION OR OTHER LEGAL REQUIREMENTS HAVE BEEN COMPLIED WITH.
POTENTIAL INVESTORS SHOULD NOTE THAT IF THEIR APPLICATION FOR SHARES IS NOT ACCEPTED, THE COMPANY, OR ITS AGENTS ON BEHALF OF THE COMPANY, MAY RETAIN SUCH APPLICANT’S SUBSCRIPTION DOCUMENTS, SUBJECT TO THE COMPANY, OR ITS AGENTS ON BEHALF OF THE COMPANY’S DISCRETION TO RETURN SUCH SUBSCRIPTION DOCUMENTS TO THE UNSUCCESSFUL APPLICANT.
CAYMAN ISLANDS
NO OFFER OR INVITATION TO SUBSCRIBE FOR SHARES MAY BE MADE TO THE PUBLIC IN THE CAYMAN ISLANDS (WHICH DOES NOT INCLUDE AN EXEMPTED OR ORDINARY NON-‐‑RESIDENT COMPANY IN THE CAYMAN ISLANDS) AND THIS
Legal – 2644317.7 (ii)
PRIVATE PLACEMENT MEMORANDUM DOES NOT CONSTITUTE SUCH AN OFFER OR INVITATION.
FOR INFORMATION REQUIRED BY THE SECURITIES LAWS OF CERTAIN JURISDICTIONS OUTSIDE THE CAYMAN ISLANDS, PLEASE SEE THE SCHEDULE TO THIS PRIVATE PLACEMENT MEMORANDUM, WHICH IS INCORPORATED HEREIN BY REFERENCE.
THE ABSENCE OF A DISCUSSION IN THIS PRIVATE PLACEMENT MEMORANDUM REGARDING SALES RESTRICTIONS OF SHARES IN ANY PARTICULAR JURISDICTION DOES NOT IMPLY THAT SHARES MAY OR MAY NOT BE PURCHASED IN SUCH JURISDICTION BY PROSPECTIVE INVESTORS. JURISDICTIONS NOT ADDRESSED HEREIN MAY OR MAY NOT PERMIT THE PURCHASE OF SHARES BY PROSPECTIVE INVESTORS WHO ARE SUBJECT TO THE LAWS AND REGULATIONS OF SUCH JURISDICTIONS. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN PROFESSIONAL ADVISORS WITH RESPECT TO THE PURCHASE OF SHARES.
THE DELIVERY OF THIS PRIVATE PLACEMENT MEMORANDUM OR ANY SALE MADE HEREUNDER SHALL NOT UNDER ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE OF THIS PRIVATE PLACEMENT MEMORANDUM.
THE PURCHASE OF THE SHARES OFFERED HEREBY IS HIGHLY SPECULATIVE AND INVOLVES A SIGNIFICANT DEGREE OF RISK. SEE THE SECTION HEADED “RISK FACTORS” IN THIS PRIVATE PLACEMENT MEMORANDUM. THE SHARES ARE SUITABLE ONLY FOR SOPHISTICATED INVESTORS FOR WHOM AN INVESTMENT IN THE COMPANY DOES NOT CONSTITUTE A COMPLETE INVESTMENT PROGRAM AND WHO FULLY UNDERSTAND AND ARE WILLING TO ASSUME THE RISKS INVOLVED IN THE COMPANY AND THE INVESTMENT PROGRAM OF THE APPLICABLE PORTFOLIO. THE INVESTMENT PROGRAM AND STRATEGY OF THE SEGREGATED PORTFOLIOS, BY THEIR NATURE, MAY BE CONSIDERED TO INVOLVE A SUBSTANTIAL DEGREE OF RISK.
THE SHARES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED, IN WHOLE OR IN PART, EXCEPT IN ACCORDANCE WITH THE TERMS HEREIN OR CONTAINED IN THE APPLICABLE SUPPLEMENT. ACCORDINGLY, INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF AN INVESTMENT IN THE SHARES FOR AN INDEFINITE PERIOD OF TIME. THERE WILL BE NO PUBLIC MARKET FOR THE SHARES.
ANY REPRODUCTION OF THIS PRIVATE PLACEMENT MEMORANDUM OR THE DIVULGENCE OF ANY OF ITS CONTENTS, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY, IS STRICTLY PROHIBITED.
THE COMPANY RESERVES THE RIGHT TO WITHDRAW, CANCEL OR MODIFY THIS OFFER AND TO REJECT ANY APPLICATION TO PURCHASE SHARES IN WHOLE OR IN PART FOR ANY REASON.
Legal – 2644317.7 (iii)
THE DIRECTORS, WHOSE NAMES APPEAR IN THIS PRIVATE PLACEMENT MEMORANDUM, ACCEPT RESPONSIBILITY FOR THE INFORMATION CONTAINED IN THIS PRIVATE PLACEMENT MEMORANDUM. TO THE BEST OF THE KNOWLEDGE AND BELIEF OF THE DIRECTORS (WHO HAVE TAKEN ALL REASONABLE CARE TO ENSURE THAT SUCH IS THE CASE) THE INFORMATION CONTAINED IN THIS PRIVATE PLACEMENT MEMORANDUM IS IN ACCORDANCE WITH THE FACTS AND DOES NOT OMIT ANYTHING LIKELY TO AFFECT THE IMPORT OF SUCH INFORMATION. THE DIRECTORS ACCEPT RESPONSIBILITY ACCORDINGLY.
NO PERSON HAS BEEN AUTHORISED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PRIVATE PLACEMENT MEMORANDUM, IN CONNECTION WITH THE PLACING OF SHARES AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. NEITHER THE DELIVERY OF THIS PRIVATE PLACEMENT MEMORANDUM NOR THE ALLOTMENT AND ISSUE OF SHARES SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY, OR IN ANY OF THE OTHER MATTERS REFERRED TO IN THIS PRIVATE PLACEMENT MEMORANDUM, SINCE THE DATE OF THIS PRIVATE PLACEMENT MEMORANDUM.
NO ACTION HAS BEEN TAKEN TO PERMIT DISTRIBUTION OF THIS PRIVATE PLACEMENT MEMORANDUM IN ANY JURISDICTION WHERE SUCH ACTION IS REQUIRED TO BE TAKEN. THIS PRIVATE PLACEMENT MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORISED OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
YOU ARE ADVISED TO EXERCISE CAUTION IN RELATION TO THE OFFER. IF YOU ARE IN ANY DOUBT AS TO THE CONTENTS OF THIS PRIVATE PLACEMENT MEMORANDUM, YOU SHOULD OBTAIN INDEPENDENT PROFESSIONAL ADVICE AND CONSULT YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR FINANCIAL ADVISOR.
POTENTIAL INVESTORS SHOULD NOT TREAT THE CONTENTS OF THIS PRIVATE PLACEMENT MEMORANDUM AS ADVICE RELATING TO INVESTMENT, LEGAL OR TAXATION MATTERS AND MUST RELY ON THEIR OWN LEGAL COUNSEL AND ACCOUNTANTS OR OTHER ADVISORS AS TO LEGAL, TAX AND RELATED MATTERS CONCERNING AN INVESTMENT IN THE COMPANY.
FORWARD-‐‑LOOKING STATEMENTS
CERTAIN STATEMENTS IN THE PRIVATE PLACEMENT MEMORANDUM AND/OR APPLICABLE SUPPLEMENT MAY CONSTITUTE FORWARD-‐‑LOOKING STATEMENTS. SUCH FORWARD-‐‑LOOKING STATEMENTS INCLUDE THOSE RELATING TO FUTURE INVESTMENT OPPORTUNITIES, THE OUTLOOK OF THE INVESTMENT MARKETPLACE AND THE FUTURE PERFORMANCE OF THE SEGREGATED PORTFOLIOS. IN ADDITION, SUCH FORWARD-‐‑LOOKING STATEMENTS INVOLVE
Legal – 2644317.7 (iv)
KNOWN AND UNKNOWN RISKS, UNCERTAINTIES, AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY OR THE SEGREGATED PORTFOLIOS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS EXPRESSED OR IMPLIED BY SUCH FORWARD-‐‑LOOKING STATEMENTS. SUCH FACTORS INCLUDE THE ABILITY OF THE COMPANY AND EACH SEGREGATED PORTFOLIO TO IMPLEMENT SUCCESSFULLY ITS INVESTMENT PHILOSOPHY AND OTHERWISE ACHIEVE ITS OBJECTIVES; GOVERNMENTAL REGULATION OF PRIVATE INVESTMENT COMPANIES AND FUNDS; OVERALL ECONOMIC CONDITIONS AND OTHER RISK FACTORS, SEE SECTION HEADED “RISK FACTORS” IN THIS PRIVATE PLACEMENT MEMORANDUM. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO UPDATE OR REVISE ANY FORWARD-‐‑LOOKING STATEMENTS CONTAINED HEREIN, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Legal – 2644317.7
CONTENTS
NOTICE .................................................................................................................................... i
DIRECTORY ............................................................................................................................ 1
DEFINITIONS ......................................................................................................................... 2
THE COMPANY .................................................................................................................. 11
Introduction ............................................................................................................... 11 Directors of the Company ....................................................................................... 12 Investment Objective and Investment Strategy ................................................... 15 Investment Restrictions ........................................................................................... 15 Borrowing Policy ...................................................................................................... 15 Distribution Policy ................................................................................................... 16 Liquidity .................................................................................................................... 16 Fiscal Year .................................................................................................................. 16
MANAGEMENT OF THE SEGREGATED PORTFOLIOS ............................................ 17
Investment Manager ................................................................................................ 17 Investment Adviser .................................................................................................. 17 Administrator ........................................................................................................... 17 Auditors ..................................................................................................................... 17 Potential Conflicts of Interest ................................................................................. 17
THE OFFERING ................................................................................................................... 19
Issue of Shares ........................................................................................................... 19 Initial Offer Period ................................................................................................... 19 Continuous Offering ................................................................................................ 19 Minimum Commitments ......................................................................................... 19 Drawdowns and Issuance of Shares ...................................................................... 20 Subscription Procedure ........................................................................................... 20 Restrictions on Transfers of Shares ........................................................................ 21 No Redemption of Shares ....................................................................................... 22 Calculation of Net Asset Value .............................................................................. 23 Events of Default ...................................................................................................... 26
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Temporary Suspension of Calculation of Net Asset Value and of Issues and Redemptions ............................................................................................................. 27
EXPENSES ............................................................................................................................. 29
Management and Performance Fees ..................................................................... 29 Administration Fees ................................................................................................. 29 Organisational Expenses ......................................................................................... 29 Operational Expenses .............................................................................................. 29 Directors Fees ............................................................................................................ 31
RISK FACTORS ..................................................................................................................... 32
General Risk Factors ................................................................................................ 32 Political and Economic Risks .................................................................................. 32 Risk of terrorism ....................................................................................................... 33 Repatriation of Capital, Dividends, Interest and other Income Risks .............. 33 Market Risk ............................................................................................................... 33 Regulatory Risks and Accounting Standards ...................................................... 33 Exchange Control and Currency Risk ................................................................... 34 Fees Paid to the Investment Manager ................................................................... 34 Investment Manager Risk ....................................................................................... 35 Lack of Operating History ...................................................................................... 35 Dependence on Key Personnel ............................................................................... 35 No Current Income .................................................................................................. 35 No Assurance of Profit, Cash Distributions or Appreciation ............................ 35 Failure to Make Capital Contributions ................................................................. 35 Lack of Management Control by Shareholders ................................................... 36 Projections ................................................................................................................. 36 Broad Indemnification ............................................................................................. 36 Borrowing and Interest Rates ................................................................................. 36 Conflicts of Interest .................................................................................................. 37 No Separate Counsel ................................................................................................ 37 Net Asset Value Considerations ............................................................................ 37 Segregated Portfolio Company Risks and Liabilities of the Company ............ 38 Non-‐‑Transferability of Shares ................................................................................ 38 Concentration of Investments ................................................................................ 38 Risk of Litigation ...................................................................................................... 38 Long Term Nature of Closed-‐‑ended Segregated Portfolios and Illiquid Investments ............................................................................................................... 39
TAXATION ........................................................................................................................... 40
Cayman Islands ........................................................................................................ 40
Legal – 2644317.7
GENERAL INFORMATION .............................................................................................. 41
Fund ........................................................................................................................... 41 Segregated Portfolios ............................................................................................... 41 Rights of the Management Shares ......................................................................... 42 Rights of the Shares .................................................................................................. 42 Rights Attaching to a Class ..................................................................................... 43 Termination ............................................................................................................... 43 Compulsory Redemption and Transfer Articles ................................................. 43 Alteration of the Articles ......................................................................................... 43 Directors ..................................................................................................................... 43 Indemnification ......................................................................................................... 44 Litigation .................................................................................................................... 45 Reports ....................................................................................................................... 45
SCHEDULE ........................................................................................................................... 46
Selling Restrictions ................................................................................................... 46
Legal – 2644317.7 -‐‑ 1 -‐‑
DIRECTORY
Registered Address of the Company
Cricket Square Hutchins Drive P.O. Box 2681
Grand Cayman KY1-‐‑1111 Cayman Islands
Directors
Jeremy Smeeton Carl Bulter
Legal Adviser as to Cayman Islands Laws
Conyers Dill & Pearman (Cayman) Limited Cricket Square Hutchins Drive P.O. Box 2681
Grand Cayman KY1-‐‑1111 Cayman Islands
Legal – 2644317.7 -‐‑ 2 -‐‑
DEFINITIONS
The following definitions apply throughout this Private Placement Memorandum and each Supplement unless the context otherwise requires:
“Administration Agreement” means a fund administration agreement between the Company on behalf and for the account of each Segregated Portfolio and the Administrator from time to time;
“Administrator” means such person that may be appointed as administrator and transfer agent of the Company in respect of any Segregated Portfolio from time to time;
“Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is Controlled by or is under common Control with, such Person; provided that the Company shall not be treated as an Affiliate of any Shareholder;
“AML Regulations” means the Money Laundering Regulations of the Cayman Islands, as revised, amended or supplemented from time to time;
“Applicable Portfolio” means the applicable Segregated Portfolio relating to an Applicant’s subscription of Shares;
“Applicable Supplement” means the Supplement relating to the Applicable Portfolio;
“Applicant” means an applicant for subscription of Shares;
“Articles” means the memorandum of association and articles of association of the Company for the time being in force;
“Auditor” means such entity as may be appointed as auditor of the Company from time to time;
“Available Operating Income” means, for each Fiscal Year of the Company or other applicable period, the Operating Income received by a Segregated Portfolio during such Fiscal Year or other period, less all amounts paid by or for the account of the Segregated Portfolio during the same Fiscal Year or other period (including, without limitation, payments of principal and interest on any Segregated
Legal – 2644317.7 -‐‑ 3 -‐‑
Portfolio indebtedness), and less any amounts determined by the Directors to be necessary to provide a reasonable reserve for working capital needs or any other contingencies of the Segregated Portfolio. Available Operating Income shall be determined in accordance with the cash receipts and disbursements method of accounting and otherwise in accordance with IFRS, consistently applied. Available Operating Income shall not be reduced by depreciation, amortisation, cost recovery deductions, depletion, similar allowances or other non cash items, but shall be increased by any reduction of reserves previously established;
“Base Currency” has the meaning assigned to it in the Supplement issued in respect of a particular Segregated Portfolio;
“Board” or “Board of Directors” means the Board of Directors of the Company;
“Business Day” any day from Monday to Friday on which banks are open for business in Singapore or such other place or places as the Directors and /or the Investment Manager may from time to time determine;
“Capital Contributions” means, with respect to any Shareholder, the aggregate amount of money (and the initial gross asset value of any property other than money) contributed by such Shareholder to the Company in respect of a Segregated Portfolio pursuant to the provisions of the Subscription Documents; any Person who acquires Shares in the Company pursuant to a transfer of Shares in accordance with the Articles shall succeed to the Capital Contributions of the selling Shareholder;
“Class” means a class (or classes) of Shares issued in respect of a Segregated Portfolio;
“Closing Date” has the meaning assigned to it in the Supplement issued in respect of a particular Segregated Portfolio;
“Commitment” means the total amount committed by an Applicant or a Shareholder as its investment in a Segregated Portfolio in accordance with the Subscription Documents, this Private Placement Memorandum and the Applicable Supplement;
“Commitment Period” means the period during which Drawdown Notices may be issued by the Company as may be specified in
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the Applicable Supplement;
“Companies Law” means the Companies Law of the Cayman Islands, as revised, amended or supplemented from time to time;
“Control”
(and the derivative terms “controlling” and “controlled”)
means the possession, directly or indirectly, of the power to elect or cause the election of a majority of the directors of a Person, whether through the ownership of voting securities, by contract or otherwise; provided that (i) beneficial ownership of 50% or more of the voting shares of a Person shall be deemed to be control and (ii) the general partner of a limited partnership shall be deemed to control such limited partnership;
“Default Notice” has the meaning given to it under heading “Events of Default” in this Private Placement Memorandum;
“Defaulting Party” has the meaning given to it under heading “Events of Default” in this Private Placement Memorandum;
“Directors” means the directors of the Company acting as a board, including any duly authorised committee of the board of directors of the Company or, as the context so requires, a director;
“Disposition” means, with respect to all or a portion of a Portfolio Company Investment, (i) except as provided in the next sentence, the sale, exchange or other disposition by the Company (on behalf of a Segregated Portfolio) of all or a portion of the securities or other interests constituting that Portfolio Company Investment for cash, securities or other property, (ii) the receipt by the Company (on behalf of a Segregated Portfolio) of a distribution of the proceeds of the sale of all or substantially all of the assets of the Portfolio Company in complete liquidation of the Company’s entire interest in the Portfolio Company Investment, (iii) an in-‐‑kind distribution of all or part of a Portfolio Company Investment that has not previously been deemed to have been disposed of, as of the date of and to the extent of such distribution, or (iv) insurance proceeds received by a Portfolio Company in respect of the destruction or other loss of all or any substantial portion of such Portfolio Company’s assets. A “Disposition” does not include (i) a recapitalisation that consists of an exchange of a Portfolio Company Investment for other securities of or claims against the
Legal – 2644317.7 -‐‑ 5 -‐‑
issuing Portfolio Company, (ii) a business combination that consists of an exchange of substantially all of the Company’s remaining interest in a Portfolio Company Investment for securities issued by an acquiring entity, (iii) a business combination that consists of the exchange of all or substantially all of the assets of a Portfolio Company or one or more divisions or operating shares of a Portfolio Company for securities issued by an acquiring entity, or (iv) a sale, exchange or other disposition that does not constitute a pro rata disposition of a portion of each class of securities or other interests constituting such Portfolio Company Investment;
“Distributions” means the distributions of Available Operating Income and Realisation Proceeds which the Directors shall distribute to the Shareholders, to the extent permitted by the Companies Law and as described in the Applicable Supplement;
“Drawdown Notice” means the drawdown notice, substantially in the form set out in the Subscription Documents, issued to request the payment of all or a portion of the Commitment of an Applicant or Shareholder;
“Event of Default” has the meaning given to it under the heading “Events of Default” in this Private Placement Memorandum;
“Fiscal Year” means (i) the period commencing upon the formation of the Company and ending on 31 December 2013, (ii) any subsequent 12 month period commencing on 1 January and ending on 31 December;
“Fund” means GAA Investment Funds SPC Limited;
“General Assets” means the assets of the Company which are not Segregated Portfolio Assets including, without limitation the proceeds of the issue of Management Shares;
“IFRS” means International Financial Reporting Standards;
“Initial Closing Date” means in respect of a Segregated Portfolio, the initial closing date specified in the Applicable Supplement or related Subscription Documents at which Shares are first offered for subscription and at which investors will execute and deliver the Subscription Documents
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for subscription of such Shares;
“Initial Offer Period” means in respect of a Segregated Portfolio, the period specified in the Applicable Supplement during which Shares are first offered for subscription;
“Investment” means any right or interest in any real estate, share, stock, bond, debenture, debenture stock, unit, sub-‐‑unit or other security or any loan of money or any currency or interest in any currency and includes any financial stock market index, interest rate or currency futures or similar financial or other instruments, warrants, and any rights in or options over any of the aforesaid, issued by or under the guarantee of anybody, whether incorporated or unincorporated, or of any governmental body and whether paying interest or dividends or not and whether fully paid, partly paid or nil paid and includes any participation as a limited partner or participant in any partnership or unincorporated association;
“Investment Adviser” means such person that may be appointed as investment adviser to the Investment Manager with respect to a Segregated Portfolio from time to time;
“Investment Management Agreement”
means an investment management agreement between the Company for and on behalf of each Segregated Portfolio and the Investment Manager from time to time;
“Investment Manager” means such person that may be appointed as investment manager of one or more Segregated Portfolios;
“Investment Objective” means the investment objective of a Segregated Portfolio as described in the Applicable Supplement;
“Investment Restrictions” means the investment restrictions of a Segregated Portfolio and as described in the Applicable Supplement;
“Investment Strategy” means the investment strategy of a Segregated Portfolio as described in the Applicable Supplement;
“LIBOR” means the offered rates for U.S. dollar deposits as of 11:00 a.m. (London time) on the date in question. Such offered rates are those which appear on the display designated as page 3750 on the Telerate Service (or
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such other page as may replace page 3750 on that service or such other service or services as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates of major banks for U.S. dollar deposits);
“Management Fee” such fee as may be agreed by the Directors and the Investment Manager from time to time, which is paid to the Investment Manager for managing the Investments of the Company attributable one or more Segregated Portfolios to which the Investment Manager acts as investment manager;
“Management Share” means a voting, non-‐‑participating, non-‐‑redeemable management share of US$1.00 par value in the capital of the Company;
“Net Asset Value of a Segregated Portfolio”
means the Net Asset Value per Share of each Class referable to a Segregated Portfolio, multiplied by the number of Shares of the relevant Class or Classes in issue, aggregated for each Class representing such Segregated Portfolio;
“Net Asset Value per Share” means the net asset value of the Company attributable to the Shares of a Class referable to a Segregated Portfolio divided by the number of Shares of that Class in issue rounded to two decimal places and expressed in the Base Currency;
“Operating Income” for any period, means all cash income received by a Segregated Portfolio during such period, including cash income constituting interest, dividends or distributions received from or attributable to the Portfolio Company Investments or Portfolio Companies, but excluding Realisation Proceeds;
“Performance Fee” such performance fee as may be agreed by the Directors and the Investment Manager from time to time, which is paid to the Investment Manager;
“Person” means any natural person, corporation, partnership, trust, voluntary association, limited liability company, joint venture, unincorporated organisation, government (or any agency, instrumentality or political subdivision of such person) or other association or entity;
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“Portfolio Company” means any Person in which the Company makes an investment;
“Portfolio Company Investment” means (i) any investment in securities issued in a Portfolio Company, including, without limitation, equity securities, debt securities purchased with warrants or other equity securities and any other securities the value of which is expected to be realised by being exercised, converted or exchanged into equity securities or is directly dependent upon the value of related equity securities and (ii) real estate investments held indirectly through one or more Portfolio Companies;
“Private Placement Memorandum” means this confidential Private Placement Memorandum issued in connection with the offer of Shares as amended or supplemented from time to time;
“Realisation Proceeds” means all proceeds received by a Segregated Portfolio from a Disposition of a Portfolio Company or a Portfolio Company Investment;
“Redeemable Share” means a participating, non-‐‑voting, redeemable share of US$0.001 par value in the Capital of the Company;
“Regulation S” means a regulation in relation to the sale of the stocks of United States registered companies to foreign companies, found in the Securities Act;
“Restricted Person” means any person determined by the Directors in their discretion as not being entitled to subscribe for or hold Shares including a U.S. Person or where: (i) such holding may be prejudicial to the interests of Shareholders, (ii) such holding may result in any contravention of any law or the requirements of any country or governmental or regulatory authority, (iii) such holding may result in any of the Company, the Directors or the Shareholders as a whole incurring any liability to taxation or suffering any pecuniary or regulatory disadvantage which any or all of them might not otherwise have incurred or suffered, or (iv) such person does not comply with any other requirements for Shares of a Segregated Portfolio prescribed by the Directors from time to time as described in the Applicable Supplement;
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“Securities Act” means the United States Securities Act of 1933, as amended;
“Segregated Portfolio” means each segregated portfolio of assets of the Company represented by a separate Class or Classes of Shares to which particular investments are attributed, established by the Directors from time to time;
“Segregated Portfolio Assets” means the assets of the Company held within or on behalf of the Segregated Portfolios;
“Share” means a participating, non-‐‑voting, non-‐‑redeemable share of US$0.001 par value in the capital of the Company;
“Shareholder” means a person who is registered as the holder of a Share and where two or more persons are registered as the joint holders of a Share, the person whose name stands first in the register of members;
“Singapore” means the Republic of Singapore;
“Subscription Documents” a prescribed form of application for Shares which may be obtained from the Investment Manager and/or the Administrator and its agents;
“Supplement” Means a supplement to this Private Placement Memorandum issued in connection with the offer of Shares representing a Segregated Portfolio as amended from time to time;
“United States” the United States of America (including the states and District of Columbia) and any of its territories, possessions and other areas subject to its jurisdiction;
“US Person” means as defined in Regulation S of the Securities Act;
“Valuation Day” in respect of a Segregated Portfolio, such o day or days as specified in the Applicable Supplement;
“Valuation Time” means the point in time on a Valuation Day by reference to which the Net Asset Value of a Segregated Portfolio, the Net Asset Value per Share and the Net Asset Value are calculated as specified in the Applicable Supplement; and
“Year End” means the last day of the financial year of the
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Company, being 31 December of each year.
In this Private Placement Memorandum unless otherwise stated:
(i) words and expressions used, but not defined, have the same meanings as in the Articles;
(ii) “in writing” and “written” includes printing, type, telex, facsimile, electronic mail, photography and all other modes of representing or reproducing words in permanent visible form;
(iii) words importing the singular include the plural and vice versa, and words importing one gender include both genders and the neuter and vice versa;
(iv) references to a person includes an individual, body corporate, partnership, any other unincorporated body or association of persons, and any government or government agency;
(v) references to legislation or legislative provisions include any amendment, consolidation, extension or re-‐‑enactment from time to time, and any orders, regulations, instruments or other subordinate legislation made under that legislation or legislative provision; and
(vi) references to "ʺUSD"ʺ, "ʺUS$"ʺ and “U.S. dollars” are to the lawful currency of the United States of America.
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THE COMPANY
Introduction
The Company is a segregated portfolio company incorporated with limited liability under the Companies Law on 15 January 2013. The Company is of unlimited duration. The Company may, and currently only intends to, establish closed-‐‑ended Segregated Portfolios.
The investments and other assets of the Company held for the account of each Segregated Portfolio are applied solely in respect of that Segregated Portfolio, except in the case of:
(a) any asset which the Directors do not consider is attributable to a particular Segregated Portfolio or particular Segregated Portfolios. In such circumstances, the Directors may (with the Auditor’s approval) determine the basis upon which any such asset is allocated between the Segregated Portfolios and may from time to time vary such allocation. The Auditor’s approval will not be required where the asset is allocated between all the Segregated Portfolios pro rata having regard to the Net Asset Value of each Segregated Portfolio; and
(b) any liability or contingent liability which the Directors do not consider is attributable to a particular Segregated Portfolio or particular Segregated Portfolios. In such circumstances, the Directors will allocate such liability or contingent liability between all the Segregated Portfolios pro rata having regard to the Net Asset Value of each Segregated Portfolio.
A Segregated Portfolio may have, and is expected to have, different investments from those of other Segregated Portfolios. A Segregated Portfolio is not a separate legal entity and, therefore, references in this Private Placement Memorandum to acts of a Segregated Portfolio (such as entry into agreements) will be carried out by the Company on behalf of, and for the account of, the relevant Segregated Portfolio in respect of which such action is taken. Under Cayman Islands law, the assets of one Segregated Portfolio will not be available to meet the liabilities of another.
Share Capital
The Company’s authorised share capital comprises of $US50,000 divided into:
(i) 100 Management Shares having a par value of US$1.00 each,
(ii) 24,950,000 Shares having a par value of US$0.001 each; and
(iii) 24,950,000 Redeemable Shares of a par value of US$0.001 each.
All of the Management Shares have been issued and are held by Jeremy Smeeton. The Shares will be attributable to the Segregated Portfolios as described in the Applicable Supplements. No Redeemable Shares have been issued as at the date of publication of this Private Placement Memorandum.
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The Company may issue one or more Classes in respect of a Segregated Portfolio. Each Segregated Portfolio will have a separate and distinct portfolio of investments and separate books and records will be maintained for each such Segregated Portfolio.
Each Segregated Portfolio accumulates assets on behalf of the Shareholders referable to the relevant Segregated Portfolio. A Share represents the beneficial ownership of one undivided share in the assets of the relevant Segregated Portfolio referable to the relevant Class.
A Supplement will be issued for each Segregated Portfolio offered which will disclose the Investment Objective, Investment Strategy, Investment Restrictions (if any), fees and other terms applicable to the Segregated Portfolio and the terms of issue of each Class (if applicable).
The assets of each Segregated Portfolio will be invested in accordance with the Investment Objective and Investment Strategy, and subject to the Investment Restrictions (if any), of the Applicable Portfolio as set out in the Applicable Supplement. Supplements may be added to or removed from this Private Placement Memorandum as Segregated Portfolios are established or wound up, as the case may be.
The Directors have complete discretion to determine the terms of offer of Shares referable to each Segregated Portfolio, may close a Segregated Portfolio to new subscriptions for Shares at any time or close the Company as a whole to new subscriptions for Shares at any time.
The Shares are not redeemable at the option of a Shareholder, however, such Shares may be redeemed or repurchased at the option of the Company subject to the terms set out in the Applicable Supplement and the Articles.
Details of each Class in a Segregated Portfolio that are available for subscription will be set out in the Applicable Supplement for such Applicable Portfolio.
Directors of the Company
The Directors are Jeremy Smeeton and Carl Butler. The biographical and business backgrounds of the Directors are as follows:
Jeremy Smeeton
In 2013, Jeremy Smeeton established the Fund with a view to financing a variety of projects involved in the development of the biomass industry. He also incorporated GAA Green Energy Solutions Limited as a project management company to oversee the creation and management of biomass projects.
Jeremy Smeeton is a British citizen who, after completing his education in Bristol, the United Kingdom, spent nearly 7 years working in a number of sectors of the United Kingdom’s financial services industry.
In 1987, Mr. Smeeton was posted to Asia and worked extensively in Indonesia, Thailand and Malaysia where he represented a British-‐‑based financial services company. In 1990 he established Courtenay Holdings Sdn Bhd (“Courtenay Holdings”) in Kuala Lumpur in
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order to develop new ideas in the Malaysian financial services sector. That same year Courtenay Holdings entered into a joint venture agreement with Syarikat Pesaka Antah Sdn Bhd, the investment arm of the Negeri Sembilan Royal Family, to establish Pesaka Capital Corporation Sdn Bhd (“PCC”) which in turn pioneered new methods of property financing in Malaysia. Appointed as Executive Director Operations, and working with co-‐‑directors HH Tunku Tan Sri Imran, HH Tunku Dato Seri Naquiyuddin, and HH Tunku Dato Seri Nadzaruddin, the sons of the late Sultan of Negeri Sembilan and the then King of Malaysia, Mr. Smeeton designed Malaysia'ʹs first endowment mortgage programme for the Government-‐‑owned Malaysia Building Society Berhad (“MBSB”) and headed-‐‑up Malaysia'ʹs first mortgage brokerage in conjunction with Standard Chartered Bank.
In 1993, Courtney Holdings divested its interest in PCC. In the same year, Mr. Smeeton was appointed Executive Director of Sapient Assetmix Sdn Bhd (“Sapient”) and, through the investment advisory company, Sapient Resources Sdn Bhd, secured his Investment Representative License from the Malaysian Ministry of Finance. That year Sapient successfully designed and launched Malaysia'ʹs first single premium insurance bond underwritten by one of Malaysia'ʹs leading insurers, MBA Assurance Sdn Bhd.
In 1994, Courtenay Holdings entered a joint venture agreement with Malaysia'ʹs largest listed composite insurance group, Malaysian Assurance Alliance Bhd (“MAA”), to continue the development and distribution of financial instruments via banks and insurance companies. Courtenay Holdings went on to successfully launch several onshore Malaysian based insurance and investment products, working closely with MAA until the maturity of the last Courtney Holdings/MAA joint venture product in 2000.
Mr. Smeeton established Global Asset Allocation Limited (“GAA”) as a fund management company in Bermuda in 2000. GAA provides management services to the Bermuda the mutual fund company, GAA Investment Funds Limited (“GAAIFL”), also founded in 2000. GAAIFL is authorised as a “standard fund” under the Investment Funds Act 2006 of Bermuda. Covering Europe, the Middle East, Africa and Asia, GAA has since established a global distribution network of Independent Financial Advisors which assess and include, where appropriate, GAA’s funds in their clients’ investment portfolios.
In 2005, Mr. Smeeton established GAA Direct Limited (GAAD), a Malaysian licenced brokerage based in the offshore Malaysian jurisdiction of Labuan and which falls under the supervision of the Labuan FSA. GAAD also formalised a joint venture with MAA International Assurance Limited (“MAAIA”), the offshore arm of Malaysian Assurance Alliance Berhad (“MAA”). In November 2006, MAAIA and GAAD jointly launched Malaysia'ʹs first Labuan based offshore single premium investment linked insurance policy into the Malaysian market. This event was covered extensively by national television and was also featured in nine national newspapers in English, Malay and Chinese.
During his years in Malaysia, Mr. Smeeton has been interviewed by, and has contributed articles to, a number of Malaysian newspapers and magazines, including The New Straits Times, The Star, The Business Times, Malaysian Business, Smart Investor and the Malaysian Tatler. Mr. Smeeton has appeared on Malaysian business television programmes including
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'ʹBusiness Trends'ʹ and 'ʹMoney Matters'ʹ, 'ʹTV3 Prime Time News'ʹ and on the ‘Astro’ television network.
Carl Peter Tremayne Bulter
Carl Peter Tremayne Butler is a British citizen who, since completing his education in Gloucestershire, the United Kingdom has spent more than thirty years working, initially, in the automotive industry and then the financial services industry. Mr. Butler has lived and worked in more than twenty countries worldwide including, the United Kingdom, Seoul, the Republic of Korea, Germany, Singapore and Malaysia. Mr. Butler has extensive experience in international sales, marketing and production distribution, including working in sales with one of the United Kingdom’s leading investment-‐‑linked life assurance companies, as the general manager of five satellite operations for US, German and Dutch trading companies and manufacturers and as the owner/operator of an authorised motorcycle dealership in the Federal Republic of Germany.
Whilst based in the United Kingdom, Mr. Butler’s roles included being a partner in a regulated insurance brokerage and acting as a financial intermediary focusing on private wealth management.
From 1996 to 2003, Mr. Butler was responsible for the development of the administration department for an independent financial advisor based in Singapore and Kuala Lumpur.
In 2003, Mr. Butler joined GAA where he is chief operating officer, responsible for the development of sales and marketing procedures with respect to independent financial advisors, as well as the development, implementation and administration of other companies in the GAA group. Mr. Butler is also a director of GAAIFL.
General
The Directors have overall authority over, and responsibility for, the operations and management of the Company. The Company has however, delegated the investment management of the Company and its investments to the Investment Manager and may delegate the administration of the Company to the Administrator on the terms of the Investment Management Agreement and Administration Agreement, respectively.
The Directors shall serve until their death, resignation or removal in accordance with the Articles. The Articles do not stipulate a retirement age for Directors. A Director shall not be required to be a Shareholder. The holders of the Management Shares may appoint new Directors or remove Directors from time to time.
The Board meets as often as required by its interests. Two Directors (and able to vote) present or represented at a Board meeting constitute a quorum, and resolutions are adopted by the simple majority vote of the board members present or represented (and able to vote). The Board may also take decisions by means of resolutions in writing signed by all directors.
The Board may (but shall not be obliged to unless required by law) establish one or more committees (including without limitation an audit committee, a risk and strategy committee,
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and a compensation committee) and for which it shall, if one or more of such committees are set up, appoint the members (who may be but do not need to be board members), determine the purpose, powers and authorities as well as the procedures and such other Rules as may be applicable thereto (subject as to the audit committee as set forth therein).
No Director shall, solely as a result of being a Director, be prevented from contracting with the Company, either with regard to his tenure of any office or place of profit or as vendor, purchaser or in any other manner whatsoever, nor shall any contract in which any Director is in any way interested be liable to be avoided, in account of his position as Director nor shall any director who is so interested be liable to account for us or the shareholders for any remuneration, profit or other benefit realised by the contract by reason of the Director holding that office or of the fiduciary relationship thereby established.
Any Director having an actual or potential conflict of interest in a transaction submitted for approval to the board conflicting shall be obliged to advise the board thereof and to cause a record of his statement to be included in the minutes of the meeting.
All Directors are entitled to be paid or reimbursed for any reasonable out-‐‑of-‐‑pocket expenses incurred by them in attending and returning from meetings of the Directors or any committee thereof, meetings of Shareholders or otherwise in connection with the business of the Company.
Each of the Directors, past and present, are entitled to indemnification from the Company to the fullest extent permitted by law against liability and all expenses reasonably incurred by him in connection with any claim, action, suit or proceeding in which he is involved by virtue of his being or having been a Director. The Company may purchase and maintain for any Director insurance against any such liability. No indemnification shall be provided against any liability to a Director by reason of any fraud or dishonesty in relation to the Company.
Investment Objective and Investment Strategy
The Investment Objective and Investment Strategy for each Segregated Portfolio will be formulated by the Directors and will be described in the Applicable Supplement. The assets held by the Company for the account of a Segregated Portfolio will be invested in accordance with the Investment Objective and Investment Strategy of that Segregated Portfolio.
Investment Restrictions
The Articles do not contain any restrictions on the investment powers of the Company. The Investment Restrictions (if any) for each Segregated Portfolio will be formulated by the Directors and will be described in the Applicable Supplement.
Borrowing Policy
The intention in relation to borrowing and any specific borrowing restrictions for each Segregated Portfolio (if any) will be set out in the Applicable Supplement.
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Distribution Policy
The distribution policy of each Segregated Portfolio will be set out in the Applicable Supplement.
If distributions are made they will be made on a per Share basis within each Class. The amount of any distribution payable to a Shareholder will be determined by the Directors in their discretion.
In the event that distributions are declared, such distributions may be paid out of Available Operating Income plus the net of Realisation Proceeds, and accumulated capital losses of the Company, held for the account of the relevant Segregated Portfolio in respect of which such distribution is made. Distributions not claimed within six years from their due date will lapse and revert to the assets of the relevant Segregated Portfolio.
Unless otherwise stated, a distribution payable to a Shareholder will be paid in the Base Currency of the relevant Segregated Portfolio by bank transfer at the risk and expense of the Shareholder. Every such bank transfer shall be made payable to the order of such Shareholder, or in the case of joint Shareholders, made payable to the order of the first named joint Shareholder on the register at the risk of such Shareholder or joint Shareholders.
Liquidity
To the extent permitted by the Companies Law and subject to any terms and conditions specified in the Applicable Supplement, the Directors may make available, with respect to a Segregated Portfolio, such percentage of the Available Operating Income or Realisation Proceeds on a retrospective annual basis as specified in the Applicable Supplement (the “Repurchase Liquidity”) which may be used by the Company to repurchase Shares of the Applicable Portfolio from the Shareholders should the Board decide, at its discretion, to approve such repurchase at the end of each relevant Fiscal Year for such Applicable Portfolio, subject to the terms of the Articles and the Applicable Supplement. Upon the Company’s notification to the Shareholders of the Company’s offer to repurchase Shares for a Segregated Portfolio, the interested Shareholders (the “Selling Shareholders”) will have 30 Business Days (or such other period as the Board may determine from time to time) to accept a repurchase. At the end of the 30 Business Day period, the Company will affect the repurchase of the Shares of the Applicable Portfolio from the Selling Shareholders on a pro rata basis.
Fiscal Year
The financial year end of the Company is 31 December of each year. The financial statements of the Company shall be audited annually by the Auditor, and the annual audited accounts is required to be submitted to the Authority within six months of each Year End or such extension of this period as the Authority may allow. The annual audited accounts and every document required to be attached thereto shall be available for inspection by Shareholders at the office of the Investment Manager.
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MANAGEMENT OF THE SEGREGATED PORTFOLIOS
Investment Manager The Company on behalf of any Segregated Portfolio may appoint an Investment Manager to provide investment management service to one or more such Segregated Portfolio(s) as described in the Applicable Supplement(s). Investment Adviser Subject to the terms of the Investment Management Agreement, the Investment Manager may appoint an Investment Adviser to provide investment management services and/or to provide investment advisory services with respect to one or more Segregated Portfolio(s) to which such Investment Manager has been appointed as Investment Manager. Administrator The Company on behalf of any Segregated Portfolio may appoint on Administrator to provide administration and transfer agency services to one or more such Segregated Portfolio(s) as described in the Applicable Supplement(s). Auditors The Directors will effect the appointment of a professional firm of independent auditors. Potential Conflicts of Interest The Administrator, the Investment Manager, the Investment Adviser (if any) and any of their directors, officers, employees and agents (each an “Interested Party”) may engage in activities, including financial advisory activities, that are independent from, and may from time to time conflict with, those of the Company. In particular, Interested Parties may provide services similar to those provided to the Company to other entities and will not be liable to account for any profit earned from any such services. The Interested Parties will at all times have due regard to their duties owed to the Company and where a conflict arises, they will endeavor to ensure that it is resolved fairly. Where conflicts arise in the allocation of investment opportunities, the Company will seek to resolve such conflicts fairly. The services of the Investment Manager, the Investment Adviser (if any), and the Administrator and its agents are not exclusive and each such party is free to render similar services to others so long as the services to be performed by it for the Company are not impaired as a result. Each such entity may also retain, for its own use and benefit, all fees of monies payable by any other party.
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Subject as otherwise provided above, the Investment Manager may purchase or sell any investments for the account of any Segregated Portfolio and is entitled to retain for its own absolute use and benefit all commissions, brokerages or other benefits (whether monetary or otherwise) which it may derive from or in connection with any such purchase or sale. The amount of such commissions, brokerages, discounts on or rebates of brokerages and commissions or other benefits will be at market rates or terms commonly receivable by fund managers in like transactions. The Investment Manager may receive or enter into soft-‐‑dollar commissions/arrangements in respect of the Company for the account of any Segregated Portfolio, as described below. The Directors may also be directors of the Investment Manager and the Investment Adviser (if any), or directors of companies in which the Company’s assets are or may be invested. As such, the directors may have a conflict between their obligation to act in the best interests of the Company and their interest in generating revenues or other benefits for other entities with persons with which they are affiliated. A director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of director, or may act in a professional capacity to the Company on such terms as the directors may determine. No director shall be disqualified by his office from contracting with the Company in any capacity by reason of such director holding that office if he shall declare the nature of his interest.
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THE OFFERING
Issue of Shares The Directors may allot and issue Shares on such terms and in such manner as they think fit. Shares are subject to transfer restrictions as outlined in this Private Placement Memorandum and may be subject to further restrictions as set out in the Applicable Supplement for the Portfolio. Shares of a Class or Classes referable to a Segregated Portfolio are entitled to participate equally in the profits and distributions of the relevant Segregated Portfolio and in its Segregated Portfolio Assets upon winding up. The Shares carry no preferential or pre-‐‑emptive rights. Shares in each Segregated Portfolio are issued in registered form and entitlement is evidenced by entry in the register. Share certificates will not be issued. Fractions of a Share may be issued, rounded down to the nearest two decimal places. Subscription monies representing smaller fractions of a Share will be retained by the Company for the benefit of the relevant Segregated Portfolio. The Company has authorised and issued 100 Management Shares to Jeremy Smeeton. The Management Shares are not subject to this offering. Initial Offer Period The Applicable Supplement or the related Subscription Documents sets out the initial offer period for Shares in respect of the Applicable Portfolio. The Initial Closing Date for such Applicable Portfolio will be determined in the Applicable Supplement or the related Subscription Documents. Continuous Offering
After the Initial Closing Date, but subject to any Commitment Period, the Applicable Portfolio may accept further Commitments in subsequent closings at any time. Subject to any Commitment Period specified in the Applicable Supplement, the Company may continually issue one or more Classes in respect of a Segregated Portfolio on the terms specified in the Applicable Supplement. The Directors may, in their discretion, terminate or suspend the offering of Shares at any time, in whole or in part. Minimum Commitments
The minimum Commitment from each Applicant will be set out in the Applicable Supplement for the Applicable Portfolio. A placement fee may be added at the discretion of the Directors. Details of any placement fee will be set out in the Applicable Supplement.
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Drawdowns and Issuance of Shares
Subject to any Commitment Period specified in the Applicable Supplement, Commitments will be drawn down pro rata on an as-‐‑needed basis upon not less than ten (10) Business Days’ notice to an Applicant or Shareholder by way of Drawdown Notice. Shareholders admitted to the Company at the Initial Closing Date, subsequent closings and at any drawdown will be issued Shares at a price per Share specified in the Applicable Supplement. Shares may only be issued fully paid. Shares are subject to transfer restrictions as outlined in this Private Placement Memorandum and may be subject to further restrictions as set out in the Applicable Supplement for the relevant Segregated Portfolio. Shares in each Segregated Portfolio are issued in registered form and entitlement is evidenced by entry in the register. Share certificates will not be issued. Commitments will be drawn down, as required by a Segregated Portfolio, in connection with (i) the acquisition of a Portfolio Investment, or (ii) as otherwise necessary to meet the expenses and obligations of the Applicable Portfolio or the Company, or (iii) the acquisition of temporary investments (iv) to accumulate appropriate reserves subject in each case to the advice of the Investment Manager. No Shareholder shall be entitled to demand the return of its Capital Contributions. No Shareholder shall have any liability for the payment of any Commitment of any other Shareholder. Amounts contributed by a Shareholder will reduce such Shareholder’s Unfunded Commitment and distributions received by the Shareholder may not be restored to such Shareholder’s Unfunded Commitments. Subscription Procedure
Applications
Investors wishing to make a Commitment to subscribe for Shares of a particular Segregated Portfolio should complete the Subscription Documents available from the Administrator and its agents and forward it by post, facsimile or email (with the original to follow by post) to the Administrator. Where the Subscription Documents are sent by fax or email, an investor must also send the original signed Subscription Documents to the Administrator or its agents as prescribed in the Subscription Documents. Neither the Company nor its duly appointed agents will be responsible to an investor for any loss resulting from the non-‐‑receipt or illegibility of any Subscription Documents sent by fax or email or for any loss caused in respect of any action taken as a consequence of such facsimile believed in good faith to have originated from properly authorised persons. The deadline for the receipt of the Subscription Documents and payment in cleared funds is set out in the Applicable Supplement for a Segregated Portfolio. All application monies must
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originate from an account held in the name of the investor. No third party payments will be permitted. The Directors reserve the right from time to time to resolve to close any Segregated Portfolio to new subscriptions, either for a specified period or until they otherwise determine. Shareholders will be notified of any such closure. During any such period Shares of the relevant Class(es) will not be available for subscription. The Subscription Documents require each prospective applicant for Shares to represent and warrant to the Company that, among other things, it is able to acquire and hold Shares without violating applicable laws. The Shares may not be offered, issued or transferred to a Restricted Person. Each subscriber for Shares will be required to certify to the Company, among other things, that the Shares are not being acquired and will not at any time be held for the account or benefit, directly or indirectly, of any Restricted Person. Shareholders are required to notify the Company immediately of any change in such information. Each prospective Shareholder is urged to consult with its own advisers to determine the suitability of an investment in the Shares, and the relationship of such an investment to the purchaser'ʹs overall investment program and financial and tax position. Each purchaser of Shares is required to represent further that, after all necessary advice and analysis, its investment in the Company is suitable and appropriate, in light of the foregoing considerations. Investors must warrant in the Subscription Documents that they have the knowledge, expertise and experience in financial matters to evaluate the risks of investing in the Company, are aware of the risks inherent in investing in the assets in which the Company will invest and can bear the loss of their entire investment in the Company. Any transferee of Shares will be required to warrant in like terms before any transfer is registered. Applicants subscribing for Shares are advised that the Shares are issued subject to the provisions of the Articles. Confirmations
Shareholders shall not receive a certificate confirming the number of Shares held. Instead, confirmation of ownership will be by way of entry on the register of Shareholders which is maintained by the Administrator or its agents. Restrictions on Transfers of Shares
Subject to the principal conditions outlined in this Private Placement Memorandum, restrictions as to the transfer of Shares in a Segregated Portfolio will be outlined in the Applicable Supplement to the Private Placement Memorandum. A Shareholder may only transfer Shares by way of written instrument in a form approved by the Directors for the purpose, from time to time.
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Every instrument of transfer must be signed by the transferor and the transferee and the transferor shall be deemed to remain the holder of the Shares intended to be transferred until the name of the transferee is entered in the register of the Company for the account of the Applicable Portfolio. Every instrument of transfer must be sent to the Company together with such evidence and documents as the Company may require to consider the title of the transferor or his right to transfer the Shares. The Directors may decline to register a transfer of Shares if in consequence of such transfer the transferor or transferee would hold less than the minimum holding for the Applicable Portfolio. In addition to any specific suitability requirements set forth in the Applicable Supplement, no Shares may be held by or for the account of:
(i) any person that is not (a) a non-‐‑US Person (as such term is defined for the purposes of Regulation S under the US Securities Act), or (b) an “accredited investor” (as such term is defined in Rule 501 of Regulation D under the US Securities Act) and a “qualified purchaser” (as such term is defined for the purposes of the US investment Company Act);
(ii) any natural person under the age of 21 at the time of submitting executed Subscription Documents;
(iii) any person or persons in breach of the law or requirements of any country or governmental authority;
(iv) any person or persons whose participation could, in the sole discretion of the Directors, result in the Company or any Segregated Portfolio incurring any tax liability or suffering any other pecuniary, fiscal or regulatory disadvantage which the Company or any Segregated Portfolio might not have otherwise incurred or suffered; or
(v) any person prohibited or restricted by the terms of the Offering Documents from holding Shares of any particular Segregated Portfolio.
(a person falling within any of paragraphs (i) to (v) above is a “Restricted Person” for the purposes of this Private Placement Memorandum). No Redemption of Shares
The Shares are not redeemable at the option of a Shareholder. The Company has the right, in its sole discretion, as of any date that it determines and for any or no reason to compulsorily redeem any or all of a Shareholder’s Shares without the consent of such Shareholder at the Net Asset Value of such Shares effective on the date of any such redemption. The Shares may also be redeemed upon winding-‐‑up of a Segregated
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Portfolio. A Segregated Portfolio may be wound up by the special resolution of the holders of Management Shares. The Directors have the power to withhold the payment of any redemption proceeds to any shareholder for such period of time as the Directors may determine, including permanently, where the Directors determine that it is appropriate or necessary to do so in order to comply with the Proceeds of Crime Law, 2008, or any regulation, code of practice or guidance note promulgated there under, or any similar legislation applicable to the Company, directly or indirectly, in any other jurisdiction. In the event the Directors withhold the payment of any redemption proceeds, the Directors will, to the extent permitted by law, deposit such redemption proceeds with or to the order of the Custodian in the name of the Company for the payment to the shareholder upon approval by the Directors. Upon the deposit of such redemption monies as aforesaid, the shareholder will have no further interest in the relevant Shares or any claim against the Company in respect thereof except the right to receive the money so deposited (without interest) from the Company but only when, if ever, the payment is approved by the Directors. Provided the Directors act honestly and in good faith, the Company and the Directors will not be liable to any shareholder for any loss or damages arising as a result of the Directors exercising the foregoing power. Calculation of Net Asset Value
The Net Asset Value of each Segregated Portfolio and of each Share of each Class shall be determined by the Administrator or its agents. The calculation of Net Asset Value of each Segregated Portfolio and the Net Asset Value per Share of each Class shall be determined by the Administrator or its agents as at the close of each Valuation Day, and/or such other day or days in addition thereto or in substitution therefor as specified in the Applicable Supplement. The Directors may suspend the calculation of the Net Asset Value of each Segregated Portfolio and the Net Asset Value per Share of each Class in the circumstances provided in the Articles. The Net Asset Value shall be expressed in the Base Currency applicable to the relevant Segregated Portfolio. The Net Asset Value of the Company will be equivalent to all the assets less all the liabilities of the Company. The Net Asset Value of a Segregated Portfolio as of a particular date shall be the difference between (i) the aggregate value of the Segregated Portfolio’s assets (determined by adding the fair market value of each Portfolio Company Investment held directly by the Segregated Portfolio and the fair market value of all other assets of the Segregated Portfolio, including all securities, tangible assets, cash, and other assets), as of such date, less (ii) the aggregate value of the Segregated Portfolio’s liabilities, including indebtedness, accrued expenses, declared but unpaid distributions and other liabilities, as of such date (the “Net Asset Value of a Segregated Portfolio”). The Directors may, in their discretion, engage any third party appraiser or auditor in connection with any such determination of the Company’s Net Asset Value.
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Any determination of Net Asset Value of a Segregated Portfolio made in good faith shall, absent manifest error, be binding on all Shareholders. The Company values its investments at fair value in accordance with ASC (Accounting Standards Certification) 820. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants (i.e., the exit price). Fair value measurements do not include transactions costs. Recent market conditions, characterised by dislocations between asset class, elevated levels of volatility, increased global macroeconomic uncertainty, and reduced price transparency, have increased the level of management and 'ʹprincipal'ʹ judgment. In particular, it is acceptable for management and 'ʹprincipals'ʹ to make adjustments to observable inputs based on management and 'ʹprincipal'ʹ estimates when markets are not active and relevant observable inputs are not available. In reaching its determination of fair value, the Directors consider many factors including, but not limited to, the operating cash flows of and financial performance of the underlying investments relative to budgets or projections, trends within sectors or regions, underlying business models, expected exit timing and strategy and any specific rights or terms associated with the investment such as conversion features and liquidation preferences. The Directors also consider recent similar purchases as well as offers on similar investments deemed likely to close in the near future. Because of the inherent uncertainties of valuation, any values reflected in the financial statements of the Company may materially differ from the values determined upon the sale of those investments. The Directors may enlist the services of a professional independent valuation firm to assist with the valuations of certain of the Company’s investments. Assets of the Company and of the Segregated Portfolios will be valued in accordance with the following principles: 1. any security which is listed or quoted on any securities exchange or similar electronic
system and regularly traded thereon will be valued at its last traded price on the relevant Valuation Day or, if no trades occurred on such day, at the last official closing price of the relevant security as at the relevant Valuation Day, and as adjusted in such manner as the Directors think fit, having regard to the size of the holding, and where prices are available on more than one exchange or system for a particular security the Directors will in their sole discretion determine which of those prices shall apply;
2. any security which is not listed or quoted on any securities exchange or similar electronic system or if, being so listed or quoted, is not regularly traded thereon or in respect of which no prices as described above are available, will be valued at its fair value as determined by the Directors having regard to its cost price, the price at which any recent transaction in the security may have been effected, the size of the holding having regard to the total amount of such security in issue, and such other factors as the Directors deem relevant in considering a positive or negative adjustment to the valuation;
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3. investments, other than securities, which are dealt in or traded through a clearing firm or an exchange or through a financial institution will be valued by reference to the last traded price quoted by that clearing house, exchange or financial institution. If there is no such price, then the average will be taken between the lowest offer price and the highest bid price at the close of business on any market on which such investments are or can be dealt in or traded, provided that where such investments are dealt in or traded on more than one market, the Directors may determine which markets shall prevail and provided also that the Directors may permit some other method of valuation to be used if they consider that it better reflects value and is in accordance with good accounting practice;
4. deposits will be valued at their cost plus accrued interest;
5. any value (whether of any investment or cash) otherwise than in U.S. Dollars will be converted into U.S. Dollars (as the case may be) at the rate (whether official or otherwise) which the Directors in their absolute discretion deem applicable as at close of business on the relevant Valuation Day, having regard, among other things, to any premium or discount which it considers may be relevant and to costs of exchange.
The Directors may, at their discretion, permit other method of valuation to be used if they consider that such method of valuation better reflects value and is in accordance with good accounting practice. The Net Asset Value per Share on any Valuation Day will be calculated by dividing the Net Asset Value of the relevant Segregated Portfolio by the number of Shares of that Segregated Portfolio in issue as at the close of business on that Valuation Day. In determining any value, the Administrator or its agents, shall be entitled to rely on any valuations provided or attributed to any asset or liability by an independent appraiser appointed by the Directors. Subject to the above, the accounts of the Company will be drawn up in accordance with IFRS. To the extent that the valuation basis adopted by the Company deviates from IFRS, the Company may be required to include a reconciliation note in the annual accounts of the Company to reconcile values arrived at by applying the Company'ʹs valuation Rules. If the net asset value of the Company is not adjusted in preparation of the annual accounts, non-‐‑compliance with IFRS may result in the auditors qualifying their opinion on those annual accounts depending on the nature and level of materiality of the non-‐‑compliance. If it is impossible, impractical or incorrect to carry out a valuation of a specific investment in accordance with the valuation rules set out above, or if such valuation is not representative of the securities fair market value, the Company is entitled to use an alternative valuation method, agreed with the Administrator or its agents (if applicable), in order to reach a proper valuation of that specific investment.
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Events of Default
Each of the following is an event of default (“Event of Default”) by a Shareholder in respect of its Shares: (a) if the Shareholder becomes the subject of receivership, insolvency or similar
proceedings (defined in the Articles of the Company as “Liquidation”);
(b) where the Shareholder has committed a breach of any of its obligations under (a) the Subscription Documents, the terms of this Private Placement Memorandum or Portfolio Supplement, or the Articles; or of (b) any representation or warranty given by such Shareholder to the Company in connection with its acquisition of such Shares;
(c) where a Shareholder fails to contribute any portion of its Commitment pursuant to a Drawdown Notice issued by the Company within ten (10) calendar days from the date of the Drawdown Notice, or any other amount within a period of thirty (30) calendar days from the date of the Drawdown Notice and such default is not cured within a period of forty five (45) days thereafter;
(d) where the Shareholder has committed any act or omission which would constitute an offence under money laundering regulations to which such Shareholder or the Company is subject;
(e) where the holding of such Shares by the Shareholder would result in adverse legal, tax or other regulatory consequences for the Company; or
(f) where the Shareholder becomes a Restricted Person.
Upon service of a notice of default (“Default Notice”) by the Company on a Shareholder that has committed an Event of Default (any such Shareholder a “Defaulting Shareholder”), the Board of Directors may, at its discretion, and as is more explicitly set forth in the Subscription Documents, take any or all of the following actions in respect of the Defaulting Shareholder to the extent permissible under law and subject to such terms and conditions as the Board may deem appropriate: (i) accept the Capital Contribution of such Defaulting Shareholder together with interest
on the default amount from the due date until the date of payment at an interest rate equal to 10% over the prevailing six monthly LIBOR per annum or such other rate as determined by the Board of Directors of the Company and set off amounts otherwise distributable to such Defaulting Shareholder against the default amount;
(ii) suspend the right of the Defaulting Shareholder to make any further capital contributions to the Company;
(iii) suspend the right of the Defaulting Shareholder to participate in any vote, consent or decision of the Shareholders, as required or permitted under the Subscription Documents, the Offering Documents or the Articles, or to make such decision, and
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such vote, consent or decision will be tabulated or made as if such Defaulting Shareholder were not a Shareholder and such Defaulting Shareholder’s Capital Contributions and Commitments will be disregarded for purposes of any vote required or any other consent or decision requirement;
(iv) to cause the Defaulting Shareholder to transfer, effective immediately upon written notice, the Defaulting Shareholder’s Shares, in which event the Defaulting Shareholder will be required to transfer its Shares in the Company. In its entire discretion, the expenses, deductions, losses or distributions allocated to such Defaulting Shareholder shall be deducted from the consideration received and be payable to, and may be retained by, the Company;
(v) enforce the Defaulting Shareholder’s obligations through pursuing any rights and remedies the Company may have against the Defaulting Shareholder, including by taking legal or other action against the Defaulting Shareholder as more fully set out in the Subscription Documents and the Articles;
(vi) suspend or terminate the Defaulting Shareholder’s right to receive any distribution;
(vii) compulsorily redeem the Defaulting Shareholder’s Shares; and/or
(viii) recover or set off any cost incurred by the Company as a result of taking any of the actions set out above.
Each Event of Default may also constitute an event of default for any Person who has executed the Subscription Documents but who is not yet registered as a holder of a Share and the Board of Directors may, at its discretion take any or all of the actions listed above in respect of such Person to the extent permissible under law and subject to such terms and conditions as the Board may deem appropriate. If, in relation to a Drawdown Notice, there is a shortfall in the Commitments required to be contributed by reason of an Event of Default by a Defaulting Shareholder, the Company may give a further Drawdown Notice to the other Shareholders offering them the opportunity to contribute the shortfall pro rata to their Unfunded Commitments. Temporary Suspension of Calculation of Net Asset Value and of Issues and Redemptions
The Articles provide that the Directors may temporarily suspend the calculation of the Net Asset Value, the Net Asset Value of a Segregated Portfolio or the Net Asset Value per Share and the issue and redemption of Shares (including the right to receive redemption proceeds) of any Segregated Portfolios to and from Shareholders for the whole or any part of a period if:
(a) during which any stock exchange, commodities exchange, futures exchange or over-‐‑the-‐‑counter market on which a substantial part of the investments of the Segregated Portfolio are quoted, listed, traded, or dealt in is closed (other than for ordinary holidays); or
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(b) during which trading, valuation, quoting or dealings of any investments on any such stock exchange, commodities exchange, futures exchange or over-‐‑the-‐‑counter market are suspended or restricted; or
(c) when there exists a state of affairs as a result of which disposal of some or all of the
investments of the Segregated Portfolio cannot in the absolute discretion of the Directors be effected normally or without seriously prejudicing the interests of the Shareholders; or
(d) when a breakdown occurs in the means of communication normally employed in determining the value of the investments of the Segregated Portfolio or the Net Asset Value or Net Asset Value per Share or when for any other reason the value of any of the investments, which represent a significant part of the value of the Segregated Portfolio or the amount of any significant liability of the Segregated Portfolio or the Net Asset Value or Net Asset Value per Share, cannot, in the opinion of the Directors, be promptly, fairly and accurately be ascertained; or
(e) when realisation of investments of the Segregated Portfolio or the transfer of funds involved in such realisation cannot in the opinion of the Directors, be effected at normal prices or normal rates of exchange; or
(f) if the remittance of monies involved in the subscription or redemption of Shares cannot be carried out without delay and at normal rates of exchange; or
(g) when the business operations of the Investment Manager or the Administrator or its
agents are substantially interrupted or closed as a result of or arising from pestilence, acts of war, terrorism, insurrection, revolution, civil unrest, riot, strikes, or acts of God.
No Shares of a Class to which a suspension applies may be issued during any period when the calculation of the Net Asset Value is suspended except those for which applications have previously been received and accepted by the Company. Applicants for Shares will be notified in writing of such suspension and, unless withdrawn, their applications will be considered as at the next Subscription Day following the ending of such suspension.
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EXPENSES
Management and Performance Fees
The Investment Manager may receive out of the assets of a Segregated Portfolio the Management Fee and Performance Fee, as described in the Applicable Supplement.
In the event of any claim by any Investment Manager in connection with the Investment Management Agreement, the recourse of the Investment Manager shall be limited solely to the assets of the Segregated Portfolio in relation to which such claim is incurred or to which such claim is referable. Upon exhaustion of the assets of that Segregated Portfolio and the General Assets, the Investment Manager shall have no further recourse against any of the other assets of the Company or any other Segregated Portfolio or against the Directors personally in respect of such claim (except for recourse against the Directors personally to the extent that such claim arises from the gross negligence, willful misconduct or fraud of the Directors).
The fees of any Investment Adviser appointed by the Investment Manager in respect of one or more Segregated Portfolios will be paid by the Investment Manager, the details of which will be set out in the Applicable Supplement, where applicable.
Administration Fees
The Administrator will be entitled to receive fees from each Segregated Portfolio to which it has been appointed as administrator as set out in the Applicable Supplement.
Organisational Expenses
The Company, and each Segregated Portfolio thereof, will bear its own organisational costs and expenses, including, but not limited to, reasonable administrative expenses, legal expenses, accounting, auditing and tax preparation expenses, expenses relating to the offer and sale of Shares, expenses relating to the organisation of the Company and extraordinary expenses. Any such costs and expenses common to the Company and the Segregated Portfolios will generally be paid on a pro rata basis.
The total costs and expenses of establishing the Company and the first Segregated Portfolio are estimated to be up to approximately US$125,000. Costs and expenses in excess of that amount will be borne by the Manager.
Operational Expenses
The Company will be responsible for all expenses directly related to its own operations, to the extent not reimbursed by Portfolio Companies, including (i) the reasonable expenses of the Directors in connection with the Company’s business, (ii) expenses in connection with meetings of the Board, (iii) expenses in connection with meetings of the holders of the any of the shares of the Company (out-‐‑of-‐‑ pocket expenses of representatives of Shareholders will be borne by Shareholders for any meetings of the Shareholders), (iv) expenses associated
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with the Company’s financial statements (including valuation of Portfolio Investments) and reports to Shareholders, (v) third party expenses attributable to consummated transactions that are not borne by the Portfolio Companies or attributable to transactions not consummated, (vi) other expenses associated with the acquisition of, holding and disposition of the Company’s investments, including extraordinary expenses (such as litigation, if any, interest expenses related to the Company borrowings, brokerage, custody and hedging costs, costs relating to making of open offer, acquisitions made in the open offer, costs relating to preferential allotment or qualified institutional placement, and the amount of any judgments or settlements), (vii) any taxes, fees or other government charges levied against the Company, (viii) reasonable fees and expenses (including service tax, if applicable) of the Administrator and its agents, (ix) statutory, legal, audit and any other third party fees and operating expenses related to the Company, (x) reasonable insurance premiums (except those related to personal insurance) for protecting the directors, officers, shareholders, employees and agents of the Company, (xi) indemnification obligations, if any, of the Principals, (xii) costs and expenses (including stamp duty) for the issuance of Shares, if required, (xiii) all liquidation expenses of the Company, and (xiv) reasonable compensation to any advisors or consultants retained by the Directors on behalf of the Company.
Expenses of the Company specifically attributable to a specific Segregated Portfolio, as determined by the Directors will be allocated to such Segregated Portfolio. Expenses not specifically attributable to a particular Segregated Portfolio will be allocated to all Segregated Portfolios then in existence, generally on a pro rata basis according to the relative Net Asset Value thereof.
Each Segregated Portfolio shall bear and be charged with all costs and expenses of operating and carrying on its business out of its Segregated Portfolio Assets and shall promptly reimburse any Segregated Portfolio expenses paid by the Directors, the Administrator and its agents, their respective Affiliates or any other persons.
The Administrator pays out of the Segregated Portfolio Assets of each Segregated Portfolio in respect of which it has been appointed as administrator or agent of the administrator, the fees, costs and expenses of or incurred by the Administrator and its agents and the Investment Manager for that Segregated Portfolio in connection with the ongoing investments, management, administration and operation of that Segregated Portfolio. The Administrator or its agents also pays out of the Segregated Portfolio Assets, that Segregated Portfolio’s pro rata share (by reference to its respective Net Asset Value) of the fees, costs and expenses, of or incurred by the Administrator and its agents and the Investment Manager (or as applicable, the Investment Adviser) for the Company in connection with the ongoing management, administration and operation of the Company.
Each Segregated Portfolio is separately responsible for the expenses incurred by the Company and its agents on its behalf in connection with litigation relating to that Segregated Portfolio.
The financial statements will be prepared in accordance with IFRS which do not permit the amortisation of organisational costs. Where the Investment Manager pays for the
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organisation expenses of the Company and any Segregated Portfolio, the Investment Manager will be reimbursed from the Company as at the Initial Closing Date for each relevant Segregated Portfolio.
Directors Fees
The Directors do not receive any remuneration.
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RISK FACTORS
An investment in the Company and any Segregated Portfolio is speculative. Investment should only be made after consultation with independent qualified sources of investment and tax advice. Potential investors should consider the following risk factors and the risk factors set out in the Applicable Supplement before subscribing for Shares. This section does not purport to be an exhaustive list of risks involved in investing in the Shares and certain risks outlined herein pertain more particularly to certain Segregated Portfolios. There are risks associated with any investment and generally the higher the expected return on investment, the higher the risk and the greater the variability of returns. Before making an investment in the Company or any Segregated Portfolio, investors should carefully determine their investment objectives, risk tolerance and expected investment timeframe. General Risk Factors An investment in the Shares involves a degree of risk. Such an investment is suitable for persons who possess suitable financial means, and should not be made by any person who cannot afford the loss of his or her investment. All securities investments risk the loss of capital. Potential investors should be aware that the Company and Segregated Portfolios are subject to market fluctuations and to the risks inherent in all investments and markets. As a result, the price of Shares may go down as well as up. The same applies to the securities and projects in which the Company and/or each Segregated Portfolio will invest. In addition, there can be no assurance that each Segregated Portfolio will achieve its Investment Objective. The past performance of the Investment Manager and any Investment Adviser may not be construed as an indication of the future results of an investment in Shares. Investment Risks in General
All investments in securities risk the loss of capital. Investment in the various assets, securities and/or other instruments contemplated by a Segregated Portfolio involves significant economic risks. Although a Segregated Portfolio’s investment program is expected to provide some protection from the risk of loss inherent in the ownership of such investments, there can be no assurance that these strategies will completely protect against this risk or that the Applicable Portfolio’s Investment Objectives will be attained.
Political and Economic Risks The investments of the Company may be affected by uncertainties such as political or diplomatic developments, social and religious instability, changes in government policies, taxation and interest rates and other political and economic developments in law or regulations and, in particular, the risk of, and change in, legislation relating to the level of foreign ownership.
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Risk of terrorism
There is a risk that one or more of the Company’s investments will be directly or indirectly affected by terrorist attack. Such an attack could have a variety of adverse consequences for the Company, including risks and costs related to the destruction of property owned or used by Portfolio Companies in which the Company has invested, inability to use one or more such properties for their intended uses for an extended period, decline in income or property (and therefore investment) value, and injury or loss of life, as well as litigation related thereto. Such risks may not be insurable or may be insurable only at rates that the Company deems uneconomic. More widely, terrorist attacks and ongoing military and related action could have significant adverse effects on the world economy, capital markets and private equity funds. Repatriation of Capital, Dividends, Interest and other Income Risks It may not be possible for the Company to repatriate capital, dividends, interest and other income from some emerging market countries or it may require government consent to do so. The Company could be adversely affected by the introduction of the requirement for any such consent, or delays in or the failure to grant any such consent, for the repatriation of funds or by any official intervention affecting the process of settlement of transactions which may in turn affect the repatriation of funds. Economic or political conditions could lead to the revocation or variation of consent granted prior to investment being made in any particular country or to the imposition of new restrictions. Market Risk Financial markets are increasingly more volatile. Wide swings in market prices that have been a feature of smaller and less developed markets are also becoming common in major financial markets. In many instances, market prices defy rational analysis or expectation for prolonged periods of time and are influenced by movements of large funds as a result of short-‐‑term factors, counter-‐‑speculative measures or other reasons. Market volatility of large enough magnitude can sometimes weaken what is deemed to be a sound fundamental basis for investing in a particular market. Investment expectations may therefore also fail to be realised in such instances. Regulatory Risks and Accounting Standards Disclosure and regulatory standards may be less stringent in certain securities markets than they are in developed OECD countries and there may be less publicly available information on the issuers than is published by or about issuers in such OECD countries. Consequently some of the publicly available information may be incomplete and/or inaccurate. In some countries the legal infrastructure and accounting and reporting standards do not provide the same degree of shareholder protection or information to investors as would generally apply in many developed OECD countries. In particular, greater reliance may be placed by the auditors on representations from the management of a company and there may be less independent verification of information than would apply in many developed OECD countries. The valuation of assets, depreciation, exchange differences, deferred taxation,
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contingent liabilities and consolidation may also be treated differently from international accounting standards. (“OECD” means The Organisation for Economic Co-‐‑operation and Development) Follow-‐‑On Investments
Following the initial investment in a Portfolio Company, the Company may be called upon to provide additional funds or have the opportunity to increase its investment in such portfolio company or to fund additional investments through such Portfolio Company. There is no assurance that the Company will make follow-‐‑on investments or that the Company will have sufficient funds to make all such investments. Any decision by the Company not to make follow-‐‑on investments or its inability to make them may have substantial negative impact on the portfolio company in need of such investment.
Exchange Control and Currency Risk Segregated Portfolio Assets may be invested in securities denominated in currencies other than the Base Currency of the Segregated Portfolio and any income received by the Company for the account of a Segregated Portfolio from those investments will be received in those currencies, some of which may fall in value against the relevant Base Currency. There is therefore a currency exchange risk which may affect the value of Shares to the extent that a Segregated Portfolio makes investments in other currencies. The Company for the account of a Segregated Portfolio may from time to time invest its assets in countries which have exchange control restrictions and may encounter difficulties or delays in relation to the receipt of its divestments due to such controls existing in various countries. Further, because the Net Asset Value of a Segregated Portfolio will be calculated in the relevant Base Currency which may be non-‐‑U.S. dollars, Shareholders holding Shares in a Segregated Portfolio with a non-‐‑U.S. dollars Base Currency will bear the risk of conversion by the Investment Manager (or the Administrator on its behalf) of the Net Asset Value of those Shares into the relevant Base Currency. Changes in exchange rates will affect the value of those securities which are denominated or quoted in currencies other than U.S. dollars. Among the factors that may affect exchange rates are trade balances, the level of short-‐‑term interest rates, differences in relative values of similar assets in different currencies, long-‐‑term opportunities for investment and capital appreciation and political developments. The Investment Manager may try to hedge these risks by investing directly in currencies, buying and selling forward foreign currency exchange contracts and buying and selling options on currencies, but there can be no assurance such strategies will be effective.
Fees Paid to the Investment Manager
The Investment Manager will receive compensation based on the performance of each Segregated Portfolio. The existence of a performance fee may create an incentive for the Investment Manager, in its capacity as Investment Manager, to make riskier or more
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speculative investments than they would otherwise make in the absence of such performance fees.
Investment Manager Risk
Where appointed, the Administrator may consult the Investment Manager with respect to the valuation of unlisted investments. There is an inherent conflict of interest between the involvement of the Investment Manager in determining the value of investments and the Investment Manager’s other responsibilities. In addition, it should be noted that the amount of the Investment Manager’s fees will increase as the Net Asset Value of each Segregated Portfolio increases.
Lack of Operating History There can be no assurance that each Segregated Portfolio will achieve its Investment Objective. There is no operating history by which to evaluate their likely future performance. The investment results of a Segregated Portfolio may be reliant upon various factors including the success of the Investment Manager and its appointees. Dependence on Key Personnel The investment performance of each Segregated Portfolio may be dependent on the services of certain key employees of the Investment Manager and its appointees. In the event of the death, incapacity or departure of any of these individuals, the performance of each Segregated Portfolio may be adversely affected. No Current Income The Company’s investment policies should be considered speculative, as there can be no assurance that the Company’s assessments of the short-‐‑term or long-‐‑term prospects of investments will generate a profit. In view of the fact that the Company may not pay dividends, an investment in the Company is not suitable for investors seeking current income for financial or tax planning purposes.
No Assurance of Profit, Cash Distributions or Appreciation It is uncertain as to when profits, if any, will be realised. Losses on unsuccessful investments may be realised before realisation of gains on successful investments. There may be no current return on the investments for an extended period of time. Distributions are declared in the Directors. There is no assurance that the Company will make distributions to the Shareholders.
Failure to Make Capital Contributions If any Shareholder fails to make required Capital Contributions when due, the Company’s ability to complete its investment program or otherwise continue operations may be substantially impaired. A default by a substantial number of Shareholders could leave the
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Company with less than sufficient capital to meet its funding obligations and would likely reduce returns to the Company. A Shareholder that defaults in making a required Capital Contribution will be subject to certain significant and adverse consequences pursuant to the provisions of the Articles.
Lack of Management Control by Shareholders Investors will become holders of Shares, however these Shares are non-‐‑voting shares. Moreover, the Shareholders cannot take part in the management or control of the Company’s business, which is the responsibility of the Board of Directors.
Projections Projected operating results of a Portfolio Company in which the Company invests normally will be based primarily on financial projections prepared by each Portfolio Company’s management. In all cases, projections are only estimates of future results that are based upon information received from the company and assumptions made at the time the projections are developed. There can be no assurance that the results set forth in the projections will be attained, and actual results may be significantly different from the projections. Also, general economic factors, which are not predictable, can have a material effect on the reliability of projections.
Broad Indemnification The Articles contain provisions that may provide a broader indemnification to the Directors and officers of the Company against claims or lawsuits arising out of the Company’s activities than would apply in the absence of such provisions. If the Company were called upon to perform under its indemnification obligations, then the portion of its assets expended in such fashion would reduce the amount otherwise available for the Company’s operations. The Administrator and its agents and other service providers are each entitled to such indemnification from the Company, as the case may be, under such terms and subject to such conditions and exceptions and, to the extent applicable, with such entitlement to have recourse to the assets of the specific Segregated Portfolio to which the claim relates to satisfy such indemnification as shall be provided under the respective agreements to which such parties and service providers are a party. Borrowing and Interest Rates The Company may, for the account of a Segregated Portfolio, borrow funds in order to make additional investments. Consequently, fluctuations in the market value of investments will have a significant effect in relation to the capital of any such Segregated Portfolio. The risk of loss and the possibility of gains are therefore increased. The amount of borrowings which the Company may have outstanding in respect of one or more Segregated Portfolios at any time may be large in relation to its capital. In addition, the level of interest rates generally, and the rates at which borrowings can be effected, is an expense and therefore will affect the operating results of the relevant Segregated Portfolio.
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Conflicts of Interest The Directors, the Administrator and its agents, any other service providers and their directors, officers, employees, agents and Affiliates, and the Directors and any person or company with whom they are affiliated or by whom they are employed (each an “Interested Party”) may from time to time act in a similar capacity or otherwise be involved in other investment companies, funds, partnerships, accounts or collective investment schemes, some of which may have similar investment objectives to those of the Company and its Segregated Portfolios. Thus, any activities of the Directors, service providers and other employees or agents of the Company may create conflicts of interest with the Company and its Segregated Portfolios in respect of allocating management time, services and other functions between the activities each has undertaken with respect to the Company and its Segregated Portfolios and the activities each has undertaken or will undertake with respect to their own respective accounts, other investors, investment schemes, managed accounts, and/or trading advisers. The Directors will at all times have regard to their respective obligations to the Company and/or the Shareholders and, in the event that a conflict of interest arises, they will endeavor to ensure that such conflicts are resolved fairly. Potential investors’ attention is drawn to the potential conflicts of interests of the management of, and service providers to, the Company. Further details are set out in the section headed “Potential Conflicts of Interest” above.
No Separate Counsel
The counsel named in this Private Placement Memorandum represents the Company. Such counsel does not represent investors in the Company and no independent counsel has been retained to represent investors in the Company. The legal counsel named in this Private Placement Memorandum may continue to serve the Company in the future, but has not assumed any obligation to update this Private Placement Memorandum. The legal counsel named in respect of the Company is limited to the specific matters as to which it is consulted by the Directors and the Principals and, therefore, there may exist facts or circumstances which could have a bearing on the Company’s financial condition or operations with respect to which legal counsel has not been consulted and for which such legal counsel expressly disclaims any responsibility.
Net Asset Value Considerations
The Net Asset Value per Share is expected to fluctuate over time with the performance of the Segregated Portfolio. A Shareholder may not fully recover the initial investment when redeeming Shares or upon compulsory redemption if at the time of such redemption the Net Asset Value per Share is less than the Subscription Price paid by such Shareholder.
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Segregated Portfolio Company Risks and Liabilities of the Company
The Company is established as a segregated portfolio company under Cayman Islands law. As a matter of Cayman Islands law, the assets of one Segregated Portfolio (i.e., those allocable to a Class of a segregated portfolio company) are not available to meet the liabilities of another Segregated Portfolio. However, the Company is a single legal entity which may operate or have assets held on its behalf or be subject to claims in other jurisdictions which may not necessarily recognise such segregation and in such circumstances the assets of one Segregated Portfolio may be exposed to the liabilities of another.
Non-‐‑Transferability of Shares Shareholders may acquire Shares only for investment and not for resale. There are significant restrictions on the transferability of the Shares and it is not likely that a public market in the Shares will develop.
Concentration of Investments
The Company’s investment may be concentrated in only a very few trading strategies. The Company’s assets may be invested in a relatively small number of positions and this lack of diversification may subject the Company’s investments to more rapid change in value than would otherwise be the case if the assets were more widely diversified.
Risk of Litigation
Litigation can and does occur in the ordinary course of the management of an investment of portfolio companies. The Company may be engaged in litigation both as a plaintiff and as a defendant. The risk is somewhat greater where the Company exercises control or significant influence over a portfolio company’s discretion, including as a result of board participation. Such litigation can arise as a result of issuer defaults, issuer bankruptcies and/or other reasons. The Company may also accumulate substantial positions in the securities of a company that becomes involved in proxy fights or other litigation or attempts to gain control of the company. Under those circumstances, the Company might be named as a defendant in a lawsuit or regulatory action. In addition, the outcome of such disputes, which may affect the value of the Company, may be impossible to anticipate. In certain cases, such issuers and parties may bring claims and/or counterclaims against the Company, its Segregated Portfolios and/or its shareholders and Affiliates alleging violations of securities laws and other typical issuer claims and counterclaims seeking significant damages. The expense of defending against claims made against the Company by third parties and paying any amounts pursuant to settlements or judgments may be borne by the Company pursuant to indemnification obligations and reduce net assets. The Directors and others may de indemnified by the Company in connection with such litigation, subject to certain conditions.
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Long Term Nature of Closed-‐‑ended Segregated Portfolios and Illiquid Investments The Company may, and currently only intends to, create closed-‐‑ended Segregated Portfolios. As such, the Shares of closed-‐‑ended Segregated Portfolios are not redeemable by their Shareholders. Moreover, the Company’s investments will include agricultural product production, development, financing and distribution and other long term investments. As such, it is expected that certain investments of the Segregated Portfolio may take several years to complete and exit. Moreover, during the time the Segregated Portfolio will hold such investments, it may be faced with economic, regulatory, legal or tax changes, or other factors that cannot be foreseen today but that could adversely affect the Company’s investments. Further, a Segregated Portfolio may invest in non-‐‑publicly traded securities. There is a substantial risk that the Investment Manager will not be able to dispose of investments at an optimal time or price. The above discussions relating to various risks associated with the Company are not, and are not intended to be, a complete enumeration or explanation of the risks involved in an investment in the Company. Potential Shareholders should read this entire Private Placement Memorandum, including the Applicable Supplement, and the Articles and should consult with their own advisers before deciding whether to invest in the Company. In addition, as the investment programs of the Segregated Portfolios may change or develop over time, an investment in the Company and such Segregated Portfolios may be subject to risk factors not currently contemplated or described in this Private Placement Memorandum.
In view of the risks noted above, the Company should be considered a speculative investment and Applicants should invest in the Company only if they can sustain a complete loss of their investment. No guarantee or representation is made that the investment program of any Segregated Portfolio will be successful or that positive returns will be produced.
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TAXATION
The following tax summary is of a general nature only, and is based on current law and practice and is therefore subject to change, and is not intended to be, nor should it be construed to be, legal or tax advice to any particular investor. Potential investors are urged to consult their own professional advisors, including tax advisors, regarding the possible tax, exchange control or other consequences of buying, holding, selling or redeeming the Shares under the laws of the jurisdictions of which they are citizens, residents or domiciliaries and in which they conduct business. No warranty is given or implied regarding the applicability or interpretation of the tax laws in any jurisdiction. A tax advisor will be appointed to determine and to calculate the tax if applicable for the Company. The investors are responsible for the tax matters and filing of their tax returns where applicable.
Cayman Islands
There are no income, corporation, capital gains or other taxes in effect in the Cayman Islands on the basis of the present legislation. As an exempted company, the Company has obtained from the Governor-‐‑in-‐‑Council of the Cayman Islands pursuant to the Tax Concessions Law of the Cayman Islands, an undertaking that in the event of any change to the foregoing the Company, for a period of twenty years from the date of the grant of the undertaking, will not be chargeable to tax in the Cayman Islands on its income or its capital gains arising in the Cayman Islands or elsewhere and that dividends of the Company will be payable without deductions of Cayman Islands tax. No capital or stamp duties are levied in the Cayman Islands on the issue, transfer or redemption of Shares. An annual registration fee will be payable by the Company to the Cayman Islands Government which will be calculated by reference to the nominal amount of its authorised capital.
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GENERAL INFORMATION
Fund
(a) The Company is a segregated portfolio company with limited liability incorporated under the Companies Law on 15 January 2013.
(b) The Company is of unlimited duration and may, and currently only intends to, establish closed-‐‑ended Segregated Portfolios.
(c) The objects of the Company are as set out in its Memorandum of Association and are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by any law.
(d) The Company has an authorised share capital of U$50,000 divided into 100 Management Shares having a par value of US$1.00 each, (ii) 24,950,000 non-‐‑voting, redeemable participating shares having a par value US$0.001 each and (iii) 24,950,000 non-‐‑voting, non-‐‑redeemable participating shares having a par value of US$0.001 each (the “Shares”). Jeremy Smeeton holds all of the issued Management Shares.
(e) The Company may create any number of Segregated Portfolios. The Company may issued and create one or more Classes of Shares.
(f) The Company has not since its incorporation been engaged in and is not currently engaged in any litigation or arbitration nor, so far as the Directors are aware, is there any litigation or claim pending or threatened against the Company.
(g) At the date of this Private Placement Memorandum, the Company does not have for the account of any Segregated Portfolio any outstanding or created but unissued loans, or any mortgages or charges or other borrowings or indebtedness. As of the date of this Private Placement Memorandum, the Company does not have for the account of any Segregated Portfolio loan capital (including term loans) outstanding or created but unused, and no outstanding mortgages, charges, debentures or other borrowings, including bank overdrafts and liabilities under acceptances or acceptance credits, hire purchase or finance lease commitments, guarantees or other contingent liabilities.
(h) No person conditionally or unconditionally has been, or is entitled to be, given an option to subscribe for any Shares.
Segregated Portfolios
The proceeds from the issue of each Class (or Classes) shall be applied in the books of the Company to the Segregated Portfolio established for that Class (or Classes). The assets and liabilities and income and expenditure attributable to that Segregated Portfolio shall be applied to such Segregated Portfolio and, subject to the provisions of the Articles, to no other Segregated Portfolio.
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Where any asset is derived from another asset (whether cash or otherwise), such derivative asset shall be applied in the books of the Company to the same Segregated Portfolio as the asset from which it was derived, and on each revaluation of an asset the increase or diminution in value shall be applied to the same Segregated Portfolio and, subject to the provisions of these Articles, to no other Segregated Portfolio.
The assets held for the account of each Segregated Portfolio shall be applied solely in respect of the liabilities of such Segregated Portfolio. Any surplus in such Segregated Portfolio shall be held for the benefit of the Shareholders of the relevant Class or Classes attributed to such Segregated Portfolio.
Liabilities of the Company not attributable to any of its Segregated Portfolios will only be discharged from the General Assets.
The Shares of a closed-‐‑ended Segregated Portfolio will not be redeemable at the option of a Shareholder, however such Shares may be redeemed or repurchased at the option of the Company subject to the terms set out in the Applicable Supplement and the Articles.
The Directors may from time to time create further Segregated Portfolios as they consider appropriate and issue Supplements in connection with the offer of Shares in respect of such Segregated Portfolios.
The Directors may at any time present a proposal to all Shareholders in a Segregated Portfolio whereby each Shareholder will be given equity interests in a new investment entity which will acquire the assets and liabilities of the relevant Segregated Portfolio, subject to the approval by special resolution of the Shareholders of the relevant Segregated Portfolio, and the provisions of the Articles.
Rights of the Management Shares
The rights attaching to the Management Shares:
(i) have the right to receive notice of, attend at and vote as a member at any general meeting of the Company;
(ii) not be entitled to any dividends in respect of such Management Shares;
(iii) in the event of a winding-‐‑up or dissolution of the Company, whether voluntary or involuntary or for the purposes of a reorganisation or otherwise or upon any distribution of capital, be entitled, pari passu with the holders of the Shares, to an amount equal to the capital paid up on such Management Shares but to no other or further amount; and
(iv) not be subject to redemption or repurchase of such Management Shares, whether at the option of the Company or the holder.
Rights of the Shares
The rights and restrictions attaching to the Shares are:
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(i) except in relation to a class meeting, if and for so long as there are shares of any other class in issue and outstanding, not be entitled to receive notice of, attend at or vote as a member at any general meeting of the Company;
(ii) be entitled to such dividends as the Directors may from time to time declare;
(iii) in the event of a winding-‐‑up or dissolution of the Company, whether voluntary or involuntary or for the purposes of a reorganisation or otherwise or upon any distribution of capital, be entitled to an amount equal to the capital paid up on such Shares on a pari passu basis with the holders of each class out of the relevant Segregated Portfolio attributable to each such class and thereafter, subject to the provisions of these Articles, to share pro rata in the surplus assets of such Segregated Portfolio; and
(iv) be subject to redemption or repurchase of such Shares at the option of the Company as provided in the Articles.
Rights Attaching to a Class
The rights attached to any class of shares of the Company may, in accordance with law and unless otherwise provided by the terms of the issue of the shares of that class, be altered or abrogated with the consent in writing of all the Shareholders of the issued shares of that class or with the sanction of a resolution passed at a separate meeting of the Shareholders of that class by a majority of three-‐‑fourths of the votes cast at that meeting. The rights attached to the Shares shall not be deemed to be varied by the creation, allotment or issue of further Shares ranking pari passu therewith or subsequent thereto.
Termination The Company and its Segregated Portfolios may be wound up by a Special Resolution of the holders of the Management Shares. Compulsory Redemption and Transfer Articles
The Articles empower the Directors to redeem the Shares compulsorily or request a compulsory transfer including in the circumstances described in the section headed “Events of Default” above. Alteration of the Articles
The Articles may at any time be altered or added to by Special Resolution of the holders of Management Shares, subject to variation of class rights. Directors The Articles contain, inter alia, provisions relating to Directors as follows:
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1. Any Director, or any Director’s firm, partner or any company with whom any Director is associated, may act in any capacity for, be employed by or render services to the Company and such Director or such Director’s firm, partner or company shall be entitled to remuneration as if such Director were not a Director.
2. A Director who is directly or indirectly interested in a contract or proposed contract
or arrangement with the Company shall declare the nature of such interest as required by law.
3. Following a declaration being made pursuant to the Articles, and unless disqualified
by the chairman of the relevant meeting of Directors, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may be counted in the quorum for such meeting.
Indemnification
The Articles provide that the Directors and other officers of the Company (including any person appointed to any committee by the Board) shall be indemnified and secured harmless out of the General Assets or the relevant Segregated Portfolio Assets, as applicable, from and against all actions, costs, charges, losses, damages and expenses which they or any of them shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, or in their respective offices or trusts, and no indemnified party shall be answerable for the acts, receipts, neglects or defaults of the others of them or for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any monies or effects belonging to the relevant Segregated Portfolio shall or may be lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any monies of or belonging to the Company or on behalf of the relevant Segregated Portfolio shall be placed out on or invested, or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts, or in relation thereto, provided that the indemnity shall not extend to any matter in respect of any fraud or dishonesty in relation to the Company which may attach to any of the said persons. The Articles further provide that each Shareholder agrees to waive any claim or right of action such Shareholder might have against any Director on account of any action taken by such Director, or the failure of such Director to take any action in the performance of his duties with for the Company or any subsidiary therefore, provided that such waiver shall not extend to any matter in respect of any fraud or dishonesty in relation to the Company which may attach to such Director. The Company may purchase and maintain insurance for the benefit of any Director or officer of the Company out of the General Assets or the Segregated Portfolio Assets against any liability incurred by him in his capacity as a Director or officer of the Company or indemnifying such Director or officer in respect of any loss arising or liability attaching to him by virtue of any Rule of law in respect of any negligence, default, breach of duty or breach of trust of which the Director or officer may be guilty in relation to the Company or any subsidiary thereof.
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Litigation
The Company is not engaged in any litigation or arbitration proceedings and is not aware of any litigation or claim pending or threatened by or against it. Reports
The financial year end of the Company is 31 December of each year. The financial statements of the Company shall be audited annually by the Auditor, and the annual audited accounts is required to be submitted to the Authority within six months of Year End or such extension of this period as the Authority may allow. The annual audited accounts and every document required to be attached thereto shall be available for inspection by Shareholders at the office of the Investment Manager.
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SCHEDULE
Selling Restrictions
This Private Placement Memorandum does not constitute an offer or invitation to subscribe for, or purchase, any of the Shares in any jurisdiction in which it is unlawful to make such person such an offer or invitation without compliance with any registration or other legal requirements. This Private Placement Memorandum will not be registered under any applicable securities legislation in any jurisdiction. The distribution of this Private Placement Memorandum in certain jurisdictions may be restricted and, accordingly, persons into whose possession this Private Placement Memorandum comes are required to inform themselves about, and observe, such restrictions. Prospective investors should note that the information set out below for a particular jurisdiction may not reflect all the applicable laws or regulations relating to an offer or invitation to subscribe or purchase shares in the Company or a segregated portfolio in that jurisdiction. Accordingly, the information set out below should be used as a guide only and should not be relied upon. British Virgin Islands The Shares are not being, and may not be, offered to the public or to any person in the British Virgin Islands for purchase or subscription by or on behalf of the Company. The Shares may be offered to companies incorporated or re-‐‑registered under the BVI business Companies Act 2004, as amended, but only where the offer will be made to, and received by, the relevant BVI company entirely outside of the BVI. This Private Placement Memorandum has not been, and will not be, registered with the Financial Services Commission of the BVI. No registered prospectus has been or will be prepared in respect of the Shares for the purposes of the Securities and Investment Business Act 2010, as amended from time to time, or the Public Issuers Code of the BVI. Cayman Islands This Private Placement Memorandum does not constitute an offer or invitation to the public in the Cayman Islands to subscribe for Shares and no offer or invitation may be made to the public in the Cayman Islands to subscribe for Shares. China This Private Placement Memorandum does not constitute an offer to sell or the solicitation of an offer to buy any securities to any person to whom it is unlawful to make the offer or solicitation in the People’s Republic of China (excluding Hong Kong, Macau and Taiwan). This Private Placement Memorandum is delivered only to the recipient solely for the purpose of evaluating a possible investment in the Company (subject to all requisite
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approvals, registrations or filings being obtained or completed by the recipient) and may not be used, copied, reproduced or distributed, in whole or in part, to any other person (other than professional advisers of such recipient). Subscriptions will not be accepted from any person other than the person to whom this Private Placement Memorandum has been delivered. France The Company has not been authorised and this Private Placement Memorandum has not been approved by the Autorité Des Marchés Financiers or any other French authority. No marketing of the Shares has been made on French territory, and this Private Placement Memorandum and any other offering materials relating to the Company are being provided only at the request of prospective investors. This Private Placement Memorandum and any other offering materials are strictly confidential and may not be distributed to any person or entity other than the recipients of this Private Placement Memorandum. Germany This Private Placement Memorandum has not been submitted to, nor has it been approved by, the Bundesanstalt Für Finanzdienstleistungsaufsicht, the Ferman Financial Services Supervisory Authority. The Shares must not be distributed within Germany by way of a public offer, public advertisement or in any similar manner and this Private Placement Memorandum and any other document relating to the Shares, as well as information contained therein, may not be supplied to the public in Germany or used in connection with any offer for subscription of Shares to the public in Germany. This Private Placement Memorandum and other offering materials relating to the offer of Shares are strictly confidential and may not be distributed to any person or entity other than the recipients hereof. India This Private Placement Memorandum, in all circumstances, shall not be regarded as being circulated to result, directly or indirectly, in the Shares becoming available for subscription or purchase by persons other than those receiving the offer or invitation; or otherwise as being a domestic concern of the persons making and receiving the offer or invitation. The Shares are being offered on a private placement basis to less than fifty persons in India. This Private Placement Memorandum is not intended to be issued to persons: (a) other than to persons permitted to acquire the Shares under Indian law, whether as a principal or agent; or (b) in circumstances which would constitute an offering to the public within the meaning of Indian law. This Private Placement Memorandum will not generally be distributed or circulated in India, but will be for the sole consideration and exclusive use of the persons permitted to acquire the Shares under Indian law to whom it is issued or passed on. Neither this Private Placement Memorandum nor the Shares have been registered with the Securities and Exchange Board of India or any other Indian Regulatory Authority so as to permit a public offering of the Shares or any other securities under Indian law (including the Companies Act, 1956 and the Securities and Exchange Board of India Act, 1992 and all subordinate legislation thereunder). No specific permission from the reserve Bank of India
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or any other legal or regulatory authority under the Foreign Exchange Management Act, 1999 has been obtained for the offering of, or the subscription to, the Shares. The Shares may not be offered or sold, directly or indirectly, in India or to any resident of India, except as permitted by applicable Indian laws and regulations. The prospective investors who are Indian residents are requested to consult their own legal and tax advisors in respect of their eligibility to subscribe to the Shares. Italy The Company is not a UCITS. It has not been nor will it be registered with the Italian authorities. The Shares are offered upon the express request of the investor, who has directly contacted the Company or its sponsor outside of Italy at the investor’s own initiative. No active marketing of the Company has been carried out in Italy and this Private Placement Memorandum has been sent to the investor at the investor’s request. The investor acknowledges the above and hereby agrees not to transfer or otherwise resell any Shares. This Private Placement Memorandum and other offering materials relating to the offer of Shares are strictly confidential and may not be distributed to any person or entity other than the recipients hereof. Malaysia Please note that the offer for subscription or purchase of Shares in the Company has not been approved by the Malaysian Securities Commission under the Capital Markets and Services Act 2007 of Malaysia and the Shares in the Company are not being offered in Malaysia, nor may they be directly or indirectly offered or sold in Malaysia unless the proposal to offer the Shares in the Company has been approved by the Malaysian Securities Commission under the Capital Markets and Services Act 2007 of Malaysia. Netherlands The Shares may not be solicited, acquired or offered in or from the Netherlands, and this Private Placement Memorandum may not be circulated in the Netherlands to any individual or legal entity as part of the initial distribution or at any time thereafter by means of any subsequent offer by an acquirer or otherwise, other than to individuals and legal entities who will commit to invest in the Company at least EUR50,000 per investor for each separate offer. Singapore This Private Placement Memorandum has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Private Placement Memorandum and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Shares may not be circulated or distributed, nor may the Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1a),
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and in accordance with the conditions, specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where the Shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to
hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold
investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust will not be transferable for 6 months after that corporation or that trust has acquired the Shares under Section 275 except:
(1) to an institutional investor or to a relevant person, or to any person pursuant to an
offer that is made on terms that such rights or interest are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets;
(2) where no consideration is given for the transfer; or
(3) by operation of law. Switzerland The Company has not been authorised by the Swiss Federal Banking Commission as a foreign investment fund under Article 45 of the Swiss investment fund act of March 18th, 1994. Accordingly, the Shares offered hereby may not be offered to the public in or from Switzerland. The Shares and this Private Placement Memorandum may, however, be distributed in Switzerland to a maximum number of 20 private investors during a business year and to institutional investors with professional treasury management (“Investisseurs Institutionnels Dont la Trésorerie est Gérée à Titre Professionnel”) in circumstances such that there is no public offer. The Shares may also be offered in Switzerland by asset managers to their existing clients on the basis of a written agreement in circumstances such that there is no public offer. This Private Placement Memorandum and any other material relating to the Shares are strictly confidential and may not be distributed to any person or entity other than its recipients. United Kingdom The Company is an unregulated collective investment scheme for the purposes of the United Kingdom Financial Services and Markets Act 2000 (“FSMA”), the promotion of which in the United Kingdom is restricted by the FSMA. If made by a person who is not an authorised
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person under FSMA, the issue or distribution of this Private Placement Memorandum in the United Kingdom may only be made to and directed at persons who: (a) are investment professionals falling within Article 19 of the Financial Services and Markets Act 2000 (financial promotion) order 2005; or (b) are persons to whom the promotion may otherwise be lawfully made. If made by a person who is an authorised person under FSMA, the issue or distribution of this Private Placement Memorandum in the United Kingdom may only be made to and directed at persons who: (a) are investment professionals within Article 14 of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001; (b) are persons to whom the promotion may be made under Rule 14.12.1 of the FSA’s Conduct of Business Sourcebook; or (c) are persons to whom the promotion may otherwise be lawfully made. Transmission of this Private Placement Memorandum to any other person in the United Kingdom is unauthorised and may contravene FSMA. United States In making an investment decision investors must rely on their own examination of the Company, the applicable portfolio and terms of the offering, including the merits and the risks involved. The Shares have not been recommended by any US Federal or State Securities Commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary is a criminal offense. The Shares in the applicable portfolio are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the US Securities Act and the applicable State Securities Laws, pursuant to registration or exemption therefrom. Investors should be aware that they may be required to bear the financial risk of this investment for an indefinite period of time. The Shares have not been and will not be registered with the US Securities and Exchange Commission or any other governmental or self-‐‑regulatory agency. The Shares will be offered and sold for investment only to qualifying recipients of this Private Placement Memorandum pursuant to exemptions from the registration requirements of the US Securities Act and certain other exemptions from the registration requirements of applicable State Securities Laws. The Company will not be registered as an investment company under the US Investment Company Act. Other Jurisdictions This Private Placement Memorandum does not constitute an offer or invitation to subscribe for, or purchase, any of the Shares in any jurisdiction in which it is unlawful to make to such person such an offer or invitation without compliance with any registration or other legal requirements. This Private Placement Memorandum will not be registered as a prospectus under any applicable securities legislation in any jurisdiction. The distribution of this Private Placement Memorandum in certain jurisdictions may be restricted and, accordingly, persons into whose possession this Private Placement Memorandum comes are required to inform themselves about, and observe, such restrictions.