NOT AUTHORIZED FOR DISTRIBUTION BY OR TO ANY PERSON WITHIN THE UNITED STATES OR TO CANADIAN PERSONS. BSD Global Tech Hedge Fund S.P.

Transcription

1 NOT AUTHORIZED FOR DISTRIBUTION BY OR TO ANY PERSON WITHIN THE UNITED STATES OR TO CANADIAN PERSONS BSD Global Tech Hedge Fund S.P. SEGREGATED PORTFOLIO SUPPLEMENT A Segregated Portfolio of CAYMAN EMERGING MANAGER PLATFORM SPC, an exempted company incorporated with limited liability and registered as a segregated portfolio company under the laws of the Cayman Islands and registered as a mutual fund under the Mutual Funds Law (as amended) of the Cayman Islands. INVESTMENT MANAGER: Emerging Asset Management Ltd. 3 rd Floor Williams House 20 Reid Street Hamilton HM11 Bermuda ADMINISTRATOR: Apex Fund Services Ltd. 3 rd Floor Williams House 20 Reid Street Hamilton HM11 Bermuda This document is supplied for the personal use of the recipient only. Under no circumstances should it be copied or distributed to any other person other than the recipient s accounting, investment, legal, tax or other advisors. JULY

2 CAYMAN EMERGING MANAGER PLATFORM SPC SUPPLEMENT FOR BSD GLOBAL TECH HEDGE FUND S.P. THIS SUPPLEMENT DATED JULY 2014 (THE SUPPLEMENT ) IS SUPPLEMENTAL TO, FORMS PART OF AND SHOULD BE READ IN CONJUNCTION WITH THE CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM (THE MEMORANDUM ) FOR CAYMAN EMERGING MANAGER PLATFORM SPC (THE COMPANY ). DISTRIBUTION OF THIS SUPPLEMENT IS NOT AUTHORIZED UNLESS IT IS ACCOMPANIED BY A COPY OF THE MEMORANDUM. ALL DEFINED TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL, UNLESS THE CONTEXT REQUIRES OTHERWISE, HAVE THE SAME RESPECTIVE MEANINGS AS SET FORTH IN THE MEMORANDUM. A COPY OF THIS SUPPLEMENT HAS BEEN DELIVERED TO THE CAYMAN ISLANDS MONETARY AUTHORITY. COPIES OF THE MEMORANDUM ARE AVAILABLE DURING USUAL BUSINESS HOURS ON ANY WEEKDAY (SATURDAYS, SUNDAYS AND HOLIDAYS EXCEPTED), FREE OF CHARGE, FROM THE OFFICES OF THE INVESTMENT MANAGER (AS HEREINAFTER DEFINED). The BSD Global Tech Hedge Fund S.P. (hereinafter the Segregated Portfolio ) is a segregated portfolio of the Company, an exempted company with limited liability incorporated under the laws of the Cayman Islands and registered as a segregated portfolio company. Participating Shares in the Segregated Portfolio (hereinafter the Segregated Portfolio Shares ) are offered pursuant to the terms of the Memorandum and this Supplement and are referable to the Segregated Portfolio. The Directors do not expect that an active secondary market will develop in relation to the Segregated Portfolio Shares. No application has been made for the listing of the Segregated Portfolio Shares on any stock exchange; however, the Directors reserve the right to do so in the future. The Directors, whose names appear in the Memorandum, accept full responsibility for the information contained in this Supplement and confirm, having made all reasonable enquiries that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading. The information contained in this Supplement should be read in the context of, and together with, the information contained in the Memorandum and distribution of this Supplement is not authorized unless accompanied by or supplied in conjunction with a copy of the Memorandum. In making an investment decision, investors must rely on their own examination of the Company and the Segregated Portfolio and the terms of the offering of the Segregated Portfolio Shares, including the merits and risks involved. No assurance can be given that the Segregated Portfolio s investment objective will be achieved

3 CONTENTS PAGE DEFINED TERMS KEY FEATURES SUMMARY OF FEES AND EXPENSES GENERAL KEY APPOINTMENTS THE COMPANY AND THE SEGREGATED PORTFOLIO INVESTMENT OBJECTIVE THE OFFERING INVESTMENT STRATEGY INVESTMENT RESTRICTIONS LEVERAGE INVESTMENT MANAGER INVESTMENT ADVISOR REPORTS DIVIDEND POLICY SPECIFICS OF CERTAIN FEES AND EXPENSES CUSTODY AND PRIME BROKERAGE SUBSCRIPTIONS REDEMPTIONS CONFLICTS OF INTEREST

4 DEFINED TERMS ALL DEFINED TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL, UNLESS THE CONTEXT REQUIRES OTHERWISE, HAVE THE SAME RESPECTIVE MEANINGS AS SET FORTH IN THE MEMORANDUM. Business Day: a day on which banks in New York City, USA and the New York Stock Exchange are all open for business and such other days as the Directors may designate as Business Days from time to time; Canadian Person: a person who is resident or deemed to be a resident of Canada for purposes of the Income Tax Act (Canada) (the Tax Act ) or a person not so resident but who holds or uses or is deemed to hold or uses the Segregated Portfolio Shares in the course of carrying on a business in Canada for purposes of the Tax Act; Dealing Day: the first Business Day of each month or any other date determined by the Directors in their sole discretion; High Water Mark: with respect to each Series of the Segregated Portfolio Shares shall mean the Net Asset Value of the relevant Series Segregated Portfolio as of the end of the most recent calendar month for which a Performance Fee was paid or payable to the Investment Advisor, or if no Performance Fee has been paid since the Subscription Date, then the initial Net Asset Value of such Series of the Segregated Portfolio Shares; Hurdle Rate: 8% per annum; Minimum Holding: means Participating Shares referable to the Segregated Portfolio having a an aggregate Net Asset Value as at the last Valuation Day of not less than US$100,000 (or its equivalent in any other currency); Net Asset Value: the Net Asset Value of each Class of Segregated Portfolio Shares is determined by reference to the market prices of the underlying assets in the Segregated Portfolio attributable to such Class at the close of business on the Valuation Day immediately preceding each Dealing Day. Assets for which market prices are not readily available will be valued as determined by the Directors after consultation with the Investment Manager. Fees and expenses of the Segregated Portfolio will be accrued on a daily basis and subtracted from the assets of the Segregated Portfolio in determining the Net Asset Value of each Class of the Segregated Portfolio Share. The Net Asset Value of each Class of Segregated Portfolio Shares shall be calculated by dividing the value of the total net assets of that Class (i.e. the value of the assets and cash, less liabilities and estimated cost of realization) by the number of Segregated Portfolio Shares in issue of that Class. The resultant Net Asset Value per Segregated Portfolio Share is then adjusted to two decimal places. The assets of the Segregated Portfolio shall be valued as follows: 1. the value of any cash on hand or on deposit, bills, demand notes and accounts receivable, prepaid expenses, cash dividends and interest declared or accrued and not yet received shall be deemed to be the full amount thereof, unless, in any case, the same is unlikely to be paid or received in full, in which case the value thereof shall be arrived at after making any reasonable reductions in order to reflect the fair value of such assets; - 4 -

5 2. investments in other funds shall be valued at their Net Asset Value as reported or otherwise obtained. Estimated Net Asset Values may be used where final Net Asset Values have not become available; 3. securities bid on an official stock exchange or dealt in on a regulated market which operates regularly and is recognized and open to the public shall be valued at the last available price or, if such securities are dealt in on several markets, at the last available price on the main market of the relevant security. If the last available price is not representative, the securities shall be valued on the basis of the probable sales price determined prudently and in good faith by or on behalf of the Board of Directors; 4. securities not listed or dealt in on a stock exchange or regulated market which operates regularly and is recognized and open to the public shall be valued on the basis of the probable sales price determined prudently and in good faith by or on behalf of the Board of Directors; and 5. securities denominated in currencies other than the US Dollar shall be converted into US Dollars at the last available exchange rate. The liabilities of the Segregated Portfolio shall include only those expenses paid or payable by the Segregated Portfolio, including accrued contingent liabilities; however expenses and fees allocable only to a Class and/or Series of Segregated Portfolio Shares shall not be deducted from the Net Asset Value of the Segregated Portfolio prior to determining the Net Asset Value of each Class and Series, but shall thereafter be deducted from the Net Asset Value so determined for each such Class and/or Series. Net New Appreciation: the difference, if any, between (i) the Net Asset Value of the relevant Series of the Segregated Portfolio Shares as of the end of such calendar month (without reduction for any performance fees paid or payable to the Investment Advisor for such calendar month or dividends declared or paid as of the end of such calendar month) minus (ii) the Net Asset Value of such Series of the Segregated Portfolio Shares as of the end of the most recent calendar month for which a Performance Fee was paid or payable to the Investment Advisor, with such amount reduced by the amount of the Performance Fee paid or payable for such prior calendar month and also reduced by any dividends declared and/or paid as of or subsequent to the end of such prior calendar month through the first day of the calendar month referred to in paragraph (i) above and increased by the amount of all additional share purchases since the end of the most recent calendar month for which a performance fee was paid. For purposes of calculating the first Performance Fee payable to the Investment Advisor, paragraph (ii) above shall mean the initial Net Asset Value of the applicable Series of the Segregated Portfolio Shares at the Subscription Date. For the purposes of calculating Net New Appreciation, extraordinary fees and expenses and taxes shall be excluded; Redemption Date: the first Business Day of each month or any other date determined by the Directors in their sole and absolute discretion; Subscription Date: the first Business Day of each month or any other date determined by the Directors in their sole and absolute discretion; - 5 -

6 Shareholder: means a registered holder of Segregated Portfolio Shares which have not been redeemed; and Valuation Day: means the last Business Day of each month or any other date determined by the Directors in their sole and absolute discretion

7 KEY FEATURES The Offering: Offer Price: Investment Manager: Investment Advisor: Custodian/Prime Broker Investment Objective of the Segregated Portfolio: The Company is offering non-voting, participating shares of a par value of $0.001 each in the capital of the Company and referable to the Segregated Portfolio. The Segregated Portfolio Shares will be offered on the Subscription Date. The Segregated Portfolio Shares will be issued on each Subscription Date in one or more Classes, in successive Series of each Class, at a price of $1,000 per Segregated Portfolio Share. See THE OFFERING. Emerging Asset Management Ltd. has been appointed to serve as investment manager of the Company in respect of the Segregated Portfolio. The Investment Manager has appointed Black Swan Dexteritas Inc. to serve as the investment advisor (the Investment Advisor ) of the Segregated Portfolio. The Investment Manager has appointed Interactive Brokers Canada Inc. as the Custodian/Prime Broker to the Segregated Portfolio. The Investment Manager may, from time to time, terminate the appointment of the existing Custodian/Prime Broker and appoint one or more replacement custodians/prime brokers. The investment objective of the Segregated Portfolio is to achieve capital gains in the Net Asset Value of the Segregated Portfolio Shares through the appointment of the Investment Advisor by the Investment Manager to implement investment strategies as described herein and through the appointment of the Investment Manager to monitor risk in relation to the assets of the Segregated Portfolio. Minimum Initial Subscription and Minimum Subsequent Subscription: The minimum initial subscription amount for new investors in the Segregated Portfolio Shares is US$150,000 or the equivalent in any other reference currency and the minimum additional subscription amount is US$10,000. The Directors, in their sole and absolute discretion, may accept or reject all or any portion of any subscriptions and/or, increase the minimum subscription amount

8 Subscription Procedure: Redemptions: Redemption Proceeds: Eligible Investors: Prospective investors must complete and execute a Subscription Agreement and deliver the same to the Administrator. Subscription Agreements must generally be received by the Administrator at least two (2) Business Days prior to the relevant Subscription Date (or such shorter period as may be determined by the Directors in their sole and absolute discretion). All investors must also make arrangements with the Administrator for the transmission of their subscription funds at least two (2) Business Days prior to the relevant Subscription Date before 5:00pm (New York time). The Segregated Portfolio Shares may be redeemed on each Redemption Date by providing written notice to the Administrator at least ten (10) Business Days prior to the relevant Redemption Date. Segregated Portfolio Shares shall be redeemed at the Net Asset Value per Segregated Portfolio Share as of the Valuation Day immediately preceding the relevant Redemption Date. Partial redemptions may not reduce a Shareholder s investment to less than the Minimum Holding. The Company may suspend redemptions of the Segregated Portfolio Shares in certain limited circumstances as described in the Memorandum. Unless redemptions have been suspended or redemption payments are delayed, redemption proceeds allocable to Segregated Portfolio Shares will generally be paid within thirty (30) calendar days of the relevant Redemption Date. Under certain circumstances as set forth in the Memorandum, the Company may limit or suspend redemptions of the Segregated Portfolio Shares and/or delay payment of redemption proceeds to redeeming Shareholders. No interest will be paid by the Company on redemption proceeds pending distribution to Shareholders. The Company will pay redemption proceeds in kind at the request of an investor subject to the approval of the Directors. The Segregated Portfolio Shares are offered only to persons who are neither U.S. Persons (as defined in the Memorandum) nor Canadian Persons

9 SUMMARY OF FEES AND EXPENSES Organizational and Initial Offering Costs: Administration Fee: Investment Manager s Management Fee: Investment Advisor s Advisory Fee: Investment Advisor s Performance Fee: The organizational and initial offering costs of the Segregated Portfolio will be borne by the Segregated Portfolio and amortized on a straight line basis over the first sixty (60) months following the commencement of the Segregated Portfolio s investment activities. The Segregated Portfolio will pay the Administrator (as hereinafter defined) an administrative fee based upon the Net Asset Value of the Segregated Portfolio. The Administrator s fee payable by the Segregated Portfolio will be charged on a sliding scale and subject to a monthly minimum amount. In addition, the Segregated Portfolio will reimburse the Administrator s out-ofpocket expenses as invoiced. The Investment Advisor will pay the Investment Manager a management fee, payable monthly in arrears, in an amount equal to 1/12 th of 0.25% of the Net Asset Value of each Class of Segregated Portfolio Shares (approximately 0.25% annually) subject to a minimum of US$500 per month (US$6,000 per annum). The Segregated Portfolio will pay the Investment Advisor an advisory fee, payable monthly in arrears, in an amount equal to 1/12 th of 2.0% of the Net Asset Value of each Class of the Segregated Portfolio Shares (approximately 2.0% annually). In respect of each calendar month, the Segregated Portfolio shall pay the Investment Advisor a performance fee equal to 20% of the Net New Appreciation if the Net New Appreciation exceeds the Hurdle Rate (pro-rated as required for such calendar month) achieved by each Series of the Segregated Portfolio Shares during such calendar month. This Performance Fee shall be accrued monthly and paid every six months in arrears on the last Business Day of June and on the last Business Day of December

10 GENERAL Dividends: Access to Information: Reports: The Company does not anticipate paying any dividends in respect of the Segregated Portfolio Shares. Prospective investors are urged to contact the Investment Advisor with any questions they may have concerning any aspect of the Segregated Portfolio or the offering of the Segregated Portfolio Shares. Shareholders will receive quarterly performance summaries and annual audited financial statements of the Segregated Portfolio

11 KEY APPOINTMENTS Administrator Apex Fund Services Ltd. 3 rd Floor Williams House 20 Reid Street Hamilton HM11 Bermuda Tel: Fax: info@apex.bm NAV Calculation Agent Apex Fund Services Ltd. 3 rd Floor Williams House 20 Reid Street Hamilton HM11 Bermuda Tel: Fax: info@apex.bm Custodian and Prime Broker Interactive Brokers - LLC 1 Pickwick Plaza Greenwich, Connecticut USA Investment Manager Emerging Asset Management Ltd. 3 rd Floor Williams House 20 Reid Street Hamilton HM11Bermuda Tel: Fax: Investment Advisor Auditor Black Swan Dexteritas Inc. 175 Bloor Street East, Suite 807 Toronto, Ontario M4W 3R8 Tel : kim@blackswandexteritas.com Deloitte & Touche One Capital Place PO Box 1787 GT

12 Grand Cayman KY Cayman Islands Tel: Fax: Legal Advisor (as to Cayman Islands law only) Walkers (Dubai) LLP Fifth Floor, Exchange Building Dubai International Financial Centre PO Box Dubai, United Arab Emirates Tel:

13 THE COMPANY AND THE SEGREGATED PORTFOLIO The Company is an exempted company with limited liability incorporated on 18 May 2011 in the Cayman Islands for an unlimited duration and registered as a segregated portfolio company. The Company is registered as a mutual fund with the Monetary Authority. As a matter of Cayman Islands law, provided that the conditions laid down in the Law are complied with, assets attributable to each segregated portfolio of the Company shall only be available to creditors in respect of that segregated portfolio and the assets of that segregated portfolio shall be protected from creditors of the Company who are not creditors in respect of that segregated portfolio. The Segregated Portfolio is a segregated portfolio of the Company. Additional segregated portfolios may be created with the same or different investment objectives and on the same or different terms from time to time as the Directors may determine. INVESTMENT OBJECTIVE The objective of the Segregated Portfolio is to achieve capital gains in the Net Asset Value of the Segregated Portfolio Shares through the appointment of the Investment Advisor by the Investment Manager to implement investment strategies as described herein and through the appointment of the Investment Manager to monitor risk in relation to the assets of the Segregated Portfolio. There can be no assurance that the Segregated Portfolio will achieve its investment objective or that an investor will not lose some or all of the assets invested in the Segregated Portfolio. See RISK FACTORS set forth in the Memorandum. THE OFFERING The Segregated Portfolio Shares are being offered pursuant to the Memorandum and this Supplement by the Company (on behalf of the Segregated Portfolio) and by the Distributors appointed to do so by the Company on behalf of the Segregated Portfolio. The Shares issued pursuant to this Supplement shall be designated Segregated Portfolio Shares and shall be referable to the Segregated Portfolio. The minimum aggregate amount of subscription proceeds which the Company will accept pursuant to this offering is US$150,000. The minimum additional subscription amount for existing investors in the Company is US$10,000. The Directors, in their sole and absolute discretion, may accept or reject all or any portion of any subscriptions and/or increase the minimum subscription amount. There is no maximum aggregate amount of proceeds which the Company may accept pursuant to this offering of Segregated Portfolio Shares. The Segregated Portfolio Shares are being offered at $1,000 per Share. Following the commencement of the Segregated Portfolio s investment activities, Segregated Portfolio Shares will be offered in successive Series of each Class as of each Subscription Date at a price of $1,000 per Segregated Portfolio Share. The Segregated Portfolio Shares may not be offered to, sold or delivered, directly or indirectly to Canadian Persons or U.S. Persons, nor may the Segregated Portfolio be marketed to Canadian Persons

14 INVESTMENT STRATEGY The Investment Advisor will deploy funds deposited in the Segregated Portfolio in investment programs implemented by the Investment Advisor that seek to achieve medium-term capital gains through the implementation of widely diversified investment strategies. The Segregated Portfolio is managed within the following 3 mandates: (1) Up to 100% of the Segregated Portfolio is dedicated to stock investments in the global technology sector (i.e. communication equipment, computers and peripherals, data storage devices, electronic equipment and instruments, information and delivery services, information technology services, internet software and services, semiconductors, software, technology real estate, consumer financial services and telecom businesses); the tech stock holdings will have risk objectives as measured by Value at Risk ("VAR"); the Segregated Portfolio will target a two week 5% VAR of 7% of total capital and an annual 5% VAR of 25% of total capital; (2) Up to 50% of the Segregated Portfolio is dedicated to investments in derivative instruments, to hedge and leverage that portion of the Segregated Portfolio that is invested in those stocks in the global technology sector (i.e. futures and options on futures in stock indices, commodities, currencies and fixed income products); the derivatives are positioned to lessen the volatility of the Segregated Portfolio downside risk and occasionally complement the mandate described at paragraph 1 above; the derivatives portion of the Segregated Portfolio expects to return an annual minimum of 5%, net of hedging and leveraging investments; and (3) Up to 30% of the Segregated Portfolio is dedicated to cash and/or US Treasury bonds. There is no assurance that the Investment Advisor s investment strategy will be profitable or that an investor will not lose some or all of its investment in the Segregated Portfolio. See RISK FACTORS. INVESTMENT RESTRICTIONS The policy of the Segregated Portfolio is to spread investment risk. There are no restrictions as to the sector or regional weights. Although the Segregated Portfolio s aim is to be nearly fully invested, there may be periods when most of the assets could be in cash or cash equivalent investments. The period of low investments are determined by market conditions, technical indicators, valuation levels and other fundamental factors

15 LEVERAGE Leverage may be utilized by the Investment Advisor for the Segregated Portfolio, with derivative products to hedge and/or leverage that portion of the portfolio that is invested in those stocks in the global technology sector. The derivative investments can employ a maximum buying power of three times the underlying nominal value of the derivatives product. The use of leverage is measured in real time and employed as a defensive measure to lessen the volatility of the Segregated Portfolio s downside risk, and occasionally as an efficient and effective tool to complement the Segregated Portfolio s stock holdings. The description of the Investment Advisor s investment strategy and leverage mechanisms for the Segregated Portfolio is general and not intended to be exhaustive. The exact details are proprietary and may vary over time. INVESTMENT MANAGER Pursuant to an investment management agreement (the Investment Management Agreement ) by and among the Company and Emerging Asset Management Ltd., the Investment Manager serves as the investment manager of the Company in respect of the Segregated Portfolio. Peter Hughes and John Bohan are the directors of the Investment Manager. Mr. Peter Hughes is the Chief Executive and founder of Apex Fund Services Ltd. ("Apex"), one of the world s largest independent fund and private equity administration companies. Peter founded Apex over 10 years ago in September 2003 and his vision was to create a company that provides the full range of fund services enabling managers to grow and run their businesses more effectively and efficiently. Under his leadership Apex has grown rapidly and today has assets under administration of $30 billion with 34 offices in 26 countries. Peter created the Apex global network which is at the heart of the Apex s strategy of being located alongside its clients. With its global reach and local presence, Apex is able to provide the highest levels of personalised fund administration services by being in the same jurisdictions as its clients. Peter has over 20 years of financial services experience having qualified as a chartered accountant in He is a fellow of the Institute of Chartered Accountants in England and Wales. Mr. John Bohan is the Managing Director of the Apex group of companies in Europe and the Middle East, a specialist management and administration company, which provides management services to the finance industry, specializing in the administration of collective investment schemes and investment holding companies, founded in John qualified as a certified accountant in 1999 and became a fellow of the Chartered Association of Certified Accountants in early He held the role as COO between 2004 and 2013 for the Apex group of companies before taking on his current role, and has worked in management positions with Citigroup, BNY-Alternative Investment Services and Bank of Ireland Asset Management with many years experience in the financial services industry

16 INVESTMENT ADVISOR Pursuant to an investment advisory agreement by and among the Company (on behalf of the Segregated Portfolio), the Investment Manager and Black Swan Dexteritas Inc. dated 31 July 2013 (the Investment Advisory Agreement ), the Investment Advisor serves as the investment advisor of the Company in respect of the Segregated Portfolio. The Investment Advisor s main office is located at 175 Bloor Street East, Suite 807, Toronto, Ontario, M4W 3R8. The Investment Advisor s role is to advise the Investment Manager and implement the investment strategies as described herein with respect to the assets allocated by the Investment Manager to the Segregated Portfolio. Mr. Kim Bolton and Mr. Lev Leviev are the directors and majority shareholders of the Investment Advisor. Together, Mr. Leviev and Mr. Bolton control 98% on the issued and outstanding shares of Black Swan Dexteritas Inc. Mr. Leviev is the Chairman and Mr. Bolton is the President and Portfolio Manager of Black Swan Dexteritas Inc. Mr. Kim Bolton has been granted the registration of Portfolio Manager, Exempt Market dealer, Investment Fund Manager and Commodity Trading Manager by the Ontario Securities Commission. Mr. Bolton has 30 years of investment management experience and formal professional accreditations. Mr. Bolton has been a OSC registered Portfolio Manager since 1994, managing investments for global pension funds, banks and investment counsels (for example, BP America Securities Inc., Invesco, and TAL/CIBC Asset Management). Mr. Bolton has numerous Canadian Securities Institute and American NASD and SEC trading and supervisory accreditations (for example, with the Canadian Securities Institute, the CSC and Handbook, all commodity and derivatives trading and supervisory exams, and in the USA, the NASD Series 3, 4, 7 and 8 exams. Mr. Lev Leviev is CEO of Fenix Capital Ltd., an investment company, that invests in private equity opportunities in the Russian Federation, and CEO of Selectel, the largest data center operator in Russia. The Investment Advisory Agreement sets forth the investment advisory services to be provided by the Investment Advisor. The Investment Advisory Agreement provides that, to the extent permitted by applicable law, the Investment Advisor will not be liable, in damages or otherwise, for any act or omission unless constituting gross negligence, willful misconduct or bad faith in the performance of its duties under such agreement. The Investment Advisor, the Investment Manager and the Company (on behalf of the Segregated Portfolio) as applicable, may terminate the Investment Advisory Agreement effective at the close of business on the last day of any fiscal year by giving not less than thirty (30) days prior written notice. No party may assign the Investment Advisory Agreement without the prior written consent of the other parties, except that the Investment Advisor may freely assign its rights and obligations to any other entity directly or indirectly controlled by it or its principals. The investment advisory services of the Investment Advisor are non-exclusive and the Investment Advisor is free to and does provide investment advisory services for others

17 REPORTS An annual audited financial statement of the Segregated Portfolio is expected to be delivered to Shareholders within one hundred and eighty (180) days of the end of each fiscal year (or as promptly as practicable thereafter). Unaudited quarterly reports which state the Net Asset Value of the Segregated Portfolio Shares will be sent to Shareholders for each calendar month, which statements are expected to be delivered to Shareholders as soon as practicable after the end of each calendar month. DIVIDEND POLICY The Company is not precluded from paying dividends on the Segregated Portfolio Shares, but it is not anticipated that it will do so. SPECIFICS OF CERTAIN FEES AND EXPENSES Organizational and Initial Offering Fees and Expenses The Investment Advisor has advanced all fees and expenses incurred in connection with the organization of the Segregated Portfolio and the initial offer and sale of Segregated Portfolio Shares, including, without limitation, fees and expenses of attorneys and accountants, printing costs and promotional expenses. The Investment Advisor may also advance payment for certain services related to the Segregated Portfolio such as the monthly minimum fees paid to the administrator. The Segregated Portfolio has or will reimburse the Investment Advisor, as applicable, for the total of such fees and expenses. While the financial statements of the Segregated Portfolio will be prepared in conformity with International Financial Reporting Standards as a guideline, the organizational fees and expenses of the Segregated Portfolio will be amortized over the first sixty (60) months of its existence because the Investment Manager believes such treatment is more equitable than expensing the entire amount of the organizational fees and expenses in the first year of operations. Administration Fees The Company, on behalf of the Segregated Portfolio, has appointed Apex Fund Services Ltd. (the Administrator ) to serve as the administrator of the Segregated Portfolio pursuant to an administration agreement between the Company and the Administrator (the Administration Agreement ). The Administrator is part of the Apex Group, a global provider of fund administration services with 34 offices across the globe, ISAE 3402/SSAE16 audited, independently owned with over US$30 billion under administration. Apex Group provides specialist fund administration, share registrar, corporate secretarial services and directors to funds and collective investment schemes globally. The Administrator will perform all general administrative tasks for the Segregated Portfolio, including the preparation of valuations, keeping of financial records and acting as registrar and transfer agent. The Administrator shall receive an annual fee calculated in accordance with its customary schedule of fees and is also entitled to be reimbursed for all out of pocket expenses properly incurred in performing its duties as Administrator of the Segregated Portfolio

18 Under the Administration Agreement, the Company on behalf of the Segregated Portfolio will indemnify the Administrator to the fullest extent permitted by law against any and all judgments, fines, amounts paid in settlement and reasonable expenses, including legal fees and disbursements, incurred by the Administrator, save where such actions, suits or proceedings are the result of fraud, wilful misconduct or gross negligence of the Administrator. In accordance with the terms of the Administration Agreement, the services of the Administrator may be terminated by at least 90 days written notice from either the Company or the Administrator (or such shorter notice period as the parties may agree to accept) or earlier on the liquidation of either the Company or the Administrator. The Administrator is licensed as a fund administrator by the BMA under section 43 of the Investment Funds Act Investment Manager s Management Fee The Investment Advisor will pay the Investment Manager a management fee, payable monthly in arrears, in an amount equal to 1/12 th of 0.25% of the Net Asset Value of each Class of the Segregated Portfolio Shares (approximately 0.25% annually) subject to a minimum of US$500 per month (US$6,000 per annum). For purposes of calculating the management fee, Net Asset Value is determined before reduction for the the Investment Advisor s advisory fee or any Performance Fee accrued or payable as of such calendar month-end and before giving effect to any subscriptions, dividends or redemptions accrued or paid as of such calendar month-end. If a Shareholder redeems all or some of its Segregated Portfolio Shares, or if the Investment Management Agreement is terminated or the Segregated Portfolio is dissolved as of any day other than the end of a calendar month, the Investment Manager will be paid a pro-rated management fee based upon the ratio that the number of days through the date of such event bears to the total number of days in the calendar month. Investment Advisor s Advisory Fees The Segregated Portfolio will pay the Investment Advisor an advisory fee, calculated annually and payable monthly in arrears, in an amount equal to 1/12 th of 2.0% of the Net Asset Value of each Class of Segregated Portfolio Shares (approximately 2% annually). For purposes of calculating the advisory fee, the Net Asset Value is determined before reduction for the Investment Manager s management fee, the Investment Advisor s advisory fee or any Performance Fee accrued or payable as of such calendar month-end and before giving effect to any subscriptions, dividends or redemptions accrued or paid as of such calendar month-end. If a Shareholder redeems all or some of its Segregated Portfolio Shares, the Investment Advisory Agreement is terminated or the Segregated Portfolio is dissolved as of any day other than the end of a calendar month, the Investment Advisor will be paid a pro-rated advisory fee based upon the ratio that the number of days through the date of such event bears to the total number of days in the calendar month. Pursuant to the Investment Advisory Agreement, the Investment Advisor may elect to defer the receipt of all or a portion of the advisory fees payable to it

19 Investment Advisor s Performance Fees In respect of each calendar month, the Segregated Portfolio shall pay the Investment Advisor a performance fee equal to 20% of the Net New Appreciation if the Net New Appreciation exceeds the Hurdle Rate (pro-rated as required for such calendar month) achieved by each Series of the Segregated Portfolio Shares during such calendar month. This Performance Fee shall be accrued monthly and paid every six months in arrears on the last Business Day of June and on the last Business Day of December. If, at any time, the Net Asset Value of any Series of the Segregated Portfolio Shares is below the High Water Mark, no Performance Fee will be charged to such Series of the Segregated Portfolio Shares until the Net Asset Value of such Series of the Segregated Portfolio Shares has reached or exceeded the High Water Mark as of a Performance Fee calculation date. The Hurdle Rate will be cumulative, such that, in the event that the Segregated Portfolio s performance declines, the Performance Fee is only payable once both the High Water Mark and the Hurdle Rate are achieved. The Performance Fee will be calculated and deducted as a liability in the calculation of the Net Asset Value of each Series of the Segregated Portfolio Shares on the Valuation Day. The High Water Mark with respect to each Series of the Segregated Portfolio Shares shall mean the Net Asset Value of the relevant Series of the Segregated Portfolio Shares as of the end of the most recent calendar month for which a Performance Fee was paid or payable to the Investment Advisor, or if no Performance Fee has been paid since the issuance of the first Series of Segregated Portfolio Shares, then the initial Net Asset Value of such Series of the Segregated Portfolio Shares. In the event that assets are withdrawn from a Series of the Segregated Portfolio Shares at a time when the initial Net Asset Value of such Series is below the High Water Mark, the High Water Mark shall be adjusted by a factor equal to: (i) the initial Net Asset Value of the relevant Series of the Segregated Portfolio Shares after withdrawal; divided by (ii) the initial Net Asset Value of the relevant Series of the Segregated Portfolio Shares before withdrawal. Once a Performance Fee is assessed, it is not refundable if the relevant Series of the Segregated Portfolio Shares incur losses thereafter. Pursuant to the Investment Advisory Agreement, the Investment Advisor may elect to defer the receipt of all or a portion of the performance fees payable to it. If for any reason, the Segregated Portfolio is dissolved or if the Investment Advisory Agreement is terminated as of a date other than the last day of a calendar month, the Performance Fee shall be calculated and paid to the Investment Advisor as if such date were the last day of the then current calendar month

20 CUSTODY AND PRIME BROKERAGE The Custodian/Prime Broker will provide custodian and/or prime brokerage services to the Segregated Portfolio and shall be paid fees by the Segregated Portfolio on commercial terms, arms' length terms as agreed between the Segregated Portfolio and the Custodian/Prime Broker from time to time. SUBSCRIPTIONS Persons wishing to subscribe for the Segregated Portfolio Shares must complete the Subscription Agreement attached to the Memorandum, which includes, among other things, representations that the subscriber is neither a U.S. Person nor a Canadian Person. Completed Subscription Agreements and the appendices attached thereto must be received by the Administrator (by facsimile with the original Subscription Agreement and the appendixes attached thereto sent via airmail, with a copy sent via facsimile to the Investment Manager), together with a wire transfer for the full amount of the subscription, at least two (2) Business Days prior to the relevant Subscription Date (or such shorter period as may be determined by the Directors in their sole and absolute discretion). Subscription monies must be paid by wire transfer and should be remitted net of bank charges in accordance with the wire transfer instructions set forth in the Subscription Agreement. All investors must also make arrangements with the Administrator for the transmission of their subscription funds at least two (2) Business Days prior to the relevant Subscription Date before 5:00 p.m. (New York time). Failure to remit the full amount due will be treated as a subscription for the amount remitted. A subscription for Segregated Portfolio Shares will not be processed and Segregated Portfolio Shares will not be allotted until receipt of notification that a prospective Shareholder s funds have been cleared in the full amount of the subscription. The Company reserves the right to reject any subscription or to accept only part of a subscription for any reason. If a subscription is not accepted or is accepted only in part, the amount paid on the subscription or the balance thereof will be returned without interest and returned at the risk of the prospective Shareholder. Fractions (up to four decimal places) of Segregated Portfolio Shares may be issued. Unless the Directors determine otherwise, share certificates in respect of Segregated Portfolio Shares will not be issued. Segregated Portfolio Share ownership will be reflected in book entries in the register of members of the Company recorded by the Administrator. REDEMPTIONS; COMPULSORY REDEMPTIONS Unless redemptions have been suspended or redemption payments have been delayed and except as noted below, Segregated Portfolio Shares in any Series may be redeemed on any Redemption Date by a Shareholder at the Net Asset Value per Segregated Portfolio Share in such Series as of the Valuation Day immediately preceding such Redemption Date by sending a written notice of redemption to the Administrator. Redemption requests must be received by the Administrator at least ten (10) Business Days prior to any Redemption Date in order to be acted on as of that Redemption Date unless the Directors, acting in their sole and absolute discretion, waive any of such conditions. Unless the Directors determine otherwise, no redemption shall be approved by

21 the Directors that would result in the Shareholder owning Segregated Portfolio Shares which represent less than the Minimum Holding. The Directors, in their sole and absolute discretion, may waive any of the foregoing restrictions. If the number and value of Segregated Portfolio Shares to be redeemed is not specified, a redemption notice will be assumed to apply to all of the Segregated Portfolio Shares held by the redeeming Shareholder. Subject to certain restrictions and unless redemptions have been suspended, the net redemption proceeds will generally be paid either by wire transfer (at the expense of the redeeming Shareholder) of the redemption amount to the account designated by the Shareholder in the request for redemption or by sending a check for the amount to the address specified by the Shareholder. Pursuant to the Articles, redemption proceeds will generally be paid within thirty (30) calendar days of the relevant Redemption Date. Prospective Shareholders should be aware that the relevant redemption price will be based on unaudited accounts. In accordance with the Articles and as set out in the Memorandum, the Directors may suspend or defer redemptions and may delay redemption payments under certain circumstances. The Company may find it necessary at any time upon the request for redemption by a Shareholder to set up a reserve for determined contingent liabilities of the Segregated Portfolio and withhold all or a certain portion of a Shareholder s redemption proceeds. The right of a Shareholder to redeem Segregated Portfolio Shares is contingent upon the Segregated Portfolio having assets sufficient in the view of the Directors to discharge its liabilities on the relevant Redemption Date. The Company has the right to cause the compulsory redemption of some or all the Segregated Portfolio Shares acquired or otherwise held by any Shareholder at any time as determined by the Directors in their sole and absolute discretion for any reason or for no reason. CONFLICTS OF INTEREST Peter Hughes and is a director of the Company, the Investment Manager and the Administrator. He also has ownership interests in the Investment Manager and the Administrator. John Bohan is a director of the Investment Manager and the Administrator. He also has ownership interests in the Investment Manager and the Administrator. Rayal Bodden is a director of the Company and is an employee of an affiliate of the Administrator