BCB BOND FUND LIMITED- Offering Memorandum MANAGED BY ICM LIMITED

Transcription

1 BCB BOND FUND LIMITED- Offering Memorandum MANAGED BY ICM LIMITED

2 27 November 2014 BCB BOND FUND OFFERING MEMORANDUM BCB BOND FUND LIMITED (A Bermuda exempted company incorporated under the laws of Bermuda with limited liability and authorised as an administered fund under the Investment Funds Act 2006) Dated: 27 November 2014 Initial Price per Share: Minimum Initial Subscription per Investor: Minimum additional subscription: Fund Administrator: Investment Manager: Custodian US$ US$50, US$1, IKONIC Fund Services Ltd. ICM Limited Bermuda Commercial Bank Limited 2

3 THE SHARES ISSUED BY BCB BOND FUND LIMITED ARE NOT FOR SALE TO U.S. PERSONS EXCEPT IN A LIMITED NUMBER OF CASES AS DETERMINED IN THE SOLE DISCRETION OF BCB BOND FUND LIMITED. NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THIS OFFERING TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS OFFERING MEMORANDUM. PLEASE DIRECT ANY INQUIRIES TO: BCB BOND FUND LIMITED C/O IKONIC FUND SERVICES LTD. PENBOSS BUILDING 50 PARLIAMENT STREET HAMILTON HM 12 BERMUDA TELEPHONE: (441) FACSIMILE: (441) INVESTORSERVICES@IKONICFUNDS.COM THE SECURITIES OFFERED HEREBY HAVE NOT BEEN FILED WITH OR APPROVED OR DISAPPROVED BY ANY REGULATORY AUTHORITY OF ANY COUNTRY OR OTHER JURISDICTION, NOR HAS ANY SUCH REGULATORY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. NOTICE IF YOU ARE IN ANY DOUBT ABOUT THE CONTENTS OF THIS DOCUMENT YOU SHOULD CONSULT YOUR STOCKBROKER, BANK MANAGER, LAWYER, ACCOUNTANT OR OTHER PROFESSIONAL ADVISOR. NEITHER BCB BOND FUND LIMITED (THE FUND ) NOR THE SHARES OF THE FUND DESCRIBED IN THIS OFFERING MEMORANDUM (THE MEMORANDUM ) HAVE BEEN OR WILL BE REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF THE UNITED STATES ( US ) OR ANY OTHER JURISDICTION. THIS OFFERING MEMORANDUM SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF SHARES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE IS NOT AUTHORIZED OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE DIRECT OR INDIRECT OWNERSHIP OF SHARES BY RESTRICTED PERSONS AS DEFINED IN THIS OFFERING MEMORANDUM IS PROHIBITED EXCEPT IN ACCORDANCE HEREWITH. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATIONS CONCERNING THE FUND OR THE SHARES WHICH ARE INCONSISTENT WITH THOSE CONTAINED IN THIS OFFERING MEMORANDUM, AND ANY SUCH REPRESENTATIONS SHOULD ACCORDINGLY BE TREATED AS UNAUTHORIZED AND MAY NOT BE RELIED UPON BY THE RECIPIENT. THE PURCHASE OF SHARES IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. THERE IS NO ASSURANCE THAT THE FUND WILL BE PROFITABLE. SEE THE SECTION ENTITLED RISK FACTORS WITHIN THIS OFFERING MEMORANDUM FOR A DESCRIPTION OF CERTAIN RISKS INVOLVED IN THE PURCHASE OF SHARES. 3

4 NO LISTING OR OTHER DEALING FACILITY IS AT PRESENT BEING SOUGHT FOR ANY PART OF THE FUND'S SHARES, ALTHOUGH THE FUND MAY SEEK A LISTING IN THE FUTURE. THIS OFFERING MEMORANDUM IS INTENDED SOLELY FOR THE USE OF POTENTIAL INVESTORS TO WHOM IT HAS BEEN DELIVERED BY THE FUND FOR THE PURPOSE OF EVALUATING A POSSIBLE INVESTMENT BY THE RECIPIENT IN THE SHARES DESCRIBED HEREIN, AND IT IS NOT TO BE REPRODUCED OR DISTRIBUTED TO ANY OTHER PERSONS (OTHER THAN PROFESSIONAL ADVISORS OF THE PROSPECTIVE INVESTOR RECEIVING THIS OFFERING MEMORANDUM FROM THE FUND). THE FUND HAS BEEN CLASSIFIED AS AN ADMINISTERED FUND. AS SUCH, THE FUND MAY NOT BE SUPERVISED TO THE SAME DEGREE AS OTHER FUNDS WHICH ARE AUTHORISED AND REGULATED BY THE AUTHORITY. THEREFORE, THE FUND SHOULD BE VIEWED AS AN INVESTMENT SUITABLE ONLY FOR PARTICIPANTS WHO CAN FULLY EVALUATE AND BEAR THE RISKS INVOLVED. PERMISSION UNDER THE EXCHANGE CONTROL ACT OF 1972 OF BERMUDA (AND REGULATIONS MADE THEREUNDER) HAS BEEN OBTAINED FROM THE BERMUDA MONETARY AUTHORITY FOR THE ISSUE OF SHARES IN THE FUND TO CERTAIN INVESTORS. IN ADDITION, A COPY OF THIS DOCUMENT HAS BEEN DELIVERED TO THE BERMUDA MONETARY AUTHORITY FOR FILING PURSUANT TO THE INVESTMENT FUNDS ACT 2006 OF BERMUDA. AUTHORISATION BY THE BERMUDA MONETARY AUTHORITY DOES NOT CONSTITUTE A GUARANTEE BY THE AUTHORITY AS TO THE PERFORMANCE OF THE FUND OR ITS CREDITWORTHYNESS. FURTHERMORE, IN AUTHORISING SUCH A FUND, THE AUTHORITY SHALL NOT BE LIABLE FOR THE PERFORMANCE OF THE FUND OR THE DEFAULT OF ITS OPERATORS OR SERVICE PROVIDERS, NOR FOR THE CORRECTNESS OF ANY OPINIONS OR STATEMENTS EXPRESSED IN THE PROSPECTUS. THE FUND DOES NOT INTEND TO BE REGISTERED OR LICENSED IN ANY JURISDICTION OR WITH ANY SUPERVISORY OR REGULATORY AUTHORITY OUTSIDE BERMUDA. THERE ARE RESTRICTIONS ON THE OFFER AND SALE OF SECURITIES IN THE UNITED KINGDOM. ANY PERSON WHO IS ENGAGED IN ANY ACTIVITY WITH RESPECT TO SECURITIES THAT ARE IN ANY WAY ASSOCIATED WITH THE UNITED KINGDOM MUST COMPLY WITH ALL APPLICABLE PROVISIONS OF THE UNITED KINGDOM FINANCIAL SERVICES MARKETS ACT 2000 (THE FSMA ) AND THE PUBLIC OFFERS OF SECURITIES REGULATIONS THIS OFFERING MEMORANDUM HAS NOT BEEN ISSUED TO PERSONS IN THE UNITED KINGDOM EXCEPT TO THOSE PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM ACQUIRING, HOLDING, MANAGING OR DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESSES OR OTHERWISE IN CIRCUMSTANCES WITHIN THE MEANING OF THE PUBLIC OFFERS OF SECURITIES REGULATIONS 1995, NOR HAS ANY INVITATION OR INDUCEMENT IN CONNECTION WITH THE ISSUE OR SALE OF SHARES OR OTHERWISE TO ENGAGE IN INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF THE FSMA) PURSUANT TO THIS MEMORANDUM BEEN COMMUNICATED OR CAUSED TO BE COMMUNICATED AND WILL ONLY BE COMMUNICATED OR CAUSED TO BE COMMUNICATED OR IN CIRCUMSTANCES IN WHICH SECTION 21(1) OF THE FSMA DOES NOT APPLY TO THE FUND. THE ISSUE OF THIS OFFERING MEMORANDUM HAS COMPLIED AND WILL COMPLY WITH ALL APPLICABLE 4

5 PROVISIONS OF THE FSMA WITH RESPECT TO ANYTHING DONE BY IT IN RELATION TO THE SHARES IN, FROM OR OTHERWISE INVOLVING THE UNITED KINGDOM. THERE ARE RESTRICTIONS ON THE OFFER AND SALE OF SECURITIES IN NEW ZEALAND. ANY PERSON WHO IS ENGAGED IN ANY ACTIVITY WITH RESPECT TO SECURITIES THAT ARE IN ANY WAY ASSOCIATED WITH NEW ZEALAND MUST COMPLY WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT 1978 AND THE SECURITIES REGULATIONS THIS OFFERING MEMORANDUM HAS NOT BEEN ISSUED TO PERSONS IN NEW ZEALAND EXCEPT TO THOSE PERSONS WHOSE PRINCIPAL BUSINESS IS THE INVESTMENT OF MONEY OR WHO, IN THE COURSE OF AND FOR THE PURPOSE OF THEIR BUSINESS, HABITUALLY INVEST MONEY OR WHOSE INITIAL INVESTMENT IS NO LESS THAN NZ$500,000 PAID IN ONE TRANSACTION, OR WHO IN ALL THE CIRCUMSTANCES CAN PROPERLY BE REGARDED AS HAVING BEEN SELECTED OTHER THAN AS MEMBERS OF THE PUBLIC. SHARES IN THE FUND MAY NOT BE SOLD OR OFFERED IN CONTRAVENTION OF THE SECURITIES ACT 1978, AND THIS OFFERING MEMORANDUM IS NOT INTENDED AS AN OFFER FOR SALE OR SUBSCRIPTION TO THE PUBLIC IN NEW ZEALAND IN TERMS OF THE SECURITIES ACT THERE ARE RESTRICTIONS ON THE OFFER AND SALE OF SECURITIES IN AUSTRALIA. ANY PERSON WHO IS ENGAGED IN ANY ACTIVITY WITH RESPECT TO SECURITIES THAT ARE IN ANY WAY ASSOCIATED WITH AUSTRALIA MUST COMPLY WITH ALL APPLICABLE PROVISIONS OF THE CORPORATIONS ACT THIS OFFERING MEMORANDUM HAS NOT BEEN ISSUED TO PERSONS IN AUSTRALIA EXCEPT TO THOSE PERSONS WHO ARE WHOLESALE CLIENTS IN TERMS OF SECTION 761G OF THE CORPORATIONS ACT SHARES IN THE FUND MAY NOT BE SOLD OR OFFERED IN CONTRAVENTION OF THE CORPORATIONS ACT 2001, AND THIS OFFERING MEMORANDUM IS NOT INTENDED AS AN OFFER TO ANY PERSON OTHER THAN A WHOLESALE CLIENT IN TERMS OF THE CORPORATIONS ACT THE SHARES OF THE FUND HAVE NOT BEEN REGISTERED UNDER ANY UNITED STATES SECURITIES LEGISLATION AND ARE NOT BEING OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA OR IN ANY OF ITS TERRITORIES OR POSSESSIONS OR AREAS SUBJECTED TO ITS JURISDICTION OR TO US PERSONS. FOR THE PURPOSES OF THIS OFFERING MEMORANDUM, U.S. PERSON MEANS (A) ANY NATURAL PERSON RESIDENT IN THE UNITED STATES; (B) ANY PARTNERSHIP OR CORPORATION ORGANIZED OR INCORPORATED UNDER THE LAWS OF THE UNITED STATES; (C) ANY ESTATE OF WHICH ANY EXECUTOR OR ADMINISTRATOR IS A U.S. PERSON; (D) ANY TRUST OF WHICH ANY TRUSTEE IS A U.S. PERSON; (E) ANY AGENCY OR BRANCH OF A FOREIGN ENTITY LOCATED IN THE UNITED STATES; (F) ANY NON-DISCRETIONARY ACCOUNT OR SIMILAR ACCOUNT HELD BY A DEALER OR OTHER FIDUCIARY FOR THE BENEFIT OR ACCOUNT OF A U.S. PERSON; (G) ANY DISCRETIONARY ACCOUNT OR SIMILAR ACCOUNT HELD BY A DEALER OR OTHER FIDUCIARY ORGANIZED, INCORPORATED OR, IF AN INDIVIDUAL, RESIDENT IN THE UNITED STATES; OR (H) ANY PARTNERSHIP OR CORPORATION IF (I) ORGANIZED OR INCORPORATED UNDER THE LAWS OF ANY FOREIGN JURISDICTION AND (II) FORMED BY A U.S. PERSON PRINCIPALLY FOR THE PURPOSE OF INVESTING IN SECURITIES NOT REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT ), UNLESS IT IS ORGANIZED OR INCORPORATED, AND OWNED, BY ACCREDITED INVESTORS (AS DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT) WHO ARE NOT NATURAL 5

6 PERSONS, ESTATES OR FUNDS. U.S. PERSON DOES NOT INCLUDE: (A) ANY DISCRETIONARY ACCOUNT OR SIMILAR ACCOUNT (OTHER THAN AN ESTATE OR FUND) HELD FOR THE BENEFIT OR ACCOUNT OF A NON-U.S. PERSON BY A DEALER OR OTHER PROFESSIONAL FIDUCIARY ORGANIZED, INCORPORATED OR, IF AN INDIVIDUAL, RESIDENT IN THE UNITED STATES; (B) ANY ESTATE OF WHICH ANY PROFESSIONAL FIDUCIARY ACTING AS EXECUTOR OR ADMINISTRATOR IS A U.S. PERSON IF (I) AN EXECUTOR OR ADMINISTRATOR OF THE ESTATE WHO IS NOT A U.S. PERSON HAS SOLE OR SHARED INVESTMENT DISCRETION WITH RESPECT TO THE ASSETS OF THE ESTATE AND (II) THE ESTATE IS GOVERNED BY FOREIGN LAW; (C) ANY FUND OF WHICH ANY PROFESSIONAL FIDUCIARY ACTING AS TRUSTEE IS A U.S. PERSON IF A TRUSTEE WHO IS NOT A U.S. PERSON HAS SOLE OR SHARED INVESTMENT DISCRETION WITH RESPECT TO THE FUND ASSETS, AND NO BENEFICIARY OF THE FUND (AND NO SETTLOR IF THE FUND IS REVOCABLE) IS A U.S. PERSON; (D) AN EMPLOYEE BENEFIT PLAN ESTABLISHED AND ADMINISTERED IN ACCORDANCE WITH THE LAW OF A COUNTRY OTHER THAN THE UNITED STATES AND CUSTOMARY PRACTICES AND DOCUMENTATION OF SUCH COUNTRY; (E) ANY AGENCY OR BRANCH OF A U.S. PERSON LOCATED OUTSIDE THE UNITED STATES IF (I) THE AGENCY OR BRANCH OPERATES FOR VALID BUSINESS REASONS AND (II) THE AGENCY OR BRANCH IS ENGAGED IN THE BUSINESS OF INSURANCE OR BANKING AND IS SUBJECT TO SUBSTANTIVE INSURANCE OR BANKING REGULATION, RESPECTIVELY, IN THE JURISDICTION WHERE LOCATED; OR (F) THE INTERNATIONAL MONETARY FUND, THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, THE INTER-AMERICAN DEVELOPMENT BANK, THE ASIAN DEVELOPMENT BANK, THE AFRICAN DEVELOPMENT BANK, THE UNITED NATIONS AND THEIR AGENCIES, AFFILIATES AND PENSION PLANS. AS THE FUND'S NET ASSET VALUE WILL BE CALCULATED IN U.S. DOLLARS, EACH HOLDER OF SHARES (THE SHAREHOLDER ), AND NOT THE FUND, WILL BEAR THE RISK OF ANY FOREIGN CURRENCY EXPOSURE RESULTING FROM DIFFERENCES, IF ANY, IN THE VALUE OF THE U.S. DOLLAR RELATIVE TO THE CURRENCY IN WHICH SUCH SHAREHOLDER MAINTAINS ITS NET WORTH. TO THE BEST OF THE KNOWLEDGE AND BELIEF OF THE DIRECTORS OF THE FUND, WHO HAVE TAKEN ALL REASONABLE CARE IN REVIEWING THIS DOCUMENT, THE INFORMATION CONTAINED IN THIS DOCUMENT IS ACCURATE AND DOES NOT OMIT ANYTHING LIKELY TO AFFECT THE IMPORT OF SUCH INFORMATION. ALL MONETARY AMOUNTS SET FORTH HEREIN ARE EXPRESSED IN U.S. DOLLARS. 6

7 TABLE OF CONTENTS 1. THE FUND 1.1 Structure of the Fund 1.2 The Fund Administrator 1.3 The Custodian 1.4 The Investment Manager 1.5 The Auditor 2. INVESTMENT POLICY 2.1 Investment Objectives 2.2 Investment Strategies 2.3 Investment Restrictions 2.4 Borrowing 2.5 Distribution 2.6 List on Stock Exchange 2.7 Liquidity of the Fund s Assets 3. MANAGEMENT 3.1 Board of Directors 3.2 Fund Managers 3.3 Penalties, Sanctions and Bankruptcy 4. FEE STRUCTURE 4.1 Director Fees 4.2 Investment Manager Fees 4.3 Fund Administrator Fees 4.4 Custodian Fees 4.5 Company Secretary Fees 4.6 Auditor Fees 4.7 Other Fees & Expenses 5. SUBSCRIPTION & REDEMTION POLICY 5.1 Subscription 5.2 Subscription Procedure 5.3 US Persons 5.4 United Kingdom Persons 5.5 New Zealand Persons 5.6 Australia Persons 5.7 Redemption Procedures 5.8 Temporary Suspension of Dealings 5.9 Registration and Transfer of Shares 5.10 Purchaser s Rights 7

8 6. FUND PRICING 6.1 Determination of Net Asset Value 6.2 Currency Valuations 6.3 Calculation of Fund s Share Price based upon Net Asset Value 7. RISK FACTORS 8. POTENTIAL CONFLICTS OF INTEREST 9. TAXATION 9.1 Introduction 9.2 The Fund 9.3 Shareholders of the Fund 10. ADDITIONAL INFORMATION 10.1 Material Contracts 10.2 Reports to the Shareholders 10.3 Available Documents 10.4 Auditor s Consent 10.5 Bermuda Counsel 10.6 Enquiries and Communication with the Fund 10.7 Exchange Control 10.8 General Information APPENDIXES APPENDIX 1 APPENDIX 2 BCB Bond Fund Directory BCB Bond Fund Definitions 8

9 1. THE FUND 1.1 Structure of the Fund The Fund was incorporated as an exempted company under the laws of Bermuda on 18 January 2012 and is authorised as an administered fund under the Investment Funds Act 2006 of Bermuda. The total minimum subscription to be raised by the fund is US$10 million. The Fund s year end will be 30 September. The Management Shares only carry the right to vote in relation to the appointment and removal of the Directors and/or service providers of the Fund and consequently, the Shareholders will have virtually no control over the management of the Fund. ICM, as holder of all of the Management Shares, controls all of the voting interests in the Fund save for votes in relation to share class variations and changes to the investment strategy of the Fund in relation to which the Shareholders retain the right to vote in accordance with the provisions of the Bye-Laws. The Board of Directors may terminate the services of the Fund Administrator, the Custodian, the Investment Manager, and other agents of the Fund. An investment in the Company should therefore be regarded as a passive investment. This Memorandum is subject to and qualified in its entirety by reference to the Bye-Laws, which should be reviewed for complete information concerning the rights, privileges and obligations of Shareholders. In the event of any inconsistency between the content of this Memorandum and the Bye-Laws, the Bye- Laws shall take precedence and the Board of Directors will seek to resolve such inconsistency as soon as possible after it has come to the attention of the Board and will notify Shareholders accordingly. 1.2 The Fund Administrator The Fund has entered into an administration agreement with IKONIC Fund Services Ltd. (as the same may be amended, restated or otherwise modified, the Administration Agreement ). Pursuant to the Administration Agreement, the Fund has appointed IKONIC Fund Services Ltd. as fund administrator to provide the following services: registrar and transfer agency, AML/ATF screening and monitoring and fund accounting (the Fund Administrator ). The Fund Administrator was incorporated on May 23, 2007 as an exempted company and received its Fund Administrator License under the Bermuda Monetary Authority Investment Funds Act 2006 on August 6, The Fund Administrator has wholly owned subsidies in the U.S.A and the Cayman Islands. The Fund Administrator s Cayman office was granted its Corporate Services License under the Cayman Islands Monetary Authority Companies Management Law (2003 Revision) on April 5, The Fund has agreed to pay the Fund Administrator such customary fees for its services as the Fund and the Fund Administrator negotiate from time to time. The Administration Agreement is terminable by either party on three months' prior written notice. Pursuant to the Administration Agreement between the Fund and the Fund Administrator there are various indemnities including an indemnity whereby the Fund agrees to indemnify and hold harmless the Fund Administrator, its employees, shareholders, agents, affiliates, subsidiaries, directors, officers and any person who controls the Fund Administrator against and from any and all liabilities, obligations, losses, damages, penalties, actions, judgments, claims, demands, suits, costs, expenses or disbursements 9

10 of any kind or nature whatsoever (Claim) which may be imposed on, incurred by or asserted against any of them howsoever arising (other than by reason of the gross negligence, fraud or willful misconduct on the part of the Fund Administrator or any other Indemnified Party). Similarly the Fund has agreed to indemnify against any inaccuracy or incompleteness of any information supplied to the Fund Administrator. For the purpose of calculating the NAV of the Fund and where applicable, the NAV per unit of the Interests, the Fund Administrator shall, and shall be entitled to, rely on, and will not be responsible for or liable to the Fund Parties or any other person for the accuracy of, financial data furnished to it by any Fund Party, any of the Fund s counterparties, brokers, custodians or market makers and independent third party pricing and valuation services. Without limiting the generality of the foregoing, if, in accordance with the Fund s valuation policies and procedures set out in the Material Documents, the Investment Manager is responsible for, or otherwise involved in, the pricing of the Fund s investments or other assets, the Fund Administrator may accept, use and rely on such prices in determining the NAV of the Fund and shall not be liable to any Fund Party, any Fund Investor or any other person in so doing. 1.3 The Custodian Bermuda Commercial Bank Limited is the Custodian of the Fund pursuant to the Custodian Agreement dated, 2 March 2012 between BCB and the Fund. BCB is one of Bermuda s four licensed banks and was established in It is listed on the Bermuda Stock Exchange, with approximately 800 shareholders. It is the only bank in Bermuda focused solely on commercial, corporate and high net worth clients. BCB offers an array of banking solutions including a full range of custody, trust services, corporate services, and asset and wealth management. As at 30 September 2011, BCB had assets of approximately US$532 million, a total capital ratio of 27.1% and total assets under custody of approximately US$1 billion. The Custodian will act as the Fund s custodian for the purpose of holding all or a portion of the Fund s assets which the Fund may acquire from time to time for the benefit of the Fund for so long as such assets are held by it or to its order. The Custodian will also provide certain services, including, all reporting required by the BMA and monitoring (retrospectively) in compliance with the investment guidelines of the Fund from time to time. Subscription funds will be maintained in a segregated account at the Bank until turned over to the Fund or returned to the subscribers. Once trading commences, the Fund will maintain its primary bank accounts at the Custodian. Transfers of Fund assets for trading purposes to the brokers and financial institutions where the Fund will maintain its trading accounts will be made via wire transfer following proper instructions from the Fund or its designated agents, including the Investment Manager. The Fund will provide the Custodian with a list of all authorized transferees of Fund assets. Withdrawals from Fund accounts for the payment of Fund expenses, as well as redemption payments and distributions, if any, will require proper authorization from the Fund or its designated agents before payments will be released. The Custodian will not be responsible for the custody of any Fund assets which have been transferred to an authorized transferee of the Fund outside of the Custodian s own sub-custodian network. Further, the Custodian assumes no responsibility for monitoring or verifying the activities of the Investment Manager or the brokers or financial institutions involved with the Fund, or for verifying the existence or value of the Fund s assets held by the brokers or financial institutions. The Custodian Agreement excludes the Custodian from any liability except in the case of gross negligence or willful default and provides that the Fund will indemnify the Custodian against all actions, proceedings, claims, costs, demands and expenses which may be brought against or suffered or incurred 10

11 by reason of any action or omission undertaken in the performance or non-performance of the Custodian s obligations, functions or duties or the exercise of any of its delegated powers or otherwise, except such actions or omissions as constitute gross negligence or willful default or are not performed in good faith. The Custodian Agreement may be terminated by the Fund or the Custodian for cause, at any time, and otherwise upon 3 months prior written notice from the Custodian to the Fund or upon 3 months prior written notice from the Fund to the Custodian. 1.4 The Investment Manager ICM Limited has been appointed the Investment Manager of the Fund pursuant to the Investment Management Agreement dated 2 March 2012 between ICM and the Fund. ICM will manage the investment, disposal and re-investment of the Fund s assets in accordance with the investment policy of the Company and with a view to achieving the Company s investment objectives. ICM is a Bermuda based fund manager and corporate finance adviser ( ICM (and its predecessor companies) has been an investment manager for over 20 years and has expertise in equities, convertible bonds, fixed income and derivatives. ICM has made investments in over 20 countries and currently manages over $1.5 billion of assets. ICM provides investment management services including portfolio monitoring and research to a number of companies and non-profit organizations including two London Stock Exchange listed investment companies, Utilico Investments Limited and Utilico Emerging Markets Limited. ICM is also the investment adviser to BCB and manages BCB s investment portfolio. The Investment Management Agreement may be terminated by the Fund or the Investment Manager for cause, at any time, and otherwise upon 6 months prior written notice to the other party. 1.5 The Auditor The Fund has appointed Ernst & Young Ltd. as the independent auditors of the Fund and they have confirmed their acceptance of their appointment as auditors of the Fund. The Auditors have given and not withdrawn their written consent to inclusion of the references as to them in the form and context in which they are included. The Fund reports its results to Shareholders in U.S. dollars in accordance with IFRS. The information in this Memorandum is qualified in its entirety by the agreements and documents referred to herein and by the Bye-Laws, copies of which are available from the Fund Administrator upon request. 11

12 2. INVESTMENT POLICY 2.1 Investment Objectives The principal objective of the Fund is to provide Shareholders with an opportunity to invest in a portfolio of predominantly high yielding, investment grade debt securities that offer long-term capital appreciation and regular income. The Investment Manager has complete discretionary authority over the terms of the investment strategy, 2.2 Investment Strategies The Investment Manager shall make reasonable efforts to preserve overall capital, even though losses may occur in individual securities. While some risk is necessary to produce long-term investment returns, the Investment Manager will make reasonable efforts to control, manage and mitigate risk and it will seek to achieve its objectives through various techniques and strategies such as: Diversification To achieve its investment objective the Fund will invest in debt securities which may consist of bonds, debentures, notes, bills and any suitable quality investments which in the opinion of the Investment Manager will assist in achieving the Fund s stated investment objectives. Investments will primarily centre on corporate debt and not sovereign debt. In order to increase the Fund s returns, the Fund will invest in securities across different countries, currencies, industries and sectors. As per the Bye-Laws there are no restrictions with regard to the percentage allocation of the currency of security that the Fund may hold at any time. Given the current global environment, increased diversification should reduce the risk that the Fund is exposed to one particular sector or currency and therefore improve the Fund s overall returns Maintaining an acceptable credit rating for underlying assets The Fund will invest predominantly in investment grade debt securities. The targeted minimum credit rating for any debt security that the fund can invest in is BBB-. The Fund may hold debt securities of a credit rating below BBB- if the Investment Manager deems the investment to be suitable in order to achieve the Fund s investment objectives. If a security should be downgraded below BBB- after the date of the initial purchase, the Fund may still hold such security. It is intended that at the date of purchase the debt securities should have a targeted maturity or weighted average life less than, or equal to, 10 years. However, at the discretion of the Investment Manager, the Fund may invest in debt securities with a maturity of greater than 10 years if the securities are tradable Yield The Fund intends to invest in debt securities which are high yielding. It is intended that the securities at the time of purchase will have an annual yield of at least 5%. 12

13 2.2.4 Hedging The Fund, while valued in US Dollars, may purchase securities denominated in any other currency. The Fund will reduce the risk of holding non US Dollar denominated currencies by hedging both the capital and interest exchange rate risk. At the discretion of the Investment Manager there may be certain currencies that are not hedged as the Investment Manager may deem them to be undervalued and consequently the Fund s assets in these currencies will be exposed to exchange rate risk. The Investment Manager may also undertake certain derivative transactions, such as buying and selling of put options, in order to hedge against macroeconomic events and protect the Fund s Net Asset Value Portfolio Rebalancing The Investment Manager will be responsible for rebalancing the portfolio on a regular basis to take advantage of economic, industry and financial market conditions and aligning the portfolio with riskreturn targets. The Fund should be considered only as part of a diversified portfolio and not as a balanced investment program. There can be no assurance that Fund s investment objectives will be successful but it is the intention of the Investment Manager to follow its stated strategy as closely as economic and political conditions may dictate in the future to meet the objectives of the Fund. Investment in the Fund entails a degree of risk. Section 7 of this Memorandum sets out a summary of the Fund s risk factors. 2.3 Investment Restrictions The Fund will not engage in any undertaking other than the investment of the Fund s assets in accordance with the Fund s investment objectives. 2.4 Borrowing The Bye-Laws permit the Fund to borrow money under certain specified circumstances. The Fund is authorized to borrow in order to fund redemption requests or meet any temporary shortage of funds created by such requests and to enhance its investment leverage. Generally, loans will be obtained from the Bank and/or from other financial institutions. Any borrowings incurred by the Fund may be secured upon the assets of the Fund. The Fund may borrow up to 25% of the Fund s gross assets. 2.5 Distribution It is the intention of the Fund to distribute income to Shareholders by way of dividend payments. Distributions will be paid to Shareholders on a quarterly basis, unless otherwise specified and subject to the discretion of the Board of Directors. 2.6 List on Stock Exchange This Offering is not a public offering. The Shares offered hereby have not been registered or qualified with, nor approved or disapproved by, any regulatory authority, nor has any regulatory authority passed upon the accuracy or adequacy of this Memorandum. The Directors may seek to list the Shares of the Fund on a stock exchange in the future and reserve the right to do so at their discretion without further advice to Shareholders. Until such time, it is not anticipated that any secondary market for the Shares will 13

14 develop. Further, Shares are not transferable without the prior written consent of the Directors, which consent may be withheld in their sole discretion. 2.7 Liquidity of the Fund s Assets To date, there is no market for the Shares and no secondary market is expected to develop to provide Shareholders with liquidity. The Shareholders ability to redeem their Shares may also be limited by the Directors decision to suspend the valuation of the Shares, or to carry forward large redemption requests and the holders of such Shares may be paid the full redemption value of their investment in installments. The underlying investments of the Fund may also limit the liquidity of the Fund. In addition, the transfer or disposition of Shares is subject to the approval of the Board of Directors. Such restrictions on the transferability of Shares may further limit their liquidity. 14

15 3. MANAGEMENT 3.1 Board of Directors The Board of Directors are responsible for the overall management of the Fund. The Fund will rely on the Board of Directors to establish investment policies and restrictions for the Fund and put in place processes and procedures to regularly evaluate such policies in consultation with the Investment Manager and Fund Administrator. The powers, duties and discretions of the Board of Directors are set out in the Bye-Laws. The Board of Directors has overall authority over, and responsibility for, the proper management of the assets of the Fund. The Directors of the Fund are: Jon L. Brunson Mr. Brunson is a director of BCB and a number of other companies and public bodies in Bermuda including Colonial International Group, The Learning Disabilities Association of Bermuda and the Bermuda Overseas Missions. He worked for Orbis Investment Management Limited for 13 years and is a former Member of Parliament and Deputy Leader of the Opposition in Bermuda. He has a Bachelor of Arts in Business Administration & Computer Science and a Master of Arts in Management and Human Resources Development. Ray McMahon Mr. McMahon is Head of Canaccord Genuity (formerly Collins Stewart Hawkpoint) in Ireland. Mr. McMahon joined Collins Stewart Hawkpoint in February 2009 after 9 years at Merrill Lynch where he was Head of Fixed Income in Ireland. In this role, Mr. McMahon had responsibility for all institutional fixed income business in Ireland. Prior to joining Merrill Lynch, Mr. McMahon spent over 5 years working as a software engineer. Mr. McMahon graduated from the National University of Ireland in 1992 with a B.A in Political Science and Economics. In 1994 he completed a Graduate Diploma is Systems Analysis and Design at the National University of Ireland. Mr. McMahon is a Series 7 license holder from the NASD and is currently completing an M.Sc in Investment and Treasury from Dublin City University. Gregory Reid Mr. Reid is based in Ireland and is an employee of ICM Limited. Prior to joining ICM he was formerly the Chief Financial Officer and a director of BCB and the financial controller of BISYS Hedge Fund Services Ltd., a Bermuda based provider of accounting services to the hedge fund industry. Mr. Reid is a member of the Institute of Chartered Accountants in Ireland and has a number of years experience in the auditing industry having worked with the accounting firm Deloitte & Touche in their Limerick, Ireland office. 3.2 Fund Managers The Fund will be managed by the following individuals: Duncan Saville Mr Saville is a chartered accountant and a director of ICM. He is a non-executive director of listed companies, Infratil Limited, West Hamilton Holdings Limited and New Zealand Oil & Gas Limited and was formerly a non-executive director of Utilico Investment Trust plc, The Special Utilities Investment Trust PLC, East Surrey Holdings plc, Dee Valley Group plc, Glasgow Prestwick International Airport Limited and Wellington International Airport Limited. 15

16 Gavin Blessing Gavin Blessing graduated with a Bachelor of Commerce degree from University College Dublin, Ireland in 1992 and is a qualified Chartered Accountant and Chartered Financial Analyst. He has 20 years of experience working in the financial markets, 14 of which have been spent in the area of Credit, both Investment Grade and High Yield, He worked as a Credit Research Analyst and Portfolio Manager at Goldman Sachs Asset Management in London for 10 years and subsequently as Head of Credit Origination at ISTC in Dublin, Ireland. Prior to joining ICM he was Head of Bond Credit Research at Canaccord Genuity in Dublin. Conor Spencer Conor has worked in the International financial markets for over nine years. Prior to joining ICM, Conor worked as a Senior Credit Research Analyst and Fixed Income Portfolio Manager at Dexia S.A. Previous to that he worked within the Treasury Department of Anglo Irish Bank where his roles included helping to manage the liquidity of the bank as well as conducting bank and structured credit research and analysis. Conor has also lectured in Management Science and Statistics in the Dublin Institute of Technology (DIT). Conor holds an honours degree in Management Science and French from DIT and has obtained two post graduate diplomas in Applied Computing from the University of Limerick and DIT. 3.3 Penalties, Sanctions and Bankruptcy There are no penalties or sanctions that have been in effect during the last five (5) years against any executive officer, director or control person of the Fund or against a company of which any of the foregoing was an executive officer, director or control person at the time. No declaration of bankruptcy, voluntary assignment in bankruptcy, proposal under any bankruptcy or insolvency legislation, proceedings, arrangement or compromise with creditors or appointment of a receiver, receiver manager or trustee to hold assets, has been in effect during the last five (5) years with regard to any executive officer, director or control person of the Fund or any company of which any of the foregoing was an executive officer, director or control person at that time. 16

17 4. FEE STRUCTURE 4.1 Director Fees The Directors will each be paid an annual fixed fee of US$5,000 payable quarterly in arrears. The Directors will also be reimbursed for all reasonable out-of-pocket expenses incurred on behalf of the Fund. 4.2 Investment Manager Fees For performing investment management services for the Fund, the Investment Manager will receive an annual investment management fee of 0.50% of the Net Asset Value, calculated monthly and payable quarterly in arrears. The Investment Manager will also be reimbursed for all reasonable out-of-pocket expenses incurred on behalf of the Fund. 4.3 Fund Administrator Fees For performing and supervising the performance of corporate, registrar and transfer agent and administrative services necessary for the operation and administration of the Fund (other than the making of investment decisions), the Fund Administrator will receive an annual fixed fee payable monthly in arrears. The Fund Administrator will also be reimbursed for all reasonable out-of-pocket expenses incurred on behalf of the Fund. 4.4 Custodian Fees For its services, the Custodian will receive an annual fixed fee of US$20,000 payable quarterly in arrears. The Custodian will also be reimbursed for all reasonable out-of-pocket expenses incurred on behalf of the Fund. 4.5 Company Secretary Fees For its services, the Company Secretary will receive an annual fixed fee of US$3,000, payable quarterly in arrears. The Company Secretary will also be reimbursed for all reasonable out-of-pocket expenses incurred on behalf of the Fund. 4.6 Auditor Fees For its services, the Auditor will receive a fee based on the rates for the various personnel on the engagement team and the time required to complete the audit. The initial annual audit fee will be approximately US$20,000. The Auditor will also be reimbursed for all reasonable out-of-pocket expenses incurred on behalf of the Fund. 4.7 Other Fees & Expenses The Fund bears all other expenses incidental to its operations and business, including: interest and commitment fees on loans and debit balances; income taxes, withholding taxes, transfer taxes and other governmental charges and duties; the cost of maintaining the Fund's registered office in Bermuda; 17

18 the cost of printing and distributing this Memorandum and any subsequent information memorandum or other literature concerning the Fund, and subscription materials and any reports and notices to Shareholders; consultant and other services provider expenses deemed desirable in the sole discretion of the Board of Directors, the cost of insurance premiums (if any), including, without limitation, the cost of director and officer liability insurance policies; the Fund's annual Bermuda Government registration fee based on its assessable capital ; and all similar ongoing operational expenses. All Directors will receive reimbursement of travel and other reasonable costs incurred in connection with their services. Other fees and expenses will be charged to the Fund as a whole or otherwise at the discretion of the Board of Directors. 18

19 5. SUBSCRIPTION & REDEMPTION POLICY 5.1 Subscription The Initial Offering Period in respect of the Shares shall commence on the date of the approval of this Memorandum by the BMA and will end 20 Business Days after the date of such approval. During the Initial Offering Period, investors may subscribe for Shares at a price per Share of US$ Once the Fund is operational, Shares may be purchased on each Dealing Day (as defined herein) in accordance with the Subscription Agreement. The minimum initial subscription for each investor with respect to the Shares is US$50, The minimum additional investment for an existing Shareholder is US$1, which may be waived or reduced by the Board of Directors in its discretion on a case by case basis. Subscriptions are payable in U.S. Dollars. 5.2 Subscription Procedure Applications for Shares will be accepted during the Initial Offering Period. Application for Shares should be made by completing and signing the Subscription Agreement accompanying this Memorandum and delivering the same to the Fund Administrator at the address set out in Appendix 2 to this Memorandum. Alternatively, application may be made by facsimile or (attaching a pdf of the Subscription Agreement) by completing and signing the Subscription Agreement and returning the same to the Fund Administrator stating: the amount to be invested; how payment has been made or is being made for the amount due if the application is accepted; acknowledgement of receipt of the Memorandum and confirmation that the application is being made on the terms thereof together with the Bye-Laws and subject to the Subscription Agreement; and the name and address in which the Shares are to be registered. In the event that application is made by facsimile or , the applicant must send the signed original application to the Fund Administrator immediately thereafter. Payment for Shares may be made by wire transfer to avoid any delay in the allotment of such Shares. Applicants are advised whenever possible to make payment by telegraphic transfer to avoid any delay in the allotment of Shares. The Board of Directors has the right to accept or reject (in whole or part) any application for Shares. Applicants should be aware of the risks associated with sending faxed applications and that the Fund Administrator accepts no responsibility for any loss caused due to the non-receipt of any fax. If paying by check, please contact the Fund Administrator to determine how far in advance the draft should be delivered to allow adequate time for the funds to clear. Unless otherwise agreed to by the Fund Administrator, applications for the issuance of Shares on a particular Dealing Day must be received by 5:00 p.m. (Bermuda time) at least five (5) Business Days immediately preceding the relevant Dealing Day with cleared funds to be received by the relevant Dealing Day. Unless share certificates are specifically requested, Shares will be held in book entry form and in such cases, a contract note only will be sent to the applicant upon receipt of cleared funds and the properly completed application form and acceptance of such funds by the Fund. Applications received after this time will be held in an account and treated as applications for the next Dealing Day. Payment may also be made in cash equivalents and securities, subject to the approval of the Fund Administrator. 19

20 Applicants subscribing for Shares are advised that the Shares are issued subject to the provisions of the Bye-Laws. Subscriptions for Shares following the Initial Offering Period will be based on the Net Asset Value on the appropriate Valuation Day. The Company may, under the Bye-Laws, issue fractions of shares up to five decimal places. As part of the Fund's responsibility for the prevention of money laundering and financing of terrorism, it may require a detailed verification of the applicant's identity and the source of payment for the Shares. A detailed verification might not be required when: (a) (b) the applicant makes payment by wire transfer from an account held in the applicant's name at a financial institution residing in a jurisdiction with equivalent AML/CFT laws and regulations to Bermuda and pursuant to Bermuda AML/CFT laws and regulations, and the applicant's details appear in the confirmation of the wire transfer; or the application is made through a financial institution itself residing in Bermuda. These exceptions will apply only if the financial institution or intermediary referred to above is within a country recognized as having equivalent AML/CTF laws and regulations to Bermuda. In the case of (a) above, to avoid delays, the applicant should ensure that its remitting bank includes the applicant's full name and account number in any confirmation that it sends. The Fund Administrator reserves the right to request such additional information as it considers necessary to verify the identity of the applicant. In the event of delay or failure by the applicant to produce any information required for verification purposes, the Fund Administrator may refuse to accept the application and all subscription monies relating thereto or may refuse to process a redemption request until proper information has been provided. If the Fund Administrator has a suspicion that a payment to the Fund (by way of subscription or otherwise) contains the proceeds of criminal conduct or is any way connected to the financing of terrorism, it is required through the Fund s Reporting Officer to report such suspicion to the Financial Intelligence Agency pursuant to the AML/CFT laws and regulations. Any prospective investor acting in any fiduciary capacity is required to certify the number of beneficial owners for whom Shares are being purchased. Furthermore, it is the responsibility of each investor to verify that the purchase and payment for the Shares and payment of dividends or any other benefit accrued is in compliance with all relevant laws of the investor's jurisdiction or residence. The Board of Directors reserves the right to offer Shares to Restricted Persons upon compliance with applicable rules and regulations and reserves the right to reject subscriptions for Shares, in whole or in part, in its absolute discretion for any reason. 5.3 US Persons The Shares are not being offered to U.S. persons. For the purposes of this Memorandum, U.S. Person means: (a) (b) (c) (d) (e) any natural person resident in the United States; any partnership or corporation organized or incorporated under the laws of the United States; any estate of which any executor or administrator is a U.S. Person; any trust of which any trustee is a U.S. Person; any agency or branch of a foreign entity located in the United States; 20

21 (f) (g) (h) any non-discretionary account or similar account held by a dealer or other fiduciary for the benefit or account of a U.S. Person; any discretionary account or similar account held by a dealer or other fiduciary organized, incorporated or, if an individual, resident in the United States; or any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a U.S. Person principally for the purpose of investing in securities not registered under the United States Securities Act of 1933, as amended (the Securities Act ), unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or Funds. U.S. Person does not include: (a) (b) (c) (d) (e) (f) any discretionary account or similar account (other than an estate or fund) held for the benefit or account of a non U.S. Person by a dealer or other professional fiduciary organized, incorporated or, if an individual, resident in the united States; any estate of which any professional fiduciary acting as executor or administrator is a U.S. Person if (i) an executor or administrator of the estate who is not a U.S. Person has sole or shared investment discretion with respect to the assets of the estate and (ii) the estate is governed by foreign law; any fund of which any professional fiduciary acting as trustee is a U.S. Person if a trustee who is not a U.S. Person has sole or shared investment discretion with respect to the fund assets, and no beneficiary of the fund (and no settlor if the fund is revocable) is a U.S. Person; an employee benefit plan established and administered in accordance with the law of a country other than the United States and customary practices and documentation of such country; any agency or branch of a U.S. Person located outside the United States if (i) the agency or branch operates for valid business reasons and (ii) the agency or branch is engaged in the business of insurance or banking and is subject to substantive insurance or banking regulation, respectively, in the jurisdiction where located; or the International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the United Nations and their agencies, affiliates and pension plans. Unless otherwise agreed to by the Board of Directors, each prospective investor is required to certify that the Shares will not be acquired directly or indirectly for the account or benefit of a US person. 5.4 United Kingdom Persons This Offering Memorandum: (a) (b) has not been issued to persons in the United Kingdom except to those persons whose ordinary activities involve them acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances within the meaning of the Public Offers of Securities Regulations 1995; does not include an invitation or inducement in connection with the issue or sale of Shares or otherwise to engage in investment activity (within the meaning of section 21 of the Financial Services Markets Act 2000 (the FSMA ) pursuant to this Memorandum been communicated or caused to be communicated and will only be communicated or caused to be communicated or in circumstances in which section 21(1) of the FSMA does not apply to the Fund; and 21

22 (c) has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Shares or otherwise involving the United Kingdom. The Bye-Laws provide that the Board of Directors has the power to impose such restrictions as it may deem necessary for the purpose of ensuring that no Shares are acquired or held by any person or persons in circumstances (whether directly or indirectly affecting such person or persons) which, in the opinion of the Board of Directors, might result in the Fund incurring any tax liability or suffering any other pecuniary or commercial disadvantage that the Fund might not otherwise have incurred or suffered ( a Non-Qualified Person ). In the event that the Fund incurs any such tax liability or suffering or any other pecuniary or commercial disadvantage resulting from a Non-Qualified Person being a Shareholder, the Board of Directors may require such person to reimburse the Fund for such tax liability, suffering or disadvantage. 5.5 New Zealand Persons This Offering Memorandum has not been issued to persons in New Zealand except to those persons whose principal business is the investment of money or who, in the course of and for the purpose of their business, habitually invest money or whose initial investment is no less than NZ$500,000 paid in one transaction, or who in all circumstances can properly be regarded as having been selected other than as members of the public. (a) (b) (c) This Offering Memorandum has been prepared solely for prospective investors who are not regarded by the Securities Act 1978 as members of the New Zealand public for the purposes of the offer of Shares set out in this Offering Memorandum. This Offering Memorandum is not intended as an offer for sale or subscription to the public in New Zealand in terms of the Securities Act This Offering Memorandum is not a registered prospectus or investment statement under the Securities Act Prospective investors in New Zealand should confer with their professional advisers if in any doubt about their position and seek their own legal and tax advice as to the implications of investing in the Fund. 5.6 Australia Persons This Offering Memorandum has not been issued to persons in Australia except to those persons who are Wholesale Clients as defined in section 761G of the Corporations Act This Offering Memorandum has been prepared solely for prospective shareholders who are not regarded by the Corporations Act 2001 as Retail Clients for the purposes of the offer of Shares set out in this Offering Memorandum. This Offering Memorandum is not intended as an offer for sale or subscription by Retail Clients in terms of the Corporations Act This Offering Memorandum is not a product disclosure statement under the Corporations Act Prospective shareholders in Australia should confer with their professional advisers if in any doubt about their position and seek their own legal and tax advice as to the implications of investing in the Fund. 22

23 5.7 Redemption Procedure Shareholder requests to redeem Shares should be delivered to the Fund Administrator and may be made by facsimile, or in writing. Facsimile requests must be immediately confirmed in writing. The following written information must be given: name; personal account number of the holder of Shares; and number of Shares to be redeemed. Redemption requests accepted by the Fund Administrator will be redeemed at the relevant Redemption Price on the Dealing Day. In order to redeem Shares at the next relevant Dealing Day, redemption requests must be received by no later than 5.00 p.m. Bermuda time on the Valuation Day at least one month preceding the month in which the relevant Dealing Day falls. Redemption payments shall be paid to a redeeming Shareholder as soon as practicable, but in any event generally within 5 Business Days after the relevant Dealing Day subject to the Bye-Laws. Redemption requests, once made, may only be withdrawn in the event of a suspension or deferral of the redemption of Shares. The Fund is not bound to redeem on any given Dealing Day more than 10% of the number of Shares in issue. If redemption requests are received in respect of a greater number of Shares, such requests may be scaled down to such extent as may be necessary to ensure that the foregoing limit is not exceeded and carried forward to the next Dealing Day and so on for each succeeding Dealing Day until each request has been redeemed in full. Redemption requests which have been carried forward from an earlier Dealing Day shall, subject to the foregoing limits, be redeemed in priority over later redemption requests. In certain circumstances, including but not limited to the inability of the Fund reasonably to determine the NAV by reason of the suspension of trading on any established market where interests of the Fund are traded, or default or delay in payments due to the Fund from other persons, the Board of Directors may suspend redemptions of Shares as of the applicable Dealing Day or delay payment to persons requesting redemption of Shares. In such cases, as soon as practicable thereafter such Shares shall be redeemed or such redemption payment made. If either the average NAV for any consecutive three-month period is less than US$1 million or the Board of Directors considers it advisable or prudent in the interests of Shareholders as a result of any enactment, legislation or otherwise, the Board of Directors may at its option redeem on the next Dealing Day all Shares then outstanding at a redemption price calculated in accordance with the Memorandum. The Board of Directors shall notify the Shareholders of such redemption no later than five business days prior to such Dealing Day. The Board may charge any Member receiving notice of such a compulsory redemption or purchase any costs and expenses associated therewith. 5.8 Temporary Suspension of Dealings The Board of Directors may, with the consent of the Fund Administrator, such consent not to be unreasonably withheld, declare a suspension of the determination of the Net Asset Value and/or Redemption Price of Shares for the whole or any part of any period:- during which any stock exchange, commodities exchange, futures exchange or over-the-counter market on which any significant portion of the investments of the Fund is listed, quoted, traded or 23

24 dealt in is closed (other than customary weekend and holiday closing) or trading on any such stock exchange or market is restricted or suspended; or when circumstances exist as a result of which in the opinion of the Board of Directors and Fund Administrator it is not reasonably practicable for the Fund to dispose of investments or as a result of which any such disposal would be materially prejudicial to the Shareholders; or when a breakdown occurs in any of the means normally employed in ascertaining the value of investments or the Net Asset Value when for any other reason the value of any of the investments or other assets of the Fund or the Net Asset Value cannot in the opinion of the Board of Directors and the Fund Administrator reasonably or fairly be ascertained; or during which the Fund is, in the opinion of the Board of Directors and the Fund Administrator, unable to realize or acquire investments at normal prices or to repatriate funds for the purpose of making payments on the redemption of Shares or during which any transfer of funds involved in the realizations or acquisition of investments or payments due on redemption of Shares of the Fund cannot in the opinion of the Board of Directors and the Fund Administrator be effected at normal rates of exchange; or when the Board of Directors otherwise determines that it is in the best interests of the Fund or the Shareholders to do so or such other circumstances as may be set out in the Bye-Laws. AND SUCH SUSPENSION shall take effect forthwith upon the declaration thereof and thereafter there shall be no determination of the Redemption Price until the Board of Directors following consultation with the Fund Administrator shall declare the suspension at an end, except that the suspension shall terminate in any event on the day following the first business day on which (a) the condition giving rise to the suspension shall have ceased to exist and (b) no other condition under which suspension is authorised under the Bye- Laws shall exist. Each declaration by the Board of Directors following consultation with the Fund Administrator pursuant to the Bye-Laws shall be consistent with such official rules and regulations, if any, relating to the subject matter thereof as shall have been promulgated by any authority having jurisdiction over the Fund and as shall be in effect at the time. To the extent not inconsistent with such official rules and regulations, and subject to the foregoing provisions hereof, the determination of the Fund Administrator shall be conclusive. Whenever the Board of Directors shall, following consultation with the Fund Administrator, declare a suspension of the determination of the Redemption Price under the provisions of the Bye-Laws, then, as soon as may be practicable after any such declaration, it shall cause a notice to be given to all relevant Shareholders whose applications to subscribe for or redeem Shares shall have been affected by such suspension, stating that such declaration has been made and the reason for the suspension, and at the end of any period of suspension, the Fund shall cause notice of termination of suspension to be given to all Shareholders and the said applicants. 24

25 5.9 Registration and Transfer of Shares Shares are issued only in book registered form unless otherwise requested and subject to the discretion of the Board of Directors. The Fund Administrator maintains a current register of Shareholders, and the Fund Administrator's entry in the register is conclusive evidence of ownership of such Shares. Certificates representing Shares will not be issued save for in exceptional circumstances and then only at the discretion of the Board of Directors. In accordance with Bermuda law and the Bye-Laws, Shares are only issued to and/or registered in the names of companies, partnerships or individuals that meet the requirements as set forth herein. Transfers of Shares by instruments in writing in the usual common form are permitted only with the prior consent of the Board of Directors, which consent may be withheld in the absolute discretion of the Board of Directors. Any transferee of Shares is required to furnish the same information and complete the same documents that would be required in connection with a direct subscription, including without limitation to complete the Subscription Agreement, in order for a transfer application to be considered by the Board of Directors Purchaser s Rights A Subscriber can cancel their agreement to purchase the Shares. To do so, a Subscriber must send a written notice to the Issuer by no later than a.m. midnight on the 5th Business Day after such Subscriber signs and delivers the Subscription Agreement to the Fund Administrator; provided that such written notice is received prior to the relevant Dealing Date. 25

26 6. FUND PRICING 6.1 Determination of Net Asset Value In accordance with the provisions of the Bye-Laws, as summarized herein, and under the overall supervision and direction of the Board of Directors, the Fund Administrator will calculate the Fund's Net Asset Value per Share as of the last Business Day of the relevant calendar month, or on another day, at the discretion of the Board of Directors. The Net Asset Value is equal to the Fund s assets less the Fund s liabilities, each valued pursuant to IFRS. The Fund s Net Asset Value will be published within 5 Business Days following the last Business Day of the relevant calendar month. The Net Asset Value per Share will be calculated by dividing the Fund s Net Asset Value by the number of Shares issued. Such calculation will be made by the Fund Administrator acting in good faith, after consulting with the Board of Directors. In no event shall the Fund or the Fund Administrator incur any individual liability or responsibility for any determination made or action taken or omitted by them in the absence of willful misfeasance, bad faith or gross negligence. In general, investments are valued as follows: securities, other than options, that are listed or admitted to trading on one or more securities exchanges shall be valued in accordance with IFRS at the last bid price on the exchange selected by the Board of Directors, after consulting with the Fund Administrator, acting in good faith, on the relevant Valuation Day; in the event the Board of Directors, after consulting with the Fund Administrator, deems the foregoing valuation method to be inadequately representative of an asset's value, the Board of Directors, after consulting with the Fund Administrator, acting in good faith and a commercially reasonable manner, may assign to such asset an alternate value. Independent appraisals may be conducted but are not required; and liabilities shall be determined using IFRS. In determining Net Asset Values based upon the above parameters, the following shall be subtracted: (a) management fees and administration fees that have accrued, as of the date of computation, but are not yet payable; (b) an allowance for the cost of the Fund's annual audit, legal domiciliary, Fund and other fees and expenses; and (c) any contingency for which reserves are determined to be appropriate. Net Asset Valuations are expressed in U.S. Dollars and any items denominated in other currencies are converted at prevailing exchange rates as determined by the Board of Directors. If the Board of Directors should determine, after consulting with the Fund Administrator, that special circumstances exist whereby the value of any asset or liability of the Fund should be determined in a manner other than as set forth above, the value of such asset or liability shall be the value assigned by the Board of Directors in good faith. Prospective investors should be aware that situations involving uncertainties as to the valuation of portfolio positions could have an adverse effect on the Net Asset Value determination if judgments regarding appropriate valuations should prove incorrect. Absent bad faith or 26

27 manifest error, the Board of Directors determination of Net Asset Value is conclusive and binding on all Shareholders and prospective investors. 6.2 Currency Valuations For purposes of calculating the Net Asset Value, any assets or liabilities initially expressed in terms of foreign currencies will be translated into a Fund s base currency at the official exchange rate or, alternatively, at the current bid price of such currencies against the Fund s base currency last quoted by a major bank that is a regular participant in the foreign exchange market or on the basis of a pricing service that takes into account the quotes provided by a number of such major banks. If neither of these alternatives is available or both are deemed not to provide a suitable method for converting a foreign currency to the Fund s Base Currency, the Fund Administrator in good faith will establish a conversion rate for such currency, after consultation with the Investment Manager. 6.3 Calculation of Fund s Share Price based upon Net Asset Value Shares are valued in two parts. The first is an offer basis (the Subscription Price ) and the second is a bid basis (the Redemption/Price as the context permits). After the Initial Offering Period, the Subscription Price is the Net Asset Value per Share as calculated on any Valuation Day plus any placement charges which may be applicable. The Redemption Price is the Net Asset Value per Share as calculated on any Valuation Day minus any fees and service charges, such as, for example, telegraphic wire transfer charges or courier charges, that may be applicable. 27

28 7. RISK FACTORS Prospective investors should give careful consideration to the following risk factors in evaluating the merits and suitability of an investment in the Fund. The following does not purport to be a comprehensive summary of all of the risks associated with an investment in the Fund. Rather, the following are only certain risks to which the Fund is subject and that the Fund Administrator wishes to encourage prospective investors to discuss in detail with their professional advisers. (i) (ii) (iii) (iv) (v) (vi) Operating History. The Investment Manager has a proven track record over a number of years, but the Fund is an enterprise with no operating history. Accordingly, an investment in the Fund entails a degree of risk. There can be no assurance that the Fund will achieve its investment objective or that the strategies described herein will be successful. Given the factors that are described below, there exists a possibility that an investor could suffer a loss on their investment as a result of an investment in the Fund. Reliance on Key Personnel. All decisions with respect to the investment of the Fund's capital will be made by the Board of Directors, which relies on the services of the Investment Manager. Shareholders will have no right or power to take part in the management of the Fund. As a result, the success of the Fund for the foreseeable future will depend largely upon the ability of the Investment Manager and should it terminate its relationship with the Fund, and should the replacement (if any) not equal their predecessor's performance, the profitability of the Fund's investments may suffer. Interest rates. When interest rates rise, debt security prices generally fall. The opposite is also generally true insomuch as debt security prices rise when interest rates fall. Changes in the value of a debt security will usually not affect the income the Fund receives but could affect the value of the Fund s shares. In general, securities with longer maturities are more sensitive to such price changes. Inflation. Inflationary conditions generally lead to a higher interest rate environment. Therefore, inflation has the same effect as interest rates. When the inflation rate rises, the price of a bond tends to drop, because the bond may not be paying enough interest to stay ahead of inflation. The longer a bond s maturity, the more chance there is that inflation will rise rapidly at some point and lower the bond s price. Inflation may therefore have a significant effect on the performance of the Fund s assets and also the Shareholder s real income. Concentration of Investments. Although it is the intention of the Fund to diversify its investment portfolio, at certain times the Fund may hold relatively few positions. From time to time a significant portion of the Fund's capital may be concentrated in a particular security, industry, market or country. Should such security, industry, market or country become subject to adverse financial conditions, the Fund's capital shall not be afforded the protection otherwise available through greater diversification of its investments. The Fund could suffer significant losses if it holds a large position in a particular investment that declines in value. Political and/or Regulatory Risks: Investing in foreign securities typically involves more risks, and includes risks associated with political and economic developments. The political, economic and social structures of some foreign countries may be less stable and more volatile than those in more established markets such as the U.S. as foreign issuers may not be subject to the same disclosure, accounting and financial reporting standard and practices as U.S. issuers. Foreign markets may be less liquid making, certain foreign securities harder to sell and more volatile. 28

29 Currency rates may fluctuate. The risks of foreign investments are greater in less developed countries or emerging market countries. (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) (xv) (xvi) Credit: An issuer of debt securities may fail to make interest payments and repay principal when due. Changes in an issuer s financial strength or in a security s rating may affect a security s value and therefore the Fund s performance. High yield debt securities: Issuers of lower rated or high yield debt securities are not as strong financially as those issuing higher credit quality debt securities. The prices of higher yielding debt securities generally fluctuate more than those of higher credit quality. Higher yield debt securities are generally more illiquid, that is harder to sell and value. Currency risk: The NAV will be calculated in US Dollars, whereas the Fund s investments may be acquired in other currencies. The value of the Fund s investments may therefore rise and fall due to exchange rate fluctuations if those currencies are not hedged. Adverse movements in currency exchange rates can result in a decrease in the Fund s returns and a loss of capital. Hedging positions: The Fund may utilize financial instruments for hedging purposes. This will not eliminate fluctuations in the value of the portfolio or prevent losses if the value of the portfolio declines, but establishes other positions designed to gain from those same developments, thus limiting the decline in the value of the portfolio positions. Hedging transactions may also limit the opportunity for gain if the value if the portfolio position should increase. Illiquidity of securities. Transfers of Shares are restricted; there is no market for the Shares and, accordingly, Shares may be disposed of only through the redemption procedures described elsewhere in this Memorandum. Under certain circumstances, such redemption procedures may entail a significant delay in redemptions. Redemptions: Shareholders may redeem their Shares in accordance with the Bye-Laws. Substantial redemptions could require the Fund to liquidate investments more rapidly than otherwise desirable in order to raise the necessary cash to fund the redemptions and to achieve a market position appropriately reflecting a smaller asset and shareholder base. This could adversely affect the value of the Shares. Income: Because the Fund can only distribute what it earns, the Fund s distributions to Shareholders may decline when prevailing interest rates fall or if the Fund suffers defaults on the debt securities it holds. Litigation and Claims. The Fund and the Investment Manager may be subject to lawsuits or proceedings by government entities or private parties. Except in the event of a lawsuit or proceeding arising from the Fund s gross negligence, willful default, or fraud in the performance of its duties, expenses or liabilities of the Fund arising from any suit shall be borne by the Fund. Need for Independent Advice. The Board of Directors and the Fund Administrator have consulted with counsel, accountants and other experts regarding the structure of the Fund. Each prospective investor should consult his own legal, tax and financial advisers regarding the desirability of an investment in the Fund. Registration. The Fund is to be authorised as an administered fund pursuant to the IFA. The Fund is not registered as an investment fund under the U.S. Investment Fund Act of 1940, as amended (the Fund Act ), (or any similar state laws). Investors, therefore, will not be accorded the protective measures provided by such legislation. 29

30 (xvii) Shareholder Loss. No Shareholder will be liable for losses or debts of the Fund beyond that Shareholder's investment nor may any Shareholder be assessed or otherwise required to invest more than its initial investment. (xviii) Compliance and Legal Requirements. The Fund must comply with various legal requirements, including requirements imposed by the securities laws, tax laws and pension laws in various jurisdictions. Should any of those laws change over the scheduled term of the Fund, the legal requirements to which the Fund and the Shareholders may be subject could differ materially from current requirements. 30

31 8. POTENTIAL CONFLICTS OF INTEREST The Fund is subject to management risk because it is an actively managed investment portfolio. The Investment Manager applies investment techniques and risk analysis in making investment decisions for the Fund, but there can be no guarantee that these decisions will produce the desired results. The Investment Manager and its respective affiliates, which shall be deemed to include, in each case, their respective officers, directors, employees and entities owned by any of the aforementioned parties (together the Related Parties ) may face certain conflicts of interests in relation to the Fund. These conflicts include, but are not limited to, the following: the Investment Manager and each of its directors presently and will in the future, directly or indirectly, direct, sponsor or manage other managed pools or accounts in addition to the Fund; and the Fund Administrator and each of its directors may have financial or other incentives to favor some such pools or accounts over the Fund. The Investment Manager, Fund Administrator, and Custodian each believe that it will continue to have sufficient staff personnel and resources to perform all of its duties with respect to the Fund. However, because some of the officers of the Investment Manager, Fund Administrator and Custodian each may have duties in connection with other matters, such officers may have conflicts of interest in the allocation of responsibilities, services and functions among the Fund and other entities similar to the Fund. Some or all of the Related Parties may be involved with other entities utilizing investment strategies similar to those of the Fund and with other business in general. The Investment Manager and the Custodian each may cause the Fund to invest in securities in which some or all of the Related Parties have a financial interest, or to engage in transactions with brokers or others with whom some or all of the Related Parties have financial or other relationships. In the event the Fund intends to engage in any such transaction, the Fund may appoint an independent client representative to give or withhold the consent of the Fund to such transactions. Other Activities The Investment Manager, Fund Administrator and Custodian each and each of its affiliates may engage in other business activities and manage the accounts of clients other than the Fund including those of other collective investment vehicles and investment funds. The investment strategy for such other clients may vary from that of the Fund. The Investment Manager, Fund Administrator and Custodian and each of its affiliates are not required to refrain from any other activity, nor must they disgorge any profits from any such activity, including acting as general partner, investment manager or managing agent for investment vehicles with objectives similar to those of the Fund. 31

32 9. TAXATION 9.1 Introduction This summary of the principal tax consequences applicable to the Fund and its Shareholders is based upon advice received from the Fund's tax advisers. Such advice is based upon factual representations made by the Fund. The conclusions summarized herein could be adversely affected if any of the material factual representations on which they are based should prove to be inaccurate. Moreover, while this summary is considered to be a correct interpretation of existing laws in force on the date of this Memorandum, no assurance can be given that courts or fiscal authorities responsible for the administration of such laws will agree with such interpretations or that changes in such laws will not occur. 9.2 The Fund At the date of this Memorandum, there is no Bermuda income, corporation, or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by the Fund or its Shareholders, other than Shareholders ordinarily resident in Bermuda. The Fund is not subject to stamp duty on the issue, transfer or redemption of its Shares. The Fund has applied for and obtained an undertaking from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act, 1966, as amended, that, in the event that there is enacted in Bermuda any legislation imposing: tax computed on profits or income; tax computed on any capital assets, gain or appreciation or; any tax in the nature of estate duty or inheritance tax, such tax shall not, until 31 March 2035, be applicable to the Fund or to any of its operations, Shares, debentures or other obligations except insofar as such tax applies to persons ordinarily resident in Bermuda and holding such Shares, debentures or other obligations of the Fund or any land leased or let to the Fund. As an exempted company the Fund is liable to pay the Bermuda Government an annual registration fee based upon its assessable capital. In addition, the Fund as an Administered Fund is liable to pay the Bermuda Monetary Authority an annual licensing fee pursuant to the IFA and Regulations made there under. The registration fee payable is $830 and the annual license fee is $4,070. Prospective purchasers should consult legal advisers in the countries of their citizenship, residence and domicile to determine the possible tax or other consequences of purchasing, holding and redeeming Shares under the laws of their respective jurisdictions. 9.3 Shareholders of the Fund Shareholders who are not otherwise subject to Bermuda taxes by reason of their residence, domicile or other particular circumstances should not become subject to any such taxes by reason of the ownership, transfer or redemption of the Share. Shareholders who are or may be subject to U.S. federal income tax on their worldwide income should be aware of certain tax consequences of investing directly or indirectly in the Shares and should be certain to consult their own tax advisers in this regard. The foregoing summary does not address tax considerations that may be applicable to certain Shareholders under the laws of jurisdictions other than Bermuda. The Fund has no present plans 32

33 to apply for any certifications or registrations, or to take any other actions under the laws of any jurisdictions that would afford the relief to local investors therein from the normal tax regime otherwise applicable to an investment in the Shares. It is the responsibility of all persons interested in purchasing the Shares to inform themselves as to any income or other tax consequences arising in the jurisdictions in which they are resident or domiciled for tax purposes, as well as any foreign exchange or other fiscal or legal restrictions relevant to their particular circumstances in connection with the acquisition, holding, or disposition of the Shares. The value of the Fund's investments may also be affected by repatriation and exchange control regulations. 33

34 10. ADDITIONAL INFORMATION 10.1 Material Contracts The Fund has entered into the following contracts (not being contracts in the ordinary course of business) which may be material: The Fund Administration Services Agreement dated 1 October, 2014 between the Fund and IKONIC Fund Services Ltd; The Custodian Agreement dated 2 March 2012 between the Fund and BCB; The Investment Management Agreement dated 2 March 2012 between the Fund and ICM Reports to the Shareholders The Fund will furnish annual reports to its Shareholders containing financial statements examined by the Auditors. Shareholders will be sent copies of the audited financial statements prior to the Fund's annual general meeting each year prepared in accordance with IFRS. In addition, Shareholders will receive from the Fund Administrator unaudited monthly reports relating to the Fund's performance Available Documents The following documents in relation to the Fund are available for inspection free of charge by appointment at any time during normal business hours on any day (except Saturdays, Sundays and Public Holidays) at the registered office of the Fund and at the office of BCB Asset Management Limited: the Certificate of Incorporation; the Memorandum of Association; the Bye-Laws; the approval of the Fund as an Administered Fund pursuant to the IFA; and this Memorandum and any supplements thereto Auditor's Consent Ernst & Young Ltd. has given, and has not withdrawn prior to delivery of a copy of the Memorandum for filing with the BMA, its written consent to the inclusion of its name and reference to itself in the form and context in which they appear. 34

35 10.5 Bermuda Counsel Conyers Dill & Pearman Limited has been appointed Bermuda counsel to the Fund in connection with matters pertaining to Bermuda law. Counsel to the Fund does not represent the Shareholders Enquiries and Communication with the Fund All communications and correspondence with the Fund and enquiries concerning the Fund and the Shares, including information concerning subscription and redemption procedures and current Net Asset Value, should be directed to the Fund Administrator at the address set forth in this Memorandum Exchange Control The Fund has been classified as non-resident of the Bermuda Exchange Control area by the BMA, whose permission for the issue of the Shares by the Fund has been obtained. The transfer of Shares between persons regarded as resident outside of Bermuda for exchange control purposes and the issue and redemption of Shares to or by such persons may be affected without specific consent under the Exchange Control Act of 1972 of Bermuda and regulations made there under. Issues and transfers involving any person regarded as resident in Bermuda for exchange control purposes require specific prior authorization under that Act. The Fund, by virtue of being non-resident of Bermuda for exchange control purposes is free to acquire, hold and sell any foreign currency and security without restriction General Information Save as disclosed in this Memorandum, no commissions, discounts, brokerages or other special terms have been granted by the Fund in connection with the issue or sale of any Shares. Annual general meetings will be held in Bermuda on such date as the Fund may determine. Where required under the Bye-Laws, notices convening each annual general meeting, together with the annual accounts and reports, will be sent to Shareholders not later than fourteen days before the date of such meeting. There is no land or buildings purchased or acquired by the Fund or proposed to be purchased or acquired by the Fund that are to be paid for wholly or partly out of the proceeds of this offer, or the purchase or acquisition of which has not been completed at the date of this Memorandum. The Fund 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. No person has, or is entitled to be given, an option to subscribe for any Share or loan capital of the Fund. The Board of Directors confirms that as of the date of this Memorandum: the Fund has been validly approved by the BMA as an Administered Fund; the Fund has not approved any financial statements to be presented at a general meeting of the Fund; the Auditors have not audited any financial statements of the Fund; the Fund has not paid any dividends; and the Fund has no subsidiary. 35

36 BCB BOND FUND Appendix 1: BCB Bond Fund Directory Fund's Registered Office 19 Par-la-Ville Road Hamilton HM 11 Bermuda The Directors Jon L. Brunson Cornerstone 2 Seymour Farm Road Southampton SN01 Bermuda Ray McMahon Sunbrae House 58 Ulverton Rd Dalkey Co. Dublin Ireland Gregory Reid Bowling Green Lodge Off St. john s Hill Kinsale, Co. Cork Ireland Investment Manager ICM Limited Bermuda Commercial Bank Building 19 Par-la-Ville Road Hamilton HM11 Bermuda Fund Administrator and Registrar and Transfer Agent IKONIC Fund Services Ltd. Penboss Building 50 Parliament Street Hamilton HM12 Bermuda Custodian Bermuda Commercial Bank Limited Bermuda Commercial Bank Building 19 Par-la-Ville Road 36

37 Hamilton HM 11 Bermuda Auditor Ernst & Young Ltd #3 Bermudiana Road Hamilton HM08 Bermuda Legal Advisers Company Secretary Conyers Dill & Pearman Limited Clarendon House 2 Church Street PO Box HM 666 Hamilton HM CX Bermuda BCB Charter Corporate Services Limited Bermuda Commercial Bank Building 19 Par-la-Ville Road Hamilton HM11 Bermuda 37

38 BCB BOND FUND Appendix 2: BCB Bond Fund Definitions In this Offering Memorandum, unless the context otherwise requires, the following words and terms shall have the indicated meanings and grammatical variations of such words and terms shall have corresponding meanings: Administered Fund Auditors Account Holder AML/CFT Bank Base Currency BCB BMA Business Day Bye-Laws Company or the Fund means an investment fund authorised as an administered fund pursuant to the provisions of the Investment Funds Act 2006 as amended from time to time Ernst & Young Ltd. means an individual, a corporation, a trust or any other legally constituted entity who is the legal owner of the investor s investment in the Fund. An Account Holder may also be referred to as the Investor or Shareholder means Bermuda anti-money laundering and counter financing of terrorism laws and regulations Bermuda Commercial Bank Limited means the currency in which the Fund is denominated, US Dollar. This is the currency used for subscription, redemption, and Net Asset Value purposes. Although the Fund may have only one base currency, it will usually have assets and investments in any freely traded currency. Bermuda Commercial Bank Limited Bermuda Monetary Authority means any day other than a day which is a Saturday, or a Sunday or a day on which banks in Bermuda are generally not open for business; means the bye-laws of the Company as amended from time to time BCB Bond Fund Limited 38

39 Company Secretary "Closing Date" Custodian Custodian Agreement "Dealing Day" "Debt Securities" Directors or Board of Directors Fund Administrator and Registrar and Transfer Agent BCB Charter Corporate Services Limited means the date when the offering of Shares is closed. Closings will take place periodically at the Fund s discretion Bermuda Commercial Bank Limited means the custodian agreement dated 2 March 2012 between the Fund and the Custodian means, in relation to the subscription and/or redemption of Shares, the first Business Day of each month or such other Business Day or Business Days in addition thereto or in substitution therefor as may from time to time be determined by the Board either in any particular case or generally means debt securities such as promissory notes, bonds, debentures, etc means the board of directors of the Fund IKONIC Fund Services Ltd. Fund Administration Services Agreement means the fund administration services agreement dated 1 October 2014 between the Fund, the Fund Administrator and the Company Secretary ICM IFA IFRS Initial Offering Period Investment Manager Investment Management Agreement ICM Limited means the Investment Funds Act 2006 as amended from time to time means the International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board means the period between the date of approval of this Memorandum by the BMA and 14 days after such approval ICM means the investment management agreement dated 2 March 2012 between the Fund and the Investment Manager 39

40 GDP Management Shares Net Asset Value or NAV Offering Memorandum or Memorandum means Gross Domestic Product means 100 management shares of par value US$0.10 in the Capital of the Fund held by ICM and being subject to the rights and restrictions as specified in the Bye-Laws means the market value of the total assets attributable to the Fund including all cash and cash equivalents, securities and other investments, less the total liabilities attributable to the relevant Fund, each determined on the basis of IFRS means this offering memorandum dated 2 March 2012 Person" Redemption Price Redemption Proceeds Restricted Person Shares Shareholders Sub-Custodian "Subscribers" means an individual, corporation, partnership, limited liability company, unincorporated association, unincorporated syndicate, unincorporated organization, trust, trustee, executor, administrator or other legal representative, government, governmental authority or other entity whatsoever means the price per share, which is based upon the Net Asset Value per Share, less any redemption charges, if applicable, as calculated in accordance with the terms of this Memorandum means the net amount of the Redemption Price multiplied by the number of shares redeemed less any charges, if applicable means any U.S. person as defined in this Memorandum, and other persons from time to time designated as such by the Fund means the 999,900 common shares of par value of US$0.10 each in the capital of the Fund and being subject to the rights and restrictions as specified in the Bye-Laws means holders of Shares in the Fund means the sub-custodian as appointed by the Custodian from time to time mean those Persons subscribing for Shares, having completed Subscription Agreements 40

41 which have been accepted by the Fund Subscription Agreement means the subscription agreement accompanying this Memorandum U.S. or United States Subscription Price Valuation Day means the United States of America (including the States and the District of Colombia) its territories or possessions and other areas subject to its jurisdiction including the Commonwealth of Puerto Rico means the issue price per Share means the last Business Day of the relevant calendar month, or on another day, at the discretion of the Fund, in which the Fund s NAV is calculated Words importing the singular also include the plural and vice versa. 41

42 BCB BOND FUND LIMITED 19 PAR-LA-VILLE ROAD HAMILTON HM 11 BERMUDA T: +1 (441)