Excalibur TS [April 4, 2007] - Northern...

NF FUND SAC LIMITED TERM SHEET

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NF FUND SAC LIMITED

(THE „COMPANY‟ or „THE FUND‟)

A “SMART” FUND LICENCED AS A SFM002

IN ACCORDANCE WITH THE INVESTMENT FUND ACT 2003

AND THE INVESTMENT FUNDS (SMART FUND) RULES, 2003

TERM SHEET

Revised as of September 1st, 2016

NF Fund SAC Limited

Equity Trust House, West Bay Street, Nassau, Bahamas

The Fund is licensed as a SFM 002 (Smart Fund 002) pursuant to the Investment Funds Act, 2003 operating as a fund, which cannot have more than ten professional investors as defined herein. The Company is also registered by the Registrar of Companies as a Segregated Accounts Company pursuant to the provisions of the Segregated Accounts Companies Act, 2004. The Shares of the Company have not been licensed for public distribution.OVERVIEW

NF Fund SAC Limited is an open-ended International Business Company (hereinafter ”the Company”) incorporated under the laws of the Commonwealth of The Bahamas with registered number 167880B and registered office at Equity Trust House, West Bay Street, Nassau, Bahamas, and is an Investment Fund (hereinafter also “the Fund”) licensed as a SFM002 under the Bahamas Investment Funds Act 2003, the Bahamas Investment Funds (SMART Fund) Rules 2003 and the Bahamas Investment Funds


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Regulations and is registered as a segregated accounts company under the Segregated Accounts Companies Act, 2004. Such license is not an endorsement or a guarantee of the Company by the Securities Commission or the Licensor, nor is the Securities Commission or the Licensor responsible for the contents of this Term Sheet, the latest published annual report and accounts of the Company, if any. The Bahamas Investment Fund License of the Company does not constitute a warranty by the Securities Commission or the Licensor as to the performance of the Company and the Securities Commission or the Licensor shall not be liable for the performance or default of the Company. The Company is organised, for the time being, into management shares and three Classes of Shares, each of which are linked to a segregated account, which invest its assets in accordance with its respective investment objectives and policy. The Segregated Accounts, and any future Segregated Accounts, invest their assets in accordance with their respective investment objectives and policy, set forth in the respective Annexes (refer to “Investment Objectives”) of the relevant Segregated Account. The value of Investors’ Shares offered hereunder may go up or down and investors must be prepared to accept potentially substantial losses. Before investing in the Company or a Segregated Account of the Company, investors should consider the risks involved with such investments. The value of Investors’ Shares in the Company offered hereunder may go up or down and investors must be prepared to accept potentially substantial losses. Before investing in the Company or a Segregated Account of the Company, investors should consider the risks involved with such investments. Potential investors in Shares linked to a particular Segregated Account of the Company should inform themselves as of (i) the possible tax consequences; (ii) the legal requirements; (iii) any foreign exchange restrictions or exchange control requirements; and (iv) any other governmental requisite or other consents or formalities which they might encounter under the laws of the countries of their incorporation, citizenship, residence or domicile and which might be relevant to the subscription, purchase, holding or disposal of Shares. Potential Investors should note that the Company and each Segregated Account shall fully indemnify and keep indemnified and hold harmless each and all of the Board Members, the Administrator, Banker and the Custodian from and against any losses, damages and other obligations which may be suffered or incurred with respect to any action and/or inaction taken or investment made by the Company (each and all otherwise than by reason of gross negligence, bad faith, fraud or willful default).


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It is the intention of the Company to ensure that the investment strategy of the Company will not be focused in debt claims which yield interest payments as defined in Article 6 of the Council Directive of the European Union 2003/48 dated June 3rd, 2003. Investments will be made primarily in securities classified as “out of scope”, according to such “EU Savings Directive”. The investment objective of the Company is capital appreciation; however the price of the shares and the income therefrom may be subject to market fluctuation. To reflect material changes, the Company may from time to time update this Term Sheet and Annexes, and intending investors should enquire with the Company as to the issue of any later Term Sheet and Annexes or of any reports and accounts of the Company and each Segregated Account. Important - If you are in any doubt about the contents of this Term Sheer, you should consult with your stockbroker, bank manager, solicitor, accountant or other suitable advisor. Pursuant to Section 14 (2) of the International Business Act, 2000 of The Bahamas every investor shall be bound by the provisions of the Articles of Association of the Company, as originally drafted or as may be amended from time to time, as if such investor had subscribed his name and affixed his seal thereto and as if there were contained in the Articles on the part of the investor a covenant to observe the provisions of the Articles. In any case, it is the intention of the Company to ensure that the investment strategy of the Fund will not be focused in debt claims which yield interest payments as defined in Article 6 of the Council Directive of the European Union 2003/48 dated June 3rd, 2003. Investments will be made primarily in strategies classified as “out-of-scope”, according to such “EU Savings Directive”. The investment objective of the Fund is capital appreciation.


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NOTICE TO INVESTORS

Information and Responsibility for the Contents of the Term Sheet No securities commission or similar regulatory authority has reviewed this Term Sheet nor has

it in any way passed upon the merits of the securities offered hereby and any representation

to the contrary is an offence. Investors should be aware that the Company does not engage

in any regulated activity in Switzerland and does not qualify, and is not subject to the Federal

Act on Collective Investment Schemes Act (2006).

This Term Sheet is intended to highlight certain information contained in the Memorandum and Articles of Association of the Fund dated [insert date], as amended from time to time (“Memorandum and Articles”), where more detailed information is found. The information contained herein is qualified by the information appearing in the Memorandum and Articles. In the event of a conflict between the Memorandum and Articles and this Term Sheet, the Memorandum and Articles shall prevail.

The Directors, whose names appear below, accept responsibility in accordance with

Regulation 21 (1) of the Bahamas Investment Funds Regulations for the information

contained in this Term Sheet as being accurate as of the date of publication. To the

best of the knowledge and belief of the Company and the Administrator who have taken

all reasonable care to ensure, that such is the case, the information contained in this

Term Sheet regarding the Company and the Shares offered hereunder (to the extent

it is, in the context of the issue of the Shares material) is in accordance with the facts as

at of its date and not misleading in any material respect. The Company and the

Administrator accept responsibility for the information contained in this document

accordingly. All further responsibility of the Company, the Administrator and all personal

responsibility of their representatives shall be excluded to the extent permitted by any

law applicable hereto.

No person has been authorised to give any information or to make any representations

not contained in this Term Sheet and any such information given or any such

representation made by any dealer, salesman or other person must be regarded as

unauthorised and, accordingly, must not be relied upon if not contained in any

reports and accounts of the Company forming part hereof.

Neither the delivery of this Term Sheet nor the offer, issue or sale of Shares shall under

any circumstances create any implication that there has been no adverse change, or any

event reasonably likely to involve any adverse change, in the condition (financial or

otherwise) of the Company since the date of this Term Sheet and that the information

herein is correct as of any time subsequent to the date of this Term Sheet. To reflect

material changes, the Company may from time to time update this Term Sheet and

intending investors should inquire with the Company as to the issue of any later Term

Sheet or of any reports and accounts of the Company or any Segregated Account.

This Term Sheet may be translated into other languages in which case the translated

version of the Term Sheet will be a direct translation from the English version. In the

event of any inconsistency or ambiguity in relation to the meaning of any word or

phrase in any translation, the English text shall prevail and all disputes as to the text

thereof shall be governed by and construed in accordance with the laws of The

Commonwealth of The Bahamas (“The Bahamas”).


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Distributions and Sales Restrictions No action has been taken to permit the distribution of this Term Sheet in any

jurisdiction where such action is required. Accordingly, this Term Sheet may not

be used for the purpose of, and does not constitute, an offer or solicitation by

anyone in any jurisdiction or in any circumstances in which such offer or solicitation would not be authorised or unlawful, or to any person to whom it

would be unlawful to make such offer or solicitation.

The Shares have not been registered under the United States Securities Act of 1933 or

the US Investment Company Act 1940, both as amended, and may not, except in a

transaction which does not violate US Securities or Investment Company Law be directly

or indirectly, offered or sold in the United States or to any United States person. The

Company will not be registered under the United States Investment Company Act of 1940

as amended and investors will not be entitled to the benefits of that Act. The Company does not authorise any offer to the public of the Shares in the United

Kingdom within the meaning of the Public Offers of Securities Regulations 1995. The

Shares may not be offered or sold to persons in the United Kingdom except in

circumstances which do not result in an offer to the public in the United Kingdom within

the meaning of the Public Offers of Securities Regulations 1995. The Company has not been registered with the Swiss Financial Market Supervisory

Authority, FINMA. Accordingly, no marketing or distribution within the meaning of the

Federal Act on Collective Investment Schemes Act, 2006 (CISA), as may be substituted or

amended, may be conducted in or from Switzerland except to qualified investors in

accordance with the CISA set out in Article 10 and pursuant to any existing or future

exemption granted by the CISA or FINMA or otherwise in compliance with the applicable

Swiss law and regulations.

The Articles of Association of the Company give powers to the Directors to impose

restrictions on the shareholdings by and consequently to repurchase Shares held by or

the transfer of Shares to any United States person unless permitted under certain

exceptions under the laws of the United States or by any person who appears to be in

breach of the laws or requirements of any country or government authority or by any

person or persons in circumstances (whether directly or indirectly affecting such person

or persons, and whether taken alone or in conjunction with any other persons, connected

or not, or any other circumstances appearing to the Directors to be relevant) which, in

the opinion of the Directors, might result in the Company incurring any liability to

taxation or suffering any other pecuniary disadvantage which the Company might not

otherwise have incurred or suffered.

The financial statements of the Fund shall be audited annually (See “Financial

Statements”) Persons, trusts and corporations who or which have been designated as "resident for

purposes of exchange control" by the Central Bank of the Bahamas may not purchase or

hold Shares without the prior written permission of that authority.

Persons who do not fall into one of the following categories, a Professional Investor, may

not purchase or hold Shares in the Company:


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(a) a bank or trust company licensed under the Bank and Trust Companies Regulation Act

or licensed pursuant to the laws of another jurisdiction, whether acting in its individual or

fiduciary capacity;

(b) any registered firm under the Securities Industry Act or pursuant to the laws of

another jurisdiction;

(c) an insurance company licensed under the Insurance Act or licensed pursuant to the

laws of another jurisdiction;

(d) an investment fund licensed or registered under the Investment Funds Act or pursuant

to the laws of another jurisdiction;

(e) any natural person whose individual net worth, or jointly with the person‟s spouse,

exceeds one million dollars ($1,000,000) or currency equivalent;

(f) any natural person who has an individual income in excess of two hundred thousand

dollars ($200,000) or joint income with his spouse in excess of three hundred thousand

dollars ($300,000) in each of the two most recent years and has a reasonable expectation

of reaching the same income in the current year;

(g) a trust with total assets in excess of five million dollars ($5,000,000);

(h) any entity in which all the equity owners satisfy one of the requirements in (a) to (g)

above; or

(i) any entity with net assets in excess of five million dollars ($5,000,000).

Further Documentation, Reports, Applicable Law and Jurisdiction This Term Sheet is to be read in conjunction with the Memorandum and the

Articles of Association of the Company, all yearly and half-yearly reports of the

Company, if any. Copies thereof are available free of charge upon request from

the office of the Company and the Administrator. Each Segregated Account, the Shares and this Term Sheet shall be governed and

construed in accordance with the laws of the Commonwealth of The Bahamas and, for

purposes of venue and jurisdiction, this Term Sheet shall be deemed to be made in the

Commonwealth of The Bahamas.


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I. NAME OF THE FUND

The name of the Fund is: NF FUND SAC LIMITED

II. DATE ESTABLISHED

The Company was incorporated on June 4th, 2013 as an International Business Company

under the laws of The Bahamas and was licensed as a SMART Fund SFM 002 under the

Act. Also on June 4th, 2013 the Company was registered as a Segregated Accounts

Company pursuant to the Segregated Accounts Company Act, 2004. On December 17th,

2015 the Fund changed its name from Orwell Global Opportunities Fund SAC Limited to

NF Fund SAC Limited.

III. STRUCTURE OF THE FUND

The Fund was structured as an international business company under the laws of the

Commonwealth of The Bahamas under the name of NF FUND SAC Limited pursuant to the International Business Companies Act 2000. T h e F u n d i s a S M A R T Fund,

model 2 (SMF002), licensed under the Investment Funds (SMART Fund) Rules, 2003.

The Reference Currency of the Fund is EUR. Company: NF Fund SAC Limited

Equity Trust House,

Caves Village, West Bay Street

Nassau, Bahamas Directors of Mr. D. Gilbert Cassar, a Bahamian national with

the Company: residence in the Commonwealth of The Bahamas

Ms. Ivylyn B. Cassar, a Bahamian national with

residence in the Commonwealth of The Bahamas

Mr. Dillon R. Dean, a Bahamian national with residence in the Commonwealth of The Bahamas

Investment Manager: NF Global Limited

Level 8, 48 Emily Place, Auckland Central, Auckland 1010, New Zealand

Custodian (A Class only): Equity Bank And Trust

Bahamas Limited

Equity Trust House, Caves Village, West Bay Street,

Nassau, Bahamas

Banker (B and C Classes only): NF Global Limited

Level 8, 48 Emily Place, Auckland Central,

Auckland 1010, New Zealand

Administrator: Equity Bank And Trust Bahamas Limited

Equity Trust House, Caves Village, West Bay Street

Nassau, Bahamas


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Registrar and Transfer Agent: Equity Bank And Trust Bahamas Limited

Equity Trust House, Caves Village, West Bay Street

Nassau, Bahamas

IV. NATURE OF EQUITY INTEREST

The Company will, for the time being, have an authorised share capital of EUR 30'100

(thirty thousand, one hundred EUR), which has been divided into 10‟000 registered

voting management shares each having a par value of EUR 0.01 (one Euro Cent), 1‟000‟000 registered non-voting investors‟ shares Class A Absolute Return Fund each

having a par value of EUR 0.01 (one Euro Cent), 1‟000‟000 registered non-voting

investors‟ shares Class B Harcos Alpha Fund each having a par value of EUR 0.01 (one

Euro Cent) and 1‟000‟000 investors‟ registered non-voting shares Class C Harcos

Opportunities Fund, each having a par value of EUR 0.01 (one Euro Cent). The category/class of Shares has been divided as follows:

• 10'000 (ten thousand) registered voting Shares of EUR 0.01 (one EUR cent) par value

each, issued at par for a total subscription amount of EUR 100 (one hundred EUR),

not paid up and held by NF Global Limited (the Investment Manager) and not

offered hereunder (the “Management Shares”);

• 1'000'000 (one million) registered non-voting Shares of EUR 0.01 (one EUR cent) par

value each, issued and offered during the Initial Subscription Period hereunder at par

for EUR 100 (one hundred EUR) each (hereinafter the Class A “Absolute Return Fund”) linked to Absolute Return Fund Segregated Account;



for EUR 100 (one hundred EUR) each (hereinafter the Class B “Harcos Alpha Fund”)

linked to Harcos Alpha Fund Segregated Account;



for EUR 100 (one hundred EUR) each (hereinafter the Class C “Harcos Opportunities

Fund”) linked to Harcos Opportunities Segregated Account; Management Shares represent the only class of Shares with the right to notice of and to

vote at general meetings of the Company‟s Shareholders. However, they do not confer

any right to dividends and, on a winding up of the Company, carry only the right to the return of the share capital paid up thereon, i.e. EUR 100.

Investors‟ Shares offered hereunder will not carry the right to notice of, and to vote at

general meetings of the Company‟s Shareholders, except in respect of resolutions to vary

the class rights of the holders of Investors„ Shares. However, they carry the right to the

return of the Net Asset Value attributable to the Sub-Fund of that class of Investors‟

Shares upon redemption or upon a winding up of the Company.

Apart from the nominal capital for the Management Shares, the Company so far has no

assets or liabilities other than the organisation and offering costs (please see under "X

Fees and Expenses").


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A Segregated Account is a separate and distinct account (comprising or including entries,

recording data, assets, rights, contributions, liabilities and obligations linked to such

account) of the Company pertaining to an identified or identifiable pool of assets and

liabilities of the Company which are segregated or distinguished from the other assets and

liabilities of the Company. Accordingly, the proceeds from the issue of a particular

Segregated Account of the Company shall be applied in the books of the Company to the

Segregated Account so established. The assets and liabilities and income and expenditure

attributable to that Segregated Account will be applied to such Segregated Account and,

subject to the provisions of the Articles of Association of the Company, to no other

Segregated Account or general account. Where any asset is derived from another asset

(whether cash or otherwise), such derivative asset will be applied in the books of the

Company to the same Segregated Account as the asset from which it is derived, and on

each revaluation of an asset the increase or diminution in value will be applied to the same

Segregated Account and, subject to the provisions of the Articles of Association of the

Company, or the Segregated Accounts Companies Act, 2004, to no other Segregated

Account or general account. The assets held in each Segregated Account will be applied

solely in respect of the liabilities of such Segregated Account. Any surplus in such

Segregated Account will be held, subject to the provisions of the Articles of Association of

the Company, or the Segregated Accounts Companies Act, 2004, for the benefit of the

holders of Participating Shares issued in respect of the relevant Segregated Account. In

the case of any asset or liability of the Company that the Directors do not consider is

attributable to a particular Segregated Account or Segregated Accounts, the Directors will

have discretion to determine the basis upon which any such asset or liability will be

allocated between or among Segregated Accounts and the Directors will have power at any

time and from time to time to vary such basis.

The Participating Shares offered pursuant to this Offering Memorandum are linked

exclusively to the Absolute Return Fund Segregated Account, Harcos Alpha Segregated

Account and Harcos Opportunities Segregated Account established pursuant to the terms

of this Term Sheet and the relevant Annexes which are the governing instrument of each

Segregated Account for purposes of the Segregated Accounts Companies Act, 2004. V. INVESTMENT OBJECTIVE AND POLICY

The investment objective of the Company is to achieve positive returns in the Reference

Currency and after fees. The Company has delegated the strategy to achieve the

Investment Objective to its Investment Manager. The Investment Strategy is defined

very specific and the Company has set its intentions as stipulated below.

The Investment Objective and Strategy of each of the Sub-Funds of the Company may

differ. The Investment Objective and Strategy of each Sub-Fund will be described and

defined in each Annex. The Company will delegate the development, implementation and

execution of the Investment Strategy and relative Techniques to achieve the defined

Investment Objective for each Sub-Fund to an Investment Manager which in turn will

identify and research as well as evaluate suitable Investments.

The Fund may, at any time and at the discretion of the Investment Manager, invest all or

part of such assets, directly, both long and short, in a wide range of securities and

financial instruments (collectively, “Securities”), including, but not limited to, private

investment pools (such as hedge funds) and separate managed accounts each managed

by a selected group of investment managers, common stocks, preferred stocks, corporate

bonds, commercial paper, bank debt and other obligations, convertible securities and

other equity-linked instruments, emerging-markets risk-related debt securities, debt and


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equity indices, ETFs, closed-end funds, credit derivatives, equity and equity-linked

derivatives, physical commodities, real estate, swaps, residential, commercial and

consumer performing and nonperforming whole loans (including prime and sub-prime),

mortgage-backed and other asset-backed instruments, and other public and private

instruments, including private equity and limited partner or similar interests. From time to

time, some or all of the Fund‟s assets may be invested in cash or cash equivalents,

pending investment, for defensive purposes, to fund redemptions, to meet expenses or

for any other reason the Investment Manager may deem prudent in the circumstances.

There is no assurance that the Fund will achieve its objective, and the results may vary

from time to time.

Prospective investors must refer to the relevant Annex for each Sub-Fund in conjunction

with this Term Sheet for a specific summary of investment objectives, strategy and

technique in connection with each Sub-Fund.

Cross Sub-Fund Investment

Subject to any additional restrictions stated in the Term Sheet applicable to any particular

Sub-Fund, a Sub-Fund shall be permitted to invest in Shares of other Sub-Funds of the

Company (“Cross-Sub-Fund Investment”) under the following conditions and restrictions:

(a) a Sub-Fund may not invest more than fifty percent (50%) of its assets in any

one other Sub-Fund of the Company;

(b) a Sub-Fund which is the subject of a Cross-Sub-Fund Investment may not invest

back into a Sub-Fund which invested in it;

(c) the Investment Manager will, to the extent of the Cross-Sub-Fund Investment,

only charge one Investment Management Fee (but excluding any Performance Fees)

and one subscription or redemption fee; and

(d) to the extent applicable, Shares held by another Sub-Fund will not have any

voting rights or be counted when thresholds for consent of Investor Shareholders.

For the purpose of ensuring compliance with any applicable capital requirements,

cross-investments will be counted once.

BORROWING AND LENDING

The Directors may from time to time, at their discretion, raise or borrow or secure the

repayment of any sum or sums of money for the purposes of the Fund in such manner and

upon such terms and conditions in all respects as they think fit and in particular by the

issue of bonds, mortgages, debentures, notes, warrants or other obligations of the Fund

charged upon all or any part of the assets of the Fund (both present and future).

The Fund shall not give, whether directly or indirectly, and whether by means of a loan,

guarantee, the provision of security or otherwise, any financial assistance for the purpose

of subscription made or to be made by any person of or for any Investor Shares in the

Fund nor shall the Fund make a loan for any purpose whatsoever on the security of its

Investor Shares.


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VI. RISKS

An investment in the Fund and its Sub-Funds is speculative and involves significant risks.

There can be no assurance that the investment objectives of the Fund or its Sub-Funds

will be achieved. The Fund and its Sub-Funds is not suitable for persons who have need

of regular current income from it. Investing in the Fund and its Sub-Funds is not

intended to provide a complete investment program for the investor, but should be part

of an overall investment plan. The nature of the Fund and its Sub-Funds involves certain

risks as detailed below which should be taken into consideration before investing in the

Fund and its Sub-Funds. The Investment Manager

No assurance can be given that the investments chosen by an Investment Manager will

be successful under all ordinary market conditions. In addition, it is not known what

effect, if any, the size of the Fund‟s assets being managed will have on the performance

of the investments under the Investment Manager‟s control.

Performance Fee The Performance Fee payable to the Investment Manager may create an incentive for the Investment Manager to make investments that are riskier or more speculative than would be the case in the absence of a fee based on the performance of the Company. Since the Performance Fee is calculated on a basis which includes unrealised appreciation of the Company‟s assets, such fee may be greater than if it were based solely on realized gains. Trading can be Leveraged Some investments might involve a high degree of leverage. In a few cases, a small price movement in an investment may, therefore result in substantial gains or losses. Thus, trading of some investments may result in losses to the Company in excess of the amount initially deposited by the Company. OTC Markets and Market Participant Risk (Settlement Risk) The investments will not all be effectuated in a regulated market or through a recognized clearing organization but also in the OTC markets. There may be less or no governmental organization and supervision of transactions and less or no guarantees by exchange clearing houses. The settlement of the Investment Instruments and its divestments may, as a consequence, not be guaranteed to be executed in accordance with the principle of payment versus delivery and expose the Company to counterparty and settlement risk until the trade is settled. Furthermore, the institutions, including brokerage firms and banks, with which the Company executes trades, may not have an adequate credit rating and may not be subject to capital adequacy requirements as those applicable under the “Basel II” guidelines. As a result, counterparty may encounter financial difficulties that impair its operational capabilities or triggers a breach of its capital adequacy ratios and such counterparty might therefore be at risk to default on a transaction which might expose the Company to potential losses as a result. Trading may be Illiquid Some exchanges have daily price limits for certain investments. Once the price of an investment has increased or decreased by an amount equal to the daily limit, positions in the investment can be neither taken nor liquidated unless traders are willing to effect trades at or within the limit. In the past, investments have moved the daily price limit for several consecutive days with little or no trading occurring. Similar occurrences could prevent the Investment Manager from promptly liquidating unfavorable positions and thus


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subject the Company to substantial losses. Investment Strategy / Computerized Trading The Investment Strategy applied is heavily based on computer modeled trading, whereby a computer system generates buy and sell signals for envisaged strategies; such an approach is considered controversial in the scientific financial world and therefore an investment in such a fund is considered to be very high risk and potential investors have to be aware of the risk that they might lose substantial parts or all of their investment. Other Clients of the Investment Manager and its Affiliates The Investment Manager and its Investment Advisors (if any) might manage accounts other than the Company, including accounts in which the Investment Manager and/or the Investment Advisors (if any), its principals and employees have significant investments. The Investment Manager and its affiliates may manage additional accounts in the future. It is possible that such accounts may be in competition with the Company for the same or similar positions in the futures and forward markets. The Investment Manager intends generally to use similar trading methods for the Company and all other systematic accounts the Investment Manager and its affiliates manage. The Investment Manager will not knowingly or deliberately use systems for any account that are inferior to systems employed for any other account or favor any account over any other account. No assurance is given, however, that the results of the Company's trading will be similar to that of other accounts concurrently managed by the Investment Manager or its affiliates. Portfolio Turnover The investment strategy of the Company will involve the taking of frequent trading positions, and as a result, turnover and brokerage commission expenses of the Company may significantly exceed those of other investment entities of comparable size.

Speculative Nature of Investments The Company‟s investment policies should be considered speculative, as there can be no

assurance that the Investment Manager‟s assessments of the short-term or long-term

prospects of investments will generate a profit. In view of above the Company will very

likely not pay any dividends. An investment in the Company is not suitable for investors

seeking current income for financial or tax planning purposes.

Market Risks The profitability of a significant portion of the Company‟s investment program depends to

a great extent upon the success of the Investment Manager‟s ability to choose

appropriate investments and no assurance is given on the future course of general and global price movements of specific investments. There can be no assurance that the

Investment Manager will be able to predict accurately these price movements or that

investors will not lose all or substantially all of their investments. Lack of Operating History Although the Investment Managers may have managed investment funds with similar

objectives, the Company itself and its Investment Manager do not have an operating

history. An eventual past performance of the Investment Manager should not be construed as an indication of the future results of an investment in the Company. The

Company's investment programs should be evaluated on the basis that there can be no

assurance that the Investment Manager's assessment of the short-term or long-term

prospects of investments will prove accurate or that the Company will achieve its investment objective.

Illiquidity of Investing in the Company

Because of the limitation on redemption rights and the fact that the Shares may not be


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readily tradable, an investment in the Company is a relatively illiquid investment and

involves a high degree of risk. Redemption of the Shares will be allowed only in

accordance with the terms described in “Redemption of Shares”. Possible Effect of Substantial Redemptions

Substantial redemptions of Shares of the Company could require the Company to liquidate its positions more rapidly than otherwise desired in order to raise the cash

necessary to fund the redemptions. Illiquidity in certain securities could make it difficult

for the Company to liquidate positions on favourable terms, which could result in losses

or a decrease in the Net Asset Value. The Company is permitted to borrow cash

necessary to pay for redemptions of ordinary shares when the Investment Manager

determines that it would not be advisable to liquidate portfolio assets for that purpose. Subject to certain limitations, the Company is also authorized to pledge portfolio assets

as collateral security for the repayment of such loans. In these circumstances, the non-

redeeming shareholders of the Company will bear the risk of any subsequent decline in

the value of the net assets attributable to the ordinary shares being redeemed. Discretion of the Investment Manager The Investment Manager will seek to engage in the investment activities that have been

discussed in “Investment Policy” above. Nonetheless, the Company‟s portfolio may be

Altered at any time at the sole discretion of the Investment Manager and without the

approval of any shareholder. Although the Investment Manager will seek to distribute the

Company‟s capital among a number of investments there can be no assurance that the

Investment Manager will not decide in its sole discretion that it may be better for the

Company to concentrate its resources in a limited number of investments.

Dependence on Key Personnel

The Company‟s investment activities depend upon the experience and expertise of the

Investment Manager‟s management team. The loss of the services of any or all of these

individuals could have a material adverse effect on the Company‟s operations.

Volatility of returns

Movements in the Net Asset Value per Investor Share may be volatile from month to

month (please see under VII. “Dealing policy”). The value of the Investors‟ Shares

may fall as well as rise and investors may not get back, from redemption or otherwise,

the amount originally invested. The positions taken out by the Investment Manager may

be based upon its expectations of price movements over a period of several months

following the trade. In the meantime, the market value of the position may not increase,

and, indeed, may decrease, and this will be reflected in the Net Asset Value per Investor

Share.

Foreign Exchange

Although the Fund‟s functional currency is the EUR, it may invest some or all of its assets

in other currencies which will result in potential foreign exchange exposure. In order to

mitigate the currency risk, the Fund may engage in foreign exchange hedging

transactions if the underlying investment instrument is denominated in a currency other

than the EUR. Other Risk Factors

In consideration of the investment policy of all Sub-Funds, all prospective investors

should give careful consideration to the following factors, among others, in evaluating the

merit and suitability of an investment in the Sub-Fund:

a) Certain investment techniques as concentration of investments in a small number

of companies or sectors, borrowing funds for investment purposes, short selling or


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option-writing are not prohibited;

b) Disproportionate concentration in certain sectors is allowed;

c) Brokerage commissions and fees for investments made on the basis of short term market considerations can involve significant turnover rate;

d) The Sub-Fund invests some or all of its assets in other currencies which will

result in potential foreign exchange exposure.

e) There are risks of loss of entire investment in options;

f) There are substantial risks in the trading of equity securities and options, since

market movements can be volatile and difficult to predict.

g) Substantial losses may result under certain circumstances if a hedged position becomes a long or short position due to the assignment of the short put or short

call portion of the hedged position.

VII. DEALING POLICY

SUBSCRIPTION OF SHARES Starting as of September 1, 2016 and ending up and until October 13, 2016, 11.00

a.m. Nassau business time, the Company is offering Investors‟ Shares in the Company as

follows:

1'000'000 (one million) “Class A Shares - Absolute Return Fund” registered non-voting

Shares of EUR 0.01 (one EUR cent) par value each, linked to Absolute Return Fund

Segregated Account to be issued and offered during the Initial Subscription Period

above par for EUR 100 (one hundred EUR) each. Subscription forms should be

received before the end of the Initial Subscription Period.

Subsequent to the Initial Subscription Period, the Investors‟ Shares are being offered at

the prevailing Net Asset Value per Share determined as of the close of business the latest

5 (five) days prior to Valuation Date. The Valuation Date is monthly on the last day of each month and being the day based on

which the Fund Administrator calculates the Net Asset Value and accepts subscriptions.

Shares may be subscribed as of any Valuation Date. Deadline for submissions of

subscription applications is 5 (five) business days prior to the Valuation Date. Application

for the Shares should be made in the form of the Subscription Form, which accompanies

this Term Sheet as Appendix A. 1'000'000 (one million) “Class B Shares – Harcos Alpha Fund” registered non-voting

Shares of EUR 0.01 (one EUR cent) par value each, linked to Harcos Alpha Fund

Segregated Account to be issued and offered during the Initial Subscription Period

above par for EUR 100 (one hundred EUR) each. Subscription forms should be

received before the end of the Initial Subscription Period.



5 (five) days prior to Valuation Date. The Valuation Date is monthly on the last day of each month and being the day based on which the Fund Administrator calculates the Net Asset Value and accepts subscriptions. Shares may be subscribed as of any Valuation Date. Deadline for submissions of subscription applications is 5 (five) business days prior to the Valuation Date. Application for the Shares should be made in the form of the Subscription Form, which accompanies this Term Sheet as Appendix B.


15

1'000'000 (one million) “Class C Shares – Harcos Opportunities Fund” registered non-

voting Shares of EUR 0.01 (one EUR cent) par value each, linked to Harcos

Opportunities Fund Segregated Account to be issued and offered during the Initial

Subscription Period above par for EUR 100 (one hundred EUR) each.

Subscription forms should be received before the end of the Initial Subscription Period.



5 (five) days prior to Valuation Date. The Valuation Date is quarterly on the last day of each quarter and being the day based on which the Fund Administrator calculates the Net Asset Value and accepts subscriptions. Shares may be subscribed as of any Valuation Date. Deadline for submissions of subscription applications is 5 (five) business days prior to the Valuation Date. Application for the Shares should be made in the form of the Subscription Form, which accompanies this Term Sheet as Appendix C.

There is no minimum initial subscription amount and subsequent investments also

have no minimum for each Sub-Fund.

The Fund Administrator will determine the Net Asset Value of the Fund a n d its

Sub-funds as of the Valuation Date in accordance with International Financial Reporting

Standards ("IFRS"; formerly known as International Accounting Standards, "IAS"). The

Net Asset Value of the Fund will include all realized and unrealized gains and losses on

the Company's Investments. REDEMPTION OF SHARES

No public market for the Shares is likely to develop, but Shares in the Fund may be redeemed as described below.

Any registered holder may cause the redemption of Shares by completing and delivering

a form of Request of Redemption of Shares. In the event that a redemption requested is not received in a timely manner, as herein

provided, the Directors reserve the right to refuse to process the redemption until the

following Redemption Date. In the event the Directors refuse to accept a redemption

request for failure to have been given timely notice, the Directors should inform the

Shareholder immediately and the Shareholder shall have the right, until the next

Redemption Notice deadline, to withdraw his redemption request. Proceeds in respect of

each and every redemption of Shares shall be the product of the Net Asset Value per

Share and the number of Shares to be redeemed. Redemption proceeds of “Class A Shares - Absolute Return Fund” and “Class B Shares –

Harcos Alpha Fund” will be paid to the redeeming Shareholder within 15 (fifteen)

business days as of the Redemption Date. Redemption proceeds of “Class C Shares –

Harcos Opportunities Fund” will be paid to the redeeming Shareholder within 30 (thirty)

business days as of the Redemption Date. No interest will be paid on redemption

proceeds. The Company reserves the right not to redeem any Shares if it has not been

provided with evidence satisfactory to the Company that the redemption request was

properly made by a Shareholder of the Company.


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If redemption requests for more than 10% of the Net Asset Value of the Sub-Fund are

received, then the Company shall have the right to limit redemptions so that they don‟t

exceed this threshold amount of 10%. Redemptions shall be limited with respect to all

shareholders seeking to redeem shares as of a same Redemption Date so that each such

shareholder shall have the same percentage of its redemption request honored; the

balance of such Requests for Redemption shall be processed by the on behalf of each

Sub-Fund on the next day on which Requests for Redemption are accepted, subject to

the same limitation. On such day, such Requests for Redemption of Shares of each Sub-

Fund will be complied with in priority to subsequent requests.

The Directors have the right to temporarily suspend the right of Shareholders of each

Sub-Fund to redeem their Shares for the whole or any part of any period: • During which any recognized stock exchange, derivative exchange or other

regulated market on which the Company or its Sub-Fund trades securities or

derivatives are closed other than for ordinary holidays or during which dealings

thereon are restricted or suspended; or • During the existence of any state of affairs which, in the opinion of the Directors,

constitutes an emergency as a result of which liquidation by the Company or its Sub-

Fund of its securities or derivatives, in the opinion of the Directors, is not reasonable

or practicable or would be seriously prejudicial to the Company or to its

Shareholders; or • During any breakdown in the means of communication normally employed in

determining the value of the Company's or its Sub-Fund‟s securities or

derivatives or when, for any other reason, the value of any of the Company's

securities or derivatives cannot reasonably be promptly and accurately

ascertained; or • During a period when, in the judgment of the Directors, liquidating Investments in

order to raise sufficient funds to pay said proceeds will be, as determined in good

faith, unduly burdensome to the Shareholders remaining in the Company or Sub-

Funds.

VIII. DISTRIBUTION POLICY

The Company's and its Sub-Fund‟s objective is capital appreciation. The Directors have no present intention to pay dividends on the Shares of the Company or its Sub-

Funds.

IX. FINANCIAL STATEMENTS

The financial statements of the Fund will be audited annually unless all of the Investor

Shareholders unanimously waive the annual audit of the Fund‟s financial statements. If

the annual audit is unanimously waived by all of the Investor Shareholders in the Fund, a

performance report of the Fund will be filed with the Securities Commission of The Bahamas within six (6) months of the waiver and the Fund will also file a performance

report every six (6) months thereafter as long as the waiver is in place.

If the annual audit is not waived by all of the Investor Shareholders in the Fund, the Fund


17

will be audited and file its audited financial statements with the Securities Commission

and also make them available to all Investor Shareholders within six (6) months of the end of the Fund‟s financial year or within such time period permissible by law or extension

of same as granted by the Securities Commission.

Investor Shareholders may obtain a copy of the Fund‟s Net Asset Value report from the

Fund‟s Administrator, Registrar and Transfer Agent at the address listed above.

The Directors have determined that the Company's fiscal year shall end on 31st

December. X. FEES AND EXPENSES

Set-up costs: 40‟000 EUR incl. Government Fees and IBC fees

for the current year, to be charged to the Fund

(amortized over a period of 60months).

Subscription Fees: A Subscription fee may be charged as further

outlined in the Annex for each Sub-Fund.

Redemption Fees: A Redemption fee may be charged as further outlined

in the Annex for each Sub-Fund.

Management & Performance Fees: The Company will pay an Investment Management

fee (if any) and Performance Fee (if any) which will

differ depending on the Sub-Fund. Prospective

Investors must refer to the relevant Annex to this

Term Sheet for further details.

Performance fee will be calculated at a rate

outlined in the respective Sub-Fund above the

previous High Water Mark. Other Fees: The Investment Manager shall be entitled to charge

and retain for its own benefit all such fees,

commissions, profits or other benefits, which it

receives, out of or in connection with its

management services for the Company, from third

parties. Such fees, commissions, profits or other

benefits from third parties are considered

additional remuneration for the Investment

Manager. Such additional remuneration will be

made transparent to the Company. Except as

stipulated herein, no other fees shall be due to the

Investment Manager for its services hereunder. Administration Fees: 0.35% p.a. up to EUR 5m

0.30% p.a. from EUR 5m to EUR 10m

0.25% p.a. from EUR 10m to EUR 25m

0.20% p.a. from EUR 25m to EUR 50m 0.15% p.a. from EUR 50m to EUR 75m


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Out of pocket expenses in excess of Eur 500.00, other

than those that are administrative in nature, are subject

to approval of the Investment Manager.

Custody/Banking Fees: The Company will pay the Custodian/Banker a

Custodian/Banking Fee in accordance with the

Custodian/Banking Agreements.

Prospective Investors must refer to the relevant

Annex to this Offering Memorandum for further

details thereof.

Out of pocket, brokerage and any other operational

expenses will be assessed and charged to the Fund as

incurred.

Other Expenses: The Company will furthermore have to pay all its

other Operating Expenses, including but not limited

to costs associated with the acquisition, mainte-

nance and disposal of investments, legal and audi-

ting fees and expenses, IBC annual fees, fees and

expenses payable to the Securities Commission of

the Bahamas, the Administrator and the Company‟s

Directors and employees, if any, marketing and

advertising expenses, such as e.g. the preparing

and printing of reports to Shareholders, as well as

extraordinary expenses incurred from time to time,

such as e.g. any expenses in connection with

litigation. The Directors‟ Fees will not exceed Euro

5 ‟000 p.a. The Fund‟s assets are liable for all

costs payable by the Company or its Sub-Funds.

XI. FATCA COMPLIANCE Sections 1471 through 1474 of the U.S. Internal Revenue Code and the regulations

(whether proposed, temporary or final), as may be amended from time to time, and

administrative guidance promulgated thereunder (or which may be promulgated in the

future), and any applicable intergovernmental agreement related thereto including any

domestic Bahamian legislation to give effect to same (“FATCA”), impose or may impose a

number of obligations on the Fund.

In order to comply with the provisions of FATCA and avoid the imposition of U.S.

withholding tax, the Administrator or the Fund may, from time to time, (i) require further

information and/or documentation from the Shareholders, which may include (without

limitation) information and/or documentation relating to the Shareholder, the Shareholders

direct and indirect beneficial owners, and any such person‟s identity, residence (or

jurisdiction of formation) and income tax status, and which may need to be certified by the

Shareholder under penalties of perjury, and (ii) provide or disclose any such information

and/or documentation to the U.S. Internal Revenue Service (the “IRS”) or other proper

governmental agencies.


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Shareholders shall provide such information and/or documentation as the Administrator or

the Fund, in its reasonable discretion, determine is necessary or advisable for the Fund to

comply with its obligations under FATCA, including, without limitation, its obligations under

(i) an “FFI Agreement” (as defined under FATCA) entered between the IRS and the Fund or

any of its affiliates or (ii) the implementing legislation of an applicable intergovernmental

agreement. The Fund may provide or disclose any such information and documentation to

the IRS or other proper governmental agencies.

To the extent that the Fund suffers any withholding taxes, interest, penalties and other

expenses and costs on account of a Shareholder‟s failure to comply with the above, unless

otherwise agreed by the Fund, (i) such Shareholder shall promptly pay to the Fund an

amount equal to such withholding taxes, interest, penalties and other expenses and costs,

or (ii) the Fund may reduce the amount of the next distribution or distributions which

would otherwise have been made to such Shareholder or, if such distributions are not

sufficient for that purpose, reduce the proceeds of liquidation otherwise payable to such

Shareholder by an amount equal to such withholding taxes, interest, penalties and other

expenses and costs; provided that (A) if the amount of the next succeeding distribution or

distributions or proceeds of liquidation is reduced, such amount shall include an amount to

cover interest on the amount of such withholding taxes, interest, penalties and other

expenses and costs at the maximum rate permitted by applicable law, and (B) should the

Fund elect to so reduce such distributions or proceeds, the Fund shall use commercially

reasonable efforts to notify the applicable Shareholder of its intention to do so. Whenever

the Fund makes any such reduction of the proceeds payable to a Shareholder, such

Shareholder may be treated as having received all distributions (whether before or upon

liquidation) unreduced by the amount of such reduction. Unless otherwise agreed to by

the Fund in writing, each Shareholder shall indemnify and hold harmless the Fund and

every Administrator, Investment Advisor, Investment Manager, Custodian and other

servant or agent of the Fund from and against any withholding taxes, interest, penalties

and other expenses and costs with respect to such Shareholder‟s failure to comply with

these requirements.

XII. FATCA INDEMNITY

I. In all instances where Equity Bank And Trust Bahamas Limited (“Equity”) or its

affiliate is acting (jointly or severally) as banker, custodian, administrator,

investment manager or director to the Fund (“the Indemnified Person”), the

Subscriber hereby agrees to indemnify and keep indemnified and released the

Indemnified Person from all liabilities arising from any withholding penalties, taxes,

interest or other associated expenses and costs applied against any incoming or

outgoing payments received, or made accordingly, by the Fund or its custodian from

the aggregate or a portion thereof (of the proceeds) held on behalf of the investors

of the Fund directly or indirectly, howsoever arising from any misunderstanding or

uncertainty of due diligence data pertaining to the Subscriber‟s status as a U.S.

Person or recalcitrance (knowingly or unknowingly) of the Subscriber to this Fund in

violation of The Bahamas and the United States of America Foreign Account Tax

Compliance Agreement Act 2015 (“BUSFATCA”) or any other intergovernmental

agreement that The Bahamas may enter into involving United States taxes.

II. The Indemnified Persons may each in their own right enforce the foregoing

indemnity and release provisions notwithstanding that they are not parties hereto,


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and the Subscriber for itself and its successors, hereby waives any right which it

may have or be able to claim under any rule of law relating to the privity of contract

in order to avoid its liability or obligation to indemnify the Indemnified Persons in

accordance with the above terms.

III. Under BUSFATCA the term “U.S. Person” which is adopted herein these indemnity

clauses means a “U.S. citizen or resident individual, a partnership or corporation

organized in the United States or under the laws of the (United States or any State

thereof, a trust if (I) a court within the United States would have authority under

applicable law to render orders or judgments concerning substantially all issues

regarding administration of the trust, and (ii) one or more U.S. persons have the

authority to control all substantial decisions of the trust, or an estate of a decedent

that is a citizen or resident of the United States. This subparagraph 1 (aa) shall be

interpreted in accordance with the U.S. Internal Revenue Code.”

XIII. ANTI-MONEY LAUNDERING REQUIREMENTS The Fund, the Administrator, Registrar and Transfer Agent and the Fund‟s Directors, all

reserve the right to request such information as they may deem necessary to verify the

identity of an investor in the Fund and the underlying beneficial owner of any investor. In

the event of a delay or failure by the investor or underlying beneficial owner to produce

any information required for verification purposes, the Fund may refuse to accept a

subscription or may cause a compulsory redemption of any such investor from the Fund.

Redemption proceeds may be suspended if the Fund reasonably deems it necessary to do

so to comply with anti-money laundering regulations and rules applicable to the Fund, the

Administrator, Registrar and Transfer Agent, of any of the Fund‟s service providers.

Each investor shall be required to make such representations to the Fund as the Fund, its

Administrator, Registrar and Transfer Agent, its Directors, its Investment Advisor (if any)

and its Investment Manager (if any) shall require in connection with any such anti-money

laundering guidelines, rules or requirements.

XIV. DURATION Subject to the provisions of the Act and the Memorandum and Articles, the duration of the

Fund shall be indefinite.

XV. TERMINATION The Directors of the Company may at any time resolve to liquidate the Company and its

Sub-Funds in cases in which they consider the Company‟s and its Sub-Funds assets

insufficient to achieve its respective investment strategies or in such other cases in which

they consider, within their sole discretion, such a liquidation to be reasonable and

appropriate (the “Liquidation Resolution”).

Upon such Liquidation Resolution, the Company may liquidate the assets of the Company or its Sub-Funds or the respective Fund, as the case may be, and is entitled to unilaterally

repurchase all outstanding Investors‟ Shares of the Company or of the respective Sub-

Fund for the Net Asset Value of the liquidation proceeds per Shares of the respective

Sub-Fund, as the case may be.


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XVI. RESPONSIBILITY FOR THE CONTENTS OF THIS TERM SHEET The Board of Directors has taken all reasonable care to confirm that the information

contained in this Term Sheet is true and accurate in all material respects and that there

are no material facts the omission of which would make misleading any statement herein,

whether fact or opinion. It assumes responsibility accordingly. XVII. RIGHTS OF INVESTORS The Fund is licensed as a SMF 002 pursuant to the Investment Funds Act, 2003 operating as a fund –

a. Which is limited to having no more than ten investors who hold equity interests in the Fund;

b. Whose investors are persons to whom a professional fund may be offered; and

c. Where a majority of the investors who hold equity interests in the Fund have

the power to appoint and remove the operators of the Fund.

Excalibur TS [April 4, 2007] - Northern...

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