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Copy No: _1____ Furnished to: ___MK Special Opportunities Fund Ltd.__

SHORT TERM LIQUIDITY FUND I, LTD.
(an open-ended investment fund incorporated in the Cayman Islands as an exempted company limited by shares)

PRIVATE OFFERING MEMORANDUM
for the offer of Class A non-voting participating shares

MICHAEL KENWOOD CAPITAL MANAGEMENT, LLC Investment Manager

MAY 2010

This Private Offering Memorandum is strictly confidential. It is being provided to a restricted number or class of potential investors. It is intended to be read by the potential investor to whom it has been addressed, and is made available on the understanding that it will not be passed on to any other person. This Private Offering Memorandum is not to be distributed in, and no offer of the Offered Shares will be made in, any jurisdiction in which it would be unlawful to do so without the need for registration or other legal requirements. In any such jurisdiction, a recipient of this Private Offering Memorandum or the accompanying Subscription Agreement may not treat either document as an invitation to subscribe for Offered Shares. Nor should that recipient submit a Subscription Agreement. Prospective investors should carefully review this Private Offering Memorandum and obtain their own professional advice before subscribing for Offered Shares. In particular, potential investors should consult with their legal and financial advisors to determine the possible tax and other consequences of purchasing, holding or redeeming Offered Shares.

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TABLE OF CONTENTS
DIRECTORY ..............................................................................................................................4 IMPORTANT NOTICE TO POTENTIAL INVESTORS .............................................................5 EXECUTIVE SUMMARY ...........................................................................................................9 SECTION I - THE FUND .........................................................................................................16 1.1 Structure ..........................................................................................................................16 1.2 Regulation .......................................................................................................................17 1.3 Additional information .....................................................................................................17 SECTION II - INVESTMENT OBJECTIVE AND STRATEGY ................................................19 2.1 Investment objective .......................................................................................................19 2.2 Investment strategy .........................................................................................................19 2.3 Investment restrictions ....................................................................................................19 SECTION III - CERTAIN RISK FACTORS .............................................................................21 3.1 General risk factors .........................................................................................................21 3.2 Investment and trading risks ...........................................................................................25 3.3 Potential conflicts of interest ...........................................................................................32 SECTION IV - MANAGEMENT AND ADMINISTRATION .....................................................36 4.1 Board of directors ............................................................................................................36 4.2 Investment Manager .......................................................................................................38 4.3 Administrator ...................................................................................................................41 4.4 Brokerage and custody ...................................................................................................42 4.5 Expenses.........................................................................................................................44 SECTION V - DESCRIPTION OF THE FUND’S SHARES ....................................................46 5.1 General............................................................................................................................46 5.2 Management Shares .......................................................................................................46 5.3 Participating Shares ........................................................................................................46 5.4 Records ...........................................................................................................................47 5.5 Rights of shareholders ....................................................................................................48 5.6 Modification of Class rights .............................................................................................49 5.7 Variation of offering terms ...............................................................................................49 SECTION VI - SUBSCRIPTION, REDEMPTION AND TRANSFER OF SHARES ...............51 6.1 Subscription for shares ...................................................................................................51 6.2 Redemption of Offered Shares .......................................................................................55 6.3 Determining Net Asset Value ..........................................................................................57 6.4 Temporary suspension of dealings .................................................................................60 6.5 Transfer of Offered Shares .............................................................................................61 SECTION VII - FINANCIAL INFORMATION AND REPORTS ..............................................62 7.1 Fiscal year .......................................................................................................................62 7.2 Fiscal periods ..................................................................................................................62 7.3 Financial statements .......................................................................................................62 7.4 Auditors ...........................................................................................................................62 7.5 Reports to shareholders..................................................................................................63 SECTION VIII - TAXATION .....................................................................................................64

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8.1 8.2 8.3 8.4

General............................................................................................................................64 Cayman Islands ..............................................................................................................64 United States ...................................................................................................................65 Other jurisdictions ...........................................................................................................68

SECTION IX - GENERAL........................................................................................................69 9.1 Directors’ report...............................................................................................................69 9.2 Material Contracts ...........................................................................................................69 9.3 Documents available for inspection ................................................................................69 APPENDIX I .............................................................................................................................70 Eligible Investors ......................................................................................................................70 APPENDIX II ............................................................................................................................72 Subscription Agreement ..........................................................................................................72 APPENDIX III...........................................................................................................................80 Anti-money laundering requirements.......................................................................................80 EXHIBIT I to APPENDIX III......................................................................................................82 Source of fund exemption ........................................................................................................82 EXHIBIT II to APPENDIX III.....................................................................................................83 Letter of introduction ................................................................................................................83 APPENDIX IV ..........................................................................................................................84 Subscription Agreement for subsequent subscriptions ...........................................................84 APPENDIX V ...........................................................................................................................87 Redemption request form ........................................................................................................87

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DIRECTORY
Directors: Octavio Calvo Ronald G. Percival Odo G. Habeck Registered Office: Ogier Fiduciary Services (Cayman) Limited 89 Nexus Way Camana Bay Grand Cayman KY1-9007 Cayman Islands

Investment Manager and Administrator: Michael Kenwood Capital Management, LLC 350 Bedford Street, Suite 405 Stamford, CT 06901 USA

Auditors: McGladrey & Pullen, Cayman 2nd Floor, Harbour Place PO Box 10311 Grand Cayman KY1-1003 Cayman Islands

US Legal Advisors to the Investment Manager: Arnold & Porter LLP 399 Park Avenue New York, NY 10022 USA

Cayman Islands Legal Advisors: Ogier 89 Nexus Way Camana Bay Grand Cayman KY1-9007 Cayman Islands

Custodian: Deutsche Bank AG Herengracht 450-454 1017 CA Amsterdam Postbus 268 1000 AG Amsterdam

Enquiries Any enquiries relating to the Fund and this Private Offering Memorandum should be directed to Odo Habeck of Michael Kenwood Capital Management, LLC at +1 (203)-327-8700 ext. 112 during normal business hours.

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IMPORTANT NOTICE TO POTENTIAL INVESTORS

This Private Offering Memorandum This Private Offering Memorandum (“Memorandum”) relates to the offering of Class A nonvoting participating shares (“Offered Shares”) in Short Term Liquidity Fund I, Ltd. (“Fund”). The Fund is a company incorporated under the Companies Law (Revised) (the “Law”) of the Cayman Islands as an exempted company limited by shares. This Memorandum is strictly confidential. It is intended to be read only by the person to whom it has been delivered to enable that person to evaluate an investment in the Fund. It is not to be reproduced or distributed to any other person (except to a prospective investor’s professional advisors). But each recipient (and each employee, representative, or other agent of the recipient) may disclose to any person the tax treatment and tax structure of an investment in the Fund and all related tax materials (including opinions or other tax analyses) given to the recipient. Reliance on this Memorandum The Offered Shares are offered solely on the basis of the information contained in this Memorandum. Potential investors should disregard, and not rely upon, any other information or representations given or made by any dealer, broker or other person. No person is authorised to give any information or to make any representations in connection with the offering of Offered Shares apart from those contained in this Memorandum. A potential investor to whom such information or representations are given or made must not rely on them as having been authorised by the Fund, the directors, the investment manager or the administrator. Statements in this Memorandum are based on the law and practice in the Cayman Islands current at the date it was issued. Those statements are therefore subject to change should that law or practice change. Under no circumstance does the delivery of this Memorandum or the issue of Offered Shares imply or represent that the affairs of the Fund have not changed since the date of this Memorandum. Investor responsibility The Fund does not make representations or warranties of any kind with respect to the economic return from, or the tax consequences of an investment in, the Fund. It cannot assure that existing laws will not be changed or interpreted adversely. Prospective investors must not treat this Memorandum as legal, investment or tax advice. This Memorandum supersedes all previous versions. It should be reviewed before making an investment decision. Prospective investors should carefully review the whole of this Memorandum. They should also consult with their legal, tax and financial advisors in relation to the following: (i) the legal and regulatory requirements within their own countries for purchasing, holding, redeeming and disposing of Offered Shares;

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(ii) (iii)

any foreign exchange restrictions to which they may be subject in their own countries in relation to purchasing, holding, redeeming or disposing of Offered Shares; and the legal, tax, financial and other consequences of subscribing for, purchasing, holding, redeeming or disposing of Offered Shares.

By retaining this Memorandum, each recipient acknowledges and represents to the Fund that it has read, understood and accepted the terms of this Important Notice. If the recipient does not accept these terms, it must immediately return this Memorandum to the Fund, marked to the attention of “The directors”. No offer in restricted jurisdictions The distribution of this Memorandum and the offering or purchase of the Offered Shares may be restricted in certain jurisdictions. Neither this Memorandum nor the Offered Shares qualify for offer, sale or distribution under the laws of any jurisdiction governing the offer or sale of mutual fund shares or other securities. The receipt of this Memorandum or the accompanying Subscription Agreement does not constitute an invitation to a recipient to subscribe for Offered Shares in a jurisdiction where it is necessary to comply with some registration or other legal requirement to make that invitation, or the use of the Subscription Agreement, lawful. No such recipient may treat this Memorandum or the accompanying Subscription Agreement as an invitation to subscribe for Offered Shares, nor may such recipient use the Subscription Agreement. More particularly, this Memorandum does not constitute an offer or solicitation: • • by anyone in a jurisdiction in which such offer or solicitation is not lawful or in which the person making such offer or solicitation is not qualified to do so; or to anyone to whom it is unlawful to make such offer or solicitation.

It is the responsibility of every person in possession of this Memorandum and every person wishing to apply for Offered Shares to inform himself, herself or itself of, and to observe all applicable laws and regulations of, any relevant jurisdiction. The Offered Shares described in this Memorandum have not been, and will not be, registered under the US Securities Act of 1933, as amended (“Securities Act”), or any similar law, rule or regulation in any other jurisdiction (including without limitation any law, rule or regulation of any of the states of the United States of America). The Offered Shares may not be directly or indirectly offered or sold to or for the benefit of any person or entity which (i) is a United States person (within the meaning of Regulation S under the Securities Act or for purposes of US Federal income taxation) or (ii) is not a Non-US Person as defined in US Commodity Futures Trading Commission (“CFTC”) Rule 4.7 under the US Commodity Exchange Act, as amended (“CE Act”). See Appendix I for further information on these restrictions. In addition the Fund has not been and will not be registered under the US Investment Company Act of 1940, as amended, or any similar law, rule or regulation in any other jurisdiction (including without limitation any law, rule or regulation of any of the states of the United States of America). If the directors of the Fund later determine to accept subscriptions from United States persons, such persons would need to meet certain eligibility requirements that are not specified herein, and a new Memorandum would be issued. The Investment Manager is not registered under the US Investment Advisers Act of 1940, as amended.

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Pursuant to an exemption from registration as a commodity pool operator set forth in CFTC Rule 4.13(a)(4), the Investment Manager is not required to register, and is not registered, as a commodity pool operator under the CE Act. Consequently, unlike a registered commodity pool operator, the Investment Manager is not required to provide shareholders with a disclosure document or certified annual report meeting the requirements of the CFTC rules generally applicable to registered commodity pool operators. This Memorandum has not been, and is not required to be, filed with the CFTC, and the CFTC has not reviewed or approved this Memorandum or the offering of the Offered Shares. Risks Investment in the Fund carries with it a degree of risk. The value of the Offered Shares and the income derived from them may go down as well as up, and investors may not get back the amount invested. Because of these and other risks, an investment in the Fund is only suitable for sophisticated investors who: (a) (b) (c) (d) are able to bear the loss of a substantial portion or even all of the money they invest in the Fund; understand the high degree of risk involved; believe that investment in the Fund is suitable for them based on their investment objectives and financial needs; and have no need of liquidity of investment.

Investors are therefore advised to seek independent professional advice on the implications of investing in the Fund. Certain risk factors that potential investors need to consider appear in Section III headed “Certain Risk Factors.” There is no public market for the Offered Shares, nor is a public market expected to develop in the future. Confidentiality Except as outlined in the Data Protection policy in the Subscription Agreement that appears in Appendix II, any information forwarded to the Fund by a potential investor will be treated on a confidential basis. If required to do so by law or regulation, the Fund may pass on that information to a relevant third party. By subscribing for Offered Shares, each investor is deemed to have consented to such release of confidential information pursuant to Section 3(2)(b)(i) (or any amendment of that provision) of the Confidential Relationships (Preservation) Law (Revised) of the Cayman Islands. Forward-looking information If and when included in this Memorandum, the words “seeks,” “expects,” “believes,” “intends,” “plans,” “anticipates,” “estimates” and analogous expressions are intended to identify forward-looking statements. Any statement of this kind is inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Without seeking to be exhaustive, those risks and uncertainties include (i) general economic and business conditions, (ii) interest rate risks, (iii) prepayment risks, (iv) delinquency and default rates, (v) competition, (vi) changes in political, social and economic conditions, (viii) regulatory initiatives and compliance with governmental regulations and (ix)

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customer preferences. Many of these are beyond the Fund’s or the Investment Manager’s control. These forward-looking statements, as well as the information contained in this Memorandum, speak only as of the date of this Memorandum. None of the Fund, its directors, the Investment Manager, the Administrator or any of their respective affiliates is obliged, or undertakes, to release publicly any updates or revisions to any forward-looking statement to reflect a change in the Fund’s or the Investment Manager’s expectations or a change in events, conditions or circumstances on which the statement is based. FOR CAYMAN ISLANDS PROSPECTIVE INVESTORS THE FUND MAY NOT MAKE AN INVITATION TO THE PUBLIC IN THE CAYMAN ISLANDS TO SUBSCRIBE FOR THE OFFERED SHARES UNLESS THE FUND IS LISTED ON THE CAYMAN ISLANDS STOCK EXCHANGE. “PUBLIC” FOR THESE PURPOSES SHALL HAVE THE SAME MEANING AS “PUBLIC IN THE ISLANDS”, AS DEFINED IN THE MUTUAL FUNDS LAW (REVISED). HOWEVER, OFFERED SHARES MAY BE BENEFICIALLY OWNED BY PERSONS RESIDENT, DOMICILED, ESTABLISHED, INCORPORATED OR REGISTERED PURSUANT TO THE LAWS OF THE CAYMAN ISLANDS. THE FUND WILL NOT UNDERTAKE BUSINESS WITH ANY PERSON IN THE CAYMAN ISLANDS EXCEPT IN FURTHERANCE OF THE BUSINESS OF THE FUND CARRIED ON EXTERIOR TO THE ISLANDS.

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EXECUTIVE SUMMARY

You should not rely on this Executive Summary alone; you must read it in conjunction with the rest of this Memorandum together with the Fund’s memorandum and articles of association and its other material contracts.

The Fund

Short Term Liquidity Fund I, Ltd. (“Fund”) is incorporated in the Cayman Islands as an exempted company limited by shares. It was incorporated on June 20, 2008. The Fund’s authorised share capital is US $100,000 which is made up of: • • 100 management shares of US $0.01 par value per share (“Management Shares”); and 9,999,900 participating shares of US $0.01 par value per share (“Participating Shares”).

Initially, the directors have designated one class of Participating Shares for offer to investors, being Class A shares (“Offered Shares”). At any time, the directors may designate additional classes and series of Participating Shares without notice to, or the consent of, the Fund’s shareholders. They may also differentiate between classes on various bases, including, as to (i) the currency of denomination of each class, (ii) the level of fees payable in respect of each class; (iii) the pool of assets into which each class invests; and (iv) the redemption or information rights applicable to each class. The Class A shares will be issued in series to accommodate an equitable calculation of the Incentive Fee. (In the rest of this Memorandum, the expressions “Class” and “Series” refer any class or series, respectively, of Participating Shares designated as such by the directors pursuant to the Fund’s articles. Also, “$” or “US dollars” refers to US currency.) See Section V headed “Description of the Fund’s Shares” for full details. Investment objectives and strategies While the Fund may, from time to time, invest in longer-term securities, its primary investment strategy seeks to take advantage of products offered in the global fixed income and derivatives markets to generate gains through short-term (under one year) investments in sovereign securities, particularly those subject to currency arbitrage opportunities in their country of issuance, due to a particular country’s exchange rate policy. The Fund may, from time to time, also

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invest in G-20 government securities and derivatives referencing such securities, as well as selected short-term instruments issued by international financial institutions and other business entities. In addition, the Fund may, from time to time, take a transactional approach to the trading of fixed income securities, by taking advantage of inefficiencies in the currency markets of the securities in which it invests to generate arbitrage gains. The Fund may invest in securities denominated in different currencies. These currencies will generally include the US Dollar (USD), the Euro (EUR) and the British Pound Sterling (GBP), as well as currencies of developing countries such as the Brazilian Real (BRL) and the Venezuelan Bolívar Fuerte (VEF). From time to time, the Fund may add other currency denominations to its investments. The Investment Manager generally intends to limit the leverage applied to the Fund’s investments to 2-to-1 or less (i.e., the Fund generally will have at least $1,000 in net equity for every $2,000 initially invested by the Fund). Service Providers Directors: Octavio Calvo Ronald G. Percival Odo G. Habeck Investment Manager and Administrator: Custodian: Michael Kenwood Capital Management, LLC (“Investment Manager” or “Administrator” as the context warrants) Deutsche Bank AG (“Custodian”)

See Section IV headed “Management and Administration” for full details. Offering The initial offering of Offered Shares is open for the period from now until the time nominated by the directors (“Initial Offering Period”), or the later date nominated by the directors (“Closing Date”). During the Initial Offering Period, the Offered Shares are available for issue to Eligible Investors at a subscription price of $1,000 per share. (Investors who qualify as “Eligible Investors” are specified in Appendix 1.) After the Closing Date, the Offered Shares will be issued in Series, generally monthly, with a separate Series being issued on the first business day of the month, or an alternative day nominated by the directors (“Subscription Day”), at a subscription price of $1,000 per share. If the directors so determine, subscriptions for Offered Shares

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may be subject to an initial charge. Subscription amounts will be invested net of that charge. See Section VI headed “Subscription, Redemption and Transfer of Shares” for full details. Subject to the Law, and in the sole discretion of the Directors, each shareholder holding Offered Shares will be paid a monthly dividend when the Net Asset Value per Share held by such shareholder for the current month exceeds the Net Asset Value per Share for the immediately preceding month. The dividend will be calculated by subtracting the Net Asset Value per Share at the end of the immediately preceding month from the Net Asset Value per Share for the current month, in each case as reduced by any accrued Incentive Fees (the “Dividend”). The Dividend will be paid at the end of each month, after the deduction of the Management Fees and out of the profits available for such payment. Please see the section entitled “Description of the Fund’s Shares” for further information. Minimum investment The minimum initial investment for the Offered Shares is $1,000,000. The directors may fix some other amount as the minimum subscription payable by a particular shareholder or group of shareholders, but such amount shall not be below any statutory minimum, currently US $100,000. Only Eligible Investors may subscribe for shares. See Appendix I for the description of persons who qualify as Eligible Investors. Generally, on the holder of Offered Shares giving at least 30 days’ prior written notice, those shares may be redeemed as of the last business day of a calendar month, or an alternative day nominated by the directors, (“Redemption Day”) at Net Asset Value per Share prevailing at the close of business on that Redemption Day. In this Memorandum: “Net Asset Value”, in respect of the Fund or each Class or Series of Participating Shares, refers the net asset value of the Fund or that Class or Series determined using the valuation principles described in Section VI headed “Subscription, Redemption and Transfer of Shares” and will be calculated after considering all income, gains, expenses and losses for each reporting period; “Net Asset Value per Share”, in respect of a share of a Class or Series, refers to the Net Asset Value for that Class or Series divided by the number of currently issued shares of that Class or Series; and a reference to a business day refers a day other than a

Eligible Investors

Redemptions

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Saturday or Sunday on which banks are open for business generally in New York, or an alternative day nominated by the directors. The Fund may compulsorily redeem shares in certain circumstances. Normally, the redemption proceeds will be paid in cash (in US $) by electronic transfer at the shareholder’s risk and expense. However, in certain circumstances, the proceeds may be satisfied in securities, or partly in cash and partly in securities. No redemption charges will apply to the Offered Shares. See Section VI headed “Subscription, Redemption and Transfer of Shares – Redemption of Offered Shares” for full details. Transfers Offered Shares may not be transferred without the prior written consent of the directors. See Section VI headed “Subscription, Redemption and Transfer of Shares – Transfer of Offered Shares” for full details. Fees/expenses The Fund is responsible for the following fees and expenses. (a) The Investment Manager is entitled to receive the following fees: • The Investment Manager will be paid a monthly management fee (“Management Fee”), payable in arrears, of 1/12th of 2% of the Net Asset Value of the Fund (approximately 2% annually). In addition, as of the end of each calendar year, the Investment Manager will be paid an incentive fee (“Incentive Fee”) in an amount equal to 20% of the Net New Appreciation achieved by each Series of Participating Shares as of the end of such year prior to giving effect to the Dividend to be determined as of such year-end. “Net New Appreciation” achieved by a Series of Participating Shares as of any date of determination shall mean the excess, if any, of (a) the Net Asset Value of such Series as of such date of determination, calculated without reduction for any Incentive Fee accrued or payable to the Investment Manager with respect to such Series as of such date, over (b) the Net Asset Value of such Series as of the then applicable High Water Mark Date for such Series, reduced by the aggregate amounts of Dividend declared after the High Water Mark

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Date, and proportionately reduced to reflect any redemptions of Participating Shares in such Series since such High Water Mark Date. The “High Water Mark Date” for a Series of Participating Shares as of any date of determination shall mean the most recent date as of which an Incentive Fee was payable with respect to such Series or, if no such Incentive Fee has previously been paid to the Investment Manager, the initial subscription date for such Series. For purposes of determining Net New Appreciation, the Net Asset Value of a Series shall not be reduced by any extraordinary fees and expenses (such as attorneys’ fees and expenses incurred in relation to any litigation). • If any Participating Shares in a Series are redeemed as of any day other than the end of a calendar year, any Incentive Fee accrued with respect to such Shares as of the redemption date will be paid to the Investment Manager at the time of the redemption (as if such redemption date were the end of a calendar year).

These fees are payable under the agreement (“Management Agreement”) between the Fund and the Investment Manager referred to in Section IV headed “Management and Administration”. Out of these fees, the Investment Manager bears all of its administration and operational expenses incurred in providing investment-management services to the Fund. (b) The Administrator is entitled to fees as agreed under the agreement between the Fund and the Administrator (“Administration Agreement”) also referred to in Section IV headed “Management and Administration”. The Fund compensates the Custodian and providers of brokerage services on arm’s-length commercial terms. The fees payable to the Custodian are payable under the agreement (“Custodian Agreement”) between it and the Fund, once again referred to in Section IV headed “Management and Administration”.

(c)

(In this Memorandum, a reference to “Material Contracts” is a reference to the Management Agreement, Administration Agreement and Custodian Agreement.) The Fund bears all costs of its investment program, other

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than those borne by the Investment Manager. Those costs include interest and taxes as well as professional fees of its auditors and legal advisers. The Fund is also responsible for its initial organisational expenses. See Section IV headed “Management and Administration – Expenses”. Risk factors An investment in the Fund entails certain risks. Prospective investors should review carefully the discussion about risks in Section III headed “Certain Risk Factors”. The Fund will furnish to each shareholder an annual report that will include audited financial statements as of the end of each fiscal year. The Fund will also provide shareholders with a monthly unaudited report on the investment performance of the Fund. The Fund’s fiscal year will end on December 31 of each year, with the first fiscal year ending on December 31, 2010. Apart from registration and annual filing fees, the Fund is not (under the current laws of the Cayman Islands) subject to tax in the Cayman Islands. Each prospective investor should consult its own advisors about the tax consequences in any jurisdiction for it of any proposed investment in the Fund. To participate, an investor must do the following: (a) complete and return the form reproduced in Appendix II (“Subscription Agreement”); and (b) transfer its subscription price to the Fund’s bank account. The directors may, in their sole discretion, permit subscriptions in kind, as further described herein. Defined terms This Memorandum uses capitals to identify defined terms. Most of those terms are defined in this summary. Occasionally, a term is defined elsewhere in the part of this Memorandum that directly relates to it. In addition, other matters of interpretation to note are these: (a) a reference to any law, legislation or legislative provision includes any statutory modification, amendment or re-enactment, and any subordinate legislation or regulations issued under that legislation or legislative provision; (b) a reference to any document or agreement is to that document or agreement as amended, novated, supplemented or replaced; and

Reporting

Fiscal year Tax

Subscription procedure

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(c) a reference to ‘including’ or similar expression does not imply any limitation.

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SECTION I - THE FUND
1.1 Structure The Fund is a corporate, multi-class, open-ended investment fund. It was incorporated under the Law (the “Law”) of the Cayman Islands on June 20, 2008 as an exempted company limited by shares. The location of its registered office appears in the Directory. The Fund will only accept subscriptions for shares from Eligible Investors. It reserves the right to reject any subscriptions. The Fund maintains a separate record of income and expenses for each Class. All income and capital gains earned on the assets of a particular Class are recorded in the record for that Class. Similarly, all expenses and liabilities related to a particular Class, and any redemption of the Offered Shares of that Class, are charged to and paid from the record for that Class. All expenses of the Fund not directly attributable to a specific Class are allocated to all Classes in the proportion that the net asset value of each Class bears to the total net asset value of the Fund. A member of the Fund who holds shares of one Class will only have an interest in the assets specified in the record the Fund maintains for that Class; that member will have no interest in any other assets of the Fund. But each Class does not exist separately from the Fund. Accordingly, if the assets attributable to a particular Class are insufficient to discharge all debts arising in respect of that Class, creditors may have recourse to the assets of the Fund as a whole, being the assets attributable to the other Classes. In an attempt to ensure that investors in one Class are not exposed to trading risks of another Class, the Fund’s directors may choose to carry on the investment programme of a Class through a separate trading company attributable to that Class that is a wholly-owned subsidiary of the Fund. That wholly-owned subsidiary may be incorporated in the Cayman Islands or elsewhere. If the Fund’s directors choose to do that, then, so far as possible under applicable law, any trading losses associated with a particular Class will be contained within the relevant trading company and should have no impact on the assets of any other Class unless the trading company is treated as the agent or alter ego of the Fund. In addition, if, following consultation with the Investment Manager, it appears expedient for tax, regulatory or other reasons the directors consider appropriate, the Fund may: (i) (ii) invest through one or more wholly-owned subsidiaries of the Fund; or channel investments through a vehicle that would effectively operate as a master fund in which one or more Classes of Offered Shares or other investment vehicles may invest.

Any trading companies, investment subsidiaries or master fund may be managed by the Investment Manager or its affiliates and may pay separate fees to those persons. Any trading companies, investment subsidiaries or master fund may incur operational and administrative costs and expenses that include, but are not limited to,

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establishment costs, custodian fees and local regulatory fees. expenses will be paid out of the assets of the Fund.

These costs and

Unless otherwise indicated, references to the “Fund” in this Memorandum include the Fund and, as the context may permit, the applicable trading companies, investment subsidiaries or master fund. 1.2 Regulation The Fund will, prior to issuing Offered Shares to more than 15 investors, register as a mutual fund under the Mutual Funds Law (Revised) of the Cayman Islands (“Mutual Funds Law”). Regulation under the Mutual Funds Law entails the filing of prescribed details and audited accounts annually with the Cayman Islands Monetary Authority (the “Monetary Authority”). Once registered as a regulated mutual fund, the Fund will be subject to the supervision of the Monetary Authority; however, the Fund will not be subject to supervision in respect of its investment activities or the constitution of the Fund’s portfolio by the Monetary Authority or any other governmental authority in the Cayman Islands, although the Monetary Authority will have power to investigate the activities of the Fund in certain circumstances as set forth below. The Monetary Authority may at any time instruct the Fund to have its accounts audited and to submit them to the Monetary Authority within such time as the Monetary Authority specifies. Failure to comply with these requests by the Monetary Authority may result in substantial fines on the part of the Directors and may result in the Monetary Authority applying to the court to have the Fund wound up. The Monetary Authority may take certain actions if it is satisfied that a regulated mutual fund is or is likely to become unable to meet its obligations as they fall due or is carrying on or is attempting to carry on business or is winding up its business voluntarily in a manner that is prejudicial to its investors or creditors. The powers of the Monetary Authority include the power to require the substitution of Directors, to appoint a person to advise the Fund on the proper conduct of its affairs or to appoint a person to assume control of the affairs of the Fund. There are other remedies available to the Monetary Authority including the ability to apply to court for approval of other actions. Neither the Monetary Authority nor any other governmental authority in the Cayman Islands has passed judgment upon or approved the terms or merits of this document. There is no investment compensation scheme available to investors in the Cayman Islands. 1.3 Additional information This Memorandum does not give a complete description of the Fund’s Memorandum and Articles of Association or the Material Contracts. Before investing in the Fund, each prospective investor should examine this Memorandum, the Subscription Agreement in Appendix II, the Fund’s memorandum and articles of association and the Material Contracts, and satisfy itself that an investment in the Fund is appropriate. In addition, before a prospective investor buys any Offered Shares, the Fund will allow it or its representative: (i) to ask questions of, and receive written answers from, representatives of the Fund concerning any aspect of the investment, and

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(ii)

to obtain any additional information, to the extent that the Fund possesses that information or can acquire it without unreasonable effort or expense.

An investment in the Fund may be considered speculative. It is not intended as a complete investment program. It is designed solely for experienced and sophisticated investors who are able to bear the risk that all or a substantial part of their investment may be lost.

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SECTION II - INVESTMENT OBJECTIVE AND STRATEGY
2.1 Investment objective While the Fund may, from time to time, invest in longer-term securities, its primary investment strategy seeks to take advantage of products offered in the global fixed income and derivatives markets to generate gains through short-term (under one year) investments in sovereign securities, particularly those subject to currency arbitrage opportunities in their country of issuance, due to a particular country’s exchange rate policy. The Fund may, from time to time, also invest in G-20 government securities and derivatives referencing such securities, as well as selected short-term instruments issued by international financial institutions and other business entities. In addition, the Fund may, from time to time, take a transactional approach to the trading of fixed income securities, by taking advantage of inefficiencies in the currency markets of the securities in which it invests to generate arbitrage gains. The Fund may invest in securities denominated in different currencies. These currencies will generally include the US Dollar (USD), the Euro (EUR) and the British Pound Sterling (GBP), as well as currencies of developing countries such as the Brazilian Real (BRL) and the Venezuelan Bolívar Fuerte (VEF). From time to time, the Fund may add other currency denominations to its investments. The Investment Manager generally intends to limit the leverage applied to the Fund’s investments to 2-to-1 or less (i.e., the Fund generally will have at least $1,000 in net equity for every $2,000 initially invested by the Fund). 2.2 Investment strategy The investment objectives and strategies summarised in this Memorandum represent the Investment Manager’s current intentions. Depending on conditions and trends in the securities markets and the economy in general, the Investment Manager may pursue any strategies, employ any investment techniques and purchase any type of security it considers appropriate to achieve the investment objective of the Fund, as long as they are constrained to fixed income securities and derivatives referencing fixed income securities. It may pursue these alternative strategies subject to any applicable law or regulation, irrespective of whether they are described in this Section. The discussion in this Section includes and is based on numerous assumptions and opinions of the Investment Manager concerning world financial markets and other matters. The accuracy of those assumptions and opinions cannot be assured. The Fund cannot give an assurance that its investment strategy will achieve the intended investment objective. The Fund’s investment program is speculative and involves a high degree of risk. There is even a risk that the entire amount invested will be lost. 2.3 Investment restrictions The Fund’s investment policy is to be able to invest in a range of fixed income securities and derivatives as described above. The Fund is unlikely to restrict this policy by applying any investment restrictions in relation to the Offered Shares. From

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time to time it may carry a significant cash holding or invest in a single security or instrument.

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SECTION III - CERTAIN RISK FACTORS
An investment in the Fund entails substantial risks. Those risks include the ones listed below but there may be others. In ascertaining whether an investment in the Fund is suitable for it, a prospective investor should carefully consider the following risk factors, amongst others: 3.1 3.1.1 General risk factors Overall investment risk All investments in securities risk the loss of capital. There may be increased risk due to the nature of the securities to be purchased and traded by the Fund and the investment techniques and strategies used to try to increase profits. While the Investment Manager will devote its best efforts to the management of the Fund’s portfolio, it cannot give an assurance that the Fund will not incur losses. Many unforeseeable events, including actions by various government agencies and domestic and international political events, may cause sharp market fluctuations. 3.1.2 Lack of operating history The Fund is a recently formed entity and has no prior operating history that a prospective investor can evaluate before making an investment in the Fund. A prospective investor should evaluate the Fund’s investment program on the basis that no one can guarantee that the Investment Manager’s assessment of the shortor long-term prospects of its investment strategy will prove accurate, or that the Fund will achieve its investment objective. 3.1.3 Dependence on key personnel The Fund’s investment activities depend on the experience and expertise of the principals of the Investment Manager. If a principal leaves the Investment Manager, this may have a material adverse effect on the Fund’s operations. 3.1.4 Illiquidity of shares Participating Shares are not transferable without the approval of the directors, and there will be no secondary market for shares. Consequently, a holder of Participating Shares may only be able to dispose of its shares by having the Fund redeem them, assuming that redemption is available. Even then the shareholder may receive securities rather than cash in exchange for its shares. 3.1.5 Possible effect of substantial redemptions If a substantial number of shares are redeemed at one time, the Fund may have to liquidate its positions more rapidly than otherwise desired in order to raise the cash necessary to fund those redemptions. The Fund may find it difficult to liquidate its positions on favourable terms if some of the securities it holds are illiquid. This could result in losses or a decrease in the Net Asset Value of the Fund. If the Investment Manager determines that it is inadvisable to liquidate portfolio assets for the purpose of redeeming Participating Shares, the Fund is authorised to borrow cash to meet redemption requests. The Fund may also pledge portfolio

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assets as collateral security for the repayment of that borrowing. In these circumstances, the continuing shareholders will bear the risk of any subsequent decline in the value of the Fund’s assets. 3.1.6 Absence of regulatory oversight The Fund is not currently a registered as a regulated mutual fund under the Mutual Funds Law of the Cayman Islands, and it is not required to, nor does it intend to, register under the laws of any other jurisdiction. In particular, the Fund is not and will not be registered as an investment company under the US Investment Company Act of 1940, as amended (the “Investment Company Act”). In addition, the Investment Manager is not registered as an investment adviser under the US Investment Advisers Act of 1940, as amended, or under the laws of any State of the United States. As a consequence, the statutes of certain jurisdictions (which may provide certain regulatory safeguards to investors) do not apply. For example, the Fund is not required to maintain custody of its securities or place its securities in the custody of a bank or member of a recognised securities exchange in the same way as required under the statutes of some other jurisdictions. 3.1.7 Limited rights of holders of Participating Shares An investment in the Fund should be regarded as a passive investment. This is because shareholders holding Participating Shares have no right to participate in the day-to-day operations of the Fund, nor are they entitled to receive notice of, attend or vote at general meetings of the Fund, other than a general meeting to vote on a proposed variation of the rights attaching to their shares. Consequently, they have no control over the management of the Fund or over the appointment and removal of its directors and service providers. As holder of all the Management Shares, the Investment Manager controls all of the voting interests in the Fund, other than in respect of any vote to appoint or remove a director of the Fund or a proposal to vary the rights attaching to the Participating Shares. Consequently, it may make any changes to the Fund’s memorandum and articles of association that it considers appropriate, including increasing the share capital, consolidating the Participating Shares and sub-dividing the Participating Shares. Only the Investment Manager can appoint and remove the directors of the Fund and, in turn, only the directors can terminate the services of the Investment Manager, the Administrator and other agents of the Fund. 3.1.8 Side letters From time to time, the Fund (if required, with the consent of the Investment Manager) may enter into agreements (“Side Letters”) with certain prospective or existing shareholders holding Participating Shares of a certain Class that provides for offering terms that vary from those applicable to other shareholders of the same Class. For example, a Side Letter with a prospective or existing shareholder may give that shareholder one or more of the following advantages over other holders of Participating Shares: (i) the waiver, reduction or rebate of fees or allocations payable in respect of those shares; special rights to make future investments in the Fund, other investment vehicles or managed accounts;

(ii)

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(iii)

special redemption rights relating to frequency, period of notice, redemption fees (whether in the form of a reduction or rebate), redemption penalties payable or other terms, more favourable transfer rights, or any combination of these; rights to receive reports from the Fund on a more frequent basis or that include information not provided to other shareholders (including, without limitation, more detailed information regarding portfolio positions); and such other rights as may be negotiated by the Fund and that shareholder.

(iv)

(v)

The terms of any Side Letters are in the sole discretion of the Fund. They may be based on the following things, amongst others: (i) the size of the shareholder’s investment in the Fund or affiliated investment entity; (ii) an undertaking by the shareholder to maintain its investment in the Fund for a significant period of time; or (iii) some other similar undertaking by the shareholder to the Fund. In addition, the Investment Manager is organizing other funds, and may determine to organize additional funds and separately managed accounts that share substantially similar investment strategies and objectives with the Fund from time to time. Such other funds or accounts may offer the investors in such funds or accounts benefits that shareholders will not receive in relation to their investments in the Fund, such as different investment return/dividend characteristics, increased liquidity, heightened transparency (including with respect to portfolio composition information), the right to impose investment restrictions or guidelines, heightened reporting and reduced management fees and incentive allocations or fees. The Fund is not required to notify shareholders of the terms applicable to such other funds or accounts, and such increased liquidity and/or heightened transparency may have an adverse effect on the Fund. 3.1.9 Valuation of the Fund’s investments Valuation of the Fund’s securities and other investments may involve uncertainties and judgmental determinations. If a valuation is incorrect, the Net Asset Value per Share may be adversely affected. Independent pricing information about some of the Fund’s securities and other investments may not always be available. However, valuations will be made in good faith in accordance with the Articles. If the value assigned by the Fund to an investment differs from its actual value, the Net Asset Value per Share may be either understated or overstated to the extent of that difference. Consequently, if the actual value of some of the Fund’s investments is higher than the value assigned to them, a shareholder holding Participating Shares who redeems all or part of its shares while they are so undervalued may be paid less than if they were correctly valued. Conversely, if the actual value of some of the Fund’s investments is lower than the value assigned to them, the redeeming shareholder may, in effect, be overpaid. Furthermore, an investment in the Fund by a new shareholder (or an additional investment by an existing shareholder) may dilute the value of the Fund’s investments for the other shareholders if those investments are undervalued. Conversely, a new shareholder (or an existing shareholder who makes an additional investment) could pay too much if the Fund’s investments are overvalued by the Fund. If either of these scenarios happens, the Fund does not intend to adjust the Net Asset Value per Share retroactively.

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None of the directors, nor the Fund or Administrator will be liable if a price or valuation used in good faith in connection with any of the above procedures later proves to be incorrect or inaccurate. 3.1.10 In-kind distributions A redeeming shareholder may, in the discretion of the directors, receive securities owned by the Fund in lieu of or in combination with cash. The value of securities distributed may increase or decrease before the securities can be sold, and the investor will incur transaction costs in connection with the sale of those securities. Additionally, securities distributed to a shareholder in connection with a redemption may not be readily marketable. In those circumstances, the investor bears the risk of loss and delay in liquidating those securities, with the result that it may ultimately receive less cash than it would otherwise have received if it had been paid in cash alone for its shares on the date of redemption. 3.1.11 Business and regulatory risks of hedge funds Legal, tax and regulatory changes during the term of the Fund may adversely affect it. The regulatory environment for hedge funds is evolving. Changes in the regulation of hedge funds may adversely affect the value of the Fund’s investments. They may also adversely affect its ability to pursue its trading strategies or to obtain the leverage it might otherwise have obtained. In addition, securities and futures markets are subject to comprehensive statutes, regulations and margin requirements. Regulators and self-regulating organisations and exchanges are authorised to take extraordinary actions in cases of market emergencies. The regulation of derivative transactions and funds that engage in those transactions is an evolving area of law and is subject to modification by government and judicial actions. The effect of any future regulatory change on the Fund could be substantial and adverse. 3.1.12 No separate counsel Ogier will act as Cayman Islands counsel to the Fund. Arnold & Porter LLP will act as US counsel to the Fund in relation to taxation matters. No separate counsel has been retained to act on behalf of the shareholders or any independent directors. This Memorandum is based on information furnished by the Investment Manager. Neither Ogier nor Arnold & Porter LLP has independently verified that information. 3.1.13 Tax risks The Stop Tax Haven Abuse Act (S.506) was recently introduced in the United States Senate. If enacted in its current form, the legislation could adversely impact the US treatment of the Fund. It would provide that if a corporation has aggregate gross assets of $50 million or more, and its management and control occurs primarily in the United States, that corporation will be treated as a US domestic corporation for income tax purposes. The US Department of the Treasury would be directed to issue regulations to guide the determination of when management and control occur primarily in the United States, looking at whether substantially all of the executive officers and senior management of the corporation who exercise day-to-day responsibility for making decisions involving strategic, financial and operational policies of the corporation are located primarily within the United States. If the Fund were treated as a US, rather than a foreign, corporation as a result of the application of the Stop Tax Haven Abuse Act, it would generally be subject to US federal income

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tax on any taxable income (including all interest income, dividend income and net capital gains) realized by it at regular corporate income tax rates applicable to US corporations (currently at graduated rates up to 35%). Generally, distributions on Participating Shares to shareholders that are Non-US Holders (as defined below) (that are not otherwise engaged in a US trade or business and subject to taxation at graduated rates) would be subject to US federal tax withholding at 30% and, with respect to Non-US Holders who satisfy certain tests for presence in the United States, gains on the sale, exchange or other disposition of Participating Shares would be subject to 30% federal tax. 3.1.14 Possible Trade or Business within the United States No assurance can be given that the Fund will successfully limit its activities within the United States and otherwise conduct its affairs and structure its investments so that it will not be treated as engaged in a trade or business within the United States. If the Fund is considered to be engaged in a trade or business within the United States as a result of any activities of the Fund, the Investment Manager or the Administrator or otherwise, income and gain of the Fund that is effectively connected with that US trade or business will be subject to Federal income tax at graduated rates and, in addition, subject to a flat 30% branch profits tax. If the Fund is required to pay Federal income tax on its income or gains because it is considered to be engaged in a trade or business within the United States, such tax could result in a reduction of the amount of assets available for distribution to shareholders. 3.2 3.2.1 Investment and trading risks Sovereign risk The Fund may invest in sovereign debt, and may invest in securities and instruments of developing or emerging market issuers which are or may become non-performing and/or where the issuer is in default, at the time of purchase, of principal repayment obligations. In any such case, the actions of governments concerning their respective economies could have an important effect on their ability or willingness to service their sovereign debt. Such actions could have significant effects on market conditions and on the prices of securities and instruments held by the Fund, including the securities and instruments of non-US private issuers. As a result of political, economic or social factors not discussed herein, a governmental obligor may restructure or default on its obligations. Restructuring arrangements have included reducing and rescheduling interest and principal payments by converting outstanding principal and unpaid interest to new securities and obtaining new credit to finance interest payments. The non-US debt securities in which the Fund may invest may be subject to such restructuring arrangements, which may adversely affect the value of such investments. Furthermore, certain participants in the secondary market for such debt may be directly involved in negotiating the terms of restructuring arrangements, and may therefore have access to information not available to other market participants. If a non-US sovereign defaults on all or a portion of its non-US debt, the Fund may have limited legal recourse against the issuer and/or guarantor. Remedies must, in some cases, be pursued in the courts of the defaulting party itself, and the ability of the holder of non-US sovereign debt securities to obtain recourse will be subject to the political climate in the relevant country. Further, the markets for non-US sovereign debt generally are less liquid than the market for US Treasury bills, bonds and notes.

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3.2.2

Currency risks Shares are denominated in US Dollars. However, it is likely that a substantial portion of the investments made by the Fund will be denominated in other currencies. Accordingly, the value of such investments may decline due to fluctuations in the exchange rates between dollars and the currencies in which such investments are made. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment, capital appreciation and political developments. The risk of a decline in value of the investments due to foreign exchange fluctuations may not be hedged. The Investment Manager will monitor the currency exposures and when it deems appropriate, in its sole discretion, may implement currency hedging strategies, which may utilize currency forwards, futures, swaps or other derivative instruments.

3.2.3

Emerging markets Investment in emerging markets generally poses a greater degree of risk than investment in more mature market economies because the economies in the developing world are more susceptible to destabilization resulting from domestic and international developments. In addition, because international investors’ reactions to the events occurring in one emerging market country sometimes have demonstrated a “contagion” effect with respect to other emerging market countries, in which an entire region or class of investment is disfavored by international investors, an investment in a particular country’s debt could be affected by negative economic or financial developments in other emerging market countries. In addition, investing in emerging markets include risks such as smaller market capitalization of securities markets, which may suffer periods of relative illiquidity; significant price volatility; restrictions on foreign investment; and possible repatriation of investment income and capital. In addition, investors may be required to register the proceeds of sales. Securities traded in certain emerging markets countries may be subject to risks in addition to risks typically posed by international investing due to the inexperience of financial intermediaries and the lack of a sufficient capital base to expand business operations. Emerging securities markets may have different clearance and settlement procedures, which may be unable to keep pace with the volume of securities transactions or otherwise make it difficult to engage in such transactions. Settlement problems may cause the Fund to miss attractive investment opportunities, hold a portion of its assets in cash pending investment, or be delayed in disposing of a portfolio security. Such a delay could result in possible liability to a purchaser of such security.

3.2.4

Corporate debt obligations The Fund may invest in corporate debt obligations, including commercial paper. Corporate debt obligations are subject to the risk of an issuer’s inability to meet principal and interest payments on the obligations (credit risk). Evaluating the credit risk of a corporate issuer involves different factors and skills than evaluating the credit risk of a sovereign issuer. Moreover, the markets for commercial paper and

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corporate debt obligations have recently experienced, and may continue to experience, periods of illiquidity. 3.2.5 Trading in securities of non-US issuers The Investment Manager may trade in securities of non-US issuers traded outside of the United States. In addition to currency exchange risks, such trading requires consideration of certain other risks not typically associated with investing in securities of US issuers. There may be less publicly available information regarding issuers located in certain countries. In addition, certain countries may have no laws or regulations prohibiting insider trading. Furthermore, if the accounting standards in a non-US country do not require as much detail as US standards, it may be harder for the Investment Manager to analyze the financial condition of an issuer located in such country. The economies of certain countries often do not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. Certain of such economies may rely heavily on particular industries or foreign capital and are more vulnerable to diplomatic developments, the imposition of economic sanctions against a particular country or countries, changes in international trading patterns, trade barriers and other protectionist or retaliatory measures. Investments in non-US markets also may be adversely affected by governmental actions such as the imposition of capital controls, nationalization of companies or industries, expropriation of assets or the imposition of punitive taxes. In addition, the governments of certain countries may prohibit or impose substantial restrictions on foreign investing in their capital markets or in certain industries. Any such action could severely affect security prices, impair the Investment Manager’s abilities to purchase or sell non-US securities or otherwise adversely affect the Fund. Other non-US market risks include difficulties in pricing securities, difficulties in enforcing favorable legal judgments in non-US courts, and political and social instability. Legal remedies available to investors in certain countries may be less extensive than those available to investors in the United States or other countries. 3.2.6 Geopolitical instability, pandemics, natural disasters and terrorism An unstable geopolitical climate, pandemic, natural disaster or terrorist action could severely disrupt global, national or regional economies, and adversely affect the performance of the Fund. 3.2.7 General economic and market conditions; possible economic downturns The success of the Fund’s investment activities will be affected by general economic and market conditions, such as interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws, currency exchange controls, and national and international political circumstances, as well as changes in the financial condition of the issuers of the Fund’s investments due to other factors. Such conditions may affect the level and volatility of securities prices and the liquidity of the Fund’s investments. Volatility or illiquidity in the financial markets could impair the Fund’s profitability or result in losses. The Fund may maintain substantial investment positions that can be adversely affected by volatility and illiquidity in the financial markets; the larger the positions, the greater the potential for loss. Moreover, economic slowdowns or downturns may lead to losses.

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3.2.8

Arbitrage risks If the financial instruments being bought and sold in an arbitrage are not identical, and the arbitrageur has incorrectly assumed that the prices will be correlated, the prices may fail to converge and thus create risk of loss. Such risk is magnified when borrowings are used to leverage trades.

3.2.9

Uncovered risks The Investment Manager may employ various “risk-reduction” techniques designed in an attempt to minimize the risk of loss in portfolio positions. A substantial risk remains, nonetheless, that such techniques will not always be possible to implement and when possible will not always be effective in limiting losses. In addition, the Investment Manager may choose not to hedge positions. Hedging against a decline in the value of a portfolio position does not eliminate fluctuations in the values of portfolio positions or prevent losses if the values of such positions decline, but the Investment Manager may establish other positions designed to gain from those same developments, thus moderating the decline in the portfolio positions’ value. Such hedge transactions also limit the opportunity for gain if the value of a portfolio position should increase. Moreover, it may not be possible for the Investment Manager to hedge against a fluctuation that is so generally anticipated that they are not able to enter into a hedging transaction at a price sufficient to protect from the decline in value of the portfolio position anticipated as a result of such a fluctuation. In addition, the Investment Manager may choose not to engage in a hedging transaction if the expense associated with such hedging transaction is perceived as being too costly. The success of the hedging transactions entered into by the Investment Manager will be dependent upon its ability to correctly predict market fluctuations and movements. Therefore, while the Investment Manager may enter into such transactions to seek to reduce risks, unanticipated market movements and fluctuations may result in a poorer overall performance for the Fund than if the Investment Manager had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio position being hedged may vary.

3.2.10

Derivative instruments The Investment Manager may use various derivative instruments, including futures, forward contracts, options thereon, swaps and other derivatives. These may be volatile and speculative. Certain positions may be subject to wide and sudden fluctuations in market value, with a resulting fluctuation in the amount of profits and losses. Initially, it is not anticipated that derivatives will be used for speculative purposes. Using derivative instruments has various risks. These include the following: • Tracking When used for hedging purposes, an imperfect or variable degree of correlation between price movements of the derivative instrument and the underlying investment sought to be hedged may prevent the Investment Manager from achieving the intended hedging effect or may expose the portfolio to the risk of loss.

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Liquidity Derivative instruments, especially when traded in large amounts, may not always be liquid. Hence in volatile markets, the Investment Manager may not be able to close out a position without incurring a loss. In addition, exchanges on which the Investment Manager conducts its transactions in certain derivative instruments may have daily limits on price fluctuations and speculative positions limits. These limits may prevent the Investment Manager from liquidating positions promptly, thereby subjecting the portfolio to the potential of greater losses.

Leverage Trading in derivative instruments can result in large amounts of leverage. The leverage offered by trading in derivative instruments may magnify the gains and losses experienced by the Fund. This could subject the Fund’s net asset value to wider fluctuations than would be the case if the Investment Manager did not use the leverage feature in derivative instruments.

Over-the-Counter Trading Derivative instruments that may be purchased or sold for the portfolio may include instruments not traded on an exchange. Over-the-counter options, unlike exchange-traded options, are two-party contracts with price and other terms negotiated by the buyer and seller. The risk of non-performance by the obligor on an over-the-counter instrument may be greater, and the ease with which the Investment Manager can dispose of or enter into closing transactions with respect to such an instrument may be less, than in the case of an exchangetraded instrument. In addition, significant disparities may exist between “bid” and “asked” prices for derivative instruments that are not traded on an exchange. Derivative instruments not traded on exchanges are also not subject to the same type of government regulation as exchange-traded instruments, and many of the protections afforded to participants in a regulated environment may not be available in connection with those instruments.

3.2.11

Short sales Any short sales by the Fund that are not made “against the box” create opportunities to increase the Fund’s return, but at the same time involve special risk considerations and may be considered a speculative technique. Because the Fund does not need to invest the full purchase price of the securities on the date of a short sale, the value of its shares will tend to increase more when the securities it has sold short decrease in value, and to decrease more when the securities it has sold short increase in value, than would otherwise be the case had it not engaged in those short sales. Theoretically, short sales involve unlimited loss potential, as the market price of securities sold short may increase continuously. However, the Fund may mitigate those losses by replacing the securities sold short before the market price has increased significantly. Under adverse market conditions the Fund might have difficulty purchasing securities to meet its short sale delivery obligations, and might have to sell portfolio securities to raise the capital necessary to meet its short sale obligations at a time when fundamental investment considerations would not favour such sales.

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Short sales may be used with the intention of hedging against the risk of declines in the market value of the Fund’s long portfolio, but there is no guarantee that such hedging operations will be successful. 3.2.12 Risks of executing investment strategies The Fund will invest in a number of securities and obligations that entail substantial inherent risks. Although the Fund will attempt to manage those risks through careful research, ongoing monitoring of investments and appropriate hedging techniques, there is no assurance that the securities and other instruments purchased by the Fund will in fact increase in value or that the Fund will not incur significant losses. 3.2.13 Market risks and liquidity In large measure the profitability of a significant portion of the Fund’s investment program depends on correctly assessing the future course of the price movements of securities and other investments. There is no assurance that the Fund will be able to accurately predict those price movements. Although the Fund may attempt to mitigate market risk through the use of long and short positions or other methods, there is always some and occasionally a significant degree of market risk. Furthermore, the Fund may be adversely affected by a decrease in market liquidity for instruments in which it invests, which may impair its ability to adjust its position. The size of the Fund’s positions may magnify the effect of a decrease in market liquidity for those instruments. Changes in overall market leverage, de-leveraging as a consequence of a decision by a prime broker to reduce the level of leverage available, or the liquidation by other market participants of the same or similar positions, may also adversely affect the Fund’s portfolio. Some of the underlying investments of the Fund may not be actively traded and there may be uncertainties involved in valuing those investments. Potential investors are warned that under those circumstances, the Net Asset Value of the Fund may be adversely affected. 3.2.15 Institutional risks Institutions will have custody of the assets of the Fund. These firms may encounter financial or operational difficulties that disrupt or impair the operating capabilities or the capital position of the Fund or the Investment Manager. During the period of any such disruption or impairment, the Investment Manager may find it difficult or impossible to effect trades pursuant to its investment strategy, which could subject the Fund to substantial losses. 3.2.16 Counterparty and settlement risk Due to the nature of some of the investments that the Fund may make, the Fund may rely on the ability of the counterparty to a transaction to perform its obligations. If that party fails to complete its obligations for any reason, the Fund may suffer losses and therefore be exposed to a credit risk on the counterparties with which it trades. The Fund will also bear the risk of settlement default by clearing houses and exchanges. A default by a counterparty or a default on settlement could have a material adverse effect on the Fund.

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3.2.17

Borrowing and other forms of leverage The Fund may use leverage in its investment and trading activities. The Fund may borrow money on a secured or unsecured basis. Financing the purchase, or otherwise leveraging exposure to, an instrument may provide the opportunity for greater capital appreciation but at the same time will increase the risk of loss with respect to the instrument. Although the use of leverage by an investor increases returns to the investor if it earns a return on the incremental positions purchased with the financed amount that exceeds its financing costs, the use of leverage decreases returns to the investor if its financing costs exceed the return on such incremental positions. The amount of financing outstanding at any time by the Fund may be large in relation to their respective assets. In addition, the level of interest rates generally, and the rates at which the Investment Manager can borrow or otherwise finance investments, will ultimately affect the operating results of the Fund. In general, the use of short-term margin borrowings results in certain additional risks to the Fund. For example, should the securities pledged to brokers to secure the Fund’s margin accounts decline in value, the Fund could be subject to a “margin call,” pursuant to which the Fund must either deposit additional funds or securities with the broker, or suffer mandatory liquidation of the pledged securities to compensate for the decline in value. In the event of a sudden drop in the value of the Fund’s assets, the Fund might not be able to liquidate assets quickly enough to satisfy its margin requirements.

3.2.18 Dividends There is no guarantee that there will be sufficient assets available for the Fund to pay Dividends to investors. 3.2.19 Discretion of the investment manager; concentration of investments The Investment Manager will seek to engage in the investment activities described in this Memorandum. Nonetheless, the Investment Manager may alter the Fund’s portfolio. It can do so in its sole discretion and without the approval of any holder of Participating Shares. Although, as a matter of general policy, the Investment Manager will try to spread the Fund’s capital among a number of investments, it may depart from that policy from time to time and may hold a few relatively large securities positions in relation to the Fund’s capital. A loss on a large security position following such concentration could materially reduce the Fund’s capital. 3.2.20 Difficult market for investment opportunities The activity of identifying, completing and realizing on attractive investments is highly uncertain. There is no assurance that the Fund will be able to locate and complete investments that satisfy the Fund’s rate-of-return objective or to realise on the value of those investments; nor is there any assurance that the Fund will be able to fully invest its capital in a manner consistent with its investment strategy. 3.2.21 Portfolio Turnover The investment strategy of the Fund may involve the taking of frequent trading positions and as a result turnover and brokerage commission expenses of the Fund may significantly exceed those of other investment entities of comparable size.

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3.2.22

Recent Developments in the Capital Markets During 2008 and 2009, there was substantial turmoil in financial markets generally, including declines in the market value of asset-backed securities, especially securities backed by subprime mortgages. Such turmoil resulted in part from significant market events, including widely publicized financial institution failures and associated governmental and regulatory intervention in capital markets. Increasing credit and valuation problems in the subprime mortgage market generated extreme volatility and illiquidity in the markets for securities directly or indirectly exposed to subprime mortgage loans. This volatility and illiquidity extended to the global credit and equity markets generally, and, in particular, to the high-yield bond and loan markets, and was exacerbated by, among other things, growing uncertainty regarding the extent of the problems in the mortgage industry and the degree of exposure of financial institutions and others to such problems, decreased risk tolerance by investors and significantly tightened availability of credit. The ultimate effect of these conditions cannot be predicted, nor is it known whether or the degree to which conditions may worsen. However, these conditions could result in future declines in the market values of Fund investments, diminished investment opportunities for the Fund, otherwise prevent the Fund from successfully executing its investment strategies or require the Fund to dispose of investments at a loss while such adverse market conditions prevail. In reaction to the events described above, regulators in the United States and several other countries undertook unprecedented regulatory actions. The markets have also been materially affected by uncertainty surrounding actions by many governments around the world to guarantee the debts of or invest in their respective local banks and similar financial institutions. The nature and scope of governmental actions are ongoing, and the success or failure of any governmental program has yet to be determined. It is not clear how such programs will impact the global economy, the Fund or the financial condition of its custodians, brokers, dealers and counterparties and the impact could be material.

3.3 3.3.1

Potential conflicts of interest Generally The Investment Manager, the Administrator, the Custodian, Fund directors and any broker appointed by the Fund, may act for, sponsor, or be involved with, other funds or accounts (in which they may have substantial ownership interests) that have similar or different investment objectives or strategies to those of the Fund. Capacities in which one or more of them may act for, or be involved with, other funds or accounts of that type include: distributor, promoter, manager, investment manager, investment adviser, registrar, transfer agent, administrator, trustee, custodian, broker, director and placing agent. Similarly, one or more of them may provide discretionary fund management or ancillary administration, custodian or brokerage services to investors with similar investment objectives to those of the Fund. Consequently, any of them may, in the course of their business, have potential conflicts of interests with the Fund. The Fund will have no right to participate in the activities of or compensation received by such parties from such other funds or accounts. If a potential conflict arises, so far as practicable, each will have regard to its obligation to act in the best interests of the shareholders, having regard to its obligations to other clients, when undertaking investments. Further, each will endeavour to resolve any conflicts fairly.

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3.3.2

The Investment Manager and the Administrator The Investment Manager has been formed to engage in the business of discretionary management and advising client investors, including other investment vehicles, in the purchase and sale of securities and financial instruments. During the period it is responsible for managing the account of the Fund, it may also be advising other funds or accounts. In doing so it may use the same or different information and trading strategies that it obtains, produces or utilises in the performance of services for the Fund. The Investment Manager may have conflicts of interest in rendering advice because its compensation for managing other accounts exceeds its compensation for managing the account of the Fund, thus providing an incentive to prefer the other accounts. Moreover, if the Investment Manager makes trading decisions for other accounts at or about the same time it makes trading decisions for the account of the Fund, the Fund may be competing with those other accounts for the same or similar positions. The Investment Manager will endeavour to allocate all investment opportunities on a fair and equitable basis between the Fund and those other accounts. The Fund has been established and promoted by the directors and the Investment Manager. Accordingly the selection of the Investment Manager and the terms of its appointment, including the fees payable to it in its capacity as the Investment Manager and the Administrator, are not the result of arms-length negotiations. The Incentive Fee, if paid, could result in fees payable to the Investment Manager which are greater than fees normally paid to other investment advisers for similar services. The Investment Manager is entitled to receive an Incentive Fee, based upon the net capital appreciation, if any, allocated to the Offered Shares. The Incentive Fee may create an incentive for the Investment Manager to make investments that are riskier or more speculative than would be the case if such arrangement were not in effect. In addition, because the Incentive Fee is calculated on a basis which includes unrealised appreciation of the Fund’s assets, it may be greater than if such compensation were based solely on realised gains. From time to time, the Investment Manager may come into possession of non-public information concerning specific companies or other entities even though internal structures are in place to prevent it receiving such information. Under applicable securities laws, this may limit the Investment Manager’s flexibility to buy or sell portfolio securities issued by those companies or other entities. The Fund’s investment flexibility may be constrained due to the Investment Manager’s inability to use such information for investment purposes. The Investment Manager and its principals, directors, officers, partners, members, managers, shareholders, employees and affiliates, as applicable, trade or may trade for their own accounts or the accounts of family members, friends or investment vehicles established for the benefit of any of such persons. In addition, in their respective trading for proprietary and other accounts, The Investment Manager and such persons may take positions that are the same as or different from those taken on behalf of the Fund in accordance with the Investment Manager’s internal policies.

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3.3.3

Interests of certain directors Each of Ronald G. Percival and Odo G. Habeck is a director of the Fund as well as a principal of the Investment Manager and the Administrator. The fiduciary duty of the directors to the Fund may compete with or be different from the interests of the Investment Manager and the Administrator. Only the directors may terminate the services of the Investment Manager and the Administrator and other agents of the Fund. Each of the directors may serve as a director of other investment vehicles and accordingly to the extent that the interests of the Fund and such other investment vehicles are inconsistent a director may have a conflict of interest.

3.3.4

Duties of the directors At all times so far as practicable the directors will have regard to their obligations to act in the best interests of the Fund and its shareholders, and will seek to ensure that any conflict of interest is resolved fairly and in the interests of the Fund and its shareholders.

3.3.5

Selection of brokers and dealers Certain brokers and dealers retained by the Investment Manager provide or may agree to provide the Investment Manager with soft dollar credits, which it may use to purchase certain research and statistical services. These services would otherwise only be available to the Investment Manager for a cash payment. As a result of receiving such services, the Investment Manager would have an incentive to use, and to continue to use, such brokers and dealers to effect transactions for the accounts over which it or its affiliates exercise trading discretion so long as such brokers and dealers continue to provide such soft dollar credits to it or its affiliates.

3.3.6

Dealings with service providers and their affiliates The Fund is not prevented from entering into transactions with the Custodian or any of its affiliates so long as those transactions are carried out as if they were effected on commercial terms negotiated at arm’s length.

3.3.7

Valuation of Securities Michael Kenwood Capital Management, LLC, in its capacity as Administrator, is responsible for calculating the Net Asset Value per Share and the Net Asset Value of the Fund. To the extent that the Administrator erroneously assigns a higher value to any of the Fund’s investments than its actual value, the Net Asset Value of the Fund may be overstated. As a result, the compensation received by Michael Kenwood Capital Management, LLC as both Investment Manager and as Administrator would be higher than in the absence of such pricing error. No independent pricing agent is expected to be retained by the Fund. None of the directors, nor the Fund or Administrator will be liable if a price or valuation used in good faith in connection with the Fund’s procedures later proves to be incorrect or inaccurate.

3.3.7

Dividend The Directors have discretionary authority to declare or not declare a Dividend from time to time. Greater Management Fees and possibly Incentive Fees would be generated to the benefit of Michael Kenwood Capital Management, LLC, as Investment Manager, and greater administrative fees will be generated for the benefit

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of Michael Kenwood Capital Management, LLC, as Administrator, if the Fund’s assets are not reduced by the payment of a Dividend to the shareholders. This list of risk factors does not purport to be complete. Nor does it purport to be an entire explanation of the risks involved in an investment in the Fund. A prospective investor should read this Memorandum in its entirety as well as consult with its own legal, tax and financial advisers before deciding to invest in the Fund.

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SECTION IV - MANAGEMENT AND ADMINISTRATION
4.1 4.1.1 Board of directors Delegations by the directors The directors are responsible for the overall management and control of the Fund in accordance with its memorandum and articles of association. However, the directors are not responsible for the day-to-day operations and administration of the Fund, nor are they responsible in their capacity as directors for making or approving any investment decisions. The investment responsibilities have been delegated to the Investment Manager under the Management Agreement whilst the day-to-day administrative functions have been delegated to the Administrator under the Administration Agreement. In each case, the delegation has been made in accordance with the directors’ powers of delegation under the Fund’s articles. The directors will periodically review the performance of the Investment Manager and the Administrator. 4.1.2 Composition of the board The Fund’s board of directors comprises Octavio Calvo, Ronald G. Percival and Odo G. Habeck. Mr. Percival and Mr. Habeck serve in their capacities as Directors without compensation. Mr Calvo is paid a fee for providing the service of a director. If additional directors are elected, the Fund may compensate those directors (other than the Fund’s Investment Manager or any persons affiliated with the Investment Manager) for services rendered in that capacity. Biographical information for Mr. Calvo appears below. For the biography of the other directors, see below under the heading “Investment Manager - Investment Manager’s key personnel”. Octavio Calvo - Since May 2007, Mr. Calvo has served as a Managing Director of BNP Paribas with corporate and investment banking coverage responsibilities. In addition, he is a Director of MK Special Opportunities Fund Ltd. and MK Venezuela Fund Ltd. Prior to joining BNP Paribas, Mr. Calvo was a Managing Director of Calyon from March 2006 through April 2007. He also was a Director of Latin American Debt Capital Markets for Wachovia Securities from October 2004 to September 2005. Mr. Calvo was responsible for building the international debt capital markets and syndicate efforts for the Latin American region. Prior to Mr. Calvo’s position at Wachovia Securities, he was a Director of Latin American Debt Capital Markets for Prudential Securities from March 2003 to October 2004. Prior to joining Prudential Securities, Mr. Calvo was a Director of Latin American Debt Capital Markets and Derivatives Marketing from November 2000 to August 2002 for Deutsche Bank AG. He brings more than 19 years experience in the debt capital markets arena both from the local and international markets perspectives. Mr. Calvo was a director for Mexican public debt offerings at Operadora de Bolsa Serfin in Mexico City, and in 1994 transferred to New York, where he worked as a Director for CSFB covering Latin American clients. His coverage responsibilities have also included derivatives marketing for both corporate and government entities. Mr. Calvo received a B.A. in Business Administration from the Instituto Tecnologico Autonomo de Mexico (IITAM) in 1983.

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For the purpose of this Memorandum, the address of all the directors is the registered office of the Fund. 4.1.3 Provisions of the Fund’s articles affecting the directors The Fund’s articles of association do not stipulate a retirement age for the directors nor do they provide for retirement of the directors by rotation. There is no shareholding qualification for the directors. The directors are empowered to exercise all of the borrowing powers of the Fund. Subject to one condition, under the articles of association a director may enter into any contract or arrangement with the Fund without: (i) (ii) that contract or arrangement being liable to be declared void; or that director being liable to account to the Fund for any profit realised by that contract or arrangement due to his or her holding of that office or as a consequence of the director’s fiduciary relationship with the Fund.

The condition is that the director must disclose the nature of his or her interest at the earliest opportunity. Furthermore, under the Fund’s articles, a director may hold any other office or place of profit with the Fund (other than that of auditor) in conjunction with his or her office of Director on terms as to tenure of office and otherwise as the directors determine. Except as disclosed in this Memorandum, at the date of this Memorandum no director and no person connected with a director has any of the following interests: (i) (ii) (iii) (iv) an interest, beneficial or non-beneficial, in the share capital of the Fund; a material interest in the shares of the Fund; an option in respect of the shares of the Fund; or an agreement or arrangement with the Fund.

By virtue of the articles of association, the Fund releases its directors and officers from, and indemnifies them against, certain legal liabilities and expenses so long as, in connection with the matter that gives rise to a particular claim, they had not engaged in gross negligence or wilful default in the performance of their duties. The directors may change any of the Fund’s service providers, including the Fund’s auditors, without the consent of the holders of Participating Shares. In addition, the directors may, with the consent of a service provider, amend the remuneration that the Fund pays to that service provider (and any other term of its service agreement). This may be necessary from time to time to keep the remuneration that the Fund pays to its service providers in line with prevailing market rates.

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4.2 4.2.1

Investment Manager Background The Fund’s Investment Manager is Michael Kenwood Capital Management, LLC, a US limited liability company. The Investment Manager is responsible for the investment decisions of the Fund. The managers of the Investment Manager are Francisco A. Illarramendi, Ronald G. Percival and Odo G. Habeck.

4.2.2

Investment Manager’s key personnel The Investment Manager’s key personnel who are responsible for implementation of the Fund’s investment objectives and policies are Francisco A. Illarramendi, Ronald G. Percival and Odo G. Habeck. Odo G. Habeck, President, Chief Executive Officer - Mr. Habeck is a member and the President and Chief Executive Officer of the Investment Manager and Michael Kenwood Asset Management, LLC, an affiliated private equity and venture capital firm. In addition, he is a director of MK Special Opportunities Fund Ltd. and MK Venezuela Fund Ltd. Mr. Habeck is also the Chief Executive Officer of The Michael Kenwood Group, LLC and Michael Kenwood Consulting, LLC, where he is responsible for overall activities, including strategic and new business development, and may also serve in an executive capacity or otherwise be involved with respect to other Michael Kenwood affiliates and related entities from time to time. Mr. Habeck’s duties include consulting and advisory work for international corporations and governments, as well as identifying investment opportunities. In addition, he is a director of MK Venezuela Fund Ltd. Mr. Habeck is also the Director of Business Development and Administration of RGP Investment Advisors and a Managing Partner of the Financial Consulting Business of OGH Advisors. Prior to joining RGP Investment Advisors in April 2005 and OGH Advisors in June 2003, Mr. Habeck was a Director of Emerging Markets Debt Capital Markets, Latin America, at Credit Suisse First Boston Inc. (“CSFB”), responsible for the marketing of products to sovereign and corporate clients in Brazil, Colombia, Peru and Panama from 2000 to June 2002. Prior to his position with CSFB, Mr. Habeck gained investment banking and emerging financial markets experience holding positions with Deutsche Bank AG and affiliates, The International Bank for Reconstruction and Development (World Bank) and Daiwa Securities America Inc. He is a member of the United Nations sponsored Infrastructure Experts Group, The Bretton Woods Committee and the Initiative for Global Development. Mr. Habeck received a B.A. in Business Administration and Finance in 1984 and an MBA in International Finance in 1985 from the University of Alaska. Francisco Illarramendi, Member - Mr. Illarramendi is a member of the Investment Manager and Michael Kenwood Asset Management, LLC, and The Michael Kenwood Group, LLC, and may be involved with other Michael Kenwood affiliates and related entities from time to time. In addition, he is a director of MK Venezuela Fund Ltd. Mr. Illarramendi is one of the founding members of Highview Point Partners, LLC, which was formed in June 2005 and acts as the investment manager of an emerging markets fixed income hedge fund, where he is responsible for investment analysis and business development. Prior to that, he was a Director in the Emerging Markets Coverage Group of CSFB from 1994 until May 2004, when he left the firm to accept a temporary position as Senior Advisor to PDV USA, Inc., the international financial advisory arm of Petróleos de Venezuela, S.A. (“PDVSA”), where he served as a special financial advisor to PDVSA and its worldwide affiliates in connection with its

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ongoing restructuring of operations and its liability management program until February 2005. During his ten years of experience at CSFB, Mr. Illarramendi was responsible for all of CSFB’s fixed income coverage responsibilities in the Andean/Central America/Caribbean region. He was also responsible for the fixed income coverage of the Southern Cone from 1999 to 2001. In these roles, Mr. Illarramendi was a leading member of the teams that helped restructure both Argentina’s and Venezuela’s debt profiles, and was also one of the key people responsible for more than US$5 billion of new debt issuance from the region. Mr. Illarramendi received a B.A. in Social and Political Studies in 1990 and an M.A. in Economics in 1993 from the University of Navarra in Pamploma, Spain. Ronald G. Percival, Chief Investment Officer - Mr. Percival is a member and the Chief Investment Officer of the Investment Manager and Michael Kenwood Asset Management, LLC and The Michael Kenwood Group, LLC, and may serve in an executive capacity or otherwise be involved with respect to other Michael Kenwood affiliates and related entities form time to time. In addition, he is a director of MK Special Opportunities Fund Ltd. and MK Venezuela Fund Ltd. Mr. Percival is also the Managing Member and Chief Investment Officer of RGP Investment Advisors, LLC and of RGP Capital Management, LLC which has served as investment advisor and General Partner, respectively, of MK Global Developing Markets Offshore, Ltd and Global Developing Markets Partnership, LP, two emerging markets investment funds, since January 2002. He has thirty years of experience in global and emerging financial markets, and has developed extensive knowledge in both fixed income and equity capital markets, as well as in loan capital markets, corporate finance and investment banking. He has been an active investor in private investment funds since 1990. Prior to founding RGP and the Global Developing Markets funds, Mr. Percival was the Director and head of Latin American Loan Capital Markets and Syndications at CSFB from June 1998 to June 2001, where he was responsible for structuring, underwriting and the market execution of all Latin American syndicated loans. Before joining CSFB in 1998, Mr. Percival spent four years at ING Barings in New York with varied responsibilities in the capital markets area. He was a Managing Director and head of ING’s Global Emerging Markets Fixed Income Syndicate, and also had responsibility for ING’s Global Emerging Markets Equity Syndicate. Additionally, he was a Managing Director and head of ING’s Syndicated Loan Distribution for the Americas, responsible for global syndication and selling of loans originating from the United States, Canada and Latin America. Prior to joining ING Barings, from 1976 to 1994, Mr. Percival held various positions at Chemical Bank and Chemical Securities in emerging markets fixed income, Latin American banking, credit lending and Latin sovereign and corporate debt restructuring. At Chemical Bank, he also had various country head positions and overseas assignments in Latin America. Mr. Percival received a B.A. from the University of Texas in 1972 and an MBA from Thunderbird, The American Graduate School of International Management, in 1975. 4.2.3 Management Agreement Under the Management Agreement, the Investment Manager is authorized to make all investment decisions with respect to the investment of the Fund’s assets. The Management Agreement may be terminated by the Fund or the Investment Manager upon 90 days prior written notice. The Management Agreement contains provisions exempting the Investment Manager and its members, managers, officers, directors, employees, shareholders and

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affiliates from liability in certain circumstances for any act or failure to act taken or omitted in good faith in a manner reasonably believed to be in or not opposed to the best interests of the Fund if such act or failure to act did not constitute gross negligence, willful misconduct or a material breach of the Management Agreement. 4.2.4 Management Fee The Investment Manager will be paid a monthly Management Fee, payable in arrears, of 1/12th of 2% of the Net Asset Value of the Fund (approximately 2% annually) before the payment of the Dividend (as herein defined). In the event that the Fund is dissolved or the Management Agreement is terminated as of a date other than the last day of a month, the Management Fee will be pro-rated based on the ratio that the number of days in the month through such date bears to the total number of days in the month. The Management Fee will be paid to the Investment Manager as soon as practicable following the applicable month. For purposes of calculating Management Fees payable to the Investment Manager, the Net Asset Value of the Fund will be determined before reduction for the Management Fee, Incentive Fee and extraordinary fees or expenses accrued or payable as of the calculation date and before giving effect to any distributions or redemptions paid or payable or additional capital contributions made as of such date. 4.2.5 Incentive Fee In addition, as of the end of each calendar year, the Investment Manager will be paid an Incentive Fee in an amount equal to 20% of the Net New Appreciation (as hereinafter defined) achieved by each Series of Participating Shares as of the end of such year prior to giving effect to the Dividend to be determined as of such year-end. “Net New Appreciation” achieved by a Series of Participating Shares as of any date of determination shall mean the excess, if any, of (a) the Net Asset Value of such Series as of such date of determination, calculated without reduction for any Incentive Fee accrued or payable to the Investment Manager with respect to such Series as of such date, over (b) the Net Asset Value of such Series as of the then applicable High Water Mark Date (as hereinafter defined) for such Series, reduced by the aggregate amounts of Dividend declared after such High Water Mark Date, and proportionately reduced to reflect any redemptions of Participating Shares in such Series since such High Water Mark Date. The “High Water Mark Date” for a Series of Participating Shares as of any date of determination shall mean the most recent date as of which an Incentive Fee was payable with respect to such Series or, if no such Incentive Fee has previously been paid to the Investment Manager, the initial subscription date for such Series. For purposes of determining Net New Appreciation, the Net Asset Value of a Series shall not be reduced by any extraordinary fees and expenses (such as attorneys fees and expenses incurred in relation to any litigation). For purposes of determining monthly incentive fee accruals, Net New Appreciation shall be determined prior to giving effect to the Dividend to be determined as of the applicable month-end. Each Incentive Fee will be paid to the Investment Manager as soon as practicable following the applicable date of determination. If the Fund experiences net losses after the payment of an Incentive Fee with respect to any Series of Participating Shares, the Investment Manager will retain all Incentive

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Fees previously paid to it with respect to such Series but will not receive a new Incentive Fee with respect to such Series until additional Net New Appreciation is achieved by such Series. Prospective investors should note that the calculation of each Incentive Fee is based in part upon unrealized profits (as well as unrealized losses) and such unrealized profits might never be realized by the relevant Series of Participating Shares. Incentive Fees will be allocated solely to the Series to which they relate. If any Participating Shares in a Series are redeemed as of any day other than the end of a calendar year, any Incentive Fee accrued with respect to such Participating Shares as of the redemption date will be paid to the Investment Manager at the time of the redemption (as if such redemption date were the end of a calendar year). Similarly, if the Management Agreement is terminated as of any day other than the end of a calendar year, all Incentive Fees accrued as of the termination date will be paid to the Investment Manager at the time of termination (as if such termination date were the end of a calendar year). The Investment Manager, in its sole discretion, may, in effect, waive or reduce the Management Fees or Incentive Fees to be paid to it with respect to Participating Shares held by members, principals, officers, directors, employees or affiliates of the Investment Manager or relatives of such persons and or by certain large or strategic investors. 4.2.6 Capitalisation of Fees Any reduction of the Management Fee or Incentive Fee, or both, for a shareholder holding Participating Shares, may be effected by capitalising an amount equal to the amount of that reduction and applying that amount to pay up further shares of the relevant Class issued to that shareholder, or by creating a separate sub-class of shares of the relevant Class for that shareholder. 4.3 4.3.1 Administrator Background In addition to serving as the Investment Manager, Michael Kenwood Capital Management, LLC serves as the Administrator pursuant to an administration agreement between the Fund and the Administrator (“Administration Agreement”). 4.3.2 Fees and expenses The Fund pays the Administrator a fee based on the Net Asset Value of the Fund based on a schedule of fees, ranging from 0.12% per annum to 0.08% per annum of Net Asset Value increments above and below certain stated thresholds. A minimum monthly fee of $3,500 applies. The fee accrues daily and is payable quarterly in arrears in US dollars. The Administrator is also entitled to reimbursement of out-ofpocket expenses incurred by it on behalf of the Fund or in connection with services performed by it for the benefit of the Fund. The Administrator will also charge $10,000 for the preparation of each annual report.

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4.3.3

Administration Agreement Under the Administration Agreement, the Administrator: (a) provides office facilities and personnel adequate to administer the affairs of the Fund; and (b) performs certain designated services for the Fund in connection with the administration of its affairs. The designated services include: (i) (ii) (iii) (iv) (iv) maintaining the financial books and records of the Fund; preparing information for the Fund’s reports to shareholders; responding to shareholder inquiries relating to the Fund; ensuring that the Fund complies with applicable anti-money laundering laws and regulations; accepting and processing subscriptions, transfer requests and redemption requests from investors; maintaining the register of shareholders; providing confirmation of share ownership to investors (and share certificates if required); and such other administrative services as may be required by the Fund.

(v) (vi)

(vii)

The Administration Agreement is automatically renewed on an annual basis and may be terminated by either party giving 90 days’ notice in writing to the other. In certain circumstances, it may be terminated immediately. The Administration Agreement provides that the Fund will indemnify the Administrator, its directors, mangers, officers, employees or agents against all liabilities, obligations, losses, damages, penalties, actions, judgments, claims, demands, suits, costs, expenses or disbursements of any kind or nature whatsoever made by any person and in any way arising from the Administrator’s performance of its obligations or duties under the Administration Agreement unless due to the dishonesty, fraud, willful misconduct, gross negligence (which shall be determined consistent with the laws of the state of Delaware) or bad faith of the Administrator, its directors, managers, officers, employees or agents. The Administration Agreement is governed by the laws of the Cayman Islands. 4.4 4.4.1 Brokerage and custody Choice of brokers or dealers and scope of services received The Investment Manager is authorized to designate the banks, brokers, dealers, futures commission merchants, introducing brokers and other counterparties

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(collectively, “brokers and dealers”), to be used for all transactions effectuated by it for the Fund. Accordingly, the Investment Manager or an affiliate may designate brokers and dealers from time to time for the assets of the Fund managed by it. The policy of the Investment Manager regarding purchases and sales for such portfolio is that primary consideration will be given to obtaining the most favorable execution of the transactions in seeking to implement the Investment Manager’s trading strategy. The Investment Manager will effect transactions with those brokers and dealers which it believes provide the most favorable prices and who are capable of providing efficient executions. Those factors that the Investment Manager believes contribute to efficient execution include, among other things, size of the order, difficulty of execution, operational capabilities and facilities of the broker or dealer involved, whether that broker or dealer has risked its own capital in positioning a block of securities or other assets and the prior experience of the broker or dealer in effecting transactions of the type in which the Fund will engage. In selecting brokers or dealers to execute particular transactions, the Investment Manager may consider “brokerage and research services” (as those terms are defined in Section 28(e) of the US Securities and Exchange Act of 1934, as amended (“Exchange Act”)) and other information provided by the brokers and dealers. Research may include, among other things, proprietary research from brokers, which may be written, oral or on-line. Research products may include, among other things, computer databases and quotation equipment, in each case, to access research or which provide research directly. Research services may include, among other things, research concerning market, economic and financial data, statistical information, data on pricing and availability of securities, financial publications, electronic market quotations, performance measurement services, analyses concerning specific securities, companies or sectors, and market, economic and financial studies and forecasts. Research services may be in written or oral form or on-line. Any brokerage and research services obtained as a result of the Fund’s trading activities may or may not be used for the benefit of all accounts managed by the Investment Manager. The Investment Manager also may cause a broker or dealer who provides such brokerage and research services and products to be paid a commission or, in the case of a dealer, a dealer spread for executing a portfolio transaction, which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction. Consistent with obtaining the most favorable execution, the Investment Manager also may consider the fact that certain brokers and dealers may refer or have referred prospective investors to the Fund or other accounts managed by the Investment Manager. Prior to making such an allocation, however, the Investment Manager will make a good faith determination that such commission or spread was reasonable in relation to the value of the brokerage and research services provided, viewed in terms of that particular transaction or in terms of all the accounts over which the Investment Manager or its affiliates exercise trading discretion. 4.4.2 Custodian The Fund maintains accounts at Deutsche Bank AG which serves as the Fund’s custodian. The Investment Manager may change or add custodians without notice to the holders of Participating Shares. The Custodian performs a variety of brokerage services on arms-length commercial terms for the Fund for which fees are charged.

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4.5 4.5.1

Expenses Preliminary Expenses The Fund is responsible for paying the preliminary expenses of, and incidental to, the initial offering (including expenses relating to establishment of the Fund in the Cayman Islands, negotiation and preparation of the contracts to which it is a party, costs of printing this Memorandum and the fees and expenses of its professional advisors). These preliminary expenses will be amortised on a straight-line basis over the first five years of the Fund’s operations or such shorter period as the directors may determine in their sole discretion. While the directors of the Fund consider that such an accounting policy is appropriate and its impact on the Fund’s results is not expected to be material, that policy conflicts with generally accepted accounting principles applied in the United States, and therefore may lead to qualifications in the Fund’s audited financial statements.

4.5.2

Operating expenses The Investment Manager renders its services to the Fund at its own expense. It is responsible for its overhead expenses including the following: (i) office rent; (ii) furniture and fixtures; (iii) stationery; (iv) secretarial/internal administrative services; (v) salaries; (vi) entertainment expenses; and (vii) employee insurance and payroll taxes. The Fund will bear all investment-related expenses arising out of its investment program, including the following: (i) brokerage commissions; (ii) other expenses related to buying and selling securities; (iii) costs of due diligence (including travel) regardless of whether a particular transaction is consummated; (iv) the costs of attending shareholder meetings; (v) research expenses; and (vi) costs related to monitoring investments. It will also bear other expenses incurred in connection with its operations including the following: (i) fees and expenses of advisors and consultants; (ii) Management Fee and Incentive Fee; (iii) fees and expenses of any custodians, escrow or transfer agents and other investment-related service providers; (iv) indemnification expenses and the cost of insurance against potential indemnification liabilities; (v) interest and other borrowing expenses; (vi) legal, administrative, accounting, tax, audit and insurance expenses; (vii) expenses of preparing and distributing reports, financial statements and notices to shareholders; (viii) litigation or other extraordinary expenses; and (ix) costs of periodically updating the Memorandum. The Fund will not bear any placement agent fees.

4.5.3

The Fund is not responsible for placement agent fees The Fund may, in its sole discretion, appoint placement agents or distributors, who may, in turn, appoint selling dealers to participate in the distribution of Offered Shares. Those placement agents or distributors may be affiliated with the Investment Manager. The Investment Manager may pay (or cause to be paid) fees to those persons. If the Fund pays those fees, they will be deducted from the Investment Manager’s

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Management Fee or Incentive Fee, or both. But on no account are those fees payable by or chargeable to the Fund or any shareholder or prospective shareholder. The Fund may make such a payment only if it coincides with its payment of the Management Fee or Incentive Fee to the Investment Manager.

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SECTION V - DESCRIPTION OF THE FUND’S SHARES
5.1 General The authorised share capital of the Fund is $100,000 divided into: • • 100 Management Shares of US $0.01 par value per share; and 9,999,900 Participating Shares of US $0.01 par value per share, which may be issued in Classes and Series.

Subject to the Fund’s articles of association, the unissued Participating Shares of the Fund are under the control of the directors. The directors may issue, allot, dispose of or grant options over those unissued shares to any persons, on any terms and in any manner they think fit. No member has any pre-emptive right to purchase the Participating Shares. 5.2 Management Shares 100 Management Shares have been issued. They are fully paid up and held by the Investment Manager. The Management Shares are not transferable without the prior written consent of the directors, who do not intend to give such consent apart from transfers to affiliates of Investment Manager. The Management Shares have the entire voting power of the Fund unless the issue involves the appointment or removal of a director of the Fund or a modification of share rights. However, they do not entitle the holder to participate in the Fund’s profits and losses and they are not redeemable. On the winding up of the Fund, the holders of the Management Shares are only entitled to receive their paid-up capital of $0.01 per Management Share. 5.3 5.3.1 Participating Shares Rights of holders of Participating Shares The holders of the Participating Shares have no right to receive notice of, attend or vote at, general meetings of the Fund, nor do they have voting rights (unless the issue involves an appointment or removal of a director of the Fund or a modification of share rights – see the Section below entitled “Modification of Class Rights”). The Fund may only appoint or remove a director with the sanction of a resolution passed by a majority of shareholders at a meeting of all holders of issued shares, or alternatively with the sanction of an unanimous resolution in writing of all of the holders of issued shares. Subject to the Law, and in the sole discretion of the Directors, each shareholder holding Participating Shares will be paid a monthly dividend when the Net Asset Value per Share held by each shareholder for the current month exceeds the Net Asset Value per Share for the immediately preceding month. The dividend will be calculated by subtracting the Net Asset Value per Share at the end of the immediately preceding month from the Net Asset Value per Share for the current month, in each case as reduced by any accrued Incentive Fees (the “Dividend”). The Dividend will be paid at the end of each month, after the deduction of the Management Fees and out of the profits available for such payment and shall be paid

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on a pro-rata basis. Dividends will only be paid if the Directors declare that following such payment the Fund shall be able to pay the debts of the Fund as they fall due in the ordinary course of business. The holders of the Participating Shares are entitled to receive, to the exclusion of the holders of the Management Shares, the Dividend and any additional dividends that may be declared by the Fund. Also, on the winding up of the Fund, they will receive, by way of distribution, the full amount of the assets of the Fund other than the paidup capital in respect of the Management Shares of $1. When the Participating Shares are issued, they will be fully paid. Subscriptions for Participating Shares may be made only in cash in US dollars unless the Directors, in their sole discretion, permit subscription payments in another currency, in securities or partly in cash and partly in securities. Within each Class and Series, all Participating Shares of the Fund have equal dividend, distribution and liquidation rights. 5.3.2 Classes of Participating Shares In the future, the directors may designate further Classes of Participating Shares which may be attributable to the current single underlying portfolio of the Fund or a new portfolio. Each further Class of Participating Shares may be offered on different terms (including as to currency) to those on which the Participating Shares are being offered pursuant to this Memorandum. Additionally, the Fund may, for administrative convenience, issue sub-classes of Participating Shares. Hence, in this Memorandum, unless the context otherwise requires, a reference to “Class” includes any sub-class or sub-classes derived from that Class. 5.3.3 Series within a Class of Participating Shares Generally, Participating Shares of each Class are issuable monthly in Series. A new Series of the relevant Class of shares will be issued on each Subscription Day during a fiscal year. The reason for the different Series is to equitably reflect the differing Incentive Fees attributable to each Series (that result from the differing issue dates throughout the fiscal year). 5.3.4 Series roll-ups At the end of each fiscal year all Series of a particular Class for which an Incentive Fee is then payable will be converted into the oldest Series of Participating Shares of that Class for which an Incentive Fee is then payable. The conversion may be effected by the current Series of Participating Shares being redeemed by the Fund and the proceeds used to purchase Participating Shares of the new Series. 5.4 Records The Fund must separately record in its books each Class and Series of Participating Shares with its own distinct designation. Further, the Fund must record in its books the proceeds from the allotment and issue of each Class and Series of Participating Shares to the credit of that Class and Series of shares. Also, at the end of each fiscal period, the Fund must record the assets, profits, gains, income and liabilities, losses and expenses attributable to a particular Class and Series against that Class and Series.

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See Section VII headed “Financial Information and Reports – Fiscal periods”. 5.5 Rights of shareholders All shareholders are entitled to the benefit of, are bound by and are deemed to have notice of, the Fund’s memorandum and articles of association. Under those documents, the liability of the shareholders is limited to the amount, if any, unpaid on their shares. As the Participating Shares may only be issued if they are fully paid, the holders of participating Shares will not be liable for any debt, obligation or default of the Fund beyond their interests in the Fund. The Fund’s objects are set out in clause 3 of its memorandum of association. Those objects are unrestricted. The Fund’s articles of association have been drafted in broad and flexible terms to allow the directors: (i) the flexibility to re-organise the Fund into a master-feeder structure, if they consider it advantageous to do so; and the authority to determine, in their discretion, a number of issues including the period of notice to be given for redemptions, and whether or not to charge subscription or redemption fees generally or in any particular case. The directors have already exercised a number of these discretions in approving the offering of the Offered Shares on the terms set out in this Memorandum. Management Shares As an exempted company, the Fund is not required to hold scheduled annual general meetings of shareholders. General meetings may be called by the directors and will be called at the request of the holders of shares holding a simple majority of shares entitled to vote on the business to be considered at such meeting. All shareholder meetings will be held in the Cayman Islands, unless the directors determine to hold them elsewhere. Those meetings require seven days’ prior notice which may be given by hand, mail, fax or email, or alternatively, where the recipient has agreed, by posting the notice on a secure nominated website. Unless the Companies Law (Revised) of the Cayman Islands requires a special resolution, all decisions of the holders of shares entitled to vote on the business to be considered at such meeting will be made by an ordinary resolution on condition that a quorum of the holders of one-third of those shares is present in person or by proxy. Any matter may also be adopted by resolution in writing of all of the holders entitled to vote on the business to be considered. 5.5.2 Participating Shares The Participating Shares have no conversion or pre-emptive rights. When duly issued, all Participating Shares will be fully paid and non-assessable. By subscribing for Participating Shares, a subscriber will have irrevocably authorised and directed the Fund to convert those shares (unless they have been redeemed) into the oldest Series of Participating Shares of the relevant Class that are not subject to a carryforward loss at the end of each fiscal year.

(ii)

5.5.1

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5.5.3

Other matters From time to time, the Fund may increase its authorised share capital so that at all times a substantial number of Participating Shares is available for issue. This may be done by ordinary resolution. At any time, the Fund may amend its memorandum and articles of association or resolve that it be wound up by the holders of the Management Shares passing a special resolution to that effect.

5.6

Modification of Class rights Whether or not the Fund is being wound up, the rights attaching to any Class of shares may be modified: (i) (ii) with the consent in writing of the holders of two-thirds of the issued shares of that Class; or with the sanction of a resolution passed by a two-thirds majority of the holders of the issued shares of that Class at a separate meeting of the holders of the shares of that Class. Variation of offering terms Subject to applicable law and without the approval of any holders of Participating Shares, the Fund may amend this Memorandum to vary the offering terms applicable to any Participating Shares (as distinct from modifying Class rights attaching to those shares, as discussed above) in any of the following ways: (i) by making any change that the directors consider, in their sole discretion, will not adversely affect the shareholders in any material respect; or by making a change that is necessary or desirable to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, statute, ruling or regulation of any applicable regulator, court of competent jurisdiction, government or government entity (including any tax authority). However, that change must be made in a manner that minimizes, to the extent practicable as determined by the directors in their sole discretion, any adverse effect on the shareholders; or by making any change that the directors consider, in their sole discretion, is likely to adversely affect the shareholders in a material respect (including amendments to the trading program, fees charged to the Fund by service providers and the liquidity terms of the shares). However, that amendment does not become effective until after the affected shareholders have been given prior written notice of the change and have had the opportunity, following receipt of that notice, to request the redemption of their shares so affected. If they request that those shares be redeemed, the Fund must do so.

5.7

(ii)

(iii)

Despite the foregoing, the Fund (if required, with the consent of the Investment Manager) may enter into a written agreement with an existing or prospective investor in respect of Participating Shares of a certain Class that provides for offering terms that vary from those applicable to other shareholders of the same Class. The ways

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in which the offering terms may vary include the following: (i) the waiver, reduction or rebate of fees or allocations payable in respect of those shares; (ii) the provision of additional information or reports; (iii) more favourable transfer rights; and (iv) more favourable liquidity rights, including additional permitted dates for redemptions and the waiver or reduction of notice periods, or proceeds payment periods and different redemption terms. In those circumstances, the directors may issue shares of the same Class to that shareholder or may issue a separate Class (or sub-class) of shares to that shareholder.

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SECTION VI - SUBSCRIPTION, REDEMPTION AND TRANSFER OF SHARES
6.1 6.1.1 Subscription for shares Some defined terms used in this Section This Section uses a number of defined terms, particularly as they relate to the subscription, redemption and transfer of shares in the Fund. Of those, the following expressions are defined in the Executive Summary: “Subscription Agreement” “Closing Date” “Initial Offering Period” “Net Asset Value” “Net Asset Value per Share” “Redemption Day” “Subscription Day” When reading this Section, you should also note the following defined terms: “Redemption Request” means a redemption request in the form appearing in Appendix IV of this Memorandum or such other form determined by the directors from time to time; “Redemption Price” means the redemption price of Offered Shares described in this Memorandum and calculated in accordance with the Fund’s articles of association; and “Valuation Day”, with respect to the Offered Shares, means any one or more of the following having regard to the context: (a) (b) (c) 6.1.2 each Redemption Day; the business day immediately preceding each Subscription Day; the other day or days that the directors determine is or are to apply, whether generally or in a particular case. Offering of shares The Fund is offering its Class A shares (“Offered Shares”) privately to a limited number of Eligible Investors. The purchase of Offered Shares is not open to the general public. The description of an Eligible Investor appears in Appendix I. The minimum initial investment for Offered Shares is US$1,000,000. The directors may, in their sole discretion, determine some other amount to be the minimum investment in respect of a particular shareholder or group of shareholders. However, if the Fund is registered as a regulated mutual fund under Section 4(3) of the Mutual Funds Law of the Cayman Islands and its shares are not listed on any stock exchange approved by the Cayman Islands Monetary Authority, the minimum investment must not be less than US $100,000 or its equivalent in any other currency.

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6.1.3

Offer price, sales changes During and after the Initial Offering Period, Offered Shares will be offered at a Subscription Price of $1,000 per Offered Share. On each Subscription Day on which any new shares are issued, shares will be issued in a new Series. During and after the Initial Offering Period, both of the following must be received by the Administrator by 5:00 pm (Cayman Islands time) one business day before the Closing Date or applicable Subscription Day: (i) (ii) Subscription Agreement; and payment for those subscriptions (including the initial charge, if any) in cleared funds in US dollars.

However, following consultation with the Administrator and Investment Manager, the directors may waive those requirements in any particular case or generally if they determine that to do so will not materially prejudice the remaining holders of Participating Shares. But in no event will subscriptions be accepted for processing as of the Closing Date or on a particular Subscription Day, if the Subscription Agreement is received by the Administrator after 5:00 pm (Cayman Islands time) on the Closing Date or on that Subscription Day. Similarly, payment for those subscriptions must be received by the Administrator in cleared funds in US dollars no later than 5:00 pm (Cayman Islands time) on the Closing Date or on the applicable Subscription Day. If any Subscription Agreement or payment is received late, it will be dealt with on the next Subscription Day. 6.1.4 Payment Payment for Offered Shares must be made in cash by electronic transfer, net of bank charges, and is due in cleared funds in US dollars. Payment must be sent to the Administrator’s bank account, details of which are noted on the Subscription Agreement. However, the directors may accept payments in another currency and subscriptions in kind. No subscriptions in kind will be accepted unless the directors are satisfied of the following: (a) that the investments to be transferred are valued in accordance with the valuation provisions set out in the Fund’s articles and summarised in this Memorandum; and that the terms of that transfer do not materially prejudice the remaining shareholders.

(b)

If subscription monies are received in any currency other than US dollars, conversion into US dollars will be arranged by the Administrator at the risk and expense of the applicant. Any bank charges in respect of electronic transfers will be deducted from subscriptions and only the net amount will be invested in Offered Shares.

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6.1.5

Prevention of Money Laundering United States: To ensure compliance with statutory and other generally accepted principles relating to anti-money laundering regulations and policies, including the Fund’s and the Investment Manager’s obligations under the USA Patriot Act, the Fund requires verification of identity and source of funds from all prospective investors in the Fund. Pending the provision of evidence satisfactory to the Fund, admission of an investor may be delayed in the sole discretion of the Investment Manager. If the Investment Manager or the Administrator has not received satisfactory evidence of an investor’s identity within a reasonable period of time following a request for such evidence, the Investment Manager may refuse to admit the investor, in which event any subscription proceeds received by the Fund from such investor will be returned to the account of such investor. If the Investment Manager has suspicion that a payment to the Fund (by way of subscription or otherwise) contains the proceeds from criminal conduct, it may be required under applicable anti-money laundering laws and regulations to report its suspicions to one or more enforcement or regulatory agencies, including various US governmental agencies. In addition, in accordance with the USA Patriot Act and certain interpretations there under, certain US financial institutions, such as SEC-registered broker-dealers, may seek to rely on customer identification procedures undertaken by the Investment Manager in order to discharge certain of their own anti-money laundering obligations. In such situations, the Investment Manager may elect to undertake such procedures or to permit such reliance, which may involve sharing of customer identification information between the Investment Manager and the relying financial institution. Cayman Islands: To ensure compliance with applicable statutory requirements relating to anti-money laundering and anti-terrorism initiatives, the Fund or the Administrator will require verification of identity, address and source of funds from all prospective investors. Depending on the circumstances of each application and the anti-money laundering policies and procedures of the Administrator, a detailed verification might not be required where (1) the applicant is a qualified financial institution; or (2) the applicant makes the payment by electronic funds transfer from an account held in the applicant’s name at a qualified financial institution, and such institution provides an instruction letter or copy of SWIFT notification on behalf of the applicant in a form acceptable to the Company and Administrator; or (3) a qualified financial institution provides an introducer’s letter on behalf of the applicant. Such exceptions will only apply if the financial institution or intermediary referred to above is within a country recognized as having sufficient anti-money laundering regulations. In the case of (1) above, the applicant should ensure that its remitting bank includes the applicant’s full name and account number in any confirmation sent to avoid any delays. As mentioned above, the Fund, or the Administrator reserves the right to request such evidence as is necessary to verify the identity, address and source of funds of a prospective investor. The Fund or the Administrator also reserves the right to request such verification evidence in respect of a transferee of Offered Shares. In the event of delay or failure by the prospective investor or transferee to produce any evidence required for verification purposes, the Fund or the Administrator may refuse to accept the application or (as the case may be) to register the relevant transfer, and (in the case of a subscription of Offered Shares) any funds received will be returned without interest to the account from which such funds were originally debited.

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The Fund or the Administrator also reserves the right to refuse to make any redemption payment or distribution to a shareholder if any of the Directors of the Fund or the Administrator suspects or is advised that the payment of any redemption or distribution moneys to such shareholder might result in a breach or violation of any applicable anti-money laundering or other laws or regulations by any person in any relevant jurisdiction, or such refusal is considered necessary or appropriate to ensure the compliance by the Fund, its Directors or the Administrator with any such laws or regulations in any relevant jurisdiction. The Fund and the Administrator also reserve the right to request such verification evidence in respect of a redemption request. If, as a result of any information or other matter which comes to his attention, any person resident in the Cayman Islands or elsewhere (including the Fund, its Directors, its compliance officer, its money laundering reporting officer and/or the administrator) knows or suspects that payment to the Fund (by way of subscription or otherwise) is the proceeds of criminal conduct, such person is required to report such information or other matter pursuant to the Proceeds of Crime Law, 2008 of the Cayman Islands and such report shall not be treated as a breach of any restriction upon the disclosure of information imposed by law or otherwise. 6.1.6 Data protection/confidentiality Each subscriber and shareholder will also be required to acknowledge and consent that the Fund, the Administrator and/or the Investment Manager may disclose to each other, to any regulatory body, to a delegate, agent or any other service provider to the Fund or the Administrator in any jurisdiction, including those outside of the United States, the Cayman Islands or the European Economic Area, copies of the subscriber’s subscription application and any information concerning the subscriber provided by the subscriber to the Fund, the Administrator and/or the Investment Manager. Any such disclosure shall not be treated as a breach of any restriction upon the disclosure of information imposed on such person by law or otherwise. 6.1.7 Electronic communication consent The Fund, the Investment Manager, the Administrator or any agent of the foregoing may communicate with investors (e.g. financial statements, performance reports, manager letters) by using a variety of means including, but not limited to, by telephone, e-mail, password protected Internet website, regular mail and facsimile. An investor may, at any time, notify the Fund that it does not wish to receive electronic communication and that it wishes to receive paper communication instead. 6.1.8 Procedure for the purchase of Offered Shares Subscriptions are subject to the terms of this Memorandum, the Fund’s memorandum and articles of association and the Subscription Agreement attached in Appendix II. Persons interested in purchasing Offered Shares of the Fund should inform themselves as to (i) the legal requirements within their own countries for the purchase of such Offered Shares, and (ii) any foreign exchange restrictions which they might encounter. Only Eligible Investors may subscribe for Offered Shares. Further, Offered Shares purchased for those under 18 years of age must be registered in the name of the parent or legal guardian.

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Subscriptions must be made in the form of the attached Subscription Agreement and should be sent to the Administrator at the address or facsimile number appearing in the Subscription Agreement. With respect to certain countries, special requirements may have to be observed with respect to subscriptions. In the event that subscription monies are received in any currency other than US Dollars, conversion into US Dollars will be arranged by the Administrator at the risk and expense of the applicant. Any bank charges in respect of electronic transfers will be deducted from subscriptions and the net amount will be invested in the Fund. If subscriptions are made by facsimile, the original written form should be forwarded without delay to the Administrator. Offered Shares will not be issued until the original Subscription Agreement and all other relevant due diligence documents have been received by the Administrator. Offered Shares will be issued to two decimal places. Any smaller fraction of a Participating Share that would otherwise arise will be rounded down, with the relevant subscription monies being retained for the benefit of the Fund. Any subscription may be rejected or scaled down in the sole discretion of the directors. If subscriptions are scaled down or rejected, subscription monies received by the Fund will be returned to the account from which the monies were initially remitted, without interest. The subscription documents to be executed and delivered by prospective subscribers contain the subscriber’s agreement to indemnify the Fund, the Investment Manager, the Administrator and their respective affiliates, directors, members, partners, shareholders, officers, employees and agents against any and all losses, liabilities, damages, penalties, costs, fees and expenses (including legal fees and disbursements) that may result, directly or indirectly, from any inaccuracy in or breach of any representation, warranty, covenant or agreement set forth therein or in any other document delivered by the subscriber to the Fund. 6.1.9 Form of shareholding Offered Shares will be held in registered form. Generally, share certificates will not be issued nor will any other documentation be issued, other than confirmation notices. Confirmation notices will include a Shareholder Identification Number and details of the Offered Shares that have been allotted. However, confirmation notices will be sent to a subscriber only after that subscriber’s Subscription Agreement has been approved and due diligence in respect of that subscriber has been satisfactory completed. 6.2 6.2.1 Redemption of Offered Shares General Offered Shares may be redeemed on any Redemption Day at the Redemption Price. A shareholder holding Participating Shares wishing to redeem its Offered Shares should deliver an executed Redemption Request to the Administrator at the address specified in the Redemption Request. The completed Redemption Request must be actually received by the Administrator no later than the 30th day before the

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Redemption Day on which the redemption is to occur. If it is received after that date it will be held over and dealt with on the next Redemption Day. The directors may provide for a redemption notice period of less than 30 days in a particular case or generally if they determine that, under the circumstances, to waive that requirement will not have an adverse effect on the Fund’s portfolio. But in no event will redemption requests be accepted for processing as of a particular Redemption Day if the Redemption Form is received by the Administrator after 5:00 pm (Cayman Islands time) on that Redemption Day. The Redemption Request may be delivered to the Administrator by facsimile, so long as the original Redemption Request is forwarded immediately to the Administrator. None of the Fund, the Fund’s directors, the Administrator or any other agents of the Fund accepts any responsibility for any errors in facsimile transmissions. If a Redemption Request is forwarded by facsimile, no redemption proceeds will be paid to the shareholder until the original Redemption Request has been received by the Administrator. Cayman Islands law imposes certain restrictions on the redemption of shares, particularly where the Fund does not permit the redemption out of profits or the proceeds of a fresh issue of shares made for the purposes of redemption. In particular, a redemption payment out of capital is only possible if the Fund remains able to pay its debts as they fall due in the ordinary course of business after that redemption payment. The Fund, or the Administrator on its behalf, may refuse to make a redemption payment or distribution to a shareholder if: (i) a director of the Fund or the Administrator suspects or is advised that the payment of any redemption or distribution moneys to that shareholder may result in a breach or violation of an applicable anti-money laundering or other law or regulation by any person in any relevant jurisdiction; or that refusal is considered necessary or appropriate to ensure the compliance by the Fund, its directors or the Administrator with any of those laws or regulations in any relevant jurisdiction.

(ii)

Once given, a Redemption Request may not be revoked by the shareholder unless determination of the Net Asset Value is suspended by the directors in the circumstances set out below or the directors otherwise agree. On giving at least 30 calendar days’ notice to shareholders holding Participating Shares, the directors may amend the frequency of redemptions, but that change only takes effect on the Redemption Day immediately following that notice. 6.2.2 Redemption Proceeds At redemption, shareholders will be paid the Redemption Price. The Redemption Price is calculated in accordance with the Fund’s articles of association and is based on the Net Asset Value per Share on the preceding Valuation Day. The Redemption Price will be paid in US dollars by electronic transfer at the request and expense of the redeeming shareholder. It will usually be paid within 30 business days of the relevant Redemption Day.

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The Fund aims to pay all redemption proceeds in cash. However, under circumstances of low liquidity or adverse market conditions, the directors may choose to satisfy redemptions by transferring assets of the Fund. But no Investment will be transferred to a shareholder unless the directors are satisfied that: (a) the value of the Investments to be transferred (together with any cash redemption proceeds) is equal to, and does not exceed, the Net Asset Value of the shares to be redeemed less all duties and charges incurred as a result of the transfer. For this purpose, the Investments will be valued in accordance with the valuation provisions set out in the Articles and summarised in this Memorandum; and the terms of the transfer do not materially prejudice the interests of the remaining shareholders.

(b)

Investments may be transferred directly to the redeeming shareholder or may be transferred to a liquidating account and sold by the Fund for the benefit of the redeeming shareholder. In the latter case, payment of the proportion of the Redemption Price attributable to those Investments will be delayed until they are sold, and the amount payable in respect of those Investments will depend on their performance until they are sold. The cost of operating the liquidating account and selling the Investments will be deducted from the proceeds of sale paid to the redeeming shareholder. 6.2.3 Compulsory redemption A shareholder holding Participating Shares must notify the Fund and the Administrator immediately if it ceases to be an Eligible Investor. If that happens, at the next Redemption Day after that notification, the Fund may redeem its Participating Shares at the Net Asset Value per share. Without limitation to the previous sentence, the Fund may redeem any shares that are or become owned, directly or indirectly, by or for the benefit of a person who is not an Eligible Investor. Further, on giving notice in writing to a shareholder holding Participating Shares, the Fund may redeem all or any shares of that shareholder on a day appointed by the directors for that purpose. It may do so with or without cause but the Redemption Day must not be less than 5 days after the date of that notice. 6.3 Determining Net Asset Value The Administrator will calculate the Net Asset Value of each Class and Series of the Fund and the Net Asset Value per share as of the close of business on each Valuation Day. Those calculations will be made in accordance with the valuation provisions set out in the articles and summarised below and will be reported to shareholders to two decimal places. The Net Asset Value of a share of the relevant Series is calculated by dividing the assets of the Fund attributable to the Series to which that share belongs, less the liabilities attributable to that Series, by the number of issued shares in that Series. Unless the directors consider some other basis of valuation is more appropriate, the Fund’s assets will be valued based on accrual accounting using generally accepted accounting principles applied in the United States (“GAAP”) (apart from amortisation

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of organisational costs) as a guideline and otherwise in accordance with the principles set out in the articles and summarised below. 6.3.1 Assets For the purpose of any valuation, the Fund’s assets include, without limitation: (a) (b) (c) (d) all cash on hand or on deposit, including any paid or unpaid accrued interest; all bills and demand notes and accounts receivable (including the proceeds of investments and other assets sold); all investments and other assets owned by or contracted for by the Fund; all dividends and distributions payable in stock, cash or other property receivable by the Fund. However, the Administrator may make adjustments with respect to fluctuations in the market value of investments caused by trading ex-dividend or ex-rights or by similar practices; all interest accrued on any interest-bearing instruments owned by the Fund, except to the extent that interest is already included or reflected in the valuation of those instruments; and all other assets of every kind and nature, including prepaid expenses (although goodwill is deemed to have no value). Liabilities Once again, for the purpose of any valuation, the Fund’s liabilities include, without limitation: (a) (b) all loans, bills and accounts payable; all accrued or payable expenses and fees chargeable to the Fund including amortised organisational expenses and accrued Management Fees and Incentive Fees. Regular or recurrent expenses may be estimated for yearly or other periods in advance and accrued over that period; gross acquisition cost of investments and other property contracted to be purchased by the Fund; such sum (if any) the directors consider appropriate on account of anticipated brokerage, stamp duty and any other governmental taxes or charges; Dividends declared on the Participating Shares but not yet paid; and all other liabilities, including contingencies and such reserves as the directors, acting reasonably, consider advisable. Valuation principles In valuing the Fund’s investments, the following principles apply: (a) Unless US GAAP require otherwise:

(e)

(f)

6.3.2

(c)

(d) (e) (f) 6.3.3

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(i) (ii)

Net Asset Value shall include any unrealized profit or loss on open positions; securities (other than options and warrants) which are listed on a recognized exchange or included in an automated quotation system generally shall be valued at the closing sale price on the date of determination; options, warrants and other securities for which no sale occurred on the date of determination, or other securities which are not so listed or included shall be valued at the mean between the “bid” and “asked” price on the date of determination based on quotations obtained by the Administrator or its delegatee from one or more brokers or dealers regularly making markets in and issuing quotations for such securities, it being within the sole discretion of the Administrator or its delegatee applied in good faith to determine whether an exchange is recognized for valuation purposes; all open futures positions and options thereon shall be calculated at their then-market value which means, with respect to open futures positions, the settlement price as determined by the exchange on which the transaction is effected or the most recent appropriate quotation as supplied by the broker through which the transaction is effected, and means with respect to options on futures contracts the liquidation value thereof; if there are no trades on the date of the calculation due to the operation of the daily price fluctuation limits or due to a closing of the exchange on which the transaction is executed, the contract will be valued at fair market value as determined by the Investment Manager in good faith; in the case of forward contracts and options thereon traded on the interbank market, forward contracts shall be valued at the mean between the “bid” and “asked” price for all positions at the close of business in New York City on the day on which the Net Asset Value is determined as quoted by the banks or other brokers and dealers through which such contracts were acquired, and options on forward contracts shall be valued at the fair market value as determined by the Investment Manager in good faith; swap agreements shall be valued at fair market value as determined by the Investment Manager in good faith; all other investments, assets and liabilities of the Fund and those investments, assets and liabilities of the Fund the fair market value of which the Investment Manager determine cannot be accurately determined pursuant to any other provisions of this section, shall be assigned such fair market value as the Investment Manager may determine in good faith; brokerage commissions on securities and futures trades shall be accrued as incurred; Management Fees and Incentive Fees and other fees and expenses shall be accrued at least monthly;

(iii)

(iv)

(v)

(vi)

(vii)

(viii)

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(ix)

the amount of any Dividends or distributions made by the Fund shall be a liability of the Fund from the day when the Dividend or distribution is declared until paid; interest income shall be accrued at least monthly; and any value otherwise than in dollars shall be converted into dollars at a prevailing rate (whether official or otherwise) which the Investment Manager shall in good faith deem appropriate having regard to any premium or discount which it considers may be relevant and to costs of exchange.

(x) (xi)

(b)

In calculating the Net Asset Value per Share, the Administrator may rely on such automatic pricing services as it considers appropriate. Alternatively, if so instructed by the directors, it may use information supplied by particular pricing services, brokers, market makers or other intermediaries. The Administrator shall be entitled to rely upon prices received from a reputable pricing service. The Administrator will not be liable for any loss suffered by the Fund or a shareholder due to an error in the calculation of the Net Asset Value per share resulting from an inaccuracy in the information supplied by a pricing service, broker, market maker or other intermediary. In addition and with respect to securities valued by the directors or the Investment Manager, the Administrator shall be entitled to rely without enquiry upon the valuations submitted to it by the directors and/or the Investment Manager and shall have no responsibility to determine the accuracy or otherwise thereof. Temporary suspension of dealings

6.4

At any time, the Fund’s directors may declare that the issue or redemption of shares of any Class is temporarily suspended. Also, in either case, they may (but need not) declare that the determination of the Net Asset Value per Share of that Class is simultaneously suspended. Further, at any time, the directors may declare that the determination of the Net Asset Value per Share of any Class is temporarily suspended. Also, they may (but need not) declare that the redemption of shares of that Class is simultaneously suspended. The Fund’s directors may declare any of these suspensions in such circumstances as they think fit. These circumstances include, but are not limited to, any of the following: (a) a stock exchange on which a substantial part of the Fund’s Investments is traded is closed (apart from ordinary holidays) or dealings on that stock exchange are restricted or suspended; a state of emergency exists as a result of which: (i) disposal of a substantial part of the Fund’s investments is not reasonably practicable and may seriously prejudice the shareholders; or it is not reasonably practicable for the Fund to determine fairly the value of its net assets;

(b)

(ii)

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(c) (d)

none of the outstanding Redemption Requests is able to be lawfully satisfied by the Fund in US dollars; or there is a breakdown in the means of communication normally used to determine the prices of a substantial part of the Fund’s investments.

Any suspension takes effect at the earlier of: (a) (b) the time the directors specify in their declaration; and the close of business on the business day immediately following the day the directors declare the suspension.

The suspension continues until the directors declare that it is ended. As soon as practicable after declaring a suspension, the Fund’s directors will cause notice to be given to the holders of Participating Shares of the affected Class of the terms of that declaration. Similarly, when the period of suspension ends, they will cause further notice of that fact to be given to those holders. 6.5 Transfer of Offered Shares Offered Shares may not be transferred without the prior written consent of the directors, which they may withhold in their absolute discretion. Furthermore, transfers of Offered Shares may only be conducted in accordance with the policies and procedures of the Administrator, including anti-money laundering policies and procedures. A transferee must be an Eligible Investor and must complete a Subscription Agreement and will be subject to the same requirements as all subscribers for Offered Shares.

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SECTION VII - FINANCIAL INFORMATION AND REPORTS
7.1 Fiscal year The Fund’s fiscal year will end on December 31 of each year, with the first fiscal year ending on December 31, 2010. 7.2 Fiscal periods Because Participating Shares may be issued and redeemed, and dividends declared on them, during the course of a fiscal year, the Fund’s articles of association provide for fiscal periods that are portions of a fiscal year to enable net profits and net losses to be allocated to each Class and Series. A new fiscal period will commence on each of the following dates: • • • the day immediately after the date a redemption of Participating Shares occurs; the date that any Participating Shares are issued; and the day immediately after the date fixed by the directors for determining the record of ownership of Participating Shares of a Class and Series in connection with the payment of dividends.

When that happens, the prior fiscal period will end on the day immediately before the first day of the new fiscal period. 7.3 Financial statements Unless the directors in their discretion determine otherwise, the Fund’s financial statements will be prepared using GAAP as a guideline. Despite this, because the directors believe it is more equitable, organisational expenses will be amortised over 60 months from the date the Fund commences operations, rather than expensing the entire amount during the first year of operations as required by GAAP. As a result, the Fund’s financial statements may contain qualifications reflecting that treatment. The books and records of the Fund will be audited at the end of each fiscal year by auditors selected by the directors. The Fund’s first audit will be for the period beginning when the Fund’s operations commenced and ending on December 31, 2010. 7.4 Auditors McGladrey & Pullen are the auditors for the Fund and have consented in writing to their appointment as auditors of the Fund. They have also consented to being referred to as such in this Memorandum. The directors may replace the auditors without prior notice to the holders of Participating Shares.

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7.5

Reports to shareholders Each fiscal year, holders of Participating Shares will be sent audited financial statements of the Fund within six months after the end of that fiscal year (or as soon as practicable thereafter). The financial statements will include a statement of profit or loss for that fiscal year as well as a statement of the unaudited status of the shareholder’s holdings in the Fund at that time. The Fund will also provide a shareholder with a monthly report on the investment performance of the Fund if the shareholder requests that report from the Investment Manager. On behalf of the Fund, the Administrator offers authorised persons, including relevant service providers and investors the opportunity to review confidential fund information, including but not limited to investor and investment information, via electronic delivery. Although this may be of benefit, it is important to note that; i. electronic communications may not be secure, may contain computer viruses or other defects, may not be accurately replicated on other systems, or may be intercepted, deleted or interfered with without the knowledge of the sender or the intended recipient; and ii. the information may be located outside of the Cayman Islands and may need to be disclosed to third parties; e.g. those involved with the maintenance of the information, and could be accessed by unauthorised persons. As such, the person to whom the information belongs by investing in the Fund agrees that the Administrator, on behalf of the Fund, may employ the applicable method of communication. The person will also be required to release the Administrator and the Fund from any form of liability or loss associated with the communication or publication of fund information, including but not limited to investor and investment information. The Administrator makes no warranties in relation to these matters and the use of the alternative methods of communication will be at the sole risk of the person to whom the information belongs. The Administrator also reserves the right to intercept, monitor and retain communications to and from its systems as permitted by applicable law.

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SECTION VIII - TAXATION
8.1 General What follows is a general discussion of some of the anticipated Cayman Islands and United States tax consequences to the Fund arising from its operation. The statements as to Cayman Islands taxation are based on advice from Ogier, George Town, Grand Cayman, Cayman Islands. The statements as to United States taxation are based on advice from Arnold & Porter LLP. Each summary that follows is considered by the applicable advisor to be a correct interpretation of existing laws, regulations promulgated under those laws, published administrative findings and judicial decisions applied at the date of this Memorandum. However, the Fund does not represent that those laws, regulations, rulings or decisions, or their application or interpretation, will not change in the future, possibly with retroactive effect. Furthermore, in view of the number of different jurisdictions where local laws may apply to holders of Participating Shares, the discussion that follows does not address all the tax consequences, including income tax consequences, to potential investors of purchasing, holding, redeeming or disposing of Offered Shares. Prospective investors are urged to consult their own tax advisors to determine the possible tax consequences, including income tax consequences, to them under the laws of any of the following jurisdictions: jurisdictions of which they are citizens, residents or domiciliaries; jurisdictions in which they conduct business; and jurisdictions in which they purchase, hold, redeem or dispose of Offered Shares. The following discussion does not constitute tax advice. 8.2 8.2.1 Cayman Islands Fund Level The Fund is not subject to any income, withholding or capital gains taxes in the Cayman Islands. The Fund has applied for and is expecting to receive an undertaking from the Governor-in-Cabinet of the Cayman Islands pursuant to the Tax Concessions Law (Revised) of the Cayman Islands that for a period of twenty years from the date of the grant of the undertaking, no law which is thereafter enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciations will apply to the Fund or its operations; and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable on or in respect of the shares, debentures or other obligations of the Fund, or by way of the withholding in whole or in part of any relevant payment as defined in Section 6(3) of The Tax Concessions Law (Revised). No capital or stamp duties are levied in the Cayman Islands on the issue, transfer or redemption of Participating Shares. 8.2.2 Shareholder Level Shareholders holding Participating Shares will not be subject to any income, withholding or capital gains taxes in the Cayman Islands, with respect to their

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Participating Shares and dividends received on those shares, nor will they be subject to any estate or inheritance taxes in the Cayman Islands. 8.2.3 European Union Savings Directive The EU member states have adopted a Savings Directive (2003/48/EC) (“Directive”), which came into effect on 1 July 2005. The Directive requires that “paying agents” in one member state provide to the tax authorities of another member state details of payments of interest or other similar income (including income, by way of distribution or redemption, made by or on behalf of certain investment funds) paid by them to or for the benefit of an individual resident in that other member state. (Instead of providing that information, certain states operate a withholding system in relation to payments of that kind.) The implementation of the Directive affects certain dependencies and territories of EU member states, including the Cayman Islands, which have voluntarily agreed to apply the same or equivalent measures to those contained in the Directive. In the Cayman Islands, those measures came into effect on July 1, 2005. In common with the Directive, the Cayman Islands legislation applies to “interest payments” made by a “paying agent” to an individual resident in the EU. Under the Cayman Islands legislation, “interest payment” includes income paid (by way of distribution or redemption) by or on behalf of certain UCITS or “equivalent undertakings for collective investment established in the Cayman Islands” (called a “UCITS equivalent”). For the purpose of the Directive, the Administrator will make the payments to investors and will usually be the paying agent. The Administrator is located in the Cayman Islands, and the payments will be subject to the laws that implement the Directive in the Cayman Islands. But, the Administrator will be able to treat the Fund as a non-UCITS equivalent, and therefore outside the scope of the Directive. However, an investor may become a paying agent for purpose of the Directive if (a) that investor is based in the EU or certain states that have agreed to implement measures equivalent to those contained in the Directive (including Switzerland, the Channel Islands and Monaco); and (b) that investor makes an investment in the Fund on behalf of other underlying investors who are individuals or certain unincorporated entities resident in the EU. In those circumstances, under implementing legislation in that investor’s country of residence, the investor may be required to (i) obtain all relevant information relating to its underlying investors and their indirect investment in the Fund; and (ii) make returns to the appropriate tax authorities, or withhold tax at applicable rates from any distribution made to underlying investors in respect of a payment received from the Fund. An investor of this kind should seek tax advice from an independent tax advisor, based on its own circumstances. 8.3 8.3.1 United States US Treasury Circular 230 Notice The tax discussion contained in this Memorandum was not intended or written to be used, and cannot be used, for the purpose of avoiding US federal tax penalties. This

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discussion was written to support the promotion or marketing of the transactions or matters addressed in this Memorandum. You should seek advice based on your particular circumstances from an independent tax advisor. 8.3.2 US Federal Taxation The following is a brief summary of certain United States federal (“Federal”) income tax consequences that may be relevant to prospective investors. This summary is not a full description of the complex tax rules involved and is based upon the sections of the US Internal Revenue Code of 1986, as amended (“Code”), US Treasury regulations, published US Internal Revenue Service (“Service”) rulings, published administrative positions of the Service and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time. This summary does not take into account or anticipate any state, local or non-US tax considerations. No assurance can be given that forthcoming legislation, administrative changes or court decisions will not significantly modify the tax consequences discussed in this summary. A change in the tax law may or may not be applied retroactively to transactions entered into or completed prior to the adoption of any such change. This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular investor. The Fund has not obtained any private letter ruling from the Service or analogous ruling from any other authority concerning the tax consequences set forth herein. Accordingly, prospective purchasers of Participating Shares should consult their own tax advisers with respect to the tax treatment of the acquisition, ownership and disposition of Participating Shares in light of their particular circumstances. This summary does not purport to be a complete analysis of all the potential Federal income tax considerations relating to the purchase, ownership and disposition of Participating Shares, and does not address all aspects of taxation that may be relevant to a particular investor in light of the investor’s individual circumstances (including the effect of any non-US, state or local tax laws) or to certain types of purchasers (including dealers or traders in securities, insurance companies, financial institutions, regulated investment companies, real estate investment trusts, investors liable for the alternative minimum tax, persons whose functional currency is not the US dollar, holders in straddles, hedging or conversion transactions and tax-exempt entities) subject to special treatment under Federal income tax laws. The Fund’s policies do not permit the ownership or transfer of Participating Shares to United States persons (as defined in Appendix I). Accordingly, tax consequences to US Holders (as hereinafter defined), including investors that are citizens but not residents of the United States, are not discussed herein. Special rules may apply in the case of investors that are former citizens of the United States or that are considered, for Federal tax purposes, to be personal holding companies, controlled foreign corporations, passive foreign investment companies or corporations subject to the accumulated earnings tax, and in some situations special rules may also apply to shareholders of the foregoing. Additionally, special rules regarding certain Federal income tax consequences may apply to an investment in the Fund by a beneficial owner of Participating Shares which is or becomes, for Federal income tax purposes, a citizen or resident of the United States, a US corporation, or a holder otherwise subject to Federal income tax on a net income basis in respect of Participating Shares. This summary does not address any such special rules and, accordingly, such investors are urged to consult their tax advisers concerning the Federal tax treatment of an investment in the Fund in light of their particular circumstances.

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Participating Shares may not be purchased by United States persons. Accordingly, the tax consequences to US Holders, including individuals who are citizens of the United States but not residents of the United States, are not discussed herein. The Fund is a company incorporated under the laws of the Cayman Islands. Based on the structure and operations of the Fund, it generally should not be subject to Federal income tax, except as provided below. The Fund generally will be subject to Federal income tax on income and gain realized by it only if it is viewed for Federal income tax purposes as being “engaged in a trade or business within the United States,” either directly or through one or more non-corporate master fund in which it may invest. Whether the Fund will be viewed to be engaged in a trade or business within the United States is a question of fact the answer to which will depend principally upon the activities that the Fund (or any noncorporate master fund or other investment vehicle in which the Fund may invest) conducts within the United States. However, a “safe harbor” found in the Code provides that a non-US corporation (other than a dealer in securities or commodities) that engages in the United States in trading securities (including contracts or options to buy or sell securities) and commodities for its own account is not deemed to be engaged in a US trade or business (with the further requirement, in the case of commodities, that (a) the commodities are of a kind customarily dealt in on an organized commodities exchange and (b) the transaction is of a kind customarily consummated at such place). The Fund intends to use reasonable efforts to conduct its business in a manner so as to meet the requirements of the safe harbor. On that basis, trading activity of the Fund generally should not constitute a US trade or business, and the Fund does not expect to be subject to Federal income taxation on any of its trading profits. If, however, the Fund were deemed to be engaged in a US trade or business, income and gain deemed to be effectively connected with such investment would potentially be subject to Federal income tax at graduated rates and, in addition, subject to a flat 30% branch profits tax. The Fund will, to the extent practicable, attempt to limit its activities within the United States and otherwise conduct its affairs and structure investments so as not to be treated as engaged in a trade or business within the United States. Nonetheless, there can be no assurance that the Fund will be successful in that attempt, nor that any non-corporate master fund or other investment vehicles in which the Fund may invest will similarly limit their activities, affairs and investments. In general, under the Code, a non-US corporation (such as the Fund) which does not conduct a US trade or business nonetheless is subject to Federal tax at a flat rate of 30% on the gross amount of certain US-source income which is not effectively connected with a US trade or business, generally payable through withholding. Income subject to such a flat tax rate is described in the Code as being of a fixed or determinable annual or periodic nature, including dividends and certain interest income. There presently is no tax treaty between the United States and the Cayman Islands relating to withholding tax that would reduce the withholding rate. Certain types of income specifically are exempted from the 30% tax, and thus withholding is not required on payments of such income to a non-US corporation. The 30% tax does not apply to interest on deposits with US banks, nor to interest which qualifies as “portfolio interest.” The term “portfolio interest” generally includes interest (including original issue discount) on an obligation in registered form with respect to which the United States person who would otherwise be required to

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deduct and withhold the 30% tax receives the required statement that the beneficial owner of the obligation is not a United States person. Under certain circumstances, interest on bearer obligations also may be considered portfolio interest. Contingent interest, however, is never “portfolio interest.” Also exempt from the 30% tax is income from original issue discount obligations and interest-bearing obligations which are payable no more than 183 days from the date of issue. As used herein, the term “US Holder” means an investor that, for Federal income tax purposes, is (a) an individual citizen or resident of the United States, (b) a corporation, partnership, limited liability company or other entity created or organized in or under the laws of the United States, any State thereof or the District of Columbia, (c) an estate the income of which is subject to Federal income taxation regardless of its source or (d) a trust (i) as to which one or more United States persons (as defined for Federal tax purposes) have the authority to control all substantial decisions and over which a court within the United States is able to exercise primary supervision, or (ii) that was in existence on August 20, 1996, was considered a US trust as of that date, and has in effect an election to continue to be so treated. The term “Non-US Holder” means an investor that is not a US Holder. For purposes of this summary, any discussion relating to Non-US Holders should be understood to pertain solely to investors that will own Participating Shares as capital assets within the meaning of the Code. Subject to the discussion of “backup withholding” below, a Non-US Holder that is not considered to be engaged in a trade or business within the United States should generally not be subject to Federal income, branch profits or withholding taxes on Fund distributions or any gain realized on a disposition of its Shares. However, in the case of a nonresident alien individual, such gain will be subject to Federal tax at a 30% rate (or lower tax treaty rate) if such individual is present in the United States for 183 days or more during the taxable year (on a calendar year basis unless the nonresident alien individual has previously established a fiscal year) and has a “tax home” (within the meaning of the Code) in the United States and certain other conditions are satisfied. A 28% US “backup withholding” tax and information reporting may apply to any dividends on, and gross proceeds from the sale or redemption of, Participating Shares held in the United States by a custodian or nominee unless the investor properly certifies that it is a Non-US Holder for Federal income tax purposes or otherwise establishes an exemption from backup withholding. 8.4 Other jurisdictions Dividends, interest and other income received by the Fund from sources within certain countries may be subject to withholding taxes imposed by those countries. The Fund may also be subject to capital gains taxes or other taxes in some of the countries where it purchases and sells securities or otherwise conducts business. It is impossible to predict in advance the rate of tax that the Fund will pay since the amount of the Fund’s assets to be invested in various countries is unknown.

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SECTION IX - GENERAL
9.1 Directors’ report At the date of this Memorandum, the Fund has not, nor since its corporation has it, commenced operations, declared any dividends or made up any accounts. The Fund does not have, nor since its corporation has it had, any employees, nor is it expected to have any in the future. Since its incorporation, the Fund has not been, nor is it currently, engaged in any litigation or arbitration. Also, so far as the directors are aware, no litigation or claim is pending or threatened against the Fund. 9.2 Material Contracts The Fund has entered into the following contracts: (a) Management Agreement with the Investment Manager under which the Investment Manager is appointed to provide certain investment management services to the Fund; Administration Agreement with the Administrator under which the Administrator is appointed administrator, registrar and transfer agent of the Fund; and Custodian Agreement with the Custodian under which the Custodian is appointed as custodian of the Fund’s assets.

(b)

(c)

These contracts are summarised in the Section IV headed “Management and Administration”. They are, or may be, material. 9.3 Documents available for inspection The following documents are available for inspection during the Fund’s normal business hours, on weekdays (Saturdays, Sundays and public holidays excepted) at the registered office: (i) (ii) the Fund’s memorandum and articles of association; the Companies Law (Revised) and the Mutual Funds Law (Revised) of the Cayman Islands; the Material Contracts referred to above; and the most recent interim financial statements and audited financial statements of the Fund.

(iii) (iv)

Copies of these documents may be obtained free of charge.

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APPENDIX I
Eligible Investors

From time to time, the directors may amend the criteria for determining who is an Eligible Investor for the purpose of an investment in the Fund. Initially, all subscribers are “Eligible Investors” except the following: (i) any subscriber whose acquisition of Offered Shares would cause a breach of the law or requirements of any country or governmental authority, including anti-money laundering regulations or conventions;

(ii) any subscriber on behalf of terrorists or terrorist organisations, including those persons or entities that are included on the List of Specially Designated Nationals and Blocked Persons maintained by the US Treasury Department’s Office of Foreign Asset Control 1 (“OFAC”); (iii) any subscriber who acts, directly or indirectly, for a senior foreign political figure, any member of a senior foreign political figure’s immediate family or any close associate of a senior foreign political figure 2 unless the Fund, after being specifically notified by the subscriber in writing that it is such a person, conducts further due diligence, and determines that the investment is permitted; (iv) any subscriber or any entity acting as trustee, agent, representative or nominee for a subscriber that is a foreign shell bank 3; (v) any subscriber who makes representations in a Subscription Agreement that are not true when given or have ceased to be true; (vi) any subscriber whose circumstances are such that, in the opinion of the directors, its continued ownership of Offered Shares would cause an undue risk of adverse tax or other consequences to the Fund or another shareholder. Those circumstances include those that affect that subscriber directly or indirectly, whether taken alone or in conjunction with another person or persons, connected or not, or any other circumstance that appears to the directors to be relevant; and (vii) any subscriber, or any subscriber that is an entity acting as trustee, agent, representative or nominee for a person, who (A) is a “United States person” (within the meaning of Regulation S under the United States Securities Act or for purposes of US Federal income taxation) or (B) is not a Non-US Person as defined in US Commodity Futures Trading Commission (“CFTC”) Rule 4.7 under the US Commodity Exchange Act, as amended (“CE Act”). The subscriber must notify the Fund immediately if the subscriber becomes a United States person or becomes aware that any person for whom the subscriber holds shares as trustee, agent, representative or nominee has become a United States person. All persons who do not come into any of the above categories are “Eligible Investors”. All persons who do come within any of those categories are known collectively as “Prohibited Persons”. Definition of “United States person” within the meaning of Regulation S under the United States Securities Act for purposes of category (vii) above: 1. Any natural person resident in the United States, including any United States resident who is temporarily outside the United States; Any corporation, partnership or other entity organized or incorporated under the laws of the United States; Any estate of which any executor or administrator is a United States person;

2.

3.

The OFAC list may be accessed on the web at http://www.treas.gov/ofac. Senior foreign political figure means a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party or a senior executive of a foreign government-owned corporation. In addition a senior foreign political figure includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure. The immediate family of a senior foreign political figure typically includes the political figure’s parents, siblings, spouse, children and in-laws. A close associate of a senior foreign political figure is a person who is widely and publicly known internationally to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure. 3 Foreign shell bank means a foreign bank without a physical presence in any country, but does not include a regulated affiliate.
2

1

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4. 5. 6.

Any trust of which any trustee is a United States person; Any agency or branch of a foreign entity located in the United States; Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a United States person; Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident, in the United States; and Any corporation, partnership or other entity if (a) organized or incorporated under the laws of any foreign jurisdiction; and (b) formed by a United States person principally for the purpose of investing in securities not registered under the United States Securities Act unless it is organized or incorporated, and owned, by “accredited investors” (as such term is defined in Rule 501(a) under the Securities Act) which are not natural persons, estates or trusts.

7.

8.

Definition of the term “United States person” for US Federal income tax purposes for purposes of category (vii) above: 1. 2. An individual citizen or resident of the United States; A partnership, corporation or any other entity formed under the laws of the United States or any political subdivision thereof; An estate the income of which is subject to US Federal income tax regardless of its source, or

3.

4. A trust (a) the administration of which is subject to the primary supervision of a court within the United States and for which one or more United States persons have the authority to control all substantial decisions, or (b) that has elected to be treated as a domestic trust for US Federal income tax purposes. Definition of “Non-US Person” under CFTC Rule 4.7 under the CE Act for purposes of category (vii) above: 1. 2. A natural person who is not a resident of the United States; A partnership, corporation or other entity, other than an entity organized principally for passive investment, organized under the laws of a foreign jurisdiction and which has its principal place of business in a foreign jurisdiction; An estate or trust, the income of which is not subject to US Federal income tax regardless of source; An entity organized principally for passive investment such as a pool, investment company or other similar entity, provided that units of participation in the entity held by persons who do not qualify as NonUS Persons or otherwise as qualified eligible persons (as defined in CFTC Rule 4.7) represent in the aggregate less than 10% of the beneficial interest in the entity, and that such entity was not formed principally for the purpose of facilitating investment by persons who do not qualify as Non-US Persons in a commodity pool with respect to which the commodity pool operator is exempt from certain requirements of Part 4 of the CFTC’s regulations by virtue of its participants being Non-US Persons; and A pension plan for employees, officers or principals of an entity organized and with its principal place of business outside the United States.

3. 4.

5.

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APPENDIX II
Subscription Agreement Short Term Liquidity Fund I, Ltd.
Once completed, this form should be sent by fax, with the original to follow by mail or courier to: Short Term Liquidity Fund I, Ltd. c/o Michael Kenwood Capital Management, LLC 350 Bedford Street, Suite 405 Stamford, CT 06901 USA Facsimile: Telephone: Dear Administrator: 1. Subscription (a) The undersigned subscriber (“Subscriber”) irrevocably applies for that number of Class A non-voting participating shares (“Shares”) in Short Term Liquidity Fund I, Ltd. (“Fund”) that may be subscribed for with the subscription amount that appears below in accordance with the terms of the private offering memorandum of the Fund dated May 2010 (as amended or supplemented, the “Memorandum”). (Note: Unless defined otherwise in this Subscription Agreement, capitalised terms have the meanings given to them in the Memorandum.) Subscription Amount $ ________________ Subscription Agreements may be sent by facsimile transmission to the facsimile number stated in the Subscription Agreement, provided that the original Subscription Agreement is forwarded to the Administrator forthwith. Neither the Fund nor the Administrator accepts any responsibility for any loss arising from the non-receipt by the Administrator of any Subscription Agreement sent by facsimile transmission. (b) Subscription in cash: The Subscriber undertakes to settle in full the subscription amount invested, net of bank charges, by electronic transfer for value on ________________ to the following bank account of the Fund (for a straight-through MT 103): Correspondent Bank Name: Deutsche Bank Trust Company Americas, New York Correspondent Bank Swift: BKTRUS33 Beneficiary Bank Name: Deutsche bank, Amsterdam Beneficiary Bank Swift DEUTNL2A Account DBA with corr.bank: 04-410-816 Name account: Short Term Liquidity Fund I, Ltd. Account number: 265141648-0000USD000 IBAN NL05DEUT0265049113 Free Text: “From the Account of <INSERT Investor Name / Account Number +1 (203) 327-8725 +1 (203) 327-8700

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Subscriptions should be made only by wire transfer in US dollars, cheques will not be accepted. In the event that subscription monies are received in any currency other than US dollars, conversion into US dollars will be arranged by the Administrator at the risk and expense of the applicant. Any bank charges in respect of electronic transfers will be deducted from subscriptions and the net amount only invested in Shares. Please effect the wire by either SWIFT MT100 or MT103 and ensure the bank charges are charged separately to your account and not netted from the payment. To avoid return of funds, the wire transfer must be sent from an account in the name of the Investor. The Investor’s name must be included on line 50 of the SWIFT wire transfer message or the wire transfer must state “From the Account of ____________ (Investor name)”. Please also note that there are varying length restrictions on Field 70 so the Sender of the SWIFT message must ensure the Receiver of the SWIFT message will be passing on the information to Michael Kenwood Capital Management, LLC to avoid delays in processing or return of funds. Please note that in order for the Administrator to comply with Anti-Money Laundering Legislation in the Cayman Islands, the Administrator must be able properly to identify the source of funds sent to it for investment. Accordingly, the Subscriber is required to complete both the “Ordering Customer” (field 50) and the “Ordering Institution” (field 52D) when sending a wire payment through the international SWIFT system. The Administrator strongly suggests not to send SWIFT FIN 910 “Confirmation of Credit” messages that do not include both of the above mentioned fields. Instead, the Subscriber should send a SWIFT FIN 103 “Customer Transfer Message” or to instruct its bank to use this format and to include the “Ordering Customer” in field 50 and the “Ordering Institution” in field 52D (or equivalent CHIPS or Fed Wire indication). Subscription in kind: The Subscriber undertakes to transfer the following investments to those of the Fund’s accounts that the Fund notifies the Subscriber in writing. Submitted Securities Number of Securities Identification Number (ISIN, Common No., Cedel or Euroclear) Estimated Total Value as at Applicable Valuation Day

Note: If insufficient space for all securities that are being transferred, please complete and attach to this Subscription Agreement additional sheets setting forth the information requested above in respect of the securities being transferred. 2. Representations, warranties acknowledgements and undertakings The Subscriber (or, if more than one, each of them) gives the following representations, warranties, acknowledgements and undertakings: (a) The Subscriber acknowledges that it has received and considered the Memorandum and that this subscription is made on the terms of the Memorandum and subject to the Fund’s Memorandum and Articles of Association. It undertakes to observe and be bound by the Memorandum and Articles of Association (as amended from time to time) of the Fund and applies to be entered in the register of shareholders as the holder of the Participating Shares issued in relation to this subscription. (b) The Subscriber acknowledges that: (i) it has read and fully considered and understands the Memorandum in connection with this subscription for Participating Shares in the Fund; and (ii) it has evaluated its proposed investment in the Fund in the light of its financial condition and Resources. (c) The Subscriber confirms that: (i) it is aware of the risks involved in investing in the Fund and that an inherent risk in this investment is the potential to lose all of its investment; (ii) it is applying for Participating Shares on the basis of the Memorandum and that it has not relied on any representations or statements made or information supplied by or on behalf of the Fund other than information contained in the Memorandum;

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(iii) it has knowledge and experience in financial, investment and business matters so as to be capable of evaluating the merits and risks associated with an investment in the Participating Shares, and is able to bear the economic risk of that investment; and (iv) the Fund has made available to it all material contracts described in the Memorandum together with (where applicable) the most recent annual report and accounts of the Fund and has given it an opportunity to verify and to clarify any information contained in the Memorandum and those documents. (d) The Subscriber represents and warrants to the Fund that: (i) it is an Eligible Investor as defined in Appendix I to the Memorandum; and (ii) it is not acting on behalf of or for the benefit of, nor does it intend transferring any Participating Shares in the Fund that it may purchase to, any person who is not an Eligible Investor; (e) The Subscriber acknowledges that the Fund or the Administrator has the right to reject this subscription, in whole or in part, without giving a reason for that rejection. In those circumstances, the full amount of funds tendered, or the excess in respect of a scaled down subscription, will be refunded without interest to the bank account from which the original subscription funds were remitted. (f) Due to anti-money laundering requirements, the Subscriber acknowledges that the Administrator and the Fund (as the case may be) may require further verification of the identity and source of Subscriber’s funds before the subscription can be processed. If the verification evidence supplied is not satisfactory, the Administrator will return the subscription money, without interest and at the Subscriber’s expense, to the bank account from which they were remitted. The Subscriber releases and waives any claim against the Fund or the Administrator for any loss that it suffers as a result of that action. The Subscriber indemnifies both the Administrator and the Fund against all loss arising out, or in connection, with of a failure to process this subscription.

(g) The Subscriber acknowledges and understands that under the Proceeds of Crime Law, 2008 of the Cayman Islands, if a person who is a resident in the Cayman Islands (including the Administrator) knows or suspects that a payment to the Fund (by way of subscription or otherwise) represents criminal property, that person must report his or her knowledge or suspicion to the reporting authority, and that report is not treated as a breach of any restriction on the disclosure of information imposed by law or otherwise. (h) The Subscriber agrees to accept the number of Shares that are allotted by the Fund for the subscription amount tendered, in accordance with the Memorandum and subject to the Fund’s memorandum and articles of association and to have those Shares registered exactly as provided in the registration details in section 9 below. (i) If the Subscriber acts as trustee, agent, representative or nominee for another person (“Beneficial Owner”): (i) the Subscriber understands and acknowledges that the representations, warranties and agreements made in this Subscription Agreement are made by the Subscriber (1) with respect to the Subscriber and (2) with respect to the Beneficial Owner; (ii) the Subscriber represents and warrants that it has all requisite power and authority from Beneficial Owner to execute and perform the obligations under this Subscription Agreement; (iii) the Subscriber indemnifies the Fund, the Investment Manager, the Administrator and their respective directors, members, partners, officers and agents against all costs, fees and expenses (including legal fees and disbursements) in connection with any damages arising out of, or in connection with: • any misrepresentation or misstatement by the Subscriber in this Subscription Agreement; or • the improper assertion of the Subscriber’s proper authorisation from the Beneficial Owner to enter into this Subscription Agreement or perform its obligations. The Subscriber acknowledges that payments in respect of subscription and redemption will be made in United States dollars and that adverse fluctuations in exchange rates could reduce the return to it upon the redemption of the Shares.

(j)

(k) The Subscriber understands and agrees that any redemption proceeds paid to it will be paid to the same account from which the Subscriber’s investment in the Fund was originally remitted, unless the Fund or the Administrator, in its sole discretion, determines otherwise. (l) The Subscriber acknowledges and agrees to its personal data (as set out under “Data Protection”) being used in the manner set out in section 8 below. (m) The Subscriber must notify the Administrator or the Fund immediately if: (i) the Subscriber becomes aware that it or any person for whom it holds the Shares has ceased to be an Eligible Investor; or (ii) any of the representations, declarations or statements in this Subscription Agreement are no longer

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accurate and complete in all respects. (n) The Subscriber agrees to provide these representations, warranties, acknowledgements and undertakings to the Fund at any time the Fund requests, and to provide on request such certifications, documents or other evidence as the Fund may reasonably require to substantiate representations, warranties, acknowledgements and undertakings. 3. Anti-money laundering (a) The Subscriber (or, if more than one, each of them) gives the following representations, warranties, acknowledgements and undertakings: (i) it is not, nor is any person or entity controlling, controlled by or under common control with the Subscriber, a Prohibited Person (as defined in Appendix I of the Memorandum); and (ii) to the extent the Subscriber has any Beneficial Owners 4 : (1) it has carried out thorough due diligence to establish the identities of those Beneficial Owners; (2) based on that due diligence, the Subscriber reasonably believes that no Beneficial Owner is a Prohibited Person; (3) it holds the evidence of those identities and status and will maintain all of that evidence for at least five years from the date of the Subscriber’s complete redemption from the Fund; and (4) it will make available that evidence and any additional evidence that the Fund may require upon request in accordance with applicable regulations; (b) If any of the representations, warranties, acknowledgements and undertakings in paragraph (a) above ceases to be true or if the Fund no longer reasonably believes that it has satisfactory evidence as to their truth, despite any other agreement to the contrary, the Fund may, in accordance with applicable regulations, be obligated to do one or more of the following: (i) to take certain actions relating to the Subscriber’s holding of Shares; (ii) to report that action; and (iii) to disclose the Subscriber’s identity to OFAC or other authority. If the Fund is required to take any of those actions, the Subscriber understands and agrees that it has no claim against the Fund, the Investment Manager, the Administrator, and their respective affiliates, directors, members, partners, shareholders, officers, employees and agents for any of damages as a result of any of the those actions; and (c) In order to comply with the anti-money laundering regulations applicable to the Fund and the Administrator, the Subscriber acknowledges that Shares will not be issued until the Administrator or the Fund is satisfied that evidence regarding the source of the subscription amounts, the identity of the Subscriber and the payment instructions for redemptions, is satisfactory. Wire confirmations for subscriptions from the Subscriber must match the information provided below. Redemption proceeds will only be made to an account identified below. Subscriptions may be rejected if this information is incomplete or the wire confirmation does not match the information given below. If any of the following information changes, the Subscriber or an authorized representative of the Subscriber must notify the Fund or Administrator in writing of that change. To: ______________________________________

Fed Routing #: Swift address: For account of: Account #: In favour of: Account #:

______________________________________ ______________________________________ ______________________________________ ______________________________________ ______________________________________ ______________________________________

Note: To avoid return of funds, the wire transfer must be sent from an account in the name of the investor. The investor’s name must be included in line 50 of the SWIFT wire transfer message (or equivalent CHIP or Fed Wire indication), OR the wire transfer must state “From the Account of: (Investor Name)”. The wire should be made by SWIFT MT103.

4

For these purposes, beneficial owners will include, but not be limited to: (i) shareholders of a corporation; (ii) partners of a partnership; (iii) members of a limited liability company; (iv) investors in a fund-of-funds); (v) the grantor of a revocable or grantor trust; (vi) the beneficiaries of an irrevocable trust; (vii) the individual who established and IRA; (viii) the participant in a self-directed pension plan; (ix) the sponsor of any other pension plan; and (x) any person being represented by the Subscriber in an agency, representative, intermediary, nominee or similar capacity. If the beneficial owner is itself an entity, the information and representations set forth herein must also be given with respect to its individual beneficial owners. If the Subscriber is a publicly-traded company, it need not conduct due diligence as to its beneficial owners.

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4. Power and authority (a) The following applies if the Subscriber is an entity. (i) The person executing this Subscription Agreement on behalf of the Subscriber represents that it has the full power and authority under the Subscriber’s governing instruments to do so and that the Subscriber has the full power and authority under its governing instruments to acquire Shares of the Fund. (ii) Furthermore, the Subscriber represents and agrees that: (1) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization; (2) the execution, delivery and performance by it of terms of this Subscription Agreement are within its powers, have been duly authorised by all necessary actions on its behalf, require no action by or in respect of, or filing with, any governmental body, agency or official (except as disclosed in writing to the Fund) in order to make this investment, and does not contravene, or constitute a breach of or default under any provision of applicable law or governmental rule, regulation or policy statement or of its certificate of incorporation or other comparable organizational documents or any agreement, judgment, injunction, order, decree or other instrument binding upon it; and (3) The terms of this Subscription Agreement constitute a valid and binding agreement of the Subscriber and is enforceable against the Subscriber in accordance with its terms. (b) If the Subscriber is an individual, the Subscriber agrees that terms of this Subscription Agreement constitute a valid and binding agreement of the Subscriber and is enforceable against the Subscriber in accordance with its terms, and that the Subscriber has legal competence and capacity to execute this Form. (c) In addition to paragraph (a) or (b), if the Subscriber is acting as trustee, agent, representative or nominee for another person or entity, the Subscriber understands and acknowledges that the representations, warranties, acknowledgements and undertakings in this Subscription Agreement are made by the Subscriber (i) with respect to the Subscriber and (ii) with respect to that other person or entity. 5. Proper instructions (a) Appearing below are the names of persons authorised by the Subscriber to give and receive instructions between the Fund (or the Administrator) and the Subscriber, together with their respective signatures. Those persons are the only persons so authorised until further written notice to the Administrator signed by one or more of them. Names Signatures

(b) The Subscriber authorises and instructs each of the Administrator and the Fund to accept and execute any instructions in respect of the Shares to which this Subscription Agreement relates given by the Subscriber in writing or by facsimile. If instructions are given by facsimile, the Subscriber undertakes to send the original letter of instructions to the Administrator and the Fund and agrees to indemnify each of them against whatever loss either of them suffers as a result of acting on those facsimile instructions. Each of the Administrator and the Fund may rely conclusively upon, and incurs no liability in respect of, any action taken upon any notice, consent, request, instructions or other instrument it believes, in good faith, is genuine or is signed by properly authorised persons. 6. Indemnity The Subscriber indemnifies the Fund, the Investment Manager, the placement agent(s), if any, the Administrator and their respective affiliates, directors, members, partners, shareholders, officers, employees and agents against any and all losses, liabilities, damages, penalties, costs, fees and expenses (including, without limitation, legal fees and disbursements) that may result, directly or indirectly, from any inaccuracy in or breach of any representation, warranty, covenant or agreement set forth herein or in any other document delivered by the Subscriber to the Fund. 7. Data Protection (a) A Subscriber’s personal data may be utilised by the Administrator for any of the following purposes: (i) to properly identify the Subscriber in accordance with anti-money laundering regulatory

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requirements; (ii) to properly record the Subscriber’s interest in the Fund in accordance with relevant corporate laws and regulations; (iii) to advise the Subscriber of matters relative to its investment in the Fund, including current values and changes to Fund documentation etc; and (iv) unless the Subscriber notifies the Administrator otherwise, to advise the Subscriber of other investment opportunities that may be or become available from the Fund’s sponsors; and (b) By agreeing to invest in the Fund, Subscriber acknowledges and accepts that the Administrator may hold and process personal data for the purposes outlined above and further acknowledges and accepts that the Administrator may, in order to fulfil its duties to the Fund and comply with regulatory requirements: (i) retain such personal data for prescribed periods after the Subscriber has redeemed its holding in the Fund; (ii) transfer such personal data, by any method including electronically, to the Fund’s registered agent in its country of incorporation, including countries which may not have enacted data protection legislation; (iii) transfer such information to the directors, Investment Manager, legal advisors or any other agent of the Fund entitled to receive such information; (iv) transfer such personal data to any person or entity to which the Administrator has a legal obligation to disclose such information; (v) maintain such information on the Administrator’s computer systems which may be based or maintained in countries which have not enacted data protection legislation. (c) By executing this document, Investor is consenting to electronic delivery and giving permission for the Fund and its service providers and other representatives, to deliver via email any documentation, reports and other information to be delivered to Investor in connection with Investor’s investment in the Fund. Such information may include confidential information regarding the Fund, including but not limited to investor and investment information. Certain information, at the discretion of the Fund, may be delivered to Investor by regular mail, facsimile or courier. Investor also consents to the Fund transmitting information by email to any of Investor’s or the Fund’s service providers, advisors, accountants or others to whom Investor has requested that such information be provided. Investor understands that contact via non-encrypted email, such as that expected to be used by the Fund, and the transmission of email data take place over public networks and therefore will be unprotected. Although the Fund and its service providers will take reasonable precautions regarding the integrity, confidentiality and security of information sent by email, neither the Fund nor any of its service providers or other representatives will be liable for interception, system failure or other problems that may result in incomplete or incorrect transmission. In addition, information transmitted by email may need to be disclosed to third parties, including regulatory authorities with jurisdiction over the Fund or its service providers, and could be accessed by unauthorized persons. Investor agrees to release the Fund and its service providers from any form of liability or loss associated with the communication of Fund information by email, including but not limited to investor and investment information. The Fund and its service providers make no warranties in relation to these matters and Investor accepts the risks associated with the use of email. The Fund and its service providers also reserve the right to intercept, monitor and retain communications to and from their systems as permitted by applicable law. Investor understands that to receive information by email, Investor will need Internet access, a valid email address and the ability to install or download such applications as the Fund may specify. If Investor wishes to retain information sent by email, Investor will need access to a printer or other device to download and print or save such information. Investor also understands that it is Investor’s obligation to inform the Fund in the event that any of Investor’s or Investor’s service providers’ email addresses change. Investor may update any of Investor’s or Investor’s service providers’ email addresses by contacting an appropriate representative of the Fund and requesting an update. This consent will be effective immediately and will remain in effect unless and until Investor revokes it. At any time, Investor may revoke this consent and/or request paper copies of any documents, at no additional cost to Investor, by sending a written revocation and/or request to Michael Kenwood Capital Management, LLC, 350 Bedford Street, Suite 405, Stamford, CT 06901, USA. Investor acknowledges that it may take up to three (3) days to process a revocation of consent to electronic delivery (or request for paper copies) from the date that Investor’s revocation or request is received by the Fund.

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8. Subscriber Details (Complete in block letters please) (a) Registration details
Name of Subscriber: Registered Address:

_________________________________________ _________________________________________ _________________________________________

Telephone No: Email address:

________________ ________________

Facsimile No: Contact name:

________________ ________________

(b) Correspondence details If you wish your correspondence to be sent to an address other than the registered address in (a) above, please state below.

________________________________________________________
Name

________________________________________________________
Address

________________________________________________________
Daytime Tel No. Email Address Daytime Fax No.

________________________________________________________

Note: In the case of joint Subscribers, please use separate sheets for each Subscriber. 9. General (a) In this Subscription Agreement, unless the contrary intention appears: (i) a reference to a statute includes references to that statute as amended or re-enacted and to other statutes that modify its application as well as references to any subordinate legislation made or to be made under that statute; and (ii) a reference to the singular includes the plural and vice versa; and (iii) a reference to a gender includes the other genders; and (iv) a reference to persons includes individuals, companies, firms, partnerships, government bodies or agencies and corporations sole and aggregate; and (v) obligations entered into by more than one person in this Subscription Agreement bind all of those persons jointly and each of them severally; and (vi) the headings do not affect the interpretation of this Subscription Agreement. (b) This Subscription Agreement is binding on the Subscriber and its successors and permitted assigns and inures for the benefit of the Fund’s successors and assigns. (c) This Subscription Agreement survives the acceptance of the subscription. (d) If a provision of this Subscription Agreement is invalid or unenforceable under any applicable law, it is inoperable to that extent and its invalidity or inoperability does affect any other provision of this Subscription Agreement. (e) This Subscription Agreement is irrevocable. (f) This Subscription Agreement is governed by, and is to be construed in accordance with, the laws of the Cayman Islands. , 20____

THE SUBSCRIBER HAS EXECUTED THIS SUBSCRIPTION AGREEMENT ON

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If more than one Subscriber, please check the appropriate box: • Joint shareholders (all shareholders must sign any Redemption Request Form) • Joint and several shareholders (any one shareholder can sign any Redemption Request Form) Signature(s) of Subscriber(s) ________________________________ ________________________________ Name(s) of Subscriber(s) in full and title ________________________________ ________________________________

Notes: (i) To be valid, this Subscription Agreement must be signed by each applicant, including all joint holders. (ii) A corporation must complete this Subscription Agreement under seal or under the hand of a duly authorised corporate officer(s) who should state his or her capacity. (iii) In the case of a firm or partnership (not a limited company), this Subscription Agreement must be in the name of and signed by all partners. (iv) If this Subscription Agreement is signed under a power of attorney, that power of attorney or a duly certified copy of it must accompany this Form. (v) In respect of joint applicants only, on the death of one, the Shares will be held in the name of and to the order of the survivor or survivors or the executor or administrator of the last survivor.

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APPENDIX III
Anti-money laundering requirements

A.

EXEMPTED SUBSCRIBERS - DECLARATIONS At its discretion, the Fund or the Administrator or its agent may waive the provision of full subscriber verification evidence where the Subscriber is regulated in a country that is recognized as having an adequate anti-money laundering regime 5 or quoted on an approved stock exchange 6 or where payment has been made from an account held in the Subscriber’s name from a financial institution based in a country that is recognized as having an adequate anti-money laundering regime. If the Subscriber thinks that it falls within an exemption, it should provide a letter to the Fund setting out the applicable declaration that follows: (a) The Subscriber declares that we are licensed as [type of licence] by the [name of regulatory body] and are subject to regulations and/or guidelines which, to the best of our knowledge and understanding, are equivalent to the anti-money laundering laws and regulations of the Cayman Islands; or (b) The Subscriber declares that we are a company/mutual fund listed on an approved stock exchange [name of stock exchange]; or (c) We declare that the subscription funds have been made from an account held in our name at [name of financial institution] in [name of country] –The Source of Funds Exemption Letter under Exhibit I of this Appendix must be completed; or (d) We attach an eligible introducer’s letter addressed to the Fund signed by an eligible introducer see Letter of Introduction under Exhibit II of this Appendix.

B.

NON-EXEMPTED SUBSCRIBERS The documentation listed below is required to verify the identity and source of funds of all subscribers who do not qualify under the Exempted Subscribers Declaration in Section A. Those subscribers are required to produce the documentation that appears below in the form of original certified copies. Those subscribers should contact the Administrator’s agent (see contact details on page 1 of the Subscription Agreement) to obtain a detailed update list of documents that they will be required to produce. For individuals: (i) (ii) (iii) (iv) evidence of true name, signature, date of birth and photographic identification evidence of permanent address evidence of nationality evidence of source of subscription funds.

For companies: (i) copy of certificate of incorporation or its equivalent and any change of name certificate (ii) copy of the memorandum and articles of association or its equivalent (iii) certificate of good standing or its equivalent (iv) register or other acceptable list of directors and officers (v) identification, as described for individuals above, of two directors (vi) details of registered office and principal place of business (vii) copy of signature list (viii) additional details on the identity of the shareholders with 10% or more of the voting shares of that company (ix) source of subscription funds. For partnerships and unincorporated businesses: (i) certified copy of the partnership agreement, declaration of trust or its equivalent

5 The list of acceptable countries can be found in the Third Schedule of the Cayman Islands Money Laundering Regulations (as amended), which may be accessed on the Cayman Islands Monetary Authority website at www.cimoney.com.ky. 6 A list of approved stock exchanges can be found under Appendix H of the Cayman Islands Money Laundering Regulations (as amended) which may be accessed on the Cayman Islands Monetary Authority website at www.cimoney.com.ky.

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(ii) details of principal place of business (iii) copy of any certificate of registration and certificate of good standing, if registered (iv) identification, as described for individuals and companies above, of the general partner, or its equivalent, and the authorised signatories (v) additional details on the identity of the limited partners, or their equivalent, if considered necessary by the Administrator (vi) source of subscription funds.

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EXHIBIT I to APPENDIX III
Source of fund exemption

PLEASE GIVE THIS LETTER TO YOUR REMITTING FINANCIAL INSTITUTION FOR RETURN TO THE ADMINISTRATOR AT THE SAME TIME THAT THE SUBSCRIPTION MONIES ARE WIRED. (IMPORTANT: In order for this exemption to be effective, the remitting financial institution must be based in a country recognized as having an adequate anti-money laundering regime and the ‘Subscriber Account’ being debited must be in the name of the Subscriber.) SAMPLE LETTER [To be replaced on letterhead of the financial institution remitting payment] Date Via mail and facsimile Short Term Liquidity Fund I, Ltd. c/o Michael Kenwood Capital Management, LLC 350 Bedford Street, Suite 405, Stamford, CT 06901 USA Facsimile: Telephone: Dear Administrator: RE: Short Term Liquidity Fund I, Ltd. Name of Remitting Financial Institution: Address of Remitting Financial Institution: Name of Subscriber: Address of Subscriber: Name of Subscriber Account to be Debited: Account Number to be Debited: +1 (203) 327-8725 +1 (203) 327-8700

We have credited your account at [Name of bank], Account Number [number] for [amount] by order of [subscriber] on [date]. The above information is given in strictest confidence for your own use only and without any guarantee, responsibility or liability on the part of this institution or its officials. Yours faithfully, Signed _______________________

Full Name _______________________ Position _______________________

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EXHIBIT II to APPENDIX III
Letter of introduction

[On Introducer’s letterhead such to include their full address] Short Term Liquidity Fund I, Ltd. c/o Michael Kenwood Capital Management, LLC 350 Bedford Street, Suite 405, Stamford, CT 06901 USA Facsimile: Telephone: Date: Dear Administrator: RE: Short Term Liquidity Fund I, Ltd. [Name and Address of Client] ______________________ (“Client”) +1 (203) 327-8725 +1 (203) 327-8700

We confirm that the Client has a relationship with this company/firm since [date]. We confirm that we are a [type of financial institution] based in [the Cayman Islands or an approved jurisdiction] and subject to the anti-money laundering regime of this jurisdiction. [OR] We confirm that we are a professional intermediary (i.e. a firm of lawyers, or chartered accountants, or a member of a recognised professional body), based in [the Cayman Islands or an approved jurisdiction]. We further confirm we are required by the rules of our professional body to observe the requirements of the antimoney laundering regime of this jurisdiction and we are subject to a disciplinary procedure for failure to so observe. We confirm that we have obtained satisfactory evidence of the identity of the Client in accordance with applicable anti-money laundering requirements. We confirm that we will provide you a copy of the evidence of the identity of the Client upon your request. [OR] We confirm that under the laws of [the Cayman Islands or approved jurisdiction], we are not required to undertake identification and verification procedures in respect of the Client as the relationship pre-existed the implementation of our anti-money laundering regime. We further confirm that we are not aware that the Client has been found to be or has been suspected of activity that would presently constitute a money laundering offence. We confirm that we are compliant with the anti-money laundering requirements of this jurisdiction. Yours faithfully, Name: ______________________ Job Title: ______________________ ______________________

Signature: ______________________ Date:

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APPENDIX IV
Subscription Agreement for subsequent subscriptions Short Term Liquidity Fund I, Ltd.
Once completed, this form should be sent by fax, with the original to follow by mail or courier to:

Short Term Liquidity Fund I, Ltd. c/o Michael Kenwood Capital Management, LLC 350 Bedford Street, Suite 405 Stamford, CT 06901 USA Facsimile: Telephone: Dear Administrator: 1. Subscription (a) The undersigned subscriber (“Subscriber”) irrevocably applies for that number of Class A non-voting participating shares (“Shares”) in Short Term Liquidity Fund I, Ltd. (“Fund”) that may be subscribed for with the subscription amount that appears below in accordance with the terms of the private offering memorandum of the Fund dated May 2010 (as amended or supplemented, the “Memorandum”). (Note: Unless defined otherwise in this Subscription Agreement, capitalised terms have the meanings given to them in the Memorandum.) Subscription Amount US$ ________________ (b) The Subscriber undertakes to settle the full amount invested, net of bank charges, by electronic transfer for value on ________________ to: Correspondent Bank Name: Deutsche Bank Trust Company Americas, New York Correspondent Bank Swift: BKTRUS33 Beneficiary Bank Name: Deutsche bank, Amsterdam Beneficiary Bank Swift DEUTNL2A Account DBA with corr.bank: 04-410-816 Name account: Short Term Liquidity Fund I, Ltd. Account number: 265141648-0000USD000 IBAN NL05DEUT0265049113 Free Text: “From the Account of <INSERT Investor Name / Account Number>” Subscriptions should be made only by wire transfer in US dollars, cheques will not be accepted. In the event that subscription monies are received in any currency other than US dollars, conversion into US dollars will be arranged by the Administrator at the risk and expense of the applicant. Any bank charges in respect of electronic transfers will be deducted from subscriptions and the net amount only invested in Shares. Please effect the wire by either SWIFT MT100 or MT103 and ensure the bank charges are charged separately to your account and not netted from the payment. To avoid return of funds, the wire transfer must be sent from an account in the name of the Investor. The Investor’s name must be included on line 50 of the SWIFT wire transfer message or the wire transfer must state “From the Account of ____________ (Investor name)”. Please also note that there are varying length restrictions on Field 70 so the Sender of the SWIFT message must ensure the Receiver of the SWIFT message will be passing on the information to Michael Kenwood Capital Management, LLC to avoid delays in processing or return of funds. Please note that in order for the Administrator to comply with Anti-Money Laundering Legislation in the Cayman Islands, the Administrator must be able properly to identify the source of funds sent to it for investment. Accordingly, the Subscriber is required to complete both the “Ordering Customer” (field 50) +1 (203) 327-8725 +1 (203) 327-8700

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and the “Ordering Institution” (field 52D) when sending a wire payment through the international SWIFT system. The Administrator strongly suggests not to send SWIFT FIN 910 “Confirmation of Credit” messages that do not include both of the above mentioned fields. Instead, the Subscriber should send a SWIFT FIN 103 “Customer Transfer Message” or to instruct its bank to use this format and to include the “Ordering Customer” in field 50 and the “Ordering Institution” in field 52D (or equivalent CHIPS or Fed Wire indication). Notes: (i) Any sales charge payable will be deducted by the Administrator from subscription money remitted to the Fund, prior to the investment of that money in the Fund. (ii) The Subscription Agreement must be received one business day before the relevant Subscription Day. (c) The investor’s Subscriptions will be delivered from the following account: To:

Fed Routing #: Swift address: For account of: Account #: In favour of: Account #:

Notes: To avoid return of funds, the wire transfer must be sent from an account in the name of the investor. The investor’s name must be included in line 50 of the SWIFT wire transfer message (or equivalent CHIP or Fed Wire indication), OR the wire transfer must state “From the Account of: (Investor Name)”. The wire should be made by SWIFT MT103. 2. Reaffirmation BY EXECUTING AND DELIVERING THIS SUBSCRIPTION AGREEMENT FOR SUBSEQUENT SUBSCRIPTIONS, THE SUBSCRIBER REAFFIRMS, AS OF THE DATE OF THIS FORM, THE REPRESENTATIONS, WARRANTIES, ACKNOWLEDGEMENTS AND UNDERTAKINGS IN THE SUBSCRIBER’S ORIGINAL SUBSCRIPTION AGREEMENT IN RESPECT OF THE SUBSCRIBER’S INITIAL INVESTMENT IN CLASS A SHARES. 3. General (a) In this Subscription Agreement, unless the contrary intention appears: (i) a reference to a statute includes references to that statute as amended or re-enacted and to other statutes that modify its application as well as references to any subordinate legislation made or to be made under that statute; and (ii) a reference to the singular includes the plural and vice versa; and (iii) a reference to a gender includes the other genders; and (iv) a reference to persons includes individuals, companies, firms, partnerships, government bodies or agencies and corporations sole and aggregate; and (v) obligations entered into by more than one person in this Subscription Agreement bind all of those persons jointly and each of them severally; and (vi) the headings do not affect the interpretation of this Subscription Agreement. (b) This Subscription Agreement is binding on the Subscriber and its successors and permitted assigns and inures for the benefit of the Fund’s successors and assigns. (c) This Subscription Agreement survives the acceptance of the subscription. (d) If a provision of this Subscription Agreement is invalid or unenforceable under any applicable law, it is inoperable to that extent and its invalidity or inoperability does affect any other provision of this Subscription Agreement. (e) This Subscription Agreement is irrevocable. (f) This Subscription Agreement is governed by, and is to be construed in accordance with, the laws of

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the Cayman Islands. THE SUBSCRIBER HAS EXECUTED THIS SUBSCRIPTION AGREEMENT ON If more than one Subscriber, please check the appropriate box: • Joint shareholders (all shareholders must sign any Redemption Request Form) • Joint and several shareholders (any one shareholder can sign any Redemption Request Form) Signature(s) of Subscriber(s) ________________________________ ________________________________ Name(s) of Subscriber(s) in full and title ________________________________ ________________________________ , 20____

Notes: (i) To be valid, this Subscription Agreement must be signed by each applicant, including all joint holders. (ii) A corporation must complete this Subscription Agreement under seal or under the hand of a duly authorised corporate officer(s) who should state his or her capacity. (iii) In the case of a firm or partnership (not a limited company), this Subscription Agreement must be in the name of and signed by all partners. (iv) If this Subscription Agreement is signed under a power of attorney, that power of attorney or a duly certified copy of it must accompany this Form. (v) In respect of joint applicants only, on the death of one, the Shares will be held in the name of and to the order of the survivor or survivors or the executor or administrator of the last survivor.

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APPENDIX V
Redemption request form Short Term Liquidity Fund I, Ltd.
Once completed, this form should be sent by fax, with the original to follow by mail or courier to:

Short Term Liquidity Fund I, Ltd. c/o Michael Kenwood Capital Management, LLC 350 Bedford Street, Suite 405 Stamford, CT 06901 USA Facsimile: Telephone: Date Dear Administrator: 1. The undersigned requests redemption of a certain number of Class A non-voting participating shares in the capital of Short Term Liquidity Fund I, Ltd. (“Fund”) at a Redemption Price equal to the Net Asset Value of those shares on the relevant Redemption Day and otherwise on the terms of the private offering memorandum dated May 2010 as amended or supplemented from time to time, (“Memorandum”) and the Fund’s memorandum and articles of association. The number of shares that it requests redemption of is that number (where appropriate, rounded to the nearest whole share): (a) with a Net Asset Value equal to the amount that appears below; or (b) shown below. (Note: Unless defined otherwise in this Redemption Request Form, capitalised terms have the meanings given to them in the Memorandum.) Amount to be redeemed: US$___________________ OR Number of Class A shares requested to be redeemed: ___________________ 2. I (or, if more than one, each of us), either in my individual capacity or as an authorised representative of an entity, if applicable, represent and warrant that: (a) I am the true, lawful and beneficial owner or registered holder, as the case may be, of the shares to which this Redemption Request Form relates; (b) I have full power and authority to request redemption of those shares; (c) I have full lawful power and authority, as a duly authorised officer or representative of ________________ [name of corporation etc] to request redemption of those shares; and (d) those shares are not subject to any pledge or otherwise encumbered in any fashion. 3. In addition to the above, by executing and delivering this Redemption Request Form, the undersigned reaffirms, as of the date of this Form, the representations, warranties, acknowledgements and undertakings in the original Subscription Agreement in respect of its initial investment in Class A shares. +1 (203) 327-8725 +1 (203) 327-8700

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Please complete the following information in block letters. Name(s) and signature(s) must be identical to the name(s) in which the shares are registered. Signature(s) of Subscriber(s) ________________________________ ________________________________ Name(s) of Subscriber(s) in full and title ________________________________ ________________________________

Notes: (i) To be valid, this Redemption Request Form must be signed by each registered holder of the Shares to be redeemed. If the Redemption Request Form is signed under a power of attorney, that power of attorney or a duly certified copy of it must accompany this Form; (ii) Despite the above, the shareholder acknowledges that any redemption proceeds paid to the shareholder will be paid to the same account from which its investment in the Fund was originally remitted, unless the Fund, in its sole discretion, agrees otherwise. This is in order to comply with the anti-money laundering regulations applicable to the Fund and the Administrator and is as set forth in the shareholder’s Subscription Agreement for shares; (iii) Additional shareholder-verification evidence may be required before redemption proceeds can be made, if the shareholder was exempted from providing full verification evidence when it originally subscribed for shares because payment was made from an account held in the shareholder’s name at a financial institution based in a country which is recognized as having an adequate anti-money laundering regime; (iv) The shareholder acknowledges that redemption proceeds will not be paid until the Administrator or the Fund is satisfied that verification of the identity of the shareholder and the payment instructions for the redemption is sufficient; and (v) Redemption requests may be made by mail or facsimile. An executed copy of the Redemption Request Form must be sent to the Administrator, at the address given above, and if it is sent via facsimile the original should be sent via overnight mail or courier. Although redemption requests may be sent by facsimile, shareholders should be aware of the risks associated with sending documents in this manner. The Administrator will not accept any responsibility for any loss as a result of the nonreceipt of any Redemption Notice sent by facsimile transmission. Where a Redemption Notice is sent by facsimile transmission, the Fund will not release the redemption proceeds to the redeeming Participating Shareholders until such time as both the original Redemption Notice and Subscription Agreement are received by the Administrator.

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cheques will not be accepted. In the event that subscription monies are received in any currency other than US dollars, conversion into US dollars will be arranged by the Administrator at the risk and expense of the applicant. Any bank charges in respect of electronic transfers will be deducted from subscriptions and the net amount only invested in Shares. Please effect the wire by either SWIFT MT100 or MT103 and ensure the bank charges are charged separately to your account and not netted from the payment. To avoid return of funds, the wire transfer must be sent from an account in the name of the Investor. The Investor’s name must be included on line 50 of the SWIFT wire transfer message or the wire transfer must state “From the Account of ____________ (Investor name)”. Please also note that there are varying length restrictions on Field 70 so the Sender of the SWIFT message must ensure the Receiver of the SWIFT message will be passing on the information to Michael Kenwood Capital Management, LLC to avoid delays in processing or return of funds. Please note that in order for the Administrator to comply with Anti-Money Laundering Legislation in the Cayman Islands, the Administrator must be able properly to identify the source of funds sent to it for investment. Accordingly, the Subscriber is required to complete both the “Ordering Customer” (field 50) and the “Ordering Institution” (field 52D) when sending a wire payment through the international SWIFT system. The Administrator strongly suggests not to send SWIFT FIN 910 “Confirmation of Credit” messages that do not include both of the above mentioned fields. Instead, the Subscriber should send a SWIFT FIN 103 “Customer Transfer Message” or to instruct its bank to use this format and to include the “Ordering Customer” in field 50 and the “Ordering Institution” in field 52D (or equivalent CHIPS or Fed Wire indication). For US based users of FedWire, please use the following instructions: Correspondent Bank Name: Deutsche Bank Trust Company Americas, New York Correspondent Bank Swift: BKTRUS33 Beneficiary Bank Name: Deutsche bank, Amsterdam Beneficiary Bank Swift DEUTNL2A Account DBA with corr.bank: 04-410-816 Name account: Short Term Liquidity Fund I, Ltd. Account number: 265141648-0000USD000 IBAN NL05DEUT0265049113 Reference: [name of investor] Subscription in kind: The Subscriber undertakes to transfer the following investments to those of the Fund’s accounts that the Fund notifies the Subscriber in writing.

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