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Document Sample
MANGO CAPITAL MANAGEMENT B.V.
MANGO CAPITAL FUND
PROSPECTUS
10 DECEMBER 2009
CONTENTS
Directory 1
Important Notice 2
Summary Of The Mango Capital Fund 7
1. Definitions 10
2. Investment Objectives, Policy, Strategy And Restrictions 13
3. Risk Factors 15
4. The Fund 21
5. The Dutch Financial Markets Supervision Act 22
6. The Fund Manager 23
7. The Advisory Committee 24
8. The Trustee 25
9. Administrator, Registrar And Transfer Agent 26
10. The Broker/Custodian 27
11. Subscriptions 28
12. Redemption 32
13. Illiquid Assets 35
14. Net Asset Value 36
15. Fees And Expenses 38
16. Distribution Policy 43
17. Reports And Fina ncial Statements 44
18. Taxation 45
19. Methods Of Communication Acceptable To The Fund 46
Annex 1 Terms and Conditions of Management and Custody 49
Annex 2 Subscription Form 55
Annex 3 Wire Details 84
Annex 4 Overview of Prevention of Money Laundering Policies adopted by the Fund 87
DIRECTORY
MANGO CAPITAL FUND
Office
Mango Capital Management B.V.
Kleverparkweg 14
2023 CE Haarlem
Advisory Committee
Mr. L. de Bruijn
Mr. J. Dobber
Fund Manager Bank
Mango Capital Management B.V. Citco Bank Nederland N.V.
Kleverparkweg 14 Telestone 8 - Teleport
2023 CE Haarlem Naritaweg 165
1043 BW Amsterdam
The Netherlands The Netherlands
Trustee Administrator
Citco Bewaarder Stichting Citco Fund Services (Nederland) B.V.
Telestone 8 - Teleport Telestone 8 - Teleport
Naritaweg 165 Naritaweg 165
1043 BW Amsterdam 1043 BW Amsterdam
The Netherlands The Netherlands
Broker and Custodian Auditor
Pictet & Cie (Europe) S.A. KPMG Auditors N.V.
1, Boulevard Royal Burgemeester Rijnderslaan 10-20
L-2449 Luxembourg 1185 MC Amstelveen
The Netherlands
Legal Advisor Tax Advisor
Greenberg Traurig LLP Greenberg Traurig LLP
Strawinskylaan 3127 Strawinskylaan 3127
1077 ZX Amsterdam 1077 ZX Amsterdam
The Netherlands The Netherlands
1
IMPORTANT NOTICE
Defined terms and expressions have the meaning ascribed to them in section 1
(Definitions) of this Prospectus.
Potential investors should review this Prospectus and its ancillary documents carefully
and consult their legal and financial advisers to check possible tax or other issues
related to the purchase, holding or redemption of Units.
The Fund Manager accepts responsibility for the information contained in this
document. To the best knowledge and belief of the Fund Manager (which has taken all
reasonable care to ensure that such is the case), the information contained in this
document is in accordance with the facts and does not omit anything likely to affect
the importance of such information.
r
Any information given or representation made by any dealer, salesman o other person
and (in either case) not contained herein should be regarded as unauthorised and,
accordingly, should not be relied upon. Neither the delivery of this prospectus nor the
offer, issue or sale of Units will, under any circumstances, constitute a representation
that the information contained in this Prospectus is correct at any time subsequent to
the date of this Prospectus as printed on the cover of this Prospectus.
No person has been authorised to provide any information or make any representation
in connection with the Fund, other than the information and representations contained
in this Prospectus and its ancillary documents. Any such other information or
representations, if given or made, should not be relied upon as having been authorised
by the Fund Manager.
The distribution of this Prospectus and the offer, sale and delivery of the Units in
certain jurisdictions may be restricted by law. No action has been taken to permit the
distribution of this Prospectus in any jurisdiction where action would be required for
such purpose.
This Prospectus does not constitute an offer for, or an invitation to subscribe to or
purchase, any Units in any jurisdiction to any person to whom it is unlawful to make
such offer or invitation in such jurisdiction. Persons into whose possession this
Prospectus comes are required to inform themselves about and to observe any such
restrictions.
The Units are redeemable by the Fund at the option of the Unitholder on certain
conditions (as defined below and in the Terms and Conditions). Otherwise Units
cannot be transferred at all.
The contents of this Prospectus are not to be construed as investment, legal or tax
advice. Investors must take notice of the risk profile of the Fund as discussed in section
3 (Risk Factors) of the Prospectus. The value of the investment may fluctuate. Returns
on past investments are no guarantee as to the returns on future investments.
2
SELLING RESTRICTIONS
Belgium
The Fund has not been and will not be registered in Belgium and this Prospectus has
not been submitted for approval to the Belgian Banking, Finance and Insurance
Commission. Accordingly, the Units may not be distributed in Belgium by way of a
public offering, as defined in Article 3, 1° of the Law of 20 July 2004 with regard to
certain forms of collective management of investment portfolios as amended or
replaced from time to time, save in those circumstances (commonly called "private
placement") set out in Article 5 of the Law of 20 July 2004 with regard to certain
forms of collective management of investment portfolios as amended or replaced
from time to time
France
This Prospectus has not been approved by the Autorité des Marchés Financiers.
Accordingly, the Units in the Fund may not be offered for subscription or sale and
will not be offered for subscription or sale in France.
Neither this Prospectus nor any offering material relating to the offer of Units in the
Fund may be distributed or caused to be distributed in France or used in connection
with any offer for subscription or sale of the Units.
Germany
The Units have not been notified to, registered with or approved by the German
Federal Financial Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht - BaFin) for public offer or public distribution under
German law.
Accordingly, the Units may not be distributed/offered to or within Germany by way
of a public distribution/offer within the meaning of applicable German laws, public
advertisement or in any similar manner. This Prospectus and any other document
relating to the Units, as well as information contained therein, may not be supplied to
the public in Germany or used in connection with any offer for subscription of the
Units to the public in Germany or any other means of public marketing.
This Prospectus and any other document relating to the offer of the Units are strictly
confidential and may not be distributed to any person or entity other than the recipient
hereof to whom this Prospectus is personally addressed.
Italy
This Prospectus is solely intended for the individuals to whom it is delivered and may
not be considered or used as an offering of interests in the Fund in the meaning of,
and for the purposes of, section 42 and section 94 and seq. of legislative decree no 58
of 24 February 1998, as amended.
3
In addition, any person who is in possession of this Prospectus understands that the
Fund have not been and will not be authorised by the Bank of Italy to offer the Units
to Italian residents pursuant to section 42 of legislative decree no 58 of 24 February
1998.
Accordingly, the Units may not be offered, sold or delivered and neither this
Prospectus nor any other offering material relating to the Units may be distributed or
made available to Italian residents. This Prospectus cannot be construed as a
solicitation by any person to investors in Italy to subscribe for the Units.
Spain
The Fund has not been registered with the Spanish Securities Market Commission
(Comisión Nacional del Mercado de Valores) ("CNMV"). Accordingly, the Units
may not be offered, sold or distributed in Spain by carrying out any activities that
may be deemed to constitute marketing of funds (as defined in Law 35/2003, of 4
November, on Investment Collective Undertakings) (Ley 35/2003, de 4 de
noviembre, de Instituciones de Inversión Colectiva) or in circumstances which
constitute a public offer of securities in Spain as defined in the Spanish Securities
Market Act (Ley 24/1988 de 28 de julio, del Mercado de Valores) and the regulations
approved thereunder.
This Prospectus has not been registered with the CNMV and therefore it is not
intended for the marketing or a public offer of the Fund in Spain.
Switzerland
The Units may not be publicly offered, distributed, marketed, sold or advertised,
directly or indirectly, in or from Switzerland. Neither this Prospectus nor any other
offering or marketing material relating to the Fund may be publicly distributed or
otherwise made publicly available in or from Switzerland.
The Units may only be offered, distributed, marketed, sold or advertised, and this
Prospectus as well as any other offering or marketing material relating to the Fund
may only be distributed or otherwise made available in Switzerland to qualified
investors within the meaning of the Sw iss legislation on collective investment
schemes (including but not limited to the Federal Act on Collective Investment
Schemes of June 23, 2006 ("CISA"), the Ordinance on Collective Investment
Schemes of November 22, 2006 ("CISO"), and the Circular 03/1 of the Federal
Banking Commission on Public Advertising / Collective Investment Schemes of May
28, 2003 (last amendment A ugust 29, 2007) ("Circular") by using advertising means
which are common in this market within the meaning of the Swiss legislation on
collective investment schemes (including but not limited to the CISA, the CISO, and
the Circular).
4
According to art. 10 para. 3 CISA and art. 6 para. 2 CISO qualified investors are (a)
supervised financial intermediaries such as banks, securities dealers and fund
management companies; (b) supervised insurance institutions; (c) corporate entities
under public law and employee welfare institutions (pension funds) with a
professional treasury department; (d) enterprises with a professional treasury
department; (e) high net worth individuals; (f) investors that have concluded a written
asset management agreement with a supervised financial intermediary (according to
n
(a)); and (g) i vestors that have concluded a written asset management agreement
with an independent asset manager, if (i) the asset manager as financial intermediary
is governed by the Federal Money Laundering Act of October 10, 1997 (MLA) (art. 2
para. 3 subpara. e MLA); (ii) the asset manager is subject to the code of conduct of a
representative industry association recognized by the supervisory authority as
minimum standards; and (iii) the asset management agreement complies with the
recognized guidelines of a representative industry association. According to art. 6
para. 1 CISO a high net worth individual is someone who confirms in writing to a
supervised financial intermediary according to art. 10 para. 3 subpara. a and b CISA
or to an independent asset manager according to art. 6 para 2 CISO that he/she has
financial assets of at least 2 million Swiss Francs directly or ind irectly at his/her
disposition at the time of the acquisition.
United Kingdom
This Prospectus is not to be distributed, delivered or passed on to any person resident
in the United Kingdom, unless it is being made only to, or directed only at, persons
falling within: (i) Article 19 of the Financial Services and Markets Act (Financial
Promotion) Order 2005 as amended (the "Financial Promotion Order") (Investment
Professionals); or (ii) Article 49(2) of the Financial Promotion Order (high net worth
companies, unincorporated associations etc); or (iii) any other person to whom it may
otherwise lawfully be made (all such persons together being referred to as "relevant
persons").
This communication must not be acted on or relied on by persons who are not
relevant persons. Any investment or investment activity to which this communication
relates is available only to relevant persons and will be engaged in only with relevant
persons. Persons of any other description in the United Kingdom may not receive and
should not act or rely on this document or any other marketing materials relating to
the Fund.
Potential investors in the United Kingdom are advised that all, or most, of the
protections afforded by the United Kingdom regulatory system will not apply to an
investment in the Fund and that compensation will not be available under the United
Kingdom Financial Services Compensation Scheme.
United States
The Units have not been and will not be registered under the US Securities Act of
1933, as amended (the "Securities Act"), or the securities laws of any state of the
United States and, subject to certain exceptions, may not be offered or sold within the
5
United States or to, or for the account or benefit of, US persons (as defined in
Regulat ion S under the Securities Act ("Regulation S")). The Units are being offered
and sold outside the United States in reliance on Regulation S and within the United
States only by a US registered broker-dealer to investors who are both "accredited
investors" (as defined in Regulation D under the Securities Act) and "qualified
purchasers" (as defined in the US Investment Company Act 1940, as amended (the
"1940 Act" . The Units may not be offered, sold, pledged or otherwise transferred
within the United States or to, or for the account or benefit of, US persons, except
pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
The Units are being offered as an investment for sophisticated investors who have the
ability to evaluate the merits and risks of an investment in Units and the ability to
assume the economic risks involved in such an investment. Each purchaser will be
required in connection with any purchase of Units to make representations confirming
its eligibility as a prospective and sophisticated investor and, with respect to offers
within the United States, that it is an "accredited investor" (as defined in Rule 501(a)
of Regulation D) purchasing the Units for its own account and not with a view to their
distribution. The Subscription Agreement for US persons will contain restrictions
limiting the subsequent disposition of Units designed to permit compliance with the
Securities Act and the securities laws of any State of the United States.
The Units have not been approved or disapproved by the US Securities and Exchange
Commission, any federal or state securities commission in the United States or any
other US regulatory authority, nor have any of the foregoing authorities passed upon
or endorsed the merits of the offering of Units or the accuracy or adequacy of this
Prospectus Any representation to the contrary is a criminal offence in the United
States.
The Fund will not register as an investment company under the US Investment
Company Act of 1940, as amended, in reliance on the exemption contained in Section
3(c)(7) thereof.
6
SUMMARY OF THE MANGO CAPITAL FUND
The following is a brief summary only and is qualified in its entirety by the more
detailed information appearing in the body of this Prospectus. Information in this
introduction is not intended to be exhaustive and should be read in conjunction with
the full text of this Prospectus.
This Prospectus will be governed by and construed in accordance with the laws of the
Netherlands. This Prospectus will be published in the English Language only.
(A) The Fund
The Fund is a contractual fund with a semi open-ended structure. The Fund is
governed by the Terms and Conditions. By entering into a Subscription Agreement, a
Unitholder represents and warrants to have reviewed the Terms and Conditions and
agrees to be bound thereby. A Unitholder is admitted to the Fund by the issuance of
Units to the Unitholder.
The Units are redeemable at the option of the Unitholder on certain conditions as
defined in this Prospectus and in the Terms and Conditions. Otherwise Units cannot be
transferred or assigned, and cannot be made subject to any encumbrance, as described
in the Terms and Conditions.
(B) Investment Objectives
The investment objective of the Fund is to achieve capital growth by investing in listed
equity instruments issued by public companies in 24 plus frontier emerging markets
mainly in Africa and the Middle East, including, but not limited to the United Arab
Emirates, Botswana, Cyprus, Morocco, Egypt, Ghana, Jordan, Kenya, Lebanon,
Malawi, Mauritius, Mozambique, Namibia, Nigeria, Oman, Qatar, Swaziland,
Tanzania, Tunisia, Uganda, Zambia, Zimbabwe.
All investments will be made in accordance with the investment policy described in
section 2 (Investment Objectives, Policy, Strategy and Restrictions) of the Prospectus.
Unitholders will not be able to exercise any influence or control over the investment
policy.
(C) Fund Manager and Trustee
The Fund Manager will act as the manager (beheerder) of the Fund and the Trustee
will act as the trustee (bewaarder) of the assets and liabilities of the Fund. In managing
the assets and liabilities of the Fund, the Fund Manager will act solely in the interests
of the Unitholders. The Trustee will be the legal owner of all assets of the Fund. The
Trustee will acquire and hold the assets of the Fund and assume obligations on behalf
of and for the account of the Unitholders. The Trustee will act solely in the interest of
the Unitholders.
(D) Administrator, Broker and Custodian
Citco Fund Services (Nederland) B.V. will act as administrator of the Fund.
7
Pictet & Cie (Europe) S.A. will act as broker and custodian of the Fund.
(E) Subscriptions and Redemptions
Subscriptions and redemptions are processed on the first Business Day of each
calendar month. Applications to subscribe for Units should be sent to the
Administrator at least five Business Days prior to the Subscription Date on which the
investor wishes to receive Units. Units may be redeemed upon a notice period of 30
Business Days prior to the Redemption Date on which the Unitholder wishes to
redeem its Units. Redemption is subject to certain other conditions as described in
section 11 (Redemption) of the Prospectus and in the Terms and Conditions.
Unitholders will in principle not be entitled to redeem their Units within one year of
their issuance. In the event that an application for the redemption of Units is requested
within one year from their date of issuance, such redemption is only possible with the
prior written approval of the Fund Manager and subject to payment of redemption fees
of 5% of the redemption proceeds. The Fund Manager may at it's sole discretion waive
the redemption fees (either in whole or in part).
(F) Fees and Expe nses
The Fund Manager is entitled to a Management Fee equal to 2% per annum of the Net
Asset Value of the Fund prior to the deduction of the Management Fee and the
Performance Fee. The Management Fee shall be calculated and accrued monthly (at a
rate of 1/12 of 2%) and paid quarterly.
In addition, the Fund Manager is entitled to a Performance Fee of 20% of the increase
in the Net Asset Value of each Series of Units the Fund before deduction of
Performance Fees (in excess of the Hurdle Rate) subject to the High Water Mark
principle which means that no Performance Fee shall be payable until any previous
losses experienced by relevant Series of Units of the Fund are recouped. The
Performance Fee is calculated and accrued monthly and payable quarterly.
(G) Reporting to Unitholders
Unitholders will receive a copy of audited annual financial statements upon request.
The Administrator will also provide Unitholders with statements of the Net Asset
Value per Unit of the Fund on a monthly basis.
(H) Risk Profile
An investment in Units carries a very high degree of risk and is suitable only for
persons who can assume the risk of losing their entire investment. Potential investors
should consider, among other things, the risks mentioned below, review this
Prospectus and its ancillary documents and consult with their professional advisors.
Each Unitholder must make certain representations and warranties in the Subscription
Agreement which include, without limitation, that:
8
(i) the Unitholder has the knowledge and expertise in business and financial
matters to make it capable of assessing and evaluating the merits and risks
associated with investing in the Fund;
(ii) the Unitholder has independently assessed, evaluated and verified the merits
and risks associated with investing in the Fund and the transactions
contemplated there under; and
(iii) the Unitholder is willing to assume and will be able to bear the full financial
and economic risk of its subscription, while maintaining adequate means of
providing for its current needs and foreseeable contingencies, even in the
event of a loss of its entire investment in the Fund.
Investors are advised to take notice of the risk profile of the Fund as discussed in
section 3 (Risk Factors). Furthermore, it should be noted that the value of the
investment may fluctuate. Returns on past investments are no guarantee as to the
returns on future investments. By investing in the Fund, Unitholders assume the risk of
losing their entire investment.
(I) Application Procedure
An applicant must complete and return the Subscription Agreement and pay the
relevant Total Subscription Price to invest in the Fund.
9
1. DEFINITIONS
The following definitions will apply to this document:
"Administrator" means Citco Fund Services (Nederland) B.V. or such other
administrator as may be appointed from time to time by the Fund Manager.
"Advisory Committee" means the advisory committee of the Fund Manager.
"Articles of Association" means the articles of association (statuten) of a Company.
“Bench Mark Series Date” m eans the 1st March 2009 (or if no Units are issued on that
date, the first date thereafter on which Units are issued).
"Broker" means Pictet & Cie (Europe) S.A. or such other broker as may be appointed
from time to time by the Fund Manager and the Trustee.
"Business Day" means any day on which banks are generally open for business in the
Netherlands and Luxembourg.
"CET" means Central European Time.
"Custodian" means Pictet & Cie (Europe) S.A. or such other custodian as may be
appointed from time to time by the Fund Manager and the Trustee.
"Euro" and "EUR" each means the lawful currency of the participating member states
of the European Union adopted in acoordance with the Treaty establishing the
European Communities, as amended by the Treaty on European Un ion.
"Euro Unit" means a Unit which is expressed in Euro.
"Fund" means the contractual arrangements between the Unitholders, the Fund
Manager and the Trustee in relation to the participation, management, custody and
administration of the Fund as described in this Prospectus and the Terms and
Mango Capital Fund ".
Conditions, also referred to as the "
"Fund Manager" means Mango Capital Management B.V.
"Hurdle Rate" means an increase in the Net Asset Value of each Series of Units at a
rate of 1.25% for the relevant quarter.
"Management Fee" means the amount calculated in accordance with paragraph 14.2
(Management Fee).
"Minimum Subscription Amount" means the minimum initial subscription which an
investor may subscribe for Units in the Fund, currently 100,000 Euro (and 150,000
USD) subject to the discretion of the Trustee or the Fund Manager to reduce the
minimum to a sum of not less than 50,000 Euro or the equivalent thereof in another
currency.
10
"Net Asset Value" or "Net Asset Value of the Fund" means the total value of the
Fund's assets less an amount equal to all accrued debts, liabilities and obligations of
the Fund.
"Net Asset Value per Unit" means the Net Asset Value of the Fund divided by the
number of Units in issue at that time.
"Non-Euro Unit" means a Unit which is not a Euro Unit.
“Original Investors’ Series” means the series of Units in issue as at 1st March 2009.
"OTC" means Over -the-Counter or asset traded other than on an Exchange.
a
"Performance Fee" means the amount calcul ted in accordance with paragraph 14.3
(Performance Fee).
"Prospectus" means this document including its annexes.
"Redemption Date" means the first Business Day of each month and/or, under certain
circumstances as set out in the Terms and Conditions, such other day or days as the
Fund Manager may from time to time determine at its sole discretion.
"Redemption Form" means the standard form through which a request for redemption
of Units is made.
"Redemption Price" means the price at which each Unit is redeemed and is an amount
equal to the Net Asset Value per Unit as at the Valuation Day immediately prior to the
relevant Redemption Date.
"Register" means the register in which the names and addresses of all Unitholders are
recorded stating the particulars of their Units and their Subscription Date in accordance
with the Terms and Conditions.
"Series" means a series of US Dollar Units, Euro Units, Sterling Units, Swiss Franc
Units or any other class issued in order to reflect actual performance in the calculation
of the Performance Fees as discussed under section 14.4 of this Prospectus.
"Sterling", "£" and "GBP" each means the lawful currency of the United Kingdom.
"Sterling Unit" means a Unit which is expressed in Sterling.
"Subscription Agreement" means the subscription agreement between the Fund
Manager, the Trustee and each of the Unitholders individually, as attached as Annex 2,
as amended from time to time.
"Subscription Date" means the first Business Day of each month and/or such other day
or days as the Fund Manager may from time to time determine at its sole discretion.
"Subscription Price" means US Dollar 100 per US Dollar Unit, Euro 100 per Euro
Unit, GBP100 per Sterling Unit, CHF100 per Swiss Franc Unit.
11
"Swiss Franc", and "CHF" each means the lawful currency of Switzerland.
"Swiss Franc Unit" means a Unit which is expressed in Swiss Franc".
"Terms and Conditions" means the terms and conditions of management and custody
(voorwaarden van beheer en bewaring) of the Fund as attached as Annex 1.
"Total Redemption Price" means the Redemption Price multiplied by the relevant
number of Units.
"Total Subscription Price" means the Subscription Price multiplied by the relevant
number of Units.
"Trustee" means Citco Bewaarder Stichting or such other Trustee as may be appointed
from time to time by the Fund Manager.
"Unitholder" means a natural person or legal person which participates in the Fund in
accordance with the Subscription Agreement and the Terms and Conditions.
"Unit" means a unit representing the rights of the holder of the Unit to a certain
percentage of the Net Asset Value.
"US Dollar", "$" and "USD" each means the lawful currency of the United States of
America.
"US Dollar Unit" means a Unit expressed in US Dollar.
"Valuation Day" means the last Business Day of each month, or such other day or days
as the Fund Manager may from time to time determine at its sole discretion, provided
that there will never be more than 2 Valuation Days in any calendar month.
12
2. INVESTMENT OBJECTIVES, POLICY, STRATEGY AND RESTRICTIONS
2.1 Investment Objectives
The investment objective of the Fund is to achieve capital growth by investing in listed
equity instruments issued by public companies in 24 plus frontier emerging markets
mainly in Africa and the Middle East, including, but not limited to the United Arab
Emirates, Botswana, Cyprus, Morocco, Egypt, Ghana, Jordan, Kenya, Lebanon,
Malawi, Mauritius, Mozambique, Namibia, Nigeria, Oman, Qatar, Swaziland,
Tanzania, Tunisia, Uganda, Zambia, Zimbabwe.
2.2 Investment Policy
The markets the Fund will invest in do not yet belong to the mainstream of established
emerging markets. They are not as well followed and researched as the western
markets and the more established emerging markets. Therefore valuation inef ficiencies
exist that should be corrected over time as these markets get more exposure. The
Fund’s policy is to buy and hold equities in these markets. Short selling is not part of
the investment policy, but can be practised opportunistically or for the purpose of
protecting the assets of the Fund. The Fund Manager may at his sole discretion decide
when and if to sell short. Short selling may not be possible in many of the target
markets.
Currency exposure of non-USD denonimated Units may be hedged. The Fund
Manager can engage in currency transactions either opportunistically or in order to
protect the Fund’s assets.
Any income or gains derived will be reinvested and not distributed to the Unitholders.
Under no circumstances will the Fund Manager be required to purchase assets on
behalf of the Fund if he is of the opinion that such would not be for the benefit of the
Fund at any given time, and the Fund Manager may hold any cash in interest bearing
cash accounts pending the selection for suitable investments.
2.3 Investment Strategy
The strategy of the Fund is to primarily invest in listed equities (it is, however,
conceivable that the Fund will also invest in equities that are OTC traded) that
represent value in terms of price versus growth rate. The price, or Price/Earnings ratio,
will not be considered in isolation, but against the backdrop of general macro-
economic and financial circumstances in the relevant country. The target countries’
equity markets tend to have pronounced cycles. The Fund will in general avoid
markets that have experienced a very strong performance. Exceptions will be made in
case individual equities continue to offer value. The Fund’s strategy is buy-and-hold. It
is anticipated that an equity, once purchased, will be held for a multi year period.
13
2.4 Investment Restrictions
The Fund Manager will endeavour to have the Fund invest in a minimum of 5 different
countries in order to mitigate country specific risk. None of the individual equity
positions shall exceed 10% of the total portfolio of the Fund at the moment of
purchase.
The Fund may use borrowing for the purpose of making investments or for financing
its obligations including the payment of redemptions which would otherwise result in
the Fund having to realise investments prematurely, up to a maximum of 30% of the
Net Asset Value. In certain circumstances, the borrowing limitation may be exceeded,
for example, where there are redemptions from the Fund that result in the Net Asset
Value decreasing and existing borrowings thereby representing more than 30% of the
Net Asset Value of the Fund. In the event that the maximum borrowing amount is
exceeded, the Fund Manager will take steps as soon as reasonably practicable to
reduce the borrowing to adhere to the borrowing limitation. The equity investments or
other assets of the Fund may be used to provide collateral or other types of security to
financing parties.
14
3. RISK FACTORS
There can be no assurance that the Fund's investment policy will be successful or that
the Fund will achieve its investment objectives as described in section 2. An investment
in Units carries a very high degree of risk and is suitable only for persons who can
assume the risk of losing their entire investment. Potential investors should consider,
among others, the risks mentioned below, review this Prospectus and its ancillary
documents such as the Subscription Agreement carefully and consult with their
professional advisors. Returns on past investments are no guarantee as to the returns
on future investments.
3.1 General Risks
3.1.1 Business Risk
The investment results of the Fund are reliant upon the success of the Fund
Manager, which is a recently established entity, and there is likewise no
operating history by which to evaluate its likely future performance.
No assurance can be given that the Units of the Fund will increase in value.
An investment in Units therefore carries a degree of risk and is suitable only
for persons who can assume the risk of losing their entire investment.
3.1.2 Net As set Value Considerations
The Net Asset Value per Unit is expected to fluctuate over time with the
performance of the Fund's investments. A Unitholder may not fully recover
his initial investment when he chooses to redeem his Units or upon
compulsory redemption if the Net Asset Value per Unit at the time of such
redemption is less than the Subscription Price paid by such Unitholder or if
any un-amortized costs and expenses of establishing the Fund remain.
3.1.3 Illiquidity of Units
The Units are not listed on any stock exchange. Unitholders will, however, be
able to redeem their Units subject to restrictions set out herein and in
accordance with the Terms and Conditions.
3.1.4 Exchange Rates
The base currency of the Fund is Euro. The Manager may hedge currency
risks of the Units depending on the currency in which the Units are expressed.
The value of the Units may however still be affected by changes in currency
exchange rates.
3.2 Market Risks
3.2.1 Emerging Markets
The emerging markets on which the Fund focuses historically show little
correlation to each other, to the established emerging markets (Russia, Turkey
15
and India for example) and to the developed western markets. In general, the
markets experience independent economic cycles that depending on the
country in question can be more or less influenced by commodity price
fluctuations, exchange rates, economic management, trade, inflation and size
of the unofficial economy. Some of the equity markets are considerably less
liquid than markets in Europe and the United States.
3.2.2 Borrowing
The Fund may use borrowing for the purpose of making investments or for
financing its obligations including the payment of redemptions, up to a
maximum of 30% of the Net Asset Value of the Fund. In exceptional
circumstances, the borrowing limitation may be exceeded. In the event, that
the maximum borrowing amount is exceeded the Fund Manager will take
steps as soon as reasonably practicable to reduce the borrowing to adhere to
the borrowing limitation. Such equity investments may be used to provide
collateral or other types of security to financing parties.
3.2.3 Concentration of Investments
Although the Fund Manager will diversify the investment portfolio of the
Fund in accordance with the principles set out in paragraph 2 (Investment
Objectives, Policy, Strategy and Restrictions), the Fund may at certain times
hold relatively few, large investments in relation to the size of the Fund. The
Fund could be subject to significant losses if it holds a large position in a
particular investment that declines in value or is otherwise adversely affected.
3.2.4 Iliquidity of Investments
In some circumstances, investments may be relatively illiquid, making it
difficult to acquire or dispose of them at the prices quoted on the various
exchanges. Accordingly, the Fund's ability to respond to market movements
may be impaired and the Fund may experience adverse price movements
upon liquidation of its investments. If trading on an exchange is suspended,
the Fund may not be able to execute trades or sell positions at prices the Fund
believes are desirable. OTC transactions may involve additional risk, as there
is no exchange or market on which to close out an open position. It may be
impossible to liquidate an existing position, to assess the value of a position
or to assess the exposure to risk.
The Fund may redeem illiquid assets in-kind. The Fund Manager and the
Trustee will have the authority to make in-kind distributions of the Fund's
investments at any time (whether or not pursuant to investor redemption
requests). There may be in-kind redemptions by the Fund of Units to the
Unitholders, all of which are likely to be highly illiquid. There can be no
assurance that any Unitholders will be able to dispose of these investments or
that the value of thes e investments as determined by the Fund Manager in
connection with the determination of redemptions will ultimately be realised.
16
3.2.5 The Fund may also redeem illiquid assets by issuing a separate class of Units
to redeeming investors, in which case such illiqu id assets will be allocated to
such specific class of Units. The Fund may decide to use new subscription
monies to redeem such separate class of Units and effectively bring (part of)
the illiquid assets that are allocated to the separate class of Units bac k into the
main Fund. Investors should take notice of the fact that their subscriptions
may be used towards the redemption of investors by purchasing illiquid
assets.
3.2.6 Settlement Risk
The markets in certain emerging markets in which the Fund may invest are
less regulated than many of the world's leading securities markets. In
addition, market practices in relation to settlement of securities transactions
and custody of assets in such countries can provide increased risk to the
o
Fund. Furthermore, due to the l cal postal and banking systems, no guarantee
can be given that all entitlements attaching to securities acquired by the Fund,
including in relation to dividends, can be realised. However, none of the Fund
Manager, the Trustee, the Administrator or any of their agents makes any
representation or warranty about, or any guarantee of, the operation,
performance or settlement, clearing and registration of transactions dealing in
emerging market securities. Some of the markets in which the Fund may
effect its transactions are OTC or "interdealer" markets. The participants in
such markets are typically not subject to credit evaluation and regulatory
oversight as are members of "exchange-based" markets. To the extent the
Fund invests in OTC transactions, on these markets, the Fund may take a
credit risk with regard to parties with whom it trades and may also bear the
risk of settlement default. These risks may differ materially from those
entailed in exchange-traded transactions which generally are backed by
clearing organization guarantees, daily marking-to-market and settlement,
and segregation and minimum capital requirements applicable to
intermediaries. Transactions entered into directly between two counterparties
generally do not benefit from such protections. This will expose the Fund to
the risk that a counterparty will not settle a transaction in accordance with its
terms and conditions because of a dispute over the terms of the contract
(whether or not bona fide) or because of a credit or liquidity problem, thus
causing the Fund to suffer a loss. The Fund will not be restricted from dealing
with any particular counterparty or from concentrating any or all of its
transactions with one counterparty. The ability of the Fund to transact
business with any one or number of counterparties, the lack of any
independent evaluation of such counterparties' financial capabilities and the
absence of a regulated market to facilitate settlement may increase the
potential for losses by the Fund.
17
3.2.7 Currency Exposure
The Units are denominated in Euro, Sterling, U.S Dollars and Swiss Franc
and will be issued and redeemed in those currencies. A large part of the assets
may, however, be invested in securities and other investments which are
y
denominated in other currencies. Accordingl , the value of such assets may
be affected favourably or unfavourably by fluctuations in currency rates. In
addition, potential investors whose assets and liabilities are predominantly in
other currencies should take into account the potential risk of loss arising
from fluctuations in value between the currency of the Units purchased by
them and such other currencies.
Currency exposures of the Fund may be hedged.
3.2.8 Short Selling
Short selling may occur in certain circumstances and at the sole discretion of
the Fund Manager. It will only be used opportunistically and/or only for the
protection of the assets in the portfolio. Short selling is not the main focus of
the investment policy.
3.3 Other Risks
3.3.1 Political Risk
The investments of the Fund may be adversely affected by developments in
the countries the Fund may invest in. This may result in a partial or complete
loss of the investments made by the Fund. Such developments include,
without limitation:
(i) war;
(ii) civil unrest, ranging from protests to civil war;
(iii) changes in the political situation and/or government of a country; and
(iv) acts of terrorism.
3.3.2 Fund Risk
The provision of information by companies may not be comparable to the
levels of quality customary in Western European and North American
n
markets. To ensure that i vestment decisions are made based on correct, up-
to-date and adequate information, the Fund will only invest in companies
having a standard of disclosure comparable to that of companies in Western
Europe and North America.
3.3.3 Counterparty Risks
Counterparty risk will be managed by the Broker and the Custodian. The
Broker and the Custodian have been selected as such for their ability to settle
18
transactions in securities in the target countries and to arrange for custody.
Counterparty risk has been minimised by severe selection procedures for local
brokers and subcustodians. Counterparty risk is, however, ultimately borne by
the Fund.
3.3.4 Conflicts of Interest
It is possible that the Fund Manager, the Trustee, the Broker, or the
Administrator may, in the course of business, have conflicts of interest with
the Fund. Each will, at all times, have regard in such event to its obligations
to the Fund and will endeavour to ensure that such conflicts are resolved
fairly.
In addition, subject to applicable law, any of the foregoing may deal, as
principal or agent, with the Fund, provided that such dealings are carried out
as if effected on normal commercial terms negotiated on an arm's length
basis.
The Fund Manager or any person connected with the Fund Manager may
invest in, directly or indirectly, or manage or advise other investment funds or
accounts which invest in assets which may also be purchased or sold by the
Fund. Neither the Fund Manager nor any person connected with it is under
any obligation to offer investment opportunities of which any of them
becomes aware to the Fund or to account to the Fund in respect of (or share
with the Fund or inform the Fund of) any such transactions or any benefit
received by any of them from any such transaction, but will allocate suc h
opportunities on an equitable basis between the Fund and other clients.
3.3.5 Investment Management Risk
The investment performance of the Fund is dependent on the services of Marc
J. Wesseling who is responsible for managing the investments of the Fund. In
the event of his death, disability, departure, insolvency or withdrawal, the
Fund will be liquidated.
3.3.6 Profit Sharing
In addition to receiving a Management Fee, the Fund Manager receives a
Performance Fee as described in paragraph 14.3 (Performance Fee) and
accordingly the Performance Fee will increase with regard to unrealized
appreciation, as well as realized gains. The Performance Fee may create an
incentive for the Fund Manager to take more risks than it would take in the
absence of a fee based on the performance of the Fund.
3.3.7 Regulatory Risk
The regulatory environment for investment Funds is evolving and changes
therein may adversely affect the Fund's ability to pursue its investment
strategies. In addition, the regulatory and/or tax environment for derivative
19
and related instruments is evolving and may be subject to modification by
government or judicial action which may adversely affect the value of the
investments held by the Fund. The effect of any future regulatory or tax
change on the Fund is impossible to predict.
3.3.8 The Banking System
The banking system in certain emerging markets in which the Fund will
invest may be subject to the risks of local banks becoming insolvent and to
the risks of inefficiency and fraud in bank transfers.
3.3.9 Difficulties in Protecting and Enforcing Rights
In certain emerging markets local courts may lack experience in commercial
dispute resolution and many of the procedural remedies for enforcement and
protection of legal rights typically found in Western jurisdictions are not, as
yet, available. There remains uncertainty as to the extent to which local
parties and entities, including local governmental agencies, will recognise the
contractual and other rights of the parties with which they deal. There can be
no assurance that this difficulty in protecting and enforcing rights in emerging
markets will not have a material adverse effect on the Fund and its operations.
3.3.10 Repatriation Questions
Foreign investments in emerging markets may be subject to currency, tax,
export restrictions and numerous other regulations. Foreign investment
legislation in emerging markets may not provide firm assurances of the rights
of foreign investors to remit profits and dividends from their investments (and
the repatriation of capital upon the liquidation of such investments).
3.3.11 Uncertain Legal and Regulatory Environment
The law and regulations affecting foreign investment and business continue to
evolve in an unpredictable manner. Laws and regulations, particularly those
involving taxation, currency regulation, foreign investment and trade, and
transfer of title to securities and other property, applicable to the Fund's
activities are relatively new and can change quickly and unpredictably.
Although basic commercial laws are in place, they are often unclear and
untested and subject to varying interpretation, and may at any time be
amended, modified, repealed or replaced in a manner adverse to the interests
of the Fund.
3.3.12 Absence of Regulatory Oversight
The Fund is not supervised or regulated in The Netherlands (or any other
jurisdiction) by any governmental or regulatory authority to conduct business,
and, accordingly, the provisions of any laws or regulations applying to
regulated investment institutions (which may provide certain regulatory
safeguards or compensation schemes) will not be applicable.
20
The Fund
The Fund is a contractual investment fund (beleggingsfonds or fonds voor gemene
rekening). It is not a legal entity but a contractual arrangement sui generis between the
Fund Manager, the Trustee and the Unitholders. The Fund shall continue to exist for an
indefinite period of time.
The Fund has a semi open-ended structure, which means that the Fund will on request
issue and redeem Units subject to certain restrictions as described herein. The Fund is
governed inter alia by the Terms and Conditions. By entering into a Subscription
Agreement, a Unitholder represents and warrants to have reviewed the Terms and
Conditions and agrees to be bound thereby. A Unitholder is admitted to the Fund by
the issuance of Units.
Unitholders have no proprietary rights with respect to the assets of the Fund but an
economic interest in the assets of the Fund. The Trustee is the legal owner of all assets
of the Fund. The Trustee will acquire and hold the assets for the purpose of
management and custody (ten titel van beheer en bewaring) on behalf of and for the
account of the Unitholders. Such interest of the Unitholders is represented by the Units
held by each of them.
Pursuant to the Terms and Conditions, the Trustee will grant a power of attorney to the
Fund Manager to manage (beheren) the assets of the Fund in accordance with the
Terms and Conditions.
The base currency of the Fund is Euro. Units may be issued in Euro, US Dollar, Swiss
Francs and Sterling. The Fund Manager may hedge the currency exposure depending
on the currency in which the Units are expressed. The Manager will therefore seek to
hedge the currency risks of the Fund investments underlying the Euro Units to the
i
Euro. Since the nvestments of the Fund are predominantly in USD or USD related
currencies the manager will in principle not hedge the investments underlying the US
Dollar Units. Due to inter alia the exchange rate changes and hedging costs the Net
Asset Value of the Units may show a different performance depending on the currency
of the Unit. There is no guarantee that such hedging of the currency exposure will be
achieved.
21
4. THE DUTCH FINANCIAL MARKETS SUPERVISION ACT
The Fund Manager is not licensed in respect of the Fund pursuant to the Dutch
Financial Markets Supervision Act ( Wet op het financieel toezicht, the "FMSA") to
offer Units and is not subject to supervision by the Dutch Authority for the Financial
Markets (Stichting Autoriteit Financiële Markten), as the Fund Manager makes use of
an exemption under the FMSA and the lower rules and regulations pursuant thereto.
Furthermore, the Fund Manager is not licensed under any other financial services
legislation in or outside The Netherlands.
22
5. THE FUND MANAGER
The Fund Manager is an investment management company and the manager
(beheerder) of the Fund based on the Terms and Conditions. The Fund Manager is
responsible for the implementation of the investment objectives, in accordance with
the Fund's investment policy, and decides on the Fund's investment activities.
The Fund Manager, Mango Capital Management B.V. is a limited liability company
(besloten vennootschap met beperkte aansprakelijkheid) incorporated on 10 January
2006 in Amsterdam, having its statutory seat (statutaire zetel) in Amsterdam. The
Fund Manager has been registered in the Trade Register at the Chamber of Commerce
of Amsterdam under number 34240246.
The fiscal year of the Fund Manager is the same as the calendar year. The annual
report and annual accoun ts of the Fund Manager will be published within 5 months
after the close of the fiscal year. The Articles of Association of the Fund Manager are
deposited at its office and copies are available free of charge.
The board of directors of the Fund Manager directly determines the policy of the Fund.
Marc J. Wesseling is the sole member of the Fund Manager's board of directors.
After receiving a Civil Law degree from Leiden University and an MBA degree from
INSEAD in Fontainebleau, France, Marc has been employed in the securities industry
since 1986. He acted as an investment advisor and asset manager to high net worth
individuals and financial institutions with Morgan Stanley and Credit Suisse First
Boston in London, dealing in debt, equity instruments and derivatives in markets and
currencies around the world. From 1996 to 2001, Marc was partner/managing director
with Optimix Vermogensbeheer N.V. in Amsterdam. Apart from general asset
management responsibilities, his main occupation was to establish and manage the
Optimix Technology Fund. Marc has resided in several countries in the Fund's target
area, including Lybia, Congo, Kenya, Uganda, Lebanon and Qatar. He has engaged in
fundraising for the Instituto Libertad y Democracia, which implements "formalisation"
of the economies of developing countries around the world.
23
6. THE ADVISORY COMMITT EE
The Advisory Committee assists the Fund Manager in general business and other non-
investment related matters. The members of the Advisory Committee are appointed by
the board of directors of the Fund Manager.
At the time of publishing of this Prospectus the Advisory Committee is formed by Mr.
L. de Bruijn and Mr. J. Dobber.
Mr. L. de Bruijn started his career in business as the co- founder and manager of
Boedelbak B.V. in 1985. After this first successful venture he started other ventures
and acquired Van Dijk's Boekhuis in 1992, since when Van Dijk experienced a
fivefold expansion in turnover. In 1998 Boedelbak B.V. was sold and Van Dijk
Boekhuis refinanced and as a result he started to become actively involved in
managing his own portfolio, both private- and listed holdings.
Since 2003 Mr. L. De Bruijn concentrates more on arms-length investing around the
globe. He is currently involved as a board member in various companies and acts as an
active shareholder. He runs a portfolio with extensive emerging markets exposure.
Mr. J. Dobber has been active in the financial markets since 1985. Following a
successful career at the Dutch option marketmaker Optiver he started becoming an
active investor in hedgefunds and built a portfolio of venture capital/private equity
stakes in a number of companies. Mr. J. Dobber currently advises a number of Dutch
financial institutions on strategy and corporate development.
24
7. THE TRUSTEE
The Trustee (bewaarder) holds the assets of the Fund in its name with the Custodian.
Liabilities for the Fund are assumed in the name of the Trustee. The Trustee
specialises in the safekeeping and administration of assets and liabilities of contractual
investment Funds such as Mango Capital Fund.
The Trustee is a foundation established under the laws of The Netherlands on 16
January 2006 in Amsterdam. The Trustee has been registered in the Trade Register at
the Chamber of Commerce of Amsterdam under number 34240589.
The fiscal year of the Trustee is the same as the calendar year. The annual report and
annual accounts of the Trustee will be produced within 5 months after the close of the
fiscal year. The Articles of Association, and the annual report and annual accounts of
the Trustee are deposited at its office and copies are available free of charge.
The members of the board of directors of the Trustee are at the time of publishing of
this Prospectus:
(i) Robertino Marugg; and
(ii) J.C. De Marez Oyens.
25
8. ADMINISTRATOR, REGIS TRAR AND TRANSFER AGENT
The Fund has engaged Citco Fund Services (Nederland) B.V. to provide certain
financial, accounting, administrative and other services to the Fund. The Administrator
provides, subject to the overall direction of the Fund Manager, administrative services
and registrar and transfer agent services. Citco Fund Services, of which the
Administrator is affiliated is a global leader in providing accounting and administrative
services to approximately 2500 Funds worldwide with in excess of US$ 650 billion
dollars in net assets.
Pursuant to an Administration Agreement effective 17 January 2006 (the
"Administration Agreement") between the Administrator, the Fund Manager and
Trustee, the Administrator will be responsible, inter alia, for the follow ing matters
under the general supervision of the Fund Manager and Trustee:
- communicating with Unitholders;
- maintaining the Register;
- processing subscriptions and redemptions;
- preparing and maintaining the Fund's financial and accounting records and
statements;
- determining the Net Asset Value of the Units (on a monthly basis);
- preparing financial statements;
- arranging for the provision of accounting, clerical and administrative
services; maintaining corporate records; disbursing payments of fees and
salaries, if any.
The Administrator will be indemnified out of the assets of the Fund against all
liabilities, actions, proceedings, claims, costs, demands and expenses (other than out-
of-pocket expenses) arising out of its proper performance under the Administration
Agreement except for gross negligence, bad faith, fraud, dishonesty or a material
breach by the Administrator.
The Administrator will not provide any investment advisory or management service
y
and therefore will not be in any wa responsible for the Fund's performance. The
administrator will not be responsible for monitoring any investment restrictions or
compliance and therefore will not be liable for any breach thereof.
26
9. THE BROKER/CUSTODIAN
Pictet & Cie (Europe) S.A. will act as the Fund's main broker and custodian. In trading
and custodial services, it will rely on local brokers and subcustodians that have been
selected by it and meet quality standards set out by it.
Founded in 1805 in Geneva, Pictet & Cie is today one of Swit zerland's largest private
banks, and one of the premier independent asset management specialists in
Continental-Europe, with over USD 380 billion (EUR 260 billion) in assets under
management and custody as at end-December 2007.
The Bank is a partnership currently owned by eight general partners who have
unlimited liability.
The Pictet Group is an asset management specialist focusing mainly on the following
areas of expertise: private and institutional asset management, Fund administration and
management, global custody and family office services.
The Group employs over 2,000 people in the following locations: Geneva, London,
Frankfurt, Madrid, Zurich, Lausanne, Luxembourg, Paris, Milan, Turin, Florence,
Montreal, Nassau, Singapore, Hong Kong and Tokyo.
27
10. SUBSCRIPTIONS
10.1 Subscription Price and Total Subscription Price
Four classes of Units are available for subscription, i.e. Euro Units, Sterling Units,
Swiss Franc Units and US Dollar Units.
The Minimum Subscription Amount which an investor may invest in the Fund is:
(i) Euro 100,000 for Euro Units;
(ii) USD 150,000 for US Dollar Units;
(iii) GBP 100,000 for Sterling Untis; and
(iv) CHF 200,000 for Swiss Franc Units.
Persons subscribing for Units on behalf of others (conferring an indirect legal or
economic interest in the Units on such others), such as nominees, securities giro's and
special purpose custody vehicles, may only subscribe for Units if the beneficiaries of
their participation will individually each (indirectly) participate in the Fund for the
Minimum Subscription Amount or more.
At the discretion of the Fund Manager, a lesser amount may be invested provided it is
not less than Euro 50,000 exclusive of any fees and costs. Investments in other
currencies than Euro may at all times not be less than Euro 50,000 or the equivalent
thereof in such other currency.
The Units will be issued on each Subscription Date at the Subscription Price of:
(i) EUR 100 per Euro Unit;
(ii) USD 100 per US Dollar Unit;
(iii) GBP 100 per Sterling Units; and
(iv) CHF 100 per Swiss Franc Unit.
In principle, Units will be offered for subscription on a monthly basis.
Existing Unitholders can make further applications for Units in amounts of Euro
50,000 or more or the equivalent thereof in the currency of the Non-Euro Units,
subject to the Fund Manager which has the discretion to accept lesser amounts.
Unitholders may use the short form subscription agreement (which is attached to the
Subscription Agreement) to apply for additional Units in the Fund.
An initial fee with respect to the issue of the relevant Units may be deducted by the
Fund (see paragraph 14.1 (Initial Fee and Expenses)).
The Fund Manager is authorized from time to time to resolve to close the Fund to new
subscriptions, either for a specified period or until a time that is otherwise determined
28
and either in respect of all investors or new investors only. During any such period
Units will not be available for subscription.
Subscriptions for Units will not be possible in case of suspension of valuations as set
out in paragraph 14.3.
10.2 Procedure
Applicants should refer to the section “Methods of Communication Acceptable to the
Fund” for further information in relation to the submission of their Subscription
Agreement and other correspondence regarding their investment in the Fund.
10.2.1 Subscriptions
Subscriptions requests for Units should be submitted to the Adminsitrator at least five
Business Days prior to the Subscription Date on which the subscriber wishes to receive
Units.
10.2.2 Payment of the Units
Payment of the Total Subscription Pric e must be received in the currency of the
desired type of Unit in the account of the Trustee with Citco Bank Nederland N.V. at
least three Business Days prior to the relevant Subscription Date (please refer to
Annex 3 for payment details). Payment of the Total Subscription Price will further
need to be made in accordance with instructions in the Subscription Agreement. If (i)
the relevant completed and signed Subscription Agreement and/or (ii) payment of the
Total Subscription Price have not been received timely, the application may at the
discretion of the Administrator be accepted or held over until the following
Subscription Date, in which case the relevant Units will then be issued at the
Subscription Price on that Subscription Date. Any subscription amounts sent in
advance of the relevant notice requirements for a Subscription Date will not receive
interest, and any interest received on such amounts will be for the benefit of the Fund
generally.
Upon calculation and approval of the Net Asset Value for the relevant Subscription
Date, the number of Units to be issued to a subscriber will be determined and the
subscriber will be notifed of the issuance of such Units. Fractions of Units may, if
necessary, be issued to four decimal positions.
The Fund Manager reserves the right to reject any application in whole or in part at its
absolute discretion, in which event the amount paid on application or the balance
thereof (as the case may be) will be returned (without interest) as soon as practicable at
the risk and cost of the applicant.
The Administrator will issue a written confirmation to applicants confirming receipt of
their application. If this confirmation is not received within 5 days, please contact
Citco by telephone at number +31 205 722 850. Upon issuance of the Units in
satisfaction of an application the Administrator will confirm the number and value of
29
the Units so issued. Completed applications are irrevocable once received by the
Administrator.
f
Under exceptional circumstances, in the interest o the Unitholders, the Subscription
Date may be a different day than the first Business Day of a month. In that case the
Unitholders concerned will be notified by mail or facsimile.
10.3 Investor Representations and Warranties
s
The Subscription Agreement require each prospective applicant for Units to make
certain representations and warranties to the Trustee and the Fund Manager.
The representations and warranties required of a Unitholder include, among other
things that:
(i) the execution and performance of the Subscription Agreement do not
contravene, or constitute a default under any provision of law applicable to
the Unitholder;
(ii) the Unitholder has the knowledge and expertise in business and financial
matters to make it capable of assessing and evaluating the merits and risks
associated with investing in the Fund;
(iii) the Unitholder has independently assessed, evaluated and verified the merits
and risks associated with investing in the Fund and the transactions
contemplated thereunder; and
(iv) the Unitholder is willing to assume and will be able to bear the full financial
and economic risk of its subscription, while maintaining adequate means of
providing for its current needs and foreseeable contingencies, even in the
event of a loss of its entire investment in the Fund.
10.4 Form of Units
All the Units will be in registered form. Certificates representing Units will not be
issued.
10.5 Prevention of Money Laundering
Measures aimed at the prevention of money laundering will require an applicant for
Units to verify its identity to the Administrator. The procedure used by the
Administrator is compliant with the Dutch Prevention of Money Laundering and
Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren
terrorisme). Further details of the policies adopted by the Administrator, on behalf of
the Fund, in relation to the Prevention of Money Laundering are contained in Annex 4.
Investors should be aware that the Total Subscription Price will be at risk once it has
been invested in the Fund. An investor's failure to c omply with applicable client
identification and anti-money laundering requirements may result in the return of an
amount lower than the Total Subscription Price.
30
10.6 Transfer
The Units are redeemable by the Fund Manager and the Trustee at the option of the
Unitholder on certain conditions (see paragraph 11 (Redemption) and the Terms and
Conditions). The Units cannot be transferred or assigned except by way of redemption,
and cannot be made subject to any encumbrance.
31
11. REDEMPTION
11.1 Redemption Price and Total Redemption Price
Units are each redeemed at the Redemption Price prevailing at the relevant
Redemption Date. In principle, Units may be redeemed on a monthly basis. Units may,
however, not be redeemed during the first 12 months after issue unless the Fund
Manager approves such early redemption, in which case a redemption fee of 5% shall
be payable or such other amount which is determined at the sole discretion of the Fund
Manager, provided it is not less than 1.5% of the amount bein g redeemed.
11.2 Procedure
Unitholders should refer to the section “Methods of Communication Acceptable to the
Fund” for further information in relation to the submission of their Redemption Form
and other correspondence regarding their investment in the Fund.
Units will be redeemable at the option of the Unitholder as per a Redemption Date.
Unitholders should send a completed Redemption Form to be received by the
Administrator no later than 4 p.m. CET on the Business Day falling at least 30
Business Days before the relevant Redemption Date, failing which the redemption
request will be held over until the following Redemption Date and Units will be
redeemed at the Redemption Price applicable on that Redemption Date. The Trustee
and the Fund Manager will use the ir best efforts to comply with a request for
redemption but redemption cannot be fully guaranteed given the nature of the Fund's
investments.
Redemption requests can only be made on Redemption Forms and may be sent by
facsimile or email. Redemption Forms will be made available by the Fund Manager or
the Administrator. Redemptions will be rejected if the redemption of Units would
result in a Unitholder holding Units with an aggregate value of less than:
(i) Euro 50,000 in Euro Units;
(ii) USD 150,000 in US Dollar Units;
(iii) GBP 100,000 for Sterling Units; or
(iv) CHF 200,000 in Swiss Franc Units,
or, in respect of the Non-Euro Units, such higher amount equal to Euro 50,000.
In the event a Unitholder wishes to redeem Units that would result in the Unitholder
holding less than the foregoing minimum holding amounts, the only option available is
for the Unitholder to redeem its entire holding in the Fund.
A redemption request (through submission of a Redemption Form), once made, is
irrevocable, unless the redemption request is revoked with the consent of the Fund
Manager (which consent may be withheld).
32
Under exceptional circumstances, in the interest of the Unitholders, the Redemption
Date may be a different day than the first Business Day of a month. In that case the
Unitholders concerned will be notified by mail of the change of the Redemption Date.
The Fund Manager and Trustee are entitled to restrict the redemption of Units on a
particular Redemption Date to a maximum of 20% of the Net Asset Value of the Fund.
In the event redemption requests exceeding that amount are recieved, the number of
Units redeemed per redeeming Unitholder will be pro rated accordingly. Any
remaining Units offered for redemption will receive preferential treatment over
subsequent redemption requests at the next following Redemption Date. The
Redemption Price paid on Units which are deferred to a following Redemption Date
will be the Redemption Price on the actual Redemption Date the Units are redeemed.
The Trustee and the Fund Manager may further suspend redemption of Units if:
(i) the transfer of Funds realised from the sale of Fund's investments cannot, in
the sole opinion of the Fund Manager, be effected at normal rates of
exchange;
(ii) exchanges are not open for business or the sale of Fund's investments is
otherwise restricted or suspended;
(iii) a state of affairs exists which constitutes a state of emergency as a result of
which the sale of Fund's investments would, in the sole opinion of the Fund
Manager, not be practical or would negatively affect the rights of other
Unitholders;
(iv) for whatever reason, the valuation of Fund's investments to be sold cannot be
promptly or accurately ascertained;
(v) in case of suspension of valuations as set out in paragraph 15.3.; or
(vi) the redemption of Units would be prejudicial to the interests of the
Unitholders as a whole or individually.
11.3 Settlement
Payment of the Total Redemption Price (adjusted with a redemption fee) will normally
be made within 20 Business Days of the relevant Redemption Date. Payment will be
made in the currency of the Units redeemed by direct transfer in accordance with
instructions given by the redeeming Unitholder to the Administrator on the
Redemption Form and at the Unitholder’s risk and cost. Redemption payments in cash
will only be permitted to an account held in the name of the Unitholder.
Notwithstanding the above, the Fund Manager may at it's sole discretion pay the Total
Redemption Price of the redeemed Units partially or whole in-kind (which may
include redemption of Units by issuing Units to the redeeming investor in a separate
Unit class in the Fund).
11.4 Money Laundering
33
Unitholders should note that a redemption request may be refused if it is not
accompanied by such additional information as may reasonably be required. This
power may, without limitation to the generality of the foregoing, be exercised where
proper information has not been provided for money laundering verification purposes
as described in paragraph 10.5 (Money Laundering).
34
12. ILLIQUID ASSETS
The Fund Manager may at its sole discretion create appropriate arrangements for the
treatment of assets considered by the Fund Manager to be illiquid ("Illiquid Assets").
Such arrangements may be created both for redemption purposes as well as in the
ordinary course of m anagement of the Fund. The Fund Manager will not be limited in
the type or nature of such arrangements and will in the selection of such arrangements
always act in the interest of the Unitholders. Examples of such arrangements are side
pockets, separate redemption classes or redemptions in-kind (which may include
distributions of shares in a special purpose vehicle that will hold the Illiquid Assets or
or distributions in debt certificates or any other equivalent thereof). Such arrangements
may be made in view of the continuation of the holding of the Illiquid Assets or and/or
the liquidation thereof in due course.
Illiquid Assets can be valued in a manner deemed appropriate by the Fund Manager in
accordance with generally accepted accounting practices. The Fund Manager will
calculate fees, costs and other expenses in respect of Illiquid Assets taking into account
the differing valuation and liquidity of those assets.
The rights of existing and new Unitholders to Illiquid Assets can differ from other
Fund Assets. If a Unitholder redeems (part of) its Units, it will not receive the amount
it is entitled to in respect of the Illiquid Assets within the normal periods of time.
The Fund Manager will notify the Unitholders of the precise terms and conditions
applicable to the Illiquid Assets and the rights and obligations of the Unitholders in
respect of those Illiquid Assets. Such terms and conditions will also be published on
the Fund Manager's website, together with an explanation of those terms and
conditions. Such terms and conditions will be supplemental to the Terms and
Conditions and shall in case of any inconsistency prevail.
The Fund Manager will act in the interests of the Unitholders at all times when Fund
Assets are qualified as Illiquid Assets and when establishing and operating separate
arrangements.
35
13. N ET ASSET VALUE
13.1 Net Asset Value
The Net Asset Value (and the Net Asset Value per Unit) will be expressed in Euro and
the value of each Non-Euro Unit will be expressed in the currency of that type of Unit.
The Net Asset Value (and the Net Asset Value per Unit) will be determined at the
close of business on each Valuation Day. The Fund Manager delegates, subject to the
supervision of the Fund Manager, the determination of the Net Asset Value and the
Net Asset Value per Unit to the Administrator.
13.2 Valuation methods
Assets of the Fund will be valued in accordance with the following policies and
principles:
(i) any security which is listed or quoted on any securities exchange or similar
electronic system and regularly traded thereon will be valued at its last traded
price on the relevant Valuation Day or, if no trades occurred on such day, at
the closing bid price if held long by the Fund and at the closing offer price if
sold short by the Fund, as at the relevant Valuation Day, and as adjusted in
such manner as the Fund Manager, in its sole discretion, think fit, having
regard to the size of the holding, and where prices are available on more than
one exchange or system for a particular security the price will be the last
traded price or closing bid or offer price, as the case may be, on the exchange
which constitutes the main market for such security or the one which the
Fund Manager in its sole discretion determine provides the fairest criteria in
ascribing a value to such security;
(ii) investments, other than securities, which are dealt in or traded through a
clearing firm or an exchange or through a financial institution will be valued
by reference to the most recent official settlement price quoted by that
clearing ho use, exchange or financial institution. If there is no such price,
then the average will be taken between the lowest offer price and the highest
bid price at the close of business on any market on which such investments
are or can be dealt in or traded, provided that where such investments are
dealt in or traded on more than one market, the Fund Manager may determine
at their discretion which market shall prevail;
(iii) any security which is not listed or quoted on any securities exchange or
similar electronic system or if, being so listed or quoted, is not regularly
traded thereon or in respect of which no prices as described above are
available, will be valued at its probable realisation value as determined by the
Fund Manager in good faith having regard to its cost price, the price at which
any recent transaction in the security may have been effected, the size of the
holding having regard to the total amount of such security in issue, and such
36
other factors as the Fund Manager in its sole discretion deem relevant in
considering a positive or negative adjustment to the valuation;
(iv) investments, other than securities, which are not dealt in or traded through a
clearing firm or an exchange or through a financial institution will be valued
on the basis of the latest available valuation provided by the relevant
counterparty;
(v) deposits will be valued at their cost plus accrued interest;
(vi) any value (whether of an investment or cash) otherwise than in Euros will be
converted into Euros at the rate (whether official or otherwise) which the
Administrator in its absolute discretion deem applicable as at close of
business on the relevant Valuation Day, having regard, among other things, to
any premium or discount which they considers may be relevant and to costs
of exchange.
The Fund Manager and Trustee may, at their discretion, permit any other method of
valuation to be used if they consider that such method of valuation better reflects value
and is in accordance with good accounting practice.
The determination of the Net Asset V alue of the Fund and the Net Asset Value per
Unit has been delegated to the Administrator. In determining the Net Asset Value of
the Fund and the Net Asset Value per Unit, the Administrator will follow the valuation
policies and procedures adopted by the Fund as set out above. If and to the extent that
the Fund Manager is responsible for or otherwise involved in the pricing of any of the
Fund’s portfolio securities or other assets, the Administrator may accept, use and rely
on such prices in determining the Net Asset Value of the Fund and shall not be liable
to the Fund, any Unitholder in the Fund, the Investment Manager or any other person
in so doing.
13.3 Suspension of Valuation
The Fund Manager may declare a suspension of the determination of the Net Asset
Value for the whole or part of any period during which:
(a) any exchange on which a substantial part of investments owned by the Fund
are traded is closed, otherwise than for ordinary holidays, or dealings thereon
are restricted or suspended;
(b) there exists any state of affairs which constitutes a state of emergency in any
jurisdiction or region as a result of which the sale of the Fund's investments
would, in the sole opinion of the Fund Manager, not be practical or would
negatively affect the rights of Unitholder s.
37
14. FEES AND EXPENSES
14.1 Initial Fee and Expenses
An initial fee of 1% of the Total Subscription Price may be payable to the Fund
Manager. The initial fee may be waived at the discretion of the Fund Manager.
14.2 Management Fee
The Fund Manager is entitled to a Management Fee equal to 2% per annum of the Net
Asset Value of the Fund prior to the deduction of the Management Fee and the
Performance Fee at a monthly rate of 1/12 of 2%. The Management Fee shall be
accrued monthly and payable quarterly.
14.3 Performance Fee
The Fund Manager is paid by the Fund a Performance Fee at the rate of 20% per
annum of any increase in the Net Asset Value of each Series of Units of the Fund
(including net realised gains) in excess of the Hurdle Rate.
As a result of the application of the Hurdle Rate no Performance Fee for a particular
quarter will be payable unless the increase in the Net Asset Value of the relevant
Series of Units for that quarter exceeds the Hurdle Rate.
The Performance Fee is calculated and accrued monthly, and payable quarterly in
arrears. The Performance Fee will ordinarily be paid to the Fund Manager within 20
calendar days of the end of the quarter in respect of which it became due.
The Performance Fee is subject to the highwater mark principle which means that no
Performance Fee shall be payable until any previous losses experienced by the relevant
Series of the Fund are recouped (the "High Water Mark"). For the purposes of
determining the High Water Mark the previous highest Net Asset Value of the relevant
Series at the end of any previous quarter will be used, regardless of whether the Net
Asset Value for the previous quarter exceeded the Hurdle Rate. Therefore, there will
be no accumulation of Hurdle Rate on an annual basis and the Net Asset Value will
simply require to exceed (1) the previous High Water Mark and (2) the Hurdle Rate for
that quarter of 1.25% for Performance Fee for that Series to be paid.
14.4 Adjustments
Solely for the purposes of calculating the Performance Fee, Units will be issued in
Series. Units in issue as at 1st March 2009 shall form the Original Investors’ Series
and shall remain in issue as part of the Original Investors’ Series until all Units of that
Series are redeemed or otherwise cancelled.
Units issued on Bench Mark Series Date will belong to the Benchmark Series. Units
issued after the Bench Mark Series Date, will be issued on a series -by-series basis with
a new Series being issued on each date the Fund accepts subscriptions for Units save
that on the first Subscription Date after the end of each calendar quarter of the Fund,
Units may instead be issued in the oldest Series (including, if appropriate the
38
Benchmark Series) for which a Performance Fee is payable in respect of the most
recent Performance Period (as defined in this section 14). The Benchmark Series will
be designated as such and all other Series will be designated with sequential
numbering, the first such Series being designated Series 1. Differences in the Net
Asset Value per Unit of each Series of Units belonging to the same class should,
absent unforeseen circumstances, reflect only a difference in the Performance Fee
payable in respect of those Series.
In respect of each Series, the Fund Manager will only be entitled to a Performance Fee
based on the calculation at the end of each Performance Period. The Performance Fee
will be calculated on each Valuation Day. Units will be issued in Series so as to
enable the calculation of Performance Fee for each Series to reflect the increase in
value (if any) of each individual Unit from the Previous High. The Performance Fee is
calculated after taking account of the Management Fee payable in relation to the
relevant Performance Period but before any amount payable or accrued in respect of
the Performance Fee then under calculation. The first Performance Period will
terminate on 30 June 2009.
For the purposes of calculating the Performance Fee the following definitions shall
apply:
" Performance Period " means a calculation period for the purpose of calculating the
Performance Fee, which shall mean each calendar quarter,
save that:
(i) in respect of the Benchmark Series, the first
Performance Period will commence on next Subscription
Day thereafter;
(ii) in respect of all other Series, the first Performance
Period will commence on the Subscription Day on which
Units of the relevant Series are issued;
(iii) in respect of Units being redeemed, the final
Performance Period shall be deemed to end as at the
Valuation Day immediately preceding the Redemption
Date on which such redemption takes place; and
(iv) in all cases other than redemptions described in (iii)
above, the final Performance Period will end on the
termination of the relevant class or on the liquidation of
the Fund (as appropriate).
"Net New Profits" means the excess of the relevant Net Asset Value per Unit on
the last Valuation Day of each Performance Period (taking no
account of the Performance Fee, if any, then due) over (1) the
Previous High and (2) the Hurdle Rate.
39
"Previous High" means in respect of the first Performance Period for each Unit
of any Series, the Subscription Price; and in respect of all
subsequent Performance Periods, the greater of:
(i) the Subscription Price; and
(ii) the highest previous Net Asset Value per Unit at the end
of a Performance Period (reduced by the amounts of any
distributions per Unit which have occurred since the
calculation thereof)
The Performance Fee, if any, is calculated and accrued monthly as of each Valuation
Day and paid at the end of each Performance Period. In respect only of a redeeming
Unitholder, any Performance Fee will be paid as of any Redemption Date on which
Units are redeemed. All fees and expenses (except the Performance Fee for the
relevant Performance Period) will be deducted prior to calculating the Performance
Fee, including without limitation, the Management Fee. The Fund Manager, in its sole
discretion, may waive or reduce all or part of the Performance Fee otherwise due with
respect to any Unitholder’s investment, without consent or notice to any Unitholder, by
rebate or otherwise, at no additional cost to the Fund.
To the extent a Performance Fee is payable as of the end of a Performance Period with
respect to more than one issued and outstanding Series (including the Benchmark
Ser ies), any such Series, other than the Benchmark Series, may be redesignated and
converted into the oldest Series (including the Benchmark Series) for which a
Performance Fee is payable. Such conversion will be made, after the payment of any
Performance Fees, at the prevailing Net Asset Value per Unit of the Benchmark Series.
Should there be no Performance Fee payable in relation to the Benchmark Series, the
Series which paid a Performance Fee may be redesignated and converted into the
oldest Series which paid a Performance Fee in the same manner.
If there is no Performance Fee payable in relation to a Series, that Series shall remain
in existence until such time as a Performance Fee is paid on such Series in the future.
14.5 Redemption Fee and Expenses
A redemption fee of 1.5% of the Total Redemption Price will be deducted in respect of
redeemed Units which were issued more than 12 months prior to the relevant
Redemption Date. Without prejudice to the Fund Manager's approval as set out in
paragraph 12.1 hereof, a redemption fee of 5% of the Total Redemption Price will be
deducted in respect of redeemed Units issued within a period of 12 months prior to the
Redemption Date. The Fund Manager has the power to waive the redemption fee of
5% for redemptions within the first 12 months of issuance of the Units, subject to the
discretion of the Fund Manager to waive this provided it is not less than 1.5% of the
amount redeemed.
14.6 Administration Fee
40
The Administrator will receive from the Fund a monthly administration fee, payable in
arrears, at normal commercial rates. The Administrator will also be reimbursed by the
Fund for any reasonable out-of-pocket expenses necessarily incurred in the
performance of its duties. These out-of-pocket expenses are budgeted at Euro 1,00 0
per annum.
14.7 Trustee Fee
The Trustee is not entitled to receive a fee from the Fund but will be reimbursed by the
Fund for any reasonable out-of-pocket expenses (budgeted at Euro 1,000 per annum)
necessarily incurred in the performance of its duties.
14.8 Broker Commissions
The Broker will receive commissions from the Fund at normal commercial rates on
transactions executed by the Broker. The Broker charges debit interest on debit
balances at an agreed rate, the amount of which will be reduced by the amount of
credit interest payable on credit balances generated by short sales or otherwise. The
Broker will receive separate fees from the Fund for its and its subcustodians' clearing
and settlement services at normal commercial rates.
14.9 Other Fees and Expenses
The Fund will bear its own operating and other expenses. These expenses may include,
without limitation:
(i) investment expenses;
(ii) administrative expenses;
(iii) charges, fees and expenses of legal advisers and auditors;
(iv) transfer taxes or stamp duties chargeable in connection with securities
transactions;
(v) all taxes and corporate fees payable to governments or agencies;
(vi) interests on borrowings;
(vii) communication expenses with respect to investor services and all
expenses of meetings of Unitholders and of preparing, printing and
distributing financial and other reports, proxy forms, prospectuses and
similar documents;
(viii) litigation and indemnification expenses and extraordinary expenses not
incurred in the ordinary course of business;
(ix) fees and expenses of supervisory authorities; an d
(x) any other organisational and operating expenses.
41
The total costs and expenses of establishing the Fund were approximately Euro 46,500
and and were paid by the Fund. This amount mainly concerns costs for legal and tax
advice and printing costs, and is being amortized over a period of 5 years. The Fund
Manager is aware that the amortization of the organizational costs is not in conformity
with International Financial Reporting Standards and accordingly the Annual Audited
Financial Statements may be qualified by the Auditors.
42
15. DISTRIBUTION POLICY
In accordance with the Fund's investment objectives and under normal circumstances it
is envisaged that any income or gains derived will be re-invested and not distributed to
the Unitholders. However, the Fund Manager may, at its sole discretion and at any
time, decide to distribute any income or gains derived to the Unitholders. In this case
the Unitholders will be notified in writing at their addresses stated in the Register.
43
16. REPORTS AND FINANCIAL STATEMENTS
The financial year of the Fund will coincide with the calendar year. The first financial
year of the Fund was from the period from the date of commencements of operations
of the Fund to 31st December 2006.
An annual report and audited financial statements for the Fund in respect of each
financial year will be sent to Unitholders as soon as practicable and in any event within
5 months of the end of the Fund’s financial year.
The annual report and audited annual financial statements of the Fund will be mailed
to each Unitholder at the address stated in the Register free of charge and will be made
available for inspection at the registered offices of the Administrator and the Fund.
The financial statements will be prepared in accordance with International Financial
Reporting Standards.
The most recently published annual report will be included in the Prospectus.
44
17. TAXATION
The following summary of certain Dutch taxation matters is based on the laws and
practice in force as of the date of this Prospectus and is subject to any changes in law
and the interpretation and application thereof, which changes could be made with
retroactive effect. The following summary does not purport to be a comprehensive
description of all the tax considerations that may be relevant to a Unitholder, and does
not purport to deal with the tax consequences applicable to all categories of
Unitholders. Unitholders should consult their professional advisers on the tax
consequences of their acquiring, holding and disposing of the Units.
17.1 Taxation of the Fund
The Fund is transparent for Dutch corporate income tax purposes. As a consequence,
the Fund is not subject to Dutch corporate income tax.
Distributions by the Fund (if any) are not subject to Dutch dividend withholding tax.
17.2 Taxation of Unitholders
Dutch Resident Unitholders
Unitholders who are individuals and are resident or deemed to be resident in The
Netherlands, or who have elected to be treated as a Dutch resident Unitholder for
Dutch tax purposes will generally be taxed annually on a notional income of 4% of
their net investment assets, including the value of their Unit(s), at a rate of 30%,
regardless of whether any distributions are received or any capital gains are realised
with respect to the Unit(s), provided the Unitholder(s) are held as a portfolio
investment and not, for instance in the context of any business.
Corporate and institutional Unitholders that are resident or deemed to be resident in
The Netherlands, without being exempt from Dutch corporate income tax, will be
subject to Dutch corporate income tax on all income and gains realised in connection
with the Units. As the Fund is transparent for Dutch corporate income tax purposes,
such income and gains will consist of any income derived and any gain realised in
respect of the Fund investments in proportion to the Units held in the Fund.
Due to the transparency of the Fund for Dutch corporate income tax purposes, changes
of the proportional interest of a Unitholder e.g. as a result of a new Unitholder
investing in the Fund may lead to a realization of capital gains for Dutch corporate
income tax purposes.
Dutch tax resident Unitholders, whether private individual, corporate or institutional,
may, depending on the source country of the relevant Fund investment and the
interpretation of any applicable tax treaty between such country and The Netherlands,
benefit from certain exemptions and/or reductions from withholding and capital gains
tax relating to the Fund investments. Any remaining withholding tax at the level of the
Fund investments is generally creditable to Dutch resident private individual
45
Unitholders and corporate and institutional Unitholders that are subject to Dutch
corporate income tax.
Non-Dutch Resident Unitholders
Non-Dutch resident Unitholders normally will not be subject to Dutch income or
corporate taxation with respect to income or capital gains realised in connection with
Units, unless there is a specific connection with the Netherlands, such as an enterprise
or part thereof which is carried on through a permanent establishment in The
Netherlands. For a Unitholder holding the Units in the context of an enterprise it
cannot be ruled out that a permanent establishment is deemed to exist.
A Unitholder will not become resident or deemed to be resident in The Netherlands by
reason only of the holding of a Unit.
18. METHODS OF COMMUNICATION ACCEPTABLE TO T HE FUND
The following forms of communication are acceptable to the Fund for submitting
subscription, redemption, transfer or other instructions (such as change of address) to
the Administrator:
(i) Facsimile Transmission – On facsimile number +31 205 722 610; OR,
(ii) Email Transmission – Via email (provided that it contains a scanned copy of
the relevant duly signed document) to amscfsorders@citco.com; AND,
(iii) Mail – Mailing the original via courier to the Investor Relations Group of the
Administrator at Mango Capital Fund, c/o Citco Fund Services (Nederland)
B.V., Telestone 8 – Teleport, Naritaweg 165, 1043BW Amsterdam, The
Netherlands.
Notwithstanding the method of communication, the Fund and/or the Administrator
reserve the right to ask for the production of original documents or other information
to authenticate the communication. In the case of mis-receipt or corruption of any
message, you will be required to re-send the documents. Note that you must use the
form document provided by the Fund in respect of the subscription, redemption or
transfer, unless such condition is waived by the Fund and/or the Administrator. Email:
Please note that messages sent via email must contain a duly signed document as an
attachment.
Neither the Fund nor the Administrator shall be responsible for any mis-delivery or
non-receipt of any facsimile or email if they have not acknowledged receipt of the
facsimile, email or original document. Facsimiles or emails sent to the Fund or the
Administrator shall only be effective when actually acknowledged by the Fund or the
Administrator. In the event that no acknowledgement is received from the
Administrator within five (5) days of submission of the request, you should contact the
Administrator on telephone number +31 205 722 850 to confirm receipt by the
Administrator of the request. The Subscriber agrees that the foregoing shall also apply
to any subscription request made using the short form subscript ion application form
46
ANNEX 1
TERMS AND CONDITIONS OF MANAGEMENT AND CUSTODY
1. DEFINITIONS
The following definitions apply in these Terms and Conditions:
"Administrator" Citco Fund Services (Nederland) B.V. or such other
s
administrator of the Fund Estate a may be appointed
from time to time.
“Bench Mark Series Date” 1st April 2009 (or if no Units are issued on that date,
the first date thereafter on which Units are issued).
"Business Day" Any day on which banks are generally open for
business in The Netherlands and Luxembourg.
"Cash " Cash in any currency held in interest bearing call
accounts or bank deposits.
"CET" Central European Time.
"Costs" All costs, fees and expenses incurred by or charged to
the Trustee or the Fund Manager in connection with
the Fund Estate.
"Euro" and "EUR" Each the lawful currency of the participating member
states of the European Union adopted in acoordance
with the Treaty establishing the European
Communities, as amended by the Treaty on
European Union.
"Euro Unit" A Unit which is expressed in Euro.
"Fund" The contractual arrangements between the
Unitholders, the Fund Manager and the Trustee in
relation to the participation, management, custody and
administration as governed by these Terms and
Conditions and the Prospectus, also referred to as the
Mango Capital Fund.
"Fund Assets" The Fund Means and the Fund Investments.
"Fund Estate" The totality of the Fund Assets and the Fund
Obligations.
"Fund Investments" All Securities and/or other assets (goederen) other
than Fund Means that are acquired and held by the
Trustee in its own name on behalf and for the account
of the Unitholders in connection with the Fund.
47
"Fund Manager" Mango Capital Management B.V.
"Fund Means" Cash and cash equivalents.
"Fund Obligations" The liabilities which the Trustee (or the Fund
Manager on behalf of the Trustee) assumes and/or
incurs in its own name on behalf and for the account
of the Unitholders in connection with the Fund.
"Hurdle Rate" means an increase in Net Asset Value of 1.25% for
the relevant quarter;
"Investment Objectives" The investment objectives of the Fund and the
restrictions imposed on the Trustee set out in Article
3.3 hereof, as amended from time to time.
"Management Fee " The Fund Manager's remuneration to be calculated in
accordance with the provisions of Article 19.1 hereof.
"Meeting of Unitholders" The meeting of representatives of Unitholders referred
to in Article 20.1 hereof.
"Net Asset Value" The balance, expressed in Euro, of the value of the
Fund Assets and the value of the Fund Obligations,
determined in accordance with the provisions of
Article 10 hereof.
"Net Asset Value per Unit " means the Net Asset Value divided by the number of
Units in issue at that time.
"Non-Euro Unit" A Unit which is not a Euro Unit.
“Original Investors’ Series” The series of Units in issue as at 1st March 2009.
"Performance Fee " The Fund Manager's remuneration to be calculated in
accordance with the provisions of Article 19.2 hereof.
"Prospectus" The prevailing prospectus of the Fund as amended
from time to time.
"Redemption Date" The first Business Day of each month and/or, under
certain circumstances as set out in these Terms and
Conditions, such other day as the Fund Manager may
from time to time determine.
"Rede mption Form " The standard form through which a request for
redemption of Units is made.
"Redemption Price " The Net Asset Value per Unit as at the last Valuation
Day prior to the relevant Redemption Date.
"Register" As defined in Article 9.2 hereof.
48
"Securities" Ordinary shares, preference shares, bonds, notes,
convertible securities, derivatives or securities or
interests in a public or private company.
"Series" A series of US Dollar Units, Euro Units, Sterling
Units, Swiss Franc Units or any other class issued in
order to reflect actual performance in the calculation
of the Performance Fees as discussed under section
14.4 of this Prospectus.
GBP"
"Sterling", "£" and " The lawful currency of the United Kingdom.
"Sterling Unit" A Unit which is expressed in Sterling.
"Subscription Agreement" The subscription agreement between the Fund
Manager, the Trustee and each of the Unitholders
individually, as amended from time to time.
"Subscription Date" The first Business Day of each month and/or, under
exceptional circumstances, such other date or dates as
the Fund Manager may from time to time determine.
"Subscription Price" The price at which each Unit is issued and is an
amount equal to the Net Asset Value per Unit as at the
Valuation Day immediately prior to the relevant
Subscription Date.
"Swiss Franc", and "CHF" Each the lawful currency of Switzerland.
"Swiss Franc Unit" A Unit which is expressed in Swiss Franc.
"Terms and Conditions" The terms and conditions of management and custody
(voorwaarden van beheer en bewaring) of the Fund
set forth herein, as amended from time to time.
"Total Redemption Price" The Redemption Price multiplied by the relevant
number of Units.
"Total Subscription Price" The Subscription Price multiplied by the relevant
number of Units.
"Trustee" Citco Bewaarder Stichting or such other trustee
(bewaarder) as may be appointed from time to time.
"Unitholder" A natural person or legal person which participates
in the Fund in accordance with the Subscription
Agreement and these Terms and Conditions.
"Unit" A unit representing the rights of the holder of the
Unit to a certain percentage of the Net Asset Value.
"US Dollar", "$" and "USD" The lawful currency of the United States of America.
49
"US Dollar Unit" A Unit expressed in US Dollar.
"Valuation Day" The last Business Day of each month or such other
day or days as may be determined by the Fund
Manager, provided that there shall never be more than
two (2) Valuation Days in any calendar month.
2. NAME, TERM AND REGIS TRATION
2.1 The name of the Fund is: Mango Capital Fund.
2.2 The Fund shall continue to exist for an indefinite period of time.
3. NATURE AND OBJECTS
3.1 The Fund is a contractual investment fund (beleggingsfonds); it is not a legal entity but
a contractual arrangement (sui gene ris) between the Fund Manager, the Trustee and
the Unitholders. These Terms and Conditions and the arrangements made in
connection herewith do not establish a partnership (maatschap or vennootschap onder
firma) or limited partnership (commanditaire vennootschap).
3.2 The Fund is established, operated and maintained exclusively for the collective
investment and reinvestment of moneys in accordance with the general purposes set
out in Article 3.3.
3.3 The investment objective of the Fund is to achieve capital growth by investing in listed
equity instruments issued by public companies in 24 plus frontier emerging markets
mainly in Africa and the Middle East as more specifically set out in the Prospectus.
3.4 The Fund Assets may be made subject to a pledge, mortgage, usufruct, charge, lien
retention or other encumbrance (whether or not a beperkt recht) of any nature as
security for obligations incurred for the purposes of the Fund.
4. CUSTODY
4.1 All the Fund Assets shall be legally owned by, and will be administered in the name
of, the Trustee. The Trustee shall place the Fund Assets in subcustody with a reputable
custodian or broker.
4.2 The Trustee shall acquire and hold the Fund Assets for the purpose of management and
custody (ten titel van beheer en bewaring) on behalf and for the account of the
Unitholders and shall act solely in the interests of the Unitholders. Unitholders shall
have no proprietary rights with respect to the Fund Assets.
4.3 The Trustee shall not acquire any assets or assume any obligations for its own account
or for the account of third parties who or which are not Unitholders or unitholders in
any other fund for which the Trustee acts as such.
4.4 The Fund Obligations shall be assumed in the name of the Trustee. The Trustee shall
assume the Fund Obligations for the risk and account of the Unitholders.
50
4.5 The Trustee shall ascertain that the Fund Estate is managed by the Fund Manager in
accordance with the Investment Objectives.
4.6 The Trustee shall act solely in the interest of the Unitholders. The Trustee shall only be
liable towards the Unitholders for a loss suffered by them in connection with the
performance of its duties and responsibilities under this article, if and to the extent that
such loss is directly caused by the gross negligence (grove schuld) or wilful default
(opzet) of the Trustee. The Trustee shall not be liable towards the Unitholders for any
loss suffered by them as a result of any act or omission of a third party.
4.7 Should the Trustee cease to perform its function for whatever reason, while no
subsequent trustee has been appointed by the Meeting of Unitholders, the Fund
Manager shall be authorised to appoint an interim trustee until a new trustee has been
appointed by the Meeting of Unitholders. The Fund Manager shall convene a Meeting
of Unitholders within two (2) months after it has appointed an interim trustee for the
purposes of appointing a permanent new trustee.
5. MANAGEMENT AND INVES TMENTS
5.1 The Fund Manager is charged with the management and administration of the Fund
Estate and is, subject to these Term s and Conditions, entitled and authorised in the
name of the Trustee, to invest the Fund Means, to dispose of (beschikken) any of the
Fund Investments, to assume Fund Obligations and to perform any and all other acts in
its own name on behalf and for the a ccount of the Fund which are reasonably
necessary for or conducive to the attainment of the Investment Objectives. The Fund
Manager's authority to act in the Trustee's name shall be subject to a separate power of
attorney granted to the Fund Manager.
5.2 In managing the Fund Estate, the Fund Manager shall act solely in the interest of the
Unitholders. In the performance of its obligations and in the exercise of its rights,
powers and authorities here under, the Fund Manager shall exercise the standard of
care, skill, prudence and diligence under the circumstances then prevailing that a
prudent (zorgvuldig) person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of like character, risk profile and investment
objectives as the Fund, having regard to the provisions hereof.
5.3 The Fund Manager may employ third parties in the exercise of its powers and duties
under these Terms and Conditions.
5.4 The management and administration of the Fund Estate shall be performed for the
account and at the risk of the Unitholders. Benefits and/or losses resulting therefrom
shall consequently be for the benefit of or be borne by the Unitholders.
5.5 The Fund Manager shall not resign or withdraw from the Fund.
5.6 The Fund Manager shall only be liable towards the Unitholders for a loss suffered by
them in connection with the performance of its duties and responsibilities under this
article, if and to the extent that such loss is directly caused by the gross negligence
(grove schuld) or wilful default (opzet) of the Fund Manager. The Fund Manager shall
51
not be liable towards the Unitholders for a loss suffered by them as a result of any act
or omission of a third party.
6. FUND MEANS
6.1 The Fund Means may be received by the Trustee in consideration for Units, in respect
of or in exchange for Fund Investments, by creation and increase of Fund Obligations
and/or by creation, increase and application of provisions and reserves, if any.
6.2 The Fund Means may be held by the Trustee at the discretion of the Fund Manager
pending the selection and purchase of suitable investments and reinvestments, and to
maintain liquidity to meet payment obligations which arise or may arise.
6.3 The Fund Means may be used to pay for all Fund Obligations and Costs.
7. AUTHORITY TO INVEST AND ADMINISTER THE FUND ASSETS
7.1 Subject to the provisions set forth in Article 3.3 hereof and in this Article, the Fund
Manager may invest the Fund Means in any Securities and the determination of the
Fund Manager as to whether or not any Securities are of a type which may be
purchased or held by the Trustee in view of the Investment Objectives shall be
conclusive.
7.2 Subject to the provisions set forth in Articles 3.3 and 4.4 hereof and in this Article, the
Fund Manager may assume Fund Obligations, including but not limited to borrowing
cash and assuming obligations under transactions in Securities. Fund Obligations may
be secured upon the Fund Assets.
7.3 It is the intention that subject only to the specific restrictions mentioned herein the
Fund Manager shall have the broadest power and authority in making investments
consistent with the investment powers herein provided. The Fund Manager shall have
full discretionary power to retain for as long a period as it shall think proper and to
manage, convert, exchange, transfer and dispose of the Fund Assets. The Fund
Manager shall have and may exercise every right and privilege pertaining to
management provided that the exercise of such right or privilege is conducive to the
attainment of the Investment Objective.
7.4 Without limiting the generality of the foregoing, the Fund Manager's powers and
authority shall include:
(i) to enter into, perform and carry out contracts of any kind necessary or
incidental to the matters set forth in this Article 7;
(ii) to bring, sue, prosecute, defend, settle or comprise actions at law related to
the purpose of the Fund;
(iii) to employ, retain or otherwise secure or enter into agreements or other
undertakings with persons or firms in connection with the management and
operation of the Fund's business, including, without limitation, auditors,
52
attorneys, consultants, investment bankers, any other agents, all on such terms
and for such consideration as the Fund Manager deems advisable;
(iv) to exercise the statutory and contractual voting rights attached to or
concerning the Fund Investments; and
(v) to engage in any kind of lawful activity, and perform and carry out contracts
of any kind, necessary or advisable in connection with the accomplishment of
the purpose of the Fund.
7.5 The Fund Manager and the Trustee may appoint the Administrator and replace it.
7.6 The Fund Manager may at its sole discretion create appropriate arrangements for the
treatment of assets considered by the Fund Manager to be illiquid ("Illiquid Assets").
Such arrangements may be created both for redemption purposes as well as in the
ordinary course of management of the Fund. The Fund Manager will not be limited in
the type or nature of such arrangements and will in the selection of such arrangements
always act in the interest of the Unitholders. Such arrangements include, but are not
limited to, the creation of side pockets, the creation of one or more separate
redemption classes or redemptions in-kind (which may include distributions of shares
or units in a special purpose vehicle that will hold the Illiquid Assets or distributions in
debt certificates or any other equivalent thereof).
7.7 The Fund Manager will act in the interests of the Unitholders at all times when Fund
Assets are qualified as Illiquid Assets and when establishing and operating separate
arrangements.
8. UNITHOLDERS
8.1 A Unitholder is admitted to the Fund by the issuance of a Unit.
8.2 Each Unitholder shall be beneficially entitled to the Fund Estate pro rata the number of
its Units.
8.3 All benefits and burdens, beneficially attached to the ownership of the Fund Estate,
shall be in favour or for the account of each Unitholder pro rata the number of its
Units.
8.4 Each Unitholder will be provided with a copy of these Terms and Conditions.
8.5 The rights of existing and new Unitholders to Illiquid Assets can differ from other
Fund Assets. The Fund Manager will notify the Unitholders of the precise terms and
conditions applicable to the Illiquid Assets and the rights and obligations of the
Unitholders in respect of those Illiquid Assets. Such terms and conditions will also be
published on the Fund Manager's website, together with an explanation of those terms
and conditions. Such terms and conditions will be supplemental to the Terms and
Conditions and shall in case of any inconsistency prevail.
8.6 Each Unitholder shall be bound by and subject to these Terms and Conditions by
entering into a Subscription Agreement.
53
9. UNITS
9.1 The Units shall be in registered form. Unit certificates shall not be issued. All Units
shall represent an equal interest to the Net Asset Value without priority or preference
one over the other. Units may be issued in different currencies.
9.2 The Fund Manager shall keep a register in which the names and addresses of all
Unitholders will be recorded, stating the particulars of their Units and their
Subscription Date (the "Register").
9.3 The Fund Manager shall at all times be entitled to rely on the accuracy of the
information provided by each Unitholder for inclusion in the Register and to treat such
information as conclusive with respect to such Unitholder and its entitlement to its
Units. The Fund Manager shall not be bound:
(i) by any change in such information which has not been notified to the Fund
Manager in accordance with Article 9.4 hereof; or
(ii) to recognise any interest or claim of any person to a Unit other than the
Unitholder whose details have been duly entered in the register in respect
thereof.
9.4 Each Unitholder shall notify the Fund Manager promptly of any change in the
information referred to in Article 9.2 hereof in relation to such Unitholder. The Fund
Manager shall upon receipt cause the Register to be amended accordingly within five
(5) Business Days.
9.5 Within ten (10) Business Days upon entry (or any change in the entry relating to it) the
Fund Manager shall send to each Unitholder an extract from the Register signed by the
Fund Manager, in so far as it concerns its Unit(s). Such extract shall only serve as
evidence of the entry and is non-negotiable.
9.6 Upon written request to that effect by the Unitholder to the Fund Manager, the
Register shall be available at the Fund Manager’s office for the inspection of each
Unitholder on Business Days, but only in so far as it concerns the Unitholder’s own
entry.
9.7 The Fund Manager may delegate all or any part of its duties and responsibilities under
this Article 9 to the Administrator.
10. N ET ASSET VALUE AND N ET ASSET VALUE PER UNIT
10.1 On each Valuation Day the Fund Manager shall determine the Net Asset Value and the
Net Asset Value per Unit. The Net Asset Value and the Net Asset Value per Unit shall
be expressed in Euro and the value of each Non-Euro Unit will be expressed in the
currency of that type of Unit. A statement containing the Net Asset Value and the Net
Asset Value per Unit will be made available to the Unitholders in accordance with
Article 15 hereof.
54
10.2 The reasonable decision of the Fund Manager regarding the Net Asset Value,
including the determination whether a method of valuation fairly indicates fair market
value, and the selection of experts for purposes of assessing the value of the Fund
Assets and the Fund Obligations, shall be conclusive and binding upon all Unitholders.
10.3 Illiquid Assets can be valued in a manner deemed appropriate by the Fund Manager in
accordance with generally accepted accounting practices. The Fund Manager will
calculate fees, costs and other expenses in respect of Illiquid Assets taking into account
the differing valuation and liquidity of those assets.
10.4 Notwithstanding Article 10.2 hereof the Fund Manager shall use the valuation methods
set out in the Prospectus.
10.5 The Fund Manager may delegate all or any part of its duties and responsibilities under
this Article 10 to the Administrator.
11. ISSUE OF UNITS
11.1 The minimum Total Subscription Price for each Unitholder is:
(i) Euro 100,000 for Euro Units;
(ii) USD 150,000 for US Dollar Units;
(iii) GBP 100,000 for Sterling Untis; and
(iv) CHF 200,000 for Swiss Franc Units,
subject to the discretion of the Trustee or the Fund Manager to reduce the minimum to
a sum of not less than fifty thousand (50,000) Euro or the equivalent thereof in another
currency. The minimum additional Total Subscription Price for each Unitholder is fifty
thousand (50,000) Euro or the equivalent thereof in another currency, subject to the
sole discretion of the Fund Manager which has the discretion to accept lesser amounts.
Persons subscribing for Units on behalf of others (conferring an indirect legal or
economic interest in the Units on such others), such as nominees, securities giro's and
special purpose custody vehicles, may only subscribe for Units if the beneficiaries of
i
their participation will ndividually each (indirectly) participate in the Fund for an
amount of the minimum Total Subscription Price or more.
11.2 Subscription for Units shall be made by completing the Subscription Agreement
Agreement which shall be made available by the Administrator or the Fund Manager
and payment of the Total Subscription Price.
11.3 The Fund Manager may in its sole discretion decide to whom Units shall be issued and
may in its sole discretion decide to temporarily discontinue or indefinitely stop the
issuance of Units.
11.4 T he Trustee shall issue Units subscribed for in accordance with and subject to the
provisions of the Subscription Agreement and the Prospectus.
55
11.5 Units shall be issued by the Trustee and acquired by the Unitholders on Subscription
Dates.
11.6 Payment for Units will ordinarily be accepted in the currency of the Units subscribed
for by transfer to the bank account of the Fund designated for such payments. At the
sole discretion of the Fund Manager, payment in-kind for Units by the transfer of
Securities from a Unitholder to the Fund may also be accepted.
11.7 The Trustee may delegate any or a part of its administrative duties and responsibilities
under this Article 11 to the Administrator.
12. TRANSFER OR ENCUMBRANCE OF UNITS
12.1 Units cannot be transferred or assigned, except by way of redemption as provided in
Article 13 hereof.
12.2 Units cannot be made subject to any pledge, mortgage, usufruct, charge, lien, retention
or other encumbrance (whether or not a beperkt recht) of any nature whatsoever.
13. ILLIQUID ASSETS
The Fund Manager may at its sole discretion create appropriate arrangements for the
treatment of assets considered by the Fund Manager to be illiquid ("Illiquid Assets").
Such arrangements may be created both for redemption purposes as well as in the
ordinary course of management of the Fund. The Fund Manager will not be limited in
the type or nature of such arrangements and will in the selection of such arrangements
always act in the interest of the Unitholders. Examples of such arrangements are side
pockets, separate redemption classes or redemptions in-kind (which may include
distributions of shares or units in a special purpose vehicle that will hold the Illiquid
Assets or or distributions in debt certificates or any other equivalent thereof). Such
arrangements may be made in view of the continuation of the holding of the Illiquid
Assets or and/or the liquidation thereof in due course.
Illiquid Assets can be valued in a manner deemed appropriate by the Fund Manager in
accordance with generally accepted accounting practices. The Fund Manager will
calculate fees, costs and other expenses in respect of Illiquid Assets taking into account
the differing valuation and liquidity of those assets.
The rights of existing and new Unitholders to Illiquid Assets can differ from other
Fund Assets. If a Unitholder redeems (part of) its Units, it will not receive the amount
it is entitled to in respect of the Illiquid Assets within the normal periods of time.
The Fund Manager will notify the Unitholders of the precise terms and conditions
applicable to the Illiquid Assets and the rights and obligations of the Unitholders in
respect of those Illiquid Assets. Such terms and conditions will also be published on
the Fund Manager's website, together with an explanation of those terms and
conditions. Such terms and conditions will be supplemental to the Terms and
Conditions and shall in case of any inconsistency prevail.
56
The Fund Manager will act in the interests of the Unitholders at all times when Fund
Assets are qualified as Illiquid Assets and when establishing and operating separate
arrangements.
14. REDEMPTION OF UNITS
14.1 Each Unitholder shall be entitled to redemption of all or some of its Units in
accordance with the provisions of this Article 13 provided that at all times redemption
of Units within 12 months of issue shall only be possible with the prior approval of the
Fund Manager and against payment of 5% redemption fees of the value of the Units so
redeemed.
14.2 Redemption of Units as referred to in Article 13.1 hereof shall only be effected as per a
Redemption Date. Redemption of Units as referred to in Article 13.6 may be effected
at all times.
14.3 A request for redemption by a Unitholder shall be made by completing a Redemption
Form. Redemption Forms shall be made available by the Administrator. Completed
Redemption Forms shall be sent to the Administrator with a copy to the Fund
Manager. Redemption Forms will need to be received by the Administrator no later
than 4.30 p.m. CET on the Business Day falling at least thirty (30) Business Days prior
to the Redemption Date in relation to which the Unitholder requests that redemption
shall take place. Requests for redemption not received in time will be held over until
the following Redemption Date. Redemption Forms may be sent by fax or mail
simultaneously.
A request for a partial redemption of Units may be refused, or the holding redeemed in
its entirety, if, as a result of such partial redemption, the Net Asset Value of the Units
retained by the Unitholder would be less than:
(i) Euro 50,000 in Euro Units;
(ii) USD 150,000 in US Dollar Units;
(iii) GBP 100,000 for Sterling Units; or
(iv) CHF 200,000 in Swiss Franc Units,
or, in respect of the Non-Euro Units, such higher amount equal to Euro 50,000.
Persons subscribing for Units on behalf of others (conferring an indirect legal or
economic interest in the Units on such others), such as nominees, securities giro's and
special purpose custody vehicles, may only redeem Units if the beneficiaries of their
participation will individually each (indirectly) still participate in the Fund for an
amount of Euro 50,000 or more. If such beneficiaries will hold participations of less
than Euro 50,000 after a requested redemption, their entire participation has to be
redeemed. Otherwise, the redemption will be rejected.
Redemption Forms received by the Administrator shall be irrevocable unless the Fund
Manager agrees otherwise. Requests for redemption may be refused in case anti-
57
money laundering verification procedures so require. The Trustee and the Fund
Manager shall use their best efforts to comply with a request for redemption but
redemption cannot be fully guaranteed given the nature of the Fund Investments.
14.4 A redemption fee of 1.5 per cent. of the Total Redemption Price will be deducted in
respect of redeemed Units issued more than twelve (12) months prior to the
Redemption Date. Redemption fees so withheld will remain in the Fund. A redemption
fee of five (5) per cent. of the Total Redemption Price will be deducted in respect of
redeemed Units issued within a period of twelve (12) months prior to the Redemption
Date.
14.5 The Total Redemption Price (adjusted with the redemption fee) will be paid within
twenty (20) Business Days of the relevant Redemption Date unless exceptional
circumstances occur, in which case the Total Redemption Price will be paid at the
earliest possible Business Day thereafter.
14.6 The Fund Manager and the Trustee shall be entitled to redeem all (but not part of) the
Units of any Unitholder:
(i) if the Unitholder is dissolved, becomes insolvent, is unable to pay its debts,
institutes or has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy, any other relief under any bankruptcy, insolvency
or similar law; or
(ii) if in the Fund Manager’s reasonable opinion the tax position of the Trustee,
the Fund Estate or any of the other Unitholders is or will become negatively
affected due to the tax status or position or any change therein of the relevant
Unitholder or any other circumstance concerning such Unitholder;
(iii) if any Unitholder, in the opinion of the Fund Manager or Trustee, fails to
comply with the policies of the Fund adopted to comply with any law or
regulation aimed at the prevention of money laundering.
Each Unitholder agrees that it shall immediately notify the Fund Manager if any such
status, position, change therein or any other circumstance occurs.
14.7 The Trustee and the Fund Manager may limit the redemption of Units to a maximum
of 20 per cent. of the Net Asset Value on the last Valuation Day prior to the
Redemption Date. In this case, the number of Units to be redeemed per redeeming
Unitholder will be pro rated accordingly. Any remaining Units (for which redemption
was requested) shall be redeemed with preference over subsequent redemption
requests on the following Redemption Date. The Redemption Price paid on Units
which are deferred to the following Redemption Date will be the Redemption Price on
the actual Redemption Date the Units are redeemed.
14.8 If a Unitholder redeems (part of) its Units, it will not receive the amount it is entitled to
in respect of the Illiquid Assets within the normal periods of time.
14.9 The Trustee and the Fund Manager may further suspend redemption of Units if:
58
(i) the transfer of funds realised from the sale of Fund Investments cannot, in the
sole opinion of the Fund Manager, be effected at normal rates of exchange;
(ii) exchanges are not open for business or the sale of Fund Investments is
otherwise restricted or suspended;
(iii) a state of affairs exists which constitutes a state of emergency as a result of
which the sale of Fund Investments would, in the sole opinion of the Fund
Manager, not be practical or would negatively affect the rights of other
Unitholders;
(iv) for whatever reason, the valuation of Fund Investments to be sold cannot be
promptly or accurately ascertained;
(v) in case of a suspension of valuations as set out in Article 13.3 of the
Prospectus; or
(vi) the redemption of Units would be prejudicial to the interests of the
Unitholders as a whole or individually.
14.10 Any and all Units which are redeemed shall not be held by the Trustee but shall be
automatically cancelled.
14.11 Immediately upon redemption, the Fund Manager shall procure that the necessary
amendments are made to the Register.
14.12 The Trustee and Fund Manager may redeem Units in-kind. This paragraph 14 and any
other provisions on redemptions shall apply accordingly, to the extent possible, to
such redemptions.
14.13 Notice of any redemption (including its nature and method of payment) will be sent by
the Fund Manager to the redeeming Unitholder.
14.14 The Trustee and the Fund Manager may delegate any or all part of their duties and
responsibilities under this Article 13 to the Administrator.
15. NOTICES
15.1 All notices to Unitholders shall be sent in writing to the addresses of Unitholders stated
in the Register.
15.2 All notices to the Trustee, the Fund Manager or the Administrator shall be sent in
writing and shall be addressed or directed as to the addresses set out below or such
other address as may have been notified to the Unitholders in writing:
Fund Manager :
Mango Capital Management B.V.
Kleverparkweg 14
59
2023 CE Haarlem
The Netherlands
Fax no: 023-5254428
Trustee:
Citco Bewaarder Stichting
Telestone 8 - Teleport
Naritaweg 165
1043 BW Amsterdam
The Netherlands
Fax no: 020-5722600
Administrator:
Citco Fund Services (Nederland) B.V.
Telestone 8 - Teleport
Naritaweg 165
1043 BW Amsterdam
The Netherlands
Fax no: 020-5722600
16. REPORTING
16.1 Within fifteen (15) Business Days following a Valuation Day, or more frequently if the
Fund Manager in its sole discretion so determines, the Fund Manager shall send a
statement to the Unitholders with information with respect to the Fund. This statement
shall contain at least the following information:
(i) the Net Asset Value and the Net Asset Value per Unit as per such Valuation
Day;
(ii) the number of Units outstanding as per such Valuation Day; and
(iii) the number of Units held by the relevant Unitholder and the total Net Asset
Value of such Units as per such Valuation Day.
-
The Fund Manager shall upon request send un-audited semi annual accounts of the
Fund to the Unitholders.
16.2 Upon the reasonable request of a Unitholder, the Fund Manager shall provide such
Unitholder at the expense of such Unitholder with the data relevant to its tax
declarations; the Fund Manager accepts no liability whatsoever with respect to the data
provided.
16.3 The Fund Manager may delegate all or any part of its duties and responsibilities under
this Article 15 to the Administrator.
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17. FINANCIAL YEAR
The financial year of the Fund shall coincide with the calendar year.
18. ACCOUNTING
18.1 The Fund Manager shall adopt annual reports and audited financial statements,
consisting of a balance sheet, an income statement and explanatory notes thereto. The
annual reports and audited financial statements of the Fund shall be signed by all
members of the management board (bestuur) of the Fund Manager. Should one (1) or
more signatures be missing, this shall be disclosed stating reasons.
18.2 The Fund Manager shall appoint a chartered accountant or another expert, as referred
to in Article 2:393 paragraph 1 of the Netherlands Civil Code to audit the annual
accounts of the Fund referred to in Article 17.1 hereof. Such person shall report on his
audit to the Fund Manager, shall set out the results of his audit in a certificate and shall
be entitled to receive reasonable compensation for the services rendered.
18.3 T he annual accounts of the Fund shall together with the expert's certificate referred to
in Article 17.2 hereof be sent to the Unitholders promptly and will be made available
for inspection at the registered office of the Administrator and the Fund.
18.4 The Fund Manager shall use reasonable endeavours to cause the annual accounts to be
prepared and furnished to the Unitholders within five (5) months after the close of each
financial year.
19. DISTRIBUTIONS
19.1 Subject to Article 18.2 hereof, the balance of any income or gains derived will be
reinvested.
19.2 The Fund Manager may, at its sole discretion and at any time, decide to distribute any
income or gains derived to the Unitholders. Any distribution of proceeds decided on
shall be separately notified to each Unitholder in accordance with Article 14.1 hereof.
20. FEES AND EXPENSES
20.1 The Fund Manager is entitled to a Management Fee equal to 2% per annum of the Net
Asset Value of the Fund prior to the deduction of the Management Fee and the
Performance Fee . The Management Fee shall be calculated and accrued monthly (at a
rate of 1/12 of 2%) and paid quarterly. In addition, the Fund Manager is entitled to a
Performance Fee of 20% of the increase in the Net Asset Value of each Series of Units
of the Fund before deduction of Performance Fees (in excess of the Hurdle Rate)
subject to the High Water Mark principle, which means that no Performance Fee shall
be payable until any previous losses experienced by that relevant Series of Units of the
Fund are recouped. The Performance Fee for each Series is calculated and accrued
monthly and payable quarterly.
20.2 Costs and expenses in relation to the Fund (including but not limited to fees charged
by the Administrator and the Trustee) shall be paid out of the Fund Assets.
61
20.3 Adjustments
Solely for the purposes of calculating the Performance Fee, Units will be issued in
Series. Units in issue as at 1st March 2009 shall form the Original Investors’ Series
and shall remain in issue as part of the Original Investors’ Series until all Units of that
Series are redeemed or otherwise cancelled.
Units issued on Bench Mark Series Date will belong to the Benchmark Series. Units
issued after the Bench Mark Series Date, will be issued on a series -by-series basis with
a new Series being issued on each date the Fund accepts subscriptions for Units save
that on the first Subscription Date after the end of each calendar quarter of the Fund,
Units may instead be issued in the oldest Series (including, if appropriate the
Benchmark Series) for which a Performance Fee is payable in respect of the most
recent Performance Period (as defined in this Section 20). The Benchmark Series will
be designated as such and all other Series will be designated with sequential
numbering, the first such Series being designated Series 1. Differences in the Net
Asset Value per Unit of each Series of Units belonging to the same class should,
absent unforeseen circumstances, reflect only a difference in the Performance Fee
payable in respect of those Series.
In respect of each Series, the Fund Manager will only be entitled to a Performance Fee
based on the calculation at the end of each Performance Period. The Performance Fee
will be calculated on each Valuation Day. Units will be issued in Series so as to
enable the calculation of Performance Fee for each Series to reflect the increase in
value (if any) of each individual Unit from the Previous High. The Performance Fee is
calculated after taking account of the Management Fee payable in relation to the
relevant Performance Period but before any amount payable or accrued in respect of
the Performance Fee then under calculation. The first Performance Period will
terminate on 30 June 2009.
For the purposes of calculating the Performance Fee the following definitions shall
apply:
" Performance Period " means a calculation period for the purpose of calculating the
Performance Fee, which shall mean each calendar quarter,
save that:
(i) in respect of the Benchmark Series, the first
Performance Period will commence on next Subscription
Day thereafter;
(ii) in respect of all other Series, the first Performance
Period will commence on the Subscription Day on which
Units of the relevant Series are issued;
(iii) in respect of Units being redeemed, the final
Performance Period shall be deem ed to end as at the
Valuation Day immediately preceding the Redemption
62
Date on which such redemption takes place; and
(iv) in all cases other than redemptions described in (iii)
above, the final Performance Period will end on the
termination of the relevant class or on the liquidation of
the Fund (as appropriate).
"Net New Profits" means the excess of the relevant Net Asset Value per Unit on
the last Valuation Day of each Performance Period (taking no
account of the Performance Fee, if any, then due) over (1) the
Previous High and (2) the Hurdle Rate.
"Previous High" means in respect of the first Performance Period for each Unit
of any Series, the Subscription Price; and in respect of all
subsequent Performance Periods, the greater of:
(i) the Subscription Price; and
(ii) the highest previous Net Asset Value per Unit at the end
of a Performance Period (reduced by the amounts of any
distributions per Unit which have occurred since the
calculation thereof)
The Performance Fee, if any, is calculated and accrued monthly as of each Valuation
Day and paid at the end of each Performance Period. In respect only of a redeeming
Unitholder, any Performance Fee will be paid as of any Redemption Date on which
Units are redeemed. All fees and expenses (except the Performance Fee for the
relevant Performance Period) will be deducted prior to calculating the Performance
Fee, including without limitation, the Management Fee. The Fund Manager, in its sole
discretion, may waive or reduce all or part of the Performance Fee otherwise due with
respect to any Unitholder’s investment, without consent or notice to any Unitholder, by
rebate or otherwise, at no additional cost to the Fund.
To the extent a Performance Fee is payable as of the end of a Performance Period with
respect to more than one issued and outstanding Series (including the Benchmark
Series), any such Series, other than the Benchmark Series, may be redesignated and
converted into the oldest Series (including the Benchmark Series) for which a
Performance Fee is payab le. Such conversion will be made, after the payment of any
Performance Fees, at the prevailing Net Asset Value per Unit of the Benchmark Series.
Should there be no Performance Fee payable in relation to the Benchmark Series, the
Series which paid a Performance Fee may be redesignated and converted into the
oldest Series which paid a Performance Fee in the same manner.
If there is no Performance Fee payable in relation to a Series, that Series shall remain
in existence until such time as a Performance Fee is paid on such Series in the future.
63
21. MEETING OF UNITHOLDERS
21.1 Meetings of Unitholders may only be held when called by the Fund Manager. The
Fund Manager will call Meetings of Unitholders as follows:
21.1.1 The Fund Manager must call a Meeting of Unitholders each year within four
(4) months after the close of the financial year in order for the annual
accounts of the Fund to be considered for approval and, if approved, adopted.
21.1.2 Fund Manager must call a Meeting of Unitholders in the case that one or
more of the Unitholders - alone or collectively entitled to cast at least thirty
(30) per cent. of the total number of votes that can be cast by all the
Unitholders together - so request(s) the Fund Manager by means of a letter
addressed to the Fund Manager. Such letter must state the reasons for
convening the meeting and the items to be dealt with at the Meeting of
Unitholders.
21.1.3 Fund Manager must convene a meeting of Unitholders whenever otherwise
required pursuant to these Terms and Conditions.
21.1.4 Fund Manager may convene a Meeting of Unitholders as often as it (in its
sole discretion) deems necessary in the interests of the Unitholders.
21.2 The Meetings of Unitholders will be held in Haarlem or another place to be determined
by the Fund Manager. Notice for a Meeting of Unitholder s will be given in accordance
with Article 14.1 hereof at least fourteen (14) days prior to the meeting and will state
the date, time, place and agenda for the meeting.
21.3 Unitholders wishing to attend a Meeting of Unitholders must notify the Fund Manager
thereof in writing no later than five (5) Business Days prior to the meeting.
Unitholders which have so notified the Fund Manager are entitled to be heard at the
meeting and to exercise their voting rights.
21.4 Nothwithstanding Article 21.2 above, the Meeting of Unitholders may also be held in
writing. Notice for a Meeting of Unitholders in writing will be given in accordance
with Article 15.1 hereof at least fourteen (14) days prior to the meeting and will state
the date, agenda, proposed resolutions and the fin al closing date to cast votes for the
meeting. Resolutions taken at a meeting held in writing will only be validly taken if a
quorum of all Units entitled to vote at the meeting representing at least 10% of the Net
Asset Value of the Fund are present at such meeting. Unitholders must have cast their
vote on proposed resolutions at least 3 calendar days in advance of the Meeting of
Unitholders in order to exercise their vote.
21.5 The Fund Manager shall appoint a chairman and a secretary of Meetings of
Unitholders. The chairman shall be responsible for determining the procedure to be
adopted for the conduct of any meeting. The secretary shall be responsible for the
preparation of the meeting.
64
21.6 The agenda for a Meeting of Unitholders shall be determined in the sole discretion of
the Fund Manager save where a meeting is convened pursuant to a request made by
one or more Unitholders as referred to in Article 21.1 hereof.
21.7 In Meetings of Unitholders, one (1) vote may be cast per Unit.
22. AMENDMENT TO THE TERMS AND CONDITIONS
22.1 The Terms and Conditions may be amended by the Trustee and the Fund Manager
upon the adoption with a two -third majority by all members of the Meeting of
Unitholders of a resolution approving the same.
22.2 The Trustee and the Fund Manager shall inform the Unitholders of the text of a
proposed amendment at least fourteen (14) calendar days before the day on which the
amendment shall come into effect.
22.3 Upon amendment of the Terms and Conditions, the Fund Manager shall promptly send
to the Unitholders the text of the revised Terms and Conditions.
22.4 The Fund Manager shall have the right to reject, at it's sole discretion, to implement
any such resolution taken by the Meeting of Unitholders as referred to under paragraph
22.1 above. The Fund Manager will notify Unitholders of its rejection to implement
such resolution in writing or at the relevant Meeting of Unitholders where such
resolution was taken.
23. WINDING UP
23.1 The Fund Manager, at its sole discretion, shall have the right to liquidate the Fund
Estate, provided that it shall inform the Unitholders thereof in a Meeting of
Unitholders.
23.2 The liquidation of the Fund Estate shall be effected by the Fund Manager. During the
liquidation period these Terms and Conditions shall, to the extent possible, remain in
full force and effect. A separate power of attorney has been granted to an employee of
the Fund Manager to liquidate the Fund in case the sole director of the Fund Manager
is indisposed.
23.3 The balance left after the liquidation shall be distributed among the Unitholders in
proportion to the number of their Units, by which the Units shall be cancelled. Notice
that distributions are to be made payable to the Unitholders and the composition of the
distributions or collections shall be given in accordance with the provisions of Article
14.1 hereof.
23.4 The Fund Manager shall prepare liquidation accounts, which shall be accompanied by
a certificate of the person referred to in Article 18.2 hereof. Approval of those
liquidation accounts by the Meeting of Unitholders shall, upon the unanimous adoption
by all members of the Meeting of Unitholders in a resolution, in so far as the Meeting
of Unitholders does not make a proviso, constitute a discharge of the Trustee and the
Fund Manager.
65
24. APPLICABLE LAW, COMPETENT COURT AND DURATION
These Terms and Conditions shall be governed by the laws of The Netherlands. The
competent courts of Amsterdam and its appellate courts shall have exclusive
jurisdiction to decide on a dispute between the parties arising from these Terms and
Conditions. These Terms and Conditions shall remain in full force and effect until
amended in accordance with Article 22 hereof.
25. ***
66
ANNEX 2
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT
M ANGO CAPITAL FUND
("the Fund")
C/O CITCO FUND SERVICES (NEDERLAND) B.V.
T ELESTONE 8 - TELEPORT
NARITAWEG 165
1043 BW AMSTERDAM, THE NETHERLANDS
TEL.: (31-20) 5722850 / FAX: (31-20) 5722610
E-MAIL:
AMSCFSCLIENTDESK@CITCO.COM (FOR GENERAL ENQUIRIES AND
CORRESPONDENCE)
AMSCFSORDERS@CITCO.COM (FOR SUBMITTING THIS SUBSCRIPTION AS A
SIGNED ATTACHMENT TO SUBSCRIBE)
WHEREAS:
(A) The Subscriber wishes to subscribe for Units in the Fund, in the applicable currency
indicated by them herein, at the next available Subscription Date;
(B) The Fund is willing to offer Units to the Subscriber subject to (1) the Terms and
Conditions of Management and Custody of the Fund; and (2) the Prospectus of the
Fund dated 10 December 2009 (the"Prospectus") and subject to the terms and
conditions set out in this Subscription Agreement (the "Subscription Agreement").
67
THE SUBSCRIBER AGREES AS FOLLOWS:
(1) The Subscriber hereby subscribes for Units having a total amount as indicated below,
subject to the acceptance of this Agreement by the Fund Manager which acceptance
will be evidenced by the issue of the respective Units.
TYPE OF UNIT M INIMUM S UBSCRIPTION A MOUNT TO BE
A MOUNT SUBSCRIBED
Euro Unit Euro 100,000
US Dollar Unit USD 150,000
Sterling Unit GBP 100,000
Swiss Franc Unit CHF 200,000
Please complete the Amount to be Subscribed for next to the type of Unit desired.
(2) In consideration of the issue of the Units by the Fund to the Subscriber, the Subscriber
undertakes, represents and warrants as follows:
(i) the Unitholder has independently assessed, evaluated and verified the merits
and risks associated with investing in the Fund and the transactions
contemplated thereunder;
(ii) it is acquiring the Units for its own account for investment purposes and not
with a view to resale, transfer or other disposition in whole or in part;
(iii) the Unitholder has the knowledge and expertise in business and financial
matters to make it capable of assessing and evaluating the merits and risks
associated with investing in the Fund;
(iv) it has had the opportunity to review the Fund’s Terms and Conditions of
Management and Custody of the Fund and to ask questions and receive
answers concerning the Fund and the terms and conditions of this offering
from authorised representatives of the Fund and to obtain such additional
information as it considers necessary to appropriately evaluate an investment
in the Fund;
(v) it has obtained and complied with all legal and tax advice, registrations,
declarations or filings with, or consents, licenses, approvals or authorisations
of any legislative body, governmental department or other governmental
r
authority, necessary o appropriate in connection with its investment in the
Fund;
(vi) the person signing this Agreement on behalf of the Subscriber has full power
and authority to do so;
68
(vii) it understands that an investment in the Fund is highly speculative and may
result in a complete loss of its investment;
(viii) it understands that its capital contribution cannot be withdrawn from the Fund
except by way of redemption of the Units, that a portion of its investment
may be invested in securities that are illiquid, and that it has no right to
demand distribution from the Fund prior to the Fund’s termination other than
by redemption of Units;
(ix) the Unitholder is willing to assume and will be able to bear the full financial
and economic risk of its subscription, while maintaining adequate means of
providing for its current needs and foreseeable contingencies, even in the
event of a loss of its entire investment in the Fund; and
(x) it understands that if any of the Subscriber’s representations, warranties,
agreements or certifications contained in this Agreement are untrue the Fund
Manager in its sole discretion may redeem all or part of the Units.
(xi) The Subscriber certifies that it is not now, and for as long as it owns the
Units, it will not be a US Person as defined below nor a custodian, nominee
or trustee of such a person in relation to the Units. The Subscriber further
certifies that it is not acquiring the Units for and will not hold the Units on
behalf of or transfer Units to any person or entity that is a US Person as
described.
For the purposes of the Agreement a "US Person" shall mean:
(a) any person considered resident or benefiting from any rights of
citizenship in the United States of America;
(b) any partnership or corporation organised or incorporated whether under
federal or state law as constituted under the laws of the United States of
America;
(c) any estate of which an executor or administrator is a US Person;
(d) any trust of which a trustee is a US Person;
(e) any foreign entity, including all subsidiary branches or agencies of the
said entity, located in the United States of America;
(f) any non-discretionary account or other account not being that of an
estate or trust held by another, whether or not in a fiduciary capacity, for
the benefit of a US Person;
(g) any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organised, incorporated or, if
an individual, resident in the United States of America; or
69
(h) any partnership or corporation otherwise organised or incorporated
under the laws of any foreign jurisdiction formed by a US person
principally for the purpose of investing in securities other than those
registered under the United States Securities Act 1933 as amended (the
"Act") unless organised, incorporated and owned by accredited
investors (as defined in Rule 501(a) of the Act) which investors are not
of an individual estate or trust nature (whenever such term is used in
this Agreement it shall have the meaning given in the Act).
(3) The Subscriber acknowledges and agrees that:
(i) the Units have not been registered under the Act or the laws of any other
jurisdiction: and
(ii) the Units may not be sold, transferred or distributed to or on behalf of any
person who is a US person (as that term is defined under the Act). The Units
may not otherwise be transferred without the prior approval of the Fund
Manager.
(iii) The Subscriber agrees that it will promptly notify the Administrator of the
Fund at any time when it becomes a US Person (as described in Clause 3),
and the Subscriber agrees that in such event the Fund shall be entitled to (but
shall not be obliged to) redeem or repurchase or to require the Subscriber to
redeem or sell the Units to a person designated by the Fund at a price equal to
the Net Asset Value per Unit as calculated by the Administrator as at the date
of the repurchase or sale or as at the date of any unauthorised transfer giving
rise to such repurchase or sale.
(iv) Where the Subscriber is an individual, it agrees to produce a copy or copies of
the relevant passport or passports together with any other documentation of
identity providing detailed verification of the Subscriber’s identity as
requested by the Administrator in order that it might comply with legislation
for the prevention of money laundering from time to time in force. The
Subscriber acknowledges that the Fund Manager or Administrator reserves
the right to request any further information which it considers to be in any
way necessary to the process of verification.
(v) Where the Subscriber is a corporation, trust or partnership, it agrees to
produce a certified copy or copies of the certificate of incorporation (and any
change of name), Memorandum and Articles of Association (or other
document evidencing the existence of the legal entity), the register of
directors or an excerpt from the trade register held at the relevant chamber of
commerce and the signatory card verifying the authority of officers to sign on
behalf of the corporate entity and any other relevant documentation as
requested by the Administrator.
(vi) The Subscriber acknowledges that the Fund reserves the right to reject in its
absolute discretion this and any other subscription for Units in whole or in
70
part. If the Units are oversubscribed, the Fund Manager will determine in its
sole discretion which subscriptions shall be accepted.
(vii) The Subscriber agrees that the Fund Manager and/ or its Administrator may
share any information relating to its holding with other offices, affiliates or
branches of the Fund Manager and/ or its Administrator.
(viii) If this subscription is rejected or if the sale of the Units is not completed for
any reason (in which event this subscription shall be deemed to be rejected),
the Administrator shall as soon as practicable return any Funds transferred by
the Subscriber (without interest) along with this Agreement and any other
documents delivered by the Subscriber.
(ix) The Subscriber is aware that the Total Subscription Price will be at risk once
it has been invested in the Fund. A Subscriber's failure to comply with
-
applicable client identification and anti money laundering requirements may
result in the return of an amount lower than the Total Subscription Price in the
event their application to invest will subsequently not be accepted.
(x) This Agreement and the rights, powers and duties set out in it shall bind and
inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties to it.
(xi) Unless otherwise agreed in writing by the parties hereto, this Agreement
represents the entire agreement of the parties in respect of the subscription for
Units and may not be changed or terminated orally.
(xii) No waiver by any party of any breach of any term of this Agreement shall be
construed as a waiver of any subsequent breach of that term or any other term
of the same or of a different nature.
(xiii) If any legal action or any arbitration or other proceeding is brought for the
enforcement of this Agreement or because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provision of this
Agreement, the successful or prevailing party or parties shall be entitled to
recover reasonable attorneys’ fees and other costs incurred in that action or
proceeding, in addition to any other relief to which they may be entitled.
(xiv) The Subscriber agrees when entering into the Agreement to be bound by the
laws of The Netherlands and in addition to the non-exclusive jurisdiction of
the relevant courts therein subject to which laws this agreement shall be
governed and interpreted.
(xv) The Subscriber understands that a misrepresentation or breach of any
warranty or agreement made by the Subscriber could subject the Fund to
significant damages and expenses. The Subscriber agrees to indemnify the
Fund Manager and Administrator from and against any loss, liability,
damage, cost or expense (including legal fees and expenses in the defense or
settlement of any demands, claims, or lawsuits) actually and reasonably
71
incurred arising from the Subscriber’s misrepresentation or breach of any
warranty or agreement in this Agreement.
(xvi) The Subscriber acknowledges that the Administrator is entitled to act upon
facsimile instructions from or purported to be from the Subscriber and that all
such instructions, where accepted by the Fund, will be final and binding upon
the Subscriber. The Subscriber agrees to indemnify the Fund Manager and
Administrator against any and all claims, demands, liabilities, costs, charges,
damages and expenses that they may incur by reason of any act or failure to
act on the part of the Fund with regard to all facsimile instructions so
provided by the Subscriber.
(xvii) The Subscriber agrees that neither the Fund nor the Administrator shall be
responsible for any mis-delivery or non-receipt of any facsimile or email if
they have not acknowledged receipt of the facsimile, email or original
document. Facsimiles, emails or original documents sent to the Fund or the
Administrator shall only be effective when actually acknowledged by the
Fund or the Administrator. In the event that no acknowledgement is received
ays
from the Administrator within five (5) d of submission of the request, you
should contact the Administrator on telephone number +31 205 722 850 to
confirm receipt by the Administrator of the request. The Subscriber agrees
that the foregoing shall also apply to any redemption request or subscription
request made using the short form subscription application form.
(xviii) The representations, warranties, agreements and indemnification obligations
of the Subscriber contained in this Agreement shall survive the execution of
this Agreement and the purchase of the Units.
(xix) Defined terms in this agreement shall have the meanings ascribed to them in
the Prospectus, as may be amended from time to time.
(xx) The execution and performance of the Subscription Agreement do not
contravene, or constitute a default under any provision of law applicable to
the Unitholder.
Date:
Signature of Subscriber if individual:
Signature for and on behalf of Subscriber
72
if corporate, partnership or trust:
Print Name:
This form should be faxed, together with the subscription in formation, to Investor Relations Group
at (31 - 20) 5722610 or send a signed scanned copy of this document to amscfsorders@citco.com .
73
SUBSCRIPTION I NFORMATION
Name & Address for Share Registration:
..................................................................................................................................................................
..................................................................................................................................................................
..................................................................................................................................................................
E-mail address:
..................................................................................................................................................................
Amount of Subscription:
.............................................................................................................................................
Date of Subscription:
.............................................................................................................................................
Postal Address (if other than address of registration):
..................................................................................................................................................................
..................................................................................................................................................................
..................................................................................................................................................................
Telephone:
.............................................................................................................................................
Fax:
.............................................................................................................................................
E-mail:
.............................................................................................................................................
Related Party Information (e,g if you wish your adviser or back office to receive copies of
correspondence or holding statements):
Name of contact:
.............................................................................................................................................
74
Address:
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
Fax:
.............................................................................................................................................
E-mail:
.............................................................................................................................................
Name & Address of Remitting Bank:
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
Name & Address of Bank for transfers in case of redemption (if different from above):
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
No certificates evidencing the issue of Units are issued.
Signed: ............................................. Date: ....................................
By: ............................................. Entity: .....................................
Title: .......................................... Accepted: ..............................…….
75
Short Form Subscription Agreement
For Existing Unitholders
Mango Capital Fund
(the "Fund")
C/o Citco Fund Services (Nederland) B.V.
Telestone 8 – Teleport
Naritaweg 165
1043 BW Amsterdam
The Netherlands
Telephone: (31-20) 5722850
Facsimile: (31-20) 572 2610
E-mail:
amscfclientdesk@citco.com (for general enquiries and correspondence)
amscfsorders@citco.com (for submitting this application as a signed attachment)
76
SHORT FORM SUBSCRIPTION AGREEMENT
THIS APPLICATION IS TO BE USED ONLY BY EXISTING REGISTERED
UNITHOLDERS OF THE FUND PURCHASING ADDITIONAL UNITS IN THE SAME
REGISTERED NAME. IT MAY NOT BE USED BY NEW SUBSCRIBERS.
The undersigned Subscriber:
(1) is an existing Unitholder in the Fund;
(2) has previously delivered to the Fund a fully executed subscription agreement (the
"Subscription Agreement");
(3) has received the Fund’s current Prospectus or other offering documents applicable as at
the date hereof) and;
(4) wishes to subscribe for additional Units in the Fund.
By executing in the space below, the undersigned Unitholder hereby:
(1) agrees with the Fund, subject to the Fund’s acceptance and on the terms and conditions
set out in the Prospectus, to subscribe for as many of the Fund’s Units as may be
purchased on the Additional Subscription Date specified below for the Additional
Subscription Amount specified below;
(2) requests that the Fund accept this additional subscription application in lieu of
completing an entirely new subscription agreement for the additional Units;
(3) restates in full all of the declarations, acknowledgements, representations, warranties,
agreements, covenants and understandings made in the Subscription Agreement as if
they were made on the date hereof, and certifies that all of the information set forth in the
Subscription Agreement remains true, accurate and complete as of the date hereof, save
as otherwise disclosed below;
(4) agrees, at the request of the Fund Manager and/ or its Administrator, to promptly
complete and execute a new subscription agreement (and/ or provide such additional
information or documentation as the Fund Manager or its Administrator shall require) in
relation to the additional Units subscribed pursuant to this letter;
(5) confirms that the beneficial owner, on behalf of which this additional subscription
request is made, already holds Units in the Fund;
(6) warrants and represents that if the Subscriber is an entity, the person executing this letter
agreement has the full power and authority under the Subscriber’s constitutive
documents, has been authorized to do so and the Subscriber has the full power and
authority under its constitutive documents to acquire Units of the Fund; and
77
(7) indemnifies the Fund Manager and/or its Administrator against any loss arising from the
use of this letter in lieu of any other subscription agreement in use by the Fund.
New Subscription Information:
Subscriber: ____________________________________
Additional Subscription Date: _________________, 200__
Units: __________________________________
Additional Subscription Amount: Currency / Amount ____________________________
Changes to Subscription Agreement: [ ] None
[ ] Yes, as follows:
____________________________________________________________ ___________
The undersigned has executed this Subscription Agreement on this ______________ day of
_____________, 200__.
78
Corporate, Partnership, Trust or Account Subscribers Individual Subscribers
_______________________ _______________________
Name of Entity (Print) Name (Print)
By: ____________________ _____________________
Signature Signature
____________________ ______________________
Name (Print) Name of Joint Purchaser,
If any (Print)
____________________ _______________________
Title Signature
Telephone: ________________ Telephone: __________________
Fax: ____________________ Fax: _______________________
No certificates evidencing the issuance of the Units will be issued.
79
ANNEX 3 WIRE DETAILS
EURO SUBSCRIPTIONS:
Intermediary Bank – Field 56
Bank :ING Belgium SA/N.V., Brussels
BIC :BBRUBEBB
Account with Institution - Field 57
Account Name : Citco Bank Nederland N.V.
Account Number : BE70 301010441325
BIC : CITCNL2A
Beneficiary Cust omer – Field 59
IBAN : NL31CITC0635974274
Beneficiary Account Name : Mango Capital Fund - re Investors EUR
Reference :Name and address of subscriber (Field 70)
*********************************************************
U.S DOLLAR SUBSCRIPTIONS:
Intermediary Bank – Field 56
Bank: HSBC Bank USA, New York
BIC: MRMDUS33
FedWire: 021001088
Account with Institution - Field 57
Account Name : Citco Bank Nederland N.V.
Account Number : 000304212
BIC : CITCNL2A
Beneficiary Customer – Field 59
IBAN : NL77CITC0635984407
Beneficiary Account Name : Mango Capital Fund - re Investors USD
Reference : Name and address of subscriber (Field 70)
80
*********************************************************************
GBP STERLING SUBSCRIPTIONS:
Intermediary Bank – Field 56
Bank : Barclays Bank Plc, London
BIC : BARCGB22
Account with Institution - Field 57
Sort Code : 20-32-53
Account Name : Citco Bank Nederland N.V.
IBAN : GB49 BARC 2032 5320 5809 02
BIC : CITCNL2A
Beneficiary Customer – Field 59
IBAN : NL96 CITC 0635 9849 38
Beneficiary Account Name : Mango Capital Fund – re Investors GBP
Reference : Name and address of subscriber (Field 70)
************************************************************************
SWISS FRANC SUBSCRIPTIONS
Intermediary Bank – Field 56
Bank : Credit Suisse, Zürich
BIC : CRESCHZZ80A
Account with Institution - Field 57
Account Name : Citco Bank Nederland N.V.
IBAN : CH10 0483 5096 1153 2300 0
BIC : CITCNL2A
Beneficiary Customer – Field 59
IBAN : NL74 CITC 0635 9849 46
Beneficiary Account Name : Mango Capital Fund – re Investors CHF
Reference : Name and address of subscriber (Field 70)
FAILURE TO USE THE ABOVE WIRE INSTRUCTIO NS MAY LEAD TO A DEL AY
IN ACCEPTING YOUR SUBSCRIPTION
81
ANNEX 4 OVERVIEW OF PREVENTION OF MONEY LAUNDERING POLICIES ADOPTED BY
THE FUND
-
To ensure compliance with statutory and other generally accepted principles relating to anti
money laundering, the Fund Manager and/or the Administrator may require a detailed
verification of a prospective investor's identity.
Regardless of the source of funds, all subscription money sent must come from an account held
in the same name as the person applying for Units. In the event, the name of the originating
account and name of the person applying for Units do not match, then the money will be
returned.
Although the Fund Manager and/or the Administrator reserve the right to request a detailed
verification of a prospective investors’ identity such verification should not be necessary if:
? the prospective investor makes the subscription payment from an account held in their
own name at a Qualified Financial Institution in an approved jurisdiction (a "QFI"); or
? n
the prospective investor is introduced by a QFI in a approved jurisdiction and that QFI
provides written assurance to the Fund Manager and/or the Administrator that it has
established the identity of the prospective investor and holds evidence of that identity.
A QFI in an approved jurisdiction is defined as a financial institution which is established in one
of the following countries recognized by the Administrator;
ADMINISTRATOR APPROVED COUNTRIES
Austria Italy
Australia Japan
Belgium Luxembourg
Canada The Netherlands
Channel Islands New Zealand
Denmark Norway
Finland Portugal
France Singapore
Germany Spain
Greece Sweden
Hong Kong Switzerland
82
Iceland United Kingdom
Ireland United States of America
Isle of Man
Prospective investors who DO NOT make the subscription payment from an account held in
their own name at a QFI or who are NOT introduced by a QFI will be required to provide the
following documentation, as is relevant to their status.
For signature and identity verification purposes all Individual Investors (natural persons) should
note that they will generally be required to provide proof of identity and address whether or not
they send their application money from a financial institution which is a QFI.
INVESTOR IDENTIFICATION MATRIX
Natural Persons
Individual subscribers • Copy of passport/drivers license, certified as a true copy
of the original document by a suitable certifier;
• Address verification of the residential address, either the
original or a copy certified as a true copy.
Entities
Limited Partnerships • Certified true copy of the Certificate of
(“LPs”) or Limited Formation/Incorporation or similar document (e.g. excerpt
Liability Companies from the Chamber of Commerce);
• Constitutive Documents, certified as true copy (Limited
(“LLCs”) Partnership Agreement or Limited Liability
Company/Operating Agreement or similar document),
which should contain confirmation of the registered
address, otherwise verification of the registered address
should be provided from another source, for example an
extract from a public registry or other appropriate
document;
• List of authorized signatories (including sample of
signatures);
• The name and identity of the general partner/managing
83
member (certified passport copy and address verification);
• Where the general partner or managing member is an
entity it must be identified in accordance with the
requirements set forth in the applicable entity type listed in
this document. The individual(s) acting on behalf of such
entity must also be identified (certified passport copy and
address verification);
• A complete list with the full name and address of any
members or partners of the LLC or LP holding over 10%,
accompanied by identity documents (certified passport
copy and address verification). Refer to “Pooled
Investment Vehicle” where the LLC or LP is a pooled
investment vehicle/fund.
Not-for- • Formation documents, including objectives of the
Profit/Charitable Charitable Entity, which should contain confirmation of
Entities/Foundations the registered address, otherwise verification of the
registered address should be provided from another source
• List of authorized signatories (including sample of
signatures);
• Identity documents (certified passport copy and address
verification) of the authorized signatories who signed the
subscription documents;
• List of principles/trustees/officers; their identity documents
(certified passport copy and address verification) may be
requested.
Listed/publicly held • Evidence that the corporation is quoted on a stock
companies on Stock exchange, is the subsidiary of such a quoted corporation, or
Exchange(s) or their is regulated (e.g. a Bloomberg or search of the list of
corporations listed on the relevant Stock Exchange);
subsidiaries • Verification of the registered office address;
• A list of directors' names (e.g. Certificate of Incumbency)
and their identity documents (certified true passport copy
and address verification) may be requested;
• List of authorized signatories (including sample of
signatures).
Non-listed/private • List of authorized signatories (including sample of
holding company signatures);
• Certified true copy of the Certificate of Incorporation or
similar document (e.g. Excerpt from the Chamber of
Commerce);
• Certificate of Good Standing if the company has been in
existence for greater than one year (Original or Certified
True Copy);
• Constitutional documents (Articles of Association, Bye-
Laws, Memorandum of Association), certified as a true
copy;
• Verification of the registered office address if not included
in constitutional documents;
• A list of direc tors' names and their identity (certified true
84
copy of passport and address verification).
Note:
If the private corporation has a corporate director, information on
that corporate director should be provided to determine whether
it is subject to regulatory oversight or is fully owned by a
regulated company. Otherwise the corporate director must be
identified in accordance with the requirements set forth in this
document, including identifying any individual directors of that
corporation.
Certified true copy of the shareholder register with:
• A complete list of any shareholders holding 10% or more
of the issued share capital of the private corporation;
• Identity documents (certified true copy of passport and
address verification) for all individual shareholders holding
10% or more of the issued share capital of the private
corporation; and
• Corporate entities owning >10% of the private company,
should provide identification information in accordance
with the requirements set forth in this document of
individual(s) who are the ultimate beneficial owners
(>10% ownership) of the private corporation. Refer to
“Pooled Investment Vehicle” where the corporation is a
pooled investment vehicle/fund.
Pooled Investment • List of authorized signatories (includin g sample of
Vehicles signatures);
• Certified true copy of the certificate of incorporation or
similar document;
• Constitutional documents (Articles of Association, Bye-
Laws, Memorandum of Association), certified as a true
copy;
• Verification of the registered office address if not included
in constitutional documents;
• A list of directors' names and their identity (certified
passport copy and address verification);
• A list of shareholders, limited partners or members
accompanied by identity documents (certified passport
copy and address verification) on any shareholders, limited
partners or members holding over 10% (complete Exhibit
D). Where the administrator, registrar and transfer agent,
general partner or investment manager is subject to
regulatory oversight in an Approved Country, the list of
shareholders, limited partners or members can be replaced
by an AML Letter/Introducers Letter that states that anti-
money laundering policies and procedures are in place,
which are reasonably designed to verify the identity of its
shareholders/ partners/members and their sources of funds,
as well as checking against OFAC lists, shell banks etc.
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(This letter should also include information concerning the
regulatory oversight under which the administrator
operates and the legislation that is applied to their
KYC/AML procedures).
Trust where Trustee • Full name and address of the trustee;
= Financial • Documentary evidence showing that the trust ee is a
Institution or Trust Financial Institution in an Approved Country, subsidiary
thereof or licensed trust company in an Approved Country;
Co licensed and
• List of authorized signatories of the trustee (including
regulated in an sample of signatures);
Approved Country • Address verification of Trustee;
or subsidiary thereof • For subsidiaries: written confirmation (original signed
letter) from the ultimate parent company that, without
exception, the subsidiary applies substantially similar
requirements for identifying customers as the ultimate
parent company.
Trust where Trustee • Full name, occupation, business and/or residential address
= Financial and, where available, telephone and facsimile numbers of
Institution or Trust the settlor/grantor (if not named in the trust deed or
declaration of trust, then the identity of the person(s) who
Co in a NON established the trust should be obtained);
Approved • A complete list with the full name and address of the
Jurisdiction beneficiaries with a vested interest in the Trust’s assets, and
where individuals, their identity documents (certified true
passport copy and address verification);
• Name and address of the trustee;
• A certified copy of the trustee’s license (or equivalent);
• Purpose of the trust;
• List of authorized signatories of the trustee (including
sample of signatures);
• A list of directors' names and their identity documents
(certified true passport copy and address verification);
• A certified true copy of the Trust Deed or excerpt thereof;
• Address verification, if not contained in the trust
documents.
Trustee=One or more • Full name, occupation, business and/or residential address
individuals and, where available, telephone and facsimile numbers of
the settlor/grantor (if not named in the trust deed or
declaration of trust, then the identity of the person(s) who
established the trust should be obtained);
• Name(s) and addresses of the trustee(s);
• The identity of the trustee(s) independently verified as per
requirements for individuals (certified passport copy and
address verification);
• A complete list with the full name and address of the
beneficiaries with a vested interest in the Trust’s assets, and
where individuals, their identity documents (certified true
passport copy and address verification);
• A certified true copy of the Trust Deed or excerpt thereof;
• Address verification, if not contained in the trust
documents.
Private Foundation • Full name, occupation, business and/or residential address
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(private endowment and, where available, telephone and facsimile numbers of
or foundation that is the Founder of the Foundation;
not a charitable • The identity of the Founder independently verified as per
requirements for individuals (certified passport copy and
foundation) address verification);
• Full name and address of the beneficiaries with a vested
interest in the Foundation’s assets, and where individuals,
their identity documents (certified true passport copy and
address verification for individuals);
• Certified true copy of the certificate of incorporation or
similar document (e.g. excerpt Chamber of Commerce);
• A list of directors' names and their identity (cer tified true
copy of passport and address verification);
• List of authorized signatories (including sample of
signatures);
• Address verification, if not contained in the Foundation
documents.
EXPLANATORY NOTES ON THE DOCUMENTATION
Address Verification:
The proof of address (such as the utility bill or bank statement) should not be older than 3
months on the day it is received by Citco under this policy.
Certificate of Good Standing:
Issued by a state official or registrar of companies and confirms that t he corporation/LLC/LP
is in existence and authorized to transact business, has paid or filed all outstanding fees, taxes
and penalties and filings. The Certificate of Good Standing (original or Certified True Copy)
should be provided where an entity is older than one year, and should not be older than three
months old.
Certificate of Incumbency:
Confirms the current officers/operators of the corporation, LP or LLC (e.g. its directors,
general partner or managing member(s)) and is certified / provided by the company secretary,
managing member or issued by the local registrar of companies.
Identity Verification:
The document provided must not be expired and must contain a specimen signature. If there is
no specimen signature of the holder shown on the document an additional form of
identification should be provided, containing a specimen signature.
Legibility:
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Any document provided which contains a photograph should allow the recipient to recognize
the person from the copy provided (i.e. the photograph cannot be blocked out which may
happen depending on the shading and method of copying).
Name Changes:
If there has been a name change of an individual (natural person) either by marriage or
otherwise the relevant document evidencing such name change should be obtained. In respect
of entities, where there has been a name change an updated certificate of incorporation on
change of name or other relevant certificate evidencing the name (original or certified copy)
should be provided.
Subscriptions will also be cross checked against lists held by various international agencies in
order to establish that the persons or entities subscribing have not been blacklisted or are wanted
in connection with a criminal investigation. Such international agencies include the Bah amas
Financial Intelligence Unit, the Central Bank of Ireland, the FBI, the Bank of England. Other
agencies will be consulted as and when appropriate.
Finally it should be noted that redemption payments will only be paid to a bank account held in
the name of the registered owner of the Unit and that any transferee will have to furnish the
same information (and enter into a subscription agreement) which w ould be required in
connection with a direct subscription in order for a transfer application to be considered by the
Administrator.
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