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Rye Select Broad Market Portfolio Limited


                Prospectus
CONFIDENTIAL                                           Name of Recipient ________________
                                ...
NOTICES

       NEITHER THE COMPANY NOR ANY OF THE COMPANY SHARES DESCRIBED IN THIS AMENDED AND
RESTATED PROSPECTUS (THE “...
____________________________

              ALL REFERENCES HEREIN TO “U.S.$”, “DOLLARS” OR “$” ARE U.S. DOLLARS.


FOR AUS...
FOR ISRAELI PROSPECTIVE SHAREHOLDERS ONLY:

      ISRAELI RESIDENTS, OTHER THAN THOSE CONSIDERED “EXEMPTION HOLDERS” UNDER...
OTHER THAN TO OTHER PERSONS AUTHORISED TO CARRY OUT INVESTMENT BUSINESS UNDER THE FSA,
PERSONS WHOSE ORDINARY BUSINESS INV...
Rye Select Broad Market Portfolio Limited

                                                 SUMMARY

          The informa...
(as defined herein). The Investment Manager (as defined herein)
                     will also select strategies whose per...
Multi-Manager Investment
Approach                   The overall success of the Company depends on the ability of (i)
     ...
which the redemption occurs is completed in order to confirm the
                     accuracy of the amount or to comply ...
Administrator       The Company has appointed Tremont Partners, Inc., located in
                    New York (the “Admini...
Fee shall be payable monthly in arrears. The Investor Servicing Fee
            will be prorated based upon a Class C Shar...
Risk Factors                   An investment in the Company entails certain risks. There is no
                           ...
transferees of Shares may be required to make certain
                 representations regarding compliance with ERISA and...
DIRECTORY

     Company's Registered Office
Rye Select Broad Market Portfolio Limited
   c/o Trulaw Corporate Services Ltd...
Auditors
                   KPMG
                Century Yard
                Cricket Square
                P.O. Box 493
...
Table of Contents
                                                                                                        ...
Nature of Certain Investments ...............................................................................................
Rye Select Broad Market Portfolio Limited

                                             THE COMPANY


        Rye Select B...
INVESTMENT OBJECTIVE AND STRATEGIES


Investment Objective

         The Company's objective is to seek to (i) achieve lon...
The level of risk associated with the Company's investments varies depending on the particular
investment strategy utilize...
MANAGEMENT


The Board of Directors

        The Board of Directors of the Company (the “Directors” or the “Board”) consis...
included product development for many hedge fund and structured products. He was also involved with
portfolio risk managem...
Investment Management Agreement

         The Investment Manager performs its services for the Company pursuant to the ter...
of, or in the course of, the discharge by the Administrator or its directors, officers, employees or delegates of
its duti...
Research or investment-management-related services and equipment provided by brokers through
which portfolio transactions ...
Manager’s affiliates or to engage in brokerage transactions in which any of the Sub-Advisor’s or the
Investment Manager’s ...
FEES AND EXPENSES


Management Fees

    The Company pays the Investment Manager a monthly management fee calculated at an...
Other Operating Expenses

          All ongoing costs and expenses associated with the administration and operation of the...
SHARES OF THE COMPANY


The Company's Share Capital

    The Company has an authorized capital of U.S. $50,000.00 consisti...
2.       When circumstances exist as a result of which in the opinion of the Board of Directors it is
                 not...
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
Rye Select Broad Market Ltd Ppm
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Transcript of "Rye Select Broad Market Ltd Ppm"

  1. 1. Rye Select Broad Market Portfolio Limited Prospectus
  2. 2. CONFIDENTIAL Name of Recipient ________________ Prospectus Number________________ Rye Select Broad Market Portfolio Limited A Cayman Islands Exempted Company July 1, 2007 Amended and Restated Prospectus Private Offering of Class A, Class B, and Class C Shares PROSPECTUS Minimum Initial Subscription per Investor: Class A U.S.$500,000.00 Minimum Initial Subscription per Investor: Class B U.S. $500,000.00 Minimum Initial Subscription per Investor: Class C U.S. $500,000.00 Investment Manager: Tremont (Bermuda) Limited Sub-Advisor: Tremont Partners, Inc. Administrator: Tremont Partners, Inc. Sub-Administrator: The Bank of New York NONE OF THE SHARES ISSUED BY THE COMPANY ARE FOR SALE TO U.S. PERSONS EXCEPT TO CERTAIN TAX EXEMPT, ERISA AND OTHER SELECTED INDIVIDUALS AND/OR ENTITIES AND THEN IN A LIMITED NUMBER OF CASES. NO PERSON HAS BEEN AUTHORISED IN CONNECTION WITH THIS OFFERING TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS AMENDED AND RESTATED PROSPECTUS. PLEASE DIRECT ANY INQUIRIES TO TREMONT PARTNERS, INC.
  3. 3. NOTICES NEITHER THE COMPANY NOR ANY OF THE COMPANY SHARES DESCRIBED IN THIS AMENDED AND RESTATED PROSPECTUS (THE “PROSPECTUS”) HAVE BEEN OR WILL BE REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF THE UNITED STATES (“U.S.”) OR ANY OTHER JURISDICTION. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF SHARES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE IS NOT AUTHORISED OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE DIRECT OR INDIRECT OWNERSHIP OF SHARES BY “NON-QUALIFIED PERSONS” AS DEFINED IN THIS PROSPECTUS IS PROHIBITED EXCEPT IN ACCORDANCE HEREWITH. NO PERSON HAS BEEN AUTHORISED TO MAKE ANY REPRESENTATIONS CONCERNING THE COMPANY OR THE SHARES WHICH ARE INCONSISTENT WITH THOSE CONTAINED IN THIS PROSPECTUS, AND ANY SUCH REPRESENTATIONS SHOULD ACCORDINGLY BE TREATED AS UNAUTHORISED AND MAY NOT BE RELIED UPON BY THE RECIPIENT. PROSPECTIVE INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS PROSPECTUS AS LEGAL, TAX OR FINANCIAL ADVICE. ALL PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN PROFESSIONAL ADVISORS AS TO THE LEGAL, TAX, FINANCIAL OR OTHER MATTERS RELEVANT TO THE SUITABILITY OF AN INVESTMENT IN THE SHARES FOR SUCH INVESTOR. THE PURCHASE OF SHARES IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. THERE IS NO ASSURANCE THAT THE COMPANY WILL BE PROFITABLE OR THAT AN INVESTOR WILL NOT LOSE ITS ENTIRE INVESTMENT IN THE COMPANY. SEE THE SECTION ENTITLED “RISK FACTORS” WITHIN THIS PROSPECTUS FOR A DESCRIPTION OF CERTAIN RISKS INVOLVED IN THE PURCHASE OF SHARES. THIS PROSPECTUS IS INTENDED SOLELY FOR THE USE OF THE PERSON TO WHOM IT HAS BEEN DELIVERED BY THE COMPANY FOR THE PURPOSE OF EVALUATING A POSSIBLE INVESTMENT BY THE RECIPIENT IN THE SHARES DESCRIBED HEREIN, AND IT IS NOT TO BE REPRODUCED OR DISTRIBUTED TO ANY OTHER PERSONS (OTHER THAN PROFESSIONAL ADVISORS OF THE PROSPECTIVE INVESTOR RECEIVING THIS DOCUMENT FROM THE COMPANY). THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF THE SHARES TO ANY MEMBER OF THE PUBLIC IN THE CAYMAN ISLANDS AND THE SHARES MAY NOT BE OFFERED TO ANY MEMBER OF THE PUBLIC IN THE CAYMAN ISLANDS UNLESS THE SHARES BECOME LISTED ON THE CAYMAN ISLANDS STOCK EXCHANGE. CAYMAN ISLANDS EXEMPTED AND ORDINARY NON-RESIDENT COMPANIES MAY BE PERMITTED TO ACQUIRE THE SHARES. THE COMPANY HAS BEEN REGISTERED AS A MUTUAL FUND PURSUANT TO SECTION 4(3) OF THE MUTUAL FUNDS LAW (REVISED) OF THE CAYMAN ISLANDS (THE “MUTUAL FUNDS LAW”) WITH THE MUTUAL FUNDS DEPARTMENT OF THE MONETARY AUTHORITY OF THE CAYMAN ISLANDS (THE “MONETARY AUTHORITY”). SUCH REGISTRATION DOES NOT IMPLY THAT THE MONETARY AUTHORITY OF THE CAYMAN ISLANDS OR ANY OTHER REGULATORY AUTHORITY IN THE CAYMAN ISLANDS HAS PASSED UPON OR APPROVED THIS PROSPECTUS OR THE OFFERING OF THE SHARES HEREUNDER NOR IS IT INTENDED THAT THEY WILL. THE COMPANY'S NET ASSET VALUE WILL BE CALCULATED IN U.S. DOLLARS. EACH SHAREHOLDER WILL BEAR THE RISK OF ANY FOREIGN CURRENCY EXPOSURE RESULTING FROM DIFFERENCES, IF ANY, IN THE VALUE OF THE U.S. DOLLAR RELATIVE TO THE CURRENCY OF THE COUNTRY IN WHICH SUCH SHAREHOLDER RESIDES OR MAINTAINS ITS NET WORTH. INVESTORS (AND EACH EMPLOYEE, REPRESENTATIVE OR OTHER AGENT OF INVESTORS) MAY DISCLOSE TO ANY AND ALL PERSONS, WITHOUT LIMITATIONS OF ANY KIND, THE TAX TREATMENT AND TAX STRUCTURE OF THE TRANSACTION AND ALL MATERIALS OF ANY KIND (INCLUDING OPINIONS OR OTHER TAX ANALYSIS) THAT ARE PROVIDED TO INVESTORS RELATING TO SUCH TAX TREATMENT AND TAX STRUCTURE. THIS AUTHORIZATION OF TAX DISCLOSURE IS RETROACTIVELY EFFECTIVE TO THE COMMENCEMENT OF THE FIRST DISCUSSIONS BETWEEN SUCH INVESTOR AND THE COMPANY REGARDING THE TRANSACTIONS CONTEMPLATED HEREIN. DISCUSSIONS IN THIS PROSPECTUS BELOW AS THEY RELATE TO CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES ARE NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING UNITED STATES FEDERAL TAX PENALTIES. SUCH DISCUSSIONS WERE WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED IN THIS PROSPECTUS, AND ANY TAXPAYER TO WHOM THE TRANSACTIONS OR MATTERS ARE BEING PROMOTED, MARKETED OR RECOMMENDED SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR. (iii)
  4. 4. ____________________________ ALL REFERENCES HEREIN TO “U.S.$”, “DOLLARS” OR “$” ARE U.S. DOLLARS. FOR AUSTRALIAN PROSPECTIVE SHAREHOLDERS ONLY: NO OFFER FOR SUBSCRIPTION OR PURCHASE OF THE SHARES OFFERED HEREBY, NOR ANY INVITATION TO SUBSCRIBE FOR OR BUY SUCH SHARES HAS BEEN MADE OR ISSUED IN AUSTRALIA, OTHERWISE THAN BY MEANS OF AN EXCLUDED ISSUE, EXCLUDED OFFER OR EXCLUDED INVITATION WITHIN THE MEANING OF SECTION 66(2) OR 66(3) OF THE CORPORATIONS LAW (REVISED). ACCORDINGLY, THIS PROSPECTUS HAS NOT BEEN LODGED WITH THE AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION. FURTHER, THE SHARES OFFERED HEREBY MAY NOT BE RESOLD IN AUSTRALIA WITHIN A PERIOD OF SIX MONTHS AFTER THE DATE OF ISSUE OTHERWISE THAN BY MEANS OF AN EXCLUDED OFFER OR EXCLUDED INVITATION AS DESCRIBED ABOVE. FOR BELGIAN PROSPECTIVE SHAREHOLDERS ONLY: THE SHARES MAY NOT BE OFFERED OR SOLD IN ANY MANNER THAT CONSTITUTES AN OFFER OR SALE TO THE PUBLIC IN THE KINGDOM OF BELGIUM WITHIN THE LAWS AND REGULATIONS FROM TIME TO TIME APPLICABLE TO PUBLIC OFFERS OR SALES OF SECURITIES. FOR CANADIAN PROSPECTIVE SHAREHOLDERS ONLY: THIS PROSPECTUS CONSTITUTES AN OFFERING IN CANADA OF THE SECURITIES DESCRIBED HEREIN IN ONTARIO AND QUEBEC ONLY. THIS PROSPECTUS IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE CONSTRUED AS, AN ADVERTISEMENT OR A PUBLIC OFFERING OF THE SECURITIES REFERRED TO HEREIN. NO SECURITIES COMMISSION OR SIMILAR AUTHORITY IN CANADA HAS REVIEWED OR IN ANY WAY PASSED UPON THIS DOCUMENT OR THE MERITS OF THE SECURITIES DESCRIBED HEREIN AND ANY REPRESENTATION TO THE CONTRARY IS AN OFFENCE. FOR FINNISH PROSPECTIVE SHAREHOLDERS ONLY: THE SHARES OFFERED HEREBY MAY NOT BE PUBLICLY OFFERED, SOLD OR ADVERTISED IN FINLAND AND THIS PROSPECTUS MAY ONLY BE CIRCULATED TO A LIMITED NUMBER OF PERSONS IN FINLAND. FOR FRENCH PROSPECTIVE SHAREHOLDERS ONLY: THE SHARES OFFERED HEREBY DO NOT COMPLY WITH THE CONDITIONS IMPOSED BY FRENCH LAW FOR ISSUANCE, DISTRIBUTION, SALE, PUBLIC OFFERING, SOLICITATION AND ADVERTISING WITHIN FRANCE. THE DISTRIBUTION OF THIS CONFIDENTIAL PROSPECTUS AND THE OFFERING OF SHARES IN THE COMPANY IN FRANCE ARE THEREFORE RESTRICTED BY FRENCH LAW. PROSPECTIVE INVESTORS SHOULD INFORM THEMSELVES AS TO THE RESTRICTIONS WITH RESPECT TO THE MANNER IN WHICH THEY MAY DISPOSE OF THE SHARES IN FRANCE. FOR HONG KONG PROSPECTIVE SHAREHOLDERS ONLY: THIS PROSPECTUS RELATES TO A PRIVATE PLACEMENT AND DOES NOT CONSTITUTE AN OFFER TO THE PUBLIC IN HONG KONG TO SUBSCRIBE FOR SHARES. NO STEPS HAVE BEEN TAKEN TO REGISTER THIS CONFIDENTIAL OFFERING PROSPECTUS AS A PROSPECTUS IN HONG KONG. THE OFFER OF THE SHARES IS PERSONAL TO THE PERSON TO WHOM THIS PROSPECTUS HAS BEEN DELIVERED BY OR ON BEHALF OF THE COMPANY, AND A SUBSCRIPTION FOR SHARES WILL ONLY BE ACCEPTED FROM SUCH PERSON (OR A COMPANY WHICH SUCH PERSON SHALL HAVE CERTIFIED TO BE ITS CONTROLLED SUBSIDIARY) FOR SUCH MINIMUM AMOUNT OF SHARES AS DESCRIBED IN THIS CONFIDENTIAL PROSPECTUS. IT IS A CONDITION OF THE OFFER THAT EACH PERSON WHO AGREES TO SUBSCRIBE FOR SHARES PROVIDES A WRITTEN UNDERTAKING THAT IT (OR ITS PRINCIPAL) IS ACQUIRING SUCH SHARES FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO DISTRIBUTE OR RESELL SUCH SHARES AND THAT IT WILL NOT OFFER FOR SALE, RESELL OR OTHERWISE DISTRIBUTE OR AGREE TO DISTRIBUTE SUCH SHARES WITHIN SIX MONTHS FROM THEIR DATE OF SALE TO SUCH PERSON. (iv)
  5. 5. FOR ISRAELI PROSPECTIVE SHAREHOLDERS ONLY: ISRAELI RESIDENTS, OTHER THAN THOSE CONSIDERED “EXEMPTION HOLDERS” UNDER THE GENERAL CURRENCY CONTROL PERMIT, (AS AMENEDED FROM TIME TO TIME), REQUIRE A SPECIAL PERMIT FROM THE ISRAELI CONTROLLER OF FOREIGN CURRENCY IN ORDER TO PURCHASE THE SHARES. FOR KUWAIT PROSPECTIVE SHAREHOLDERS ONLY: THE SHARES ARE OFFERED TO A LIMITED NUMBER OF SOPHISTICATED INVESTORS WHOSE MINIMUM INVESTMENT IN THE COMPANY SHOULD NOT BE LESS THAN THE EQUIVALENT OF KUWAITI DINAR 50.000 (EQUIVALENT TO APPROXIMATELY U.S.$173,000 AT THE CURRENT EXCHANGE RATE). ANY OFFER OF THE SHARES SHOULD BE MADE THROUGH A PRIVATE PLACEMENT CONDUCTED BY A KUWAITI AGENT AUTHORISED TO CARRY OUT INVESTMENT BUSINESS IN THE STATE OF KUWAIT IN ACCORDANCE WITH LAW NO. 31/1990 AND ITS AMENDMENTS RELATED TO THE TRADING OF SECURITIES AND THE INCORPORATION OF INVESTMENT FUNDS IN KUWAIT. FOR LUXEMBOURG PROSPECTIVE SHAREHOLDERS ONLY: THE SHARES ARE OFFERED TO A LIMITED NUMBER OF SOPHISTICATED INVESTORS, IN ALL CASES UNDER CIRCUMSTANCES DESIGNED TO PRECLUDE A DISTRIBUTION WHICH WOULD BE OTHER THAN A PRIVATE PLACEMENT. THIS PROSPECTUS MAY NOT BE REPRODUCED OR USED FOR ANY OTHER PURPOSE, NOR BE FURNISHED TO ANY OTHER PERSON OTHER THAN THOSE TO WHOM COPIES HAVE BEEN SENT. FOR NETHERLANDS PROSPECTIVE SHAREHOLDERS ONLY: IN THE NETHERLANDS, THE SHARES MAY NOT BE SOLICITED, ACQUIRED OR OFFERED IN OR FROM WITHIN THE NETHERLANDS, AND THIS CONFIDENTIAL PROSPECTUS MAY NOT BE CIRCULATED IN THE NETHERLANDS, TO ANY INDIVIDUAL OR LEGAL ENTITY AS PART OF THEIR INITIAL DISTRIBUTION OR ANY TIME THEREAFTER, OTHER THAN TO INDIVIDUALS OR LEGAL ENTITIES WHO OR WHICH TRADE OR INVEST IN SECURITIES IN THE CONDUCT OR A PROFESSION OR TRADE, INCLUDING BANKS, BROKERS, DEALERS, AND (OTHER) INSTITUTIONAL INVESTORS INVESTING IN SECURITIES, AS DEFINED IN THE WET TOEZICHT BELEGGINGSWEZEN, THE ACT ON THE SUPERVISION OF INVESTMENT INSTITUTIONS, OF JUNE 27, 1990, AND IN THE REGELING VAN 9 OKTOBER TOT UITVOERING VAN ARTIKEL 14 VAN DE WET TOEZICHT BELEGGINGSINSTELLIGEN, THE REGULATION DATED OKTOBER 9, 1990, IN RESPECT OF THE IMPLEMENTATION OF ARTICLE 14 OF THE ACT ON SUPERVISION OF INVESTMENT INSTITUTIONS AND THE RESPECTIVE ACCOMPANYING MEMORANDA THERETO OF THE MINISTER OF FINANCE OF THE NETHERLANDS (AS AMENDED FROM TIME TO TIME). IN THE EVENT OF A SOLICITATION, ACQUISITION OR OFFERING MADE TO OR BY PROFESSIONAL INVESTORS AND THEREFORE EXEMPT FROM THE GENERAL PROHIBITION AS CONTAINED IN THE ACT, NO SUBSEQUENT OFFERING OF THE PARTICIPATION RIGHTS IN A “SECONDARY OFFERING” BY SUCH PROFESSIONAL INVESTORS TO OTHERS THAN SUCH PROFESSIONAL INVESTORS MAY BE MADE. ACTING IN VIOLATION OF THE PROHIBITIONS CONTAINED IN THE ACT OR IN VIOLATION OF RESTRICTIONS OR CONDITIONS CONTAINED IN THE EXEMPTION MAY CONSTITUTE A CRIMINAL OFFENSE FOR THE INVESTMENT INSTITUTION (OR ITS DIRECTORS) AND THE PERSON OR LEGAL ENTITY WHO SOLICITS, ACQUIRES OR OFFERS PARTICIPATION RIGHT IN SUCH INVESTMENT INSTITUTION. IN ADDITION, CONTRACTUAL TERMS CONFLICTING WITH THE PROHIBITION PROVISION OF THE ACT OR IN VIOLATION OF RESTRICTIONS OR CONDITIONS CONTAINED IN AN EXEMPTION MAY BE DEEMED NULL AND VOID OR VOIDABLE UNDER THE GENERAL RULES OF NETHERLANDS CIVIL LAW. FOR UNITED KINGDOM PROSPECTIVE SHAREHOLDERS ONLY: THERE ARE RESTRICTIONS ON THE OFFER AND SALE OF SECURITIES IN THE UNITED KINGDOM. ALL APPLICABLE PROVISIONS OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (“FSA”) AND THE PUBLIC OFFERS OF SECURITIES (EXEMPTIONS) REGULATIONS 2001 WITH RESPECT TO ANYTHING DONE BY ANY PERSON IN RELATION TO SECURITIES IN, FROM OR OTHERWISE INVOLVING THE UNITED KINGDOM MUST BE COMPLIED WITH. THIS PROSPECTUS SHOULD NOT BE ISSUED OR PASSED ON IN THE UNITED KINGDOM TO ANY PERSON UNLESS THAT PERSON IS OF A KIND DESCRIBED IN THE UNITED KINGDOM FINANCIAL SERVICES ACT, 1986 (INVESTMENT ADVERTISEMENTS)(EXEMPTIONS) ORDER, 1988, OR FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2001 OR IS A PERSON TO WHOM THE DOCUMENT MAY OTHERWISE BE ISSUED OR PASSED ON. THE COMPANY IS AN UNREGULATED COLLECTIVE INVESTMENT SCHEME, THE PROMOTION OF WHICH BY AUTHORISED PERSONS IN THE UNITED KINGDOM IS RESTRICTED BY THE FSA. SHARES MAY NOT BE OFFERED OR SOLD IN THE UNITED KINGDOM BY AUTHORISED PERSONS (v)
  6. 6. OTHER THAN TO OTHER PERSONS AUTHORISED TO CARRY OUT INVESTMENT BUSINESS UNDER THE FSA, PERSONS WHOSE ORDINARY BUSINESS INVOLVES THE ACQUISITION AND DISPOSAL OF PROPERTY OF THE SAME KIND AS THE PROPERTY, OR A SUBSTANTIAL PART OF THE PROPERTY, IN WHICH THE COMPANY INVESTS AND PERSONS PERMITTED TO RECEIVE THIS DOCUMENT UNDER THE UNITED KINGDOM FINANCIAL SERVICES (PROMOTION OF UNREGULATED COLLECTIVE INVESTMENT SCHEMES) REGULATIONS, 1991 OR SERVICES AND MARKETS ACT 2000 (PROMOTION OF COLLECTIVE INVESTMENT SCHEMES) (EXEMPTIONS) ORDER 2001. (vi)
  7. 7. Rye Select Broad Market Portfolio Limited SUMMARY The information set out below should be read in conjunction with, and is qualified in its entirety by, the full text of this Prospectus (the “Prospectus”), the Company's Memorandum and Articles of Association (the “Memorandum and Articles of Association”) and the documents and agreements referred to herein. Company Rye Select Broad Market Portfolio Limited (the “Company”) is an open-ended investment company organised as an exempted company under the laws of the Cayman Islands on 23 August, 2001. Offering of Shares The Company is offering its Class A, B, and Class C Shares (the “Class A Shares,” the “Class B Shares,” and the “Class C Shares” are collectively referred to as the “Shares”) pursuant to this Prospectus. Furthermore, the Company’s Class D Shares are offered pursuant to a separate offering supplement to the Prospectus (the “Supplement”). The Class A, B, and C Shares are U.S. Dollar denominated shares. The Class A Shares have been issued only to those investors who are shareholders of record as of December 31, 2002 (the “Existing Shareholders”). Any investors, who are not Existing Shareholders, will be issued Class B or Class C Shares. Class C Shares are the same in all material respects as the Class B Shares, except that Class C Shares are charged an Investor Servicing Fee (as defined herein). The Company’s Shares are currently being offered based on the Net Asset Value per Share as of the preceding Valuation Date - as of April 30, 2007 the Net Asset Value of the Company was $872,191,564. In addition to the Shares, the Company may authorize and issue such further additional classes of shares. Such additional classes may be subject to terms and conditions different from the terms and conditions applicable to the Shares discussed herein (such as, among other things, different fee structures (including no fee assessments) and varying redemption rights. See “SHARES OF THE COMPANY - The Company's Share Capital” and “DETERMINATION OF NET ASSET VALUATION.” Investment Objective and Strategy The Company’s objective is to seek to (i) achieve long term capital appreciation and (ii) consistently generate positive returns irrespective of stock market volatility or direction, while focusing on preservation of capital. The Company attempts to accomplish this investment objective by investing the majority of the assets with one Manager who employs a “split strike conversion” strategy. The remainder of the assets of the Company are invested with a diverse group of non-U.S. investment funds, separate accounts, or similar vehicles (the “Funds”) whose Managers (as defined herein) employ a variety of investment strategies that have a low correlation to the performance of traditional asset classes. Currently, the majority of the assets are allocated to one Manager (vii)
  8. 8. (as defined herein). The Investment Manager (as defined herein) will also select strategies whose performance historically has been negatively correlated to equity/debt and other markets in attempt to generate a consistent return pattern with minimum deviation. There is no guarantee that the Company will be successful in achieving its investment objective. See “INVESTMENT OBJECTIVE AND STRATEGIES.” Minimum Investment The minimum initial investment in the Company is U.S.$500,000.00 for the Class A, B, and C Shares. The minimum additional investment in the Company is U.S.$100,000.00 for the Class A, B, and C Shares. The foregoing initial investments are subject to the discretion of the Board to reduce such amounts, provided that the Board will not reduce the minimum subscription to below $50,000 or such other amount specified under Cayman Islands law from time to time. Investment Manager The Company has retained Tremont (Bermuda) Limited, a corporation organised under the laws of Bermuda as an exempted company, to serve as its investment manager (the “Investment Manager”). The Investment Manager is responsible for allocating the Company's assets among one or more Funds, monitoring their performance and adherence to their stated objectives, managing the Company’s investments and its day-to-day operations (other than trading and investment decisions), subject to the overall control and supervision of the Board. The Investment Manager performs its services for the Company pursuant to the terms of a management agreement, amended December 31, 2002 (the “Management Agreement”). However, the Investment Manager has delegated substantially all of its duties in this regard to its affiliate, Tremont Partners, Inc., which serves as the sub-advisor to the Company. See “Sub-Advisor.” Sub-Advisor The Investment Manager had retained its affiliate, Tremont Partners, Inc., to serve as a sub-advisor to the Company (the “Sub- Advisor”) at no additional cost to the Company and has delegated substantially all of its duties in respect of the Company to the Sub- Advisor. As such, the Sub-Advisor is responsible for selecting the Company’s Managers, negotiating fee arrangements with the Managers, allocating assets among Managers and monitoring the Funds’ investments. The Sub-Advisor is registered as an investment adviser pursuant to the Advisers Act. The Investment Manager pays the Sub-Advisor a fee from its own assets pursuant to an investment sub-advisory agreement. (viii)
  9. 9. Multi-Manager Investment Approach The overall success of the Company depends on the ability of (i) the Investment Manager to select appropriate Funds and to allocate the Company's assets, and (ii) each Fund to perform successfully. The past performance of the Investment Manager and/or any of the Funds or any of their respective managers (collectively, the “Managers”) is not necessarily indicative of the future profitability of any strategies employed by them. No assurance can be given that the strategy or strategies utilized by a given Manager of a Fund will be successful under all or any market conditions. There can be no guarantee of future performance and there is no assurance that the Company will be able to achieve its investment objective or be profitable. Board of Directors The Board of Directors of the Company (the “Directors” or the “Board”) consists of three (3) Directors. The Board has complete authority over the operations and management of the Company. The Board, however, has delegated the day-to-day management of the Company to the Investment Manager. See “MANAGEMENT - The Board of Directors.” Subscriptions Shares may be purchased on the first day of each month and any other day approved by the Board (each a “Subscription Date”) valued at a price per Share equal to the Net Asset Value of the relevant per Share Class as of the close of business on the last Business Day of the preceding calendar month (each a “Valuation Date”). The term “Business Day” refers to any day when banks in the United States (“U.S.”) and Bermuda are open for business other than a Saturday or a Sunday. Completed subscription materials and cleared funds must be received by the Administrator (as defined herein) prior to the Subscription Date on which prospective investors wish to subscribe for Shares. See “ELIGIBLE INVESTORS” and “SUBSCRIPTIONS.” Redemptions A holder of Shares (each a “Shareholder”) may request a redemption of Shares (see attached form “Redemption Request”), on thirty-six (36) days' prior written notice to the Administrator, as of the last Business Day of each month, or on another Valuation Date (each a “Redemption Date”) at the Board's discretion, at a redemption price per Share equal to the Net Asset Value of the relevant per Share Class on the corresponding Valuation Date. Except with the consent of the Board of Directors, redemption requests are irrevocable. If a redemption would cause the value of the Shares held by a Shareholder to fall below U.S.$100,000.00, or such other minimum amount or amounts as determined by the Board, then the Board has the right to require the compulsory redemption of all Shares held by such Shareholder. Settlement of redemptions will generally take place within thirty (30) days after the Redemption Date, although the Company reserves the right to retain up to ten percent (10%) of the settlement proceeds until after the annual audit for the year in (ix)
  10. 10. which the redemption occurs is completed in order to confirm the accuracy of the amount or to comply with applicable regulatory requirements. The Board shall have the right to require the compulsory redemption of all or portions of the Shares held by a Shareholder upon ten (10) Business Days' prior written notice for the reasons set out herein in the section entitled “REDEMPTIONS,” at the price per Share equal to the then prevailing Net Asset Value per relevant Share Class. In circumstances where the Company is unable to liquidate securities positions in an orderly manner in order to fund redemptions or where the value of the assets and liabilities of the Company cannot reasonably be determined, the Company may extend such thirty (30) day period to effect settlements of redemptions or it may even suspend redemptions. The Board may in its discretion settle redemptions in kind for all redemptions submitted in respect of a given Redemption Date. See “REDEMPTIONS.” Eligible Investors The Class A, Class B, and Class C Shares may be purchased only by “Eligible Investors” as described in this Prospectus. Persons interested in purchasing Shares should inform themselves as to the legal requirements within their own countries for the purchase of Shares and any foreign exchange restrictions which they may encounter. In the case of such U.S. investors, Shares may only be sold to investors who (i) are accredited investors under Rule 501 of Regulation D under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and (ii) meet any other eligibility standards as legal counsel to the Company advises. The Board reserves the right to reject subscriptions for Shares in its absolute discretion for any reason or for no reason. See “ELIGIBLE INVESTORS.” Net Asset Value The Net Asset Value of the Company is equal to the Company's assets, calculated at fair value, less its liabilities and any accrued but unpaid expenses (including the Management Fee (as defined herein)). The Net Asset Value per Share of a particular class is determined by dividing such class’ Net Asset Value by the number of Shares of that class then outstanding. The Net Asset Value will be calculated on a monthly basis as of each Valuation Date or on such other date when such computation is necessary or appropriate. See “DETERMINATION OF NET ASSET VALUATION.” The Company’s Net Asset Value will be based on asset valuations supplied by the administrator of each Fund. As such, a portion of the Company’s Net Asset Value may at any given time include estimated valuations. See “DETERMINATION OF NET ASSET VALUATION.” Such valuations will not be subject to independent review or investigation by the Company, and the Investment Manager and Administrator are entitled to rely on such valuations without independent verification. See “RISK FACTORS.” (x)
  11. 11. Administrator The Company has appointed Tremont Partners, Inc., located in New York (the “Administrator”), as administrator of the Company under an Administration Agreement (the “Administration Agreement”). The Administrator performs various administrative services for the Company, including Share issue and redemption services, calculation of the Net Asset Value of each respective Class of Shares on a monthly basis, or at any other point in time when a valuation is deemed necessary and appropriate, and act as registrar and transfer agent. See “MANAGEMENT - The Administrator.” However, the Administrator with effect from July 1, 2007 has delegated substantially all of its duties in this regard to the Company’s Bank, The Bank of New York, who will provide the delegated duties through its Alternative Investment Services division, (“BNY-AIS”) which will serve as the sub-administrator to the Company. See “Sub-Administrator” below. Sub-Administrator The Company has retained BNY-AIS to serve as a sub- administrator to the Administrator (the “Sub-Administrator”) and substantially all of its duties in respect of the Company have been delegated to the Sub-Administrator. As such, the Sub- Administrator is responsible for assisting the Administrator with the day-to-day maintenance of the Company’s investor records, attending to subscription, redemption and share transfer requests and calculation of the Company’s Net Asset Value. The Sub-Administrator, which is a part of a global financial services group, specializes in providing administration and related services to alternative investment entities including hedge funds. Dividends The Company does not currently expect to pay dividends or other distributions to Shareholders. Fees and Expenses Management Fee. The Company pays the Investment Manager a monthly management fee calculated at an annual rate (the “Management Fee”). The Management Fee for Class A Shares is calculated at an annual rate of one and a half percent (1.50%) of the month-end Class A Net Asset Value of the Company, and the Management Fee for Class B and Class C Shares is calculated at an annual rate of one and three quarters percent (1.75%) of the month end Class B and Class C Net Asset Value of the Company, respectively. The Management Fee is paid to the Investment Manager by the Company on or about the 15th Business Day of the subsequent month. Investor Servicing Fee. The Investment Manager on behalf of the Company may enter into one or more agreements with one or more unaffiliated third party placement agents (each a “Placement Agent”) to place investors in the Class C Shares of the Company. Any such Placement Agents who place investors in the Company will be entitled to receive a fee from Class C Shareholders in an amount up to 1.00% of the Net Asset Value of the Class C Shares per annum (the “Investor Servicing Fee”). The Investor Servicing (xi)
  12. 12. Fee shall be payable monthly in arrears. The Investor Servicing Fee will be prorated based upon a Class C Shareholder’s actual period of ownership of its Class C Shares. The Investor Servicing Fee is accrued monthly and is payable quarterly, in arrears, within a reasonable time thereafter. Administrative Fee. The Administrator receives a monthly administration fee calculated at the annual rate of one-fifth of one percent (0.20%) of the Company's average net assets per month paid out of the respective Fund’s assets (the quot;Administration Feequot;). The Administration Fee shall be calculated as of the last Business Day of each calendar month and paid from the Company on or about the 15th Business Day of the subsequent month. The Administrator is also entitled to reimbursement of actual out-of- pocket expenses incurred on behalf of the Company. Managers. The Company bears all direct and indirect costs associated with investment advisory services of the Managers. Such costs may include both a fixed fee equal to a percentage of the average Net Asset Value of a given fund and a performance fee calculated as a percentage of the realized and unrealized annual profit produced by the assets of the fund managed by a given Manager. The Investment Manager will endeavor to negotiate with Managers to obtain reduced fees for the Company, although there can be no assurance that a fee less than that charged by a particular Manager to other investors will be possible. Other Fees. The Company bears all other costs of its investment program (including brokerage, banking and custody charges, interest, auditors, taxes and duties) as well as professional fees of its attorneys. Brokerage The Managers of the Funds selected by the Investment Manager may allocate portfolio transactions through brokerage accounts on the basis of best execution and also in consideration of such brokers' provision or payment of the costs of research and other investment-management-related services and equipment (i.e., “soft dollar” payments). Research and other investment management- related services and equipment obtained through soft dollar commission arrangements may benefit the Managers of Funds. Some soft dollar arrangements also may be outside of the parameters of Section 28(e) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), which permits the use of soft dollars to acquire research and brokerage services. The commission rates charged by the brokers in the foregoing circumstances may be higher than those charged by other brokers who may not offer such services. See “MANAGEMENT−Brokerage.” The Bank The bank for the Company is The Bank of New York (the “Bank”). (xii)
  13. 13. Risk Factors An investment in the Company entails certain risks. There is no assurance that the Company will be profitable or that an investor will not lose some or all of its investment in the Company. Past results achieved by the Company, the Investment Manager, the Managers of the Funds or their affiliates, are not necessarily indicative of future results. Prospective investors should review carefully the discussion under the caption “RISK FACTORS” contained herein. Valuations; Reporting The Administrator shall be responsible for computing as of each Valuation Date, or at such other date as may be decided by the Board, the Net Asset Value of the Company and the Net Asset Value of the Class A, B, and C Shares. The Company sends Shareholders monthly reports of the Net Asset Value of the Company and the Net Asset Value of the Class of Shares. A report containing the Company's annual audited financial statements will be sent to Shareholders within six (6) months of the end of each Fiscal Year (as defined herein) or as soon thereafter as possible. The annual audited financial statements will be prepared in accordance with U.S. Generally Accepted Accounting Principles. Conflicts of Interest An investment in the Company is subject to certain conflicts of interest. See “CONFLICTS OF INTEREST.” Fiscal Year The Company's fiscal year-end is December 31st of each year. Tax Status The Company should not be subject under current law to any Cayman Islands or U.S. income taxation (other than U.S. withholding taxes on dividends and certain interest income derived from U.S. sources). Certain dividend income and certain capital gains income realized by the Company may be subject to income or withholding taxes in the source jurisdiction. Transfers; Listing There is currently no public market for resale of Shares and none is likely to exist in the future. Functional Currency The Company's functional currency (i.e., the currency in which it maintains its books and records and its financial statements) is the U.S. Dollar. Certain ERISA Considerations Investment in the Company generally will be open to employee benefit plans and other funds subject to ERISA and/or Section 4975 of the Code. Except as described below under quot;RISK FACTORS - Compliance with ERISA Transfer Restrictionsquot;, the Investment Manager intends to use commercially reasonable efforts to cause quot;benefit plan investorsquot; not to own a significant portion of any class of equity interests in the Funds, so that the assets of the Funds should not be considered quot;plan assetsquot; for purposes of ERISA and Section 4975 of the Code, although there can be no assurance that non quot;plan assetquot; status will be obtained or maintained (See “RISK FACTORS – Compliance with ERISA Transfer Restrictions”). Prospective purchasers and subsequent (xiii)
  14. 14. transferees of Shares may be required to make certain representations regarding compliance with ERISA and Section 4975 of the Code. See quot;CERTAIN ERISA CONSIDERATIONSquot;. EACH PROSPECTIVE INVESTOR THAT IS SUBJECT TO ERISA AND/OR SECTION 4975 OF THE CODE IS ADVISED TO CONSULT WITH ITS OWN LEGAL, TAX AND ERISA ADVISORS AS TO THE CONSEQUENCES OF AN INVESTMENT IN THE COMPANY. Privacy Notice Any and all nonpublic personal information received by the Company and the Investment Manager with respect to the Shareholders who are natural persons, including the information provided to the Company by a Shareholder in the subscription documents, will not be shared with nonaffiliated third parties which are not service providers to the Company and/or the Investment Manager without prior notice to such Shareholders. Such service providers include but are not limited to the Administrator, the auditors and the legal advisors of the Company. Additionally, the Company and/or the Investment Manager may disclose such nonpublic personal information as required by law, including without limitation, the disclosure that may be required by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 and the rules and regulations promulgated thereunder. (xiv)
  15. 15. DIRECTORY Company's Registered Office Rye Select Broad Market Portfolio Limited c/o Trulaw Corporate Services Ltd. P.O. Box 866 George Town, Grand Cayman KY1-1103 Cayman Islands Telephone: (441) 949 7555 Facsimile: (441) 949 8492 Investment Manager Tremont (Bermuda) Limited Tremont House 4 Park Road Hamilton HM 11, Bermuda Telephone: (441) 292-3781 Facsimile: (441) 296-0667 Sub-Advisor Tremont Partners, Inc. 555 Theodore Fremd Avenue Rye, New York 10580 Telephone: (914) 925-1179 Facsimile: (914) 925-9337 Administrator Tremont Partners, Inc. 555 Theodore Fremd Avenue Rye, New York 10580 Telephone: (914) 925-1179 Facsimile: (914) 925-9337 Sub-Administrator The Bank of New York Alternative Investment Services 101 Barclay Street, 20th Floor West New York, New York 10286 Telephone: (212) 815-4090 Facsimile: (212) 644-6669 Bank The Bank of New York One Wall Street New York, NY 10286 Telephone: (212) 715-6540 Facsimile: (212) 644-6669 (xv)
  16. 16. Auditors KPMG Century Yard Cricket Square P.O. Box 493 Grand Cayman KY1-1106 Cayman Islands Telephone: (345) 949-4800 Facsimile: (345) 949-7164 Legal Advisors As to Cayman Islands Law: Truman Bodden & Company P.O. Box 866 Anderson Square Building George Town, Grand Cayman KY1-1103 Cayman Islands Telephone: (345) 949-7555 Facsimile: (345) 949-8462 As to United States Law: Tannenbaum Helpern Syracuse & Hirschtritt LLP 900 Third Avenue New York, NY 10022 Attn: Michael Tannenbaum, Esq. Telephone: (212) 508-6700 Facsimile: (212) 371-1084 (xvi)
  17. 17. Table of Contents Page DIRECTORY.............................................................................................................................................. xv THE COMPANY.......................................................................................................................................... 1 INVESTMENT OBJECTIVE AND STRATEGIES .................................................................................... 2 Investment Objective ........................................................................................................................ 2 Investment Strategy........................................................................................................................... 2 Fund of Funds Approach.................................................................................................................. 2 Selection of Funds............................................................................................................................. 3 Distributions and Reinvestment ........................................................................................................ 3 Use of Proceeds ................................................................................................................................ 3 Borrowing and Lending; Portfolio Lending ....................................................................................... 3 INVESTMENT OBJECTIVE AND STRATEGIES .................................................................................... 4 The Board of Directors ..................................................................................................................... 4 Custodian.......................................................................................................................................... 8 FEES AND EXPENSES ............................................................................................................................ 10 Fees of the Administrator................................................................................................................ 10 Fees of the Managers ...................................................................................................................... 10 Fees Relating to Brokerage .............................................................................................................. 10 Other Operating Expenses.............................................................................................................. 11 SHARES OF THE COMPANY.................................................................................................................. 12 The Fund's Share Capital................................................................................................................. 12 Temporary Suspension of Dealings ................................................................................................. 12 Voting and Other Rights ................................................................................................................. 13 Registration and Transfer of Shares................................................................................................. 13 SUBSCRIPTIONS....................................................................................................................................... 14 REDEMPTIONS ........................................................................................................................................ 15 ELIGIBLE INVESTORS............................................................................................................................ 16 DETERMINATION OF NET ASSET VALUATION .............................................................................. 18 RISK FACTORS ......................................................................................................................................... 20 Limited Operating History; No Liquidity......................................................................................... 20 Business Dependent Upon Key Individuals..................................................................................... 20 Multi-Manager Concept................................................................................................................... 20 Access to Information from Funds ................................................................................................. 20 Investment Decisions of the Managers of Each Fund Are Independent of Each Other ............................................................................................................................................. 21 Incentive Fees Payable Irrespective of Fund Performance............................................................... 21 Delays in Reporting......................................................................................................................... 21 (xvii)
  18. 18. Nature of Certain Investments ........................................................................................................ 21 Lack of Liquidity in Markets............................................................................................................ 21 Trading Risks 21 Risks of Certain Investments Made By Managers of Funds ............................................................. 22 Institutional Risk ............................................................................................................................. 26 Illiquidity of the Investment ............................................................................................................ 26 Effect of Substantial Redemptions .................................................................................................. 26 Regulation 26 Changes in Applicable Law ............................................................................................................. 26 Reserve for Contingent Liabilities.................................................................................................... 26 Lack of Independent Experts Representing Investors...................................................................... 27 General Economic Conditions ........................................................................................................ 27 Suspensions of Trading ................................................................................................................... 27 Certain Investment Manager Activities ............................................................................................ 30 Directors......................................................................................................................................... 30 TAXATION................................................................................................................................................ 32 Introduction.................................................................................................................................... 32 The Company ................................................................................................................................. 32 Shareholders of the Company ......................................................................................................... 33 ADDITIONAL AND GENERAL INFORMATION ................................................................................ 36 Cayman Islands Mutual Funds Law................................................................................................. 36 Further Issues of Shares .................................................................................................................. 38 Objects ........................................................................................................................................... 38 Repurchase of Shares ...................................................................................................................... 38 Alterations to the Company's Share Capital ..................................................................................... 39 Amendment of Memorandum and Articles of Association .............................................................. 39 Directors Interest in Contracts ........................................................................................................ 39 Directors Powers ............................................................................................................................ 39 Director’s Interests.......................................................................................................................... 40 Reports to the Shareholders ............................................................................................................ 40 Meetings of Shareholders ................................................................................................................ 40 Inquiries.......................................................................................................................................... 40 EXHIBIT: I. PRIVACY NOTICE (xviii)
  19. 19. Rye Select Broad Market Portfolio Limited THE COMPANY Rye Select Broad Market Portfolio Limited (the “Company”) is an open-ended investment company organized as an exempted company under the laws of the Cayman Islands on 23 August 2001. The Company amended and restated its articles on December 31, 2002 and approved the issuance of a new Class B Shares. The Company is offering its Class A Shares (the “Class A Shares”) to Existing Shareholders and it’s Class B and C Shares to new Shareholders (the “Class B Shares” and the “Class C Shares” pursuant to this Prospectus. Furthermore, the Company’s Class D Shares are offered pursuant to a separate offering supplement to the Prospectus (the “Supplement”). The Company’s Shares are currently being offered based on the Net Asset Value per Share as of the preceding Valuation Date. Any investors, who are not Existing Shareholders, will be issued Class B or Class C Shares. Class C Shares are the same in all material respects as the Class B Shares, except that Class C Shares are charged an Investor Servicing Fee (as defined herein). The Company’s Shares are currently being offered based on the Net Asset Value per Share as of the preceding Valuation Date. As of April 30, 2007 the Net Asset Value of the Company was $872,191,564. In addition to the Shares, the Company from time to time may authorise and issue additional classes of shares in its sole discretion. Such additional classes may be subject to terms and conditions different from the terms and conditions applicable to the Shares discussed herein (such as, among other things, different fee structures (including no fee assessments) and varying redemption rights to accommodate investors with special characteristics). The Company qualifies as a “mutual fund” under the Mutual Funds Law (Revised) of the Cayman Islands and is so registered in the Cayman Islands and is regulated in accordance with such law. The proceeds of the sale and issue of each class of Shares will be deposited in an account for that class of Shares or be segregated on the books of the Company. The assets, liabilities, income and expenditures attributable to each such class of Shares will be applied to such account (or book entry) subject as provided herein and to applicable law. The assets so held in respect of each class of Shares will be applied solely in respect of that class of Shares except to the extent that expenses of the Company are allocated among the classes of Shares at the discretion of the Board (as defined herein). The Net Asset Value of each class of Shares will be calculated separately and, in terms of redemption, Shares of a particular class will be redeemed at the Net Asset Value of that class at the relevant time. For limitations of such a corporate structure as regards the liabilities of the Company, see “RISK FACTORS” herein. Fees and expenses that are identifiable with respect to a particular class of Shares will be charged against that class of Shares in computing its Net Asset Value. Other fees and expenses will be allocated pro rata between the classes based on their respective Net Asset Values, as necessary. The information in this Prospectus is qualified in its entirety by the agreements and documents referred to herein and by the Memorandum and Articles of Association of the Company, which are available from the Administrator upon request.
  20. 20. INVESTMENT OBJECTIVE AND STRATEGIES Investment Objective The Company's objective is to seek to (i) achieve long term capital appreciation and (ii) consistently generate positive returns irrespective of stock market volatility or direction, while focusing on preservation of capital. The Company attempts to accomplish this investment objective by investing the majority of the assets with one Manager who employs a “split strike conversion” strategy. The remainder of the assets of the Company are invested with a diverse group of non-U.S. investment funds or similar vehicles (the “Funds”) whose Managers (as defined herein) employ a variety of investment strategies. Such strategies may encompass a wide variety of investment styles including but not limited to: statistical arbitrage; index arbitrage; pairs trading; convertible arbitrage; basis and spread trading; multiple strategy; long/short equity strategies; and merger arbitrage. These sophisticated investment strategies often require the use of derivative trading vehicles such as stock options, index options, futures contracts (subject to all applicable regulatory requirements), and options on futures. Should the Company invest with Funds that invest in futures, the Company and all appropriate individuals will register with the appropriate regulatory authorities prior to investing with such Fund. Investment Strategy The Investment Manager has delegated overall responsibility for allocating the assets of the Company to the Sub-Advisor who implements the investment strategy discussed herein and has the authority to select the Funds in which the Company invests its assets. Multi-Manager Investment Approach The use of a multi-manager or “fund of funds” format, whereby investments are made through a variety of Funds, the Managers for which utilize different and, if possible, non-correlated investment strategies and trading techniques, is intended to afford the Company the ability to do the following: · Provide investors with a diversified investment portfolio and enable them to obtain above- average returns over an extended period of time; · Invest with Managers of Funds that have different investment styles and philosophies; · Lower risk by investing in Funds, the performance of which have low volatility and low correlations to each other; and · Invest with Managers of Funds that have a consistent past performance record. The overall success of the Company depends on the ability of (i) the Sub-Advisor to select appropriate Funds and to allocate the Company's assets, and (ii) each Fund to perform successfully. The past performance of the Sub-Advisor, the Investment Manager and/or any of the Funds or any of their respective managers (collectively, the “Managers”) is not necessarily indicative of the future profitability of any strategies employed by them. No assurance can be given that the strategy or strategies utilized by a given Manager of a Fund will be successful under all or any market conditions. There can be no guarantee of future performance and there is no assurance that the Company will be able to achieve its investment objective or be profitable. To the extent to which the assets of the Company may be invested with a particular Fund, such assets are subject to applicable legal and regulatory constraints. For example, the U.S. Investment Company Act of 1940, as amended (the “Company Act”) (and the regulations thereunder), imposes limits on the ability of the Company to invest in “investment companies” (as defined in the Company Act). 2
  21. 21. The level of risk associated with the Company's investments varies depending on the particular investment strategy utilized by the Managers of the Funds. Potential investors in the Company should consider the risks associated with the Company's investment strategy prior to investing. The Sub-Advisor, Investment Manager and their affiliates cannot assure the Company's success or profitability. The success of the Company will depend upon a variety of factors, many of which are beyond their control. See “RISK FACTORS.” Selection of Funds The Sub-Advisor will select Funds that satisfy one or more criteria including, but not limited to: • the investment management experience of the Manager; • the historical performance pattern of the Manager demonstrating consistent returns irrespective of the market's volatility; • the degree to which a specific Fund complements and balances the Company's portfolio with respect to the strategies employed by other Funds; • the quality and stability of the Fund's organization; • and the ability of the Company to make withdrawals from or liquidate its investment in a Fund. Certain of the criteria may be emphasized above others in the selection of a particular Fund. Distributions and Reinvestment The Company does not anticipate that any dividends or other distributions will be paid to holders of Shares in the Company (each a quot;Shareholderquot;) out of the Company's current earnings and profits, but rather, that such income will be reinvested. Potential investors should remain aware of this limitation when determining whether or not an investment in the Company is suitable for their particular circumstances. The Company reserves the right to change such policy. Use of Proceeds The net proceeds of the private offering contemplated herein (after payment of expenses) will be invested in accordance with the policies set forth under “INVESTMENT OBJECTIVE AND STRATEGIES”. The Company, without limitation, may hold cash or invest in cash equivalents for short- term investments. Among the cash equivalents in which the Company may invest are: obligations of the U.S. and foreign governments, their agencies or instrumentalities, commercial paper, repurchase agreements, money market mutual funds, money market accounts and other similar bank accounts, certificates of deposit and bankers' acceptances issued by banks and financial institutions. In the event that the Sub-Advisor and/or the Investment Manager believes that there is not sufficiently good value in any securities suitable for investment of the Company's capital, all such capital may be held in cash and cash equivalents. Borrowing and Lending; Portfolio Lending The Managers of Funds may engage in short sales, that is, the practice of selling securities, which are borrowed from a third party. In such event, the Manager of any such Fund will be required to return, at the lender's demand, securities equivalent to those borrowed for the short sale. Pending the return of such securities, the Manager of such Fund will be required to deposit with the lender as collateral the proceeds of the short sale plus additional cash or securities; the amount of the required deposit may be adjusted periodically to reflect any change in the market price of the security which the Fund is required to return to the lender. See “RISK FACTORS”. 3
  22. 22. MANAGEMENT The Board of Directors The Board of Directors of the Company (the “Directors” or the “Board”) consists of three (3) Directors, each of whom serves in accordance with the laws of the Cayman Islands and in accordance with the Company's Memorandum and Articles of Association. The Directors are as follows: Peter D. Anderson, CA, Mr. Anderson is a Partner with the Cayman Islands firm of Rawlinson & Hunter, an international firm of chartered accountants with a global network of offices established over 70 years ago. The Cayman Islands firm has been offering a comprehensive range of professional services since it was established in 1973. Peter is a director of The R&H Trust Co. Ltd. and The Harbour Trust Co. Ltd, duly licensed Cayman Islands trust companies owned and operated by Rawlinson & Hunter in the Cayman Islands. He is also a director of a number of Cayman Islands regulated mutual funds and other client companies. He is a Fellow of the Institute of Chartered Accountants in Ireland, and past president of the Cayman Islands Society of Professional Accountants. Peter has extensive experience in the offshore financial industry having worked in the Cayman Islands since 1982, including 12 years in his own practice and three years as a Partner of Deloitte & Touche. R. Darren Johnston is a Vice President and the Manager of the Rye Investment Management division at Tremont Group Holdings, Inc.. In this capacity, Mr. Johnston is responsible for managing and growing the firm’s select manager business globally and for providing a focal point for all of the related business initiatives. Prior to his current position, Mr. Johnston served as Vice President and Chief Operating Officer of the Tremont’s Canadian subsidiary where he was responsible for the execution of the business plan for the Canadian marketplace. Mr. Johnston worked closely with various departments from the Rye, New York headquarters to integrate the Canadian business with the firm’s global operations. He also contributed to product development, fund administration and investor relations. Mr. Johnston earned a Master of Business Administration degree from the Richard Ivey School of Business at the University of Western Ontario in London, Ontario in 1999. He attended Queen’s University in Kingston, Ontario for his undergraduate studies. James Mitchell is a Vice President and currently responsible for overseeing TGHI’s European operations from London. This includes Business Development and Sales as well as Investment Management. Mr. Mitchell is also member of TGHI’s Investment Committee. Previously at TGHI, Mr. Mitchell was a member of TGHI’s Investment Relationship Management team in New York where he was responsible for many advisory and consulting clients. He played an integral role in portfolio construction, ongoing manager monitoring, performance measurement and administration. Prior to joining TGHI, Mr. Mitchell served as Vice President of Investments for Hennessee Group, where he was responsible for overseeing the group's asset allocation and manager selection processes, as well as acting as a relationship manager to many of the firm's larger high net worth and institutional clients. Additionally, he was a Vice President with Citibank Alternative Investments where his responsibilities 4
  23. 23. included product development for many hedge fund and structured products. He was also involved with portfolio risk management within Citibank's quantitative group. Mr. Mitchell started his career at Bankers Trust where he served as a Relationship Manager for six years to many of the firm's global custody pension clients. Mr. Mitchell graduated with a Bachelor of Arts degree in Economics from Denison University in Ohio. No Director has: (i) any unspent convictions in relation to indictable offences; (ii) been bankrupt or the subject of an involuntary arrangement, or has had a receiver appointed to any asset of such Director; (iii) been a director of any company which, while he was a director with an executive function or within twelve (12) months after he ceased to be a director with an executive function, had a receiver appointed or went into compulsory liquidation, creditors voluntary liquidation, administration or company voluntary arrangements, or made any composition or arrangements with its creditors generally or with any class of its creditors; (iv) been a partner of any partnership, which while he was a partner or within twelve (12) months after he ceased to be a partner, went into compulsory liquidation, administration or partnership voluntary arrangement, or had a receiver appointed to any partnership asset; (v) had any public criticism by statutory or regulatory authorities (including recognised professional bodies); or (vi) been disqualified by a court from acting as a director or from acting in the management or conduct of the affairs of any company. Investment Manager; Sub-advisor The Investment Manager is responsible for allocating assets among various Funds, monitoring their performance and adherence to their stated objectives, managing the Company’s investments and its day-to- day operations, subject to the overall control and supervision of the Board. The Investment Manager may engage other persons or entities to perform similar functions, as it deems necessary from time to time. Consequently, the Investment Manager has delegated, at no cost to the Company, substantially all of its responsibility with respect to the Company, including, managing the assets of the Company, selecting Managers, negotiating fee arrangements with Managers, allocating assets among Managers and monitoring their performance and adherence to their stated investment objectives, to its affiliate, Tremont Partners, Inc. (the “Sub-Advisor”) at no additional cost to the Company and has delegated substantially all of its duties in respect of the Company to the Sub-Advisor. As such, the Sub-Advisor is responsible for selecting the Company’s Managers, negotiating fee arrangements with the Managers, allocating assets among Managers and monitoring the Fund’s investments. Both the Investment Manager and the Sub-Advisor are wholly-owned subsidiaries of Tremont Group Holdings, Inc., which, in turn, is wholly-owned by Oppenheimer Acquisition Corp., the parent corporation of OppenheimerFunds, Inc., one of America's largest and most respected asset management companies. The Sub-Advisor is registered as an investment adviser pursuant to the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”). 5
  24. 24. Investment Management Agreement The Investment Manager performs its services for the Company pursuant to the terms of a management agreement between the Investment Manager and the Company (the “Management Agreement”). The Management Agreement provides that the Investment Manager will be responsible for, among other things, the supervision of the general administration and accounting services required by the Company in connection with its business and operation. The Management Agreement provides that the Investment Manager will not be liable to the Company for any act taken or omitted in good faith if negligence, reckless misfeasance, fraud or any violation of law is not involved. The Company will indemnify the Investment Manager in certain circumstances. The Management Agreement dated September 1, 2001 was amended as of December 31, 2002 and will continue in force and effect for an initial term ending on December 31, 2005, and thereafter, will be automatically renewed for successive one year terms, provided, however, that either party may terminate the Management Agreement by thirty (30) days’ prior written notice after the end of the initial term. The Administrator Tremont Partners, Inc. (the “Administrator”), a Connecticut corporation, has been appointed as the Company's Administrator pursuant to an Administration Agreement (the “Administration Agreement”) under which it provides administrative accounting, registrar and transfer agency services to the Company. However, the Administrator with effect from July 1, 2007 has delegated substantially all of its duties in this regard to the Company’s Bank, The Bank of New York, who will provide the delegated duties through its Alternative Investment Services division,(“BNY-AIS”) which will serve as the sub-administrator to the Company. See “Sub-Administrator” below. The Administrator receives, as negotiated from time to time, an administrator fee consistent with its customary charges for providing accounting, shareholder record keeping and administrative services to the Company and is also entitled to be reimbursed for actual out-of-pocket expenses incurred in the performance of its duties. Pursuant to the Administration Agreement entered into between the Company and the Administrator, the Administrator is responsible for, among other things: (i) maintaining the register of shareholders of the Company and generally performing all actions related to the issuance and transfer of Shares of the Company and the safe-keeping of certificates therefor, if any, (ii) reviewing and, subject to approval by the Board, accepting subscriptions for the Shares and accepting payment therefor, (iii) computing and disseminating the Net Asset Value of the Company and the Net Asset Value per Share for each class of Shares in accordance with its Memorandum and Articles of Association and as otherwise stated in this Prospectus, (iv) performing all acts related to redemption of the Shares, (v) keeping the accounts of the Company and such financial books and records as are required by law or otherwise for the proper conduct of the financial affairs of the Company and preparing or procuring the preparation of unaudited monthly and audited annual financial statements of the Company and furnishing such statements to Shareholders, (vi) performing all other accounting and clerical services necessary in connection with the administration of the Company and (vii) communicating with Shareholders. The Administration Agreement may be terminated at any time by either party provided that at least ninety (90) days’ written notice has been given to the other party. The Administrator will not, in the absence of gross negligence, willful default or fraud on its part or on the part of its directors, officers, employees or delegates, be liable to the Company or any Shareholder for any act or omission, in the course of, or in connection with, the services rendered by it under the Administration Agreement or for any loss or damage which the Company may sustain or suffer as the result 6
  25. 25. of, or in the course of, the discharge by the Administrator or its directors, officers, employees or delegates of its duties under or pursuant to the Administration Agreement. The Company will indemnify the Administrator and its directors, officers, employees and delegates from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements or any kind or nature whatsoever (other than those resulting from the gross negligence, willful default or fraud on the part of the Administrator or its directors, officers, employees or delegates) which may be imposed on, incurred by, or asserted against the Administrator or its directors, officers, employees or delegates in performing its obligations or duties hereunder. See “FEES AND EXPENSES” herein for a description of the fees payable to the Administrator pursuant to the Administration Agreement. The Sub-Administrator The Company has retained BNY-AIS to serve as a sub-administrator to the Company (the “Sub- Administrator”) and substantially all of its duties in respect of the Company have been delegated to the Sub- Administrator. As such, the Sub-Administrator is responsible for assisting the Administrator with the day-to- day maintenance of the Company’s investor records, attending to subscription, redemption and share transfer requests and calculation of the Company’s Net Asset Value. The Sub-Administrator,: a division of The Bank of New York (BNY) (see section entitled “Bank” below), specializes in providing administration and related services to alternative investment entities including hedge funds. Its primary objective is to provide a quality accounting and administrative service tailored to complex investment vehicles. At this time BNY-AIS works with over 90 hedge funds and money management firms and services over 401 entities representing net assets of approximately $105.6 billion. BNY-AIS has offices located in Hamilton, Bermuda; New York, New York; Dublin, Ireland and San Francisco, California. BNY-AIS will assist the Administrator in performing certain day-to-day tasks on behalf of the Company, including: (i) maintaining the register of shareholders of the Company and generally performing all actions related to the issuance and transfer of Shares of the Company and the safe-keeping of certificates therefor, if any, (ii) reviewing and, subject to approval by the Board, accepting subscriptions for the Shares and accepting payment therefor, (iii) computing and disseminating the Net Asset Value of the Company and the Net Asset Value per Share for each class of Shares in accordance with its Memorandum and Articles of Association and as otherwise stated in this Prospectus, (iv) performing all acts related to redemption of the Shares, (v) keeping the accounts of the Company and such financial books and records as are required by law or otherwise for the proper conduct of the financial affairs of the Company and preparing or procuring the preparation of unaudited monthly and audited annual financial statements of the Company and furnishing such statements to Shareholders, (vi) performing all other accounting and clerical services necessary in connection with the administration of the Company and (vii) communicating with Shareholders. Brokerage Managers of Funds will utilize various brokers to execute, settle and clear securities transactions for them. In selecting brokers to effect portfolio transactions, an investment manager may consider such factors as price, the ability of the brokers to effect the transactions, the brokers' facilities, reliability and financial responsibility, and any research or investment-management-related services and equipment provided by such brokers. If a Manager obtains research or investment-management-related services from a broker, such manager may pay commissions to such broker in an amount greater than the amount another broker might charge. 7
  26. 26. Research or investment-management-related services and equipment provided by brokers through which portfolio transactions are executed, settled and cleared may include research reports on particular industries and companies, economic surveys and analyses, recommendations as to specific securities, on-line quotations, news and research services, and other services (e.g., computer and telecommunications equipment), providing lawful and appropriate assistance to the Managers in the performance of their investment decision-making responsibilities on behalf of their Funds (collectively, “soft dollar items”). Soft dollar items within the Section 28(e) safe harbor of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether provided directly or indirectly, as well as soft dollar items that fall outside of the Section 28(e) safe harbor, may be utilized for the benefit of the Managers of Funds. Managers of the Funds may expect to use soft dollars to acquire soft dollar items that they would otherwise be obligated to provide to, or acquire at their own expense for, their investment vehicles. Section 28(e) of the Exchange Act permits the use of soft dollar items in certain circumstances, provided that the investment vehicle does not pay a rate of commissions in excess of what is competitively available from comparable brokerage firms for comparable services, taking into account various factors, including commission rates, financial responsibility and strength and ability of the broker to efficiently execute transactions and refer investors. Non-research products acquired by Managers of Funds through the use of soft dollars, and soft dollars that are not generated through agency transactions in securities, are outside of the parameters of Section 28(e)'s safe harbor, as are transactions effected in futures, currencies or certain derivatives. Certain soft dollar items received by the Managers of Funds based on transactions for their investment vehicles may be outside of the safe harbor under Section 28(e). Shareholders should be aware that the Managers of the Funds may or may not follow brokerage practices similar to those described above and as a result, the Investment Manager will not be able to monitor whether or not certain soft dollar items received by the Managers are outside the safe harbor of Section 28(e) of the Exchange Act. The Bank The Bank of New York (“BNY”), headquartered in New York and with offices globally, serves as the Company’s bank for purposes of receiving subscription funds, disbursing redemption payments and processing cash transactions not directly related to the Company’s investment portfolio. BNY, founded in 1784 by Alexander Hamilton, is the United States’ oldest bank and is the principal subsidiary of The Bank of New York Company, Inc. (NYSE:BK), a financial holding company. With approximately $13 trillion in total assets under custody as of December 31, 2006, BNY provides a complete range of banking and other financial services to corporations and individuals worldwide through its basic businesses, namely, Securities Processing and Global Payment Services, Corporate Banking, BNY Asset Management and Private Client Services, Retail Banking, and Global Market Services. Portfolio assets will be held in the custody of one or more financial institutions, including any brokers or dealers or other institutions through which the Company effects transactions. Portfolio transactions are executed by brokers and dealers selected on behalf of the Company on the basis of their ability to effect prompt and efficient executions at competitive rates. Brokerage and custody services may be provided by the Managers or their affiliated firms. Independent Client Representative The Company has the authority to appoint a person (the “Independent Client Representative”) unaffiliated with the Sub-Advisor, the Investment Manager or any of their affiliates to act as the agent of the Company to give or withhold any consent of the Company required under applicable law to a transaction in which the Sub-Advisor and/or the Investment Manager causes the Company to purchase securities or other instruments from, or sell securities or other instruments to, the Sub-Advisor’s and/or the Investment 8
  27. 27. Manager’s affiliates or to engage in brokerage transactions in which any of the Sub-Advisor’s or the Investment Manager’s affiliates acts as a broker for another person on the side of the transaction opposite that of the Company. The role of the Independent Client Representative is to determine whether or not a proposed transaction falls within the investment purview of the Company notwithstanding the affiliated nature of the transaction. This is designed to meet the requirements of Section 206 of the Investment Advisers Act of 1940, as amended. If appointed, the Independent Client Representative may be paid by the Company and will receive an indemnity from the Company for claims arising out of its activity in such capacity. 9
  28. 28. FEES AND EXPENSES Management Fees The Company pays the Investment Manager a monthly management fee calculated at an annual rate. The Management Fee for Class A Shares is calculated at an annual rate of one and a half percent (1.50%) of the month-end Class A Net Asset Value of the Company, and the Management Fee for Class B and Class C Shares is calculated at an annual rate of one and three quarters percent (1.75%) of the month end Class B and Class C Net Asset Value of the Company, respectively. The Management Fee is paid to the Investment Manager from the Company on or about the 15th Business Day of the subsequent month. Investor Servicing Fees The Investment Manager on behalf of the Company may enter into one or more agreements with one or more third party placement agents (each a “Placement Agent”) to place investors in the Class C Shares of the Company. Any such Placement Agents who place investors in the Company will be entitled to receive a fee from Class C Shareholders in an amount up to 1.00% of the Net Asset Value of the Class C Shares per annum (the “Investor Servicing Fee”). The Investor Servicing Fee shall be payable monthly in arrears. The Investor Servicing Fee will be prorated based upon a Class C Shareholder’s actual period of ownership of its Class C Shares. The Investor Servicing Fee is accrued monthly and is payable quarterly, in arrears, within a reasonable time thereafter. Administration Fees The Administrator receives a monthly administration fee calculated at the annual rate equal to one-fifth of one percent (0.20%) of the Company's average net assets per month paid out of the Company's assets (the quot;Administration Feequot;). The Administration Fee will be calculated as of the last Business Day of each calendar month and paid by the Company on or about the 15th Business Day of the subsequent month. The Administrator is also entitled to reimbursement of actual out-of-pocket expenses incurred on behalf of the Company. Fees of the Managers The Company bears all direct and indirect costs associated with investment advisory services of the Managers. Such costs may include both a fixed fee equal to a percentage of the average net asset value of the fund managed by a given Manager and a performance fee calculated as a percentage of the realized and unrealized annual profit produced by the assets of the fund managed by a given Manager. The Investment Manager will endeavor to negotiate with Managers to obtain reduced fees for the Company, although there can be no assurance that a fee less than that charged by a particular Manager to other investors will be possible. Fees Relating to Brokerage Decisions on purchase and sales of securities for the Company, the selection of brokers used in securities transactions and the negotiation of commission rates are made by the Managers of Funds. In selecting brokers to effect portfolio transactions for the Company, there is no guarantee that the Managers of the Funds will allocate brokerage business on the basis of best available execution and in consideration of such brokers' provision or payment of the costs of services. 10
  29. 29. Other Operating Expenses All ongoing costs and expenses associated with the administration and operation of the Company including brokerage commissions in relation to the affairs of the Company are borne by the Company and treated in accordance with U.S. Generally Accepted Accounting Principles. Such ongoing expenses also include, but are not limited to the following: (i) charges, fees and expenses associated with investing in various Funds, (ii) fees and charges of custodians, (iii) interest and commitment fees on loans and debit balances, (iv) income taxes, withholding taxes, transfer taxes and other governmental charges and duties, (v) fees of the Company’s Administrator, legal advisers and independent auditors and accountants, (vi) Directors' fees and expenses, (vii) the cost of maintaining the Company’s registered office in the Cayman Islands and maintaining the Company in good standing and duly registered with the Cayman Islands Monetary Authority, (viii) the cost of preparing and distributing any subscription materials and any reports and notices to Shareholders, (ix) the costs incurred in connection with listing the Shares on any stock exchange, if such listing is deemed desirable in the sole discretion of the Directors, (x) the cost of insurance premiums if any, including, without limitation, the cost of director and officer liability insurance policies, and (xi) all similar ongoing operational expenses. Each Director of the Company who is not an officer or employee of the Investment Manager or related companies may receive fees for serving in such capacity. All Directors will receive reimbursement for travel and other costs incurred in connection with their services. 11
  30. 30. SHARES OF THE COMPANY The Company's Share Capital The Company has an authorized capital of U.S. $50,000.00 consisting of the following: (i) 1,000,000 Class A Shares, par value U.S. $0.01 per Share; (ii) 1,000,000 Class B Shares, par value U.S. $0.01 per Share; (iii) 1,000,000 Class C Shares par value U.S. $0.01 per Share; (iv) 1,000,000 Class D Shares par value U.S. $0.01 per Share; (v) 999,900 undesignated redeemable participating non-voting Shares par value U.S. $0.01 each; and (vi) 100 non-participating voting Management Shares, par value U.S. $0.01 per share. Each of the outstanding Shares participates ratably with all other outstanding Shares in the Company's fees, expenses, assets and earnings with respect to such Class of Shares. Fractional shares are permitted to three decimal points. Each Share has the redemption rights discussed herein. There are no outstanding options or any special rights relating to any Shares, nor has it been agreed conditionally or unconditionally to put Shares under option. The Class A, Class B, and Class C Shares are redeemable participating non-voting Shares in the Company. The Management Shares are non-redeemable, non-participating shares, which have the sole voting rights in the Company. Shares are issued on such terms and conditions as the Directors may determine. Each of the outstanding Shares participates ratably with all other outstanding Shares of the same class in the Company's fees, expenses, assets and earnings. Each Share has the redemption rights discussed herein. There are no outstanding options or any special rights relating to any Shares, nor has it been agreed conditionally or unconditionally to put Shares under option. Each Share has equal voting rights and each Share in each class has equal dividend, distribution and liquidation rights and is redeemable in accordance with the Net Asset Value of the Shares of that class. Subject as provided herein, the Board may in its discretion issue additional classes of shares without notice to or consent of the Shareholders provided such additional classes do not dilute the Shares or modify the rights attaching thereto. Such additional classes of Shares may be subject to different terms and conditions than as discussed herein and may be offered pursuant to separate memoranda. Temporary Suspension of Dealings The Board may temporarily declare a suspension of the sale, allotment, issue or redemption of the Shares and the payment on redemption of Shares (in any of the classes) upon the occurrence of any of the following circumstances: 1. If the determination of the Net Asset Value for the whole or part of a period during which any stock exchange or over-the-counter market on which any significant portion of the investments of the Company are listed, traded or dealt in is closed (other than customary weekend and holiday closing) or trading on such stock exchange or market is restricted; or 12
  31. 31. 2. When circumstances exist as a result of which in the opinion of the Board of Directors it is not reasonably practicable for the Company to dispose of its investments or as a result of which any such disposal would be materially prejudicial to Shareholders; or 3. When a breakdown occurs in any of the means normally employed in ascertaining the value of a significant portion of its investments or when for any other reason the value of a significant portion of its investments or other assets of the Company cannot reasonably or fairly be ascertained. The Board may temporarily declare a suspension of the determination of the Company's Net Asset Value (in any of the classes) during: 1. Any period when for any reason the prices of any investments which constitute a substantial portion of the assets of the Company cannot be reasonably, promptly or accurately ascertained; or 2. Any period (other than customary holiday or weekend closings) when any recognised exchange or market on which the Company's investments are normally dealt in or traded is closed, or during which trading thereon is restricted or suspended. Any suspension of redemptions and the calculation of the Net Asset Value will be notified immediately to the Shareholders, and any stock exchange, if applicable, and, where possible, all reasonable steps will be taken to bring any period of suspension to an end as soon as possible. Voting and Other Rights Subject to any rights or restrictions for the time being attached to any class or classes of Shares, on a show of hands or on a poll every Shareholder present in person, or by proxy shall be entitled to vote in accordance with the aggregate Net Asset Value (as at the most recent date of determination) of Shares held by such Shareholder. General meetings of the Company's Shareholders may, but need not be, held annually to approve the selection of auditors and to attend to such other business as may properly be placed before a meeting. Shareholders will receive at least fourteen (14) days' notice of any Shareholders' meeting and will be entitled to vote their Shares either personally or by proxy. If the proxy sent with the notice of meeting is not completed and returned prior to the meeting and the Shareholder does not appear personally at such meeting, such Shares will be voted in the discretion of the proxy designated in the Subscription Agreement executed by such Shareholder. Registration and Transfer of Shares Shares will be issued in registered form; the Company does not issue bearer shares. The Administrator maintains a current register of the names and addresses of the Company's Shareholders. Such entry in the share register will be conclusive evidence of ownership of such Shares. Certificates representing Shares will be issued only upon written request. Transfers of Shares are permitted only with the prior consent of the Board, which consent may be withheld in the absolute discretion of the Board (such as, in order to prevent adverse regulatory, pecuniary, legal, taxation or material administrative disadvantage to the Company or its Shareholders as a whole) or where the transfer would result in the transferee holding Shares with a Net Asset Value of less than U.S. $100,000 for the Class A, B, and C Shareholders. Any transferee is required to furnish the same information, which would be required in connection with a direct subscription in order for a transfer application to be considered by the Board. Violation of applicable ownership and transfer restrictions may result in a compulsory redemption. 13

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