Palio Uk Mid-Market Debt Fund Limited

Proof 11: 6.11.12

THIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take or the contents of this document, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank, solicitor, accountant, or other appropriate independent financial adviser, who is authorised under the Financial Services and Markets Act 2000 (the ‘‘FSMA’’) if you are in the United Kingdom, or from another appropriately authorised independent financial adviser if you are in a territory outside the United Kingdom. A copy of this document, which comprises a prospectus relating to Palio UK Mid-Market Debt Fund Limited (the ‘‘Company’’) in connection with the issue of shares in the Company, prepared in accordance with the Prospectus Rules of the UK Listing Authority made pursuant to section 73A of the FSMA, has been filed with the Financial Services Authority in accordance with Rule 3.2 of the Prospectus Rules. This document also constitutes a Listing Document for the purposes of seeking admission of the Company to the Official List of the CISX. The Shares are only suitable for sophisticated investors (i) who understand the potential risk of capital loss and that there may be limited liquidity in the underlying investments of the Company; (ii) for whom an investment in the Shares is part of a diversified investment programme; and (iii) who fully understand and are willing to assume the risks involved in such an investment programme. It should be remembered that the price of the Shares and the income from them can go down as well as up. Application will be made for the Shares to be admitted to trading on the Specialist Fund Market of The London Stock Exchange UK and application will be made to the CISX for the Shares to be admitted to trading and listing on the Official List of the CISX. It is expected that Admission will become effective and that dealings in the Shares which are the subject of the Issue will commence on 3 December 2012. This document includes particulars given in compliance with the CISX Listing Rules for the purpose of giving information with regard to the Company. The Company and the Directors, whose names appear on page 34 of this document, accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Company and the Directors (who have 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 import of such information and there are no other facts the omission of which would make any statement herein misleading. The Company is a registered closed-ended investment scheme registered pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, and the Registered Collective Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission (the ‘‘Commission’’). The Commission, in granting registration, has not reviewed this Prospectus but has relied upon specific warranties provided by the Administrator, the Company’s designated manager. The Investment Adviser, Palio Capital Partners LLP, accepts responsibility for the information contained in this document attributed to it. To the best of the knowledge of the Investment Adviser, which has taken all reasonable care to ensure that such is the case, the information contained in this document attributed to them is in accordance with the facts and contains no omission likely to affect its import. Capitalised terms contained in this document shall have the meanings set out in Part X of this document. The attention of potential investors is drawn to the Risk Factors set out on pages 14 to 26 of this document. The latest time and date for applications under the Offer is 1100 hours on 26 November 2012. Further details of the Issue are set out in Part VI of this document.

PALIO UK MID-MARKET DEBT FUND LIMITED (a closed-ended investment company limited by shares incorporated under the laws of Guernsey with registered number 55691)

Placing and Offer for Subscription for a target issue in excess of 150 million Shares at an issue price of £1.00 per Share Investment Manager Palio Capital Management Guernsey Limited Investment Adviser Palio Capital Partners LLP Financial Adviser and Bookrunner Oriel Securities Limited

This Prospectus does not constitute an offer to sell, or the solicitation of an offer to acquire or subscribe for, Shares in any jurisdiction where such an offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on the Company, the Investment Manager or the Investment Adviser. The offer and sale of the Shares has not been and will not be registered under the applicable securities laws of the United States, Canada, Japan or South Africa. The Shares may not be offered or sold within the United States, Canada, Japan or South Africa or to any U.S. person (‘‘U.S. Person’’) as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the ‘‘U.S. Securities Act’’)) or to any national, resident or citizen of Canada, Japan or South Africa. The Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and the Shares may not be offered, sold, resold, transferred or delivered, directly or indirectly, into or within the United States or to, or for the account or benefit of, U.S. Persons. There will be no public offer of the Shares in the United States. The Shares are being offered and sold only outside the United States in ‘‘offshore transactions’’ to persons who are not U.S. Persons in accordance with and in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by Regulation S thereunder. The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the ‘‘U.S. Investment Company Act’’) and investors will not be entitled to the benefits of the U.S. Investment Company Act. The Shares are subject to significant selling and transfers restrictions as set out under the headings ‘‘Selling restrictions’’ beginning on page 29 and ‘‘Purchase and transfer restrictions’’ beginning on page 72 of this Prospectus. Neither the U.S. Securities and Exchange Commission nor any state securities commission nor any other regulatory authority in the United States has approved or disapproved of the Shares or passed upon the adequacy or accuracy of this Prospectus. Any representation to the contrary is a criminal offence in the United States. Prospective investors should note that, except with the express written consent of the Company given in respect of an investment in the Company, the Shares may not be acquired by: (i) investors using assets of (A) an ‘‘employee benefit plan’’ as defined in Section 3(3) of the U.S. Employee Retirement Income Security Act of 1974, as amended (‘‘ERISA’’) that is subject to Title I of ERISA; (B) a ‘‘plan’’ as defined in Section 4975 of the United States Internal Revenue Code of 1986, as amended (the ‘‘U.S. Tax Code’’), including an individual retirement account or other arrangement that is subject to Section 4975 of the U.S. Tax Code; or (C) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the U.S. Tax Code or; (ii) a governmental, church, non- U.S. or other employee benefit plan that is subject to any federal, state, local, non-U.S. or other law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the U.S. Tax Code, unless its purchase, holding, and disposition of the Shares will not constitute or result in a non-exempt violation of any such substantially similar law. Oriel Securities Limited (‘‘Oriel’’), which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as Financial Adviser and Bookrunner to the Company in connection with the matters described herein. Oriel is acting for the Company and no one else in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in relation to the Placing, the contents of this Prospectus or any transaction or arrangement referred to herein. Apart from the responsibilities and liabilities, if any, which may be imposed on Oriel by FSMA or the regulatory regime established thereunder, Oriel does not accept any responsibility whatsoever for the contents of this Prospectus or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Investment Manager, the Investment Adviser the Shares or the Issue. Oriel accordingly disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of such document or any such statement. In connection with the Placing, Oriel and any of its Affiliates acting as an investor for its or their own account(s), may subscribe for the Shares and, in that capacity, may retain, purchase, sell, offer to sell or otherwise deal for its or their own account(s) in such securities of the Company, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in this Prospectus to the Shares being issued, offered, subscribed or otherwise dealt with, should be read as including any issue or offer to, or subscription or dealing by, Oriel and any of its Affiliates acting as an investor for its or their own account(s). None of Oriel or any of its Affiliates intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so. Neither the admission of the Shares to the Official List of the CISX nor the approval of this Prospectus pursuant to the listing requirements of the CISX shall constitute a warranty or representation by the CISX as to the competence of the service providers to or any other party connected with the Company, the adequacy and accuracy of the information contained in this Prospectus or the suitability of the issuer for investment or for any other purpose. The CISX has been recognised by the HMRC under Section 841 of the Income and Corporation Tax Act 1988 and the UK Financial Services Authority has approved the CISX as a Designated Investment Exchange within the meaning of the Financial Services and Markets Act 2000.

This Prospectus is dated 7 November 2012.

2 c107409pu010 Proof 11: 6.11.12_23:37 B/L Revision: 0 Operator BonP CONTENTS

Summary...... 4 Risk Factors...... 14 Important Notices...... 27 Expected Timetable...... 32 Issue Statistics ...... 33 Directors, Investment Manager and Advisers ...... 34 Part I: Introduction to the Company...... 35 Part II: Product and Market Overview ...... 43 Part III: Investment Manager and Adviser...... 52 Part IV: Investment Process and Portfolio Management...... 59 Part V: Directors, Management and Administration...... 63 Part VI: Issue Arrangements ...... 70 Part VII: Additional Information ...... 75 Part VIII: Terms and Conditions of the Offer...... 101 Part IX: Terms and Conditions of the Placing...... 108 Part X: Deﬁnitions...... 113 Appendix 1 Application Form for the Offer...... 119

3 c107409pu010 Proof 11: 6.11.12_23:37 B/L Revision: 0 Operator BonP SUMMARY

Section A – Introduction and warnings

Element Disclosure requirement Disclosure

A1 Warning This summary section should be read as an introduction to this Prospectus which comprises the whole of this Prospectus. Any decision to acquire Shares should be based on a consideration of this Prospectus as a whole. Where a claim relating to the information contained in a prospectus is brought before a court, a plaintiff investor might, under national legislation of the European Economic Area states, have to bear the costs of translating that prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary, including any translation of the summary, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus or it does not provide, when read together with the other parts of the prospectus, key information in order to aid investors when considering whether to invest in such securities.

A2 Consent for Resale Not Applicable

Section B – Issuer

Element Disclosure requirement Disclosure

B1 Legal and commercial Palio UK Mid-Market Debt Fund Limited (the ‘‘Company’’). name

B2 Domicile and legal The Company is a registered closed-ended investment company limited by form shares, registered and incorporated in Guernsey under the Companies Laws on 3 October 2012, with registration number 55691.

B5 Group description The Company will hold its investments through a holding vehicle, the Investment Partnership, of which it is the general partner. The only other partner in the Investment Partnership will be the Special Limited Partner whose economic rights in respect of the Investment Partnership are limited only to receiving an incentive allocation as described further under the heading ‘‘Incentive allocation’’ in Part V of this Prospectus and, upon liquidation of the Investment Partnership, the return of its capital contribution of £10. For the purposes of efﬁcient portfolio management, the Company intends to hold certain investments through further wholly- owned investing subsidiaries incorporated in Guernsey and/or Luxembourg which are expected to be incorporated on or shortly after Admission.

B6 Major Shareholders As at the date hereof, insofar as is known to the Company, no person is or will, immediately following the Issue, be directly or indirectly interested in 5 per cent. or more of the Company’s issued share capital.

B7 Key ﬁnancial Not applicable. The Company has been newly incorporated and has no information historical ﬁnancial information.

B8 Key pro forma Not applicable. The Company has been newly incorporated and has no ﬁnancial information historical ﬁnancial information.

4 c107409pu020 Proof 11: 6.11.12 B/L Revision: 0 Operator BonP B9 Proﬁt forecast Not applicable. No proﬁt estimate or forecast is made.

B10 Description of the Not applicable. The Company has been newly incorporated and has no nature of any historical financial information. qualifications in the audit report on the historical financial information

B11 Explanation if working Not applicable. The Company is of the opinion that, on the basis that the capital not sufﬁcient Minimum Net Proceeds are raised, the working capital available to the for present Group is sufﬁcient for the Group’s present requirements, that is for at least requirements the next 12 months from the date of this Prospectus.

B34 Investment objective Investment objective and policy The Company’s investment objective is the generation of superior risk- adjusted returns, comprising both income and capital, through originating and structuring a combination of senior debt, mezzanine instruments and Junior Equity into SMEs, while emphasising the preservation of capital and capital appreciation. Investment policy Allocations The Company aims to generate proprietary deal flow to structure senior debt, mezzanine loans and Junior Equity predominantly into PE backed SMEs. The Company will only lend to and invest in SMEs with enterprise values of approximately £10 million to £100 million and which typically would have the support of a PE backer with what the Company considers to be a successful track record and a plan to develop shareholder value. It is intended that, following the expiry of the Investment Period, the majority of assets in the Company’s Portfolio will comprise a combination of the following instruments: (i) senior debt; (ii) mezzanine loans, which will typically also include warrants; and (iii) Junior Equity. Diversification The Company’s Portfolio is expected to consist of approximately 10 investments based on the target size of the Issue (although this may increase or decrease with the size of the Company). No investment will represent more than 20 per cent. of the Net Asset Value of the Company at the time of investment. Portfolio diversity will be aided by the fact that the Company will invest across a range of sectors including support services, transport, industrial, healthcare, financial services, information technology and leisure. The Company, however, appreciates the importance of socially responsible investing and so will not lend to or invest in companies which at the time of lending or investment: * produce tobacco; * generate nuclear power; * produce or sell torture equipment, landmines or nuclear weapons; * are considered by it to harm stakeholders through unacceptable corporate governance practices;

5 c107409pu020 Proof 11: 6.11.12 B/L Revision: 0 Operator BonP * are considered by it to not satisfactorily mitigate any signiﬁcant negative impact they might have on the environment; * derive a material proportion (typically 10 per cent. or more of revenues) of their business from: military applications or weaponry; services and products directly related to nuclear power generation; products tested on animals other than for human health; animal fur products; pornography; irresponsible gambling; irresponsible drinking; and/or tobacco. Gearing The Company will not employ gearing or invest in derivatives for investment purposes. Although there is no intention for the Company to put any borrowing facilities in place, the Company will have the ﬂexibility to borrow up to 20 per cent. of Net Asset Value. Any such borrowing would be intended to be short term, and would be capped at 20 per cent. of the Company’s Net Asset Value as at the time of draw down. Changes to the Company’s investment policy Any material changes to the Company’s investment policy will only be made with the approval, by ordinary resolution, of Shareholders.

B35 Borrowing limits The Company will not employ gearing or invest in derivatives for investment purposes. Although there is no intention for the Company to put any borrowing facilities in place, the Company will have the ﬂexibility to borrow up to 20 per cent. of Net Asset Value. Any such borrowing would be intended to be short term, and would be capped at 20 per cent. of the Company’s Net Asset Value as at the time of draw down.

B36 Regulatory status The Company is a registered closed-ended investment scheme registered pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, and the Registered Collective Investment Scheme Rules 2008 issued by the GFSC. The Company is registered with the GFSC. The Company is not regulated by the Financial Services Authority or any other regulator.

B37 Typical investors Investment in the Company is only suitable for institutional, professional and high net worth investors, private client fund managers and brokers and other investors who understand the risks involved in investing in the Company and/or who have received advice from their fund manager or broker regarding investment in the Company.

B38 Investment of 20% or Not applicable. No investment will represent more than 20 per cent. of the more in single Net Asset Value of the Company at the time of investment. underlying asset or investment company

B39 Investment of 40% Not applicable. No investment will represent more than 40 per cent. of the or more in single Net Asset Value of the Company at the time of investment. underlying asset or investment company

B40 Applicant’s service Investment Manager and Investment Adviser providers Management fee

6 c107409pu020 Proof 11: 6.11.12 B/L Revision: 0 Operator BonP The Investment Manager will be entitled to a quarterly management fee. This quarterly fee shall be equal to 0.25 per cent. of the NAV of the Company as at the last day of the previous calendar quarter and shall be payable within 14 days of the calculation of the NAV of the Company as at such date. The management fee for the period from Admission to the end of the ﬁrst calendar quarter following Admission shall be calculated by reference to the NAV of the Company immediately following Admission and shall be pro-rated accordingly. The Investment Manager will be responsible for paying the Investment Adviser. The Investment Adviser shall be paid such amount in respect of its services as is agreed between the Investment Manager and the Investment Adviser from time to time. The Investment Manager may at its discretion enter into arrangements with certain investors pursuant to which it will rebate to such investors a proportion of the management fee received from the Company. Incentive allocation The Special Limited Partner (the principal partners of which are the Senior Executives) will be entitled to receive an incentive allocation from the Investment Partnership through which the Company will hold all of its investments. The Company will, save for any amounts retained for paying fees and expenses or for working capital purposes, contribute the net proceeds of the Issue to the Investment Partnership in which it is the general partner and through which it will hold all of its investments. All amounts subsequently distributed by the Investment Partnership (including, without limitation, net income generated by the Company’s investments and the proceeds of realising such investments) will be for the account of the Company save that the Special Limited Partner (the principal members of which are the Senior Executives) will be entitled to receive an incentive allocation. The Investment Partnership will therefore, after having paid to the Company all amounts necessary to enable the Company to meet fees and expenses payable by it, make distributions on the following basis: (A) ﬁrst, to the Company, an amount equal to the aggregate gross proceeds received by the Company from the issue of Shares (including sales of Shares out of treasury); (B) second, to the Company, an amount equal to a realised (cash-paid) IRR on the aggregate gross proceeds received by the Company from the issue of Shares (including sales of Shares out of treasury), equal to LIBOR plus 7 per cent; (C) third, amounts distributed shall be distributed 50 per cent. to the Company and 50 per cent. to the Special Limited Partner until the Special Limited Partner has been distributed amounts which in aggregate are equal to 10 per cent. of all amounts in excess of that distributed under paragraph (A), being that distributed to the Company under paragraphs (B) and (C); and (D) thereafter, all amounts distributed shall be distributed 10 per cent. to the Special Limited Partner and 90 per cent. to the Company.

7 c107409pu020 Proof 11: 6.11.12 B/L Revision: 0 Operator BonP Administrator and Custodian Under the terms of the Administration and Custody Agreement, the Administrator is entitled to various fees, including a minimum annual administration fee of £65,000, an annual secretarial fee of £30,000 and a minimum annual loan administration fee of £40,000. Registrar The Registrar will be entitled to an annual fee from the Company equal to £2 per Shareholder per annum or part thereof, with a minimum of £6,500 per annum per class of Shares. Other registrar activity will be charged for in accordance with the Registrar’s normal tariff as published from time to time. Directors Each of the Directors will be entitled to receive £35,000 per annum, other than Michael Iain Stokes who will be entitled to receive £30,000, the Chairperson who will be entitled to receive £40,000 per annum, and the chairman of the Audit Committee who will be entitled to receive an additional fee of £5,000 per annum. No amount has been set aside or accrued by the Company to provide pension, retirement or other similar beneﬁts. CISX Sponsor Fee The CISX Sponsor will be entitled to a one-off listing fee of £6,000 which is due on Admission and, for acting as sponsor on an ongoing basis, an annual fee of £6,000. Auditor The Auditor will be entitled to an annual fee from the Company, which fee will be agreed each year in advance of the Auditor commencing audit work.

B41 Regulatory status of The Company is a registered closed ended investment company limited by investment manager, shares, registered and incorporated in Guernsey under the Companies investment adviser Laws on 3 October 2012, with registration number 55691. The Company and custodian has appointed Palio Capital Management Guernsey Limited, a company incorporated in Guernsey under the Companies Laws on 1 October 2012, with registration number 55683, as its Investment Manager. The Investment Manager is licensed by the GFSC under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. The Investment Adviser is Palio Capital Partners LLP, a limited liability partnership incorporated in England and Wales, with registered number OC349941. The Investment Adviser is an appointed representative of Hutchinson Lilley Asset Management LLP, which is authorised and regulated by the Financial Services Authority, and will act in such capacity until such time as its application to the FSA is processed and it becomes authorised and regulated by the Financial Services Authority.

B42 Calculation of Net The Company currently intends to publish its estimate of the Net Asset Asset Value Value per Share, as calculated by the process described below, on a monthly basis (or at such other intervals as may be determined by the Board from time to time). The Net Asset Value per Share will be published in Sterling and will be published by RIS announcement and on the website of the Company and notiﬁed to the CISX. Individual assets which make up the Portfolio will be valued by the Investment Manager, as advised by the Investment Adviser, or the Administrator, as appropriate, using a variety of techniques.

8 c107409pu020 Proof 11: 6.11.12 B/L Revision: 0 Operator BonP Loans made directly to borrowers for which no market exists will be valued by the Administrator at amortised cost. Values will be ascribed using IFRS. To the extent that the Company invests in unquoted equities, such equities will be valued by the Investment Manager, as advised by the Investment Adviser, in accordance with the International Private Equity and Venture Capital Guidelines. In respect of any valuation to be published by the Company (be it the monthly NAV or otherwise), in circumstances where either the Directors, Administrator or the Investment Manager, as advised by the Investment Adviser, are of the opinion that the International Private Equity and Venture Capital Guidelines (in respect of equities) or valuation at amortised cost (in respect of loans) is not appropriate, or when valuing other securities such as warrants, the Directors, in consultation with the Administrator and the Investment Manager, as advised by the Investment Adviser, shall determine an appropriate alternative valuation method or valuation source for the relevant investment. This may include valuations on the basis of fair value. The overall criterion for fair value is a price at which an asset would change hands in a transaction between a willing buyer and a willing seller, neither being under compulsion to buy or sell and both having the same knowledge of the relevant facts. Third party valuations, market levels and other valuation sources will be reviewed and audited as part of the annual audit. The Audit Committee will semi-annually review the reasonableness of the valuations concluded in the valuation analysis in order to be satisﬁed that they represent a reasonable estimate of the fair value of the assets held by the Company as included in the published year end and interim accounts on the relevant reporting date. Having been presented with the recommendations of the Audit Committee, the Board is ultimately responsible, on behalf of the Company, for determining the fair value of the investments held by the Company in good faith.

B43 Cross liability Not applicable. The Company has no cross liability between classes or investment in another collective investment undertaking.

B44 No ﬁnancial statements The Company has not commenced operations and no ﬁnancial statements have been made up have been made up as at the date of this Prospectus.

B45 Portfolio Not applicable. The Company has not commenced operations and so has no Portfolio as at the date of this Prospectus.

B46 Net Asset Value Not applicable. The Company has not commenced operations and so has no Net Asset Value as at the date of this Prospectus.

Section C – Securities

Element Disclosure requirement Disclosure

C1 Type and class of The Company will target an issue in excess of 150 million Sterling Shares at securities an issue price of £1.00 per Share. The ISIN for the Sterling Shares is GG00B7G8GV90.

C2 Currency Sterling.

9 c107409pu020 Proof 11: 6.11.12 B/L Revision: 0 Operator BonP C3 Number of securities The following table shows the issued ordinary share capital of the in issue Company as at 3 October 2012 (being the date of incorporation): Number of Shares Shares 1

C4 Description of the Voting Rights rights attaching to Subject to any special rights, restrictions or prohibitions as regards voting the securities for the time being attached to any Shares, holders of Shares shall have the right to receive notice of and to attend and vote at general meetings of the Company. Each Shareholder being present in person or by proxy or by a duly authorised representative (if a corporation) at a meeting shall upon a show of hands have one vote and upon a poll each such holder present in person or by proxy or by a duly authorised representative (if a corporation) shall (unless otherwise determined by the Directors prior to the first issue of Shares of such class) have one vote in respect of each Share held by him. B Shares and, save in limited circumstances, C Shares will not carry the right to attend and receive notice of any general meetings of the Company, nor will they carry the right to vote at such meetings. Return of Capital As to a winding up of the Company or other return of capital (other than by way of a repurchase or redemption of Shares in accordance with the provisions of the Articles and the Companies Laws), the surplus assets of the Company attributable to the Shares of each class remaining after payment of all creditors (as determined by the Directors), or such proportion of such assets as the Directors determine to distribute, shall, subject to the rights of any Shares that may be issued with special rights or privileges, be divided pari passu among the holders of Shares of that class in proportion to the number of Shares of that class held by them. Pre-emption rights There are no provisions of Guernsey law which confer rights of pre- emption in respect of the allotment of the Shares. However, the Articles of Incorporation provide that the Company is not permitted to allot and issue (for cash) equity securities (being Shares or C Shares or rights to subscribe for, or convert securities into, Shares) or sell (for cash) any Shares or C Shares held in treasury, unless it shall first have offered to allot and issue to each existing holder of Shares and C Shares on the same or more favourable terms a proportion of those Shares or C Shares the aggregate value of which (at the proposed issue price) is as nearly as practicable equal to the proportion of the total Net Asset Value of the Company represented by the Shares or C Shares held by such shareholder. These pre-emption rights may be excluded and disapplied or modified by special resolution of the Shareholders.

C5 Restrictions on the Subject to the Articles (and the restrictions on transfer contained therein), free transferability a Shareholder may transfer all or any of his uncertificated Shares in any of the securities. manner which is permitted by the Companies Laws or in any other manner which is from time to time approved by the Board. A transfer of a certificated Share shall be in any usual form or in any other form approved by the Board. An instrument of transfer of a certificated Share shall be signed by or on behalf of the transferor and, unless the Share is fully paid, by or on behalf of the transferee.

10 C6 Admission Applications will be made to the London Stock Exchange for the Shares issued pursuant to the Issue to be admitted to trading on the SFM and to the CISX for the Shares to be admitted to trading and listing on the Ofﬁcial List of the CISX. It is expected that such admissions will become effective and that dealings in such Shares will commence at 0800 hours on 3 December 2012.

C7 Dividend policy Subject to compliance with the Companies Law and the solvency test set out therein, the Company will pay out all net income received on investments of the Company (including any fees received as a result of the Company’s investments) by way of two half yearly dividends in respect of its ﬁrst ﬁnancial year, and by way of quarterly dividends thereafter. It is a requirement of an exception to the United Kingdom offshore fund rules that all income from the Company’s Portfolio (after deduction of reasonable expenses) is to be paid to investors. This dividend policy should ensure that this requirement is met. The exact amount of any such dividend will be variable depending on the amounts of income received by the Company.

Section D – Risks

Element Disclosure requirement Disclosure

D1 Key information on * The Company is a newly formed company incorporated under the the risks specific to the laws of Guernsey with no operating history and no revenues, and issuer or its industry. investors have no basis on which to evaluate the Company’s ability to achieve its investment objective * The Company’s Target Return is based on estimates and assumptions that are inherently subject to significant business and economic uncertainties and contingencies, and the actual rate of return may be materially lower than the Target Return * Investment in the Company is only suitable for sophisticated investors * The Company may be unable to realise value from its investments and investors could lose all or part of their investment * The Company’s Net Asset Value may be based on estimates which may be inaccurate * Capital gains from the Company’s investments may require significant time to materialise or may not materialise at all * Global capital markets have been experiencing volatility, disruption and instability. Material changes affecting global debt and equity capital markets may have a negative effect on the Company’s business, financial condition and results of operations * The Company has no employees and is reliant on the performance of third party service providers

D3 Key information on * The Shares may trade at a discount to NAV per Share and the key risks speciﬁc Shareholders may be unable to realise their investments through to the securities. the secondary market at NAV per Share * The existence of a liquid market in the Shares cannot be guaranteed * The Company is not, and does not intend to become, registered in the United States as an investment company under the U.S. Investment Company Act and related rules

11 c107409pu020 Proof 11: 6.11.12 B/L Revision: 0 Operator BonP * The Shares will be subject to signiﬁcant selling and transfer restrictions as well as forced transfer provisions

Section E – Offer

Element Disclosure requirement Disclosure E1 Net proceeds and The target size of the Issue is in excess of £150 million. The actual number costs of the Issue of Shares to be issued pursuant to the Issue, and therefore the Gross Issue Proceeds, is not known as at the date of this Prospectus but will be notified by the Company via a RIS announcement prior to Admission. The target issue size should not be taken as an indication of the number of Shares to be issued. The minimum subscription per investor pursuant to the Offer is £1,000. The costs of the Issue to be borne by the Company are fixed at an amount equal to 2 per cent. of the Gross Issue Proceeds. To the extent that such expenses exceed an amount equal to 2 per cent. of the Gross Issue Proceeds, the Investment Adviser will bear the excess. These expenses will be paid on or around Admission and will include, without limitation, placing fees and commissions; registration, listing and admission fees; the cost of settlement and escrow arrangements; printing, advertising and distribution costs; legal fees, and any other applicable expenses. All such expenses will be immediately written off. On the assumption that the Company achieves its target issue of £150 million, and given that the initial expenses of the Issue to be borne by the Company will be fixed at an amount equal to 2 per cent. of the Gross Issue Proceeds, the NAV of the Company immediately following Admission will be £147 million (in other words, 98 per cent. of the Gross Issue Proceeds), and the NAV per Share will be £0.98.

E2a Reasons for the offer The Company’s investment objective is the generation of superior risk- and use of proceeds adjusted returns, comprising both income and capital, through originating and structuring a combination of senior debt, mezzanine instruments and Junior Equity SMEs, while emphasising the preservation of capital and capital appreciation. Proceeds will be invested in accordance with the investment policy with a view to achieving the Company’s investment objective.

E3 Terms and conditions Offer of the offer Shares are available under the Offer at a price of £1.00 per Share. The Offer Shares will, when issued and fully paid, include the right to receive all dividends or other distributions made, paid or declared, if any, by reference to a record date after the date of their issue. Applications to acquire Offer Shares must be made on the Application Form attached as Appendix 1 to this Prospectus or otherwise published by the Company. The Offer will be conditional upon: * Admission occurring by 0800 hours on 3 December 2012 (or such later time or date, not being later than 13 December 2012, as the Company, the Investment Adviser and Oriel may agree); * the Placing and Offer Agreement becoming otherwise unconditional in all respects, and not being terminated in accordance with its terms before Admission occurs; and * the Minimum Net Proceeds having been raised.

12 c107409pu020 Proof 11: 6.11.12 B/L Revision: 0 Operator BonP E4 Material interests Not applicable. No interest is material to the Issue.

E5 Name of person Not applicable. No person or entity is offering to sell the security as part of selling securities the Issue.

E6 Dilution Not applicable. One share is held in the legal reserve at the date of the Placing and Offer.

E7 Expenses charged to Not Applicable the investor

13 c107409pu020 Proof 11: 6.11.12 B/L Revision: 0 Operator BonP RISK FACTORS

An investment in the Shares carries a number of risks including the risk that the entire investment may be lost. In addition to all other information set out in this Prospectus, the following specific factors should be considered when deciding whether to make an investment in the Shares. The risks set out below are those which are considered to be the material risks relating to an investment in the Shares or the Company or its industry but are not the only risks relating to the Shares or the Company or its industry. No assurance can be given that Shareholders will realise profit on, or recover the value of, their investment in the Shares. It should be remembered that the price of Shares and the income from them can go down as well as up. The Shares are only suitable for investors who understand the risk of capital loss and that there may be limited liquidity in the underlying investments of the Company and in the Shares, for whom an investment in the Shares would be of a long-term nature and constitute part of a diversified investment portfolio and who understand and are willing to assume the risks involved in investing in the Shares. Additional risks and uncertainties of which the Company is presently unaware or that the Company currently believes are immaterial may also adversely affect its business, financial condition, results of operations or the value of the Shares. Potential investors in the Shares should review this Prospectus carefully and in its entirety and consult with their professional advisers prior to making an application to subscribe for Shares. Defined terms used in the risk factors below have the meanings set out under the section headed ‘‘Definitions’’ in Part X of this Prospectus.

Risks relating to the Company The Company is a newly formed company incorporated under the laws of Guernsey with no operating history and no revenues, and investors have no basis on which to evaluate the Company’s ability to achieve its investment objective The Company is a newly formed company with no operating results, and it will not commence operations until obtaining funding through the Issue. Because the Company lacks an operating history, investors have no basis on which to evaluate the Company’s ability to achieve its investment objective and provide a satisfactory investment return. The Company’s returns and operating cash flows will depend on many factors, including the price and performance of its investments, the availability and liquidity of investment opportunities falling within the Company’s investment objective and policy, the level and volatility of interest rates, readily accessible short-term borrowings, conditions in the financial markets, the markets and industries in which its portfolio companies operate and the wider economy, the financial performance of borrowers, and the Company’s ability to successfully operate its business and execute its investment strategy. There can be no assurance that the Company’s investment strategy will be successful.

The Company’s Target Return is based on estimates and assumptions that are inherently subject to significant business and economic uncertainties and contingencies, and the actual rate of return may be materially lower than the Target Return The Company’s Target Return set forth in this Prospectus is a target only and is based on estimates and assumptions about a variety of factors including, without limitation, asset mix, value, volatility, holding periods, performance of underlying borrowers, investment liquidity, changes in current market conditions, interest rates, government regulations or other policies, the worldwide economic environment, changes in law and taxation, natural disasters, terrorism, social unrest and civil disturbances or the occurrence of risks described elsewhere in this Prospectus, which are inherently subject to significant business, economic and market uncertainties and contingencies, all of which are beyond the Company’s control and which may adversely affect the Company’s ability to achieve the Target Return. Such Target Return is also based on the assumption that the Company will be able to implement its investment policy and strategy successfully as well as market conditions and the economic environment at the time of assessing the proposed Target Return, and is therefore subject to change. There is no guarantee or assurance that the Target Return or actual returns can be achieved at or near the levels set forth in this Prospectus. Accordingly, the actual rate of return achieved may be materially lower than the Target Return, or may result in a loss. The Company does not intend to publish target returns regularly or to update or otherwise revise its Target Return to reflect subsequent events or circumstances. A failure to achieve the Target Return

14 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP set forth in this Prospectus may adversely affect the Company’s business, ﬁnancial condition, results of operations and the NAV and price of the Shares.

Investment in the Company is only suitable for sophisticated investors The Company will invest all of the Net Issue Proceeds in an actively managed portfolio of investments. Such investments are only suitable for sophisticated investors who fully understand and are willing to assume the risks involved in such investments, including the fact that they may be illiquid. The Directors consider that an investment in the Company should be regarded as long term in nature and is suitable only for sophisticated investors, investment professionals, high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts, in each case who can bear the economic risk of a substantial or entire loss of their investment and who can accept that there may be limited liquidity in the Shares. Potential investors should have regard to this when considering an investment in the Company. To optimise returns, Shareholders may need to hold the Shares on a long term basis and the Shares are not suitable for short term investment.

The Company may be unable to realise value from its investments and investors could lose all or part of their investment Investments that the Company makes may not appreciate in value and, in fact, may decline in value. During times of recession and economic contraction, there may be little or no ability to realise value on any of the Company’s assets, or the value which can be realised may be substantially below the assessed value of the collateral. A default by a borrower/portfolio company that results in the Company holding collateral may materially adversely affect the performance of the Portfolio and the value of the Shares. There can be no assurance that the Company’s investments will generate gains or income or that any gains or income that may be generated will be sufﬁcient to offset any losses that may be sustained. As a result, investing in the Company is speculative and involves a high degree of risk. The Company’s performance may be volatile and investors could lose all or part of their investment. Past performance is no indication of future results and there can be no assurance that the Company will achieve results comparable to any past performance achieved by the Investment Manager, Investment Adviser or any director of, adviser to or partner of either the Investment Manager or Investment Adviser described in this Prospectus.

The Company’s Net Asset Value may be based on estimates which may be inaccurate A substantial portion of the Company’s investments will be in the form of investments for which market quotations are not readily available, and third-party pricing information may not be available for certain investments held in the Portfolio. Individual assets which make up the Portfolio will be valued by the Investment Manager, on the advice of the Investment Adviser, using a variety of techniques as described in further detail in Part I of this Prospectus. As valuations and, in particular, valuations of investments for which market quotations are not readily available are inherently uncertain, these may fluctuate over short periods of time and may be based on estimates. In addition, determinations of fair value may differ materially from the values that would have resulted if a ready market had existed. Even if market quotations are available for certain of the Company’s investments, such quotations may not reflect the value that would actually be realised because of various factors, including the illiquidity of the investments held in the Portfolio, future price volatility or the potential for a future loss in value based on poor industry conditions or overall company and management performance. Consequently, the value at which investments in the Portfolio can be liquidated may differ, sometimes significantly, from any interim valuations arrived at by the Company. The value ascribed to assets/investments will not constitute a guarantee of value and may not necessarily reflect the prices at which such assets could be, or could have been, purchased or sold at any given time, which may be subject to significant volatility and uncertainty and depend on various factors beyond the control of the Company, the Investment Manager and the Investment Adviser. There can therefore be no guarantee that the Company’s investments could ultimately be realised at the Company’s valuation of such investments. Furthermore, the Company’s profitability, Net Asset Value and Share price could be adversely affected if the values of investments that the Company records are materially higher than the values attributed to investments from time to time. This may

15 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP result in volatility in the Net Asset Values and operating results that the Company reports from period to period.

Capital gains from the Company’s investments may require signiﬁcant time to materialise or may not materialise at all There may be a signiﬁcant period between the date that the Company makes an investment and the date that any capital gain or loss on such investment is realised. Capital return on the Company’s investments, therefore, may not be realised for a substantial time period, if at all.

Global capital markets have been experiencing volatility, disruption and instability. Material changes affecting global debt and equity capital markets may have a negative effect on the Company’s business, financial condition and results of operations Global capital markets have been experiencing extreme volatility and disruption for more than three years as evidenced by a lack of liquidity in the equity and debt capital markets, significant write-offs in the financial services sector, the repricing of credit risk in the credit market and the failure of major financial institutions. Despite actions of government authorities, these events have contributed to worsening general economic conditions that have materially and adversely affected the broader financial and credit markets and reduced the availability of debt and equity capital. Continued or recurring market deterioration, the failure of one or more major financial institutions, the breakup of the Eurozone, the miscalculation of interest rates or other such systemic failures may materially adversely affect the ability of a borrower to service its debts or refinance its outstanding debt. Further, such financial market disruptions may have a negative effect on the valuations of the Company’s investments, and on the potential for liquidity events involving its investments. In the future, non-performing assets in the Portfolio may cause the value of its investment portfolio to decrease if the Company is required to write down the values of its investments. Adverse economic conditions may also decrease the value of collateral securing some of its loans. In the event of sustained market improvement, the Company may have access to only a limited number of potential investment opportunities, which also would result in limited returns to Shareholders. Depending on market conditions, the Company may incur substantial realised losses and may suffer additional unrealised losses or a total loss in future periods, which may adversely affect its business, financial condition and results of operations.

The Company has no employees and is reliant on the performance of third party service providers The Company has no employees and the Directors have all been appointed on a non-executive basis. The Company is therefore reliant upon the performance of third party service providers for its executive function. In particular, the Investment Manager, the Investment Adviser, the Administrator and the Registrar will be performing services which are integral to the operation of the Company. Failure by any service provider to carry out its obligations to the Company in accordance with the terms of its appointment could have a materially detrimental impact on the operation of the Company and could affect the ability of the Company to successfully pursue its investment policy.

Risks relating to the Shares The Shares may trade at a discount to NAV per Share and Shareholders may be unable to realise their investments through the secondary market at NAV per Share The Shares may trade at a discount to NAV per Share for a variety of reasons, including as a result of adverse market conditions or the extent to which investors undervalue the management activities of the Investment Manager or the advisory services of the Investment Adviser or discount the valuation methodologies used and judgments made. While the Directors may seek to mitigate any discount to NAV per Share through discount management mechanisms they consider appropriate, there can be no guarantee that they will do so or that such mechanisms will be successful and the Directors accept no responsibility for any failure of any such strategy to effect a reduction in any discount.

The existence of a liquid market in the Shares cannot be guaranteed The Company will apply for the Shares to be admitted to trading on the SFM and the CISX. However, there is no guarantee that an active secondary market in the Shares will develop. The market price of the Shares may rise or fall rapidly. Investors should carefully consider the following factors before dealing in Shares: * the prevailing market price of the Shares;

16 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP * the NAV per Share, market price volatility and liquidity of the Shares;

* any related transaction costs; and

* the Company’s creditworthiness.

In addition, general movement in local and international stock markets, prevailing and anticipated economic conditions and interest rates, investor sentiment and general economic conditions may all affect the market price of the Shares.

The Company has been established as a registered closed-ended vehicle. Accordingly, Shareholders will have no right to have their Shares redeemed or repurchased by the Company at any time. While the Directors retain the right to effect repurchases of Shares and to return capital in the manner described in this Prospectus, they are under no obligation to use such powers at any time and Shareholders should not place any reliance on the willingness of the Directors to do so. Shareholders wishing to realise their investment in the Company will normally therefore be required to dispose of their Shares through the secondary market. Accordingly, Shareholders’ ability to realise their investment at NAV per Share or at all is dependent on the existence of a liquid market for the Shares.

The number of Shares to be issued pursuant to the Issue is not yet known and, following the Issue, there may be a limited number of holders of Shares. Limited numbers and/or holders of Shares may mean that there is limited liquidity in such Shares which may affect (i) an investor’s ability to realise some or all of his investment, and/or (ii) the price at which such investor can effect such realisation, and/or (iii) the price at which such Shares trade in the secondary market.

The Company is not, and does not intend to become, registered in the United States as an investment company under the U.S. Investment Company Act and related rules The Company has not, does not intend to, and may be unable to, become registered in the United States as an investment company under the U.S. Investment Company Act. The U.S. Investment Company Act provides certain protections to U.S. investors and imposes certain restrictions on companies that are registered as investment companies. As the Company is not so registered, and does not intend to register, none of these protections or restrictions is or will be applicable to the Company.

The Shares will be subject to signiﬁcant selling and transfer restrictions for investors in the United States as well as forced transfer provisions

The Shares have not been and will not be registered under the U.S. Securities Act or under any securities laws of any state or other jurisdiction of the United States and are subject to restrictions on transfer contained in such laws. The Shares are being offered and sold only outside the United States in ‘‘offshore transactions’’ to persons who are not U.S. Persons in accordance with and in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by Regulation S thereunder.

Moreover, in order to avoid being required to register under the U.S. Investment Company Act, the Company has imposed significant restrictions on the transfer of the Shares which may materially affect the ability of Shareholders to transfer Shares in the United States or to U.S. Persons. The Shares and any beneficial interests therein may only be transferred in an ‘‘offshore transaction’’ in accordance with Regulation S to (i) a person outside the United States and not known by the transferor to be a U.S. Person, by prearrangement or otherwise; or (ii) the Company or a subsidiary thereof. These restrictions may make it more difficult to resell the Shares and may have an adverse effect on the market value of the Shares. See ‘‘Selling restrictions’’ beginning on page 29 and ‘‘Purchase and transfer restrictions’’ beginning on page 72 of this Prospectus.

Furthermore, under the Articles, if any Shares are owned directly, indirectly or beneficially by a person believed by the Board to be a Non-Qualified Holder, the Board may give notice requiring such person to sell or transfer his Shares to a person who is not a Non-Qualified Holder. Any such person who fails to comply with such notice may be deemed to have forfeited his Shares and, if the Board in its absolute discretion so determines, the Company may dispose of the Shares at the best price reasonably obtainable and pay the net proceeds of such disposal to the former holder. See ‘‘Transfer of Shares’’ beginning on page 85 of this Prospectus.

17 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP Risks relating to the investment strategy and investment portfolio The Company may have lower returns than the Target Return during the Investment Period It is the intention of the Directors, subject to market conditions, that the Company will be substantially invested or committed in accordance with its investment policy within 9 to 12 months of Admission (although there can be no guarantee that the Company will be substantially invested or committed within this period and the Company has an Investment Period of 18 months). As described in the section headed ‘‘Cash uses and cash management activities’’ in Part I of this Prospectus, until such time as the Company’s assets are fully invested and drawn down, the assets of the Company will be held in cash, cash equivalents, money market instruments, government securities and other investment grade securities. Such temporary investments that the Company will make to utilise uninvested cash will almost certainly have yields that are signiﬁcantly lower than the Target Return. Furthermore, such temporary investments may also be subject to counterparty risk, notwithstanding the implementation of cash management protocols from time to time that diversify concentration. Following the end of the Investment Period, cash which has not been invested or committed will be returned to Shareholders as soon as practicable save that, where one or more transactions are in process and the Directors have determined that it would be in the best interests of Shareholders to complete such transaction(s) (and notwithstanding that such completion will fall outside of the Investment Period), the cash in respect of such transaction(s) will not be returned to Shareholders unless and until the relevant transaction aborts. An investment in the Company should be considered as a long-term investment. Shareholders who dispose of their investment over the short or medium term may achieve a lower return on their investment as compared with Shareholders holding for the longer term, and they are more likely to receive a return which is below the target returns of the Company.

The value of loans and Junior Equity may be adversely influenced by a number of factors and early prepayment or default by a borrower may affect the value of the Portfolio The market value of loans and Junior Equity may vary because of a number of factors, including, but not limited to, the financial condition of the underlying borrowers, the industry in which a borrower operates, general economic or political conditions, interest rates, the condition of the financial markets, developments or trends in any particular industry and changes in prevailing interest rates. The loans will generally have maturities ranging from five to seven years. Given that many loans are repaid early, the actual maturity of loans is typically shorter than their stated final maturity calculated solely on the basis of the stated life and repayment schedule. Generally voluntary prepayments are permitted and the timing of prepayments cannot be predicted with any accuracy. The degree to which borrowers prepay loans, whether as a contractual requirement or at their election, may be affected by general business conditions, market interest rates, the borrower’s financial condition and competitive conditions among lenders. Investments in loans are also subject to interest rate risk and reinvestment risk. Prepayments of loans held by the Company may be made during any period of declining interest rates. Loans that the Company will make are subject to credit, liquidity and interest rate risk. Any loan may become a defaulted obligation for a variety of reasons, including non-payment of principal or interest, as well as covenant violations by the borrower in respect of the underlying loan documents. In the event of any default on the Company’s investment by the borrower, the Company will bear a risk of loss of principal and accrued interest on the loan, which could have a material adverse effect on the Company’s investment. A defaulted loan may become subject to either substantial workout negotiations or restructuring, which may entail, among other things, a substantial reduction in the interest rate, a substantial write-down of principal, and a substantial change in the terms, conditions and covenants with respect to such defaulted loan. In addition, such negotiations or restructuring may be extensive and protracted over time, and therefore may result in substantial uncertainty with respect to the ultimate recovery on such defaulted loan. In addition, substantial costs and demands on resources may be imposed on the lender in such situations, further affecting the value of the loan. The liquidity in defaulted loans may also be limited, and to the extent that defaulted loans are sold, it is highly unlikely that the proceeds from such sale will be equal to the amount of unpaid principal and interest thereon, which would adversely affect the value of the Portfolio and consequently the Shares. The level of defaults in the Portfolio and the losses suffered on such defaults may increase in the event of adverse financial or credit market conditions.

18 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP The value of the loans made by the Company may be affected by fraud or misrepresentation or omission The value of the loans made by the Company may be affected by fraud, misrepresentation or omission on the part of the borrower to which the loan relates, by parties related to the borrower or by other parties to the loan (or related collateral and security arrangements). Such fraud, misrepresentation or omission may adversely affect the value of the collateral underlying the loan in question or may adversely affect the Company’s ability to enforce its contractual rights under the loan.

The Company may be subject to lender liability and equitable subordination In recent years, a number of judicial decisions have upheld the right of borrowers to sue lending institutions on the basis of various evolving legal theories, collectively referred to as ‘‘lender liability’’. Generally, lender liability is founded on the premise that a lender has either violated a duty, whether implied or contractual, of good faith and fair dealing owed to the borrower or has assumed a degree of control over the borrower resulting in the creation of a ﬁduciary duty owed to the borrower or its other creditors or shareholders. The Company may become subject to allegations of lender liability. The Company cannot provide assurance that these claims will not arise or that it will not be subject to signiﬁcant liability if a claim of this type arises.

In addition, under common law principles that in some cases form the basis for lender liability claims, if a lender: (i) intentionally takes an action that results in the undercapitalisation of a borrower to the detriment of other creditors of such borrower; (ii) engages in other inequitable conduct to the detriment of such other creditors; (iii) engages in fraud with respect to, or makes misrepresentations to, such other creditors; or (iv) uses its inﬂuence as a shareholder to dominate or control a borrower to the detriment of other creditors of such borrower, a court may elect to subordinate the claim of the offending lender to the claims of the disadvantaged creditor or creditors, a remedy called ‘‘equitable subordination’’.

As a lender, the Company may be subject to additional liability such as liability resulting from the breach of ﬁduciary duty or duty of good faith and fair dealing, or its claims may be subject to equitable subordination, which may materially affect the Company’s business, ﬁnancial condition and results of operations.

The Company may be subject to losses on investments as a result of fraudulent conveyance ﬁndings by courts Various laws enacted for the protection of creditors may apply to certain investments that are debt obligations. For example, if a court were to ﬁnd that the borrower did not receive fair consideration or reasonably equivalent value for incurring indebtedness evidenced by an investment and the grant of any security interest or other lien securing such investment, and, after giving effect to such indebtedness, the borrower: (i) was insolvent; (ii) was engaged in a business for which the assets remaining in such borrower constituted unreasonably small capital; or (iii) intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature, such court may invalidate such indebtedness and such security interest or other lien as a fraudulent conveyance, subordinate such indebtedness to existing or future creditors of the borrower or recover amounts previously paid by the borrower (including to the Company) in satisfaction of such indebtedness or proceeds of such security interest or other lien previously applied in satisfaction of such indebtedness. In addition, if a borrower becomes insolvent, any payment made on such investment may be subject to cancellation as a ‘‘preference’’ if made within a certain period of time (which may, for example, be as long as one year) before insolvency.

In general, if payments on an investment are voidable, whether as fraudulent conveyances or preferences, such payments can be recaptured either from the initial recipient or from subsequent transferees of such payments. To the extent that any such payments are recaptured from the Company, the resulting loss will be borne by the investors in the Company.

On an event of default, the Company may not be able to bring an enforcement action for a prescribed period The terms of the Company’s investments may provide that it is not able to bring an enforcement action against the relevant borrower until a prescribed period after a default by that borrower has elapsed. The ﬁnancial strength of the borrower may, however, continue to deteriorate during this standstill period, thereby potentially affecting the Company’s ability to recover all (or any) of its investment.

19 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP The Company’s investments will be highly illiquid The Company’s investments will be highly illiquid, and there can be no assurance that the Company will be able to liquidate investments in a timely manner. Investors should not expect that the Company will be able to realise its investments in a timely manner, and any such realisations that may be achieved may be at a considerably lower price than prevailing indicative market prices.

The Company may invest in loans made to borrowers that later become financially distressed The Company will not structure loans where the borrower is experiencing, or where it, the Investment Manager or the Investment Adviser believes the borrower will experience, difficulty in meeting its capital, interest or repayment obligations. While it is intended that due diligence be conducted on borrowers to assess whether or not such borrowers may be distressed, there is no guarantee that such borrowers will not become distressed after such due diligence is conducted, or that the results of such due diligence will highlight whether the relevant borrower is in financial distress. Investment in loans made to borrowers that have become financially distressed involve significantly greater risks than investments in loans made to non-distressed borrowers, and financially distressed borrowers may be unable to fulfil their payment obligations under the loan in full or at all.

In the event of a reorganisation or restructuring of a loan made to a borrower that has become financially distressed, the Company may receive greater equity or other securities or instruments in the borrower than it had originally intended In the event that the Company has invested in a loan made to a borrower that has become financially distressed, and the borrower is unable to meet its repayment or other obligations under the loan and seeks a reorganisation or restructuring of its obligations under the loan, the Company may receive a greater equity capital exposure than it had originally intended in order to account for some, or all, of the debt obligation of the borrower. Indeed, it may receive securities or instruments other than equity capital. In these circumstances, the value of such equity securities (or other instruments) may be less than the level of investment made by the Company in the loan. The Company will therefore have a greater exposure to those factors that influence the ratio of equity securities than it would otherwise have had (factors such as general economic and market conditions). In addition, the receipt of a greater proportion of equity capital of the borrower to replace the debt may be detrimental to the Company, as debt holders are entitled to be repaid in full before distributions can be made to equity holders in the event of an insolvency, liquidation, dissolution, reorganisation or bankruptcy of the borrower, and the Company may not be able to realise any value for such equity.

The Company will provide loans to small or less well established companies The Company will provide loans to borrowers that are small and/or less well established companies. Whilst smaller and/or less well established companies may have potential for rapid growth, smaller and/or less well established companies often represent a higher degree of risk because they may lack the management experience, financial resources, product diversification and competitive strength of larger companies. These risks may influence the value of the Company’s loans to such borrowers.

Warrants held by the Company may expire worthless, may be highly volatile and there may not be an active and liquid market for those warrants The Company may hold warrants as part of its investments. Warrants have a limited life and following their expiry they can no longer be traded or exercised. Warrants may expire worthless and/ or it may be the case that at expiry the exercise price is greater than the price of the underlying security. There also may not be an active market for the warrants held by the Company. The Company cannot predict the effects on the price of any warrants held if a liquid and active trading market for those warrants does not exist or develop. In addition, if such a market does not exist or develop, relatively small sales may have a significant negative impact on the price of the warrants, and sales of a significant number of those warrants may be difficult to execute at a stable price. The market price of the warrants may rise or fall rapidly dependent on, among other things, the following factors: * the prevailing trading price of the warrants; * the value and volatility of the underlying securities; * the time remaining to expiry; * the liquidity of the underlying securities;

20 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP * any related transaction costs; and * the borrower’s creditworthiness. In addition, general movement in local and international stock markets, prevailing and anticipated economic conditions and interest rates, investor sentiment and general economic conditions could all affect the market price of such warrants.

Risks relating to the Company’s collateral The collateral and security arrangements under a loan made by the Company may not have been properly created or perfected, or may be subject to other legal or regulatory restrictions The collateral and security arrangements in relation to loans made by the Company will be subject to security or collateral having been correctly created and perfected and also to applicable legal or regulatory requirements which may restrict the giving of collateral or security by a borrower under a loan, such as, for example, thin capitalisation, over-indebtedness, ﬁnancial assistance and corporate beneﬁt requirements. This may adversely affect the value of the investments made by the Company.

The Company’s loan investments will be based in part on valuations of collateral which are subject to assumptions and factors that may be incomplete, inherently uncertain or subject to change A component of the Investment Adviser’s and Investment Manager’s analyses of the desirability of making a given investment will relate to the estimated residual or recovery value of such investments in the event of the insolvency of the borrower. This residual or recovery value will be driven primarily by the value of the underlying assets constituting the collateral for such investment. The value of collateral can, however, be extremely difﬁcult to predict as in certain circumstances market quotations and third party pricing information may not be available.

In the event of a default under a loan, the value of the Company’s investment in a loan may exceed the value of recovery possible under the collateral or security arrangements that support the loan If a default were to occur in relation to a loan in which the Company has invested, and the Company exercises its rights to enforce the collateral or security arrangements that support the loan, the value of recoveries under those arrangements may be smaller than the value of the Company’s investment in the loan, (whether due to external factors such as changes in the market for the assets to which the security or collateral relates, general economic conditions or otherwise).

Risks relating to the Investment Manager and the Investment Adviser The Company is dependent on the expertise of the Investment Manager and the Investment Adviser and their key personnel to properly evaluate attractive investment opportunities and to implement its investment strategy In accordance with the Investment Management Agreement, the Investment Manager is responsible for the management of the Company’s underlying investments. The Investment Manager has appointed the Investment Adviser to advise it as to the selection of potential target companies, the composition of the ﬁnancing package to be offered and the disposal of investments. The Company does not have employees and its Directors are appointed on a non-executive basis. The Investment Manager will have sole responsibility for the discretionary management of, and will conduct ongoing management of, the Company’s assets (including uninvested cash) following advice from the Investment Adviser. Accordingly, the success of the Company will depend on the Investment Adviser’s ability to identify investments in senior debt, mezzanine loans and Junior Equity of small and medium-sized UK enterprises (typically valued at between £10 million and £100 million) and the Investment Manager’s and Investment Adviser’s respective abilities to advise on and manage such investments in accordance with the Company’s investment objective and policy. There can be no assurance that either the Investment Manager or the Investment Adviser will be able to generate any investment returns for the Company and, accordingly, Shareholders, or indeed avoid investment losses. The Investment Manager will not be required to and generally will not submit decisions concerning the discretionary or ongoing management of the Company’s assets for the approval of the Board. Consequently, the future ability of the Company to successfully pursue its investment policy may depend on the ability of the Investment Manager to retain its existing directors and the Investment Adviser to retain its existing staff, partners and advisers and/or for each to recruit individuals of similar experience and calibre. Whilst the Investment Manager has endeavoured to ensure that its directors are suitably incentivised, the retention of directors cannot be guaranteed. Similarly, the Investment Adviser has endeavoured to ensure that the principal members of its management team

21 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP are suitably incentivised, but the retention of key members again cannot be guaranteed. Key personnel are not subject to restrictions on their departure from either the Investment Manager or the Investment Adviser. In the event of a departure of a key person, there is no guarantee that the Investment Manager would be able to recruit a suitable replacement director or that the Investment Adviser would be able to recruit a suitable replacement partner, adviser or other member of staff, or that any delay in doing so would not adversely affect the performance of the Company. Events impacting but not entirely within the Company’s, the Investment Manager’s or the Investment Adviser’s control, such as financial performance, being acquired or making acquisitions or changes to internal policies and structures could in turn affect the ability to retain key personnel. The investment strategy detailed in this Prospectus is resource and time intensive. If the Investment Manager or the Investment Adviser is unable to allocate the appropriate time or resources to the Company’s investments, the Company may be unable to achieve its investment objectives. In addition, neither the Investment Management Agreement nor the Investment Advisory Agreement requires either the Investment Manager or the Investment Adviser to dedicate specific personnel to the Company or to require personnel servicing the Company’s business to allocate a specific amount of time to the Company. The Company is also subject to the risk that the Investment Management Agreement may be terminated and that no suitable replacement will be found to manage the Company. If the Investment Management Agreement is terminated and a suitable replacement is not secured in a timely manner or key personnel of the Investment Manager are not available to the Company with an appropriate time commitment, the ability of the Company to execute its investment strategy or achieve its investment objective may be adversely affected. The Company may similarly be affected if the Investment Advisory Agreement is terminated and no suitable replacement is found, as it may impact on the Investment Manager’s ability to fulfil its obligations. The obligations of the Investment Manager are not guaranteed by any other person.

The Investment Adviser may be unable to find suitable investments The Company is dependent on the Investment Adviser sourcing a sufficient number of suitable investments during the Investment Period. The Investment Adviser’s ability to do so will be in part dependent on industry relationships of key personnel of the Investment Adviser and also on being able to invest the Net Issue Proceeds during an economic cycle that offers opportunities which meet the investment criteria of the Company, Investment Manager and Investment Adviser. The Company cannot be sure that the Investment Adviser’s relationships will be maintained (whether as a result of changes in key personnel of the Investment Adviser or otherwise), or that these relationships will assist the Company in obtaining suitable investments on financially attractive terms within the Investment Period. In addition certain companies or their PE backers may be reluctant to secure funding from (or provide information to) companies with public disclosure obligations such as those that the Company will be subject to. If the Investment Adviser is not able to source a sufficient number of suitable investments during the Investment Period, the Company’s ability to execute its investment strategy or achieve its investment objective may be adversely affected.

The due diligence process undertaken in evaluating specific investment opportunities for the Company may not reveal all facts that may be relevant in connection with such investment opportunities and any corporate mismanagement, fraud or accounting irregularities may materially affect the integrity of the due diligence on investment opportunities When conducting due diligence and making an assessment regarding an investment, the Investment Adviser and Investment Manager will be required to rely on resources available to them, including internal sources of information as well as information provided by existing and potential borrowers, any equity sponsor(s), lenders and other independent sources. The due diligence process may at times require reliance on limited or incomplete information, particularly with respect to newly established companies for which only limited information may be available. In addition, the Investment Adviser and the Investment Manager will select investments for the Company in part on the basis of information and data relating to potential investments filed with various government regulators and publicly available or made directly available to the Investment Adviser or the Investment Manager by such issuers or third parties. Although the Investment Adviser and the Investment Manager will evaluate all such information and data and seek independent corroboration when they consider it appropriate and reasonably available, neither the Investment Adviser nor the Investment Manager will be in a position to confirm the completeness, genuineness or

22 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP accuracy of such information and data. The Investment Adviser and the Investment Manager are dependent on the integrity of the management of the entities filing such information and of such third parties as well as the financial reporting process in general. Recent events have demonstrated the material losses that investors such as the Company can incur as a result of corporate mismanagement, fraud and accounting irregularities. Investment analyses and decisions by the Investment Adviser and the Investment Manager may also be undertaken on an expedited basis in order to make it possible for the Company to take advantage of short-lived investment opportunities. In such cases, the available information at the time of an investment decision may be limited, inaccurate and/or incomplete. Furthermore, the Investment Adviser and Investment Manager may not have sufficient time to evaluate fully such information even if it is available. Accordingly, due to a number of factors, it cannot be guaranteed that the due diligence investigations carried out in respect of any investment opportunity will reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. Any failure to identify relevant facts through the due diligence process may cause the Company to make inappropriate investment decisions, which may have a material adverse effect on the Company’s business, financial condition, results of operations or the value of the Shares. Due diligence may also be costly, which will decrease the Company’s overall profits from an investment. There are potential conflicts of interest between the Investment Manager and Investment Adviser in their roles on behalf of the Company and the Investment Manager’s and Investment Adviser’s affiliates or advisers as equity investors The Company may from time to time provide loans to companies in which the Investment Manager’s or the Investment Adviser’s affiliates or advisers have an indirect or direct equity interest, which has the potential to influence the Investment Manager in its dealings on behalf of the Company with such companies or the Investment Adviser’s advice in respect of the same. Such conflicts of interest between the Investment Manager and/or the Investment Adviser and the Company could affect the ability of the Company to successfully pursue its investment policy, in which case the Company’s returns as a whole may be adversely affected. The Investment Manager and the Investment Adviser have put conflict resolution procedures in place to deal with such a situation, as described in this Prospectus.

There are potential conflicts between the interests of the Company and the interests of other clients of the Investment Manager and Investment Adviser and their affiliates which could impact the investment return The Investment Manager, the Investment Adviser and their respective affiliates may from time to time act for other clients or manage or advise other funds which may have a similar or different investment objective and policy to that of the Company. Circumstances may arise where investment opportunities will be available to the Company which are also suitable for one or more such clients of the Investment Manager or Investment Adviser or other funds managed or advised by the Investment Manager or the Investment Adviser. Where a conflict arises in respect of an investment opportunity, the Investment Manager and Investment Adviser will each allocate the opportunity on a fair basis in the manner described in this Prospectus. Such conflicts of interest between the Investment Manager and/or the Investment Adviser and the Company could affect the ability of the Company to successfully pursue its investment policy, in which case the Company’s returns as a whole may be adversely affected.

Risks relating to regulation and taxation Greater regulation of the financial services industry which imposes additional restrictions on the Company may materially affect the Company’s business and its ability to carry out its investment objective Legislation proposing greater regulation of the financial services industry is being actively pursued by the U.S. Congress (including the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act 2010), as well as the governing bodies of non-U.S. jurisdictions, in the wake of the ongoing financial crisis and the dramatic losses incurred both by private funds and their counterparties from trading in substantially unregulated markets. The U.S. government ‘‘bailout’’ of financial institutions that began in 2008 is the largest governmental intervention in the history of the U.S. financial markets. In connection with this ‘‘bailout’’, U.S. Congress has applied new restrictions to the U.S. financial markets. Similar government ‘‘bailouts’’ of financial institutions by both

23 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP individual member states and the European Union has also increased the scrutiny on the financial services industry in Europe and may lead to further regulation of the financial markets. There can be no assurance that future regulatory action will not result in additional market dislocation. It is impossible to predict the nature, timing and scope of future changes in laws and regulations applicable to the Company, the Investment Manager, the markets in which they trade and invest or the counterparties with which they do business. Any such changes in laws and regulations may have a material adverse effect on the ability of the Company to carry out its business, to successfully pursue its investment policy and to realise its profit potential, and may include a requirement of increased transparency as to the identity of investors in the Company. Any such event may materially adversely affect the investment returns of the Company.

Changes in the Company’s tax status or tax treatment may adversely affect the Company and if the Company becomes subject to the UK offshore fund rules there may be adverse tax consequences for certain UK resident Shareholders Any change in the Company’s tax status, or in taxation legislation or practice in any relevant jurisdiction (including Guernsey, Luxembourg and the UK or any jurisdiction in which the Company’s instruments are held or loans structured from) or in the Company’s tax treatment may affect the value of the investments held by the Company or the Company’s ability to successfully pursue and achieve its investment objectives, or alter the after-tax returns to Shareholders. Statements in this Prospectus concerning the taxation of Shareholders are based upon current United Kingdom and Guernsey tax law and published practice, any aspect of which law and practice is, in principle, subject to change (potentially with retrospective effect) that may adversely affect the ability of the Company to successfully pursue its investment policy or meet its investment objectives, and which may adversely affect the taxation of Shareholders. Statements in this Prospectus in particular take into account the UK offshore fund rules contained in Part 8 of the Taxation (International and Other Provisions) Act 2010. Should the Company or any class of Shares be regarded as being subject to the offshore fund rules this may have adverse tax consequences for certain UK resident shareholders. Potential investors are urged to consult their tax advisers with respect to their particular tax situations and the tax effect of an investment in the Company.

Failure by the Company (or any subsidiary or holding vehicle) to maintain its non-UK tax resident status may subject the Company (or any subsidiary or holding vehicle) to additional taxes which may materially adversely affect the Company’s business, results of operations and the value of the Shares In order to maintain its non-UK tax resident status, the Company is required to be controlled and managed outside the United Kingdom. The composition of the board of Directors of the Company, the place of residence of the individual Directors and the location(s) in which the board of Directors of the Company makes decisions will be important in determining and maintaining the non-UK tax resident status of the Company. Although the Company is established outside the United Kingdom and a majority of the Directors live outside the United Kingdom, continued attention must be given to ensure that major decisions are not made in the United Kingdom or the Company may lose its non-UK tax resident status. As such, management errors may potentially lead to the Company being considered UK tax resident which may adversely affect the Company’s ﬁnancial condition, results of operations, the value of the Shares and/or the after-tax return to the Shareholders. The same analysis applies to any relevant subsidiary or holding vehicle.

Individual Shareholders may have conflicting investment, tax and other interests with respect to their investments in the Company Shareholders are expected to include taxable and tax-exempt entities and persons or entities organised and residing in various jurisdictions who may have conflicting investment, tax and other interests with respect to their investments in the Company. The conflicting interests of individual Shareholders may relate to or arise from, among other things, the nature of investments made by the Company, the structuring of the acquisition of investments, the timing of disposition of investments and the manner in which income and capital generated by the Company is distributed to Shareholders. The structuring of investments and distributions may result in different returns being realised by different Shareholders. As a consequence, conflicts of interest may arise in connection with decisions made by the Investment Manager, including the selection of borrowers, which may be more beneficial for one investor than for another investor, especially with respect to investors’ individual situations. In selecting and structuring investments appropriate for the Company and in determining the manner in

24 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP which distributions shall be made to Shareholders, the Investment Manager and the Directors, respectively, will consider the investment and tax objectives of the Company and Shareholders as a whole, not the investment, tax or other objectives of any Shareholder individually, which may adversely affect the investment returns of individual Shareholders.

The Company’s assets could be deemed to be ‘‘plan assets’’ that are subject to ERISA, the U.S. Tax Code or substantially similar laws and potential investors’ ability to invest in the Shares or to transfer any Shares that investors hold may be limited by certain ERISA, U.S. Tax Code and other considerations The Company intends to use commercially reasonable efforts to restrict the ownership and holding of the Shares so that none of its assets will constitute ‘‘plan assets’’ of any of the following (each, a ‘‘U.S. Plan Investor’’): (i) investors using assets of (A) an ‘‘employee benefit plan’’ as defined in Section 3(3) of ERISA that is subject to Title I of ERISA, (B) a ‘‘plan’’ as defined in Section 4975 of the U.S. Tax Code, including an individual retirement account or other arrangement that is subject to Section 4975 of the U.S. Tax Code, or (C) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the U.S. Tax Code; or (ii) a governmental, church, non-U.S. or other employee benefit plan that is subject to any federal, state, local, non-U.S. or other law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the U.S. Tax Code, unless its purchase, holding, and disposition of the Shares will not constitute or result in a non-exempt violation of any such substantially similar law. However, no assurances can be given that such commercially reasonable efforts will be successful in restricting the ownership and holding of Shares such that none of the Company’s assets will be deemed to be ‘‘plan assets’’ of any such U.S. Plan Investor. If the Company’s assets were deemed to be ‘‘plan assets’’ subject to ERISA and/or Section 4975 of the U.S. Tax Code, pursuant to U.S. Department of Labor regulations promulgated under ERISA by the U.S. Department of Labor and codified at 29 C.F.R. 2510.3-101, as modified by Section 3(42) of ERISA (the ‘‘U.S. Plan Asset Regulations’’), then certain transactions that the Company may enter into, or may have entered into, in the ordinary course of business might constitute or result in non-exempt prohibited transactions under Section 406 of ERISA and/or Section 4975 of the U.S. Tax Code and might have to be rescinded and result in the imposition of excise taxes. Governmental plans, certain church plans and non-U.S. plans, while not subject to Title I of ERISA or Section 4975 of the U.S. Tax Code, may nevertheless be subject to other federal, state, local, non-U.S. or other laws or regulations that would have the same or similar effect as the U.S. Plan Asset Regulations so as to cause the Company’s underlying assets to be treated as assets of an investing entity by virtue of its investment (or any beneficial interest) in the Company and thereby subject the Company (or other persons responsible for the investment and operation of the Company’s assets) to laws or regulations that are similar to the fiduciary responsibility and/or prohibited transaction provisions contained in Title I of ERISA or Section 4975 of the U.S. Tax Code. Because of the foregoing, none of the Shares may be acquired or held by or transferred to any U.S. Plan Investor unless and until the Company removes these restrictions on ownership by U.S. Plan Investors. These restrictions may make it more difficult to resell the Shares and may have an adverse effect on the market value of the Shares.

Certain payments of (or attributable to) U.S.-source income and the proceeds of sales of property that give rise to U.S.-source interest and dividends paid to the Company, will in future be subject to 30 per cent. withholding tax unless the Company agrees to certain reporting and withholding requirements and certain Shareholders may themselves be subject to such withholding tax if they do not provide the Company with required information The Foreign Account Tax Compliance Act (‘‘FATCA’’) was enacted by the United States Congress in March 2010 and will come into effect in 2013 (although implementation will be staggered). Pursuant to FATCA, the Company may be classified as a ‘‘foreign financial institution’’. It is not clear as at the date of this Prospectus whether or not the Company will be characterised as a ‘‘foreign financial institution’’ for these purposes and/or whether Shareholders would be regarded as holding ‘‘financial accounts’’ in the Company. Investors should consult their own, appropriately qualified, tax advisers on how these rules may apply to the Company and to any distributions they receive. If the Company is classified as a ‘‘foreign financial institution’’ it would be required to file a FATCA agreement with the Internal Revenue Service (‘‘IRS’’), under which the Company may be required to obtain information about its Shareholders and to disclose information about its Shareholders to the IRS (if Shareholders are treated under FATCA as holders of ‘‘financial accounts’’ in the Company). Alternatively, the Company would be deemed to be compliant with the FATCA legislation were it to

25 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP be categorised as either a ‘‘Qualified collective investment vehicle’’ or a ‘‘Restricted fund’’ pursuant to draft regulations published by the IRS on 8 February 2012. Failure by the Company to file such an agreement with the IRS, or fall within such ‘deemed’ compliant categories, could mean that the Company would become subject to a 30 per cent. withholding tax on certain US source payments to the Company. Additionally, if the Company were to enter into such an agreement with the IRS, the Company may be compelled under FATCA to withhold tax on payments it makes to Shareholders that do not provide information as to their FATCA status or which are themselves non-compliant ‘‘foreign financial institutions’’. Further, even if the Company is not characterised under FATCA as a ‘‘foreign financial institution’’, it nevertheless may become subject to such 30 per cent. withholding tax on certain US source payments to it unless it either provides information to withholding agents with respect to its ‘‘substantial US owners’’ or certifies that it has no such ‘‘substantial US owners’’. As a result, Shareholders may be required to provide any information that the Company determines necessary to avoid the imposition of such withholding tax or in order to allow the Company to satisfy such obligations.

The AIFM Directive may impair the ability of the Investment Manager to manage the investments of the Company, which may materially adversely affect the Company’s ability to implement its investment strategy and achieve its investment objective The AIFM Directive, which is due to be transposed by EU Member States into national law in 2013, seeks to regulate alternative investment fund managers (in this paragraph, ‘‘AIFM’’) based in the EU and prohibits such managers from managing any alternative investment fund (in this paragraph, ‘‘AIF’’) or marketing shares in such funds to EU investors unless authorisation is granted to the AIFM. The AIFM Directive does not provide for the authorisation of AIFMs established outside the EU, such as the Investment Manager. Rather, the AIFM Directive places restrictions on the marketing of shares in AIFs managed by ‘third country’ AIFMs. Following national transposition of the AIFM Directive in a given EU Member State, the marketing of shares in AIFs that are established outside the EU or managed by an AIFM established outside the EU (such as the Investment Manager) to investors in that EU Member State shall be prohibited unless certain conditions are met. Certain of these conditions are outside the Company’s control as they are dependent on the regulators of the relevant third country and Member State entering into agreements with one another and so the Company cannot guarantee that such conditions will be satisﬁed. In cases where the conditions are not satisﬁed, the ability of the Company to market shares or raise further equity capital in the EU may be removed. If the FSA, or any successor body, determined that the Investment Adviser was the AIFM (rather than the Investment Manager), the Investment Adviser would need to seek authorisation to manage the Company. If the Investment Adviser was to fail to obtain or maintain such authorisation, it would be unable to continue to advise or manage the Company or its ability to advise (or manage) the Company may be impaired. Any regulatory changes arising from implementation of the AIFM Directive (or otherwise) that would impair the ability of the Investment Manager to manage the investments of the Company (or the ability of the Investment Adviser to advise on the same), or limit the Company’s ability to market future issuances of its Shares, may materially adversely affect the Company’s ability to carry out its investment strategy and achieve its investment objective.

26 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP IMPORTANT NOTICES

Investors should rely only on the information contained in this Prospectus. No person has been authorised to give any information or to make any representations other than those contained in this Prospectus in connection with the Issue and, if given or made, such information or representations must not be relied upon as having been authorised by or on behalf of the Company, the Investment Manager, the Investment Adviser or Oriel. Without prejudice to any obligation of the Company to publish a supplementary prospectus pursuant to section 87G(1) of FSMA, neither the delivery of this Prospectus nor any subscription or sale made under this Prospectus shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Company since the date hereof or that the information contained herein is correct as of any time subsequent to its date. The contents of this Prospectus are not to be construed as legal, business or tax advice. Each prospective investor should consult their own solicitor, ﬁnancial adviser or tax adviser for legal, ﬁnancial or tax advice in relation to the purchase of Shares.

An investment in the Shares is suitable only for investors who are capable of evaluating the merits and risks of such an investment and who have sufﬁcient resources to be able to bear losses (which may equal the whole amount invested) that may result from such an investment. An investment in the Shares should constitute part of a diversiﬁed investment portfolio. Accordingly, typical investors in the Company are expected to be institutional, professional and high net worth investors, private client fund managers and brokers and other investors who understand the risks involved in investing in the Company and/or who have received advice from their fund manager or broker regarding investment in the Company.

General Investors may be required to bear the ﬁnancial risks of their investment in the Shares for an indeﬁnite period of time. For a description of additional restrictions on offers, sales and transfers of the Shares, see ‘‘Selling restrictions’’ beginning on page 29 and ‘‘Purchase and transfer restrictions’’ beginning on page 72 of this Prospectus.

Prospective investors should rely only on the information in this Prospectus. No person has been authorised to give any information or make any representations other than those contained in this Prospectus and, if given or made, such information or representations must not be relied on as having been authorised by the Company, the Investment Manager, the Investment Adviser or Oriel. Without prejudice to the Company’s obligations under the Prospectus Rules, neither the delivery of this Prospectus nor any subscription or purchase of Shares made pursuant to this Prospectus shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since, or that the information contained herein is correct at any time subsequent to, the date of this Prospectus.

Prospective investors must inform themselves as to: (i) the legal requirements within their own countries for the purchase, holding, transfer, redemption or other disposal of the Shares; (ii) any foreign exchange restrictions applicable to the purchase, holding, transfer, redemption or other disposal of the Shares which they might encounter; and (iii) the income and other tax consequences which may apply in their own countries as a result of the purchase, holding, transfer, redemption or other disposal of the Shares. Prospective investors must rely on their own representatives, including their own legal advisers and accountants, as to legal, tax, investment, or any other related matters concerning the Company and an investment therein.

Statements made in this Prospectus are based on the law and practice currently in force and are subject to changes therein. This Prospectus should be read in its entirety before making any application for Shares.

Applications will be made to the London Stock Exchange for the Shares issued pursuant to the Issue to be admitted to trading on the SFM and to the CISX for the Shares to be admitted to trading and listing on the Ofﬁcial List of the CISX. It is expected that such admissions will become effective and that dealings in such Shares will commence at 0800 hours on 3 December 2012.

All times and dates referred to in this Prospectus are, unless otherwise stated, references to London times and dates and are subject to change without further notice.

27 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP Restrictions on Distribution and Sale The distribution of this Prospectus and the offering and sale of securities offered hereby in certain jurisdictions may be restricted by law. Persons in possession of this Prospectus are required to inform themselves about and observe any such restrictions. This Prospectus may not be used for, or in connection with, and does not constitute, any offer to sell, or solicitation to purchase, any such securities in any jurisdiction in which solicitation would be unlawful.

For a description of restrictions on offers, sales and transfers of Shares, see ‘‘Selling restrictions’’ beginning on page 29 and ‘‘Purchase and transfer restrictions’’ beginning on page 72 of this Prospectus. In addition, prospective investors should note that, except with the express written consent of the Company given in respect of an investment in the Company, the Shares may not be acquired by: (i) investors using assets of (A) an ‘‘employee benefit plan’’ as defined in Section 3(3) of ERISA that is subject to Title I of ERISA; (B) a ‘‘plan’’ as defined in Section 4975 of the U.S. Tax Code, including an individual retirement account or other arrangement that is subject to Section 4975 of the U.S. Tax Code; or (C) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the U.S. Tax Code; or (ii) a governmental, church, non-U.S. or other employee benefit plan that is subject to any federal, state, local, non-U.S. or other law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the U.S. Tax Code, unless its purchase, holding, and disposition of the Shares will not constitute or result in a non-exempt violation of any such substantially similar law.

No Incorporation of Website The contents of the Company’s website at www.palioukmidmarketdebtfund.com do not form part of this Prospectus. Investors should base their decision to invest on the contents of this Prospectus alone and should consult their professional advisers prior to making an application to subscribe for Shares.

Forward-looking Statements This Prospectus includes statements that are, or may be deemed to be, ‘‘forward-looking statements’’. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms ‘‘believes’’, ‘‘estimates’’, ‘‘anticipates’’, ‘‘expects’’, ‘‘intends’’, ‘‘may’’, ‘‘will’’ or ‘‘should’’ or, in each case, their negative or other variations or comparable terminology. These forward looking statements include all matters that are not historical facts. They appear in a number of places throughout this Prospectus and include statements regarding the intentions, beliefs or current expectations of the Company concerning, amongst other things, the investment objectives and investment policy, financing strategies, investment performance, results of operations, financial condition, prospects, and dividend policy of the Company and the markets in which it, and its portfolio of investments, invest and/or operate. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company’s actual investment performance, results of operations, financial condition, dividend policy and the development of its financing strategies may differ materially from the impression created by the forward-looking statements contained in this Prospectus. In addition, even if the investment performance, results of operations, financial condition of the Company, and the development of its financing strategies, are consistent with the forward-looking statements contained in this Prospectus, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause these differences include, but are not limited to: * changes in economic conditions generally and the Company’s ability to achieve its investment objective and returns on equity for investors; * the Company’s ability to invest the cash on its balance sheet and the proceeds of the Issue in suitable investments on a timely basis; * changes in interest rates and/or credit spreads, as well as the success of the Company’s investment strategy in relation to such changes and the management of the uninvested proceeds of the Issue; * impairments in the value of the Company’s investments; * the availability and cost of capital for future investments; * the departure of key personnel of the Investment Manager and/or Investment Adviser;

28 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP * the failure of the Investment Manager to perform its obligations under the Investment Management Agreement with the Company, the Investment Adviser to perform its obligations under the Investment Advisory Agreement or the termination of the Investment Manager or the Investment Adviser; * changes in laws or regulations, including tax laws, or new interpretations or applications of laws and regulations, that are applicable to the Company or borrowers; and * general economic trends and other external factors, including those resulting from war, incidents of terrorism or responses to such events, and all other risks referred to in the section headed ‘‘Risk Factors’’ beginning on page 14 of this Prospectus. Given these uncertainties, prospective investors are cautioned not to place any undue reliance on such forward-looking statements. Prospective investors should carefully review the ‘‘Risk Factors’’ section of this Prospectus for a discussion of factors that could cause the Company’s actual results to differ materially before making an investment decision. Forward-looking statements speak only as at the date of this Prospectus. Although the Company, the Investment Manager and the Investment Adviser undertake no obligation to revise or update any forward looking statements contained herein (save where required by the CISX Listing Rules, the Prospectus Rules, the Disclosure Rules and Transparency Rules, the Guernsey Prospectus Rules 2008 or the Registered Collective Investment Scheme Rules 2008), whether as a result of new information, future events, conditions or circumstances, any change in the Company’s, the Investment Manager’s or the Investment Adviser’s expectations with regard thereto or otherwise, Shareholders are advised to consult any communications made directly to them by the Company and/or any additional disclosures through announcements that the Company may make through a RIS.

Selling Restrictions This Prospectus does not constitute, and may not be used for the purposes of, an offer or an invitation to apply for any Shares by any person: (i) in any jurisdiction in which such offer or invitation is not authorised; or (ii) in any jurisdiction in which the person making such offer or invitation is not qualiﬁed to do so; or (iii) to any person to whom it is unlawful to make such offer or invitation. The distribution of this Prospectus and the offering of Shares in certain jurisdictions may be restricted. Accordingly, persons into whose possession this Prospectus comes are required to inform themselves about and observe any restrictions as to the offer or sale of Shares and the distribution of this Prospectus under the laws and regulations of any jurisdiction in connection with any applications for Shares, including obtaining any requisite governmental or other consent and observing any other formality prescribed in such jurisdiction. Save for the UK, no action has been taken or will be taken in any jurisdiction by the Company that would permit a public offering of Shares in any jurisdiction where action for that purpose is required, nor has any such action been taken with respect to the possession or distribution of this Prospectus other than in any jurisdiction where action for that purpose is required.

European Economic Area In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (each, a ‘‘Relevant Member State’’), no Shares have been offered or will be offered pursuant to the Issue to the public in that Relevant Member State prior to the publication of a Prospectus in relation to the Shares which has been approved by the competent authority in that Relevant Member State, or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that offers of Shares to the public may be made at any time under the following exemptions under the Prospectus Directive, if they are implemented in that Relevant Member State: (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; (b) to fewer than 100, or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) in such Relevant Member State; or (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Shares shall result in a requirement for the publication of a Prospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in a Relevant Member State and each person who initially acquires any Shares or to whom

29 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP any offer is made under the Issue will be deemed to have represented, acknowledged and agreed that it is a ‘‘qualiﬁed investor’’ within the meaning of Article 2(1)(e) of the Prospectus Directive. For the purposes of this provision, the expression an ‘‘offer to the public’’ in relation to any offer of Shares in any Relevant Member State means a communication in any form and by any means presenting sufﬁcient information on the terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression ‘‘Prospectus Directive’’ means Directive 2003/71/EC (and the amendments thereto, including Directive 2010/73/EU (the ‘‘2010 PD Amending Directive’’), to the extent implemented in the Relevant Member State and includes any relevant implementing measure in each Relevant Member State. The distribution of this Prospectus in other jurisdictions may be restricted by law and therefore persons into whose possession this Prospectus comes should inform themselves about and observe any such restrictions.

United States The Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and the Shares may not be offered, sold, resold, transferred or delivered, directly or indirectly, into or within the United States or to, or for the account or benefit of, U.S. Persons. There will be no public offer of the Shares in the United States. The Shares are being offered and sold only outside the United States in ‘‘offshore transactions’’ to persons who are not U.S. Persons in accordance with and in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by Regulation S thereunder. The Company has not been and will not be registered under the U.S. Investment Company Act and investors will not be entitled to the benefits of the U.S. Investment Company Act. The Shares are also subject to significant transfer restrictions. See ‘‘Purchase and transfer restrictions’’ beginning on page 72 of this Prospectus.

Bailiwick of Guernsey The Company is a registered closed-ended investment scheme registered pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, and the Registered Collective Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission (the ‘‘Commission’’). The Commission, in granting registration, has not reviewed this Prospectus but has relied upon specific warranties provided by the Administrator, the Company’s designated manager. The Commission takes no responsibility for the financial soundness of the Company or for the correctness of any of the statements made or opinions expressed with regard to it. A registered collective investment scheme is not permitted to be directly offered to the public in Guernsey but may be offered to regulated entities in Guernsey or offered to the public by entities appropriately licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. If potential investors are in any doubt about the contents of this Prospectus they should consult their accountant, legal or professional adviser or other financial adviser. The Directors of the Company have taken all reasonable care to ensure that the facts stated in this Prospectus are true and accurate in all material respects, and that there are no other facts the omission of which would make misleading any statement in this Prospectus, whether of fact or of opinion. All the Directors accept responsibility accordingly.

Switzerland This document does not constitute an issuance prospectus pursuant to art. 652a or art. 1156 of the Swiss Code of Obligations, a prospectus pursuant to the Federal Act on Collective Investment Schemes (CISA) or a listing prospectus pursuant to the SIX regulations. The Company has not been authorised for public distribution in and from Switzerland by the Swiss Financial Market Supervisory Authority (FINMA) pursuant to art. 120 of the CISA and it is not foreseen to request such an approval. This document may not be distributed to, and Shares of the Company may not be offered, distributed or sold to the public in or from Switzerland but only to qualiﬁed investors as deﬁned by CISA and its implementing Ordinance on Collective Investment Schemes (CISO). The following

30 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP investors are considered to be qualiﬁed investors: (i) regulated ﬁnancial intermediaries (such as banks, securities dealers and fund management companies), (ii) insurance companies, (iii) public entities and pension foundations with professional treasury operations, iv) companies with professional treasury operations, (v) high net worth individuals, (vi) investors who have entered into a discretionary management agreement with a bank, securities dealer, or with a fund management company or (vii) independent asset managers and investors who have entered into a written discretionary management agreement to the extent the independent asset manager is subject to the Swiss anti-money laundering legislation and to a code of conduct issued by a professional organization recognized by the Swiss Financial Market Supervisory Authority FINMA and under the condition that the management agreement is in compliance with recognized standards issued by a professional organization. This document may only be used by those persons to whom it has been handed out and may neither be copied, distributed or made available to other persons without the express consent of the issuer.

31 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP EXPECTED TIMETABLE

Publication of this Prospectus and opening of the Placing and the 7 November 2012 Offer Latest time and date for receipt of Application Forms and payment in 1100 hours on 26 November full under the Offer Latest time and date for placing commitments under the Placing 1200 hours on 27 November* Result of Issue announced 0800 hours on 28 November Admission and unconditional dealings commence 0800 hours on 3 December Crediting of CREST stock accounts in respect of the Shares 3 December Share certiﬁcates despatched Week beginning 17 December The dates and times speciﬁed are subject to change without further notice. References to times are London times unless otherwise stated.

* Or such earlier time as may be notiﬁed in writing by the Company to a particular Placee.

32 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP ISSUE STATISTICS

Issue Price* £1.00 Target Number of Shares being issued** in excess of 150,000,000 Shares Target Gross Issue Proceeds** in excess of £150,000,000 Net Asset Value per Share*** £0.98

* The minimum subscription per investor pursuant to the Offer is £1,000 and the minimum subscription per investor pursuant to the Placing is £50,000. ** The target size of the Issue is in excess of £150,000,000 with the actual size of the Issue being subject to investor demand. The number of Shares to be issued pursuant to the Issue, and therefore the Gross Issue Proceeds, is not known as at the date of this Prospectus but will be notiﬁed by the Company via a RIS announcement prior to Admission. *** NAV per Share immediately following Admission (given that the costs of the Issue to be borne by the Company are ﬁxed at an amount equal to 2 per cent. of the Gross Issue Proceeds). The costs of the Issue will be borne by the Company. To the extent that such costs exceed an amount equal to 2 per cent. of the Gross Issue Proceeds, the Investment Adviser will bear the excess.

33 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP DIRECTORS, INVESTMENT MANAGER AND ADVISERS

Directors Registered Ofﬁce Christian Brodie (Chairman) BNP Paribas House Richard Crowder St Julian’s Avenue Michael Iain Stokes St Peter Port Trevor Hunt Guernsey All c/o the Company’s registered ofﬁce GY1 1WA

Financial Adviser and Bookrunner CISX Sponsor Oriel Securities Limited Mourant Ozannes Securities Limited 150 Cheapside 1 Le Marchant Street London EC2V 6ET St Peter Port United Kingdom Guernsey GY1 4HP

Investment Manager Investment Adviser Palio Capital Management Guernsey Limited Palio Capital Partners LLP BNP Paribas House c/o Buzzacott LLP St Julian’s Avenue 130 Wood Street St Peter Port London Guernsey EC2V 6DL GY1 1WA United Kingdom

Solicitors to the Company (as to English law) Solicitors to the Financial Adviser and Bookrunner Herbert Smith Freehills LLP (as to English law) Exchange House Lawrence Graham LLP Primrose Street 4 More London Riverside London EC2A 2EG London SE1 2AU United Kingdom United Kingdom

Advocates to the Company (as to Guernsey law) Reporting Accountant and Auditor Mourant Ozannes KPMG Channel Islands Limited 1 Le Marchant Street 20 New Street St Peter Port St Peter Port Guernsey Guernsey GY1 4HP GY1 4AN

Receiving Agent Registrar Capita Registrars Capita Registrars (Guernsey) Limited Corporate Actions Mont Crevett House The Registry Bulwer Avenue 34 Beckenham Road St Sampson Beckenham Guernsey Kent GY2 4LH BR3 4TU United Kingdom

Designated Manager, Administrator, Company Principal Banker Secretary and Custodian BNP Paribas Securities Services S.C.A. – Guernsey BNP Paribas Fund Services (Guernsey) Limited Branch BNP Paribas House BNP Paribas House St Julian’s Avenue St Julian’s Avenue St Peter Port St Peter Port Guernsey Guernsey GY1 1WA GY1 1WA

34 c107409pu030 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP PART I: INTRODUCTION TO THE COMPANY

Introduction The Company is a registered closed-ended investment company limited by shares, registered and incorporated in Guernsey under the Companies Laws on 3 October 2012, with registration number 55691. The Company has appointed Palio Capital Management Guernsey Limited, a company incorporated in Guernsey under the Companies Laws on 1 October 2012, with registration number 55683, as its Investment Manager. The Investment Manager is licensed by the GFSC under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. The Investment Manager has appointed as its investment adviser Palio Capital Partners LLP, an investment advisory firm established in 2009 to address the opportunities that exist due to the substantial funding gap for debt finance in the UK lower mid-market (‘‘LMM’’). Further information in relation to the Investment Manager and the Investment Adviser is set out in Part III of this Prospectus. Investment in the Company is only suitable for institutional, professional and high net worth investors, private client fund managers and brokers and other investors who understand the risks involved in investing in the Company and/or who have received advice from their fund manager or broker regarding investment in the Company. Applications will be made to the London Stock Exchange for the Shares to be admitted to trading on the SFM and to the CISX for the Shares to be admitted to trading and listing on the Official List of the CISX. It is expected that Admission will become effective and that dealings in such Shares will commence at 0800 hours on 3 December 2012.

Investment objective The Company’s investment objective is the generation of superior risk-adjusted returns, comprising both income and capital, through originating and structuring a combination of senior debt, mezzanine instruments and Junior Equity into small and medium-sized UK enterprises (‘‘SMEs’’), while emphasising the preservation of capital and capital appreciation.

Highlights * Attractive target return – target net dividend yield of 7 per cent. on the Issue Price in the first year and an average net dividend yield of 8 per cent.1 on the Issue Price thereafter, with a target net total return of 12.5 per cent. on the Issue Price per annum2,3. * Market opportunity – demand for debt financing in the LMM is estimated by the Investment Adviser at £25 billion (2013 to 2017)4. * Focus on UK assets – the Company’s investment policy (set out in full below) is for the Portfolio to be invested in loans to assist predominantly UK PE firms in acquiring UK companies with enterprise values of between approximately £10 million and £100 million. * Highly experienced portfolio management team – the Investment Adviser’s Senior Executives have over 30 years of combined experience of managing loan assets and PE deals. * First lien security – each financial package offered by the Company will involve senior debt, which will entail a first lien security over the portfolio company’s assets. * Capital deployment – the Company expects to be fully invested within 9 to 12 months. * Limited life – 18-month Investment Period after which the Portfolio will be placed into run-off. * Monthly NAV – the Company will calculate and publish NAV per Share on a monthly basis. * Share purchases and buy backs – authority to buy back up to 14.99 per cent. of Shares.

1 Modelled over the life of the investments. 2 Averaged over the life of the Company. 3 This is a target only and is based on market conditions as at the date of this Prospectus. There is no guarantee that the Target Return can or will be achieved and it should not be seen as an indication of the Company’s expected or actual return. 4 Assuming demand for senior debt normalising at levels seen between 2001 and 2005, resulting in an annualised requirement in the LMM of c.£2 billion per annum (Source: : Investment Adviser’s estimate based on CMBOR data), the target market of £25 billion based on this assumption would comprise c.£10 billion primary loans and c.£15 billion reﬁnancing (of which c.£10 billion is bank loans (Source: Investment Adviser’s estimate based on CMBOR data) and c.£5 billion (Investment Adviser’s estimate) represented by loan notes ﬁnanced by the PE houses).

35 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP Investment policy Allocations The Company aims to generate proprietary deal ﬂow to structure senior debt, mezzanine loans and Junior Equity predominantly into PE backed SMEs. The Company will only lend to and invest in SMEs with enterprise values of approximately £10 million to £100 million and which typically would have the support of a PE backer with what the Company considers to be a successful track record and a plan to develop shareholder value. It is intended that, following the expiry of the Investment Period, the majority of assets in the Company’s Portfolio will comprise a combination of the following instruments: (i) senior debt; (ii) mezzanine loans, which will typically also include warrants; and (iii) Junior Equity.

Diversification The Company’s Portfolio is expected to consist of approximately 10 investments based on the target size of the Issue (although this may increase or decrease with the size of the Company). No investment will represent more than 20 per cent. of the Net Asset Value of the Company at the time of investment. Portfolio diversity will be aided by the fact that the Company will invest across a range of sectors including support services, transport, industrial, healthcare, financial services, information technology and leisure. The Company, however, appreciates the importance of socially responsible investing and so will not lend to or invest in companies which at the time of lending or investment: * produce tobacco; * generate nuclear power; * produce or sell torture equipment, landmines or nuclear weapons; * are considered by it to harm stakeholders through unacceptable corporate governance practices; * are considered by it to not satisfactorily mitigate any significant negative impact they might have on the environment; * derive a material proportion (typically 10 per cent. or more of revenues) of their business from: military applications or weaponry; services and products directly related to nuclear power generation; products tested on animals other than for human health; animal fur products; pornography; irresponsible gambling; irresponsible drinking; and/or tobacco.

Gearing The Company will not employ gearing or invest in derivatives for investment purposes. Although there is no intention for the Company to put any borrowing facilities in place, the Company will have the ﬂexibility to borrow up to 20 per cent. of Net Asset Value. Any such borrowing would be intended to be short term, and would be capped at 20 per cent. of the Company’s Net Asset Value as at the time of draw down.

Changes to the Company’s investment policy Any material changes to the Company’s investment policy will only be made with the approval, by ordinary resolution, of Shareholders. Further information in relation to the investment process which will be employed by the Company is set out in Part IV of this Prospectus.

Investment strategy The Company’s strategy will be to work with PE houses/institutional investors on transactions, acting as a ‘‘one-stop shop’’ by providing 100 per cent. of the funding not provided by such institutions. The Company anticipates that its PE partners will predominantly, but not exclusively, be UK PE houses, and will aim to generate proprietary primary deal ﬂow in large part from the Investment Adviser’s relationships with PE houses. The Company will target senior debt, mezzanine loans and Junior Equity in SMEs that meet the following criteria: * they have an enterprise value of approximately £10 million to £100 million;

36 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP * they have been sourced from predominantly PE investors with a successful performance track record and a strategy to develop shareholder value; * their management teams have been assessed by the Investment Adviser as suitably experienced and financially committed, the members of which are deemed to possess skill sets which are complementary to one another; * they have sound business models, a predictable sales stream, a transparent cost base and fit-for- purpose systems infrastructure to support the operations and finances of the business and facilitate clarity of reporting to stakeholders; * they have a robust underlying business in sectors that are considered to be less cyclical such as: support services, transport, industrial, healthcare, financial services, information technology and leisure; * they have a sustainable market position and are, in the opinion of the Investment Adviser, able to withstand market ‘shocks’ (within reason) and competitive threats; * they have strong cash/working capital management and a strong EBITDA to operating cash flow conversion; and * they offer a credible exit plan for the Company. Following Admission the Company will have an Investment Period of 18 months, although the Company expects the Net Issue Proceeds to be fully invested within the first 9 to 12 months of this Investment Period. This is in line with the Company’s emphasis on credit quality, investing only in what the Investment Manager and Investment Adviser consider to be the best investments for inclusion in the Portfolio and avoiding a chase for market share. Further details in relation to the Investment Period are set out in the section headed ‘‘Investment Period’’ in this Part I of this Prospectus.

Portfolio Composition Figure 1 below shows the anticipated characteristics of the proposed Portfolio5. Figure 1: Proposed Portfolio Composition

Target Return The Company will target a mezzanine equivalent return from a hybrid blend of products that it believes will have a lower relative risk proﬁle than investing solely in mezzanine debt. On the basis of market conditions as at the date of this Prospectus, the Company will target an annualised yield per Share of 7 per cent. on the Issue Price in respect of the ﬁrst year of full investment and a yield of 8 per cent. (averaged over the life of the Company) on the Issue Price thereafter, with a target total return averaged over the life of the Company of 12.5 per cent. per annum on the Issue Price (the ‘‘Target Return’’)6. All returns are stated net of fees and expenses.

5 Provided for illustrative purposes only. Does not necessarily reﬂect the actual composition of the Portfolio. 6 Averaged over the life of the Company. This is a target only and is based on market conditions as at the date of this Prospectus. There is no guarantee that the Target Return can or will be achieved and it should not be seen as an indication of the Company’s expected or actual return.

37 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP Based on the Portfolio composition set out above, the Company expects that approximately 68.5 per cent. of the income received by the Company will be contractual, comprising predictable scheduled interest income from the senior, mezzanine and equity instruments (such interest constituting approximately 60 per cent. of income) together with certain fees, including arrangement fees (approximately 8.5 per cent. of income). The balance of income (approximately 31.5 per cent. of total income) will comprise profit from mezzanine warrant and equity holdings. Figure 2 illustrates this anticipated income profile7. Figure 2: Anticipated Company income profile

The actual return generated by the Company in pursuing its investment objective will, however, depend on a wide range of factors including, but not limited to, general economic and market conditions, prevailing interest rates and credit spreads, the terms of the investments made by the Company and the risks highlighted in the section headed ‘‘Risk Factors’’ in this Prospectus. The Target Return should not be taken as an indication of the Company’s expected future performance or results over such period. The Target Return is a target only and there is no guarantee that it can or will be achieved and it should not be seen as an indication of the Company’s expected or actual return.

Dividend Policy Subject to compliance with the Companies Law and the solvency test set out therein, the Company will pay out all net income received on investments of the Company (including any fees received as a result of the Company’s investments) by way of two half yearly dividends in respect of its ﬁrst ﬁnancial year, and by way of quarterly dividends thereafter. It is a requirement of an exception to the United Kingdom offshore fund rules that all income from the Company’s Portfolio (after deduction of reasonable expenses) is to be paid to investors. This dividend policy should ensure that this requirement is met. The exact amount of any such dividend will be variable depending on the amounts of income received by the Company.

Capital distributions Following the Investment Period, the Company expects to make distributions of Capital Returns comprising cash arising from portfolio company loan repayments or reﬁnancing, together with the disposal of Junior Equity positions and/or crystallisation of warrants and, if applicable, any ongoing loan amortisation. The Directors will, over the life of the Company following the Investment Period, seek to return the Capital Returns to Shareholders in such manner as they consider to be efﬁcient, having taken advice at the relevant time. The Directors currently expect that the mechanism for making Capital Returns will be by way of a Bonus Issue and immediate redemption of redeemable B Shares on a pro rata basis, subject to the Companies Law and to retaining an amount equivalent to 10 per cent. of the Gross Issue Proceeds plus the proceeds of any subsequent equity issues until liquidation. The terms of the B Shares are set out in paragraph 5.2.6 of Part VII of this Prospectus.

Investment Period Following Admission the Company will have an Investment Period of 18 months (although the Company currently expects the Net Issue Proceeds to be fully invested within the ﬁrst 9 to 12 months of this Investment Period) after which the Portfolio will be placed into run-off and the proceeds of

7 Provided for illustrative purposes only. Does not necessarily reﬂect the actual income proﬁle of the Company.

38 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP realising the Company’s investments, net of the fees and expenses payable by the Company, will be distributed to Shareholders over the remaining life of the Company. Following the end of the Investment Period, cash which has not been invested or committed will be returned to Shareholders as soon as practicable, save that where one or more transactions are in process and the Directors have determined that it would be in the best interests of Shareholders to complete such transaction(s) (and notwithstanding that such completion will fall outside of the Investment Period), the cash in respect of such transaction(s) will not be returned to Shareholders unless and until the relevant transaction aborts. To the extent that a portfolio company seeks subsequent reﬁnancing rounds after the Investment Period, it is anticipated that this will trigger the repayment of the Company’s capital in that particular portfolio company, enabling the Company to return capital to investors.

Cash Uses and Cash Management Activities In accordance with the Company’s investment policy, the Company’s principal use of cash will be to fund investments sourced by the Investment Adviser, as well as initial expenses related to the Issue, ongoing operational expenses and payment of dividends and other distributions to Shareholders in accordance with the Company’s dividend policy as discussed in the section entitled ‘‘Dividend Policy’’ in this Part I of the Prospectus. While the Company intends to fully invest the Net Issue Proceeds within 9 to 12 months of Admission, suitable investment opportunities may not be immediately available. It is likely, therefore, that during the Investment Period and at certain other times (for example, following the disposal of an acquired investment), the Company will have surplus cash. It is expected that any surplus cash will be temporarily invested in cash, cash equivalents, money market instruments, government securities and other investment grade securities pending either its investment in accordance with the Company’s investment policy during the Investment Period, or distribution to Shareholders. The Company’s investment policy does not impose any ﬁxed requirements relating to the allocation of the Company’s excess capital among various types of temporary investments. Any temporary investments that the Company will make to utilise uninvested cash will almost certainly have yields that are signiﬁcantly lower than the Target Return and which may be nil or negative returns.

Share Purchases and Buy Backs The Company will have shareholder authority to purchase in the market up to 14.99 per cent. of the Shares in issue immediately following Admission. This authority will expire at the conclusion of the first annual general meeting of the Company and the Directors intend to seek renewal of this authority from Shareholders at each annual general meeting. Subject to compliance with the Companies Law and the solvency test therein, the Company will return value to Shareholders in the form of dividends and capital distributions. The Company has committed to distribute its net income in the form of dividends. In the event that the Board does decide to repurchase Shares, purchases will only be made through the market for cash at prices below the estimated prevailing Net Asset Value per Share where the Directors believe such purchases will result in an increase in the Net Asset Value per Share. Such purchases will only be made in accordance with the Companies Law, which provides inter alia, that any buyback is subject to the Company passing the solvency test contained in the Companies Law at the relevant time. The maximum price to be paid per Share will not be more than the higher of: (i) five per cent. above the average of the mid-market values of the Shares for the five Business Days before the purchase is made; or (ii) the higher of the last independent trade or the highest independent bid for the Shares. Shares purchased by the Company may be cancelled or held in treasury. Shareholders and prospective Shareholders should note that the purchase of Shares by the Company is entirely discretionary and no expectation or reliance should be placed on the Directors exercising such discretion on any one or more occasions.

The Issue The target size of the Issue is in excess of £150 million. The actual number of Shares to be issued pursuant to the Issue, and therefore the Gross Issue Proceeds, is not known as at the date of this Prospectus but will be notiﬁed by the Company via a RIS announcement prior to Admission.

39 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP The target issue size should not be taken as an indication of the number of Shares to be issued. The minimum subscription per investor pursuant to the Offer is £1,000.

The costs of the Issue to be borne by the Company are ﬁxed at an amount equal to 2 per cent. of the Gross Issue Proceeds. To the extent that such expenses exceed an amount equal to 2 per cent. of the Gross Issue Proceeds, the Investment Adviser will bear the excess.

Further issues of Shares Subject to compliance with the Companies Law and the Articles, the Directors will have authority to allot further Shares following Admission. Further issues of Shares will only be made if the Directors determine such issues to be in the best interests of Shareholders and the Company as a whole. Relevant factors in making such determination include net asset value performance, share price rating and perceived investor demand. Shares will only be issued at prices which are not less than the estimated prevailing NAV per Share.

There are no provisions of Guernsey law which confer rights of pre-emption in respect of the allotment of Shares. The Articles, however, contain pre-emption rights in relation to allotments of Shares for cash, though such pre-emption rights will be disapplied in relation to the issue of up to 250,000,000 Shares following Admission for a period concluding immediately prior to the annual general meeting of the Company to be held in 2015 so as to assist the Company in managing market demand for Shares by the issue of further Shares. The Directors intend to request that the authority to allot Shares on a non-pre-emptive basis is renewed at the annual general meeting of the Company to be held in 2015 and at each subsequent annual general meeting of the Company.

The Articles contain provisions that permit the Directors, subject to the Companies Law, to issue C Shares from time to time. C Shares are shares which convert into Shares only when a speciﬁed proportion of the net proceeds of issuing such C Shares have been invested in accordance with the Company’s investment policy (prior to which the assets of the Company attributable to the C Shares are segregated from the assets of the Company attributable to the Shares). A C Share issue would therefore permit the Board to raise further capital for the Company whilst limiting any dilution of investment returns for existing Shareholders which may otherwise result.

Reports and Accounts The ﬁrst accounting period of the Company will run from the date of the Company’s incorporation to 31 December 2013 and, thereafter, accounting periods will end on 31 December in each year. The audited annual accounts will be provided to Shareholders within four months of the year end to which they relate. Unaudited half yearly reports, made up to 30 June in each year, will be published within two months of that date. The Company will also produce interim management statements in accordance with the Disclosure Rules and Transparency Rules. The Company will report its results of operations and ﬁnancial position in Sterling.

The audited annual accounts and half yearly reports will also be available at the registered ofﬁce of the Administrator and the Company and from the Company’s website, www.palioukmidmarketdebtfund.com.

The financial statements of the Company will be prepared in accordance with IFRS, and the annual accounts will be audited by the Auditor using auditing standards in accordance with International Standards on Auditing (UK and Ireland). The Company expects that its financial statements, which will be the responsibility of its Board, will consist of a balance sheet, profit and loss statement and cash flow statement, related notes and any additional information that the Board deems appropriate or that is required by applicable law.

The preparation of ﬁnancial statements in conformity with IFRS requires that the Directors make estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Such estimates and associated assumptions are generally based on historical experience and various other factors that are believed to be reasonable under the circumstances, and form the basis of making judgements about attributing values of assets and liabilities that are not readily apparent from other sources. Actual results may vary from such accounting estimates in amounts that may have a material impact on the ﬁnancial statements of the Company.

40 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP Net Asset Value Publication of Net Asset Value The Company currently intends to publish its estimate of the Net Asset Value per Share, as calculated by the process described below, on a monthly basis (or at such other intervals as may be determined by the Board from time to time). The Net Asset Value per Share will be published in Sterling and will be published by RIS announcement and on the website of the Company and notiﬁed to the CISX.

Valuation of the assets held in the Portfolio Individual assets which make up the Portfolio will be valued by the Investment Manager, as advised by the Investment Adviser, or the Administrator, as appropriate, using a variety of techniques. Loans made directly to borrowers for which no market exists will be valued by the Administrator at amortised cost. Values will be ascribed using IFRS. To the extent that the Company invests in unquoted equities, such equities will be valued by the Investment Manager, as advised by the Investment Adviser, in accordance with the International Private Equity and Venture Capital Guidelines. In respect of any valuation to be published by the Company (be it the monthly NAV or otherwise), in circumstances where either the Directors, Administrator or the Investment Manager, as advised by the Investment Adviser, are of the opinion that the International Private Equity and Venture Capital Guidelines (in respect of equities) or valuation at amortised cost (in respect of loans) is not appropriate, or when valuing other securities such as warrants, the Directors, in consultation with the Administrator and the Investment Manager, as advised by the Investment Adviser, shall determine an appropriate alternative valuation method or valuation source for the relevant investment. This may include valuations on the basis of fair value. The overall criterion for fair value is a price at which an asset would change hands in a transaction between a willing buyer and a willing seller, neither being under compulsion to buy or sell and both having the same knowledge of the relevant facts. Third party valuations, market levels and other valuation sources will be reviewed and audited as part of the annual audit. The Audit Committee will semi-annually review the reasonableness of the valuations concluded in the valuation analysis in order to be satisﬁed that they represent a reasonable estimate of the fair value of the assets held by the Company as included in the published year end and interim accounts on the relevant reporting date. Having been presented with the recommendations of the Audit Committee, the Board is ultimately responsible, on behalf of the Company, for determining the fair value of the investments held by the Company in good faith.

Suspension of the calculation of Net Asset Value The Directors may at any time, but cannot be obliged to, temporarily suspend the calculation of the NAV and NAV per Share during a period when: (i) as a result of political, economic, military or monetary events or any circumstances outside the control, responsibility or power of the Board, disposal or valuation of investments of the Company or other transactions in the ordinary course of the Company’s business is not reasonably practicable without this being materially detrimental to the interests of Shareholders; (ii) if, in the opinion of the Board, the Net Asset Value cannot be fairly calculated; (iii) there is a breakdown of the means of communication normally employed in determining the calculation of Net Asset Value; or (iv) it is not reasonably practicable to determine the Net Asset Value on an accurate and timely basis. Should the Directors exercise their powers in this regard then an announcement detailing such will be released to the CISX and the listing of the Shares on the Ofﬁcial List of the CISX will be suspended during the period that these powers are being exercised. Any suspension in the calculation of the Net Asset Value will, to the extent required under the Articles of the Company, be notiﬁed to the market by the Administrator via a RIS announcement as soon as practicable after any such suspension occurs.

41 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP Company Structure The Company will hold its investments through a holding vehicle, the Investment Partnership, of which it is the general partner. The only other partner in the Investment Partnership will be the Special Limited Partner whose economic rights in respect of the Investment Partnership are limited only to receiving an incentive allocation as described further under the heading ‘‘Incentive allocation’’ in Part V of this Prospectus and, upon liquidation of the Investment Partnership, the return of its capital contribution of £10. For the purposes of efﬁcient portfolio management, the Company intends to hold certain investments through further wholly-owned investing subsidiaries incorporated in Guernsey and/or Luxembourg which are expected to be incorporated on or shortly after Admission. Figure 3 below presents a summary of the organisational and investment structure of the Company. Figure 3: Company group organisational structure

Investors

Investment IMA Manager Special Limited The Company Partner (Guernsey) General Partnership Interest Limited IAA Partnership Investment Partnership (LP) Interest (Guernsey) Investment Adviser Investing subsidiary or subsidiaries

42 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP PART II: PRODUCT AND MARKET OVERVIEW

Overview The financial dislocation of 2008 has left acquisition finance for PE backed SMEs in the LMM in short supply and transaction completions in the LMM have fallen to in the region of 50 to 100 deals per annum. This is well below the norm of 2000 to 2005, when, on average, in the region of 130 to 150 deals per annum were being closed in the LMM. PE backed LMM deals can be estimated to have been structured with approximately 60 to 70 per cent. equity since the financial dislocation8. In the Investment Adviser’s opinion this is not sustainable because PE houses will be challenged to meet the returns their investors require using such ‘over- equitised’ capital structures. It follows that for PE houses in the UK the emergence of new entrants such as the Company will be welcome, as such new entrants will assist PE houses in sustaining their own business models. Given the importance of PE to the UK economy the Investment Adviser considers that this should be a matter of national importance at a UK Government level. The LMM is a crucial source of employment and potential growth in the UK economy and includes companies described as ‘gazelles’ by the CBI that are out-performing low macro GDP growth, with some companies achieving 10 per cent. plus per annum revenue growth. Many of these SMEs receive support in their growth plans from the UK’s well established PE industry, second only in size and hence influence to the USA’s PE industry. Where the Company’s deals are not already PE backed the management teams’ risk profile and incentive packages will be biased towards equity in a manner similar to deals that are PE backed. An exit over a 3 to 5 year time horizon will be a key shareholder objective. The Investment Adviser considers that UK PE backed SMEs need easier access to debt coupled with wider choice in order to access a package of economically priced loans (debt and mezzanine) from one source, ideally with more financial flexibility. It therefore considers that the Company’s one-stop lending capability, coupled with its flexible approach to the repayment schedule on these loans, will prove attractive to the market. This approach would enhance SMEs’ cash flexibility in their business plans, which the Investment Adviser believes to be of great importance given that the prevailing economic uncertainty makes accurate business forecasting very challenging. To lead successfully and arrange these loans for PE backed companies and to make the right credit assessments to deliver a financially rewarding outcome for investors requires particular expertise and experience. The Investment Adviser considers that its team of Senior Executives is ideally placed to fulfil this role. Indeed the Investment Adviser believes that the complexity of the credit judgements required to be made, coupled with the lack of supply of loans, means that PE debt and mezzanine loans have been attracting 5 per cent. (or greater) arrangement fees and margins ranging from 5 to 10 per cent. over LIBOR, and that the scarcity of supply likely means that these conditions will prevail for the near future. In addition, it should be noted that by replacing more expensive equity capital in PE backed deals with mezzanine loans the Company will be delivering a lower WACC to portfolio companies. For PE houses, the advantage of this lower WACC will be the possibility of higher equity returns meaning, all else remaining equal, more transactions will be closed and, as lower WACC may help SME management teams to negotiate a relatively higher equity shareholding, this should also be welcomed by PE backed entrepreneurs and the Investment Adviser considers that this anticipated demand is reflected in its ‘pipeline’ of potential deals, described further below. The Investment Adviser considers that, with the introduction of lending entities such as the Company to the market, this approach to financing offers the potential for the LMM to return to a volume of approximately 130 to 150 SME deals per annum, as was the case from 2000 to 2005. The Investment Adviser considers that easier access to debt is important for the wider UK economy because the under-supply of economically priced debt and mezzanine loans has been a major constraint on transaction completions in the LMM (which are up from fewer than 50 deals per annum, as was the case in 2009, but still well below the norm of 130 to 150 deals per annum achieved in 2000 to 2005). The potential scale of bank deleveraging in Europe can be considered exceptional for recent times. The IMF has estimated the quantum of deleveraging at Euro 2.8 trillion. Although the IMF has

8 Investment Adviser’s estimate

43 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP estimated the timeframe for this deleveraging as ending Q4 2013, Deloitte LLP has recently published a report which suggests that the majority of banks surveyed anticipate a 5 to 7 year period or longer for deleveraging. The Investment Adviser concurs with this report’s ﬁndings in respect of this timeframe and considers that the deleveraging overhang will likely negatively impact the availability of bank credit to all SMEs. In the opinion of the Investment Adviser, these issues are structural and unlikely to be resolved in the short term. Therefore the opportunity to provide non-bank ﬁnance for PE backed businesses is likely to be material in quantum and could last for several years, potentially well beyond the investment period. It is also believed that more stringent banking regulations (where the prevailing political pressure is such that these may be expected to tighten further) mean it is uneconomic for banks to provide these PE loans, with banks focusing on areas delivering a higher return on regulatory capital such as property, asset backed lending and invoice discounting.

The Opportunity The Investment Adviser believes that in current market conditions a well-capitalised and experienced new entrant to the LMM will be well positioned to source successfully senior and mezzanine debt investments in PE backed SMEs in the LMM over the next 12 to 18 months. The principal demand drivers include: (1) the scarcity of debt capital; (2) premium pricing on debt margins and fees; and (3) a slow global recovery from the recent credit crisis which may prolong the ‘inertia’ that has plagued capital markets in the last 4 years, implying a continuation of these key factors for the near future. The Investment Adviser considers that there are substantial barriers to entry for new debt funds operating in this PE LMM segment, including (1) the allocation of capital; (2) hiring suitably experienced people; and (3) replicating the longstanding, deep relationships that the Investment Adviser’s team holds with both pre-eminent PE houses and SME management teams.

The Company’s target market The Company intends to originate and structure senior debt, mezzanine loans and Junior Equity of between £10 million to £25 million in aggregate, primarily to assist UK PE firms in acquiring SMEs with enterprise values of between approximately £10 million and £100 million. The Investment Adviser estimates that the target market is in excess of £25 billion for 2013 to 2017, on the basis that the Investment Adviser expects demand for senior debt to normalise at levels seen between 2001 and 2005, resulting in an annualised requirement in the LMM of c.£2 billion per annum (Source: Investment Adviser’s estimate based on CMBOR data). The target market of £25 billion, based on this assumption, would comprise approximately £10 billion primary loans and £15 billion refinancing (of which approximately £10 billion is bank loans (Source: Investment Adviser’s estimate based on CMBOR data) and approximately £5 billion9 is represented by loan notes financed by the PE houses). Supply of debt to this market has been constrained since 2008 as a result of the financial problems banks continue to face, with this situation being exacerbated by regulation under which the risk weightings of such loans makes these instruments relatively uneconomical for banks. When the potential increase in demand for debt from the current build-up of refinancing/secondary transactions is factored in, the outlook suggests that the current supply:demand imbalance for debt to support UK PE transactions is set to continue. In the Investment Adviser’s view, this bodes well for the continuance of the current attractive margins and fee levels.

Key advantages of investing in the target market The following points highlight key advantages to investing in the target market: * The UK is the seventh largest economy globally and has the second largest and second most mature PE market. * The UK has, since 2000, generated an average of more than 130 deals per annum in the LMM and has generally proved more robust since 2008 than the larger LBO market. Nearly 50 per cent. of total European LMM PE activity in Q1 2012 was within the UK (Source: CMBOR).

9 Investment Adviser’s estimate

44 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP * The CBI has identified faster growth companies as the ‘‘gazelles’’ of the UK economy, with some companies generating greater than 10 per cent. per annum revenue growth. In the Investment Adviser’s opinion these represent attractive potential lending opportunities. * In benchmarking, PE backed companies have significantly out-performed the FTSE All Share Total Return Index, with less than 30 per cent. of this outperformance being attributable to leverage and market timing. * The Investment Adviser considers that more focused and decisive relationships between owners and managers and enhanced equity performance incentive structures are key drivers of success in PE backed MBOs. * Working capital management in PE backed businesses is, in the Investment Adviser’s opinion, considerably more focused than in comparable non-PE backed businesses. * The appointment of a partner or other appointee of the Investment Adviser as a member of the boards of portfolio companies (subject to that person’s fiduciary and contractual duties as a member of the board of the relevant portfolio company) potentially provides greater access to information, enabling these loans to be managed more effectively than the traditional ‘‘hands- off’’ models. * English law and practice weights the balance of control/power to the debt provider/security holder much more than its continental European neighbours.

The Asset Classes Senior Debt Companies issue senior debt for a number of reasons, including the financing of operations, capital expenditure, mergers and acquisitions and the refinancing of existing debt maturities. Senior debt benefits from first lien security, and is typically secured by some or all of the borrower’s assets. This means that in the event of a borrower default the holders of such loans are afforded a first priority claim on the assets of the borrower, which normally includes security over the shares of the borrower. In the case of a default by a borrower, this could allow the investors to enforce their rights under the security documentation and sell assets of the borrower to recover their debt. In less acute circumstances, the interests of the lenders are protected by financial and non-financial covenants or contractual restrictions in the credit agreement, which set minimum standards for a borrower’s financial conduct and performance. These restrictions are designed to permit, in the majority of cases, lenders to step in and protect their claims against the borrower when there is still significant enterprise value within those businesses in excess of their borrowings. Senior loans generally pay interest monthly, quarterly or semi-annually based on a floating rate of LIBOR plus a fixed margin usually expressed in ‘basis points’. The Investment Adviser expects to obtain margins on such loans of between 450bps and 550bps above LIBOR. Typically senior loans have 5 to 9 year terms and may be structured so that, over this period, a portion of the principal balance will be repaid quarterly, semi-annually or annually, leaving only a small remaining balance to be repaid at the maturity date. However, the Company’s senior debt loans will typically not have any scheduled amortisation, which the Investment Adviser believes will enable the Company to optimise interest yield. In practice, the Investment Adviser considers that for financial management reasons the Company’s portfolio companies should logically seek to make early repayments of principal, which has some benefits to the Company both in terms of risk and IRR given the intention of the Company to distribute net income receipts. In practice, senior debt loans in the UK PE backed LMM can be expected to be repaid within a 3 to 5 year period, as PE houses will typically focus on realising a partial or complete exit by way of a refinancing or sale within such timeframes. In the Investment Adviser’s view institutional investors (who might otherwise be exposed to fixed income products) generally find senior loans attractive because of the floating rate spread generally received on the principal amount lent and the contractual protections through covenants and security.

45 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP Figure 4 illustrates the position of senior loans within the capital structure. Figure 4: Summary of UK Capital Structure Prioritisation

In PE transactions, senior debt is a common feature of acquisition finance. Prior to the credit crisis, debt generally constituted approximately 50 per cent. of the total financing requirement utilised to acquire a private company in deals with enterprise values of greater than £10 million. Since 2008, the proportion of debt financing has fallen to as low as 27 per cent., but the Investment Adviser considers that this will normalise at approximately 50 per cent. as illustrated in Figure 5. Figure 5: Typical structure of the Company’s deals

Mezzanine Loans As illustrated in Figures 4 and 5, mezzanine loans sit mid-way between senior debt and ordinary equity in the capital structure priority. Such instruments benefit from second lien security, with claims over the assets of a portfolio company subordinate to first lien senior debt holders. Interest charges for mezzanine loans typically comprise LIBOR plus a fixed margin, and the Investment Adviser expects to obtain margins of c.1000bps above LIBOR. In general, approximately half of this interest charge is paid in cash on a quarterly basis, with the remaining balance accrued, compounded and paid at final maturity (or, if earlier, on the sale of the portfolio company).

46 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP In comparison with senior loans, mezzanine loans are typically repaid only at maturity (which will often be six months to one year beyond the associated senior loan maturity).

Mezzanine loans will also typically include a warrant over the ordinary shares in the portfolio company, which warrant converts to cash on the sale of the portfolio company. This provides a mezzanine lender with equity-style ‘upside’ in return for the higher risk of taking a position in the capital structure subordinate to the senior debt.

Junior Equity Junior ordinary equity is fully subordinated to both senior debt and mezzanine loans, but will rank ahead of the lead PE ﬁrm’s investment.

It is expected that, in respect of certain investments, the Company will hold a minority share of the ordinary equity capital of the relevant portfolio. Such shareholdings will be converted to cash on the sale of the portfolio company, providing an enhanced return in exchange for subordination to both senior and mezzanine loan instruments. Although in a PE deal holders of ordinary equity may generally not expect to receive a dividend on such an instrument, given the control which the senior lender will effectively exert over the free cash ﬂows of the portfolio company, it is intended that the Company will sometimes beneﬁt from a dividend on the Junior Equity which it will hold.

The UK PE LMM Market

The evolution of the UK PE LMM Buyout market The Company’s target market is the LMM, which the Company considers to be deﬁned by transactions with an enterprise value ranging from approximately £10 million to £100 million. This is a clearly deﬁned segment of the UK market in which the PE houses that the Investment Adviser will target focus their deal activities. This is summarised in Figure 6 which shows the development of the total UK market for MBOs/MBIs of enterprise value £10 million to £100 million during the period 2000 to 2010.

Figure 6: UK LMM for MBOs/MBIs £10m-£100m – Deal Volumes and Values

Figure 6 demonstrates that the UK market for MBOs/MBIs of values between £10 million and £100 million has proved fairly robust in deal volume and total value (averaging c.£4.5 billion per annum) during the period 2000 to 2008. However, following the credit tightening that occurred mid-2007, deal volumes and values fell dramatically for the ﬁrst time in many years. The Investment Adviser considers that they are unlikely to return to 2005 to 2007 levels (i.e. £5 billion to £7 billion per annum) but could be expected to return to 2003 to 2005 levels of c.£4.5 billion per annum.

47 c107409pu040 Proof 11: 6.11.12_23:38 B/L Revision: 0 Operator BonP Figure 7: UK LMM for MBOs/MBIs £10-100m – Transaction Pricing

Deal pricing in the LMM set out in Figure 7 suggests that enterprise values have remained in the 10x to 13x EBIT range throughout the period since 1999. Deal multiples have had limited impact on the market size over time, although there is evidence of a short term pricing reduction in 2008 to 2010, with the market remaining flat in 2011 and average pricing increasing in the 12 months to June 2012. Prices paid by PE for companies have averaged 13.9x post-tax profits for the 12 months to June 2012 compared with 11.5x for the previous 12 months (Source: BDO Private Company Price Index Q2 2012, which states that this is due to PE houses remaining under pressure to invest funds raised and competing against corporates that have conserved cash and are similarly under pressure to invest such cash or return it to shareholders. The Investment Adviser concurs with this view. Given the high levels of private equity capital raised in 2005-2008, in addition to a number of recent successful fundraisings, the Investment Adviser considers that there is likely an ‘equity overhang’ in the private equity segment of the LMM which the Investment Adviser believes means pricing could remain at current levels for the foreseeable future. Mapping the LMM PE houses Deal-making in the UK PE LMM underpinned the total market activity in 2011. Buy-outs in the £10 million to £100 million range numbered 83 with a total value of £2.8 billion in 2011, compared to 69 deals with a total value of £2.3 billion the previous year (Source: CMBOR). The LMM showed a c. 20 per cent. increase from £2.3 billion in 2010 to £2.8 billion in 2011. The value of upper mid-market deals (£100 million to £500 million range) declined by 40 per cent., with £4.5 billion total value in 2011 compared to £7.4 billion in 2010. Moreover, the upper mid- market has historically been a more crowded space where no individual debt provider commands a significant market share. The LMM, in which the Company will operate, is the segment which the Investment Adviser believes represents the most attractive investment opportunity. Future Outlook Despite the potential rationalisation process on the horizon within UK PE (applying downward pressure to some future PE fundraisings or potentially threatening the survival of the less active/ financially successful PE houses), the Investment Adviser considers that the role of PE within the wider UK economy is secure and that the normalisation of the current equity overhang in the private equity segment of the LMM (as described above) will result in more optimal investment opportunities, thereby increasing demand for the Company’s flexible loan products.

The LMM Debt Market The Opportunity Prior to 2008, the c.£2.5 billion per annum LMM acquisition ﬁnance market was dominated by the major UK high street banks. The subsequent credit crunch and the ensuing regulatory constraints

48 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP have seemingly materially diminished the banks’ capacity and desire to arrange senior loans and mezzanine debt. The recent banking turmoil has consequently created a significant credit supply gap in primary PE acquisition finance, especially senior debt. The Company intends to target this gap, specifically in the LMM. The Investment Adviser estimates the debt funding and refinancing need in the LMM between 2013-2017 is approximately £20 billion to £25 billion, of which up to 50 per cent. represents a funding gap. Evolution of the LMM debt market Figure 8: The target UK LMM for MBOs/MBIs, £10 million to £100 million – Senior loan and mezzanine loan value supply and cumulative refinancing value

Figure 8 sets out the annual development during the period 2000 to 2011 in the LMM with regard to the supply of senior debt and mezzanine loans plotted against the latent refinancing requirement in deals transacted post-2004 that are yet to exit. The Investment Adviser estimates that demand for senior and mezzanine loans in the LMM during the last decade has ranged from on average approximately £2.1 billion to £2.7 billion per annum. However, the decline in exits during the last 4 years has led to a substantial potential latent demand for senior debt and mezzanine refinancing which the Investment Adviser has estimated at up to £10.7 billion for the LMM alone. This excludes an estimated £5 billion or more of PE loan notes, estimated at c.50 per cent. of £10.7 billion on the basis of average financial gearing levels in deals of greater than £10 million post 2004. The competitive landscape – recent capital outflows During the recent global financial crisis, a number of banking institutions have been experiencing well publicised difficulties. It is therefore expected that the Irish and Icelandic institutions together with CIT (restructured following US parent’s declaration of Chapter 11 bankruptcy in November 2009) will not feature prominently in the UK mid-market for the foreseeable future. A recent report suggests that the timeframe of bank deleveraging around Europe will be materially greater than previously anticipated by the International Monetary Fund – Euro 2.8 trillion by the end of 2013 (Source: ‘‘European Bank Deleveraging – The Deloitte Bank Survey 2012’’ Deloitte LLP 2012). The Investment Adviser believes that the scale of this deleveraging provides a substantial opportunity for non-bank finance (such as is represented by the Company), which it plans to exploit. The 5 to 7 year timeframe for deleveraging suggested by the findings in this report is in keeping with the view of the Investment Adviser. The Investment Adviser believes that this deleveraging is likely to manifest itself in disposals of loan books or the non-renewal of maturing loans. When coupled with

49 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP the scaled down activities and deleveraging of major UK high street banks, the Investment Adviser considers it unlikely that there will be any material increase in the supply of debt to UK PE from these sources for the near future. Beyond these financial difficulties there are structural challenges facing the banking sector owing to its overexposure to certain asset classes. In response, the regulatory authorities have sought to tighten the constraints around capital adequacy manifested by the introduction of Basel III. Should the current turmoil in European government bonds persist or increase, this will likely place further restrictions on the supply of all forms of debt capital. When the potential increase in demand for debt from the current build-up of latent refinancing/ secondary transactions is factored in, the outlook suggests that the current supply:demand imbalance for debt to support UK PE transactions is set to continue. The Investment Adviser therefore considers that the current attractive margins and fee levels are likely to continue. Whilst more debt is being used to fund UK buy-outs, a typical deal structure for deals over £10 million contains a conservative level of debt (27 per cent. in 2011, 29 per cent. in 2010 and 31 per cent. in 2009 (Source: CMBOR) as a result of the continued scarcity of leveraged finance (a function of the ongoing withdrawal from this capital intensive product area by mainstream banks due to the increasing strictures of the Basel regulations). The Company notes that commentators from LMM PE houses have recently remarked that they have been experiencing a long credit drought which has seen the major banks struggle to continue lending as cheaply and freely as they used to be able to. It has also been noted that the biggest problem in leverage at the moment is the scarcity of lenders in the LMM and that there is neither sufficient volume of debt capital nor adequate ‘one-stop’ debt and mezzanine capital available from the major banks. This is a view that the Investment Adviser concurs with and believes is shared by many LMM PE houses. It is also worth noting that before 2008 the main suppliers of mezzanine debt to the LMM comprised the senior lending banks together with a small number of specialist mezzanine finance firms. However, since 2008 the business models of these mezzanine specialists have evolved with a stronger focus on sponsorless mezzanine (i.e. leading MBOs without a PE partner). The Investment Adviser considers that this change in strategy is likely to distance the PE funds from the mezzanine specialists whom they would then begin to perceive as ‘competitors’. This has improved the opportunity for the Company in the mezzanine space, particularly given its capability to act as a ‘one-stop shop’ for all debt and mezzanine loans plus any Junior Equity the PE house cannot or does not want to fund. Risk and Returns The following graph, Figure 9, sets out a comparison of risk and return for PE (buy-out), mezzanine and the Company. Figure 9: Comparative Risk : Return

50 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP With a senior debt component of some 50 per cent. the Company will have less implicit risk/volatility than a pure mezzanine fund. Further, certain mezzanine funds increase implicit risk driven by fund level leverage.

Potential deal pipeline As set out in the ‘‘Investment Process’’ section of this Prospectus, the Investment Adviser has been appointed to source potential transactions for the Company. A sample of potential transactions is set out below. Figure 10: Sample transactions from pipeline

Of these sample transactions, four are currently under preliminary review by the Investment Adviser, while Deal C has already been declined by the Investment Adviser on the basis that the historic sales and EBITDA information indicates that the potential target company might be subject to cyclical ﬂuctuations and thus not in line with the Company’s investment strategy. All of the above potential transactions were sourced within a one-month period. The Investment Adviser considers that this indicates a healthy potential ‘run rate’. The above information is a sample only of certain transactions currently under consideration by the Investment Adviser. While investments that contain similar characteristics to those described above may be sought, there can be no assurance that the above transactions will be entered into by the Company, will continue to available for the Company to enter into following Admission, or that the future investments in the Company’s actual portfolio will share these characteristics.

51 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP PART III: INVESTMENT MANAGER AND ADVISER

The Investment Manager The Company has appointed Palio Capital Management Guernsey Limited as its Investment Manager. The Investment Manager was incorporated in Guernsey under the Companies Laws on 1 October 2012, with registration number 55683. The Investment Manager is licensed by the GFSC under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. The Investment Manager was founded, and is wholly-owned by, the Senior Executives of the Investment Adviser. The Investment Manager will have sole responsibility for the discretionary management of, and will conduct ongoing management of, the Company’s assets (including uninvested cash) following advice from the Investment Adviser and will not be required to and generally will not submit decisions concerning the discretionary or ongoing management of the Company’s assets for the approval of the Board.

Directors Jonathan (Jon) Bridel Jon Bridel is a Guernsey resident and is currently a non-executive chairman or director of various listed and unlisted investment funds. Listings include the premium segment of the London Stock Exchange and the Channel Island Stock Exchange. He was until 2011 Managing Director of Royal Bank of Canada’s Investment businesses in Guernsey and Jersey. This role had a strong focus on corporate governance, oversight, regulatory and technical matters and risk management. He graduated from the University of Durham with a degree of Master of Business Administration in 1988 and worked with Price Waterhouse Corporate Finance in London. He subsequently served in a number of senior management positions in Australia and Guernsey in corporate and offshore banking and specialised in credit. He was also Chief Financial Ofﬁcer of two private multi-national businesses, one of which raised private equity. He holds qualiﬁcations from the Institute of Chartered Accountants in England and Wales, the Chartered Institute of Marketing and the Australian Institute of Company Directors. He is a Chartered Marketer and a Member of the Chartered Institute of Marketing, the Institute of Directors and is a Chartered Fellow of the Chartered Institute for Securities and Investment.

John de Garis John de Garis joined the Edmond de Rothschild Group in the Channel Islands in September 2008 as Chief Investment Ofﬁcer. This followed 17 years at Credit Suisse Asset Management in London, where from 2001 he was Head of European and Sterling Fixed Income and in 2005 was promoted to Managing Director. Born and raised in Guernsey, he was educated at the Grammar School for Boys and then completed a Higher Diploma in Business and Finance at Richmond College before starting his City career at Provident Mutual in 1987. He later joined MAP Fund Managers (which was subsequently acquired by Credit Suisse) where he gained experience managing equity funds. He is a Member of the Chartered Institute for Securities and Investment.

The Investment Adviser The Investment Manager and the Company have appointed Palio Capital Partners LLP, a limited liability partnership incorporated in England and Wales with registered number OC349941, as Investment Adviser. Palio Capital Partners LLP was established in 2009. Its Senior Executives, Michael Henebery, Jeremy Wilson and Darren Gibson, are experienced PE and senior debt professionals and have more than 40 years’ combined investment experience in equity investing, operations and structuring equity and debt in the LMM and established relationships with PE houses. The Investment Adviser will source potential investments and submit recommended investments to the Investment Manager for its consideration and will provide advice as to the ongoing management of the assets held in the Portfolio (including uninvested cash) and as to the disposal of the Company’s assets. Michael Henebery and Jeremy Wilson will be the Senior Executives primarily responsible for sourcing, executing and advising on the Company’s investments, with Darren Gibson having primary responsibility for operational activities. Brief details of their experience are set out below. The Investment Adviser is an appointed representative of Hutchinson Lilley Asset Management LLP, which is authorised and regulated by the Financial Services Authority, and will act in such capacity

52 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP until such time as its application to the FSA is processed and it becomes authorised and regulated by the Financial Services Authority. Senior Executives Michael Henebery, Managing Partner and Chief Executive Ofﬁcer Michael Henebery’s background is in private equity investment, having been an Investment Director and Managing Director respectively for 14 years at two leading PE funds active in the UK LMM, Montagu Private Equity and Gresham Private Equity. He was head of Gresham Private Equity’s London investment team for eight years. Mr Henebery has strong relationships with many of the PE houses in London. He is a commerce graduate from the University of Birmingham and is both ACA and CF qualiﬁed.

Jeremy Wilson, Managing Partner and Chief Investment Ofﬁcer Jeremy Wilson has extensive experience of the LMM, with over 13 years’ experience of structuring debt products into the UK MBO mid-market across a broad range of industry sectors, in particular during his time at The Royal Bank of Scotland from 1997 to 2008 where he was responsible for establishing RBS’s Corporate & Structured Finance unit, the bank’s mid-market lending unit, in 2002. Under his stewardship, the RBS Corporate & Structured Finance unit was awarded the prestigious ‘…Unquote’’ Debt Provider of the Year’ accolade in both 2005 and 2006.

Darren Gibson, Managing Partner and Chief Operating Officer Darren Gibson has more than 11 years’ operational experience predominantly within the banking and PE sectors, having started his career as a graduate analyst at Goldman Sachs. Prior to joining the Investment Adviser, he established the operational infrastructure of Global Macro Fixed Income Fund and was COO for IBIS Capital Management LLP, a PE/family office firm. He holds a BSc Finance (Hons) degree from The Queen’s University Belfast. Advisers to the Investment Adviser The Investment Adviser expects also to be able to call on the services of the following advisers with whom it has existing relationships and whose expertise is complementary to those of the Senior Executives.

Richard Connell Richard Connell has been involved in the PE industry for 30 years, working for 3i, Invesco, and Montagu Private Equity. For the last 14 years he has been either chairman or non-executive director of a number of PE-backed businesses, including Dignity, Cory Environmental and 2e2 Group. He is presently chairman of CVS Group PLC, Ideal Stelrad Limited, Mercury Pharma Group Limited, Maynard & Harris Group Limited and Leaders Lettings Limited.

Craig Wilson Craig Wilson spent his career with Bank of Scotland, between Edinburgh, New York, Los Angeles and London. Amongst a wide variety of roles in corporate banking at Bank of Scotland, he was Head of Structured Finance for nine years and also ran the bank’s Private Equity Direct Fund Investment Portfolio. He has over 20 years’ experience in deal environments and has close links with the UK PE community, and also has experience of chairing credit committees and in assessing banking and investment opportunities. He is a Fellow of the Chartered Institute of Bankers.

Hassall & Slaughter Ltd (‘‘HSL’’) HSL was established in 1991 to guide the development of businesses in the UK PE market and is owned and controlled by Mike Hassall and Ian Slaughter, serial entrepreneurs with long experience as PE-backed owner-managers in the LMM. They have fulﬁlled both executive and non-executive board roles in several PE backed businesses in a range of sectors including industrial products, electronic engineering, support services and information technology.

Andrew Fullerton Andrew Fullerton is a PE professional with over 20 years’ transaction experience across the UK and continental Europe, the majority of which was gained at Bridgepoint Capital where his roles included Head of Nordic Region and Gescha¨ftsfu¨hrer (MD) in Frankfurt. He is also an active investor in early stage businesses in several sectors. He is a Chartered Accountant and a Politics graduate from Leicester University.

53 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Track records Michael Henebery The table below sets out Michael Henebery’s track record from March 2000 to January 2009. All investments represented in this table were made whilst Mr Henebery headed Gresham Private Equity’s London Investment Team. The Investment Adviser, Palio Capital Partners LLP, accepts responsibility for the information contained in this table. To the best of the knowledge of the Investment Adviser, which has taken all reasonable care to ensure that such is the case, the information contained in this table is in accordance with the facts and contains no omission likely to affect its import. The information presented in the table is based on what is, to the best of the Investment Adviser’s knowledge, an unaudited contemporaneous record of the transactions prepared by Mr Henebery. Potential investors should note that, save in respect of the fact of Mr Henebery’s involvement in the relevant deal, this information has not been reviewed by an independent third party nor has the table been audited or the data from which it is derived been checked against the relevant internal accounting (or other) records or conﬁrmed as accurate, genuine or complete by any previous employer. The data has not been independently veriﬁed for the purposes of this Prospectus. When considering the above information and performance data potential investors should note that in relation to the investments referenced in this table, Mr Henebery’s previous employer provided research, administrative and other relevant support to Mr Henebery and his investment activities. Mr Henebery’s track record is not indicative of the returns or performance that the Company will or is likely to generate going forward, and potential investors should be aware that investment in the Company is speculative, involves a high degree of risk, and could result in the loss of all or substantially all of their investment. Mr Henebery’s past performance is no guarantee of future returns.

54 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Figure 11: Track record of Michael Henebery

Investment period March 2000 – February 2009

All investments led whilst Head of Gresham Private Equity’s London Investment Team

Exited investments

Gross money Holding Invested Realised Unrealised Total multiple Gross IRR period Investment Sector Entry year Exit year cost (£m) (£m) value (£m) value (£m) (£m) % Months AA Consumer July 2000 2004 18.2 18.7 0 18.7 1.03 0.6 50 Support AB services July 2000 2001 6.2 18.1 0 18.1 2.92 222.0 18 Support AC services Dec 2000 2004 6.5 46.3 0 46.3 7.12 83.0 44 AD Stafﬁng Apr 2001 2005 4.2 11.2 0 11.2 2.66 19.3 51 Financial AE Services Jan 2002 2004 9.5 21.2 0 21.2 2.23 50.0 32 AF IT services Jul 2003 2006 14.6 52.2 0 52.2 3.57 69.3 38 AG Retail Jun 2004 2005 3.9 5.9 0 5.9 1.52 116.5 8 AH Restaurants Feb 2004 2006 6.8 16.3 0 16.3 2.35 44.1 34 AI Water services Dec 2004 2008 6.0 18.8 4.1 22.9 3.83 48.0 40 AJ Consumer Jan 2006 2012 17.2 0000072 AK Industrial Sept 2005 2012 20.5 82.0 0 82 4.00 Tbc. 84 AL Retail Nov 2005 2008 19.7 12.2 0 12.2 0.62 n/a 25 Total exited investments 133.3 302.9 4.1 307.0 2.30 30.0* 38**

*Estimate; **Weighted average holding period (based on investment cost)

Unexited investments as of 31 August 2012

Investment Sector Entry year Invest cost (£m) BA Financial Services 2005 16.2 BB Support services 2006 32.6 BC Financial Services 2007 25.4 Total unexited investments 74.2 Total investments 207.5

Jeremy Wilson The table below sets out Jeremy Wilson’s track record from 1995 to 2007. The principal investments were undertaken whilst deal leader/managing director of The Royal Bank of Scotland’s Mid-Market Leveraged Finance Business. The Investment Adviser, Palio Capital Partners LLP, accepts responsibility for the information contained in this table. To the best of the knowledge of the Investment Adviser, which has taken all reasonable care to ensure that such is the case, the information contained in this table is in accordance with the facts and contains no omission likely to affect its import. The information presented in the table is based on an unaudited contemporaneous record of the transactions prepared by Mr Wilson. Potential investors should note that, save in respect of the fact of Mr Wilson’s involvement in the relevant deal, the information has not been reviewed by an independent third party nor has the table been audited or the data from which it is derived been checked against the relevant internal accounting (or other) records or conﬁrmed as accurate, genuine or complete by any previous employer. Neither the amount of debt written nor the known provisions have been independently veriﬁed for the purposes of this Prospectus.

55 When considering the above information potential investors should note that in relation to the debt referenced in the above table, previous employers provided research, administrative and other relevant support to Mr Wilson and his investment activities. Mr Wilson’s track record is not indicative of the returns or performance that the Company will or is likely to generate going forward, and potential investors should be aware that investment in the Company is speculative, involves a high degree of risk, and could result in the loss of all or substantially all of their investment. Mr Wilson’s past performance is no guarantee of future returns. Potential investors should also note that the stated known provisions represents the approximate value that was set aside as a provision and does not constitute an actual loss incurred.

56 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Figure 12: Track record of Jeremy Wilson Investment period: 1995 to 2007 Principal investments undertaken whilst Deal Leader / Managing Director of The Royal Bank of Scotland’s Mid Market Leveraged Finance Business Exited investments

Debt Known Company Financial written Transaction Provisions name Industry sector sponsor Transaction type c.£m date Exit date c.£m AA Media MA Secondary MBO 10.0 2007 2011 to HA 0 AB Business Services MB Capex Facilities 10.0 2007 2010 0 AC Healthcare MC Secondary MBO 30.0 2006 2008 0 AD Business Services MD MBO 11.0 2006 2011 0 AE Business Services ME Secondary MBO – participation 20.0 2006 2012 0 AF Business Services MF MBO 12.0 2006 2010 to HB 0 AG Business Services MG MBO 15.0 2006 2008 to HC 0 AH Restaurants MH P2P 77.0 2006 2011 0 AI Business Services MI P2P 130.0 2006 2010 to HD 0 AJ Leisure MJ Secondary MBO – participation 30.0 2006 2010 to HE 0 AK Healthcare MK MBO 15.0 2006 2012 to HF 0 AL Manufacturing ML Secondary MBO 25.0 2006 2010 0 AM Healthcare MM MBO – participation 20.0 2006 2008 0 AN Leisure MN Participation in Reﬁnancing 17.5 2006 Listed May 2007 0 AO Education MO Recapitalisation 37.1 2006 2007 0 AP Media MP BIMBO 9.6 2005 2006 0 AQ Healthcare MQ Recapitalisation 73.0 2005 2006 to HG 0 AR Healthcare MR Recapitalisation + Acquisition 77.0 2005 2007 0 AS Retail MS Acquisition 25.0 2005 2009 0 AT Consumer Products MT MBO 15.0 2005 2011 5 AU Restaurants MU Secondary MBO 25.0 2005 2011 to HH 0 AV Healthcare MV MBO 54 2005 2007 0 AW Restaurants MW MBO 15.0 2005 2006 0 AX Leisure MX Secondary MBO 10.0 2005 2007 0 AY Media MY Secondary MBO 20.0 2005 2008 0 AZ Media MZ Acquisition of Lime Pictures 25.0 2005 2007 0 BA Media NA MBO 30.0 2005 2007 0 BB Financial Services NB P2P Participation 25.0 2005 2007 to HI 0 BC Leisure NC MBO 56.9 2005 2007 to HJ 0 BD Media ND MBO 50.6 2005 2011 to HK 0 BE Business Services NE Secondary MBO 35.0 2004 2007 0 Manufacturing / BF Consumer Products NF Secondary MBO 40.0 2004 2007 0 BG Manufacturing NG MBO 20.0 2004 0 BH Business Services NH Secondary MBO 30.0 2004 2007 0 BI Leisure NI P2P 60.0 2004 2005 0 BJ Business Services NJ MBO 10.0 2004 2006 0 BK Business Services NK MBO 16.0 2003 2005 0 BL Media NL MBO 10.0 2003 2007 0 BM Leisure NM MBO 40.0 2003 2007 0 BN Retail NN P2P 13.0 2003 0 Transport / BO Logistics NO Recapitalisation 50.0 2003 0 BP Manufacturing NP Recapitalisation 25.0 2003 0 BQ Manufacturing NQ P2P 22.0 2003 0 BR Financial Services NR MBO 16.0 2003 0 BS Healthcare NS MBO 40.0 2002 0 BT Business Services NT Restructuring 24.0 2002 0 BU Construction NU P2P 263.0 2000 0 BV Business Services NV MBO 17.0 1999 2004 – sold to HL 0 Food BW Manufacturing NW Merger 62.8 1999 0 Food BX Manufacturing NX MBO 36.0 1998 0 BY Leisure NY MBO – participation 20.0 1998 0 BZ Manufacturing NZ MBO 15.0 1998 1999 7 CA Manufacturing OA JV 20.0 1998 0 CB Manufacturing OB MBO 6.0 1998 0 CC Business Services OC MBO 20.0 1998 0 Food CD Manufacturing OD Acquisition 12.0 1996 0 CE Business Services OE MBO 10.0 1996 0 Food CF Manufacturing OF Acquisition 8.0 1995 5 Debt Exited 1,911.5

57 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Unexited investments

Debt Known Company Financial written Transaction Provisions name Industry sector sponsor Transaction type c.£m date Exit date c.£m CG Telecoms OG MBO 30.0 2007 0 CH Business Services OH MBO Undisclosed 2007 0 CI Manufacturing OI MBO 15.0 2007 0 CJ Healthcare OJ MBO 10.0 2007 0 CK Business Services OK Reﬁnancing 25.0 2007 0 Professional CL Services OL MBO 15.0 2007 0 CM Financial Services OM Reverse takeover 25.0 2007 0 CN Media ON Secondary MBO 15.0 2006 0 CO Manufacturing OO Tertiary MBO 67.6 2006 0 CP Financial Services OP MBO 29.9 2006 0 CQ Business Services OQ MBO 24.5 2006 0 CR Consumer Products OR Recapitalisation 112.5 2006 0 CS Healthcare OS Tertiary MBO 170.0 2006 0 CT Financial Services OT MBO 15.0 2006 0 CU Consumer Products OU MBO 35.0 2006 0 CV Healthcare OV Recapitalisation 36.0 2006 0 CW Healthcare OW Recapitalisation 35.9 2006 0 CX Media OX MBO 15.0 2006 0 CY Restaurants OY Recapitalisation 141.0 2005 0 CZ Leisure OZ P2P 25.0 2005 0 DA Financial Services PA MBO 15.0 2005 0 DB Support Services PB MBO 15.0 2005 0 DC Financial Services PC Secondary MBO 47.4 2005 0 DD Business Services PD Acquisition of Safe Estates 41.0 2004 0 DE Consumer Products PE SMBO 22.5 2002 0 Total Known* Provisions 17 Known Provision Debt yet to exit 983.3 % 0.587% Total Debt deployed – Excluding Underwrites 2,894.8

*Approximate value set aside – does not constitute an actual loss incurred.

58 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP PART IV: INVESTMENT PROCESS AND PORTFOLIO MANAGEMENT

Investment Process As described in Part III, the Investment Adviser will be responsible for sourcing potential investments. Recommended investments will be presented to the Investment Manager for its approval. The Investment Manager will not be required to and generally will not submit decisions concerning the discretionary or ongoing management of the Company’s assets for the approval of the Board. Any investment recommended by the Investment Adviser which the Investment Manager rejects, however, will be promptly notified to the Company. Step 1 – Sourcing investments The Investment Adviser believes that there will be two key sources of target companies: (i) MBO/unquoted transactions: new deals predominantly from the pre-eminent PE houses in the LMM, sourced through the Investment Adviser’s existing relationships with PE houses; and (ii) refinancing of existing primary PE transactions which could take the form of pure debt refinancings, hybrid debt/equity refinancings or pure equity refinancings. Members of the Investment Adviser’s team have longstanding relationships with a number of active PE firms in the LMM. The Company, therefore, anticipates seeing deal flow from, inter alia, those PE firms. Furthermore, the Investment Adviser has a broad network across the corporate finance world, including at leading accounting firms and with mergers and acquisitions specialists. The Company considers that the following key differentiators set the Investment Adviser apart in the market: * depth of Senior Executives’ longstanding PE relationships; * a low volume business – the Investment Adviser intends to use a selective approach to filter the highest quality investments for the Company’s Portfolio; * financial alignment amongst Shareholders, the Investment Adviser’s Senior Executives, PE houses and investee management teams; * the Investment Adviser’s Credit Committee delivering transparent and consistent decisions; * flexible, non-amortising loan products; * risk based approach to pricing risk on a deal-by-deal basis; * commercial approach to setting financial and operational covenant controls; * relationship continuity – it is intended that the relevant Senior Executive at the Investment Adviser will retain responsibility over the entire life of the investment; * the taking of a board seat on portfolio companies; and * the development of close relationships with the management teams of portfolio companies.

59 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Step 2 – Decision making for selection and conclusion of investments Figure 13: Investment Adviser ‘s process for selection and conclusion of investments

Once potential investments have been sourced, target companies will be selected as follows.

Preliminary deal assessment Typically, the Investment Adviser will receive a business plan comprising an operational plan and ﬁnancial forecasts for the potential target company. If the preliminary information contained in the business plan suggests the potential target company meets the Investment Adviser’s credit quality thresholds, the Investment Adviser will then meet with the management team and PE sponsor of the potential target company and undertake a review of what it considers to be the ‘totality of risk’ attaching to the business.

Stage 1 Following the preliminary deal assessment, the Investment Adviser will prepare a short credit paper (a ‘Stage 1 Credit Paper’) outlining an assessment of the key risks and proposals on the most appropriate capital structure and pricing for the potential target company. Following Credit Committee approval the Investment Adviser will issue a term sheet for its proposed investment.

Stage 2 The Investment Adviser will then review the formal due diligence commissioned by the PE sponsor. This due diligence will comprise investigative reports prepared by independent firms exploring, inter alia, important business, financial, tax, accounting, environmental, governance, regulatory and legal issues to assist in determining whether or not to proceed with an investment. If, following the review of this due diligence, the Investment Adviser still intends to invest in the potential target company, the Investment Adviser will prepare a more comprehensive credit paper (a ‘Stage 2 Credit Paper’) containing a full assessment of what it considers to be the totality of risk attaching to the proposed deal and recommending the final capital structure and pricing to its Credit Committee.

Stage 3 Following Credit Committee approval, the Investment Adviser’s deal team will proceed to present this potential investment to the Investment Manager. The Investment Manager will review the materials prepared by the Investment Adviser and will decide whether or not to make the potential investment.

60 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP The Investment Manager will promptly notify the Company of any investment recommendations of the Investment Adviser that were not made by the Investment Manager. The Company may request further information on all such investments. Stage 4 As final deal negotiations are concluding but before the Company’s funds are invested, the Investment Adviser’s deal team will prepare a short paper (the ‘Pre-Completion Memo’) focusing on the latest management accounts and cash position of the target company. This paper will assess whether trading, working capital and cash continue to meet the criteria set at the time that the investment was recommended. If the Investment Manager is satisfied with this information, the Investment Adviser and Investment Manager will proceed to arrange completion of the transaction. The Investment Adviser’s Credit Committee The decision-making process regarding which opportunities to recommend to the Investment Manager will be undertaken by the Senior Executives. As a proposed deal progresses through the Investment Adviser’s preliminary deal assessment process (as described in the section headed ‘‘Stage 1’’ above), the Credit Committee will typically comprise two of the three Senior Executives, ensuring that the knowledge of each transaction is retained within the business throughout the decision making cycle. The Investment Adviser will incorporate a degree of independence in its decision making by distinguishing within the Credit Committee between the ‘sponsoring’ Senior Executive who will be leading and presenting the transaction, and the two ‘independent’ Senior Executives who will comprise the Credit Committee in relation to that transaction. Role of advisers Where appropriate, the Credit Committee may call on the expertise offered by its advisers. On certain deals, HSL may be able to enhance the assessment of the risks attaching to proposed deals by providing their views from the perspective of an ‘operator’ as opposed to a ‘financier’. It is intended that HSL will in certain circumstances join the Senior Executives at management meetings and site visits, in order to provide the Investment Adviser with further views on the configuration of the operations of a business and identifying potential issues to be addressed or possible improvements to be made. They may also be asked from time to time to provide an additional perspective on the composition of a portfolio company’s management team.

Portfolio management

Figure 14: Post-investment portfolio management process

61 As it is anticipated that all proposed deals will involve either a mezzanine tranche and / or a Junior Equity investment by the Company, the Company intends to secure the right to appoint a member of the Investment Adviser’s team or such other representative, agent or appointee of the Investment Adviser as the Investment Adviser considers appropriate to the board of the portfolio company as a condition to the Company’s investment. This should ensure that, subject to the appointed person’s ﬁduciary and contractual duties as a member of the board of the relevant portfolio company, the Investment Adviser will have direct, regular access to the business. It should also be able to observe more closely the performance of the management team and explore aspects of the portfolio company’s business that may require attention. If the Investment Manager or the Investment Adviser receives a fee from a portfolio company for providing services or board level expertise to that company, the Investment Manager or Investment Adviser, as appropriate, may retain all or such part of that fee as it considers reasonable to fund the cost of the provision of such expertise or services. Within the framework set out in Figure 14, and in particular in the context of having a seat at the board of its portfolio companies, the Investment Adviser will undertake an in-depth review of the management accounts of its portfolio companies. A condition of the loans will be that management accounts are submitted on a monthly basis. Should information come to light that requires further investigation by the Investment Adviser, the ‘sponsoring’ Senior Executive will endeavour to meet with the management team of the portfolio company and challenge any aspect of the business that deviates from the agreed management plan at the next meeting of the portfolio company’s board or next other available opportunity.

Summary Critical success factors for the Company comprise the rigour of the decision making process to filter the individual investments and the discipline of the portfolio management approach to minimise risk to the impairment of the capital of the Company. In this regard, the Company will benefit from the following features: * the Investment Adviser’s Senior Executives’ blend of debt and equity experience of more than 30 years combined; * access to highly experienced advisers (as set out in the section headed ‘‘The Investment Adviser’’ in Part III of this Prospectus) with, between them, substantial PE, acquisition finance and operational management experience; and * the trend to over-equitise PE transactions such that the proportion of equity capital has increased from c.30 per cent. to c.60 per cent. of the total financing requirement utilised to acquire a private company in PE deals, which the Investment Adviser considers to be due to: * scarcity of supply of debt capital; and * PE houses needing to deploy capital to protect access to limited partnership funds and management fee income, such that, while the Investment Adviser anticipates that the proportion of equity in PE transactions may normalise at c.50 per cent. of the total capital base, the Company will continue to benefit, through its senior and mezzanine loans, from this healthy level of equity ‘cushion’, so that the full PE equity in a portfolio company would need to be eroded before the Company’s loan capital in that company would be impacted.

62 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP PART V: DIRECTORS, MANAGEMENT AND ADMINISTRATION

Directors The Directors are responsible for managing the business affairs of the Company in accordance with the Articles and have overall responsibility for the Company’s activities including the review of investment activity and performance and the overall control and supervision of the Investment Manager. The Directors may appoint other parties such as the Investment Manager, the Administrator and the Registrar to provide services to the Company. In particular, the Directors have appointed the Investment Manager to manage the assets comprised in the Portfolio. The Investment Manager will have sole responsibility for the discretionary management of, and will conduct ongoing management of, the Company’s assets (including uninvested cash) following advice from the Investment Adviser and will not be required to and generally will not submit decisions concerning the discretionary or ongoing management of the Company’s assets for the approval of the Board. The Board comprises 5 Directors, all of whom are independent of the Investment Manager and also the Investment Adviser. Details of each of the Directors are set out below. The address of the Directors, all of whom are non-executive, is the registered ofﬁce of the Company. The Directors of the Company are as follows:

Directors’ biographies Christian (Chris) Brodie (Chairperson), 55 Christian Brodie is one of two Vice Chairmen of UBS Investment Bank and a Business Group Vice Chairman of UBS AG. He started his career as a lawyer at Herbert Smith & Co in 1979 and worked in its London and New York offices. In 1985 he joined S.G. Warburg & Co. Ltd., a merchant bank to work in their corporate finance department. This company eventually became part of UBS AG. He has mainly been involved in advising on mergers and acquisitions and advising governments and companies around the world on raising capital in the financial markets. He is the Chairman of the Chelsea and Westminster Health Charity, a National Health Service Charity and is the Vice Chairman and Treasurer of the University of Sussex. He is a solicitor and a law graduate of the University of Oxford. Richard Crowder, 62 Richard Crowder holds a range of directorships and consultancy appointments including Better Capital PCC Limited, BlueCrest Limited, BlueCrest AllBlue Fund Limited, Japan Residential Investment Company Limited, London & Stamford Property plc and a number of investment funds listed on the Irish and Channel Islands stock exchanges. He is also a director of Pantheon International Participations Plc and a number of private equity fund-of-funds managed by the Pantheon Group. In his early career he worked as an investment manager with Ivory & Sime in Edinburgh and as head of investment research with W.I. Carr in the Singapore, Hong Kong & Tokyo and he undertook a wide range of responsibilities for Schroders in London and the Far East, culminating in the role of Managing Director for Schroders’ Singapore associate and director of J Henry Schroder Wagg & Co Ltd. Having then worked as Chairman of Smith New Court International Agency and Director of Smith New Court Plc, Richard Crowder was the founding Managing Director of Schroders’ Channel Islands subsidiary from 1991 until he became a full time non-executive Director and consultant in 2000. He is a member of the Securities & Investment Institute and he resides in Guernsey. Michael Iain Stokes, 48 Michael Iain Stokes holds a range of non-executive directorships on fund management and fund investment companies focussed on private equity and infrastructure asset strategies. He also acts as a consultant for Wyvern Partners, an independent corporate advisory firm active in many sectors, including financial services. In his early career he worked in audit and advisory for BDO Binder, Guernsey before moving to Guernsey International Fund Managers Limited (part of Barings) in 1996. He joined Mourant International Finance Administration (MIFA) in 2003 as head of its Guernsey office and, following a period as Head of Private Equity Funds, in 2008 he became Managing Director with responsibility for MIFA’s jurisdictional offices covering North America, Europe and Asia. He was a member of the senior executive team that managed the sale of MIFA to State Street Corporation in 2010 and was a Senior Managing Director in State Street’s Alternative Investment

63 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Solutions business unit as Head of Private Equity Product, EMEA until June 2012. He is a Chartered Certified Accountant, holds the IoD Diploma in Company Direction and is resident in Guernsey. Trevor Hunt, 59 Trevor Hunt, a Jersey resident, has extensive experience in the offshore financial services fund administration sector. Mr Hunt worked for HSBC for over 30 years in various senior management positions, in particular within the open-ended and closed-ended offshore funds industry. Mr Hunt retired from HSBC in 2003 and spent six years as a director of Capita Financial Administrators (Jersey) Limited and of other Capita entities before leaving in 2009 to join BNP Paribas Securities Services in a senior management role. On 30 September 2011, Mr Hunt left BNP Paribas in order to focus on providing non-executive directorship services to a number of Channel Islands funds and fund management companies. Mr Hunt is registered with the Jersey and Guernsey Financial Services Commission to carry out the provision of services as a non-executive director. Mr Hunt is also a member of the Jersey Association of Directors and Officers and holds the Chartered Institute of Bankers (Trustee Diploma).

Administrator, Company Secretary and Custodian BNP Paribas Fund Services (Guernsey) Limited has been appointed as Administrator, Company Secretary and Custodian of the Company pursuant to the Administration and Custody Agreement (further details of which are set out in paragraph 6.5 of Part VII of this Prospectus). In its capacity as Administrator, BNP Paribas Fund Services (Guernsey) Limited will be responsible for the day-to-day administration of the Company (including but not limited to the calculation and production of the estimated monthly NAV) and general secretarial functions required by the Companies Laws (including but not limited to the maintenance of the Company’s accounting and statutory records). In its capacity as Custodian of the Company’s investments, it shall provide for the safekeeping of contracts and other documents of title to the loans and may take custody of cash and other assets. Documents will be registered in the name of the Company or its subsidiary (as appropriate) and assets will be held in a custody account and registered in the name of the Custodian or its delegate or a nominee as required under the Licensees (Conduct of Business Rules) 2009. The Company has consented to, and BNP Paribas Fund Services (Guernsey) Limited is permitted and may, subject to applicable law and upon prior written notice to the Company, delegate any or all of its functions to any member of the Administrator’s group. Investors should note that it is not possible for the Administrator to provide investment advice to investors.

Registrar Capita Registrars (Guernsey) Limited has been appointed as Registrar of the Company pursuant to the Registrar Agreement (further details of which are set out in paragraph 6.6 of Part VII of this Prospectus).

Fees and expenses Initial expenses related to the Issue The initial expenses of the Company are those which are necessary for the Issue. The expenses to be borne by the Company are ﬁxed at an amount equal to 2 per cent. of the Gross Issue Proceeds. To the extent that such expenses exceed an amount equal to 2 per cent. of the Gross Issue Proceeds, the Investment Adviser will bear the excess (the ‘‘Excess Amount’’). Should notice to terminate the Investment Advisory Agreement be served upon the Investment Adviser at any time during the 18- month period from Admission it shall be entitled to be paid by the Company an amount equal to the Excess Amount. These expenses will be paid on or around Admission and will include, without limitation, placing fees and commissions; registration, listing and admission fees; the cost of settlement and escrow arrangements; printing, advertising and distribution costs; legal fees, and any other applicable expenses. All such expenses will be immediately written off. On the assumption that the Company achieves its target issue of £150 million, and given that the initial expenses of the Issue to be borne by the Company will be ﬁxed at an amount equal to 2 per

64 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP cent. of the Gross Issue Proceeds, the NAV of the Company immediately following Admission will be £147 million (in other words, 98 per cent. of the Gross Issue Proceeds), and the NAV per Share will be £0.98.

Ongoing Annual Expenses Management fee The Investment Manager will be entitled to a quarterly management fee. This quarterly fee shall be equal to 0.25 per cent. of the NAV of the Company as at the last day of the previous calendar quarter and shall be payable within 14 days of the calculation of the NAV of the Company as at such date. The management fee for the period from Admission to the end of the ﬁrst calendar quarter following Admission shall be calculated by reference to the NAV of the Company immediately following Admission and shall be pro-rated accordingly. The Investment Manager will be responsible for paying the Investment Adviser. The Investment Adviser shall be paid such amount in respect of its services as is agreed between the Investment Manager and the Investment Adviser from time to time. The Investment Manager may at its discretion enter into arrangements with certain investors pursuant to which it will rebate to such investors a proportion of the management fee received from the Company. Incentive allocation The Special Limited Partner (the principal partners of which are the Senior Executives) will be entitled to receive an incentive allocation from the Investment Partnership through which the Company will hold all of its investments. The Company will, save for any amounts retained for paying fees and expenses or for working capital purposes, contribute the net proceeds of the Issue to the Investment Partnership in which it is the general partner and through which it will hold all of its investments. All amounts subsequently distributed by the Investment Partnership (including, without limitation, net income generated by the Company’s investments and the proceeds of realising such investments) will be for the account of the Company save that the Special Limited Partner (the principal members of which are the Senior Executives) will be entitled to receive an incentive allocation. The Investment Partnership will therefore, after having paid to the Company all amounts necessary to enable the Company to meet fees and expenses payable by it, make distributions on the following basis: (A) ﬁrst, to the Company, an amount equal to the aggregate gross proceeds received by the Company from the issue of Shares (including sales of Shares out of treasury); (B) second, to the Company, an amount equal to a realised (cash-paid) IRR on the aggregate gross proceeds received by the Company from the issue of Shares (including sales of Shares out of treasury) equal to LIBOR plus 7 per cent; (C) third, amounts distributed shall be distributed 50 per cent. to the Company and 50 per cent. to the Special Limited Partner until the Special Limited Partner has been distributed amounts which in aggregate are equal to 10 per cent. of all amounts in excess of that distributed under paragraph (A), being that distributed to the Company under paragraphs (B) and (C); and (D) thereafter, all amounts distributed shall be distributed 10 per cent. to the Special Limited Partner and 90 per cent. to the Company.

65 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Other fees and expenses The Company will also incur ongoing annual fees and expenses. These fees and expenses will include the following:

(i) Administrator and Custodian Under the terms of the Administration and Custody Agreement, the Administrator is entitled to various fees, including a minimum annual administration fee of £70,000, an annual secretarial fee of £30,000 and a minimum annual loan administration fee of £40,000.

(ii) Registrar The Registrar will be entitled to an annual fee from the Company equal to £2 per Shareholder per annum or part thereof, with a minimum of £6,500 per annum per class of Shares. Other registrar activity will be charged for in accordance with the Registrar’s normal tariff as published from time to time.

(iii) Directors Each of the Directors will be entitled to receive £35,000 per annum, other than Michael Iain Stokes who will be entitled to receive £30,000, the Chairperson who will be entitled to receive £40,000 per annum, and the chairman of the Audit Committee who will be entitled to receive an additional fee of £5,000 per annum. No amount has been set aside or accrued by the Company to provide pension, retirement or other similar beneﬁts.

(iv) CISX Sponsor Fee The CISX Sponsor will be entitled to a one-off listing fee of £6,000 which is due on Admission and, for acting as sponsor on an ongoing basis, an annual fee of £6,000.

(v) Auditor The Auditor will be entitled to an annual fee from the Company, which fee will be agreed each year in advance of the Auditor commencing audit work.

(vi) Other operational expenses All other ongoing operational expenses of the Company (excluding fees paid to service providers as detailed above) will be borne by the Company including, without limitation: the incidental costs of making its investments and the implementation of its investment objective and policy; travel, accommodation and printing costs; the cost of directors’ and ofﬁcers’ liability insurance and website maintenance; and audit and legal fees. All out of pocket expenses that are reasonably and properly incurred of the Investment Manager, the Administrator, the Custodian, the Registrar, the CREST agent and the Directors relating to the Company will be borne by the Company.

Taxation Information concerning the tax status of the Company and the tax treatment of Shareholders is contained in paragraph 4 of Part VII of this Prospectus. A potential investor should seek advice from his or her own independent professional adviser as to the taxation consequences of acquiring, holding or disposing of Shares.

Meetings and reports to Shareholders All general meetings of the Company shall be held in Guernsey. The Company expects to hold its ﬁrst annual general meeting in 2013. The Company’s audited annual report and accounts will be prepared to 31 December each year, commencing in 2013, and it is expected that copies will be sent to Shareholders within four months of the ﬁnancial year end, or earlier if possible. Shareholders will also receive an unaudited interim report each year commencing in respect of the period to 30 June, expected to be despatched to Shareholders within two months of the period end, or earlier if possible. The Company’s audited annual report and accounts will be available on the Company’s website, www.palioukmidmarketdebtfund.com. The Company’s accounts will be drawn up in Sterling and in compliance with IFRS.

66 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Conflicts of interest Directors In relation to transactions in which a Director is interested, the Articles provide that where the nature and monetary value or, if such value is not quantifiable, the nature and extent of the Director’s interest has been disclosed, a Director shall, inter alia, not be disqualified by his office from entering into a contract or arrangement with the Company, and no such contract or arrangement or any contract or arrangement entered into by or on behalf of the Company with any person, firm or company of or in which any Director shall be in any way interested, shall be avoided. A Director may not, however, vote in respect of any such contract or arrangement. For further details see paragraph 5.14 of Part VII of this Prospectus. The Directors are also required by the Registered Collective Investment Scheme Rules 2008 to take all reasonable steps to ensure that there is no breach of any of the conflict of interest requirements in those Rules.

Investment Manager and Investment Adviser The Investment Manager, the Investment Adviser, their shareholders and subsidiaries, any of their officers, directors, employees, agents and affiliates and any person or company with whom they are affiliated or by whom they are employed (together, ‘‘Interested Parties’’ and each an ‘‘Interested Party’’) may be involved in other financial, investment or professional activities which may on occasion give rise to conflicts of interest with the Company or any member of the Group. In particular, the Interested Parties may provide investment management, investment advice or other services in relation to other funds which may have similar investment policies to that of the Company. All potential investors should read carefully the Risk Factors set out on pages 14 to 26 of this Prospectus and, in particular, the risks set out under the section headed ‘‘Risks relating to the Investment Manager and Investment Adviser’’ on page 21 of this Prospectus. In the event of a conflict of interest arising, each of the Investment Manager and the Investment Adviser, as relevant, will seek to ensure that it is resolved fairly and in accordance with their obligations under and the restrictions contained in the Investment Management Agreement and the Investment Advisory Agreement respectively (which incorporate the restrictions in this Prospectus) and any applicable regulatory obligations. As at the date of this Prospectus neither the Investment Manager nor the Investment Adviser manage or advise any clients or funds which would rank in priority or pari passu with the Company in relation to opportunities to invest in senior debt, mezzanine instruments and Junior Equity of SMEs.

Other direct or indirect holdings of equity or debt positions in portfolio companies The Investment Manager may from time to time hold or subsequently acquire, through other funds under its discretionary management, a direct or indirect position in the equity, debt or any other related instruments of an existing or prospective portfolio company. Likewise the Investment Adviser may hold positions through funds which it manages or advises from time to time. In the case of indirect holdings, the Investment Manager will disclose to the Board both its and the Investment Adviser’s indirect holdings. In the case of direct holdings the Investment Manager will, to the extent that such direct holdings constitute actual or potential conflicts of interest, disclose to the Company, prior to making the relevant investment, both its and the Investment Adviser’s direct holdings and will also seek the Company’s approval that the actual or potential conflicts of interest have been properly managed and mitigated. If the Company is not satisfied with the steps proposed to be taken to manage the actual or potential conflicts of interest, the Company may exercise a veto in relation to the investment and the Investment Manager will not proceed with the proposed investment.

Other vehicles investing in the same investment opportunities Both the Investment Manager and the Investment Adviser may from time to time act for other clients or manage or advise other funds which have a similar or different investment objective and policy to that of the Company related to senior debt, mezzanine instruments and Junior Equity of SMEs. Neither the Investment Manager nor the Investment Adviser currently acts for other clients or manages or advises other funds which have a similar investment objective and policy to that of the Company. However, circumstances may arise where investment opportunities will be available to the Group which are also suitable for one or more other such clients of the Investment Manager or the Investment Adviser.

67 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP The Directors have satisfied themselves that the Investment Manager and Investment Adviser have procedures in place to address potential conflicts of interest and that, where a conflict arises, the Investment Manager and Investment Adviser, as relevant, will allocate the opportunity on a fair basis and in accordance with the contractual restrictions described below. If the Net Issue Proceeds are at least £150 million, neither the Investment Manager nor the Investment Adviser will establish any additional investment funds with the ability to invest in senior debt, mezzanine instruments and Junior Equity of SMEs until 80 per cent. of the Net Issue Proceeds are invested or the end of the Investment Period, whichever is the earlier, unless such additional investment funds will only have the ability to invest in opportunities in which the Group cannot invest or in which the Group chooses not to invest or if such additional investment fund is entirely subordinated to the Group in relation to its participation in such investment opportunity. If the Net Issue Proceeds are lower than £150 million, the Investment Manager and the Investment Adviser will both be entitled to raise additional funds with the ability to invest in senior debt, mezzanine instruments and Junior Equity of SMEs on the basis that the ability to invest the assets of such funds will be limited such that the total combined capacity of the Group and any such funds in respect of senior debt, mezzanine instruments and Junior Equity of SMEs will be no more than £185 million until 80 per cent. of the Net Issue Proceeds are invested or the end of the Investment Period, whichever is the earlier, unless such additional investment funds will only have the ability to invest in opportunities in which the Group cannot invest or in which the Group chooses not to invest. If, during the Investment Period, an additional opportunity arises to make a further investment in an existing portfolio company then, until 80 per cent. of the Net Issue Proceeds are invested, the Group will be given priority (or priority pari passu with any other fund managed by the Investment Manager or Investment Adviser which initially invested in a particular loan alongside the Company) to any other fund managed by the Investment Manager or Investment Adviser. For the purposes of this paragraph, pari passu as between the Group and any other fund managed by the Investment Manager or Investment Adviser will be determined according to the amount available for investment in such additional opportunity by the Group and such other funds. The Investment Manager and Investment Adviser may, to the extent permitted by applicable law, from time to time enter into transactions with any member of the Group. Any such transactions must be carried out as if effected on normal commercial terms negotiated at arm’s length and must be in the best interest of Shareholders. Transactions permitted are subject to: (i) certified valuation by a person approved by the Custodian as independent and competent; (ii) execution on best terms on organised investment exchanges under their rules; or (iii) where (i) and (ii) are not practical, execution on terms which the Custodian is satisfied conform to the principles of execution on normal commercial terms negotiated at arm’s length. The Investment Manager will notify the General Partner and Board of such transactions.

Takeover Code The Takeover Code will apply to the Company as at Admission.

Corporate governance The Company has voluntarily committed to comply, currently complies, and will comply from Admission with the AIC Code as appropriate. The AIC Code addresses the governance issues relevant to investment companies and enables boards to satisfy any requirements they may have under the UK Corporate Governance Code. The Company will therefore comply with the UK Corporate Governance Code. Save for departing from the requirements to: (i) have a chief executive (since the Company will not have any executive Directors); (ii) have a senior independent director (since the Company considers that each Director who is not chairman can effectively fulﬁl this function); and (iii) appoint the Directors for a term of six years (given the expected relatively short life of the Company), the Company is not presently aware of any departures from the AIC Code. The Guernsey Financial Services Commission (‘‘GFSC’’) has issued a new Corporate Governance Code (the ‘‘Guernsey Code’’) which came into effect on 1 January 2012. Companies which report against the UK Corporate Governance Code are deemed to meet the requirements of the Guernsey Code. In addition, the Company intends to require that its principal service providers shall have procedures in place in accordance with the Bribery Act 2010 that prevent persons who perform services for or on

68 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP behalf of the Group from bribing another person (as such term is deﬁned in the Bribery Act 2010) intending to obtain or retain business or an advantage in the conduct of business for any member of the Group.

Audit committee The Company’s Audit Committee will meet formally at least three times a year for the purpose, amongst other things, of considering the appointment, independence and remuneration of the auditor and to review the annual accounts, interim reports and interim management statements. Where non- audit services are to be provided by the auditor, full consideration of the ﬁnancial and other implications on the independence of the auditor arising from any such engagement will be considered before proceeding. The Audit Committee comprises each of the Directors. Michael Iain Stokes will act as chairperson of the Audit Committee. The principal duties of the Audit Committee will be to consider the appointment of external auditors, to discuss and agree with the external auditors the nature and scope of the audit, to keep under review the scope, results and cost effectiveness of the audit, the independence and objectivity of the auditor and the reliability of the ﬁnancial reporting and internal controls to review the external auditors’ letter of engagement and management letter and to analyse the key procedures adopted by the Company’s service providers.

Remuneration and Nomination Committee The Company has established a Remuneration and Nomination Committee, which comprises each of the Directors. Trevor Hunt will act as chairperson of the Remuneration and Nomination Committee. The Remuneration and Nomination Committee will meet not less than once a year and will have responsibility for considering the remuneration of the Directors. It will also: (i) identify individuals qualiﬁed to become Board members and select the director nominees for election at general meetings of the Shareholders or for appointment to ﬁll vacancies; (ii) determine director nominees for each committee of the Board; and (iii) consider the appropriate composition of the Board and its committees. In addition, the chairmanship of the Audit Committee, Remuneration and Nominations Committee and Management Engagement Committee and each Director’s performance will be reviewed annually by the Chairman and the performance of the Chairman will be assessed by the remaining Directors.

Management Engagement Committee The Company has established a Management Engagement Committee which comprises each of the Directors, with Richard Crowder as the chairperson of the committee. The Management Engagement Committee will meet not less than once a year. The Management Engagement Committee’s main function is to review and make recommendations on any proposed amendment to the Investment Management Agreement and keep under review the performance of the Investment Manager in its role as investment manager to the Company.

69 c107409pu040 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP PART VI: ISSUE ARRANGEMENTS

The Issue The target size of the Issue is in excess of £150 million with the potential for increase subject to investor demand. The actual number of Shares to be issued pursuant to the Issue, and therefore the Gross Issue Proceeds, are not known as at the date of this Prospectus but will be notiﬁed by the Company via a RIS announcement and the Company’s website www.palioukmidmarketdebtfund.com prior to Admission. The Issue will not proceed if the Net Issue Proceeds would be less than £75 million (or such lesser amount as the Company and Oriel may determine). If the Issue does not proceed, subscription monies received will be returned without interest at the risk of the applicant. The target issue size should not be taken as an indication of the number of Shares to be issued. The actual number of Shares issued pursuant to the Issue will be announced via a RIS announcement shortly following the deadline for receipt of placing commitments under the Placing. The Directors have determined that the Shares under the Issue will be issued at a price of £1.00 per Share. The Issue is not being underwritten.

Proceeds of the Issue The Company will use the Net Issue Proceeds to implement its investment policy.

The Placing The Company, the Investment Adviser and Oriel have entered into the Placing and Offer Agreement pursuant to which Oriel has agreed, as agent for the Company, to use its reasonable endeavours to procure subscribers (in certain jurisdictions outside the United States) for the Shares under the Placing at the Issue Price in return for the payment by the Company of placing commissions. A summary of the terms of the Placing and Offer Agreement is set out in paragraph 6.1 of Part VII of this Prospectus. Oriel may, at its discretion and out of its own resources at any time rebate to some or all investors, or to other parties, part or all of its fees relating to the Issue. Oriel is also entitled under the Placing and Offer Agreement to retain agents and may pay commission in respect of the Issue to any or all of those agents out of its own resources. Applications under the Placing must be for a minimum subscription amount of £50,000.

The Offer The Company is also offering the Shares to investors in the United Kingdom pursuant to the Offer. The Terms and Conditions of Application relating to the Offer are set out in Part VIII of this Prospectus and an Application Form is set out in Appendix 1 to this Prospectus. The Terms and Conditions of Application should be read carefully before an application is made. Application Forms must be posted or delivered by hand (during normal business hours only) to Capita Registrars, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, so as to arrive by no later than 1100 hours on 26 November 2012. Unless extended, the Offer will be closed at that time. Applications under the Offer must be for a minimum subscription amount of £1,000 and then multiples of £100 thereafter. Payment for Shares pursuant to the Offer may be made by cheque, banker’s draft or building society cheque and must accompany the Application Form. The Directors reserve the right to refuse applications for any reason. Investors wishing to subscribe for Shares pursuant to the Offer may submit payment in a currency other than Sterling in which case the Company shall convert such amount into the relevant currency at such time and at such exchange rate as it determines reasonable.

The SFM The SFM is an EU regulated market. Pursuant to its admission to the SFM, the Company will be subject to the Prospectus Rules, the Disclosure Rules and Transparency Rules and the Market Abuse

70 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Directive (as implemented in the United Kingdom through the Financial Services and Markets Act 2000, as amended).

Scaling back and allocation In the event that aggregate applications for Shares under the Placing and the Offer were to exceed a level that the Directors determine in their absolute discretion at the time of closing the Issue to be the appropriate maximum size of the Issue, it would be necessary to scale back applications under the Issue. Oriel reserves the right, at its sole discretion but after consultation with the Company, to scale back applications in such amounts as it considers appropriate. The Company reserves the right to decline in whole or in part any application for Shares pursuant to the Issue. The Offer will not be subject to scaling back in favour of the Placing. Accordingly, applicants for Shares may in certain circumstances not be allotted the number of Shares for which they have applied. The Company will notify investors of the number of Shares in respect of which their application has been successful and the results of the Issue will be announced by the Company on or around 28 November 2012 via a RIS announcement. Subscription monies received in respect of unsuccessful applications (or to the extent scaled back) will be returned without interest at the risk of the applicant to the bank account from which the money was received.

General Pursuant to anti-money laundering laws and regulations with which the Company must comply in the UK and/or Guernsey, the Company (and its agents) may require evidence in connection with any application for Shares, including further identification of the applicant(s), before any Shares are issued. In the event that there are any significant changes affecting any of the matters described in this Prospectus or where any significant new matters have arisen after the publication of this Prospectus and prior to Admission, the Company will publish a supplementary prospectus. The supplementary prospectus will give details of the significant change(s) or the significant new matter(s). The Directors (in consultation with Oriel) may in their absolute discretion waive the minimum application amounts in respect of any particular application for Shares under the Issue. Should the Issue be aborted or fail to complete for any reason (including as a result of the Net Issue Proceeds being less than £75 million), monies received will be returned without interest at the risk of the applicant. Definitive certificates in respect of Shares in certificated form will be dispatched by post in the week commencing 17 December 2012. Temporary documents of title will not be issued.

Clearing and settlement In the case of the Placing, payment for the Shares should be made in accordance with settlement instructions to be provided to Placees by (or on behalf of) the Company or Oriel. In the case of the Offer, payment for the Shares should be made in accordance with the Terms and Conditions of Application under the Offer in Part VIII of this Prospectus and in the Application Form. To the extent that any application for Shares is rejected in whole or in part (whether by scaling back or otherwise), monies received will be returned without interest at the risk of the applicant. Shares will be issued in registered form and may be held in either certificated or uncertificated form and settled through CREST from Admission. In the case of Shares to be issued in uncertificated form pursuant to the Issue, these will be transferred to successful applicants through the CREST system. Accordingly, settlement of transactions in the Shares following Admission may take place within the CREST system if any shareholder so wishes. Shares issued under the Offer will be issued to successful applicants in accordance with the Terms and Conditions of Application under the Offer. CREST is a paperless book-entry settlement system operated by Euroclear UK and Ireland which enables securities to be evidenced otherwise than by certificates and transferred otherwise than by written instrument. CREST is a voluntary system and Shareholders who wish to receive and retain share certificates will be able to do so. It is expected that the Company will arrange for Euroclear UK and Ireland to be instructed on 3 December 2012 to credit the appropriate CREST accounts of the subscribers concerned or their

71 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP nominees with their respective entitlements to Shares. The names of subscribers or their nominees investing through their CREST accounts will be entered directly on to the share register of the Company. The transfer of Shares outside of the CREST system following the Issue should be arranged directly through CREST. However, an investor’s beneficial holding held through the CREST system may be exchanged, in whole or in part, only upon the specific request of the registered holder to CREST for share certificates or an uncertificated holding in definitive registered form. If a Shareholder or transferee requests Shares to be issued in certificated form and is holding such Shares outside CREST, a share certificate will be despatched either to him or his nominated agent (at his risk) within 21 days of completion of the registration process or transfer, as the case may be, of the Shares. Shareholders (other than U.S. Persons) holding definitive certificates may elect at a later date to hold such Shares through CREST or in uncertificated form provided they surrender their definitive certificates.

Dealings Applications will be made to the London Stock Exchange for the Shares issued pursuant to the Issue to be admitted to trading on the SFM and to the CISX for the Shares to be admitted to trading and listing on the Ofﬁcial List of the CISX. It is expected that Admission will become effective and that unconditional dealing in the Shares will commence at 0800 hours on 3 December 2012. Dealings in Shares in advance of the crediting of the relevant stock account shall be at the risk of the person concerned. The ISIN number for the Shares is GG00B7G8GV90 and the SEDOL code is B7G8GV9. The Company does not guarantee that at any particular time any market maker(s) will be willing to make a market in the Shares, nor does it guarantee the price at which a market will be made in the Shares. Accordingly, the dealing price of the Shares may not necessarily reﬂect changes in the Net Asset Value per Share.

Purchase and transfer restrictions This Prospectus does not constitute an offer to sell, or the solicitation of an offer to acquire or subscribe for, Shares in any jurisdiction where such an offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on the Company, the Investment Adviser or the Investment Manager. The Company has elected to impose the restrictions described below on the Issue and on the future trading of the Shares so that the Company will not be required to register the offer and sale of the Shares under the U.S. Securities Act, so that the Company will not have an obligation to register as an investment company under the U.S. Investment Company Act and related rules and to address certain ERISA, U.S. Tax Code and other considerations. These transfer restrictions, which will remain in effect until the Company determines in its sole discretion to remove them, may adversely affect the ability of holders of the Shares to trade such securities. Due to the restrictions described below, potential investors in the United States and U.S. Persons are advised to consult legal counsel prior to attempting to acquire any interest in the Shares or otherwise becoming involved in any offer, resale, exercise, pledge or other transfer of the Shares. The Company and its agents will not be obligated to recognise any resale or other transfer of the Shares made other than in compliance with the restrictions described below. Restrictions due to lack of registration under the U.S. Securities Act and U.S. Investment Company Act restrictions The Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and the Shares may not be offered, sold, resold, transferred or delivered, directly or indirectly, into or within the United States or to, or for the account or benefit of, U.S. Persons. There will be no public offer of the Shares in the United States. The Shares are being offered and sold only outside the United States in ‘‘offshore transactions’’ to persons who are not U.S. Persons in accordance with and in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by Regulation S thereunder. Moreover, the Company has not been and will not be registered under the U.S. Investment Company Act and investors will not be entitled to the benefits of the U.S. Investment Company Act. The

72 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Shares and any beneﬁcial interests therein may only be transferred in an offshore transaction in accordance with Regulation S (i) to a person outside the United States and not known by the transferor to be a U.S. Person, by prearrangement or otherwise; or (ii) to the Company or a subsidiary thereof.

Subscriber warranties Each subscriber of Shares in the Issue and each subsequent investor in the Shares will be deemed to have represented, warranted, acknowledged and agreed as follows: (a) it is not a U.S. Person, is not located within the United States and is not acquiring the Shares for the account or benefit of a U.S. Person; (b) it is acquiring the Shares in an offshore transaction meeting the requirements of Regulation S; (c) it acknowledges that the Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, into or within the United States or to, or for the account or benefit of, U.S. Persons; (d) it acknowledges that the Company has not registered and will not register under the U.S. Investment Company Act; (e) no portion of the assets used to purchase, and no portion of the assets used to hold, the Shares or any beneficial interest therein constitutes or will constitute the assets of: (i) an ‘‘employee benefit plan’’ as defined in Section 3(3) of ERISA that is subject to Title I of ERISA; (ii) a ‘‘plan’’ as defined in Section 4975 of the U.S. Tax Code, including an individual retirement account or other arrangement that is subject to Section 4975 of the U.S. Tax Code; or (iii) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the U.S. Tax Code. In addition, if it is a governmental, church, non-U.S. or other employee benefit plan that is subject to any federal, state, local, non-U.S. or other law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the U.S. Tax Code, its purchase, holding, and disposition of the Shares does not constitute and will not constitute or result in a non-exempt violation of any such substantially similar law; (f) that if any Shares are issued in certificated form, then such certificates evidencing ownership will contain a legend substantially to the following effect unless otherwise determined by the Company in accordance with applicable law: PALIO UK MID-MARKET DEBT FUND LIMITED (THE ‘‘COMPANY’’) HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940, AS AMENDED. IN ADDITION, THE SECURITIES OF THE COMPANY REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘U.S. SECURITIES ACT’’), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. ACCORDINGLY, THIS SECURITY MAY NOT BE OFFERED, SOLD, RESOLD, DELIVERED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, INTO OR WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT. (g) if in the future the investor decides to offer, sell, transfer, assign or otherwise dispose of the Shares, it will do so only in an ‘‘offshore transaction’’ in accordance with Regulation S under the U.S. Securities Act (i) to a person outside the United States and not known by the transferor to be a U.S. Person, by prearrangement or otherwise; or (ii) to the Company or a subsidiary thereof. It acknowledges that any sale, transfer, assignment, pledge or other disposal made other than in compliance with the above stated restrictions will be subject to the compulsory transfer provisions as provided in the Articles; (h) it is purchasing the Shares for its own account or for one or more investment accounts for which it is acting as a fiduciary or agent, in each case for investment only, and not with a view to or for sale or other transfer in connection with any distribution of the Shares in any manner that would violate the U.S. Securities Act, the U.S. Investment Company Act or any other applicable securities laws;

73 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP (i) it acknowledges that the Company reserves the right to make inquiries of any holder of the Shares or interests therein at any time as to such person’s status under the U.S. federal securities laws and to require any such person that has not satisfied the Company that holding by such person will not violate or require registration under the U.S. securities laws to transfer such Shares or interests in accordance with the Articles; (j) it is entitled to acquire the Shares under the laws of all relevant jurisdictions which apply to it, it has fully observed all such laws and obtained all governmental and other consents which may be required thereunder and complied with all necessary formalities and it has paid all issue, transfer or other taxes due in connection with its acceptance in any jurisdiction of the Shares and that it has not taken any action, or omitted to take any action, which may result in the Company, the Investment Manager, the Investment Adviser or Oriel, or their respective directors, officers, agents, employees and advisers being in breach of the laws of any jurisdiction in connection with the Issue or its acceptance of participation in the Issue; (k) it has received (outside the United States), carefully read and understands this Prospectus, and has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted this Prospectus (or any part thereof) or any other presentation or offering materials concerning the Shares to within the United States or to any U.S. Persons, nor will it do any of the foregoing; (l) if it is acquiring any Shares as a fiduciary or agent for one or more accounts, it has sole investment discretion with respect to each such account and full power and authority to make, and does make, such foregoing representations, warranties, acknowledgements and agreements on behalf of each such account; (m) at the time the Shares are acquired, it is not an affiliate of the Company or a person acting on behalf of such an affiliate, and it is not acquiring the Shares for the account or benefit of an affiliate of the Company or of a person acting on behalf of such an affiliate; and (n) the Company, the Investment Manager, the Investment Adviser, Oriel and their respective Directors, officers, agents, employees, advisers and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgments and agreements. If any of the representations, warranties, acknowledgments or agreements made by the investor are no longer accurate or have not been complied with, the investor will immediately notify the Company.

74 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP PART VII: ADDITIONAL INFORMATION

1. Incorporation and Administration 1.1 The Company was incorporated with liability limited by shares in Guernsey under the Companies Laws on 3 October 2012 with registered number 55691 as a closed ended investment company registered pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, and the Registered Collective Investment Scheme Rules 2008 issued by the GFSC. The registered office and principal place of business of the Company is BNP Paribas House, St Julian’s Avenue, St Peter Port, Guernsey GY1 1WA and the telephone number is +44 (0) 1481 750 858. The statutory records of the Company will be kept at this address. The Company operates under the Companies Laws and ordinances and regulations made thereunder and has no employees. 1.2 The Directors confirm that the Company has not traded or commenced operations and that, as at the date of this Prospectus, no accounts of the Company have been made up since its incorporation on 3 October 2012. The Company’s accounting period will end on 31 December of each year, with the first year end on 31 December 2013. 1.3 KPMG Channel Islands Limited has been the only auditor of the Company since its incorporation. KPMG Channel Islands Limited is a member of the Institute of Chartered Accountants of England & Wales. 1.4 The annual report and accounts will be prepared according to IFRS. 1.5 Save for its entry into the material contracts summarised in paragraph 6 of this Part VII of the Prospectus and certain non-material contracts, since its incorporation the Company has not carried on business, incurred borrowings, issued any debt securities, incurred any contingent liabilities or made any guarantees, nor granted any charges or mortgages. 1.6 As at the date of this Prospectus, there have been no changes to the issued share capital of the Company since incorporation. 1.7 There has been no significant change in the financial or trading position of the Company since its incorporation or of any member of the Group since incorporation.

2. Share Capital 2.1 The share capital of the Company consists of an unlimited number of redeemable ordinary shares of no par value which upon issue the Directors may classify as (i) Shares of such classes denominated in such currencies as the Directors may determine; (ii) in the event of any Bonus Issue, B Shares of such classes denominated in such currencies as the Directors may determine; and (iii) in the event of any issue of C Shares, C Shares of such classes denominated in such currencies as the Directors may determine. Notwithstanding this, a maximum number of 250,000,000 Shares will be issued pursuant to the Issue. 2.2 As at the date of incorporation and as at the date of this Prospectus, the Company’s issued share capital comprises one Share issued at a price of £1.00. If Admission had taken place on the date of incorporation (and assuming that 150,000,000 Shares had been issued pursuant to the Issue), the Issue would have increased the net assets of the Company by £147,000,00010 and would have been earnings neutral. 2.3 The Directors have absolute authority to allot the Shares under the Articles and are expected to resolve to do so shortly prior to Admission in respect of the Shares to be issued pursuant to the Issue. 2.4 The Shares will be issued and created in accordance with the Articles and the Companies Laws and will be free from any liens. 2.5 The Shares are in registered form and, from Admission, will be capable of being held in uncertificated form and title to such Shares may be transferred by means of a relevant system (as defined in the CREST Regulations). Where the Shares are held in certificated form, share certificates will be sent to the registered members or their nominated agent (at their own risk) within 10 days of the completion of the registration process or transfer, as the case may be, of

10 Issue expenses ﬁxed at an amount equivalent to 2 per cent. of the Gross Issue Proceeds, and so assumed to be £3,000,000 on the assumption that 150,000,000 Shares issued pursuant to the Issue.

75 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP the Shares. Where Shares are held in CREST, the relevant CREST stock account of the registered members will be credited. The Registrar, whose registered address is set out on page 34 of this Prospectus, maintains a register of Shareholders holding their Shares in CREST. 2.6 No share or loan capital of the Company is under option or has been agreed, conditionally or unconditionally, to be put under option. 3. Directors’ and other Interests 3.1 As at the date of this Prospectus, none of the Directors or any person connected with any of the Directors has a shareholding or any other interest in the share capital of the Company. The Directors and their connected persons may, however, subscribe for Shares pursuant to the Placing and/or Offer. 3.2 As at the date hereof, insofar as is known to the Company, no person is or will, immediately following the Issue, be directly or indirectly interested in 5 per cent. or more of the Company’s issued share capital. 3.3 There are no outstanding loans from the Company to any of the Directors or any outstanding guarantees provided by the Company in respect of any obligation of any of the Directors. 3.4 The aggregate remuneration and benefits in kind of the Directors in respect of the Company’s accounting period ending on 31 December 2013 which will be payable out of the assets of the Company are not expected to exceed £250,000. Each of the Directors will be entitled to receive £35,000 per annum, other than Michael Iain Stokes who will be entitled to receive £30,000, the Chairperson who will be entitled to receive £40,000 per annum, and the chairman of the Audit Committee who will be entitled to receive an additional fee of £5,000 per annum. No amount has been set aside or accrued by the Company to provide pension, retirement or other similar benefits. 3.5 No Director has a service contract with the Company, nor are any such contracts proposed. The Directors’ appointments can be terminated in accordance with the Articles and without compensation. There is no notice period specified in the Articles for the removal of Directors. The Articles provide that the office of Director shall be terminated by, among other things: (i) written resignation; (ii) unauthorised absences from board meetings for 12 months or more; (iii) written request of the other Directors; and (iv) a resolution of the Shareholders. 3.6 No loan has been granted to, nor any guarantee provided for the benefit of, any Director by the Company. 3.7 None of the Directors has, or has had, an interest in any transaction which is or was unusual in its nature or conditions or significant to the business of the Company and which has been effected by the Company since its incorporation. 3.8 Pursuant to an instrument of indemnity entered into between the Company and each Director, the Company has undertaken, subject to the Companies Law and certain limitations, to indemnify each Director out of the assets and profits of the Company against all costs, charges, losses, damages, expenses and liabilities arising out of any claims made against him in connection with the performance of his duties as a Director of the Company.

76 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP 3.9 In addition to their directorships of the Company, the Directors hold or have held the directorships and are or were members of the partnerships, as listed in the table below, over or within the past ﬁve years.

Name Current directorships/partnerships Past directorships/partnerships

Christian Brodie Tonbridge School Limited The Kensington at Chelsea and Tonbridge Services Limited Westminster Limited (Dissolved) CWHC Trading Limited

Richard Crowder Absolute Alpha Fund PCC Ltd Affinity Partners Ltd (Voluntary Aviva Investors Alternative Funds liquidation) PCC (formerly Morley Alternative Asia Direct Limited (Voluntary Investments) liquidation) Better Capital PCC Limited Consulta Alternative Strategy Fund Bracken Partners Investments PCC Limited (Voluntary liquidation) Channel Islands Limited Consulta Alternative Strategy Bluecrest AllBlue Fund Limited Holdings Limited (formerly Close AllBlue Fund Consulta Canadian Energy Fund Limited) (Voluntary liquidation) FCM Funds Public Limited Company Consulta Capital Fund PCC Limited FF&P Alternative Strategy PCC (Voluntary liquidation) Limited Consulta Capital Holdings Limited FF&P Global Property Fund PCC (Voluntary liquidation) Limited Consulta CI Ltd FF&P Russia Real Estate Limited Consulta Collateral Fund PCC FF&P Russia Real Estate Limited Development Limited Consulta Collateral Holdings Limited FF&P Venture Funds PCC Limited Consulta High Yield Fund PCC FF&P World Equities Fund Limited Limited (Voluntary liquidation) Global Credit Opportunities Master Consulta High Yield Holdings Investment Company Limited Limited (Voluntary liquidation) Japan Residential Investment Da Vinci Capital Management Company Limited Limited Jupiter Insurance Limited FCM Asia-Pacific Fund Limited London & Stamford Property Plc (Voluntary liquidation) Pantheon Asia Fund II Limited FCM Asia-Pacific Master Fund Pantheon Asia Fund III Limited Limited (Voluntary liquidation) Pantheon Asia Fund IV Limited FCM European Frontier Fund Pantheon Asia Fund IV Limited Limited (Voluntary liquidation) Pantheon Europe Fund IV Limited FCM European Frontier Master Fund Pantheon USA Fund III Limited Limited (Voluntary liquidation) Pantheon USA Fund V Limited FCM European Opportunities Fund Pantheon USA Fund VII Limited Limited (Voluntary liquidation) PASIA V GP Limited FCM European Opportunities Master PEURO V GP Limited Fund Limited (Voluntary liquidation) PEURO VI GP Limited FCM Global Opportunities Fund Pantheon International Participations Limited (Voluntary liquidation) Plc FCM Global Opportunities Master Rothschild Bank (CI) Limited Fund Limited (Voluntary liquidation) Rothschild Bank International FCM Japan Kachi Fund Limited Limited (Voluntary liquidation) Royal London Asset Management FCM Japan Kachi Master Fund C.I. Limited Limited (Voluntary liquidation) Rufford & Ralston PCC Limited FRM Access Fund PCC Limited FF&P Enhanced Opportunities (Voluntary liquidation) Subsidiary Limited FRM Manufactured Alpha Fund SPC J-RIC International Limited FRM Manufactured Alpha Master JRIC Holdings Limited Fund SPC London & Stamford Property Limited Olivant Limited

77 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Name Current directorships/partnerships Past directorships/partnerships

Royal London Custody Services C.I. Pantheon Asia Fund Limited Limited (Voluntary liquidation) Horos Limited Parkmead Special Situations Energy Mysia Investments Limited Fund Syros Investments Limited (formerly Patria Brazil Fund Limited Samos Investments Limited) Schroder Property Managers (Jersey) Limited Schroders C.I. Limited

Michael Iain Stokes Tempo GP Limited The Westbury Property Fund Limited Nova General Partner (Guernsey) Platinum (Guernsey) PCC Limited Limited Pearl GP Guernsey Limited Nova Cross GP (Guernsey) Limited State Street Services (US) LLC Nova Boxer GP (Guernsey) Limited Mourant Ireland Limited PPF Feeder Limited State Street Fund Services (UK) Uberior Infrastructure Finance GP Limited Limited State Street Services (Luxembourg) PPF Partners Limited SA Nova Argent GP (Guernsey) Limited State Street (Guernsey) Limited TF Executive Investments 2 Limited State Street Capital Markets Services Novavest Growth Fund Limited (Jersey) Limited Greenpark Step Verwaltungs State Street Investment Services NovaVest Growth Fund GmbH (Jersey) Limited NT General Partner (Guernsey) Limited TFCP Capital Investments Limited Brenig Wind Holdings Limited Parabellum GP (Guernsey) Limited Nova Shell GP (Guernsey) Limited

Trevor Hunt GCP Infrastructure Fund Ltd Goldengate Real Estate Company Ltd GCP Infrastructure Investments Ltd Merebis Master Fund Ltd Purisima Investment Fund (CI) Ltd Merebis International Fund Ltd Hero Funds PCC Ltd Merebis Capital Management (Jersey) Ukraine Liberty Fund Ltd Ltd Wellington Partners Ventures Special Capita Financial Administrators (G.P) Ltd (Jersey) Ltd (Formerly Capital Wellington Partners Management Ltd Financial (CI) Ltd) KIC Fund Managers (Guernsey) Ltd Capita Registrars (Jersey) Ltd KIC Global Strategy Fund Ltd ACP Capital Ltd Overlord Group Limited Class Solutions Ltd Overlord Holdings Limited Leebrook Total Return Fund Ltd Overlord Asset Managers Limited Leebrook Total Return Master Fund Standfast Vision 1 Limited Ltd Harewood Structured Investment Leebrook Ltd PCC Limited Magellan Emerging Markets Ltd Magellan Emerging Markets Management (Jersey) Ltd Legg Mason Investors (Jersey) Ltd KIC Global Technology Ltd KIC Delta Ltd Capita Registrars (Guernsey) Ltd Capita Alternative Fund Services (Guernsey) Ltd Concerto Private Markets IC Ltd Arch Mutli Strategy ICC Ltd Arch Sustainable Strategies IC Ltd Arch Private Finance Strategies IC

78 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Name Current directorships/partnerships Past directorships/partnerships

Ltd Arch Keystone IC Ltd Arch Foundations Property Opportunities IC Ltd Concord MISR Investments (Guernsey) Ltd The Arab Islamic Equity Fund PCC Ltd Shamil Asset Management (Channel Islands) Ltd Ruffer International Funds Ltd SIPP Residential Income Choice PCC Ltd (Voluntary liquidation) CFIM Offshore Funds Ltd (Voluntary liquidation) GEM Capital Diamond Fund Ltd (Voluntary liquidation) 3.10 As at the date of this Prospectus, there are no potential conflicts of interest between any duties to the Company of any of the Directors and their private interests and/or other duties. There are no lock up provisions regarding the disposal by any of the Directors of any Shares. 3.11 At the date of this Prospectus: 3.11.1 none of the Directors has had any convictions in relation to fraudulent offences for at least the previous five years; 3.11.2 save as detailed above, none of the Directors was a director of a company, a member of an administrative, management or supervisory body or a senior manager of a company within the previous five years which has entered into any bankruptcy, receivership or liquidation proceedings; 3.11.3 none of the Directors has been subject to any official public incrimination and/or sanctions by statutory or regulatory authorities (including designated professional bodies) or has been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer for at least the previous five years; and 3.11.4 none of the Directors are aware of any contract or arrangement subsisting in which they are materially interested and which is significant to the business of the Company which is not otherwise disclosed in this Prospectus. 3.12 The Company intends to maintain directors’ and officers’ liability insurance on behalf of the Directors at the expense of the Company. 3.13 No members of the Administrator or the Investment Manager have any service contracts with the Company.

4. Taxation General The information below, which relates only to Guernsey and United Kingdom taxation, summarises the advice received by the Board and is applicable to the Company and (except in so far as express reference is made to the treatment of other persons) to persons who are resident or ordinarily resident in Guernsey or the United Kingdom for taxation purposes and who hold Shares as an investment. It is based on current Guernsey and United Kingdom tax law and published practice, respectively, which law or practice is, in principle, subject to any subsequent changes therein (potentially with retrospective effect). Certain Shareholders, such as dealers in securities, collective investment schemes, insurance companies and persons acquiring their Shares in connection with their employment may be taxed differently and are not considered. The tax consequences for each Shareholder of investing in the Company may depend upon the Shareholder’s own tax position and upon the relevant laws of any jurisdiction to which the Shareholder is subject.

79 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP If you are in any doubt about your tax position, you should consult your professional adviser. Guernsey (i) The Company The Directors of the Company intend that the Company will apply for and obtain exempt status for Guernsey tax purposes annually. In return for the payment of a fee, currently £600, a registered closed-ended investment scheme, such as the Company, is able to apply annually for exempt status for Guernsey tax purposes. If exempt status is granted, the Company will not be considered resident in Guernsey for Guernsey income tax purposes. A company that has exempt status for Guernsey tax purposes is exempt from tax in Guernsey on both bank deposit interest and any income that does not have its source in Guernsey. It is not anticipated that any income other than bank interest will arise in Guernsey and therefore the Company is not expected to incur any additional liability to Guernsey tax. In keeping with its ongoing commitment to meeting international standards, the States of Guernsey is currently undertaking a review of its tax regime with the expectation of implementing any required revisions to the regime in the period between 2013 and 2015. At this point in time, the key features of any revised regime have yet to be determined. It is currently not anticipated that there will be any change to the current exemption for investment funds and as such the Company is expected to be able to apply for and obtain Guernsey tax exempt status. Guernsey currently does not levy taxes upon capital inheritances, capital gains, gifts, sales or turnover, nor are there any estate duties, save for an ad valorem fee for the grant of probate or letters of administration. No stamp duty or other taxes are chargeable in Guernsey on the issue, transfer, disposal, conversion or redemption of shares.

(ii) Shareholders Shareholders, other than those resident in Guernsey for tax purposes, will receive dividends without deduction of Guernsey income tax. Any Shareholders who are resident for tax purposes in Guernsey, Alderney or Herm will incur Guernsey income tax on any dividends paid on Shares owned by them but will suffer no deduction of tax by the Company from any such dividends payable by the Company where the Company is granted exempt status. The Company is required to provide details of distributions made to Shareholders resident in the Islands of Guernsey, Alderney and Herm to the Director of Income Tax in Guernsey. Guernsey has introduced measures that are equivalent to those contemplated by the EU Savings Tax Directive. However, paying agents located in Guernsey are not required to operate the measures on payments made by closed-ended investment companies, such as the Company. This is on the basis that the Company should not be regarded as an undertaking for collective investment that is equivalent to an Undertaking for Collective Investment in Transferable Securities (UCITS) in accordance with EC Directive 85/611/EEC for the purposes of the application in Guernsey of the bilateral agreements on the taxation of savings income entered into by Guernsey with the EU Member States. The operation of the EU Savings Tax Directive is currently under review by the European Commission and a number of changes have been outlined which, if agreed, will signiﬁcantly widen its scope. These changes could lead to the Company having to comply with the EU Savings Tax Directive in the future.

United Kingdom (i) The Company The Directors intend to conduct the affairs of the Company in such a way that it should not be resident in the United Kingdom for United Kingdom tax purposes. Accordingly, and provided that the Company does not carry on a trade in the United Kingdom (whether or not through a branch, agency or permanent establishment situated therein) and is not centrally managed and controlled in the United Kingdom, the Company will not be subject to United Kingdom income tax or corporation tax other than on any United Kingdom source income.

80 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP (ii) Shareholders UK Offshore Fund Rules The Directors have been advised that, under current law, the Company should not be an ‘‘offshore fund’’ for the purposes of United Kingdom taxation and that the offshore fund legislation effective from 1 December 2009, contained in Part 8 of the Taxation (International and Other Provisions) Act 2010, should not apply. This is on the basis that the Company will distribute to investors all relevant income from the Company’s Portfolio (after deduction of reasonable expenses) and therefore be able to fall with a statutory exception so as to be outside the scope of the UK offshore fund rules. Accordingly, Shareholders (other than those holding Shares as dealing stock, who are subject to separate rules) who are resident or ordinarily resident in the United Kingdom, or who carry on business in the United Kingdom through a branch, agency or permanent establishment with which their investment in the Company is connected, may, depending on their circumstances and subject as mentioned below, be liable to United Kingdom tax on chargeable gains realised on the disposal of their Shares (which will include a redemption and on ﬁnal liquidation of the Company).

Tax on Chargeable Gains A disposal of Shares (which will include a redemption) by a Shareholder who is resident or, in the case of an individual, ordinarily resident in the United Kingdom for United Kingdom tax purposes or who is not so resident but carries on business in the United Kingdom through a branch, agency or permanent establishment with which their investment in the Company is connected may give rise to a chargeable gain or an allowable loss for the purposes of UK taxation of chargeable gains or capital gains, depending on the Shareholder’s circumstances and subject to any available exemption or relief. For such individual Shareholders capital gains tax at the rate of tax at 18 per cent. (for basic rate taxpayers) or 28 per cent. (for higher or additional rate taxpayers) will be payable on any gain and for Shareholders that are bodies corporate any gain will be within the charge to corporation tax. Individuals may benefit from certain reliefs and allowances (including a personal annual exemption allowance, which presently exempts the first £10,600 of gains from tax for tax year 2012 to 13) depending on their circumstances. Shareholders which are bodies corporate resident in the United Kingdom for taxation purposes will benefit from indexation allowance which, in general terms, increases the chargeable gains tax base cost of an asset in accordance with the rise in the retail prices index.

Capital Distributions For the purposes of United Kingdom capital gains tax and corporation tax on chargeable gains, each Bonus Issue of B Shares should be treated as a reorganisation of the share capital of the Company. Accordingly, the B Shares should be treated as the same asset as the Shareholder’s holding of Shares and as having been acquired at the same time as the Shareholder’s holding of Shares was acquired. As a result of each Bonus Issue the Shareholder’s remaining original base cost in their remaining Shares will in practice be apportioned between their remaining Shares and the B Shares by reference to their respective market values on the day on which the B Shares are disposed of (which will include a redemption). Holders of B Shares may, depending on their circumstances, be subject to tax on chargeable gains on any gain arising as a result of disposal of their B Shares.

Dividends Individual Shareholders resident in the United Kingdom for tax purposes will be liable to UK income tax in respect of dividends or other income distributions of the Company. An individual Shareholder resident in the UK for tax purposes and in receipt of a dividend from the Company will, provided they own less than 10 per cent. of the Shares, be entitled to claim a non-repayable dividend tax credit equal to one ninth of the dividend received. The effect of the dividend tax credit would be to extinguish any further tax liability for eligible basic rate taxpayers (who currently pay tax at the dividend ordinary rate of 10 per cent.). The effect for current eligible higher rate taxpayers (who pay tax at the current dividend upper rate of 32.5 per cent.) would be to reduce their effective tax rate to 25 per cent. of the cash dividend received.

81 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP With effect from 6 April 2010, a new additional rate of income tax applies for United Kingdom resident individuals with income in excess of £150,000. Such individuals will pay 42.5 per cent. tax on dividends received (reduced to 36.11 per cent. for eligible taxpayers as a result of applying the tax credit). The additional rate is to be reduced from 6 April 2013 so that such individuals will pay 37.5 per cent. tax on dividends received (reduced to 30.56 per cent. For eligible investors as a result of applying the tax credit) Shareholders who are bodies corporate resident in the United Kingdom for tax purposes may be able to rely on the various exemptions applying to dividends set out in Part 9A, Corporation Tax Act 2009. Stamp duty and Stamp Duty Reserve Tax (‘‘SDRT’’) No UK stamp duty or SDRT will arise on the issue of Shares. No UK stamp duty will be payable on a transfer of Shares, provided that all instruments effecting or evidencing the transfer (or all matters or things done in relation to the transfer) are not executed in the United Kingdom and no matters or actions relating to the transfer are performed in the United Kingdom. Provided that the Shares are not registered in any register kept in the United Kingdom by or on behalf of the Company and that the Shares are not paired with shares issued by a Company incorporated in the United Kingdom, any agreement to transfer the Shares will not be subject to UK SDRT. ISAs and SSAS/SIPPs Investors resident in the United Kingdom who are considering acquiring Shares are recommended to consult their own tax and/or investment advisers in relation to the eligibility of the Shares for ISAs and SSAS/SIPPs. Shares acquired pursuant to the Offer (but not the Placing) will be eligible for inclusion in a stocks and shares ISA. On Admission, Shares acquired in the market should be eligible for inclusion in a stocks and shares ISA, subject to applicable subscription limits. The annual ISA investment allowance is £11,280 for the tax year 2012 to 2013. Up to £5,640 of that allowance can be invested as cash with one provider. The remainder of the allowance can be invested in a stocks and shares ISA with either the same or another provider. The Shares should be eligible for inclusion in a SSAS or SIPP, subject to the discretion of the trustees of the SSAS or SIPP, as the case may be. Other United Kingdom Tax Considerations: Controlled Foreign Companies (CFCs) United Kingdom resident companies having an interest in the Company, such that 25 per cent. or more of the Company’s profits for an accounting period could be apportioned to them, may be liable to United Kingdom corporation tax in respect of their share of the Company’s undistributed profits in accordance with the provisions of Chapter IV of Part XVII of the Taxes Act relating to controlled foreign companies. These provisions only apply if the company is controlled by United Kingdom residents. Investors should note that the UK controlled foreign company regime is the subject of a full reform pursuant to Finance Act 2012 under which a new regime will apply to accounting periods beginning on or after 1st January 2013. Transfer of Assets Abroad 4.1 Individuals ordinarily resident in the United Kingdom should note that Chapter II of Part XVIII of the Income Tax Act 2007, which contains provisions for preventing avoidance of income tax by transactions resulting in the transfer of income to persons (including companies) abroad, may render them liable to taxation in respect of any undistributed income and profits of the Company. It should be noted that pursuant to a HMRC Consultation Document dated 30 July 2012, these provisions are currently the subject of a potential reform in order to make the legislation compatible with EU law. The changes are likely to limit the scope of the provision. Close Company Provisions 4.2 The attention of Shareholders resident or ordinarily resident in the United Kingdom is drawn to the provisions of section 13 of the Taxation of Chargeable Gains Act 1992 under which, in certain circumstances, a portion of capital gains made by the Company can be attributed to a

82 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Shareholder who holds, alone or together with associated persons, more than 10 per cent. of the Shares. It should be noted that pursuant to a HMRC Consultation Document dated 30 July 2012, these provisions are currently the subject of a potential reform in order to make the legislation compatible with EU law, The proposed draft Finance Bill clauses expand the categories of assets excluded from charge to include those used in genuine economic activity and also introduces a motive test.

5. Memorandum and Articles 5.1 Objects The memorandum of incorporation of the Company provides that the objects of the Company are unlimited.

5.2 Dividends and other distributions 5.2.1 Subject to the rights of any Shares which may be issued with special rights or privileges, the Shares of each class carry the right to receive all income and other profits of the Company attributable to such Shares (as determined by the Directors). Any distribution of such income or other profits made by the Company shall be divided pari passu among the holders of Shares of that class in proportion to the number of Shares of such class held by them. 5.2.2 The Directors may from time to time authorise dividends and distributions to be paid to Shareholders in accordance with the procedure set out in the Companies Laws and subject to any Shareholder’s rights attaching to their Shares. 5.2.3 All unclaimed dividends and distributions may be invested or otherwise made use of by the Board for the benefit of the Company until claimed. All dividends unclaimed on the earlier of (i) a period of seven years after the date when it first became due for payment and (ii) the date on which the Company is wound up, shall be forfeited and shall revert to the Company without the necessity for any declaration or other action on the part of the Company. 5.2.4 The manner in which distributions of capital proceeds realised from investments (net of fees and expenses) and attributable to the Shares (‘‘Capital Proceeds’’) shall be effected shall, subject to compliance with the Companies Laws, be determined by the Directors in their absolute discretion and, once determined, shall be notified to Shareholders by way of a RIS announcement. 5.2.5 Without restricting the discretion of the Directors described in paragraph 5.2.4, the Directors may effect distributions of Capital Proceeds by: (A) issuing B Shares to holders of Shares of a particular class as described in paragraph 5.2.6; or (B) by compulsorily redeeming a proportion of each Shareholder’s holding of Shares and paying the redemption proceeds to Shareholders on such terms and in such manner as the Directors may determine; or (C) in such other manner as may be lawful. 5.2.6 Any B Shares shall be issued on and in accordance with the following terms: (A) Following the expiry of the Investment Period, provided that an amount equivalent to 10 per cent. of the Gross Issue Proceeds plus the proceeds of any subsequent equity issues is retained by the Company until liquidation and subject to the Companies Law, if at any time the value of the Bonus Issue Pool equals or exceeds 10 per cent. of the Gross Issue Proceeds plus the proceeds of any subsequent equity issues (or such lower amount as the Directors in their absolute discretion may decide), the Directors shall issue certificated B Shares out of the Bonus Issue Pool provided that such B Shares be fully paid up from amounts standing to the credit of the Bonus Issue Pool. (B) Any B Shares issued by the Directors in accordance with the mechanism referred to in paragraph 5.2.6(A) are only to be issued to existing Shareholders pro rata to their holdings of Shares at the time of such issue of B Shares. (C) The Directors may allot fractional B Shares.

83 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP (D) The B Shares are issued on terms that each B Share shall be redeemable by the Company in accordance with the terms set out in the Articles. (E) The Company may, at the discretion of the Board, upon issue redeem all or any of the B Shares in issue, in accordance with such procedures as the Directors may determine and in consideration of the payment of the issue price of the B Shares, being £1.00 each. (F) The redemption referred to in paragraph 5.2.6(E) will become effective on the date of redemption. (G) The redemption monies payable in respect of the redemption of any certificated B Shares will be paid to the holder (or, in the case of joint holders, to the holder whose name stands first in the register in respect of the B Shares) by cheque(s) dispatched at their own risk at such time as the Directors, in their discretion, determine is appropriate. (H) The Company shall not be liable for any loss or damage suffered or incurred by any holder of B Shares or any other person as a result of or arising out of late settlement, howsoever such loss or damage may arise. (I) B Shares do not carry any right to any dividends or other distributions out of the profits of the Company. (J) The B Shares do not entitle any B Shareholder to any surplus assets of the Company remaining after payment of all the creditors of the Company apart from a distribution in respect of any capital paid up on the B Shares which shall rank behind any amounts due in respect of Shares and such distribution shall be distributed pro rata. (K) The B Shares shall not carry any right to receive notice of, or attend or vote at, any general meeting of the Company or any right to vote on written resolutions of the Company. (L) The B Shares shall not be transferable. 5.3 Voting 5.3.1 Subject to any special rights, restrictions or prohibitions as regards voting for the time being attached to any Shares, holders of Shares shall have the right to receive notice of and to attend and vote at general meetings of the Company. 5.3.2 Each Shareholder being present in person or by proxy or by a duly authorised representative (if a corporation) at a meeting shall upon a show of hands have one vote and upon a poll each such holder present in person or by proxy or by a duly authorised representative (if a corporation) shall (unless otherwise determined by the Directors prior to the first issue of Shares of such class) have one vote in respect of each Share held by him. 5.3.3 B Shares and, save in limited circumstances, C Shares will not carry the right to attend and receive notice of any general meetings of the Company, nor will they carry the right to vote at such meetings. 5.4 Capital As to a winding up of the Company or other return of capital (other than by way of a repurchase or redemption of Shares in accordance with the provisions of the Articles and the Companies Laws), the surplus assets of the Company attributable to the Shares of each class remaining after payment of all creditors (as determined by the Directors), or such proportion of such assets as the Directors determine to distribute, shall, subject to the rights of any Shares that may be issued with special rights or privileges, be divided pari passu among the holders of Shares of that class in proportion to the number of Shares of that class held by them. 5.5 Pre-emption rights There are no provisions of Guernsey law which confer rights of pre-emption in respect of the allotment of the Shares. However, the Articles of Incorporation provide that the Company is not permitted to allot and issue (for cash) equity securities (being Shares or C Shares or rights to subscribe for, or convert securities into, Shares) or sell (for cash) any Shares or C Shares held in treasury, unless it shall first have offered to allot and issue to each existing holder of

84 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Shares and C Shares on the same or more favourable terms a proportion of those Shares or C Shares the aggregate value of which (at the proposed issue price) is as nearly as practicable equal to the proportion of the total Net Asset Value of the Company represented by the Shares or C Shares held by such shareholder. These pre-emption rights may be excluded and disapplied or modiﬁed by special resolution of the Shareholders.

5.6 Variation of rights 5.6.1 Whenever the capital of the Company is divided into different classes of shares, the rights attached to any class of shares may (unless otherwise provided by the terms of issue of the shares of that class) be varied or abrogated: (A) with the consent in writing of the holders of three-fourths in number of the issued shares of that class; or (B) with the sanction of a Special Resolution of the holders of the shares of that class passed at a separate general meeting of the holders of the shares of that class. 5.6.2 The necessary quorum at any separate class meeting shall be two persons present holding or representing by proxy at least one third of the voting rights of that class (provided that if any such meeting is adjourned for lack of a quorum, the quorum at the reconvened meeting shall be one person present holding shares of that class or his proxy) provided always that where the class has only one member, that member shall constitute the necessary quorum and any holder of shares of the class in question may demand a poll. 5.6.3 The special rights conferred upon the holders of any shares or class of shares issued with preferred, deferred or other rights shall (unless otherwise expressly provided by the conditions of issue of such shares) be deemed not to be varied by (i) the creation or issue of further shares ranking pari passu therewith or (ii) the purchase or redemption by the Company of any of its shares (or the holding of such shares as treasury shares).

5.7 Disclosure of interests in Shares 5.7.1 The Board shall have power by notice in writing (a ‘‘Disclosure Notice’’) to require a Shareholder to disclose to the Company the identity of any person other than the Shareholder (an ‘‘interested party’’) who has any interest (whether direct or indirect) in the Shares held by the Shareholder (or has been so interested at any time during the 3 years immediately preceding the date on which the Disclosure Notice is issued) and the nature of such interest. Any such Disclosure Notice shall require any information in response to such Disclosure Notice to be given in writing to the Company within 28 days of the date of service (or 14 days if the Shares concerned represent 0.25 per cent. or more of the number of Shares in issue of the class of Shares concerned). 5.7.2 If any member is in default in supplying to the Company the information required by the Company within the prescribed period (which is 28 days after service of the notice or 14 days if the Shares concerned represent 0.25 per cent. or more in number of the issued Shares of the relevant class), or such other reasonable period as the Board may determine, the Board in its absolute discretion may serve a direction notice on the member (a ‘‘Direction Notice’’). The Direction Notice may direct that in respect of the Shares in respect of which the default has occurred (the ‘‘Default Shares’’) and any other Shares held by the Shareholder, the Shareholder shall not be entitled to vote in general meetings or class meetings. Where the Default Shares represent at least 0.25 per cent. in number of the class of Shares concerned, the Direction Notice may additionally direct that dividends on such Shares will be retained by the Company (without interest) and that no transfer of the Default Shares (other than a transfer authorised under the Articles) shall be registered until the default is rectiﬁed. 5.7.3 The Board shall be required to exercise its powers to require disclosure of interested parties on a requisition of Shareholders holding not less than 1/10th of the total voting rights attaching to the shares in issue at the relevant time.

5.8 Transfer of Shares 5.8.1 Subject to the Articles (and the restrictions on transfer contained therein), a Shareholder may transfer all or any of his uncertiﬁcated Shares in any manner which is permitted by the Companies Laws or in any other manner which is from time to time approved by the Board.

85 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP 5.8.2 A transfer of a certiﬁcated Share shall be in any usual form or in any other form approved by the Board. An instrument of transfer of a certiﬁcated Share shall be signed by or on behalf of the transferor and, unless the Share is fully paid, by or on behalf of the transferee.

5.8.3 The Articles of Incorporation provide that the Board has power to implement such arrangements as it may, in its absolute discretion, think ﬁt in order for any class of Shares to be admitted to settlement by means of the CREST UK system. If the Board implements any such arrangements, no provision of the Articles will apply or have effect to the extent that it is in any respect inconsistent with:

(A) the holding of Shares of the relevant class in uncertiﬁcated form;

(B) the transfer of title to Shares or of the relevant class by means of the CREST UK system; or

5.8.4 Where any class of Shares is, for the time being, admitted to settlement by means of the CREST UK system such securities may be issued in uncertificated form in accordance with and subject to the CREST UK Guernsey Regulations. Unless the Board otherwise determines, Shares held by the same holder or joint holders in certificated form and uncertificated form will be treated as separate holdings. Shares may be changed from uncertificated to certificated form, and from certificated to uncertificated form, in accordance with and subject to the CREST Guernsey Regulations. Title to such of the Shares as are recorded on the register as being held in uncertificated form may be transferred only by means of the CREST UK system.

5.8.5 The Board may, in its absolute discretion and without giving a reason, refuse to register a transfer of any Share in certiﬁcated form or uncertiﬁcated form subject to the Articles which is not fully paid or on which the Company has a lien provided that, in the case of a listed Share, this would not prevent dealings in the Shares of that class from taking place on an open and proper basis on the London Stock Exchange.

5.8.6 In addition, the Board may decline to transfer, convert or register a transfer of any Share in certificated form or (to the extent permitted by the CREST Guernsey Requirements) uncertificated form: (i) if it is in respect of more than one class of Shares; (ii) if it is in favour of more than four joint transferees; (iii) if applicable, if it is delivered for registration to the registered office of the Company or such other place as the Board may decide, not accompanied by the certificate for the Shares to which it relates and such other evidence of title as the Board may reasonably require; or (iv) the transfer is in favour of any Non-Qualified Holder.

5.8.7 If any Shares are owned directly, indirectly or beneficially by a person believed by the Board to be a Non-Qualified Holder, the Board may give notice to such person requiring him either: (i) to provide the Board within 30 days of receipt of such notice with sufficient satisfactory documentary evidence to satisfy the Board that such person is not a Non- Qualified Holder; or (ii) to sell or transfer his Shares to a person who is not a Non- Qualified Holder within 30 days and within such 30 days to provide the Board with satisfactory evidence of such sale or transfer. Pending such sale or transfer, the Board may suspend the exercise of any voting or consent rights and rights to receive notice of or attend any meeting of the Company and any rights to receive dividends or other distributions with respect to such Shares. Where condition (i) or (ii) is not satisfied within 30 days after the serving of the notice, the person will be deemed, upon the expiration of such 30 days, to have forfeited his Shares. If the Board in its absolute discretion so determines, the Company may dispose of the Shares at the best price reasonably obtainable and pay the net proceeds of such disposal to the former holder.

5.8.8 The Board may decline to register a transfer of an uncertiﬁcated Share which is traded through the CREST UK system in accordance with the CREST rules where, in the case of a transfer to joint holders, the number of joint holders to whom uncertiﬁcated Shares is to be transferred exceeds four.

86 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP 5.9 General meetings 5.9.1 The first general meeting (being an annual general meeting) of the Company shall be held within such time as may be required by the Companies Laws and thereafter general meetings (which are annual general meetings) shall be held at least once in each calendar year and in any event no more than 18 months since the last annual general meeting. All general meetings (other than annual general meetings) shall be called extraordinary general meetings. Extraordinary general meetings and annual general meetings shall be held in Guernsey or such other place outside the United Kingdom as may be determined by the Board from time to time. 5.9.2 Any general meeting shall be called by at least ten clear days’ notice. The notice must specify the date, time and place of any general meeting and the text of any proposed special, unanimous and ordinary resolutions. A general meeting may be deemed to have been duly called by shorter notice if it is so agreed by all the members entitled to attend and vote thereat. The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive such notice shall not invalidate the proceedings at the meeting. 5.9.3 The Shareholders may require the Board to call an extraordinary general meeting in accordance with the Companies Laws. 5.10 Restrictions on voting Unless the Board otherwise decides, no member shall be entitled to vote at any general meeting or at any separate meeting of the holders of any class of Shares in the Company, either in person or by proxy, in respect of any Share held by him unless all calls and other sums presently payable by him in respect of that Share have been paid. No member of the Company shall, if the Board so determines, be entitled in respect of any Share held by him to attend or vote (either personally or by representative or by proxy) at any general meeting or separate class meeting of the Company or to exercise any other right conferred by membership in relation to any such meeting if he or any other person appearing to be interested in such Shares has failed to comply with a Disclosure Notice (see paragraph 5.7.1 above) within 14 days, in a case where the Shares in question represent at least 0.25 per cent. of their class, or within 28 days, in any other case, from the date of such Disclosure Notice. These restrictions will continue until the information required by the notice is supplied to the Company or until the Shares in question are transferred or sold in circumstances specified for this purpose in the Articles. 5.11 Appointment, retirement and disqualification of Directors 5.11.1 Unless otherwise determined by the Shareholders by ordinary resolution, the number of Directors shall not be less than two and there shall be no maximum number. At no time shall a majority of the Board be resident in the UK for UK tax purposes. 5.11.2 A Director need not be a Shareholder. A Director who is not a Shareholder shall nevertheless be entitled to attend and speak at Shareholders’ meetings. 5.11.3 Subject to the Articles, Directors may be appointed by the Board (either to fill a vacancy or as an additional Director). No person other than a Director retiring at a general meeting shall, unless recommended by the Directors, be eligible for election by the Company to the office of Director unless not less than seven and not more than 42 clear days before the date appointed for the meeting there shall have been left at the Company’s registered office (or, if an electronic address has been specified by the Company for such purposes, sent to the Company’s electronic address) notice in writing signed by a Shareholder who is duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for election together with notice in writing signed by that person of his willingness to be elected, specifying his tax residency status and containing a declaration that he is not ineligible to be a Director in accordance with the Companies Laws. 5.11.4 No person shall be or become incapable of being appointed a Director, and no Director shall be required to vacate that office, by reason only of the fact that he has attained the age of 70 years or any other age. 5.11.5 Subject to the Articles, at each annual general meeting of the Company, any Director: (i) who has been appointed by the Board since the last annual general meeting; (ii) who held office at the time of the two preceding annual general meetings and who did not

87 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP retire at either of them; or (iii) who has held office with the Company, other than employment or executive office, for a continuous period of nine years or more at the date of the meeting, shall retire from office and may offer himself for election or re- election by the Shareholders. 5.11.6 A Director who retires at an annual general meeting may, if willing to continue to act, be elected or re-elected at that meeting. If he is elected or re-elected he is treated as continuing in office throughout. If he is not elected or re-elected, he shall remain in office until the end of the meeting or (if earlier) when a resolution is passed to appoint someone in his place or when a resolution to elect or re-elect the Director is put to the meeting and lost. 5.11.7 The office of a Director shall be vacated: (i) if he (not being a person holding for a fixed term an executive office subject to termination if he ceases from any cause to be a Director) resigns his office by one month’s written notice signed by him sent to or deposited at the Company’s registered office; (ii) if he dies; (iii) if the Company requests that he resigns his office by giving one month’s written notice; (iv) if he shall have absented himself (such absence not being absence with leave or by arrangement with the Board on the affairs of the Company) from meetings of the Board for a consecutive period of 12 months and the Board resolves that his office shall be vacated; (v) if he becomes bankrupt or makes any arrangements or composition with his creditors generally; (vi) if he ceases to be a Director by virtue of, or becomes prohibited from being a Director by reason of, an order made under the provisions of any law or enactment; (vii) if he is requested to resign by written notice signed by a majority of his co-Directors (being not less than two in number); (viii) if the Company by ordinary resolution shall declare that he shall cease to be a Director; (ix) if he becomes resident in the United Kingdom for tax purposes and, as a result thereof, a majority of the Directors would, if he were to remain a Director, be resident in the United Kingdom for tax purposes; or (x) if he becomes ineligible to be a Director in accordance with the Companies Laws. 5.11.8 Any Director may, by notice in writing, appoint any other person (subject to the provisions in paragraph 5.11.9 below) who is willing to act as his alternate and may remove his alternate from that office. 5.11.9 Each alternate Director shall be either: (i) resident for tax purposes in the same jurisdiction as his appointer; or (ii) resident outside the UK for UK tax purposes, in each case for the duration of the appointment of that alternate Director and in either case shall also be eligible to be a Director under the Companies Laws and sign a written consent to act. Every appointment or removal of an alternate Director shall be by notice in writing signed by the appointer and served upon the Company.

5.12 Proceedings of the Board 5.12.1 The Board may meet for the despatch of business, adjourn and otherwise regulate its meetings as it thinks fit. The quorum necessary for the transaction of the business of the Board may be fixed by the Board and unless so fixed shall be two. Subject to the Articles, a meeting of the Board at which a quorum is present shall be competent to exercise all the powers and discretion exercisable by the Board. 5.12.2 All meetings of the Board are to take place outside the United Kingdom and any decision reached or resolution passed by the Directors at any meeting of the Board held within the United Kingdom or at which no majority of Directors resident outside the UK (and not within the UK) for UK tax purposes is present shall be invalid and of no effect. 5.12.3 The Board may elect one of their number as chairperson. If no chairperson is elected or if at any meeting the chairperson is not present within five minutes after the time appointed for holding the meeting, the Directors present may choose one of their number to be chairperson of the meeting. 5.12.4 Questions arising at any meeting shall be determined by a majority of votes. 5.12.5 The Board may delegate any of its powers to committees consisting of one or more Directors as they think fit with a majority of such Directors being resident outside of the United Kingdom for United Kingdom tax purposes. Committees shall only meet

88 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP outside the United Kingdom. Any committee so formed shall be governed by any regulations that may be imposed on it by the Board and (subject to such regulations) by the provisions of the Articles that apply to meetings of the Board.

5.13 Remuneration of Directors The Directors shall be entitled to receive fees for their services, such sums not to exceed in aggregate £500,000 in any ﬁnancial year (or such higher amount as may be determined from time to time by ordinary resolution of the Company). The Directors may be paid all reasonable travelling, hotel and other out of pocket expenses properly incurred by them in attending Board or committee meetings or general meetings, and all reasonable expenses properly incurred by them seeking independent professional advice on any matter that concerns them in the furtherance of their duties as a Director.

5.14 Interests of Directors 5.14.1 Subject to and in accordance with the Companies Laws, a Director must, immediately after becoming aware of the fact that he is interested in a transaction or proposed transaction with the Company, disclose that fact to the Directors (including, if the monetary value of the Director’s interest is quantifiable, the nature and monetary value of that interest, or if the monetary value of the Director’s interest is not quantifiable, the nature and extent of that interest). 5.14.2 Subject to the provisions of the Companies Laws, and provided that he has disclosed to the Directors the nature and extent of any interests of his, a Director notwithstanding his office: (A) may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director on such terms as to the tenure of office and otherwise as the Directors may determine; (B) may be a party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise interested; (C) may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, a shareholder of or otherwise interested in, any body corporate promoted by the Company or in which the Company is otherwise interested; (D) shall not, by reason of his office, be accountable to the Company for any remuneration or benefit which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit; (E) may act by himself or his firm in a professional capacity for the Company, other than as auditor, and he or his firm shall be entitled to remuneration for professional services as though he were not a Director of the Company; and (F) may be counted in the quorum present at any meeting in relation to any resolution in respect of which he has declared an interest (but he may not vote thereon).

5.15 Winding up 5.15.1 If the Company shall be wound up, the liquidator may, with the authority of a special resolution and any other sanction required by the Companies Laws, divide the whole or any part of the assets of the Company among the members entitled to the same in specie and the liquidator or, where there is no liquidator, the Directors may for that purpose value any assets as he or they deem fair and determine how the division shall be carried out as between the members or different classes of members and, with the like sanction, may vest the whole or any part of the assets in trustees upon such trusts for the beneﬁt of the members as he or they may determine, but no member shall be compelled to accept any assets upon which there is a liability. 5.15.2 Where the Company is proposed to be or is in the course of being wound up and the whole or part of its business or property is proposed to be transferred or sold to another company, the liquidator may, with the sanction of an ordinary resolution,

89 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP receive in compensation shares, policies or other like interests for distribution or may enter into any other arrangements whereby the members may, in lieu of receiving cash, shares, policies or other like interests, participate in the proﬁts of or receive any other beneﬁt from the transferee.

5.16 Borrowing powers The Directors may exercise all the powers of the Company to borrow money and to give guarantees, mortgage, hypothecate, pledge or charge all or part of its undertaking, property (present or future) or assets or uncalled capital and to issue debentures and other securities whether outright, or as collateral security for any debt, liability or obligation of the Company or of any third party.

5.17 Alteration of capital Subject as provided elsewhere in the Articles, the Company may by ordinary resolution: (i) consolidate and divide all or any of its share capital into shares of larger amounts than its existing shares; (ii) subdivide all or any of its shares into shares of smaller amounts so that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived and so that the resolution whereby any share is subdivided may determine that as between the holders of the shares resulting from subdivision one or more of the shares may have such preferred, deferred or other rights over the others as the Company has power to attach to unissued or new shares; (iii) cancel any shares which at the date of the resolution have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of shares so cancelled; (iv) redesignate or convert the whole, or any particular class, of its shares into shares of another class; (v) convert all or any of its fully paid shares the nominal amount of which is expressed in a particular currency into fully paid shares of a nominal amount of a different currency, the conversion being effected at the rate of exchange (calculated to not less than 3 significant figures) current on the date of the resolution or on such other date as may be specified therein; and (vi) where its share capital is expressed in a particular currency or former currency, denominate or redenominate it, whether by expressing its amount in units or subdivisions of that currency or former currency or otherwise. The Board may on any consolidation of shares deal with fractions of shares in any manner.

5.18 Untraceable members The Company shall be entitled to sell at the best price reasonably obtainable the shares of a member or any shares to which a person is entitled by transmission on death or bankruptcy if and provided that: (i) for a period of 12 years no cheque or warrant sent by the Company through the post in a pre-paid letter addressed to the member or to the person so entitled to the share at his address in the register of members or otherwise the last known address given by the member or the person entitled by transmission to which cheques and warrants are to be sent has been cashed and no communication has been received by the Company from the member or the person so entitled provided that in such period of 12 years, the Company has paid out at least three dividends whether interim or ﬁnal; or (ii) the Company has at the expiration of the said period of 12 years by advertisement in a newspaper circulating in the area in which the address referred to in (i) above is located given notice of its intention to sell such shares; (iii) the Company has not during the period of three months after the date of the advertisement and prior to the exercise of the power of sale received any communication from the member or person so entitled; or (iv) if any part of the share capital of the Company is quoted on any stock exchange, the Company has given notice in writing to the quotations department of such stock exchange of its intention to sell such shares. To give effect to any such sale the Board may appoint any person to execute as transferor an instrument of transfer of the said shares and such instrument of transfer of the said shares shall be as effective as if it had been executed by the registered holder of, or person entitled by transmission to, such shares and the title of the purchaser or other transferee shall not be affected by any irregularity or invalidity in the proceedings relating thereto. The net proceeds of sale shall belong to the Company which shall be obliged to account to the former member or other person previously entitled as aforesaid for an amount equal to such proceeds and shall enter the name of such former member or other person in the books of the Company as a creditor for such amount. No trust shall be created in respect of the debt, no interest shall be

90 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP payable in respect of the same and the Company shall not be required to account for any money earned on the net proceeds, which may be employed in the business of the Company or invested in such investments (other than shares of the Company) as the Board may from time to time think ﬁt.

6. Material Contracts The following are all of the contracts, not being contracts entered into in the ordinary course of business, that have been entered into by the Company since its incorporation and are, or may be, material or that contain any provision under which the Company has any obligation or entitlement which is or may be material to it as at the date of this Prospectus:

6.1 Placing and Offer Agreement 6.1.1 Pursuant to the Placing and Offer Agreement of even date with this Prospectus between the Company, Oriel, the Directors, the Investment Adviser, Jeremy Wilson and Michael Henebery, the Company has agreed, subject to certain conditions that are typical for an agreement of this nature, the last condition being Admission, to issue the Shares to be issued pursuant to the Issue at the Issue Price. Oriel has agreed, subject to such conditions, to use its reasonable endeavours on behalf of and as agent for the Company to procure Placees to subscribe for Ordinary Shares at the Issue Price. The Placing will not be underwritten. 6.1.2 Subject to the Placing and Offer Agreement becoming unconditional and not being terminated and the Shares being issued and allotted pursuant to the Issue, the total expenses of the Issue payable by the Company (including all fees, commissions and expenses payable to Oriel and all other advisers and services providers to the Company and Oriel) shall be an amount equal to two (2) per cent. of the gross Sterling proceeds of the Issue (such Sterling amount being known as the ‘‘Expenses Pot’’). The Company will bear, and pay or cause to be paid, solely and up to the amount available from the Expenses Pot, all reasonable expenses of or incidental to the Issue and Admission including, without limitation, the fees of its accountancy, legal and other professional advisers, the cost of printing and distribution of all the Issue Documents, Registrars’ fees, UKLA, CISX and/or London Stock Exchange fees, the fees of Oriel’s legal and other professional advisers and the amount of any expenses which Oriel may have paid on behalf of the Company, together in each case with any applicable value added taxes (together the ‘‘Fixed Costs’’). The residual amount, if any, remaining in the Expenses Pot after all Fixed Costs have been accounted for shall be paid to Oriel. In the event that the Placing and Offer Agreement does not become unconditional and/or is terminated under the termination provisions of the Placing and Offer Agreement, the Investment Adviser shall pay or procure the payment of the Fixed Costs. 6.1.3 The obligations of the Company to issue Shares and the obligations of Oriel to use reasonable endeavours to procure subscribers for the Shares to be issued under the Placing, are subject to conditions, including, amongst others, Admission occurring by 0800 hours on 3 December 2012 (or such later date as the Company and Oriel may agree but in any event not later than 0800 hours on 13 December 2012). Oriel may terminate the Placing and Offer Agreement in certain circumstances that are typical for an agreement of this nature prior to Admission. These circumstances include where the breach by the Company, the Investment Adviser, the Directors, Michael Henebery or Jeremy Wilson of any warranty given by them pursuant to the Placing and Offer Agreement, the occurrence of certain material adverse changes in the earnings or business affairs or business prospects of the Company, and certain adverse changes in ﬁnancial, political or economic conditions. The Company will, if applicable, pay any stamp duty payable with regard to the issue of the Shares by it under the Issue to ensure that those persons becoming entitled pursuant to the Placing and Offer Agreement to be registered as holders of any such Shares are so registered, and any stamp duty reserve tax payable by such persons in connection with their subscription of any such Shares. 6.1.4 The Company, the Investment Adviser and the Directors have given certain warranties, undertakings and indemnities to Oriel which are typical for an agreement of this nature. Jeremy Wilson and Michael Henebery have also given certain warranties to Oriel. 6.1.5 The Placing and Offer Agreement is governed by English law.

91 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP 6.2 Limited Partnership Agreement 6.2.1 Pursuant to the Limited Partnership Agreement of even date with this Prospectus between the Company (in its capacity as general partner of the Investment Partnership) and the Special Limited Partner (the principal members of which are the Senior Executives), the Special Limited Partner will be entitled to receive an incentive allocation from the Investment Partnership. The Investment Partnership will therefore make distributions, after having paid to the Company all amounts necessary to enable the Company to meet the costs and expenses incurred by it from time to time including, without limitation, any management fee payable by the Company, on the following basis:

(A) ﬁrst, to the Company an amount equal to the gross proceeds received by the Company from the issue of Shares (including sales of Shares out of treasury);

(B) second, to the Company an amount equal to a realised (cash-paid) IRR on the aggregate gross proceeds received by the Company from the issue of shares (including sales of shares out of treasury) equal to LIBOR plus 7 per cent.;

(C) third, amounts distributed shall be distributed 50 per cent. to the Company and 50 per cent. to the Special Limited Partner until the Special Limited Partner has been distributed amounts which in aggregate are equal to 10 per cent. of all amounts in excess of that distributed pursuant to paragraph 6.2.1(A), being that distributed to the Company pursuant to paragraph 6.2.1(B) and paragraph 6.2.1(C); and

(D) thereafter, all amounts distributed shall be distributed 10 per cent. to the Special Limited Partner and 90 per cent. to the Company.

6.2.2 In the Limited Partnership Agreement LIBOR means (i) the British Bankers’ Association Interest Settlement Rate for sterling (the ‘‘Screen Rate’’) or (ii) if no Screen Rate for sterling is available or at the relevant time the basis of calculation of, or the meaning of, LIBOR differs materially from that as at the date of this Agreement, a substitute rate to be determined by the Company and the Special Limited Partner, each acting reasonably (and being, in the ﬁrst instance, any replacement rate that can reasonably be considered to be the market standard replacement rate for LIBOR in the UK lower mid-market private equity sector), and if no such substitute rate can be agreed, the matter shall be referred to the auditors for expert determination whose decision shall be ﬁnal and whose fees in respect thereof shall be borne in such proportions as the auditors may determine or (in the absence of such determination) equally between the General Partner and the Special Limited Partner.

6.2.3 If the Investment Management Agreement is terminated (including, without limitation, automatically) and is not promptly replaced by an agreement between the Company and either the Investment Adviser or an entity controlled by the Investment Adviser or the Senior Executives, then the Special Limited Partner shall cease to be entitled to any allocations pursuant the Limited Partnership Agreement or any distribution as set out above arising out of proceeds from any new investments made after the effective date of the relevant termination (the ‘‘Termination Date’’) . Save as set out immediately below in paragraphs 6.2.4 and 6.2.5, the Special Limited Partner shall remain entitled to receive allocations and distributions as set out above in respect of any investments made on or prior to the Termination Date and for these purposes the allocation and distribution provisions of the Limited Partnership Agreement shall be determined and applied as if the investments made prior to the Termination Date are the sole investments of a deemed partnership constituted on the same terms as the Investment Partnership.

6.2.4 If the Investment Management Agreement is terminated pursuant to paragraph 6.3.6(I) or 6.3.8 below (as a result of termination of the Investment Advisory Agreement pursuant to 6.4.4(H) below) and is not promptly replaced by an agreement between the Company and either the Investment Adviser or an entity controlled by the Investment Adviser or the Senior Executives, then the Special Limited Partner shall cease to be entitled to any distribution as set out above not already allocated on or prior to the Termination Date.

92 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP 6.2.5 A Termination Adjustment shall apply following either: (A) the termination of the Investment Management Agreement pursuant to any of paragraphs 6.3.6(A) to 6.3.6(H) below (provided that the Investment Management Agreement is not promptly replaced by an agreement between the Company and either the Investment Adviser or an entity controlled by the Investment Adviser or the Senior Executives); or (B) the Investment Management Agreement pursuant to paragraph 6.3.8 below as a result of the termination of the Investment Advisory Agreement pursuant to any of paragraphs 6.4.4(A) to 6.4.4(G) below. If a Termination Adjustment applies then upon distribution as set out above the amounts which, but for this paragraph 6.2.5, would be allocated to, and paid to, the Special Limited Partner shall instead be allocated to, and payable to, the Company until the earlier of: (A) the Company having received the Termination Adjustment; or (B) the application of this paragraph 6.2.5 reduces the amount which would be allocated to, and paid to, the Special Limited Partner to zero. For the purposes of this paragraph 6.2.5 the Termination Adjustment shall be an amount equal to 20 per cent. of the amount that would, but for this paragraph 6.2.5, have been allocated to, and paid to, the Special Limited Partner. 6.2.6 The Limited Partnership Agreement is governed by Guernsey law.

6.3 Investment Management Agreement 6.3.1 The Company, the Company in its capacity as general partner of the Investment Partnership and the Investment Manager have entered into an investment management agreement of even date with this Prospectus (the ‘‘Investment Management Agreement’’), pursuant to which the Investment Manager, as advised by the Investment Adviser, has been given sole responsibility for the discretionary management of the Company’s assets (including uninvested cash) in accordance with the Company’s investment objectives and policy. 6.3.2 The Investment Manager will be entitled to a quarterly management fee equal to 0.25 per cent. of the NAV of the Company as at the last day of the previous calendar quarter which shall be payable within 14 days of the calculation of the NAV of the Company as at such date (provided that where the calculation of the Company’s NAV as at such date is not possible or is delayed due to the calculation of the Company’s NAV having been suspended, the management fee for the relevant quarter shall be calculated by reference to the latest reported NAV of the Company). The management fee for the period from Admission to the end of the ﬁrst calendar quarter following Admission shall be calculated by reference to the NAV of the Company immediately following Admission and shall be pro-rated accordingly. If the Investment Management Agreement is terminated otherwise than at the end of a calendar quarter, the management fee for that quarter shall be pro- rated and the Investment Manager shall reimburse the Company in respect of any overpayment. 6.3.3 If the Investment Manager receives any fees from a company as a result of an Investment made by the Investment Manager under the Investment Management Agreement in such company, the amount of any such fees shall be for the account of the Company. This shall not apply to any fee received by the Investment Manager to the extent that it is retained to fund the cost of appointing a person to the board of any portfolio company and any associated cost of management at the level of the relevant portfolio company. 6.3.4 The Investment Manager may at its discretion enter into arrangements with certain investors pursuant to which it will rebate to such investors a portion of its management fee received from the Company. 6.3.5 The Investment Management Agreement is terminable by either the Investment Manager or the Company (acting in its capacity as general partner of the Investment Partnership) giving to the other not less than six months’ written notice.

93 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP 6.3.6 The Investment Management Agreement may be terminated by the Company with immediate effect from the time at which such notice is given if: (A) an order has been made or an effective resolution passed for the winding up or liquidation of the Investment Manager or the Investment Adviser (except a voluntary liquidation for the purpose of reconstruction or amalgamation on terms previously approved by the Board); (B) the Investment Manager or the Investment Adviser ceases or threatens to cease to carry on its business or to make any material alteration to the nature of its business as carried on at the date of the Investment Management Agreement; (C) the Investment Manager or the Investment Adviser has, subject to paragraph (D) below, committed a material breach of the Investment Management Agreement or the Investment Advisory Agreement, as applicable, and fails to remedy such breach within 30 days of receiving notice requiring it to do so; (D) the Investment Manager or the Investment Adviser has committed a breach of its obligation to ensure that its obligations under the Investment Management Agreement or the Investment Advisory Agreement, as applicable, are carried out by a team of appropriately qualiﬁed, trained and experienced professionals reasonably acceptable to the Company and such breach is not remedied within 90 days of receipt of notice requiring it to do so; (E) (i) the Investment Manager ceases to hold a licence under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended or any required authorisation to carry out its services under the Investment Management Agreement and fails to remedy the situation without any material adverse implications for the Group within such reasonable period as the Company may specify, or (ii) the Investment Adviser ceases to hold any required authorisation to carry out its services under the Investment Advisory Agreement and fails to remedy the situation without any material adverse implications for the Group within such reasonable period as the Investment Manager, on instruction from the Board, may specify; (F) the Investment Manager or the Investment Adviser breaches any provision of the Investment Management Agreement or the Investment Advisory Agreement, as applicable or takes any action or omits to take any action, and such breach, action or omission results in either trading of the Issue Shares on the SFM or listing and trading of the Issue Shares on the CISX being suspended or terminated or results in the Company losing its exempt tax status for the purposes of the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 or the Company or any member of the Group becoming resident in the UK or the US for tax purposes; (G) the Investment Adviser ceases to provide such investment advisory and/or ancillary services to the Investment Manager as the Company shall, in its sole discretion, determine to be material to the interests of the Group or the Investment Advisory Agreement becomes terminable with immediate effect in accordance with its terms; (H) the Company is required to terminate the Investment Manager’s appointment or the Investment Adviser’s appointment by a relevant regulatory authority; or (I) the Investment Manager or the Investment Adviser has been fraudulent, grossly negligent or acted with wilful misconduct, bad faith, reckless disregard of its obligations as Investment Manager or Investment Adviser (as applicable) or either has acted in or caused any member of the Group to commit a material violation of applicable law or commit an offence related to investment management by the Investment Manager or Investment Adviser which (in the case of such material violation or offence) has had a material adverse effect on the value of the Company’s assets. 6.3.7 The Investment Management Agreement may be terminated by the Investment Manager with immediate effect if: (a) an order has been made or an effective resolution passed for the winding up or liquidation of the Company (save for a voluntary liquidation for the purpose of reconstruction or amalgamation upon terms previously approved by the Investment Manager); or (b) a resolution is proposed by the Board or passed by

94 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Shareholders which would make changes to the Company’s investment policy such that the Investment Manager in its reasonable opinion can no longer meet the service standard requirements under the Investment Management Agreement. 6.3.8 The Investment Management Agreement shall automatically terminate if the Investment Advisory Agreement is terminated. 6.3.9 If notice to terminate the Investment Management Agreement is served by the Company on the Investment Manager as described in paragraph 6.3.5 above at any time during the Investment Period, the Investment Manager shall be entitled to be reimbursed by the Company and/or the Investment Partnership an amount equal to those costs and expenses incurred by the Company in connection with its establishment and Admission which are borne by the Investment Adviser as described under ‘‘Initial expenses related to the Issue’’ in Part V of this Prospectus to the extent such amount is required to be paid by the Investment Manager to the Investment Adviser pursuant to the Investment Advisory Agreement. 6.3.10 If the Investment Management Agreement is terminated: (i) otherwise than on the last day of a calendar quarter, the Investment Manager shall on demand reimburse the Company for any overpayment of the management fee paid to it in respect of that calendar quarter; and (ii) the Company shall promptly reimburse to the Investment Manager all of the Investment Manager’s out of pocket expenses incurred in respect of the performance of its services under the Investment Management Agreement up to the date of termination insofar as those expenses are payable in accordance with the Investment Management Agreement. No additional payment will be required to be made to the Investment Manager by the Company or the Investment Partnership or any other member of the Group. 6.3.11 The Company has given certain market standard indemnities in favour of the Investment Manager in respect of losses which the Investment Manager may incur in connection with the provision of services to the Company under the Investment Management Agreement. 6.3.12 The Investment Management Agreement is governed by English Law.

6.4 Investment Advisory Agreement 6.4.1 The Company, the Company in its capacity as general partner of the Investment Partnership, the Investment Manager and the Investment Adviser have entered into an investment advisory agreement of even date with this Prospectus (the ‘‘Investment Advisory Agreement’’), pursuant to which the Investment Adviser has been appointed to provide investment advisory services in accordance with the Company’s investment objectives and policy, including the sourcing and recommendation of investments and the provision of advice as to the ongoing management of the assets held in the Portfolio (including uninvested cash) and the disposal of the Company’s assets. 6.4.2 The Investment Manager shall pay to the Investment Adviser such fees and expenses as may be reasonably agreed between the Investment Manager and the Investment Adviser from time to time. 6.4.3 The Investment Advisory Agreement is terminable by a party giving to the other parties not less than six months’ written notice. 6.4.4 The Investment Advisory Agreement may be terminated by the Investment Manager or the Company with immediate effect from the time at which such notice is given if: (A) an order has been made or an effective resolution passed for the winding up or liquidation of the Investment Adviser (except a voluntary liquidation for the purpose of reconstruction or amalgamation on terms previously approved by the Board); (B) the Investment Adviser ceases or threatens to cease to carry on its business or to make any material alteration to the nature of its business as carried on at the date of the Investment Advisory Agreement; (C) the Investment Adviser has, subject to paragraph 6.3.6(D) above, committed a material breach of the Investment Management Agreement or the Investment

95 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP Advisory Agreement, as applicable, and fails to remedy such breach within 30 days of receiving notice requiring it to do so; (D) the Investment Adviser has committed a breach of its obligation to ensure that its obligations under the Investment Management Agreement or the Investment Advisory Agreement, as applicable, are carried out by a team of appropriately qualiﬁed, trained and experienced professionals reasonably acceptable to the Company and such breach is not remedied within 90 days of receipt of notice requiring it to do so; (E) the Investment Adviser ceases to hold any required authorisation to carry out its services under the Investment Advisory Agreement and fails to remedy the situation without any material adverse implications for the Group within such reasonable period as the Investment Manager, on instruction from the Board, may specify; (F) the Investment Adviser breaches any provision of the Investment Management Agreement or the Investment Advisory Agreement, as applicable or takes any action or omits to take any action, and such breach, action or omission results in either trading of the Issue Shares on the SFM or listing and trading of the Issue Shares on the CISX being suspended or terminated or results in the Company losing its exempt tax status for the purposes of the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 or the Company or any member of the Group becoming resident in the UK or the US for tax purposes; (G) the Company, the Investment Partnership or the Investment Manager is required by a relevant regulatory authority to terminate, or procure the termination of, the Investment Adviser’s appointment; or (H) the Investment Adviser has been fraudulent, grossly negligent or acted with wilful misconduct, bad faith, reckless disregard of its obligations as Investment Manager or Investment Adviser (as applicable) or either has acted in or caused any member of the Group to commit a material violation of applicable law or commit an offence related to investment management by the Investment Manager or Investment Adviser which (in the case of such material violation or offence) has had a material adverse effect on the value of the Company’s assets. 6.4.5 The Investment Advisory Agreement may be terminated by the Investment Adviser with immediate effect if: (a) an order has been made or an effective resolution passed for the winding up or liquidation of the Company or the Investment Manager (save for a voluntary liquidation for the purpose of reconstruction or amalgamation upon terms previously approved by the Investment Adviser); or (b) a resolution is proposed by the Board or passed by Shareholders which would make changes to the Company’s investment policy such that the Investment Adviser in its reasonable opinion can no longer meet the service standard requirements under the Investment Advisory Agreement. 6.4.6 If notice to terminate the Investment Advisory Agreement is served by the Company or the Investment Manager on the Investment Adviser as described in paragraph 6.4.4 above at any time during the Investment Period, the Investment Adviser shall be entitled to be reimbursed by the Company and/or the Investment Manager an amount equal to those costs and expenses incurred by the Company in connection with its establishment and Admission which are borne by the Investment Adviser as described under ‘‘Initial expenses related to the Issue’’ in Part V of this Prospectus. 6.4.7 The Investment Manager has given certain market standard indemnities in favour of the Investment Adviser in respect of losses which the Investment Adviser may incur in connection with the provision of services to the Investment Manager under the Investment Advisory Agreement. 6.4.8 The Investment Advisory Agreement is governed by English Law.

6.5 Administration and Custody Agreement Under the Administration and Custody Agreement of even date with this Prospectus between the Company and BNP Paribas Fund Services (Guernsey) Limited (the ‘‘Administrator’’) has been appointed the administrator, company secretary and custodian of the Company.

96 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP The Company has given certain market standard indemnities in favour of the Administrator in respect of the Administrator’s potential losses in carrying out its responsibilities under the Administration Agreement. The Company has consented to and the Administrator is permitted and may, subject to applicable law and upon prior written notice to the Company, delegate any or all of its functions to any member of the Administrator’s group, provided that: (i) the Administrator shall remain liable for the acts or omissions of any delegate appointed by it as if such acts or omissions were its own; (ii) the Administrator shall be solely liable for the fees payable to such delegate; and (iii) such delegation shall result in any of those duties and obligations being provided from within Guernsey (or such other place or places as the Administrator may from time to time deem appropriate, provided that the Administrator shall notify the Company of the same and, if the Company demonstrates that it would be prejudicial to its tax status, the Company can request the Administrator to cease all activities which give rise to such concern in the relevant jurisdiction as agreed between the Company and the Administrator from time to time. The Administration and Custody Agreement may be amended at any time by mutual written agreement of the parties hereto and shall continue in full force and effect until terminated by either party by a notice in writing delivered or posted, postage pre-paid, to the other party, such termination to take effect not sooner than six months after the date of such delivery or posting; provided that the Company, the Company in its capacity as general partner of the Investment Partnership, or the Administrator may at any time immediately terminate this Agreement: (i) in the event of the winding up of or the appointment of an administrator, liquidator, examiner or receiver to the other or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction (except if such event occurs for the purposes of reconstruction or amalgamation upon terms previously approved in writing by the parties, such approval not to be unreasonably withheld or delayed) or if the other party is declared ‘en desastre’; or (ii) if the other shall commit any material breach or is in persistent breach of the provisions of the Administration and Custody Agreement and shall if capable of remedy not have remedied the same within 30 days after the service of notice requiring it to be remedied; or (iii) if the continued performance of the Administration and Custody Agreement for any reason ceases to be lawful. The Administration and Custody Agreement is governed by the laws of Guernsey. 6.6 Registrar Agreement The Company and the Registrar entered into a registrar agreement of even date with this Prospectus (the ‘‘Registrar Agreement’’), pursuant to which the Company appointed the Registrar to act as registrar of the Company. The Company has given certain market standard indemnities in favour of the Registrar in respect of the Registrar’s potential losses in carrying on its responsibilities under the Registrar Agreement. The Registrar Agreement may be terminated by either the Company or the Registrar: (i) giving to the other not less than three month’s written notice in the event that agreement is not reached in relation to any proposed increase in fees; (ii) upon service of written notice if the other party commits a material breach of its obligations under the Registrar Agreement which that party has failed to remedy within 45 days of receipt of a written notice to do so; or (iii) upon service of written notice if a resolution is passed or an order made for the winding-up, dissolution or administration of the other party, or if the other party is declared insolvent or if an administrator, administrative receiver, manager or provisional liquidator (or similar) is appointed over the whole of or a substantial part of the other party or its assets or undertakings. The Registrar Agreement is governed by the laws of Guernsey. 6.7 Receiving Agent Agreement The Company and the Receiving Agent entered into a receiving agent agreement of even date with this Prospectus (the ‘‘Receiving Agent Agreement’’), whereby the Receiving Agent is appointed to act as receiving agent to the Company. The Receiving Agent will accept responsibility for, inter alia, receiving the applications for shares and the application monies, holding application cheques in a secure area to present them for payment. The Receiving Agent Agreement is governed by the laws of England.

97 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP 6.8 The CISX Sponsor Agreement The Company, the CISX Sponsor and the Administrator entered into a sponsor agreement of even date with this Prospectus (the ‘‘CISX Sponsor Agreement’’), pursuant to which the CISX Sponsor is appointed to provide sponsor services to the Company in relation to the application for Admission. The CISX Sponsor will accept responsibility for: (i) preparing the formal application for listing and lodging it and all documents supporting it with the CISX; (ii) assisting in the preparation and obtaining the approval of the CISX for the publication of the Prospectus; (iii) preparing and issuing to the CISX a formal announcement of the listing; and (iv) acting as CISX Sponsor in accordance with the CISX Listing Rules. On an ongoing basis after Admission, where requested by the Company, the CISX Sponsor will: (i) advise on the application of the CISX Listing Rules; (ii) liaise with the CISX in respect of such communications, announcements, notifications or filings submitted to the CISX relating to the Company or the Shares as may be required by the CISX Listing Rules and will use the CISX market data management system to send such communications, announcements, notifications or filings submitted to the CISX relating to the Company or the Shares that are received from the Company to the CISX; and (iii) will act as authorised representative and will procure the services of one person to act as an authorised representative to the Company on an ongoing basis. The CISX Sponsor Agreement may be terminated by either party immediately upon one party giving written notice to the other under certain circumstances, including: (i) the other party has committed a material breach of any of the terms of the CISX Sponsor Agreement or the CISX Listing Rules and has failed to rectify the same within 30 days of being requested in writing to do so; (ii) the other party goes into liquidation, is unable to pay its debts as they fall due, is declared bankrupt under the laws of any jurisdiction, takes any steps for its winding-up or dissolution, enters into composition with its creditors generally or suffers any similar action in consequence of default by it in respect of any of its obligations; or (iii) if the Admission is cancelled. The CISX Sponsor Agreement is governed by the laws of Guernsey.

7. Litigation There have been no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware), during the last 12 months which may have, or have had in the recent past, significant effects on the Group’s financial position or profitability.

8. Related Party Transactions Except with respect to the appointment letters entered into between the Company and each director and as set out in paragraph 6 of this Part VII of the Prospectus, the Company has not entered into any related party transaction since incorporation.

9. General 9.1 The target size of the Issue is in excess of £150,000,000 with the actual size of the Issue being subject to investor demand. The number of Shares to be issued pursuant to the Issue, and therefore the Gross Issue Proceeds, is not known as at the date of this Prospectus but will be notiﬁed by the Company via a RIS announcement prior to Admission. The Issue will not proceed if the Net Issue Proceeds would be less than £75,000,000 (or such lesser amount as the Company and Oriel Securities may determine). If the Issue does not proceed, subscription monies received will be returned without interest at the risk of the applicant. 9.2 The minimum subscription per investor pursuant to the Offer is £1,000 and the minimum subscription per investor pursuant to the Placing is £50,000. 9.3 The Placing of the Shares is being carried out on behalf of the Company by Oriel Securities which is authorised and regulated in the UK by the Financial Services Authority. 9.4 The principal place of business and registered ofﬁce of the Company is at BNP Paribas House, St Julian’s Avenue, St Peter Port, Guernsey GY1 1WA, Channel Islands. The Company is a registered closed-ended investment scheme registered pursuant to the Protection of Investors

98 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP (Bailiwick of Guernsey) Law, 1987, as amended, and the Registered Collective Investment Scheme Rules 2008 issued by the GFSC. The Company is not regulated by the Financial Services Authority or any other regulator. 9.5 The Investment Manager may be a promoter of the Company. Save as disclosed in paragraph 6 above no amount or benefit has been paid, or given, to the promoter or any of their subsidiaries since the incorporation of the Company and none is intended to be paid, or given. 9.6 The registered office of the Investment Adviser is c/o Buzzacott LLP, 130 Wood Street, London EC2V 6DL. 9.7 As the Shares do not have a par value, the Issue Price consists solely of share premium. 9.8 None of the Shares available under the Issue are being underwritten. 9.9 CREST is a paperless settlement procedure enabling securities to be evidenced other than by certificates and transferred other than by written instrument. The Articles of the Company permit the holding of the Shares under the CREST system. The Directors intend to apply for the Shares to be admitted to CREST with effect from Admission. Accordingly it is intended that settlement of transactions in the Shares following Admission may take place within the CREST system if the relevant Shareholders (other than U.S. Persons) so wish. CREST is a voluntary system and Shareholders who wish to receive and retain share certificates will be able to do so upon request from the Registrars. 9.10 Applications will be made to the London Stock Exchange for the Shares to be admitted to trading on the SFM and to the CISX for the Shares to be admitted to listing and trading on the Official List of the CISX. It is expected that admission will become effective, and that dealings in the Shares will commence at 0800 hours on 3 December 2012. No application is being made for the Shares to be dealt with in or on any stock exchanges or investment exchanges other than the London Stock Exchange and the CISX. 9.11 The Company does not own any premises and does not lease any premises. 9.12 Not more than 10 per cent. in aggregate of the value of the total assets of the Company at the time the investment is made will be invested in other closed-ended investment funds traded on a regulated market (except to the extent that those investment funds have stated investment policies to invest no more than 15 per cent. of their total assets in other investment funds traded on a regulated market). 9.13 Regardless of the investment policy of other closed-ended investment funds which are traded on a regulated market and which are invested in by the Company, the Company shall not invest in such funds more than 15 per cent. in aggregate of the value of the total assets of the Company at the time the investment is made.

10. Third party sources 10.1 Where third party information has been referenced in this Prospectus, the source of that third party information has been disclosed. Where information contained in this Prospectus has been sourced from a third party, the Company conﬁrms that such information has been accurately reproduced and, as far as the Company is aware and able to ascertain from information published by the relevant third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. 10.2 The Investment Manager and Investment Adviser have given and not withdrawn their written consent to the issue of this Prospectus with references to their names in the form and context in which such references appear. The Investment Adviser accepts responsibility for information attributed to it in this Prospectus and declares that, having taken all reasonable care to ensure that such is the case, the information attributed to it in this Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import.

11. Working capital The Company is of the opinion that, on the basis that the Minimum Net Proceeds are raised, the working capital available to the Group is sufﬁcient for the Group’s present requirements, that is for at least the next 12 months from the date of this Prospectus.

99 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP 12. Capitalisation and indebtedness The following table shows the Company’s gross indebtedness as at 3 October 2012 (being the date of incorporation).

As at 3 October Total current debt (£) 2012

Guaranteed Nil Secured Nil Unguaranteed/unsecured Nil

As at 3 October Total non-current debt (excluding current position of non-current debt) (£) 2012

Guaranteed Nil Secured Nil Unguaranteed/unsecured Nil The following table shows the capitalisation of the Company as at 3 October 2012 (being the date of incorporation):

As at 3 October Shareholders’ equity (£) 2012

Share capital 1 Legal reserve Nil Other reserves Nil Total 1 As at the date of this Prospectus, the Company has nil net indebtedness.

13. Documents available for inspection Copies of the Memorandum and the Articles and the material contracts summarised in paragraph 6 of this Part VII of the Prospectus will be available for inspection at the registered ofﬁce of the Company during normal business hours on any weekday (Saturdays and Public Holidays excepted) until the date of Admission. Dated 7 November 2012

100 c107409pu050 Proof 11: 6.11.12_23:39 B/L Revision: 0 Operator BonP PART VIII: TERMS AND CONDITIONS OF THE OFFER

1. Introduction Shares are available under the Offer at a price of £1.00 per Share. The Shares will, when issued and fully paid, include the right to receive all dividends or other distributions made, paid or declared, if any, by reference to a record date after the date of their issue. Applications to acquire Shares under the Offer must be made on the Application Form attached as Appendix 1 to this Prospectus or otherwise published by the Company.

2. Effect of application 2.1 Offer to acquire shares By completing and delivering an Application Form, you, as the applicant, and, if you sign the Application Form on behalf of another person or a corporation, that person or corporation: (a) offer to subscribe for such number of Shares specified in Box 1 on your Application Form, or any smaller number for which such application is accepted, at the Issue Price on the terms, and subject to the conditions, set out in the Prospectus, including these Terms and Conditions of Application and the Articles; (b) agree that, in consideration for the Company agreeing that it will not offer any Shares to any person other than by means of the procedures referred to in this Prospectus, your application may not be revoked and that this paragraph shall constitute a collateral contract between you and the Company which will become binding upon despatch by post to or, in the case of delivery by hand, on receipt by the Receiving Agent of your Application Form; (c) undertake to pay the subscription amount specified in Box 1 on your Application Form in full on application and warrant that the remittance accompanying your Application Form will be honoured on first presentation and agree that if such remittance is not so honoured you will not be entitled to receive a share certificate for the Shares applied for in certificated form or be entitled to commence dealing in Shares applied for in uncertificated form or to enjoy or receive any rights in respect of such Shares unless and until you make payment in cleared funds for such Shares and such payment is accepted by the Receiving Agent (which acceptance shall be in its absolute discretion and on the basis that you indemnify the Receiving Agent, the Company and Oriel against all costs, damages, losses, expenses and liabilities arising out of, or in connection with, the failure of your remittance to be honoured on first presentation) and the Company may (without prejudice to any other rights it may have) avoid the agreement to allot the Shares and may allot them to some other person, in which case you will not be entitled to any refund or payment in respect thereof (other than the refund by a cheque drawn on a branch of a UK clearing bank to the bank account name from which they were first received at your risk of any proceeds of the remittance which accompanied your Application Form, without interest); (d) agree that, where on your Application Form a request is made for Shares to be deposited into a CREST account: (i) the Receiving Agent, under instruction from the Company, may in its absolute discretion amend the form so that such Shares may be issued in certificated form registered in the name(s) of the holder(s) specified in your Application Form (and recognise that the Receiving Agent will so amend the form if there is any delay in satisfying the identity of the applicant or the owner of the CREST account or in receiving your remittance in cleared funds); and (ii) the Receiving Agent, the Company or Oriel may authorise your financial adviser or whoever he or she may direct to send a document of title for or credit your CREST account in respect of, the number of Shares for which your application is accepted, and/or a crossed cheque for any monies returnable, by post at your risk to your address set out on your Application Form. (e) agree, in respect of applications for Shares in certificated form (or where the Receiving Agent exercises its discretion pursuant to paragraph (d) of this paragraph 2.1 to issue Shares in certificated form), that any share certificate to which you or, in the case of joint applicants, any of the persons specified by you in your Application Form may become entitled (and any monies returnable to you) may be retained by the Receiving Agent:

101 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP (i) pending clearance of your remittance, (ii) pending investigation of any suspected breach of the warranties contained in paragraphs 2.5(a), (b), (f), (h), (m), (o) or (p) below or any other suspected breach of these Terms and Conditions of Application, or (iii) pending any verification of identity which is, or which the Receiving Agent considers may be, required for the purpose of the Money Laundering Regulations 2007 of the United Kingdom and any other applicable regulations (the ‘‘Money Laundering Regulations’’) and any other regulations applicable thereto, and any interest accruing on such retained monies shall accrue to and for the benefit of the Company; (f) agree, on the request of the Receiving Agent, to disclose promptly in writing to it such information as the Receiving Agent may request in connection with your application and authorise the Receiving Agent to disclose any information relating to your application which it may consider appropriate; (g) agree that if evidence of identity satisfactory to the Receiving Agent is not provided to the Receiving Agent within a reasonable time (in the opinion of the Receiving Agent) following a request therefor, the Receiving Agent or the Company may terminate the agreement with you to allot Shares and, in such case, the Shares which would otherwise have been allotted to you may be re allotted or sold to some other party and the lesser of your application monies or such proceeds of sale (as the case may be, with the proceeds of any gain derived from a sale accruing to the Company) will be returned by a cheque drawn on a branch of a UK clearing bank to the bank account name on which the payment accompanying the application was first drawn without interest and at your risk; (h) agree that you are not applying on behalf of a person engaged in money laundering; (i) undertake to ensure that, in the case of an application signed by someone else on your behalf, the original of the relevant power of attorney (or a complete copy certified by a solicitor or notary) is enclosed with your Application Form together with full identity documents for the person so signing; (j) undertake to pay interest at the rate described in paragraph 2.2 below if the remittance accompanying your Application Form is not honoured on first presentation; (k) authorise the Receiving Agent to procure that there be sent to you definitive certificates in respect of the number of Shares for which your application is accepted or if you have completed section 2B on your Application Form, but subject to paragraph 2.1(d) above, to deliver the number of Shares for which your application is accepted into CREST, and/or to return any monies returnable by a cheque drawn on a branch of a UK clearing bank to the bank account name from which such monies were first received without interest and at your risk; (l) confirm that you have read and complied with paragraph 2.7 below; (m) agree that all subscription cheques and payments will be processed through a bank account (the ‘‘Acceptance Account’’) in the name of ‘‘Capita Registrars Limited re Palio – Acceptance Account’’ opened by the Receiving Agent; (n) agree that your Application Form is addressed to the Company and the Receiving Agent; and (o) agree that any application may be rejected in whole or in part at the sole discretion of the Company.

2.2 Acceptance of your offer The Receiving Agent may, on behalf of the Company, accept your offer to subscribe (if your application is received, valid (or treated as valid), processed and not rejected) by notifying the UK Listing Authority through an RIS of the basis of allocation (in which case the acceptance will be on that basis). The basis of allocation will be determined by Oriel in consultation with the Company and the Receiving Agent. The right is reserved notwithstanding the basis as so determined to reject in whole or in part and/or scale back any application. The right is reserved to treat as valid any application not complying fully with these Terms and Conditions of Application or not in all respects completed or delivered in accordance with the instructions accompanying the Application Form. In particular, but without limitation, the Company may accept an application made otherwise than by completion

102 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP of an Application Form where you have agreed with the Company in some other manner to apply in accordance with these Terms and Conditions of Application. The Receiving Agent will present all cheques and banker’s drafts for payment on receipt and will retain documents of title and surplus monies pending clearance of successful applicants’ payment. The Receiving Agent may, as agent of the Company, require you to pay interest or its other resulting costs (or both) if the payment accompanying your application is not honoured on ﬁrst presentation. If you are required to pay interest you will be obliged to pay the amount determined by the Receiving Agent to be the interest on the amount of the payment from the date on which all payments in cleared funds are due to be received until the date of receipt of cleared funds. The rate of interest will be the then published bank base rate of a clearing bank selected by the Receiving Agent plus 4 per cent. per annum. The right is also reserved to reject in whole or in part, or to scale down or limit, any application. Payments must be made by cheque or banker’s draft in pounds sterling drawn on a branch in the United Kingdom of a bank or building society that is either a member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or that has arranged for its cheques or bankers’ drafts to be cleared through the facilities provided for members of either of those companies. Such cheques or bankers’ drafts must bear the appropriate sort code in the top right hand corner. Cheques, which must be drawn on the personal account of an individual applicant where they have sole or joint title to the funds, should be made payable to ‘‘Capita Registrars Limited re Palio – Acceptance Account’’ and crossed ‘‘A/C payee only’’. Third party cheques may not be accepted with the exception of building society cheques or bankers’ drafts where the building society or bank has conﬁrmed the name of the account holder by stamping/ endorsing the cheque or banker’s draft to that effect. The account name should be the same as that shown on the Application Form.

2.3 Conditions The contracts created by the acceptance of applications (in whole or in part) under the Offer will be conditional upon: (a) Admission occurring by 0800 hours on 3 December 2012 (or such later time or date as the Company and Oriel may agree (not being later than 13 December 2012)); and (b) the Placing and Offer Agreement becoming otherwise unconditional in all respects, and not being terminated in accordance with its terms before Admission. You will not be entitled to exercise any remedy of rescission for innocent misrepresentation (including pre contractual representations) at any time after acceptance. This does not affect any other right you may have. The Offer will not be subject to scaling back in favour of the Placing. If the Minimum Net Proceeds are not raised and the Issue does not proceed, subscription monies received will be returned without interest at the risk of the applicant.

2.4 Return of application monies Where application monies have been banked and/or received, if any application is not accepted in whole, or is accepted in part only, or if any contract created by acceptance does not become unconditional, the application monies or, as the case may be, the balance of the amount paid on application will be returned without interest by returning your cheque, or by crossed cheque in your favour, by post at the risk of the person(s) entitled thereto, without interest. In the meantime, application monies will be retained by the Receiving Agent in a separate account.

2.5 Warranties By completing an Application Form, you: (a) undertake and warrant that, if you sign the Application Form on behalf of somebody else or on behalf of a corporation, you have due authority to do so on behalf of that other person and that such other person will be bound accordingly and will be deemed also to have given the conﬁrmations, warranties and undertakings contained in these Terms and Conditions of Application and undertake to enclose your power of attorney or other authority or a complete copy thereof duly certiﬁed by a solicitor or notary; (b) warrant, if the laws of any territory or jurisdiction outside the UK are applicable to your application, that you have complied with all such laws, obtained all governmental and other consents which may be required, complied with all requisite formalities and paid any issue,

103 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP transfer or other taxes due in connection with your application in any territory and that you have not taken any action or omitted to take any action which will result in the Company or the Receiving Agent or any of their respective officers, agents or employees acting in breach of the regulatory or legal requirements, directly or indirectly, of any territory or jurisdiction outside of the UK in connection with the Offer in respect of your application; (c) confirm that (save for advice received from your financial adviser (if any)) in making an application you are not relying on any information or representations in relation to the Company other than those contained in the Prospectus (on the basis of which alone your application is made) and accordingly you agree that no person responsible solely or jointly for the Prospectus or any part thereof shall have any liability for any such other information or representation; (d) agree that, having had the opportunity to read the Prospectus, you shall be deemed to have had notice of all information and representations contained therein; (e) acknowledge that no person is authorised in connection with the Offer to give any information or make any representation other than as contained in the Prospectus and, if given or made, any information or representation must not be relied upon as having been authorised by the Company, Oriel or the Receiving Agent; (f) warrant that you are not under the age of 18 on the date of your application; (g) agree that all documents and monies sent by post to, by or on behalf of the Company or the Receiving Agent, will be sent at your risk and, in the case of documents and returned application cheques and payments to be sent to you, may be sent to you at your address (or, in the case of joint holders, the address of the first named holder) as set out in your Application Form; (h) confirm that you have reviewed the restrictions contained in paragraph 2.7 below and warrant, to the extent relevant, that you (and any person on whose behalf you apply) comply or complied with the provisions therein. (i) agree that, in respect of those Shares for which your Application Form has been received and processed and not rejected, acceptance of your Application Form shall be constituted by the Company instructing the Registrar to enter your name on the Register; (j) agree that all applications, acceptances of applications and contracts resulting therefrom under the Offer shall be governed by and construed in accordance with the laws of England and Wales and that you submit to the jurisdiction of the courts of Englisd and Wales and agree that nothing shall limit the right of the Company to bring any action, suit or proceedings arising out of or in connection with any such applications, acceptances of applications and contracts in any other manner permitted by law or in any court of competent jurisdiction; (k) irrevocably authorise the Company, Oriel or the Receiving Agent or any other person authorised by any of them, as your agent, to do all things necessary to effect registration of any Shares subscribed by or issued to you into your name and authorise any representatives of the Company and/or Oriel and/or the Receiving Agent to execute any documents required therefore and to enter your name on the Company’s register of members (the ‘‘Register’’); (l) agree to provide the Company with any information which it or Oriel may request in connection with your application or to comply with any other relevant legislation (as the same may be amended from time to time) including without limitation satisfactory evidence of identity to ensure compliance with the Money Laundering Regulations; (m) warrant that, in connection with your application, you have observed the laws of all requisite territories, obtained any requisite governmental or other consents, complied with all requisite formalities and paid any issue, transfer or other taxes due in connection with your application in any territory and that you have not taken any action which will or may result in the Company, Oriel or the Receiving Agent acting in breach of the regulatory or legal requirements of any territory in connection with the Offer or your application; (n) agree that Oriel and the Receiving Agent are acting for the Company in connection with the Offer and for no one else and that they will not treat you as their customer by virtue of such application being accepted or owe you any duties or responsibilities concerning the price of the Shares or concerning the suitability of the Shares for you or be responsible to you for the protections afforded to their customers;

104 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP (o) warrant that you are not subscribing for the Shares using a loan which would not have been given to you or any associate or not given to you on such favourable terms, if you had not been proposing to subscribe for the Shares; (p) acknowledge and make the representations, warranties, acknowledgements and agreements set out in this Prospectus, including those set out in the ‘‘Purchase and transfer restrictions’’ section, including (without limitation) that you are not a U.S. Person, are not located within the United States and are not acquiring the Shares for the account or beneﬁt of a U.S. Person. Where you are subscribing for Shares for one or more managed, discretionary or advisory accounts, you represent and warrant that you are authorised in writing for each such account: (i) to subscribe for the Shares for each such account; (ii) to make on each such account’s behalf the representations, warranties, acknowledgements and agreements set out in this Prospectus; and (iii) to receive on behalf of each such account any documentation relating to the Offer in the form provided by the Company and/or Oriel. You agree that the provision of this paragraph shall survive any resale of the Shares by or on behalf of any such account; (q) warrant that the information contained in the Application Form is true and accurate; and (r) agree that if you request that Shares are issued to you on a date other than Admission and such Shares are not issued on such date that the Company and its agents and Directors will have no liability to you arising from the issue of such Shares on a different date.

2.6 Money Laundering You agree that, in order to ensure compliance with the Money Laundering Regulations, the Receiving Agent may at its absolute discretion require verification of identity of you as the applicant lodging an Application Form and further may request from you and you will assist in providing identification of: (a) the owner(s) and/or controller(s) (the ‘‘payor’’) of any bank account not in the name of the holder(s) on which a payment is drawn by way of banker’s draft or cheque; or (b) where it appears to the Receiving Agent that a holder or the payor is acting on behalf of some other person or persons, such person or persons. Failure to provide the necessary evidence of identity may result in your application being rejected or delays in the despatch of documents. Without prejudice to the generality of this paragraph 2.6, verification of the identity of holders and payors will be required if the value of the Shares applied for, whether in one or more applications considered to be connected, exceeds c15,000 (approximately £12,000). If, in such circumstances, you use a building society cheque or banker’s draft you should ensure that the bank or building society issuing the payment enters the name, address and account number of the person whose account is being debited on the reverse of the cheque, banker’s draft and adds its stamp. If, in such circumstances, the person whose account is being debited is not a holder you will be required to provide for both the holder and payer an original or copy of that person’s passport or driving licence certified by a solicitor and an original or certified copy of two of the following documents, no more than 3 months old, a gas, electricity, water or telephone (not mobile) bill, a recent bank statement or a council tax bill, in their name and showing their current address (which originals will be returned by post at the addressee’s risk) together with a signed declaration as to the relationship between the payor and you the holder. For the purpose of the Money Laundering Regulations, a person making an application for Shares will not be considered as forming a business relationship with either the Company or with the Receiving Agent but will be considered as effecting a one off transaction with either the Company or with the Receiving Agent. The person(s) submitting an application for Shares will ordinarily be considered to be acting as principal in the transaction unless the Receiving Agent determines otherwise, whereupon you may be required to provide the necessary evidence of identity of the underlying beneficial owner(s). If the amount being subscribed exceeds c15,000 (approximately £12,000) you should endeavour to have the declaration contained in section 5 of the Application Form signed by an appropriate firm as described in that section. If you cannot have that declaration signed and the amount being subscribed exceeds c15,000 (approximately £12,000) then you must provide with the Application Form the identity documentation detailed in section 7 of the Application Form for each underlying beneficial owner.

105 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP 2.7 Non-United Kingdom investors If you receive a copy of the Prospectus or an Application Form in any territory other than the UK you may not treat it as constituting an invitation or offer to you, nor should you, in any event, use an Application Form unless, in the relevant territory, such an invitation or offer could lawfully be made to you or an Application Form could lawfully be used without contravention of any registration or other legal requirements. In particular, the offer and sale of the Shares has not been and will not be registered under the applicable securities laws of the United States, Canada, Japan or South Africa, and the Shares may not be offered or sold within the United States, Canada, Japan or South Africa or to any U.S. Person, or to any national, resident or citizen of Canada, Japan or South Africa. It is your responsibility, if you are outside the UK and wish to make an application for Shares under the Offer, to satisfy yourself as to full observance of the laws of any relevant territory or jurisdiction in connection with your application, including obtaining any requisite governmental or other consents, observing any other formalities requiring to be observed in such territory and paying any issue, transfer or other taxes required to be paid in such territory. If you subscribe for Shares you will, unless the Company and the Registrar agree otherwise in writing, be deemed to represent and warrant to the Company that you are not a national, resident or citizen of Canada, Japan, South Africa or a corporation, partnership or other entity organised under the laws of Canada, Japan or South Africa (or any political subdivision thereof) and that you are not subscribing for such Shares for the account of any national, resident or citizen of Canada, Japan, or South Africa and will not offer, sell, renounce, transfer or deliver, directly or indirectly, any of the Shares in or into Canada, Japan, or South Africa or to any national, resident or citizen of Canada, Japan or South Africa. No application will be accepted if it shows the applicant, payor or a holder having an address in Canada, Japan, or South Africa.

2.8 The Data Protection Act Pursuant to The Data Protection Act 1998 (the ‘‘DP Act’’) the Company and/or the Registrar, may hold personal data (as defined in the DP Act) relating to past and present shareholders. Such personal data held is used by the Registrar to maintain the Register and mailing lists and this may include sharing such data with third parties in one or more of the countries mentioned below when: (a) effecting the payment of dividends and other distributions to Shareholders; and (b) filing returns of Shareholders and their respective transactions in Shares with statutory bodies and regulatory authorities. The countries referred to above include, but need not be limited to, those in the European Economic Area or the European Union and any of their respective dependent territories overseas, Argentina, Australia, Brazil, Canada, Hong Kong, Hungary, Japan, New Zealand, Singapore, South Africa, Switzerland and the United States. Personal data may be retained on record for a period exceeding six years after it is no longer used. By becoming registered as a holder of Shares a person becomes a data subject (as defined in the DP Act) and is deemed to have consented to the processing by the Company or its Registrar of any personal data relating to them in the manner described above.

2.9 Miscellaneous To the extent permitted by law, all representations, warranties and conditions, express or implied and whether statutory or otherwise (including, without limitation, pre contractual representations but excluding any fraudulent representations), are expressly excluded in relation to the Shares and the Offer. The rights and remedies of the Company, Oriel and the Receiving Agent under these Terms and Conditions of Application are in addition to any rights and remedies which would otherwise be available to any of them and the exercise or partial exercise of one will not prevent the exercise of others. The Company reserves the right to extend the closing time and/or date of the Offer from 11.00 a.m. on 26 November 2012. In that event, the new closing time and/or date will be notiﬁed through an IRS.

106 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP The Company may terminate the Offer in its absolute discretion at any time prior to Admission. If such right is exercised, the Offer will lapse and any monies will be returned as indicated without interest. You agree that Oriel and the Receiving Agent are acting for the Company in connection with the Issue and no one else and that none of Oriel and the Receiving Agent will treat you as its customer by virtue of such application being accepted or owe you any duties concerning the price of the Shares or concerning the suitability of the Shares for you or otherwise in relation to the Issue or for providing the protections afforded to their customers. Save where the context requires otherwise, terms used in these Terms and Conditions of Application bear the same meaning as where used elsewhere in the Prospectus.

107 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP PART IX: TERMS AND CONDITIONS OF THE PLACING

1. Introduction Each Placee which conﬁrms its agreement (whether orally or in writing) to Oriel to subscribe for Shares under the Placing will be bound by these terms and conditions and will be deemed to have accepted them. The Company and/or Oriel may require any Placee to agree to such further terms and/or conditions and/or give such additional warranties and/or representations as it (in its absolute discretion) sees ﬁt and/or may require any such Placee to execute a separate placing letter (a ‘‘Placing Letter’’).

2. Agreement to Subscribe for Shares Conditional on: (i) Admission occurring and becoming effective by 0800 hours (London time) on or prior to 3 December 2012 (or such later time and/or date, not being later than 13 December 2012, as the Company, the Investment Adviser and Oriel may agree); (ii) the Placing and Offer Agreement becoming otherwise unconditional in all respects and not having been terminated on or before 3 December 2012 (or such later time and/or date, not being later than 13 December 2012 as the Company, the Investment Adviser and Oriel may agree); and (iii) Oriel conﬁrming to the Placees their allocation of Shares, a Placee agrees to become a member of the Company and agrees to subscribe for those Shares allocated to it by Oriel at the Issue Price. To the fullest extent permitted by law, each Placee acknowledges and agrees that it will not be entitled to exercise any remedy of rescission at any time. This does not affect any other rights the Placee may have.

3. Payment for Shares Each Placee must pay the Issue Price for the Shares issued to the Placee in the manner and by the time directed by Oriel. If any Placee fails to pay as so directed and/or by the time required, the relevant Placee’s application for Shares shall be rejected.

4. Representations and Warranties By agreeing to subscribe for Shares, each Placee which enters into a commitment to subscribe for Shares will (for itself and any person(s) procured by it to subscribe for Shares and any nominee(s) for any such person(s)) be deemed to agree, represent and warrant to each of the Company, the Investment Manager, the Investment Adviser, the Registrar and Oriel that: (a) in agreeing to subscribe for Shares under the Placing, it is relying solely on this Prospectus and any supplementary prospectus issued by the Company and not on any other information given, or representation or statement made at any time, by any person concerning the Company or the Placing. It agrees that none of the Company, the Investment Manager, the Investment Adviser, Oriel or the Registrar, nor any of their respective officers, agents or employees, will have any liability for any other information or representation. It irrevocably and unconditionally waives any rights it may have in respect of any other information or representation; (b) the contents of this Prospectus is exclusively the responsibility of the Company and its Directors and apart from the liabilities and responsibilities, if any, which may be imposed on Oriel under any regulatory regime, none of Oriel nor any person acting on its behalf nor any of its or their affiliates, make any representation, express or implied, nor accepts any responsibility whatsoever for the contents of this Prospectus nor for any other statement made or purported to be made by them or on its or their behalf in connection with the Company, the Shares or the Issue; (c) if the laws of any territory or jurisdiction outside the United Kingdom are applicable to its agreement to subscribe for Shares under the Placing, it warrants that it has complied with all such laws, obtained all governmental and other consents which may be required, complied with all requisite formalities and paid any issue, transfer or other taxes due in connection with its placing commitment in any territory and that it has not taken any action or omitted to take any action which will result in the Company, the Investment Manager, the Investment Adviser, Oriel, the Registrar or any of their respective officers, agents or employees acting in breach of the regulatory or legal requirements, directly or indirectly, of any territory or jurisdiction outside the United Kingdom in connection with the Placing; (d) it does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the Shares and it is not acting on a non-discretionary basis for any such person;

108 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP (e) it agrees that, having had the opportunity to read this Prospectus, it shall be deemed to have had notice of all information and representations contained in this Prospectus, that it is acquiring Shares solely on the basis of this Prospectus and no other information and that in accepting a participation in the Placing it has had access to all information it believes necessary or appropriate in connection with its decision to subscribe for Shares; (f) it acknowledges that no person is authorised in connection with the Placing to give any information or make any representation other than as contained in this Prospectus and, if given or made, any information or representation must not be relied upon as having been authorised by Oriel, the Company, the Investment Manager or the Investment Adviser; (g) it is not applying as, nor is it applying as nominee or agent for, a person who is or may be liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at any of the increased rates referred to in section 67, 70, 93 or 96 (depository receipts and clearance services) of the Finance Act 1986; (h) it accepts that none of the Shares have been or will be registered under the laws of the United States, Canada, Japan or South Africa. Accordingly, the Shares may not be offered, sold, issued or delivered, directly or indirectly, within the United States, Canada, Japan or South Africa unless an exemption from any registration requirement is available; (i) if it is receiving the offer in circumstances under which the laws or regulations of a jurisdiction other than the United Kingdom would apply, that it is a person to whom the Shares may be lawfully offered under that other jurisdiction’s laws and regulations; (j) if it is a resident in the EEA (other than the United Kingdom), it is a qualified investor within the meaning of the law in the Relevant Member State implementing Article 2(1)(e)(i), (ii) or (iii) of Prospectus Directive; (k) if it is outside the United Kingdom, neither this Prospectus nor any other offering, marketing or other material in connection with the Placing constitutes an invitation, offer or promotion to, or arrangement with, it or any person whom it is procuring to subscribe for Shares pursuant to the Placing unless, in the relevant territory, such offer, invitation or other course of conduct could lawfully be made to it or such person and such documents or materials could lawfully be provided to it or such person and Shares could lawfully be distributed to and subscribed and held by it or such person without compliance with any unfulfilled approval, registration or other regulatory or legal requirements; (l) it acknowledges that none of Oriel and its affiliates nor any person acting on their behalf is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing or providing any advice in relation to the Placing and participation in the Placing is on the basis that it is not and will not be a client of Oriel or any of its affiliates and that Oriel and its affiliates do not have any duties or responsibilities to it for providing protection afforded to its or their respective clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertaking or indemnities contained in these terms and conditions or in any Placing Letter, where relevant; (m) it acknowledges and makes the representations, warranties, acknowledgements and agreements set out in this Prospectus, including those set out in the ‘‘Purchase and transfer restrictions’’ section, including (without limitation) that it is not a U.S. Person, it is not located within the United States and is not acquiring the Shares for the account or benefit of a U.S. Person. Where it is subscribing for Shares for one or more managed, discretionary or advisory accounts, it is authorised in writing for each such account: (i) to subscribe for the Shares for each such account; (ii) to make on each such account’s behalf the representations, warranties, acknowledgements and agreements set out in this Prospectus or in any Placing Letter, where relevant; and (iii) to receive on behalf of each such account any documentation relating to the Placing in the form provided by the Company and/or Oriel. It agrees that the provision of this paragraph shall survive any resale of the Shares by or on behalf of any such account; (n) it irrevocably appoints any director of the Company and any director of Oriel to be its agent and on its behalf (without any obligation or duty to do so), to sign, execute and deliver any documents and do all acts, matters and things as may be necessary for, or incidental to, its subscription for all or any of the Shares for which it has given a commitment under the Placing, in the event of its own failure to do so;

109 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP (o) it accepts that if the Placing does not proceed or the conditions to the Placing and Offer Agreement are not satisfied or the Shares for which valid application are received and accepted are not admitted to trading on the SFM and to trading and listing on the Official List of the CISX for any reason whatsoever then none of Oriel, the Company, the Investment Manager, the Investment Adviser or any of their respective affiliates, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person; (p) in connection with its participation in the Placing it has observed all relevant legislation and regulations, in particular (but without limitation) those relating to money laundering and countering terrorist financing and that its placing commitment is only made on the basis that it accepts full responsibility for any requirement to identify and verify the identity of its clients and other persons in respect of whom it has applied. In addition, it warrants that it is a person: (i) subject to the Money Laundering Regulations 2007 in force in the United Kingdom; or (ii) subject to the Money Laundering Directive (2005/60/EC of the European Parliament and of the EC Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing); or (iii) subject to the Guernsey AML Requirements; or (iv) acting in the course of a business in relation to which an overseas regulatory authority exercises regulatory functions and is based or incorporated in, or formed under the law of, a county in which there are in force provisions at least equivalent to those required by the Money Laundering Directive; (q) due to anti money laundering and the countering of terrorist financing requirements, Oriel and/ or the Company may require proof of identity of the Placee and related parties and verification of the source of the payment before the placing commitment can be processed and that, in the event of delay or failure by the Placee to produce any information required for verification purposes, Oriel and/or the Company may refuse to accept the placing commitment and the subscription moneys relating thereto. It holds harmless and will indemnify Oriel and the Company against any liability, loss or cost ensuing due to the failure to process the placing commitment, if such information as has been required has not been provided by it or has not been provided timeously; (r) any person in Guernsey involved in the business of the Company who has a suspicion or belief that any other person (including the Company or any person subscribing for Shares) is involved in money laundering activities, is under an obligation to report such suspicion to the Financial Intelligence Service pursuant to The Terrorism and Crime (Bailiwick of Guernsey) Law, 2002 (as amended) and The Disclosure (Bailiwick of Guernsey) Law 2007. Similar disclosures may be required under other legislation; (s) Oriel and the Company (and any agent on their behalf) are entitled to exercise any of their rights under the Placing and Offer Agreement or any other right in their absolute discretion without any liability whatsoever to them (or any agent acting on their behalf); (t) the representations, undertakings and warranties contained in this Prospectus or in any Placing Letter, where relevant, are irrevocable. It acknowledges that Oriel and the Company and their respective affiliates will rely upon the truth and accuracy of the foregoing representations and warranties and it agrees that if any of the representations or warranties made or deemed to have been made by its subscription of the Shares are no longer accurate, it shall promptly notify Oriel and the Company; (u) where it or any person acting on behalf of it is dealing with Oriel, any money held in an account with Oriel on behalf of it and/or any person acting on behalf of it will not be treated as client money within the meaning of the relevant rules and regulations of the Financial Services Authority or the GFSC which therefore will not require Oriel to segregate such money, as that money will be held by Oriel under a banking relationship and not as trustee; (v) any of its clients, whether or not identified to Oriel or any of its affiliates or agents, will remain its sole responsibility and will not become clients of Oriel or any of its affiliates or agents for the purposes of the rules of the Financial Services Authority or the GFSC or for the purposes of any other statutory or regulatory provision; (w) it accepts that the allocation of Shares shall be determined by Oriel and the Company in their absolute discretion and that such persons may scale down any placing commitments for this purpose on such basis as they may determine; and

110 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP (x) time shall be of the essence as regards its obligations to settle payment for the Shares and to comply with its other obligations under the Placing.

5. Supply and Disclosure of Information If Oriel, the Registrar or the Company or any of their agents request any information in connection with a Placee’s agreement to subscribe for Shares under the Placing or to comply with any relevant legislation, such Placee must promptly disclose it to them.

6. The Data Protection (Bailiwick of Guernsey) Law 2001 (a) Pursuant to The Data Protection (Bailiwick of Guernsey) Law 2001, (the ‘‘DP Law’’) the Company, Oriel, the Registrar and/or the Administrator may hold personal data (as defined in the DP Law) relating to past and present Shareholders. (b) Such personal data held is used by those parties in relation to the Placing and to maintain a register of the Shareholders and mailing lists and this may include sharing such data with third parties in one or more of the countries mentioned below when (a) effecting the payment of dividends and redemption proceeds to Shareholders (in each case, where applicable) and, if applicable, the payment of commissions to third parties and (b) filing returns of Shareholders and their respective transactions in shares with statutory bodies and regulatory authorities. Personal data may be retained on record for a period exceeding six years after it is no longer used. (c) The countries referred to above include, but need not be limited to, those in the European Economic Area or the European Union and any of their respective dependent territories overseas, Argentina, Australia, Brazil, Canada, Hong Kong, Hungary, Japan, New Zealand, Singapore, South Africa, Switzerland and the United States. (d) By becoming registered as a holder of Shares in the Company a person becomes a data subject (as defined in the DP Law) and is deemed to have consented to the processing by the Company, the Administrator, the Registrar or Oriel of any personal data relating to them in the manner described above.

7. Miscellaneous (a) The rights and remedies of Oriel, the Company, the Registrar, the Administrator, the Investment Manager and the Investment Adviser under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others. (b) On the acceptance of their placing commitment, if a Placee is a discretionary fund manager, that Placee may be asked to disclose in writing or orally the jurisdiction in which its funds are managed or owned. All documents provided in connection with the Placing will be sent at the Placee’s risk. They may be returned by post to such Placee at the address notiﬁed by such Placee. (c) Each Placee agrees to be bound by the Articles (as amended from time to time) once the Shares, which the Placee has agreed to subscribe for pursuant to the Placing, have been acquired by the Placee. The contract to subscribe for Shares under the Placing and the appointments and authorities mentioned in this Prospectus will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive beneﬁt of Oriel, the Company, the Registrar, the Administrator and the Investment Manager, each Placee irrevocably submits to the jurisdiction of the courts of England and Wales and waives any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum. This does not prevent an action being taken against any Placee in any other jurisdiction. (d) In the case of a joint agreement to subscribe for Shares under the Placing, references to a ‘‘Placee’’ in these terms and conditions are to each of the Placees who are a party to that joint agreement and their liability is joint and several. (e) Oriel and the Company expressly reserve the right to modify the Placing (including, without limitation, its timetable and settlement) at any time before allocations are determined.

111 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP (f) The Placing is subject to the satisfaction of the conditions contained in the Placing and Offer Agreement and the Placing and Offer Agreement not having been terminated. Further details of the terms of the Placing and Offer Agreement are contained in Part VII of this Prospectus.

112 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP PART X: DEFINITIONS

The following definitions apply in this Prospectus unless the context otherwise requires: ‘‘Administration and Custody means the administration and custody agreement between the Agreement’’ Company and the Administrator, a summary of which is set out in paragraph 6.5 of Part VII of this Prospectus ‘‘Administrator’’ means BNP Paribas Fund Services (Guernsey) Limited and/or such other person or persons from time to time appointed by the Company for the purposes of the Rules; the Administrator is the designated manager of the Company ‘‘Admission’’ means admission to trading on the London Stock Exchange’s Specialist Fund Market of the Shares becoming effective in accordance with the LSE Admission Standards and admission of the Shares to listing and trading on the Official List of the CISX ‘‘Affiliate’’ means an affiliate of, or person affiliated with, a specified person; a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified ‘‘AIC’’ means the Association of Investment Companies ‘‘AIC Code’’ Means the AIC’s Code of Corporate Governance Guide for Investment Companies, as amended from time to time ‘‘AIFM Directive’’ means the EU Directive on Alternative Investment Fund Managers ‘‘Application Form’’ means the application from under the Offer set out in Appendix 1 to this Prospectus ‘‘Articles’’ means the articles of incorporation of the Company ‘‘Auditor’’ means KPMG Channel Islands Limited ‘‘B Shares’’ means redeemable ordinary shares of no par value in the capital of the Company issued as ‘‘B Shares’’ of such classes (denominated in such currencies) as the Directors may determine in accordance with the Articles, and having such rights and being subject to such restrictions as contained in the Articles ‘‘BDO’’ means BDO LLP ‘‘Bonus Issue’’ means an issue of B Shares to the existing Shareholders pro rata to their respective holdings, using amounts standing to the credit of the Bonus Issue Pool to pay up the B Shares ‘‘Bonus Issue Pool’’ means a reserve established by the Board to pay up the B Shares issued by the Company from time to time ‘‘Business Day’’ means a day on which the London Stock Exchange and banks in Guernsey are normally open for business ‘‘C Shares’’ means redeemable ordinary shares of no par value in the capital of the Company issued as ‘‘C Shares’’ of such classes (denominated in such currencies) as the Directors may determine in accordance with the Articles, and having such rights and being subject to such restrictions as contained in the Articles and which will convert into Shares in accordance with the terms of the Articles ‘‘Capita Registrars’’ means a trading name of Capita Registrars Limited ‘‘Capital Returns’’ means returns comprising cash arising from portfolio company loan repayments or refinancing, together with the disposal of Junior Equity positions and/or crystallisation of warrants and, if applicable, any ongoing loan amortisation ‘‘CBI’’ means the Confederation of British Industry certificated’’ or ‘‘certificated form’’ means not in uncertificated form ‘‘CISX’’ means the Channel Islands Stock Exchange, LBG

113 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP ‘‘CISX Listing Rules’’ means the listing rules of the CISX ‘‘CISX Sponsor’’ means Mourant Ozannes ‘‘CISX Sponsor Agreement’’ means the agreement between the Company and the CISX Sponsor, a summary of which is set out in paragraph 6.8 of Part VII of this Prospectus ‘‘CMBOR’’ means The Centre for Management Buy-out Research ‘‘collective investment schemes’’ means as defined for the purposes of the Collective Investment Schemes Sourcebook forming part of the Handbook of Rules and Guidance published by the FSA ‘‘Commission’’ or ‘‘GFSC’’ means the Guernsey Financial Services Commission ‘‘Companies Laws’’ means The Companies (Guernsey) Law, 2008, as amended ‘‘Company’’ means Palio UK Mid-Market Debt Fund Limited, a closed ended investment company incorporated in Guernsey under the Companies Laws on 3 October 2012 with registered number 55691 and/or, where the context requires, the Investment Partnership and any other direct or indirect subsidiaries or holding vehicles of the Company ‘‘Credit Committee’’ means the credit committee of the Investment Adviser, as described in Part IV of this Prospectus ‘‘CREST Guernsey Requirements’’ means Rule 8 and such other rules and requirements of Euroclear UK & Ireland as may be applicable to issuers as from time to time specified in the CREST Manual ‘‘CREST Manual’’ means the compendium of documents entitled CREST Manual issued by Euroclear UK & Ireland from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, CREST Rules, CCSS Operations Manual and the CREST Glossary of Terms ‘‘CREST Regulations’’ means the Uncertificated Securities Regulations 2001 (SI No. 2001/ 3755) and the CREST Guernsey Requirements ‘‘CREST’’ means the facilities and procedures for the time being of the relevant system of which Euroclear UK and Ireland Limited has been approved as operator pursuant to the Uncertificated Securities Regulations 2001 (SI 2001 No. 2001/3755) of the United Kingdom ‘‘Custodian’’ means BNP Paribas Fund Services (Guernsey) Limited and/or such other person or persons from time to time appointed by the Company for the purposes of the Rules ‘‘Default Shares’’ has the meaning given in paragraph 5.7.2 of Part VII of this Prospectus ‘‘Direction Notice’’ has the meaning given in paragraph 5.7.2 of Part VII of this Prospectus ‘‘Directors’’ or ‘‘Board’’ means the directors of the Company ‘‘Disclosure Notice’’ has the meaning given in paragraph 5.7.1 of Part VII of this Prospectus ‘‘Disclosure Rules and means the disclosure rules and transparency rules made by the FSA Transparency Rules’’ under Part VI of the FSMA ‘‘EBIT’’ means earnings before interest and taxes ‘‘EBITDA’’ means earnings before interest, taxes, depreciation and amortisation ‘‘EEA’’ means the European Economic Area

114 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP ‘‘ERISA’’ means the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time, and the applicable regulations thereunder ‘‘EU’’ means the European Union ‘‘Euro’’ or ‘‘e’’ means the lawful currency of the EU ‘‘Euroclear’’ means Euroclear UK & Ireland Limited ‘‘Finance Act’’ means the UK Finance Act 2009, as amended ‘‘Financial Services Authority’’ or means the Financial Services Authority of the United Kingdom ‘‘FSA’’ ‘‘FSMA’’ means the Financial Services and Markets Act 2000, as amended ‘‘GDP’’ means Gross Domestic Product ‘‘Gross Issue Proceeds’’ means the aggregate value of the Shares issued under the Issue at the Issue Price ‘‘Group’’ means the Company, the Investment Partnership and any other direct or indirect subsidiaries or holding vehicles of the Company incorporated as at the date of this Prospectus ‘‘Guernsey AML Requirements’’ means The Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 (as amended), ordinances, rules and regulations made thereunder, and the GFSC’s Handbook for Financial Services Businesses on Countering Financial Crime and Terrorist Financing (as amended, supplemented and/or replaced from time to time) ‘‘HSL’’ means Hassall & Slaughter Ltd ‘‘IFRS’’ means International Financial Reporting Standards ‘‘Investment Adviser’’ means Palio Capital Partners LLP ‘‘Investment Advisory Agreement’’ means the investment advisory agreement between Company, the Company in its capacity as general partner of the Investment Partnership, the Investment Manager and the Investment Adviser, a summary of which is set out in paragraph 6.4 of Part VII of this Prospectus ‘‘Investment Management means the investment management agreement between the Agreement’’ Company, the Company in its capacity as general partner of the Investment Partnership and the Investment Manager, a summary of which is set out in paragraph 6.3 of Part VII of this Prospectus ‘‘Investment Manager’’ means Palio Capital Management Guernsey Limited ‘‘Investment Partnership’’ means Palio Holdings Guernsey LP ‘‘Investment Period’’ means the period of approximately 18 months following Admission ‘‘IRR’’ means internal rate of return, calculated as the annualised effective compounded return rate earned on the invested capital ‘‘ISA’’ means an individual savings account ‘‘ISIN’’ means International Securities Identiﬁcation Number ‘‘Issue Price’’ means £1.00 per Share ‘‘Issue’’ means the Placing and Offer ‘‘Junior Equity’’ means the ordinary issued share capital in a company that, in an insolvency situation, ranks at least pari passu with the equity of the PE sponsor of the relevant transaction and ahead of the equity of the management team

115 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP ‘‘Limited Partnership Agreement’’ means the limited partnership agreement between the Company (in its capacity as general partner of the Investment Partnership) and the Special Limited Partner, a summary of which is set out in paragraph 6.2 of this Prospectus ‘‘LIBOR’’ means the London Interbank Offered Rate ‘‘LMM’’ means lower mid-market (enterprise value £10 million to £100 million) in the UK ‘‘London Stock Exchange’’ or means the London Stock Exchange plc ‘‘LSE’’ ‘‘LSE Admission Standards’’ means the rules issued by the London Stock Exchange in relation to the admission to trading of, and continuing requirements for, securities admitted to the SFM ‘‘Market Abuse Directive’’ means Directive 2003/6/EC of the European Parliament and of the Council on insider dealing and market manipulation (market abuse) ‘‘MBI’’ management buy-in ‘‘MBO’’ management buy-out ‘‘Memorandum’’ means the memorandum of incorporation of the Company ‘‘Minimum Net Proceeds’’ means £75,000,000 (or such lesser amount as the Company and Oriel may determine) ‘‘Net Asset Value’’ or ‘‘NAV’’ means the value of the assets of the Group less its liabilities (including accrued but unpaid fees) determined by the Directors in their absolute discretion in accordance with the accounting principles adopted by the Directors ‘‘Net Asset Value per Share’’ or means the Net Asset Value of the Company divided by the number ‘‘NAV per Share’’ of Shares in issue at the relevant time ‘‘Net Issue Proceeds’’ means the Gross Issue Proceeds less applicable fees and expenses of the Issue ‘‘Non-Qualified Holder’’ any person whose holding or beneficial ownership of Shares (i) may result in the Company’s assets being deemed ‘‘plan assets’’ for the purpose of ERISA or the US Tax Code or may result in a Plan Investor holding or beneficially owning Shares; (ii) may cause the Company to be required to register as an ‘‘investment company’’ under the US Investment Company Act (including because the holder of the shares is not a ‘‘qualified purchaser’’ as defined in the US Investment Company Act) or to lose an exemption or a status thereunder to which it might otherwise be entitled; (iii) may cause the Company to have to register under the US Exchange Act or any similar legislation; (iv) may cause the Company not to be considered a ‘‘Foreign Private Issuer’’ as such term is defined in Rule 3b-4(c) under the US Exchange Act; (v) may result in a person holding Shares in violation of the selling or transfer restrictions put forth in any prospectus published by the Company, from time to time; or (vi) may cause the Company to be a ‘‘controlled foreign corporation’’ for the purposes of the US Tax Code. ‘‘Offer’’ means the offer for subscription of Shares at the Issue Price pursuant to the terms of this Prospectus ‘‘Oriel’’ means Oriel Securities Limited ‘‘PE’’ means private equity ‘‘Placee’’ means a person subscribing for Shares under the Placing ‘‘Placing’’ means the placing of Shares at the Issue Price as described in this Prospectus

116 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP ‘‘Placing and Offer Agreement’’ means the conditional agreement between the Company, the Directors, the Investment Adviser and Oriel, a summary of which is set out in paragraph 6.1 of Part VII of this Prospectus ‘‘Portfolio’’ means at any time, the portfolio of assets and investments in which the funds of the Company are invested (including cash) ‘‘Prospectus Directive’’ means Directive 2003/71/EC of the European Parliament and Council on the Prospectus to be offered when transferable securities are offered to the public or admitted to trading ‘‘Prospectus Rules’’ means the Prospectus rules made by the UK Listing Authority under section 73(A) of the FSMA ‘‘Receiving Agent’’ means Capita Registrars ‘‘Receiving Agent Agreement’’ means the receiving agent agreement between the Company and the Receiving Agent, a summary of which is set out in paragraph 6.7 of Part VII of this Prospectus ‘‘Registrar Agreement’’ means the registrar agreement between the Company and the Registrar, a summary of which is set out in paragraph 6.6 of Part VII of this Prospectus ‘‘Registrar’’ means Capita Registrars (Guernsey) Limited or such other person or persons from time to time appointed by the Company ‘‘Regulation S’’ means Regulation S promulgated under the U.S. Securities Act ‘‘RIS’’ means a regulatory information service ‘‘Risk Factors’’ means the risk factors pertaining to the Company set out on pages 14 to 26 of this Prospectus ‘‘Rules’’ means the Registered Collective Investment Scheme Rules 2008 issued by the Commission under The Protection of Investors (Bailiwick of Guernsey) Law, 1987 ‘‘SDRT’’ means Stamp Duty Reserve Tax ‘‘SEDOL’’ means Stock Exchange Daily Ofﬁcial List ‘‘Senior Executives’’ the senior executives of the Investment Adviser, as described in Part III of this Prospectus ‘‘SFM’’ means the Specialist Fund Market of the London Stock Exchange ‘‘Shareholder’’ means a holder of Shares ‘‘Shareholding’’ means a holding of Shares ‘‘Shares’’ means redeemable ordinary shares of no par value in the capital of the Company issued as ‘‘Ordinary Shares’’ ‘‘SIPP’’ means a self-invested personal pension ‘‘SME’’ or ‘‘SMEs’’ small and medium-sized UK enterprises ‘‘Special Limited Partner’’ means Palio Capital Founding Partners LP ‘‘Sterling’’ means the lawful currency of the United Kingdom ‘‘Target Return’’ has the meaning given in Part I of this Prospectus ‘‘Taxes Act’’ means the Income and Corporation Taxes Act 1988, as amended ‘‘Termination Adjustment’’ has the meaning given in paragraph 6.2.5 of Part VII of this Prospectus ‘‘Terms and Conditions of means the terms and conditions of application set out in Part VII of Application’’ this Prospectus in connection with the Offer ‘‘U.S. Exchange Act’’ means the U.S. Securities Exchange Act of 1934, as amended ‘‘U.S. Investment Company Act’’ means the U.S. Investment Company Act of 1940, as amended ‘‘U.S. Persons’’ has the meaning given to it in Regulation S

117 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP ‘‘U.S. Plan Asset Regulations’’ means the regulations promulgated by the U.S. Department of Labour at 29 CFR 2510.3 101, as modified by Section 3(42) of ERISA ‘‘U.S. Plan Investor’’ means: (i) investors using assets of (a) an ‘‘employee benefit plan’’ as defined in Section 3(3) of ERISA that is subject to Title I of ERISA; (B) a ‘‘plan’’ as defined in Section 4975 of the U.S. Tax Code, including an individual retirement account or other arrangement that is subject to Section 4975 of the U.S. Tax Code; or (C) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the U.S. Tax Code; or (ii) a governmental, church, non-U.S. or other employee benefit plan that is subject to any federal, state, local, non-U.S. or other law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the U.S. Tax Code, unless its purchase, holding, and disposition of the Shares will not constitute or result in a non-exempt violation of any such substantially similar law ‘‘U.S. Securities Act’’ means the U.S. Securities Act of 1933, as amended ‘‘U.S. Tax Code’’ means the U.S. Internal Revenue Code of 1986, as amended ‘‘UK Corporate Governance Code’’ the UK Corporate Governance Code as published by the Financial Reporting Council ‘‘UK Listing Authority’’ means the Financial Services Authority as the competent authority for listing in the United Kingdom ‘‘UK’’ or ‘‘United Kingdom’’ means the United Kingdom of Great Britain and Northern Ireland ‘‘uncertificated form’’ or ‘‘in means recorded on the register as being held in uncertificated form uncertificated form’’ in CREST and title to which may be transferred by means of CREST ‘‘United States’’ or ‘‘U.S.’’ means the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia ‘‘WACC’’ weighted average cost of capital

118 c107409pu060 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP APPENDIX 1

APPLICATION FORM FOR THE OFFER PALIO UK MID MARKET DEBT FUND LIMITED

Please complete Sections 1 to 7 of this Application Form (as applicable), detach it and FOR OFFICIAL send it with your cheque, by post or by hand (during normal business hours only) to USE ONLY Log No. / Corporate Actions, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU as soon as possible and, in any event, so as to be received no later than 11 a.m. on 26 November 2012. IMPORTANT Before completing this form, you should read the prospectus including the terms and conditions set out in Part VIII.

1. APPLICATION I/We the person(s) detailed in section 2A below offer to subscribe the amount Box 1 (minimum of shown in Box 1 for Shares at a price of 100 pence per Share subject to the £1000 and then in multiples of £100) terms and conditions set out in Part VIII of the prospectus dated 7 November 2012 and subject to the Articles of Incorporation of the Company. £ 2A. DETAILS OF HOLDER(S) IN WHOSE NAME(S) SHARES WILL BE ISSUED Insert name and address of the Applicant here in block capitals

1: Mr, Mrs, Miss or Title: Forenames (in full):

Surname/Company name:

Address (in full):

Post Code:

Designation (if any):

ATTACH CHEQUE/BANKER’S DRAFT HERE FOR AMOUNT SET OUT IN BOX 1 Cheques and banker’s drafts should be made payable to ‘‘Capita Registrars Limited re Palio – Acceptance Account’’ and crossed ‘‘A/C payee only’’ Joint Applicants (if any). Insert names and addresses of joint applicants here (you may apply with up to 3 joint applicants).

2: Mr, Mrs, Miss or Title: Forenames (in full):

Surname/Company name:

Address (in full):

Post Code:

Designation (if any):

119 c107409pu070 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP 3: Mr, Mrs, Miss or Title: Forenames (in full):

Surname/Company name:

Address (in full):

Post Code:

Designation (if any):

4: Mr, Mrs, Miss or Title: Forenames (in full):

Surname/Company name:

Address (in full):

Post Code:

Designation (if any):

2B. CREST DETAILS Only complete this section if Shares allotted are to be deposited in a CREST Account which must be in the same name as the holder(s) given in section 2A.

CREST Participant ID:

CREST Member Account ID:

3. SIGNATURE(S) – ALL APPLICANTS MUST SIGN Execution by Individuals:

First applicant signature: Second applicant signature:

Date: Date:

Third applicant signature: Fourth applicant signature:

Date: Date:

Execution by a Company:

Name of Company:

Name of Director: Signature: Date:

Name of Director/Secretary: Signature: Date:

If you are afﬁxing Company seal, Afﬁx Company seal here: please make a cross here:

120 c107409pu070 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP 4. CHEQUES/BANKER’S DRAFT DETAILS Pin or staple to the ﬁrst page of this form your cheque or banker’s draft (where indicated) for the exact amount shown in box 1 made payable to ‘‘Capita Registrars Limited re Palio – Acceptance Account’’ and crossed ‘‘A/C Payee’’. Cheques and banker’s payments must be drawn in Sterling on an account at a bank branch in the UK or the Channel Islands and must bear a UK bank sort code number in the top right hand corner. If you use a banker’s draft or a building society cheque, you should ensure that the bank or building society issuing the payment enters the name, address and account number of the person whose account is being debited on the reverse of the banker’s draft or cheque and adds its stamp.

5. RELIABLE INTRODUCER DECLARATION Completion and signing of this declaration by a suitable person or institution may avoid presentation being requested of the identity documents detailed in section 7 of this form. The declaration below may only be signed by a person or institution (such as a government approved bank, stockbroker or investment firm, financial services firm or an established law firm or accountancy firm) (the ‘‘firm’’) which is itself subject in its own country to operation of ‘know your customer’ and anti-money laundering regulations no less stringent than those which prevail in the UK.

DECLARATION: To the Company and the Receiving Agent With reference to the holder(s) details in section 2A, all persons signing at section 3 and any payor who is not also a holder (collectively the ‘‘subjects’’)

WE HEREBY DECLARE: 1. we operate in the UK, or in a country where money laundering regulations under the laws of that country are to the best of our knowledge no less stringent than those which prevail in the UK and our firm is subject to such regulations; 2. we are regulated in the conduct of our business and in the prevention of money laundering by the regulatory authority identified below; 3. each of the subjects is known to us in a business capacity and we hold valid identity documentation on each of them and we undertake immediately to provide to you copies thereof on demand; 4. we confirm the accuracy of the names and residential/business address(es) of the holder(s) given at section 2A and if a CREST Account is cited at section 2B that the owner thereof is named in section 2A; 5. having regard to all local money laundering regulations we are, after enquiry, satisfied as to the source and legitimacy of the monies being used to subscribe for the Shares mentioned; and 6. where the payor and holder(s) are different persons we are satisfied as to the relationship between them and reason for the payor being different to the holder(s).

121 c107409pu070 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP The above information is given in strict confidence for your own use only and without any guarantee, responsibility or liability on the part of this firm or its official.

Signed: Name: Position:

having authority to bind the ﬁrm.

Name of regulatory authority: Firm’s licence number:

Website address or telephone number of regulatory authority:

STAMP of ﬁrm giving full name and business address:

6. CONTACT DETAILS To ensure the efficient and timely processing of this application please enter below the contact details of a person the Registrar or the Receiving Agent may contact with any enquiries concerning this application. Ordinarily this contact person should be the person signing in section 3 on behalf of the first named holder. If no details are provided here but a regulated person is identified in section 5, the Receiving Agent will contact the regulated person. If no details are entered here and no regulated person is named in section 5 and the Receiving Agent requires further information, any delay in obtaining that additional information may result in your application being rejected or revoked.

Contact name:

E mail address:

Contact address:

Post Code:

Telephone No: Fax No:

122 c107409pu070 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP 7. IDENTITY INFORMATION If the declaration in section 5 cannot be signed and the value of your application is greater than c15,000 (approximately £12,000), please enclose with that Application Form the documents mentioned below, as appropriate. Please also tick the relevant box to indicate which documents you have enclosed, all of which will be returned by Capita Registrars to the ﬁrst named Applicant.

In accordance with internationally recognised standards for the prevention of money laundering, the documents and information set out below must be provided:

Tick box as applicable A. For each holder being an individual enclose: (1) an original or a certified clear photocopy of one of the following identification documents which bear both a photograph and the signature of the person: current passport, Government or Armed Forces identity card, driving licence; and (2) an original or certified copies of at least two of the following documents no more than 3 months old which purport to confirm that the address given in section 2A is that person’s residential address: a recent gas, electricity, water or telephone (not mobile) bill, a recent bank statement, a council tax bill, or similar document issued by a recognised authority; and (3) if none of the above documents show the person’s date and place of birth, enclose a note of such information; and (4) details of the name and address of their personal bankers from which the Receiving Agent may request a reference, if necessary. B. For each holder being a company (a ‘‘holder company’’) enclose: (1) a certified copy of the certificate of incorporation of the holder company; and

(2) the name and address of the holder company’s principal bankers from which the Receiving Agent may request a reference, if necessary; and (3) a statement as to the nature of the holder company’s business, signed by a director; and (4) a list of the names and residential addresses of each director of the holder company; and (5) for each director provide documents and information similar to that mentioned in A above; and (6) a copy of the authorised signatory list for the holder company; and

(7) a list of the name and residential/registered address of each ultimate beneficial owner interested in more than 5 per cent. of the issued share capital of the holder company and, where a person is named, also complete C below and, if another company is named (hereinafter a ‘‘beneficiary company’’), also complete D below. If the beneficial owner(s) named do not directly own the holder company but do so indirectly via nominee(s) or intermediary entities, provide details of the relationship between the beneficial owner(s) and the holder company. C. For each person named in B(7) as a beneficial owner of a holder company enclose for each other person documents and information similar to that mentioned in A(1) to (4). D. For each beneficiary company named in B(7) as a beneficial owner of a holder company enclose: (1) a certified copy of the certificate of incorporation of that beneficiary company; and

123 c107409pu070 Proof 11: 6.11.12_23:40 B/L Revision: 0 Operator BonP (2) a statement as to the nature of that beneficiary company’s business signed by a director; and (3) the name and address of that beneficiary company’s principal bankers from which the Receiving Agent may request a reference, if necessary; and (4) a list of the names and residential/registered address of each beneficial owner owning more than 5 per cent. of the issued share capital of that beneficiary company. E. If the payor is not a holder and is not a bank providing its own cheque or banker’s payment on the reverse of which is shown details of the account being debited with such payment enclose: (1) if the payor is a person, for that person the documents mentioned in A(1) to (4); or (2) if the payor is a company, for that company the documents mentioned in B(1) to (7); and (3) an explanation of the relationship between the payor and the holder(s).

The Receiving Agent reserves the right to ask for additional documents and information.

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