Class K

Argyle Funds SPC Inc.
Addendum to the Private Offering Memorandum – January 1, 2011 - Class K
Argyle Principal Protected 7.5% High Yield 3 Yr. Notes SP – EUR

Description

The Fund was formed for the purpose of investing in a pool of managed accounts receivable notes or similar short-term secured asset-backed financing securities.  The Fund generates revenue in the form of income that is produced and paid out from the commercial accounts receivable obligations. The Fund will raise investment capital through the issue of the Note(s) and will invest the proceeds in a pool of receivables, but will not actually be the party who will be lending or negotiating the lending nor the administration of the receivables; this task will be carried out by the Credit Advisors.  Asset backed lending is a process whereby a commercial client pledges its accounts receivables in exchange for either a specific one-time advance or a secured revolving credit facility. All of the investments of the Fund will be in the form of short-term, insured receivables of superior quality and Government receivables.

Base Currency of the Fund

The Fund’s base currency is Euros (EUR). All purchases, maturities, prices, Net Asset Value, statements and reporting letters are quoted in the currency paid into the Fund.

Initial Investment Amount

The minimum purchase price per Note for each new Eligible Investor is the EURO equivalent of USD$50,000 inclusive of any initial placement charges, if applicable. The Directors, in their sole discretion, reserve the right to increase or decrease the minimum at any time in the future but at no time shall the minimum be less than USD$50,000.

Additional Purchase Amount

Existing Investors may purchase further tranches of Notes. After an Investor has opened an account and made the minimum initial purchase, they may add to their holdings at any time.  The minimum Additional Purchase Amount is the EURO equivalent of USD$25,000.

Minimum Account Balance

Each Account Holder must maintain the minimum account balance at all times. The minimum account balance for the Fund is USD $50,000 or the equivalent in the base currency of the Fund. If an account goes below this minimum, the Directors will be forced to redeem the balance of Notes pursuant to the Private Offering Memorandum and close the investor’s account with the Fund.

Purchase Price of Notes

The Purchase Price of the Note(s) is not likely to fluctuate based on the performance of the Fund.  Investors are advised to familiarize themselves with the Terms and Conditions of the Note(s), which is set out in the Offering Memorandum and this Addendum to the Offering Memorandum.

Distributions

The Fund’s interest or other distributions will be paid to the Account Holders on a quarterly basis. Such distributions may be made to the investor as specified on the Application Form and Subscription Agreement. The Fund expects to return the investment face value of the Note(s) upon maturity of the investment term. Any bank charges relating to the distribution, including wire charges, will be the responsibility of the Noteholder and will be deducted from the distribution amount.

Objective of the Fund - Income - Stated Income Level – 7.5%

The objective of the Fund is to achieve stated specific returns for investors (net of Management Fees and withholding tax, if applicable) through an income stream produced from managed pools of accounts receivables and asset-backed financing. To further minimize the risk inherent in investing in accounts receivable pools, the Fund will only allocate capital to Government insured receivables of either the Governments of the United States, the United Kingdom or Canada and their respective agencies thereof, or specific accounts receivables that are insured by third party insurers that have a comparable rating of no less than “A”. Principal protection is achieved through the investments of the Fund being limited to Government receivables or high quality insured receivables. Recognising the risks inherent in the asset backed lending business, the Fund has engaged the Credit Advisor(s), whose expertise in commercial finance generally and asset backed lending in particular, provides the Fund with a level of assurance that risks will be mitigated to the extent practicable in the operation of the business. In addition to the reliance on the Credit Advisors’ skills, insurance and government obligations, the Fund intends to diversify its allocations of assets by industry, client and end-debtor (trade debtor) to the extent practical.

Valuation Day or Date

The Fund will calculate its Net Asset Value at the close of business on the last day of each month, or the nearest Business Day thereto.

Subscription Day or Date

After the new Net Asset Value (“NAV”) is calculated on each Valuation Date, future purchases will be affected as of that day at the new NAV.

Initial Placement Charges

An amount, not exceeding 4% of the subscription price for Note(s) calculated in accordance with the Private Offering Memorandum, will be levied and payable by the Investor. The Initial Placement Charge shall be deducted from the Investor's subscription price and paid in whole or part thereof to an agent in connection with such subscription.  The Initial Placement Charge will be negotiated between the Investor and the Agent.

Investors may redeem their investment by giving no less than 90 days notice but will be subject to a redemption fee. Such Redemption Fees will be attributed to the Company and will be used to subsidize the Investment Manager for organizational costs paid to start up the Funds. Notice should be sent to the Administrator and the 90 days will begin the first Valuation day after receipt of the redemption notice. Investment maturities will be paid out to the investor to the destination from which the funds were received. Any bank charges relating to the distribution, including wire charges, will be the responsibility of the Noteholder and will be deducted from the distribution amount. The Early Redemption Fee applicable to the Argyle Class K Fund as follows:

Maturity

Investments, upon maturity, will be paid out to the Investor to the account specified on the Application Form & Subscription Agreement. Any bank charges relating to the maturity, including wire charges, will be the responsibility of the Account Holder and will be deducted from the maturity amount.

Management Fees

Under the terms of the Management Agreement, the Investment Manager is entitled to receive a remuneration of a monthly management fee equal to an annual rate of 2.0% of the Fund’s Net Asset Value on the Valuation Day of each month paid quarterly in arrears.

Expenses

The Fund will pay its own expenses including the fees paid to the Investment Manager, the Administrator and the Custodian and Banker, accounting and legal expenses, organization expenses and all investment expenses.  To date the Investment Manager has borne all the organization costs and expenses of the Fund.