Octagon Investment Partners IX, Ltd. JPMorgan - Irish Stock Exchange

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To the extent funds are available for such purpose under the Indenture as described above, dividends on the Preferred Shares will be payable out of realized or unrealized profits and/or out of the Issuer's share premium account, to the extent legally permitted, on each Distribution Date. Dividends may be paid, however, to the holders of the Preferred Shares only to the extent there are funds legally available therefor and only if the Issuer is able to pay its debts as they come due in the ordinary course of the Issuer's business on the applicable Distribution Date. Pursuant to the Fiscal Agency Agreement, U.S. Bank National Association will be appointed as the Preferred Share Paying Agent. The Issuer may at any time and from time to time terminate the appointment of the Preferred Share Paying Agent through written notice and appoint one or more additional paying agents to perform the duties of the Preferred Share Paying Agent. The Issuer will give prompt notice to the Trustee of the appointment or termination of the Preferred Share Paying Agent and of the location and any change in the location of the Paying Agent's office or agency. The Preferred Share Paying Agent will provide notice to the holders of the Preferred Shares of any such change of which it receives notice. The Preferred Share Paying Agent will make distributions on the Preferred Shares and perform various fiscal services on behalf of the Issuer. On or prior to the Closing Date, the Preferred Share Paying Agent will establish a segregated non-interest bearing account designated as the "Preferred Shares Distribution Account." The Preferred Share Paying Agent will deposit any funds received from the Trustee pursuant to the Priority of Payments into the Preferred Shares Distribution Account. Pursuant to the Fiscal Agency Agreement, the Preferred Share Paying Agent, on behalf of the Issuer, will promptly give notice of the amount of all distributions thereunder for the relevant Distribution Date to the holders of the Preferred Shares and to the Issuer, the Collateral Manager and to the Trustee. The Preferred Share Paying Agent will also make such information available to the holders of Preferred Shares at the offices of the Preferred Share Paying Agent. Distributions to holders of the Preferred Shares, if any, will be paid on each Distribution Date other than its mandatory redemption date to the persons in whose name the Preferred Shares are registered at the close of business on the Record Date for such Distribution Date. Pursuant to the Fiscal Agency Agreement, distributions to the holders of Preferred Shares will be paid pro rata in the proportion that the number of Preferred Shares held by such holder bears to the total number of outstanding Preferred Shares. On its mandatory redemption date, the Issuer will redeem all outstanding Preferred Shares at the Redemption Price unless the Preferred Shares have been redeemed earlier through an Optional Redemption as described herein under "Description of the Offered Securities—Redemption—Optional Redemption of the Preferred Shares" or otherwise. Upon final redemption of the Preferred Shares, the holders thereof must present and surrender the certificates representing the Preferred Shares at the office of the Preferred Share Paying Agent in exchange for final payment. Pursuant to the Fiscal Agency Agreement, all redemption payments to a holder of Preferred Shares will be made pro rata in the proportion that the number of Preferred Shares held by such holder bears to the total number of outstanding Preferred Shares. The Issuer and the Preferred Share Paying Agent, at any time and from time to time without the consent of any holders of Preferred Shares, may enter into one or more amendments to the Fiscal Agency Agreement, in form satisfactory to the Preferred Share Paying Agent, (A) to prevent the Issuer or the Preferred Share Paying Agent from being subject to withholding or other taxes, fees, or assessments or to prevent the Issuer from being treated as engaged in a trade or business within the United States for United States Federal income tax purposes or otherwise subject to United States Federal, state, or local income or franchise tax on a net income tax basis, as evidenced by an opinion of counsel (which may be supported as to factual (including financial and capital markets) matters by any relevant certificates and other documents necessary or advisable in the judgment of counsel delivering the opinion) or (B) if the modification does not, as evidenced by an opinion of counsel (which may be supported as to factual (including financial and capital markets) matters by any relevant certificates and other documents necessary or advisable in the judgment of counsel delivering the opinion) or a certificate of an officer of the Collateral Manager, adversely affect in any material respect the interests of any Preferred Shares, to modify any provision or to remove or modify any legend of any Preferred Share to reflect changes in applicable law or regulation relating to restrictions on its transfer or eligibility to hold it or the passage of time such that any such restriction or any limitation on eligibility has ceased to be applicable. Otherwise, the Fiscal Agency Agreement may not be amended except by the Issuer and the Preferred Share Paying Agent in writing (with the consent of a Majority of the Preferred Shares); provided that no such amendment will, without the consent of the holders of each outstanding Preferred Share affected thereby (i) reduce in any manner the amount of, or delay the timing of, or change the allocation among the 113
holders of the Preferred Shares of, the payment or distributions on the Preferred Shares or (ii) change the number or percentage of the holders of Preferred Shares required to consent to any amendment to the Fiscal Agency Agreement. The Fiscal Agency Agreement provides for the terms of transfer of the Preferred Shares. Pursuant to the Fiscal Agency Agreement, the Administrator is irrevocably appointed by the Issuer to act as the "Share Registrar" for the purposes of registering the Preferred Shares and all transfers and redemptions of the Preferred Shares. The payment of the fees and expenses of the Preferred Share Paying Agent and Share Registrar is solely the obligation of the Issuer. The Fiscal Agency Agreement contains provisions for the indemnification of the Preferred Share Paying Agent for any loss, liability or expense incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of the Fiscal Agency Agreement. The Fiscal Agency Agreement will be governed by, and construed in accordance with, the laws of the State of New York. The Preferred Shares and the Memorandum and Articles will be governed by, and construed in accordance with, the laws of the Cayman Islands. THE COLLATERAL MANAGER The information appearing herein has been prepared by the Collateral Manager and has not been independently verified by the Issuer, the Co-Issuer or the Placement Agent. None of the Issuer, the Co-Issuer or the Placement Agent assume any responsibility for the accuracy, completeness or applicability of such information. General Octagon Credit Investors, LLC ("Octagon" or the "Collateral Manager") will manage the Collateral Debt Obligations and perform certain other reporting functions pursuant to the Collateral Management Agreement. Octagon is expected to purchase up to 2,240 Preferred Shares on the Closing Date. Octagon is not required to retain any of such Preferred Shares for any period of time. Octagon currently manages approximately U.S.$3.0 billion in assets, comprised principally of bank loans and high-yield bonds, for seven active investment vehicles other than the Issuer. Such vehicles consist of five arbitrage cash flow collateralized debt obligation vehicles ("CDOs"), one market value CDO, one loan trust having investment parameters similar to those of an arbitrage cash flow CDO, and one proposed arbitrage cash flow CDO that is currently warehousing assets substantially similar to those in which the Issuer will invest. Octagon commenced activities in late 1994 as CHL High Yield Advisors, a unit of Chemical Bank, predecessor to JPMorgan Chase Bank, N.A. The unit was founded by James P. Ferguson, previously a senior officer of Chemical Bank, to build an asset management business focused on loans and high-yield securities. In May of 1999, the unit was reconstituted as Octagon Credit Investors, LLC, a Delaware limited liability Company. Octagon is managed by its Managing Members, who consist of James P. Ferguson, who is its Executive Managing Member, and Andrew D. Gordon, and Michael B. Nechamkin. Octagon is majority-owned by its employees and minorityowned by certain other investors, including affiliates of JPMorgan Partners, the global private equity investment affiliate and an indirect subsidiary of JPMorgan Chase, which affiliates own approximately 30% of Octagon's equity. Octagon expects that JPMorgan Partners' ownership interest is likely to decline over time and eventually be reduced to zero. Biographies of Certain Key Individuals Set forth below is information regarding certain persons who constitute certain key personnel of Octagon, although such persons may not necessarily continue to be so employed during the entire term of the Collateral Management Agreement. See "Risk Factors—Dependence on Key Personnel of the Collateral Manager" and "The Collateral Management Agreement—Termination of the Collateral Management Agreement; Resignation or Removal of the Collateral Manager; Assignment and Delegation." 114
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Offering Subject Memorandum to Comp
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subsequent transferee will be requi
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ACCORDANCE WITH PART 6D.2 OF THE CO
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NOTICE TO RESIDENTS IN THE PROVINCE
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MUTUAL FUNDS, PORTFOLIO INVESTMENT
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THE OFFERED SECURITIES HAVE NOT BEE
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BENEFICIAL OWNERS OF SUCH OFFERED S
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Shares, the Issuer under the Prefer
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TABLE OF CONTENTS SUMMARY OF TERMS
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CAYMAN ISLANDS TAX CONSIDERATIONS..
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Issuer: ...........................
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Interest Reserve Account (to be app
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Counterparties as it may elect in i
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United States or any state thereof
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(iii) such calculation will not inc
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The "Reinvestment Overcollateraliza
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The foregoing descriptions are summ
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(z) Not more than the percentage of
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the proceeds of such sale may be re
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(v) the Weighted Average Rating Fac
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(6) to the payment of accrued and u
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(4) to the payment of the amounts r
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RISK FACTORS An investment in the O
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To the extent the requirements unde
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Preferred Shares. In the event of a
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Investments of the Issuer in securi
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Controlling Class are entitled to d
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the ability of the Co-Issuers to op
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Agency in rating the Notes or any r
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not directly benefit from the colla
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circumstances, the loaned Collatera
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Securities are entitled to vote, in
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As part of their regular business,
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Declaration of Trust). It is not an
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Carrie Bunton, Vice President Carri
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any Notes for any Interest Accrual
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Withholding Tax Obligations, in eac
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Payments on the Offered Securities
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state of the United States or any o
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payments except the portion thereof
Page 81 and 82: Intermediary; and (ii) all other ac
Page 83 and 84: Payment Sequence or (y) if, on the
Page 85 and 86: payment of all amounts due from the
Page 87 and 88: In order to ensure that the Issuer
Page 89 and 90: 3.0% Any of Greece, Italy or Portug
Page 91 and 92: assigning Selling Institution shoul
Page 93 and 94: The Class B Interest Coverage Test
Page 95 and 96: Minimum Diversity Score Maximum Wei
Page 97 and 98: Rating/Minimum Spread/Maximum WAL M
Page 99 and 100: Moody's Recovery Rate for All Other
Page 101 and 102: emaining for the payment of the Cla
Page 103 and 104: (b) the Overcollateralization Tests
Page 105 and 106: The "Required Sale Date" means, (a)
Page 107 and 108: Principal Collection Account All pr
Page 109 and 110: Agreement, or if any such Swap Agre
Page 111 and 112: Account will be utilized to purchas
Page 113 and 114: transfer of such amounts (except fo
Page 115 and 116: (y) replace itself under the relate
Page 117 and 118: denominated in the same Permitted C
Page 119 and 120: Lending Counterparty so that the Se
Page 121 and 122: agreed that if such purchaser is no
Page 123 and 124: or bad faith on its part, arising o
Page 125 and 126: and all other amounts payable under
Page 127 and 128: federal, state, local or foreign in
Page 129 and 130: elevant provisions of the Indenture
Page 131: Co-Issuers of all other amounts due
Page 135 and 136: Zhen Tao, Associate. Prior to joini
Page 137 and 138: If the Collateral Management Agreem
Page 139 and 140: Manager, the resigning or removed C
Page 141 and 142: Manager certain reports, schedules
Page 143 and 144: A U.S. Holder generally will recogn
Page 145 and 146: CAYMAN ISLANDS TAX CONSIDERATIONS T
Page 147 and 148: The Issuer intends to limit purchas
Page 149 and 150: In the Placement Agreement, each of
Page 151 and 152: any of their respective affiliates
Page 153 and 154: Additional Restrictions No transfer
Page 155 and 156: EMPLOYEE BENEFIT PLAN SUBJECT TO TI
Page 157 and 158: AND IS NOT A QUALIFIED PURCHASER, A
Page 159 and 160: warehouse facility (including the l
Page 161 and 162: GLOSSARY "Accredited Investor" mean
Page 163 and 164: such Floating Rate Collateral Debt
Page 165 and 166: has decreased its spread over a Lon
Page 167 and 168: "Defaulted Obligation" means for an
Page 169 and 170: organized under the laws of the Uni
Page 171 and 172: provides services; provided that U.
Page 173 and 174: "Form-Approved Synthetic Security"
Page 175 and 176: that the Collateral Manager may bas
Page 177 and 178: affiliates have defaulted on any de
Page 179 and 180: "Principal Balance" means with resp
Page 181 and 182: disposition of Collateral Debt Obli
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"Sale Proceeds" means with respect
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ating if such rating is higher than
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Aa1 15% 20% Aa2 10% 20% Aa3 7.5% 15
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INDEX OF DEFINED TERMS $...........
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Issuer Par Amount .................
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USA PATRIOT Act....................
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equirement for written certificatio
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9. We understand that the Issuer, t
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ANNEX B FORM OF PREFERRED SHARE ERI
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(v) (vi) the proceeds of such sale,
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EXHIBIT A Aggregate Industry Unit S
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Standard & Poor's Industry Classifi
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Octagon Investment Partners IX, Ltd. JPMorgan - Irish Stock Exchange

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