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

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(l) either (i) is issued by an entity that is treated as a corporation that is not a United States real property holding corporation as defined in Section 897(c)(2) of the Code for U.S. federal income tax purposes, (ii) is treated as indebtedness for U.S. federal income tax purposes, or (iii) with respect to which the Issuer has received advice from Milbank, Tweed, Hadley & McCloy LLP or an opinion of another nationally recognized U.S. tax counsel experienced in such matters to the effect that the acquisition, ownership or disposition of such security will not cause the Issuer to be treated as engaged in a trade or business within the United States for U.S. federal income tax purposes or otherwise subject the Issuer to U.S. federal, state or local income or franchise tax on a net income basis; (m) except for Zero-Coupon Securities or Step-Up Coupon Securities, provides for periodic payments of interest thereon in cash no less frequently than semi-annually; (n) if a Structured Finance Security, such Structured Finance Security may not be a security whose repayment is subject to substantial non-credit related risk as determined by the Collateral Manager in its reasonable business judgment (provided that catastrophe bonds, hurricane bonds, market value collateralized debt obligations and "future-flow" securities will, for the avoidance of doubt, but without limitation, be deemed to be securities whose payments is subject to substantial non-credit related risk); (o) is not a lease (other than a Finance Lease); (p) is not (i) a Deferred Interest Asset or (ii) Margin <strong>Stock</strong>; (q) does not mature or have a final mandatory redemption date more than two years following the Stated Maturity of the Notes; and (r) is (i) denominated in U.S. dollars or (ii) a Non-USD Debt Obligation; provided that (i) the entity selling a Collateral Debt Obligation that is a Participation interest will be (a) a financial institution organized under the laws of the United States or any state thereof or (b) a financial institution organized under the laws of a jurisdiction other than the United States or any state thereof but located (or has a branch that is located) in the United States, and (ii) the credit risk profile of any Collateral Debt Obligation that is a certificate of beneficial interest in an equipment trust that has the general characteristics of a debt obligation and is treated as a debt obligation for U.S. federal income tax purposes (A) will be substantially similar to the credit risk profile that would otherwise have existed had the instrument instead been a debt obligation, (B) the obligor or the obligation in respect thereof will have an underlying Moody's rating and an underlying Standard & Poor's rating and (C) the obligor in respect thereof will be principally located in the United States; provided, further, that a Non-USD Debt Obligation may not be purchased by the Issuer unless a Currency Hedge with a notional amount equal to the outstanding principal amount of such Non-USD Debt Obligation is entered into by the Issuer at the direction of the Collateral Manager on or prior to the relevant settlement date. Notwithstanding the foregoing, the term Collateral Debt Obligation will not include: (i) any obligation that requires the Issuer to make additional or future advances (other than in the case of a Delayed Draw Term Loan, a Revolving Credit Facility or a Synthetic Security); (ii) any Eligible <strong>Investment</strong>s; and (iii) any Hedge Agreements. In addition, the term Collateral Debt Obligations will include: (i) any Swap Collateral as to which the lien of the related Synthetic Security Counterparty has been released following the termination of a Synthetic Security; provided that such Swap Collateral satisfied the criteria for Collateral Debt Obligation at the time of the commitment to purchase; and (ii) a Deliverable Obligation that satisfies the criteria for inclusion as a Collateral Debt Obligation delivered to the Issuer pursuant to a Swap Agreement; provided that, in the event such Obligation does not qualify as a Collateral Debt Obligation, it shall be accepted by the Issuer and deemed to be an Equity Security. 67
In order to ensure that the Issuer is not treated as engaged in a U.S. trade or business for U.S. federal income tax purposes, the Issuer and the Collateral Manager will observe certain additional restrictions and limitations on their activities and on the Collateral Debt Obligations that may be purchased. Accordingly, although a particular prospective investment may satisfy the definition of Collateral Debt Obligation, it may be ineligible for purchase by the Issuer and the Collateral Manager as a result of these limitations and restrictions. Portfolio Profile Test From and after the Effective Date, the following requirements (subject to the paragraphs of this definition following clause (ff) below) will apply to the acquisition of Collateral Debt Obligations (the "Portfolio Profile Test"): (a) Not less than 92.5% of the Principal Collateral Value will consist of Floating Rate Collateral Debt Obligations; (b) Not less than 87.5% of the Principal Collateral Value will consist of First Lien Loans, Participation interests therein or Synthetic Securities based on or referencing First Lien Loans; (c) Not more than 7.5% of the Principal Collateral Value will consist of Fixed Rate Collateral Debt Obligations; (d) Not more than 5.0% of the Principal Collateral Value will consist of senior unsecured loans; (e) Not more than 5.0% of the Principal Collateral Value will consist of Second Lien Loans; (f) Not more than 7.5% of the Principal Collateral Value will consist of high-yield debt securities; (g) The aggregate of the Principal Balances of high-yield debt securities with a Moody's Rating of "Ba3" or higher issued or guaranteed by a single obligor will not be more than U.S.$2,000,000 except that aggregate of the Principal Balances of high-yield debt securities with a Moody's Rating of "Ba3" or higher issued or guaranteed by each of three obligors may each be up to U.S.$4,000,000; (h) The aggregate of the Principal Balances of high-yield debt securities with a Moody's Rating of "B1" or lower issued or guaranteed by a single obligor will not be more than U.S.$1,000,000; (i) The aggregate of the Principal Balances of high-yield debt securities with a right to payment that is senior subordinated or more junior will not be more than U.S.$10,000,000; (j) Not more than 5.0% of the Principal Collateral Value will consist of Non-USD Debt Obligations; (k) Collectively, not more than 12.5% of the Principal Collateral Value will consist of (i) Second Lien Loans, (ii) senior unsecured loans and (iii) high-yield debt securities; (l) Not more than 5.0% of the Principal Collateral Value will consist of DIP Loans; (m) Not more than 10.0% of the Principal Collateral Value will consist of Delayed Draw Term Loans or Revolving Credit Facilities; (n) Not more than 5.0% of the Principal Collateral Value will consist of PIK Securities; (o) Not more than 5.0% of the Principal Collateral Value will consist of Zero-Coupon Securities; (p) Not more than 5.0% of the Principal Collateral Value will consist of Step-Up Coupon Securities; (q) Not more than 5.0% of the Principal Collateral Value will consist of Collateral Debt Obligations that are the subject of Permitted Offers; 68
Page 1 and 2:
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
Page 35 and 36: (z) Not more than the percentage of
Page 37 and 38: the proceeds of such sale may be re
Page 39 and 40: (v) the Weighted Average Rating Fac
Page 41 and 42: (6) to the payment of accrued and u
Page 43 and 44: (4) to the payment of the amounts r
Page 45 and 46: RISK FACTORS An investment in the O
Page 47 and 48: To the extent the requirements unde
Page 49 and 50: Preferred Shares. In the event of a
Page 51 and 52: Investments of the Issuer in securi
Page 53 and 54: Controlling Class are entitled to d
Page 55 and 56: the ability of the Co-Issuers to op
Page 57 and 58: Agency in rating the Notes or any r
Page 59 and 60: not directly benefit from the colla
Page 61 and 62: circumstances, the loaned Collatera
Page 63 and 64: Securities are entitled to vote, in
Page 65 and 66: As part of their regular business,
Page 67 and 68: Declaration of Trust). It is not an
Page 69 and 70: Carrie Bunton, Vice President Carri
Page 71 and 72: any Notes for any Interest Accrual
Page 73 and 74: Withholding Tax Obligations, in eac
Page 75 and 76: Payments on the Offered Securities
Page 77 and 78: state of the United States or any o
Page 79 and 80: 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: payment of all amounts due from the
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 and 132: Co-Issuers of all other amounts due
Page 133 and 134: holders of the Preferred Shares of,
Page 135 and 136: Zhen Tao, Associate. Prior to joini
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If the Collateral Management Agreem
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Manager, the resigning or removed C
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Manager certain reports, schedules
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A U.S. Holder generally will recogn
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CAYMAN ISLANDS TAX CONSIDERATIONS T
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The Issuer intends to limit purchas
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In the Placement Agreement, each of
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any of their respective affiliates
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Additional Restrictions No transfer
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EMPLOYEE BENEFIT PLAN SUBJECT TO TI
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AND IS NOT A QUALIFIED PURCHASER, A
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warehouse facility (including the l
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GLOSSARY "Accredited Investor" mean
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such Floating Rate Collateral Debt
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has decreased its spread over a Lon
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"Defaulted Obligation" means for an
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organized under the laws of the Uni
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provides services; provided that U.
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"Form-Approved Synthetic Security"
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that the Collateral Manager may bas
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affiliates have defaulted on any de
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"Principal Balance" means with resp
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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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