EFTA Document EFTA01422826

Attached please find an electronic copy of the offering memorandum (the "Offering Memorandum"), dated June 15, 2011, relating to the Securities of ING IM CLO 2011-1, Ltd. (the "Issuer") and ING IM CLO 2011-1 LLC (the "Co-Issuer" and, together with the Issuer, the "CoIssuers"). The Offering Memorandum is highly confidential and does not constitute an offer to any person other than the recipient or to the public generally to subscribe for or otherwise acquire Securities. DISTRIBUTION OF THE OFFERING MEMORANDUM TO ANY PERSONS OTHER THAN THE PERSON RECEIVING THIS ELECTRONIC TRANSMISSION FROM THE CO-ISSUERS OR THE INITIAL PURCHASER REFERRED TO THEREIN AND THEIR RESPECTIVE AGENTS, AND ANY PERSONS RETAINED TO ADVISE THE PERSON RECEIVING THIS ELECTRONIC TRANSMISSION FROM THE CO-ISSUERS OR THE INITIAL PURCHASER IS UNAUTHORIZED. ANY PHOTOCOPYING, DISCLOSURE OR ALTERATION OF THE CONTENTS OF THE OFFERING MEMORANDUM, AND ANY FORWARDING OF A COPY OF THE OFFERING MEMORANDUM OR ANY PORTION THEREOF BY ELECTRONIC MAIL OR ANY OTHER MEANS TO ANY PERSON OTHER THAN THE PERSON RECEIVING THIS ELECTRONIC TRANSMISSION FROM THE CO-ISSUERS OR THE INITIAL PURCHASER IS PROHIBITED. BY ACCEPTING DELIVERY OF THIS OFFERING MEMORANDUM, THE RECIPIENT AGREES TO THE FOREGOING. EFTA01422826 OFFERING MEMORANDUM June 15, 2011 ING IM CLO 2011-1, Ltd. ING IM CLO 2011-1 LLC U.S.$260,000,000 Class A-1 Floating Rate Notes Due 2021 U.S.$38,000,000 Class A-2 Floating Rate Notes Due 2021 U.S.$34,000,000 Class B Deferrable Floating Rate Notes Due 2021 U.S.$20,000,000 Class C Deferrable Floating Rate Notes Due 2021 U.S.$16,500,000 Class D Deferrable Floating Rate Notes Due 2021 U.S.$4,220,000 Subordinated Notes 36,780 Preferred Shares ING IM CLO 2011-1, Ltd. (the "Issuer") and ING IM CLO 2011-1 LLC (the "Co- Issuer" and, together with the Issuer, the "Co-Issuers") will issue Class A-1 Floating Rate Notes Due 2021 (the "Class A-1 Notes"), Class A-2 Floating Rate Notes Due 2021 (the "Class A-2 Notes" and, together with the Class A-1 Notes, the "Class A Notes"), Class B Deferrable Floating Rate Notes Due 2021 (the "Class B Notes") and Class C Deferrable Floating Rate Notes Due 2021 (the "Class C Notes"), and the Issuer will also issue Class D Deferrable Floating Rate Notes Due 2021 (the "Class D Notes") and Subordinated Notes Due 2021 (the "Subordinated Notes" and, together with the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes, the "Notes"), pursuant to an Indenture dated as of June 22, 2011 (the "Indenture"), between the Co-Issuers and The Bank of New York Mellon Trust Company, National Association, as trustee (the "Trustee"). The Notes will be secured by collateral comprised primarily of leveraged bank loans. The Issuer will also issue preferred shares of $0.01 par value per share (the "Preferred Shares" and, together with the Subordinated Notes, the "Subordinated Securities" and, together with the Notes, the "Securities"). The allocation between the Subordinated Notes and Preferred Shares may change prior to the Closing Date. ING Alternative Asset Management LLC will act as investment manager for the Issuer (the "Investment Manager" or "ING"). (Continued on next page) See "Risk Factors" beginning on page 7 for a discussion of certain factors to be considered in connection with an investment in the Securities. It is a condition of the Offering that the Notes and the Preferred Shares are issued concurrently and that the Class A-1 Notes be rated "Aaa(sf)" by Moody's and "AAA(sf)" by S&P, that the Class A-2 Notes be rated at least "AA(sf)" by S&P, that the Class B Notes be rated at least "A(sf)" by S&P, that the Class C Notes be rated at least "BBB(sf)" by S&P and that the Class D Notes be rated at least "BB(sf)" by S&P. The Subordinated Securities will not be rated. PLEDGED ASSETS OF THE ISSUER ARE THE SOLE SOURCE OF PAYMENTS ON THE SECURITIES. THE SECURITIES DO EFTA01422827 NOT REPRESENT AN INTEREST IN OR OBLIGATION OF, AND ARE NOT INSURED OR GUARANTEED BY, THE INVESTMENT MANAGER, THE INITIAL PURCHASER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND NONE OF THE ISSUER, THE CO-ISSUER OR THE POOL OF COLLATERAL IS OR WILL BE REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT"), IN RELIANCE ON THE EXEMPTION PROVIDED BY SECTION 3(c)(7) THEREOF. ACCORDINGLY, THE SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES TO, OR FOR THE ACCOUNT OR BENEFIT OF, "U.S. PERSONS" (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, APPLICABLE STATE SECURITIES LAWS AND THE INVESTMENT COMPANY ACT. THE SECURITIES MAY ONLY BE OFFERED OR SOLD (A)(1) TO "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) AND (2) IN THE CASE OF THE SUBORDINATED SECURITIES, ALSO TO "ACCREDITED INVESTORS" (AS DEFINED IN RULE 501(a) UNDER REGULATION D UNDER THE SECURITIES ACT), THAT ARE ALSO (i) "QUALIFIED PURCHASERS" FOR PURPOSES OF THE INVESTMENT COMPANY ACT OR (ii) IN THE CASE OF THE SUBORDINATED SECURITIES, "KNOWLEDGEABLE EMPLOYEES" (AS DEFINED IN RULE 3c-5 UNDER THE INVESTMENT COMPANY ACT) OR (B) TO NON-U.S. PERSONS IN ACCORDANCE WITH THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT AND (C) IN ACCORDANCE WITH ANY OTHER APPLICABLE LAW. FOR A DESCRIPTION OF CERTAIN RESTRICTIONS ON RESALE OR TRANSFER, SEE "TRANSFER AND EXCHANGE." THIS DOCUMENT IS CONSIDERED AN ADVERTISEMENT FOR PURPOSES OF APPLICABLE MEASURES IMPLEMENTING THE PROSPECTUS DIRECTIVE. A PROSPECTUS PREPARED PURSUANT TO THE PROSPECTUS DIRECTIVE WILL BE PUBLISHED, WHICH MAY BE OBTAINED FROM THE ISSUER. The Securities are offered, subject to prior sale, when, as and if delivered to and accepted by Credit Suisse Securities (USA) LLC (the "Initial Purchaser" or "Credit Suisse"). It is expected that the Initial Purchaser will resell the Securities in individually negotiated transactions at varying prices determined at the time of sale. The delivery of interests in Global Securities is expected to be made in book-entry form through the facilities of The Depository Trust Company ("DTC") on or about the Closing Date and each Definitive Security is expected to be available for delivery to the owner thereof on such date, in each case in New York, New York against payment therefor in immediately available funds. EFTA01422828 Credit Suisse EFTA01422829 (Continued from previous page) Interest on the Class A Notes, the Class B Notes, the Class C Notes (collectively, the "Senior Notes") and the Class D Notes (together with the Senior Notes, the "Rated Notes") will accrue at the applicable Interest Rate from the Closing Date until such Notes are redeemed or repaid and will be payable in U.S. Dollars in arrears on the 22nd of March, June, September and December of each year, commencing in December 2011 (or, if any such date is not a Business Day, the next Business Day). Payments on the Securities are subordinated to certain payments on each Higher Ranking Class. "Higher Ranking Class" with respect to any Class means in the case of (a) Rated Notes, each Class of Rated Notes that ranks higher in right of payment than such Class under the Principal Payment Sequence and (b) the Subordinated Securities, each Class of Rated Notes. On each Distribution Date, the Subordinated Securities will be entitled to receive any Excess Interest under the Priority of Payments. The payment of interest on Deferrable Classes and distributions on the Subordinated Securities will be subject to, among other things, the satisfaction of certain coverage tests. In addition, the Investment Manager may direct the Issuer to designate a portion of Interest Proceeds that would otherwise be available for payment on the Subordinated Securities to be invested in Collateral Obligations. The Rated Notes will be redeemed by the Issuer at the direction of the Required Redemption Percentage (i) on any Distribution Date after the end of the Non—Call Period or (ii) upon and during the continuance of a Tax Event on any Distribution Date. The Required Redemption Percentage may direct (a) a redemption of each Class of Rated Notes, (b) a Refinancing of one or more Classes of Rated Notes; or (c) on any Distribution Date on or after the Rated Notes are redeemed or paid in full, the redemption of Subordinated Securities. "Required Redemption Percentage" means with respect to (a) any Optional Redemption resulting from a Tax Event, the holders of at least 66 2/3% of the Aggregate Outstanding Amount of the Subordinated Securities or a Majority of any Affected Class and (b) any other Optional Redemption, a Majority of the Subordinated Securities. On its Stated Maturity, each Class of Outstanding Rated Notes will be entitled to payment of its outstanding principal amount. On the Stated Maturity, Outstanding Subordinated Notes will mature and Outstanding Preferred Shares will be redeemed and holders of the Subordinated Securities will be entitled to receive Principal Proceeds (if any) remaining after payment of principal of all of the Rated Notes and all fees and expenses. Principal payments will be made on Outstanding Rated Notes in accordance with the Priority of Payments on: EFTA01422830 any Distribution Date, in the event a Continuing Effective Date Ratings Confirmation Failure has occurred and is continuing, to the extent required to obtain Rating Agency Confirmation; any Distribution Date if any Coverage Test is not satisfied as of the related Determination Date, to the extent required to come into compliance with that test; any Distribution Date after the Non-Call Period on which a Special Redemption occurs; any Distribution Date after the Reinvestment Period, until the Rated Notes are retired; any Redemption Date; and the Stated Maturity. Securities sold pursuant to Rule 144A will initially be issued either in the form of Definitive Securities or Rule 144A Global Securities; provided, that Subordinated Securities (the "ERISA Limited Securities") sold within the United States to Benefit Plan Investors or Controlling Persons (unless purchased by a Controlling Person on the Closing Date) and Subordinated Securities sold to Accredited Investors must be held in the form of Definitive Securities. Securities sold in reliance on Regulation S will initially be issued in the form of Definitive Securities or Temporary Global Securities (or, in the case of Class D Notes and Subordinated Notes, Regulation S Global Securities); provided, that Subordinated Securities sold pursuant to Regulation S that are held by Benefit Plan Investors or Controlling Persons must be held in the form of Definitive Securities unless purchased by a Controlling Person on the Closing Date. Interests in Temporary Global Securities will be exchangeable for interests in permanent Regulation S Global Securities only upon satisfaction of certain conditions set forth herein. Beneficial interests in Temporary Global Securities or Regulation S Global Securities may be held only through Euroclear or Clearstream. Interests in a Temporary Global Security or a Regulation S Global Security may not be held at any time by a "U.S. person" (as defined in Regulation S), and U.S. re-offers or resales of Securities offered outside the United States in reliance on Regulation S may be effected only in a transaction exempt from the registration requirements of the Securities Act and not involving directly or indirectly the Issuer, the Co-Issuer or their agents, Affiliates or intermediaries. In addition, until the expiration of 40 days after the later of the Closing Date and the commencement of the offering of the Securities, a re-offer or resale of any Security originally sold pursuant to Regulation S to, or for the account or benefit of, a U.S. person by a dealer or person receiving a concession, fee or remuneration in respect of the Securities (whether or not they participated in the Offering) may violate the registration requirements of the Securities Act, unless such offer and sale is made in compliance with an exemption from such registration requirements. EFTA01422831 Each purchaser (including transferees) will be required to make (or will be deemed to have made) certain representations and agreements. For a description of such representations and agreements and the restrictions on resale or transfer of interests in the Securities, see "Transfer and Exchange" and "ERISA Considerations." EFTA01422832 TABLE OF CONTENTS SUMMARY OF TERMS RISK FACTORS ISSUER AND CO-ISSUER USE OF PROCEEDS SECURITY FOR THE NOTES INVESTMENT MANAGER DESCRIPTION OF CERTAIN TERMS OF THE SECURITIES HEDGE AGREEMENTS 1 7 23 24 25 33 39 48 INVESTMENT MANAGEMENT AGREEMENT 48 TRUSTEE, FISCAL AGENT AND INDENTURE REGISTRAR PLAN OF DISTRIBUTION THE INDENTURE AND THE FISCAL AGENCY AGREEMENT TRANSFER AND EXCHANGE 52 52 55 65 CERTAIN INCOME TAX CONSIDERATIONS 75 ERISA CONSIDERATIONS 84 LISTING AND GENERAL INFORMATION 86 LEGAL MATTERS 87 GLOSSARY OF CERTAIN DEFINED TERMS 88 INDEX OF DEFINED TERMS 125 A glossary of certain defined terms and an index of defined terms, indicating the location of the definition of each defined term, appears at the end of this offering memorandum (the "Offering Memorandum"). Capitalized terms used herein and not defined shall have the meanings assigned in the Indenture. In this Offering Memorandum, references to "Dollars," "U.S. Dollars," "U.S.- $" and "$" (unless otherwise indicated) are to the legal currency of the United States of America and references to "Euro," "EUR" and "€" are to the lawful currency of the member states of the European Union that have adopted the single currency in accordance with the Treaty on European Union signed in Maastricht on February 7, 1992 and as amended by the Treaty of Amsterdam (signed in Amsterdam on October 2, 1997). The language of the Offering Memorandum is English. Any foreign language EFTA01422833 text that is included with or within this document has been included for convenience purposes only and does not form part of the Offering Memorandum. No websites mentioned herein are incorporated into or form a part of the Offering Memorandum. EFTA01422834 THE INFORMATION CONTAINED IN THIS OFFERING MEMORANDUM HAS BEEN FURNISHED BY THE CO-ISSUERS AND OTHER SOURCES BELIEVED BY THE CO-ISSUERS TO BE RELIABLE OR, WITH RESPECT TO INFORMATION IN THE SECTIONS ENTITLED "SUMMARY OF TERMS-INVESTMENT MANAGER," "RISK FACTORS-RISK FACTORS RELATING TO THE SECURITIES-- CONSIDERATIONS RELATING TO THE INVESTMENT MANAGER; DEPENDENCE ON KEY PERSONNEL," "RISK FACTORS-RISK FACTORS RELATING TO THE ISSUER AND ITS SERVICE PROVIDERS-CERTAIN CONFLICTS OF INTEREST RELATED TO THE INVESTMENT MANAGER," "RISK FACTORS-RISK FACTORS RELATING TO THE RESTRUCTURING" ISSUER AND ITS AND "INVESTMENT MANAGER" SERVICE PROVIDERS-ING GROUP (COLLECTIVELY, THE "MANAGER INFORMATION"), THE INVESTMENT MANAGER. NONE OF THE INVESTMENT MANAGER (OTHER THAN WITH RESPECT TO THE MANAGER INFORMATION), THE CO-ISSUERS (WITH RESPECT TO THE MANAGER INFORMATION ONLY) NOR THE INITIAL PURCHASER HAS MADE ANY INDEPENDENT INVESTIGATION OF SUCH INFORMATION AND MAKES NO REPRESENTATION OR WARRANTY AS TO THE ACCURACY OR COMPLETENESS OF ANY SUCH INFORMATION. THIS OFFERING MEMORANDUM CONTAINS SUMMARIES, BELIEVED TO BE ACCURATE, OF CERTAIN TERMS OF CERTAIN DOCUMENTS BUT REFERENCE IS MADE TO THE ACTUAL DOCUMENTS, COPIES OF WHICH WILL BE MADE AVAILABLE UPON REQUEST, FOR THE COMPLETE INFORMATION CONTAINED THEREIN. ALL SUCH SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY THIS REFERENCE. THIS OFFERING MEMORANDUM HAS BEEN PREPARED SOLELY FOR USE IN CONNECTION WITH THE OFFERING (THE "OFFERING") AND LISTING OF THE SECURITIES, AS DESCRIBED HEREIN. THE CO-ISSUERS ACCEPT RESPONSIBILITY FOR THE INFORMATION CONTAINED HEREIN (OTHER THAN THE MANAGER INFORMATION). TO THE BEST KNOWLEDGE AND BELIEF OF THE CO-ISSUERS (WHO HAVE TAKEN REASONABLE CARE TO ENSURE THAT SUCH IS THE CASE), THE INFORMATION CONTAINED IN THIS OFFERING MEMORANDUM (OTHER THAN THE MANAGER INFORMATION) IS IN ACCORDANCE WITH THE FACTS AND DOES NOT OMIT ANYTHING LIKELY TO AFFECT THE IMPORT OF SUCH INFORMATION. THE INVESTMENT MANAGER ACCEPTS RESPONSIBILITY FOR THE MANAGER INFORMATION. TO THE BEST KNOWLEDGE AND BELIEF OF THE INVESTMENT MANAGER (WHO HAS TAKEN REASONABLE CARE TO ENSURE THAT SUCH IS THE CASE), THE MANAGER INFORMATION IS IN ACCORDANCE WITH THE FACTS AND DOES NOT OMIT ANYTHING LIKELY TO AFFECT THE IMPORT OF SUCH INFORMATION. THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, IN EACH OF ITS CAPACITIES (INCLUDING AS TRUSTEE, PAYING EFTA01422835 AGENT, INDENTURE REGISTRAR AND COLLATERAL ADMINISTRATOR) HAS NOT PARTICIPATED IN THE PREPARATION OF THIS OFFERING MEMORANDUM AND ASSUMES NO RESPONSIBILITY FOR ITS CONTENT. NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS OFFERING MEMORANDUM, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CO-ISSUERS, THE INVESTMENT MANAGER OR THE INITIAL PURCHASER. THE INFORMATION CONTAINED HEREIN IS AS OF THE DATE HEREOF AND IS SUBJECT TO CHANGE, COMPLETION OR AMENDMENT WITHOUT NOTICE. NEITHER THE DELIVERY OF THIS OFFERING MEMORANDUM AT ANY TIME NOR ANY SUBSEQUENT COMMITMENT TO ENTER INTO ANY FINANCING SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS OF THE CO-ISSUERS OR THE INVESTMENT MANAGER SINCE THE DATE HEREOF. PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS OFFERING MEMORANDUM AS INVESTMENT, LEGAL OR TAX ADVICE. EACH INVESTOR SHOULD CONSULT ITS OWN COUNSEL, ACCOUNTANT AND OTHER ADVISORS AS TO LEGAL, TAX, BUSINESS, FINANCIAL AND RELATED ASPECTS OF A PURCHASE OF SECURITIES. NONE OF THE TRANSACTION PARTIES OR THEIR AFFILIATES IS MAKING ANY REPRESENTATION TO ANY OFFEREE OR PURCHASER OF SECURITIES REGARDING THE LEGALITY OF AN INVESTMENT THEREIN BY SUCH OFFEREE OR PURCHASER UNDER APPLICABLE LEGAL INVESTMENT OR SIMILAR LAWS. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE CO-ISSUERS AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. iv EFTA01422836 THE DISTRIBUTION OF THIS OFFERING MEMORANDUM AND THE OFFER AND SALE OF SECURITIES MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS. PERSONS INTO WHOSE POSSESSION THIS OFFERING MEMORANDUM OR ANY OF THE SECURITIES COME MUST INFORM THEMSELVES ABOUT, AND OBSERVE, ANY SUCH RESTRICTIONS. SEE "PLAN OF DISTRIBUTION." THIS OFFERING MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES TO ANY PERSON IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. THE SECURITIES DESCRIBED HEREIN HAVE NOT BEEN REGISTERED WITH, RECOMMENDED BY OR APPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC")OR ANY OTHER FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY, NOR HAS THE SEC OR ANY SUCH COMMISSION OR REGULATORY AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE INITIAL PURCHASER RESERVES THE RIGHT TO REJECT ANY COMMITMENT TO SUBSCRIBE IN WHOLE OR IN PART AND TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN THE FULL AMOUNT OF SECURITIES SOUGHT BY SUCH INVESTOR. THE INITIAL PURCHASER AND CERTAIN RELATED ENTITIES MAY ACQUIRE FOR THEIR OWN ACCOUNT A PORTION OF THE SECURITIES. THE RECEIPT OF THIS OFFERING MEMORANDUM CONSTITUTES THE AGREEMENT ON THE PART OF THE RECIPIENT HEREOF (A) TO MAINTAIN THE CONFIDENTIALITY OF THE INFORMATION CONTAINED HEREIN, AS WELL AS ANY SUPPLEMENTAL INFORMATION PROVIDED TO THE RECIPIENT BY THE CO-ISSUERS OR ANY OF THEIR REPRESENTATIVES, EITHER ORALLY OR IN WRITTEN FORM, (B) THAT ANY REPRODUCTION OR DISTRIBUTION OF THIS OFFERING MEMORANDUM, IN WHOLE OR IN PART, OR DISCLOSURE OF ANY OF ITS CONTENTS TO ANY OTHER PERSON OR ITS USE FOR ANY PURPOSE OTHER THAN TO EVALUATE PARTICIPATION IN THE OFFERING DESCRIBED HEREIN IS STRICTLY PROHIBITED AND (C) THAT THIS OFFERING MEMORANDUM, AS WELL AS OTHER MATERIALS THAT SUBSEQUENTLY MAY BE PROVIDED BY THE CO-ISSUERS, IS TO BE RETURNED PROMPTLY IF THE RECIPIENT DECIDES NOT TO PROCEED WITH THE INVESTIGATION OF, OR PARTICIPATION IN, THE OFFERING OR IF THE OFFERING IS TERMINATED. THE UNDERTAKINGS AND PROHIBITIONS SET FORTH IN THE PRECEDING SENTENCE ARE INTENDED FOR THE BENEFIT OF THE CO-ISSUERS AND MAY BE ENFORCED BY THE CO-ISSUERS. NOTICE TO NEW HAMPSHIRE RESIDENTS NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF EFTA01422837 THE NEW HAMPSHIRE REVISED STATUTES (THE "RSA") WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. NOTICE TO CONNECTICUT RESIDENTS THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT SECURITIES LAW. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND SALE. v EFTA01422838 NOTICE TO FLORIDA RESIDENTS THE SECURITIES OFFERED HEREBY WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT ("FSA"). THE SECURITIES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN ADDITION, IF SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA, ALL FLORIDA PURCHASERS OTHER THAN EXEMPT INSTITUTIONS SPECIFIED IN SECTION 517.061(7) OF THE FSA SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE CO-ISSUERS, AN AGENT OF THE CO-ISSUERS, OR AN ESCROW AGENT. NOTICE TO GEORGIA RESIDENTS THE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13) OF CODE SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973, AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT. NOTICE TO RESIDENTS OF AUSTRALIA NO PROSPECTUS, DISCLOSURE DOCUMENT, OFFERING MATERIAL OR ADVERTISEMENT IN RELATION TO THE SECURITIES HAS BEEN LODGED WITH THE AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION OR THE AUSTRALIAN STOCK EXCHANGE LIMITED. ACCORDINGLY, A PERSON MAY NOT (A) MAKE, OFFER OR INVITE APPLICATIONS FOR THE ISSUE, SALE OR PURCHASE OF THE SECURITIES WITHIN, TO OR FROM AUSTRALIA (INCLUDING AN OFFER OR INVITATION WHICH IS RECEIVED BY A PERSON IN AUSTRALIA) OR (B) DISTRIBUTE OR PUBLISH THIS INFORMATION MEMORANDUM OR ANY OTHER PROSPECTUS, DISCLOSURE DOCUMENT, OFFERING MATERIAL OR ADVERTISEMENT RELATING TO THE SECURITIES IN AUSTRALIA, UNLESS (I) THE MINIMUM AGGREGATE CONSIDERATION PAYABLE BY EACH OFFEREE IS THE U.S. DOLLAR EQUIVALENT OF AT LEAST A$500,000 (DISREGARDING MONEYS LENT BY THE OFFEROR OR ITS ASSOCIATES) OR THE OFFER OTHERWISE DOES NOT REQUIRE DISCLOSURE TO INVESTORS IN ACCORDANCE WITH PART 6D.2 OF THE CORPORATIONS ACT 2001 (CWLTH) OF AUSTRALIA; AND (II) SUCH ACTION COMPLIES WITH ALL APPLICABLE LAWS AND REGULATIONS. NOTICE TO RESIDENTS OF AUSTRIA THIS OFFERING MEMORANDUM IS CIRCULATED IN AUSTRIA FOR THE SOLE PURPOSE OF PROVIDING INFORMATION ABOUT THE SECURITIES TO A LIMITED NUMBER OF SOPHISTICATED INVESTORS IN AUSTRIA. EFTA01422839 THIS OFFERING MEMORANDUM IS MADE AVAILABLE ON THE CONDITION THAT IT IS SOLELY FOR THE USE OF THE RECIPIENT AS A SOPHISTICATED, POTENTIAL AND INDIVIDUALLY SELECTED INVESTOR AND MAY NOT BE PASSED ON TO ANY OTHER PERSON OR REPRODUCED IN WHOLE OR IN PART. THIS OFFERING MEMORANDUM DOES NOT CONSTITUTE A PUBLIC OFFERING (ÖFFENTLICHES ANGEBOT) IN AUSTRIA AND MUST NOT BE USED IN CONJUNCTION WITH A PUBLIC OFFERING PURSUANT TO THE CAPITAL MARKET ACT (KAPITALMARKTGESETZ) AND/OR THE INVESTMENT FUND ACT (INVESTMENTFONDSGESETZ) IN AUSTRIA. CONSEQUENTLY, NO PUBLIC OFFERS OR PUBLIC SALES MUST BE MADE IN AUSTRIA IN RESPECT OF THE SECURITIES. THE SECURITIES ARE NOT REGISTERED IN AUSTRIA. IN CASE THE SECURITIES ARE QUALIFIED AS SHARES IN A FOREIGN INVESTMENT FUND WITHIN THE MEANING OF THE INVESTMENT FUND ACT, THEY MIGHT BE SUBJECT TO A LESS FAVORABLE TAX TREATMENT THAN SHARES IN INVESTMENT FUNDS ESTABLISHED IN AUSTRIA UNDER THE INVESTMENT FUND ACT. ALL PROSPECTIVE INVESTORS ARE URGED TO SEEK INDEPENDENT TAX ADVICE. THE INITIAL PURCHASER AND ITS AFFILIATES DO NOT GIVE TAX ADVICE. ANMERKUNG FÜR EINWOHNER VON ÖSTERREICH DIESER PROSPEKT WIRD IN ÖSTERREICH NUR ZU DEM ZWECK HERAUSGEGEBEN, UM EINER BESCHRÄNKTEN ANZAHL VON PROFESSIONELLEN MARKTTEILNEHMERN IN ÖSTERREICH INFORMATIONEN ÜBER DIE ANGEBOTENEN WERTPAPIERE ZU GEBEN. DIESER PROSPEKT WIRD UNTER DER BEDINGUNG ZUR VERFÜGUNG GESTELLT, DASS DIESER PROSPEKT AUSSCHLIESSLICH VOM EMPFÄNGER ALS EINEM PROFESSIONELLEN POTENTIELLEN UND EINZELN AUSGEWÄHLTEN ANLEGER VERWENDET WIRD UND ER DARF NICHT AN EINE ANDERE PERSON WEITERGEGEBEN ODER TEILWEISE ODER VOLLSTÄNDIG REPRODUZIERT WERDEN. DIESER PROSPEKT STELLT KEIN ÖFFENTLICHES ANGEBOT IN ÖSTERREICH DAR UND DARF NICHT IN ZUSAMMENHANG MIT EINEM ÖFFENTLICHEN ANGEBOT IN ÖSTERREICH IM SINNE DES KAPITALMARKTGESETZES UND/ODER DES INVESTMENTFONDSGESETZES VERWENDET WERDEN. FOLGLICH DÜRFEN IN ÖSTERREICH KEINE ÖFFENTLICHEN ANGEBOTE ODER VERKÄUFE DER ANGEBOTENEN WERTPAPIEREN DURCHGEFÜHRT WERDEN. DIE WERTPAPIERE SIND NICHT IN ÖSTERREICH ZUGELASSEN. SOLLTEN DIE WERTPAPIERE ALS ANTEILE AN EINEM AUSLÄNDISCHEN INVESTMENTFONDS QUALIFIZIERT WERDEN, KÖNNTEN SIE EINER UNGÜNSTIGEREN BESTEUERUNG ALS ANTEILE AN IN ÖSTERREICH GEMÄSS EFTA01422840 DEM INVESTMENTFONDSGESETZ ERRICHTETEN INVESTMENTFONDS UNTERLIEGEN. ALLE KÜNFTIGEN ANLEGER WERDEN DAHER AUFGEFORDERT, UNABHÄNGIGE STEUERBERATUNG EINZUHOLEN. DER ERSTKÄUFER UND DIE MIT IHM VERBUNDENEN UNTERNEHMEN ERTEILEN KEINE STEUERLICHE BERATUNG. vi EFTA01422841 NOTICE TO RESIDENTS OF BAHRAIN EACH OF THE CO-ISSUERS, THE INVESTMENT MANAGER AND THE INITIAL PURCHASER REPRESENTS AND WARRANTS THAT IT HAS NOT MADE AND WILL NOT MAKE ANY INVITATION TO THE PUBLIC IN THE STATE OF BAHRAIN TO SUBSCRIBE FOR THE SECURITIES AND THAT THE DOCUMENT WILL NOT BE ISSUED, PASSED TO, OR MADE AVAILABLE TO THE PUBLIC GENERALLY. NOTICE TO RESIDENTS OF BELGIUM THE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR DELIVERED IN OR FROM BELGIUM AS PART OF THEIR INITIAL DISTRIBUTION OR AT ANY TIME THEREAFTER, DIRECTLY OR INDIRECTLY, UNLESS THEY SHALL EACH HAVE A NOMINAL AMOUNT OF EUR 50,000 OR MORE. ANY OFFER TO SELL OR SALE OF SECURITIES MUST BE MADE IN COMPLIANCE WITH THE PROVISIONS OF THE LAW OF JULY 14, 1991 ON CONSUMER PROTECTION AND TRADE PRACTICES ("SUR LES PRATIQUES DU COMMERCE ET SUR L'INFORMATION ET LA PROTECTION DU CONSOMMATEUR"/"BETREFFENDE DE HANDELSPRAKTIJKEN EN DE VOORLICHTING EN BESCHERMING VAN DE CONSUMENT"), TO THE EXTENT APPLICABLE PURSUANT TO THE ROYAL DECREE OF DECEMBER 5, 2000 "RENDANT APPLICABLES AUX INSTRUMENTS FINANCIERS ET AUX TITRES ET VALEURS CERTAINES DISPOSITIONS DE LA LOI DU 14 JUILLET 1991 SUR LES PRATIQUES DU COMMERCE ET SUR L'INFORMATION ET LA PROTECTION DU CONSOMMATEUR"/"WAARBIJ SOMMIGE BEPALINGEN VAN DE WET VAN 14 JULI 1991 BETREFFENDE DE HANDELSPRAKTIJKEN EN DE VOORLICHTING EN BESCHERMING VAN DE CONSUMENT, VAN TOEPASSING WORDEN VERKLAARD OP FINANCIELE INSTRUMENTEN, EFFECTEN EN WAARDEN." NOTICE TO CANADIAN RESIDENTS RESALE RESTRICTIONS THE DISTRIBUTION OF THE SECURITIES IN CANADA IS BEING MADE ONLY ON A PRIVATE PLACEMENT BASIS EXEMPT FROM THE REQUIREMENT THAT THE CO-ISSUERS PREPARE AND FILE A PROSPECTUS WITH THE SECURITIES REGULATORY AUTHORITIES IN EACH PROVINCE WHERE TRADES OF SECURITIES ARE MADE. ANY RESALE OF THE SECURITIES IN CANADA MUST BE MADE UNDER APPLICABLE SECURITIES LAWS WHICH WILL VARY DEPENDING ON THE RELEVANT JURISDICTION, AND WHICH MAY REQUIRE RESALES TO BE MADE UNDER AVAILABLE STATUTORY EXEMPTIONS OR UNDER A DISCRETIONARY EXEMPTION GRANTED BY THE APPLICABLE CANADIAN SECURITIES REGULATORY AUTHORITY. PURCHASERS ARE ADVISED TO SEEK LEGAL ADVICE PRIOR TO ANY RESALE OF THE SECURITIES. REPRESENTATIONS OF PURCHASERS BY PURCHASING SECURITIES IN CANADA AND ACCEPTING A PURCHASE CONFIRMATION A EFTA01422842 PURCHASER IS REPRESENTING TO THE CO-ISSUERS AND THE DEALER FROM WHOM THE PURCHASE CONFIRMATION IS RECEIVED THAT: • THE PURCHASER IS ENTITLED UNDER APPLICABLE PROVINCIAL SECURITIES LAWS TO PURCHASE THE SECURITIES WITHOUT THE BENEFIT OF A PROSPECTUS QUALIFIED UNDER THOSE SECURITIES LAWS, • WHERE REQUIRED BY LAW, THAT THE PURCHASER IS PURCHASING AS PRINCIPAL AND NOT AS AGENT, • THE PURCHASER HAS REVIEWED THE TEXT ABOVE UNDER RESALE RESTRICTIONS, AND • THE PURCHASER ACKNOWLEDGES AND CONSENTS TO THE PROVISION OF SPECIFIED INFORMATION CONCERNING ITS PURCHASE OF THE SECURITIES TO THE REGULATORY AUTHORITY THAT BY LAW IS ENTITLED TO COLLECT THE INFORMATION. FURTHER DETAILS CONCERNING THE LEGAL AUTHORITY FOR THIS INFORMATION ARE AVAILABLE ON REQUEST. RIGHTS OF ACTION - ONTARIO PURCHASERS ONLY UNDER ONTARIO SECURITIES LEGISLATION, CERTAIN PURCHASERS WHO PURCHASE A SECURITY OFFERED BY THIS OFFERING MEMORANDUM DURING THE PERIOD OF DISTRIBUTION WILL HAVE A STATUTORY RIGHT OF ACTION FOR DAMAGES, OR WHILE STILL THE OWNER OF THE SECURITIES, FOR RESCISSION AGAINST THE CO-ISSUERS IN THE EVENT THAT THIS DOCUMENT CONTAINS A MISREPRESENTATION WITHOUT REGARD TO WHETHER THE PURCHASER RELIED ON THE MISREPRESENTATION. THE RIGHT OF ACTION FOR DAMAGES IS EXERCISABLE NOT LATER THAN THE EARLIER OF 180 DAYS FROM THE DATE THE PURCHASER FIRST HAD KNOWLEDGE OF THE FACTS GIVING RISE TO THE CAUSE OF ACTION AND THREE YEARS FROM THE DATE ON WHICH PAYMENT IS MADE FOR THE SECURITIES. THE RIGHT OF ACTION FOR RESCISSION IS EXERCISABLE NOT LATER THAN 180 DAYS FROM THE DATE ON WHICH PAYMENT IS MADE FOR THE SECURITIES. IF A PURCHASER ELECTS TO EXERCISE THE RIGHT OF ACTION FOR RESCISSION, THE PURCHASER WILL HAVE NO RIGHT OF ACTION FOR DAMAGES AGAINST THE CO-ISSUERS. IN NO CASE WILL THE AMOUNT RECOVERABLE IN ANY ACTION EXCEED THE PRICE AT WHICH THE SECURITIES WERE vii EFTA01422843 OFFERED TO THE PURCHASER AND IF THE PURCHASER IS SHOWN TO HAVE PURCHASED THE SECURITIES WITH KNOWLEDGE OF THE MISREPRESENTATION, THE CO-ISSUERS WILL HAVE NO LIABILITY. IN THE CASE OF AN ACTION FOR DAMAGES, THE CO-ISSUERS WILL NOT BE LIABLE FOR ALL OR ANY PORTION OF THE DAMAGES THAT ARE PROVEN TO NOT REPRESENT THE DEPRECIATION IN VALUE OF THE SECURITIES AS A RESULT OF THE MISREPRESENTATION RELIED UPON. THESE RIGHTS ARE IN ADDITION TO, AND WITHOUT DEROGATION FROM, ANY OTHER RIGHTS OR REMEDIES AVAILABLE AT LAW TO AN ONTARIO PURCHASER. THE FOREGOING IS A SUMMARY OF THE RIGHTS AVAILABLE TO AN ONTARIO PURCHASER. ONTARIO PURCHASERS SHOULD REFER TO THE COMPLETE TEXT OF THE RELEVANT STATUTORY PROVISIONS. ENFORCEMENT OF LEGAL RIGHTS ALL OF THE CO-ISSUERS' DIRECTORS AND OFFICERS AS WELL AS THE EXPERTS NAMED HEREIN MAY BE LOCATED OUTSIDE OF CANADA AND, AS A RESULT, IT MAY NOT BE POSSIBLE FOR CANADIAN PURCHASERS TO EFFECT SERVICE OF PROCESS WITHIN CANADA UPON THE CO-ISSUERS OR THOSE PERSONS. ALL OR A SUBSTANTIAL PORTION OF THE CO-ISSUERS' ASSETS AND THE ASSETS OF THOSE PERSONS MAY BE LOCATED OUTSIDE OF CANADA AND, AS A RESULT, IT MAY NOT BE POSSIBLE TO SATISFY A JUDGMENT AGAINST THE CO-ISSUERS OR THOSE PERSONS IN CANADA OR TO ENFORCE A JUDGMENT OBTAINED IN CANADIAN COURTS AGAINST THE CO-ISSUERS OR THOSE PERSONS OUTSIDE OF CANADA. TAXATION AND ELIGIBILITY FOR INVESTMENT CANADIAN PURCHASERS OF SECURITIES SHOULD CONSULT THEIR OWN LEGAL AND TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF AN INVESTMENT IN THE SECURITIES IN THEIR PARTICULAR CIRCUMSTANCES AND ABOUT THE ELIGIBILITY OF THE SECURITIES FOR INVESTMENT BY THE PURCHASER UNDER RELEVANT CANADIAN LEGISLATION. NOTICE TO THE PUBLIC OF CAYMAN ISLANDS NO INVITATION MAY BE MADE TO THE PUBLIC IN THE CAYMAN ISLANDS TO SUBSCRIBE FOR SECURITIES OF THE ISSUER, AND THIS DOCUMENT MAY NOT BE ISSUED OR PASSED TO ANY SUCH PERSON. NOTICE TO RESIDENTS OF FINLAND THIS DOCUMENT HAS BEEN PREPARED FOR PRIVATE INFORMATION PURPOSES OF INTERESTED INVESTORS ONLY. IT MAY NOT BE USED FOR AND SHALL NOT BE DEEMED A PUBLIC OFFERING OF THE SECURITIES. THE FINNISH FINANCIAL SUPERVISION AUTHORITY (RAHOITUSTARKASTUS) HAS NOT APPROVED THIS DOCUMENT AND HAS NOT AUTHORIZED ANY OFFERING OF THE SUBSCRIPTION OF THE EFTA01422844 SECURITIES; ACCORDINGLY, THE SECURITIES MAY NOT BE OFFERED OR SOLD IN FINLAND OR TO RESIDENTS THEREOF EXCEPT AS PERMITTED BY FINNISH LAW. THIS DOCUMENT IS STRICTLY FOR PRIVATE USE BY ITS HOLDER AND MAY NOT BE PASSED ON TO THIRD PARTIES. NOTICE TO RESIDENTS OF FRANCE NO PROSPECTUS (INCLUDING ANY AMENDMENT, SUPPLEMENT OR REPLACEMENT THERETO) HAS BEEN PREPARED IN CONNECTION WITH THE OFFERING OF THE SECURITIES THAT HAS BEEN APPROVED BY THE AUTORITE DES MARCHES FINANCIERS OR BY THE COMPETENT AUTHORITY OF ANOTHER STATE THAT IS A CONTRACTING PARTY TO THE AGREEMENT ON THE EUROPEAN ECONOMIC AREA THAT HAS BEEN RECOGNIZED IN FRANCE; NO SECURITIES HAVE BEEN OFFERED OR SOLD AND WILL BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, TO THE PUBLIC IN FRANCE EXCEPT TO QUALIFIED INVESTORS (INVESTISSEURS QUALIFIES) AND/OR TO A LIMITED CIRCLE OF INVESTORS (CERCLE RESTREINT D'INVESTISSEURS) ACTING FOR THEIR OWN ACCOUNT AS DEFINED IN ARTICLE L. 411-2 OF THE FRENCH CODE MONETAIRE ET FINANCIER AND APPLICABLE REGULATIONS THEREUNDER; NONE OF THIS OFFERING MEMORANDUM OR ANY OTHER MATERIALS RELATED TO THE OFFERING OR INFORMATION CONTAINED THEREIN RELATING TO THE SECURITIES HAS BEEN RELEASED, ISSUED OR DISTRIBUTED TO THE PUBLIC IN FRANCE EXCEPT TO QUALIFIED INVESTORS (INVESTISSEURS QUALIFIES) AND/OR TO A LIMITED CIRCLE OF INVESTORS (CERCLE RESTREINT D'INVESTISSEURS) MENTIONED ABOVE; AND THE DIRECT OR INDIRECT RESALE TO THE PUBLIC IN FRANCE OF ANY SECURITIES ACQUIRED BY ANY QUALIFIED INVESTORS (INVESTISSEURS QUALIFIES) AND/OR ANY INVESTORS BELONGING TO A LIMITED CIRCLE OF INVESTORS (CERCLE RESTREINT D'INVESTISSEURS) MAY BE MADE ONLY AS PROVIDED BY ARTICLES L. 412-1 AND L. 621-8 OF THE FRENCH CODE MONETAIRE ET FINANCIER AND APPLICABLE REGULATIONS THEREUNDER. NOTICE TO RESIDENTS OF GERMANY THE SECURITIES MAY ONLY BE ACQUIRED IN ACCORDANCE WITH THE GERMAN WERTPAPIERPROSPEKTGESETZ (SECURITIES PROSPECTUS ACT) AND THE INVESTMENTGESETZ (INVESTMENT ACT). THE SECURITIES ARE NOT REGISTERED OR AUTHORIZED FOR DISTRIBUTION UNDER THE INVESTMENT ACT AND MAY NOT BE, AND ARE NOT BEING OFFERED OR ADVERTISED PUBLICLY OR OFFERED SIMILARLY UNDER THE INVESTMENT ACT OR THE SECURITIES PROSPECTUS ACT. THEREFORE, THIS OFFER IS ONLY BEING MADE TO RECIPIENTS TO WHOM THIS DOCUMENT IS PERSONALLY ADDRESSED EFTA01422845 AND DOES NOT CONSTITUTE AN OFFER OR ADVERTISEMENT TO THE PUBLIC. THE SECURITIES CAN ONLY BE viii EFTA01422846 ACQUIRED FOR A MINIMUM PURCHASE PRICE OF AT LEAST € 50,000 (EXCLUDING COMMISSIONS AND OTHER FEES) PER PERSON. ALL PROSPECTIVE INVESTORS ARE URGED TO SEEK INDEPENDENT TAX ADVICE. NONE OF THE CO-ISSUERS, THE TRUSTEE, THE INVESTMENT MANAGER, THE INITIAL PURCHASER OR ANY OF THEIR RESPECTIVE AFFILIATES GIVES ANY TAX ADVICE. NOTICE TO RESIDENTS OF GREECE THIS DOCUMENT AND THE SECURITIES TO WHICH IT RELATES AND ANY OTHER MATERIAL RELATED THERETO MAY NOT BE ADVERTISED, DISTRIBUTED OR OTHERWISE MADE AVAILABLE TO THE PUBLIC IN GREECE. THE GREEK CAPITAL MARKET COMMITTEE HAS NOT AUTHORISED ANY PUBLIC OFFERING OF THE SUBSCRIPTION OF THE SECURITIES. ACCORDINGLY, SECURITIES MAY NOT BE ADVERTISED, DISTRIBUTED OR IN ANY WAY OFFERED OR SOLD IN GREECE OR TO RESIDENTS THEREOF EXCEPT AS PERMITTED BY GREEK LAW. NOTICE TO RESIDENTS OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION (A) THE SECURITIES HAVE NOT BEEN OFFERED OR SOLD AND WILL NOT BE OFFERED OR SOLD IN HONG KONG, BY MEANS OF ANY DOCUMENT, OTHER THAN (I) TO PERSONS WHOSE ORDINARY BUSINESS IT IS TO BUY OR SELL SHARES OR DEBENTURES (WHETHER AS PRINCIPAL OR AGENT); (II) TO "PROFESSIONAL INVESTORS" AS DEFINED IN THE SECURITIES AND FUTURES ORDINANCE (CAP. 571) OF HONG KONG AND ANY RULES MADE UNDER THAT ORDINANCE; OR (III) IN OTHER CIRCUMSTANCES WHICH DO NOT RESULT IN THE DOCUMENT BEING A "PROSPECTUS" AS DEFINED IN THE COMPANIES ORDINANCE (CAP. 32) OF HONG KONG OR WHICH DO NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THAT ORDINANCE; AND (B) NO ADVERTISEMENT, INVITATION OR DOCUMENT RELATING TO THE SECURITIES HAS BEEN ISSUED OR POSSESSED FOR THE PURPOSES OF ISSUE OR WILL BE ISSUED OR POSSESSED FOR THE PURPOSES OF ISSUE, WHETHER IN HONG KONG OR ELSEWHERE, WHICH IS DIRECTED AT, OR THE CONTENTS OF WHICH ARE LIKELY TO BE ACCESSED OR READ BY, THE PUBLIC OF HONG KONG (EXCEPT IF PERMITTED UNDER THE SECURITIES LAWS OF HONG KONG) OTHER THAN ANY ADVERTISEMENT, INVITATION OR DOCUMENT WITH RESPECT TO SECURITIES WHICH ARE OR ARE INTENDED TO BE DISPOSED OF ONLY TO PERSONS OUTSIDE HONG KONG OR ONLY TO "PROFESSIONAL INVESTORS" AS DEFINED IN THE SECURITIES AND FUTURES ORDINANCE AND ANY RULES MADE UNDER THAT ORDINANCE. NOTICE TO RESIDENTS OF INDONESIA THE SECURITIES MAY NOT BE OFFERED AND/OR ONSOLD DIRECTLY OR INDIRECTLY EFTA01422847 WITHIN THE TERRITORY OF INDONESIA OR TO INDONESIAN CITIZENS OR RESIDENTS IN A MANNER WHICH CONSTITUTES A PUBLIC OFFER UNDER THE LAWS AND REGULATIONS OF INDONESIA. NOTICE TO RESIDENTS OF ISRAEL THIS DOCUMENT WILL BE DISTRIBUTED TO ISRAELI RESIDENTS ONLY IN A MANNER THAT WILL NOT CONSTITUTE AN "OFFER TO THE PUBLIC" IN ACCORDANCE WITH SECTIONS 15 AND 15A OF THE SECURITIES LAW 1968. SPECIFICALLY, THIS DOCUMENT MAY ONLY BE DISTRIBUTED TO INVESTORS OF THE TYPES LISTED IN THE FIRST ADDENDUM OF THE SECURITIES LAW 1968 AND IN ADDITION TO NOT MORE THAN 35 OTHER INVESTORS RESIDENT IN ISRAEL DURING ANY GIVEN 12 MONTH PERIOD. NOTICE TO RESIDENTS OF ITALY THIS DOCUMENT MAY NOT BE DISTRIBUTED TO MEMBERS OF THE PUBLIC IN ITALY. THE ITALIAN COMMISSIONE NAZIONALE PER LA SOCIETA E LA BORSA HAS NOT AUTHORIZED ANY OFFERING OF THE SUBSCRIPTION OF THE SECURITIES; ACCORDINGLY, THE SECURITIES MAY NOT BE OFFERED OR SOLD IN ITALY OR TO RESIDENTS THEREOF EXCEPT AS PERMITTED BY ITALIAN LAW. NOTICE TO RESIDENTS OF JAPAN THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE FINANCIAL INSTRUMENTS AND EXCHANGE LAW OF JAPAN (THE "FIEL"), AND THE SECURITIES MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN (INCLUDING JAPANESE CORPORATIONS) OR TO OTHERS FOR RE-OFFERING OR RESALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO ANY RESIDENT OF JAPAN, EXCEPT THAT THE OFFER AND SALE OF THE SECURITIES IN JAPAN MAY BE MADE ONLY THROUGH PRIVATE PLACEMENT SALE IN JAPAN IN ACCORDANCE WITH AN EXEMPTION AVAILABLE UNDER THE FIEL AND WITH ALL OTHER APPLICABLE LAWS AND REGULATIONS OF JAPAN. IN THIS CLAUSE, "A RESIDENT/RESIDENTS OF JAPAN" SHALL HAVE THE MEANING AS DEFINED UNDER THE FOREIGN EXCHANGE AND FOREIGN TRADE LAW OF JAPAN. NOTICE TO RESIDENTS OF KOREA THE SECURITIES MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN KOREA OR TO ANY KOREAN RESIDENT, EXCEPT AS PERMITTED BY APPLICABLE KOREAN LAW. WITHOUT AFFECTING THE GENERALITY OF THE FOREGOING, THE SECURITIES HAVE NOT BEEN OR WILL NOT BE REGISTERED UNDER THE SECURITIES AND EXCHANGE LAW OF KOREA ("SEL"), THUS ANY OFFER OF, OR INVITATION FOR OFFER ix EFTA01422848 OF, THE SECURITIES MAY NOT BE MADE TO ANY RESIDENT OF KOREA OTHER THAN INSTITUTIONAL INVESTORS WITHIN THE MEANING OF THE SEL. ANY SECURITY PURCHASED BY ANY KOREAN RESIDENT THROUGH THE OFFERING MAY NOT BE TRANSFERRED TO ANY KOREAN RESIDENT IN PART DURING THE ONE YEAR PERIOD FROM THE ISSUE DATE OF THE SECURITIES. NOTICE TO RESIDENTS OF MALAYSIA THE SECURITIES MAY NOT BE OFFERED OR SOLD DIRECTLY OR INDIRECTLY NOR MAY ANY DOCUMENT OR OTHER MATERIAL IN CONNECTION THEREWITH BE DISTRIBUTED IN MALAYSIA. NOTICE TO RESIDENTS OF NEW ZEALAND THE SECURITIES HAVE NOT BEEN AND MAY NOT BE OFFERED OR SOLD TO ANY PERSONS IN NEW ZEALAND WHOSE PRINCIPAL BUSINESS IS NOT THE INVESTMENT OF MONEY OR WHO, IN THE COURSE OF AND FOR THE PURPOSES OF THEIR BUSINESS, DO NOT HABITUALLY INVEST MONEY, IN EACH CASE WITHIN THE MEANING OF SECTION 3(2)(A)(III) OF THE SECURITIES ACT 1978. NOTICE TO RESIDENTS OF OMAN THE SECURITIES CANNOT BE OFFERED, MARKETED OR SOLD IN THE SULTANATE OF OMAN, WITHOUT THE APPROVAL OF THE CAPITAL MARKET AUTHORITY, AND SUBJECT TO ANY CONDITIONS OR RESTRICTIONS THAT MAY BE IMPOSED BY THAT BODY, AND IF OFFERED, MARKETED OR SOLD THROUGH A BANK LICENSED TO DO INVESTMENT BANKING BUSINESS IN OMAN, THEN WITHOUT THE APPROVAL OF THE CENTRAL BANK OF OMAN AND THE CAPITAL MARKET AUTHORITY, AND SUBJECT TO ANY CONDITIONS AND RESTRICTIONS THAT MAY BE IMPOSED BY THOSE BODIES. NOTICE TO RESIDENTS OF PEOPLE'S REPUBLIC OF CHINA THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES LAW OF THE PEOPLE'S REPUBLIC OF CHINA (AS THE SAME MAY BE AMENDED FROM TIME TO TIME) AND ARE NOT TO BE OFFERED OR SOLD TO PERSONS WITHIN THE PEOPLE'S REPUBLIC OF CHINA (EXCLUDING THE HONG KONG AND MACAU SPECIAL ADMINISTRATIVE REGIONS) UNLESS PERMITTED BY THE LAWS OF THE PEOPLE'S REPUBLIC OF CHINA. NOTICE TO RESIDENTS OF THE PHILIPPINES THE SECURITIES BEING OFFERED OR SOLD HEREIN HAVE NOT BEEN REGISTERED WITH THE PHILIPPINE SECURITIES AND EXCHANGE COMMISSION (SEC) UNDER THE SECURITIES REGULATION CODE (SRC) AND ARE BEING OFFERED AND SOLD PURSUANT TO SECTION 10.1(L) OF THE SRC. NO WRITTEN CONFIRMATION OF EXEMPTION HAS BEEN OBTAINED FROM THE SEC WITH RESPECT TO THIS MATTER. ANY FUTURE OFFER OR SALE OF THE SECURITIES IS SUBJECT TO REGISTRATION REQUIREMENTS UNDER THE EFTA01422849 SRC UNLESS SUCH OFFER OR SALE QUALIFIES AS AN EXEMPT TRANSACTION. NOTICE TO RESIDENTS OF QATAR THE ISSUER IS NOT AN INVESTMENT COMPANY AUTHORISED TO CONDUCT INVESTMENT BUSINESSES IN THE STATE OF QATAR AS REQUIRED BY QATAR CENTRAL BANK RESOLUTION NO. (15) "SUPERVISION RULES AND EXECUTIVE INSTRUCTIONS FOR INVESTMENT COMPANIES." ACCORDINGLY, THE ISSUER WARRANTS AND REPRESENTS THAT IT HAS NOT MADE AND WILL NOT MAKE ANY INVITATIONS TO THE PUBLIC IN THE STATE OF QATAR, AND NEITHER THIS OFFERING MEMORANDUM NOR ANY OTHER OFFERING MATERIAL RELATING TO THE SECURITIES WILL BE ISSUED OR MADE AVAILABLE TO THE PUBLIC GENERALLY. NOTICE TO RESIDENTS OF THE KINGDOM OF SAUDI ARABIA THE OFFERING OF THE SECURITIES HAS NOT BEEN APPROVED BY THE MINISTRY OF COMMERCE, THE MINISTRY OF FINANCE OR THE SAUDI ARABIAN MONETARY AGENCY. ACCORDINGLY, THE SECURITIES MAY NOT BE OFFERED IN THE KINGDOM OF SAUDI ARABIA. FURTHER, EACH OF THE CO- ISSUERS, THE INVESTMENT MANAGER AND THE INITIAL PURCHASER REPRESENTS AND WARRANTS THAT IT HAS NOT MADE AND WILL NOT MAKE ANY INVITATION TO THE PUBLIC OF THE KINGDOM OF SAUDI ARABIA TO SUBSCRIBE FOR THE SECURITIES AND THAT THIS OFFERING MEMORANDUM WILL NOT BE ISSUED, PASSED TO, OR MADE AVAILABLE TO THE PUBLIC GENERALLY IN THE KINGDOM OF SAUDI ARABIA. NOTICE TO RESIDENTS OF SINGAPORE THIS OFFERING MEMORANDUM HAS NOT BEEN REGISTERED AS A PROSPECTUS WITH THE MONETARY AUTHORITY OF SINGAPORE. ACCORDINGLY, THIS OFFERING MEMORANDUM AND ANY OTHER DOCUMENT OR MATERIAL IN CONNECTION WITH THE OFFER OR SALE, OR INVITATION FOR SUBSCRIPTION OR PURCHASE, OF THE SECURITIES MAY NOT BE CIRCULATED OR DISTRIBUTED, NOR MAY THE SECURITIES BE OFFERED OR SOLD, OR BE MADE THE SUBJECT OF AN INVITATION FOR SUBSCRIPTION OR PURCHASE, WHETHER DIRECTLY OR INDIRECTLY, TO PERSONS IN SINGAPORE OTHER THAN (I) TO AN INSTITUTIONAL INVESTOR UNDER SECTION 274 OF THE SECURITIES AND FUTURES ACT, CHAPTER 289 OF SINGAPORE (THE "SFA"), (II) TO A RELEVANT PERSON, OR ANY PERSON PURSUANT TO SECTION 275(1A), AND IN ACCORDANCE x EFTA01422850 WITH THE CONDITIONS, SPECIFIED IN SECTION 275 OF THE SFA OR (III) OTHERWISE PURSUANT TO, AND IN ACCORDANCE WITH THE CONDITIONS OF, ANY OTHER APPLICABLE PROVISION OF THE SFA. WHERE THE SECURITIES ARE SUBSCRIBED OR PURCHASED UNDER SECTION 275 BY A RELEVANT PERSON WHICH IS: (A) A CORPORATION (WHICH IS NOT AN ACCREDITED INVESTOR) THE SOLE BUSINESS OF WHICH IS TO HOLD INVESTMENTS AND THE ENTIRE SHARE CAPITAL OF WHICH IS OWNED BY ONE OR MORE INDIVIDUALS, EACH OF WHOM IS AN ACCREDITED INVESTOR; OR (B) A TRUST (WHERE THE TRUSTEE IS NOT AN ACCREDITED INVESTOR) WHOSE SOLE PURPOSE IS TO HOLD INVESTMENTS AND EACH BENEFICIARY IS AN ACCREDITED INVESTOR, SHARES, THEN THE DEBENTURES AND UNITS OF SHARES AND DEBENTURES OF THAT CORPORATION OR THE BENEFICIARIES' RIGHTS AND INTEREST IN THAT TRUST SHALL NOT BE TRANSFERABLE FOR 6 MONTHS AFTER THAT CORPORATION OR THAT TRUST HAS ACQUIRED THE SECURITIES UNDER SECTION 275 EXCEPT: (1) TO AN INSTITUTIONAL INVESTOR UNDER SECTION 274 OF THE SFA OR TO A RELEVANT PERSON, OR ANY PERSON PURSUANT TO SECTION 275(1A), AND IN ACCORDANCE WITH THE CONDITIONS, SPECIFIED IN SECTION 275 OF THE SFA; (2) WHERE NO CONSIDERATION IS GIVEN FOR THE TRANSFER; OR (3) BY OPERATION OF LAW. NOTICE TO RESIDENTS OF SPAIN NEITHER THE SECURITIES NOR THIS DOCUMENT HAVE BEEN APPROVED OR REGISTERED IN THE ADMINISTRATIVE REGISTRIES OF THE SPANISH SECURITIES MARKETS COMMISSION (COMISION NACIONAL DEL MERCADO DE VALORES). ACCORDINGLY, THE SECURITIES MAY NOT BE OFFERED IN SPAIN EXCEPT IN CIRCUMSTANCES WHICH DO NOT CONSTITUTE A PUBLIC OFFER OF SECURITIES IN SPAIN WITHIN THE MEANING OF ARTICLE 30BIS OF THE SPANISH SECURITIES MARKET LAW OF 28 JULY 1988 (LEY 24/1988, DE 28 DE JULIO, DEL MERCADO DE VALORES), AS AMENDED AND RESTATED, AND SUPPLEMENTAL RULES ENACTED THEREUNDER. NOTICE TO RESIDENTS OF SWITZERLAND THIS DOCUMENT HAS BEEN PREPARED FOR PRIVATE INFORMATION PURPOSES OF INTERESTED INVESTORS ONLY. IT MAY NOT BE USED FOR AND SHALL NOT BE DEEMED A PUBLIC OFFERING OF THE SECURITIES. NO APPLICATION HAS BEEN MADE UNDER SWISS LAW TO PUBLICLY MARKET THE SECURITIES IN OR FROM SWITZERLAND. THEREFORE, NO PUBLIC OFFER OF THE SECURITIES OR PUBLIC DISTRIBUTION OF THIS DOCUMENT MAY BE MADE IN OR FROM SWITZERLAND. THIS DOCUMENT IS STRICTLY FOR PRIVATE USE BY EFTA01422851 ITS HOLDER AND MAY NOT BE PASSED ON TO THIRD PARTIES. NOTICE TO RESIDENTS OF TAIWAN THE SECURITIES MAY NOT BE SOLD, ISSUED OR PUBLICLY OFFERED IN TAIWAN AND MAY ONLY BE MADE AVAILABLE TO TAIWAN INVESTORS ON A PRIVATE PLACEMENT BASIS OUTSIDE TAIWAN. NO PERSON OR ENTITY IN TAIWAN HAS BEEN AUTHORISED TO OFFER, SELL, GIVE ADVICE REGARDING OR OTHERWISE INTERMEDIATE THE OFFERING AND SALE OF THE SECURITIES. NOTICE TO RESIDENTS OF THAILAND THE SECURITIES MAY NOT BE OFFERED OR SOLD IN THAILAND OTHER THAN TO PERSONS WHO CONSTITUTE COMMERCIAL BANKS WITHIN THE MEANING OF THE COMMERCIAL BANKING ACT OF THAILAND 1962 AND ACCORDINGLY NO TRANSFER OF ANY SECURITIES TO PERSONS WHO ARE NOT COMMERCIAL BANKS WILL BE REGISTERED, RECORDED OR OTHERWISE RECOGNISED BY THE ISSUER OR REGISTRAR. NOTICE TO RESIDENTS OF TURKEY THE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED WITH THE SERMAYE PIYASASI KURULU (CAPITAL MARKETS BOARD) UNDER THE CAPITAL MARKETS LAW NO. 2499, AS AMENDED, AND RELATED COMMUNIQUES OF THE REPUBLIC OF TURKEY. THE SECURITIES MAY NOT BE OFFERED OR DISTRIBUTED IN A MANNER THAT WOULD CONSTITUTE A PUBLIC OR PRIVATE OFFERING IN TURKEY, AND NEITHER THIS OFFERING MEMORANDUM NOR ANY OTHER OFFERING MATERIAL RELATING TO THE SECURITIES MAY BE DISTRIBUTED IN CONNECTION WITH ANY SUCH OFFERING OR DISTRIBUTION. THE SECURITIES MAY BE ACQUIRED BY RESIDENTS OF TURKEY ONLY PURSUANT TO ARTICLE 15 OF DECREE NO. 32 ON THE PROTECTION OF THE VALUE OF THE TURKISH CURRENCY. xi EFTA01422852 NOTICE TO RESIDENTS OF UNITED ARAB EMIRATES THE OFFERING OF THE SECURITIES HAS NOT BEEN APPROVED BY THE UAE CENTRAL BANK AND ACCORDINGLY THE SECURITIES MAY NOT BE OFFERED IN THE UNITED ARAB EMIRATES. EACH OF THE COISSUERS, THE INVESTMENT MANAGER AND THE INITIAL PURCHASER REPRESENTS AND WARRANTS THAT THE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR DELIVERED TO THE PUBLIC IN THE UNITED ARAB EMIRATES. FURTHER, THIS OFFERING MEMORANDUM IS ADDRESSED ONLY TO THE RECIPIENT PARTY AND MAY NOT BE TRANSFERRED THEREAFTER. NOTICE TO RESIDENTS OF THE UNITED KINGDOM THIS DOCUMENT IS ONLY BEING DISTRIBUTED TO AND IS ONLY DIRECTED AT (I) PERSONS WHO ARE OUTSIDE THE UNITED KINGDOM, (II) TO INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT OF 2000 ("FSMA") (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER") OR (III) HIGH NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED, FALLING WITHIN ARTICLE 49(2) (A) TO (D) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THE SECURITIES ARE ONLY AVAILABLE AND ANY INVITATION, OFFER, INDUCEMENT OR AGREEMENT TO SUBSCRIBE, PURCHASE OR OTHERWISE ACQUIRE SUCH SECURITIES WILL BE ENGAGED IN ONLY WITH, RELEVANT PERSONS. ANY PERSON WHO IS NOT A RELEVANT PERSON SHOULD NOT ACT OR RELY ON THIS DOCUMENT OR ANY OF ITS CONTENTS. STABILISATION IN CONNECTION WITH THE ISSUE OF THE SECURITIES, THE INITIAL PURCHASER (OR PERSONS ACTING ON BEHALF OF THE INITIAL PURCHASER) MAY OVER-ALLOT SECURITIES PROVIDED THAT THE AGGREGATE PRINCIPAL AMOUNT OF SECURITIES ALLOTTED DOES NOT EXCEED 105 PER CENT OF THE AGGREGATE PRINCIPAL AMOUNT OF THE SECURITIES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE SECURITIES AT A LEVEL HIGHER THAN THAT MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE INITIAL PURCHASER (OR PERSONS ACTING ON BEHALF OF THE INITIAL PURCHASER) WILL UNDERTAKE STABILISATION ACTION. ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE FINAL TERMS OF THE OFFER OF THE SECURITIES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN 30 DAYS AFTER THE CLOSING DATE. xii EFTA01422853 EFTA01422854 SUMMARY OF TERMS The following summary does not purport to be complete and is qualified in its entirety by reference to the detailed information appearing elsewhere in this Offering Memorandum and related documents referred to herein. Offered Securities The Notes will be issued pursuant to the Indenture in the aggregate principal amounts set forth below: Class Class A-1 Notes Class A-2 Notes Class B Notes Class C Notes Class D Notes Subordinated Notes Principal Amount (U.S.$) 260,000,000 38,000,000 34,000,000 20,000,000 16,500,000 4,220,000 The Issuer will issue 36,780 Preferred Shares pursuant to its Memorandum and Articles of Association (as amended from time to time, the "Memorandum and Articles") and subject to the terms of the Fiscal Agency Agreement. The allocation between the Subordinated Notes and Preferred Shares may change prior to the Closing Date. With respect to any exercise of Voting Rights, any Class A Notes that are entitled to vote on a matter will vote together as a single class except as specified, and any Subordinated Securities that are entitled to vote on a matter will vote together as a single class. The Class D Notes and the Subordinated Notes (collectively, the "Issuer Only Notes") will be limited recourse debt obligations of the Issuer, and the Senior Notes will be limited recourse debt obligations of the Co-Issuers. The Preferred Shares will be equity interests of the Issuer. The Collateral will be the only source of funds for payments on the Securities. Payment priorities with respect to the Collateral will be in accordance with the Priority of Payments. Following realization of the Collateral and distribution of the proceeds, any claims of a holder of the Securities against the Issuer will be extinguished. Issuer ING IM CLO 2011-1, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands for the sole purpose of acquiring Collateral Obligations, issuing the Securities and engaging in certain related transactions. See "Issuer and Co-Issuer." Co-Issuer ING IM CLO 2011-1 LLC, a Delaware limited liability company EFTA01422855 established for the sole purpose of co-issuing the Senior Notes and engaging in certain related transactions. The Co-Issuer will not have any assets other than nominal capital and will not pledge any assets to secure the Notes. The membership interests of the Co-Issuer will be wholly-owned by the Issuer. Initial Purchaser Credit Suisse Securities (USA) LLC, in its capacity as Initial Purchaser. Trustee and Fiscal Agent The Bank of New York Mellon Trust Company, National Association (the "Bank"), in its capacity as Trustee and Fiscal Agent, respectively. EFTA01422856 Investment Manager ING Alternative Asset Management LLC (the "Investment Manager" or "ING"). The Investment Manager will perform certain advisory, administrative and monitoring functions with respect to the Collateral. See "Investment Management Agreement." On the Closing Date, the Investment Manager and/or one or more of its Affiliates are expected to purchase approximately $2.2 million of the Subordinated Notes and may purchase other Classes of Securities. Closing Date June 22, 2011. Distribution Dates Distribution Dates will occur on the 22nd of March, June, September and December of each year, commencing in December 2011 and any Liquidation Distribution Date (or if any such date is not a Business Day, the next Business Day). The last Distribution Date for any Class of Notes will be the earliest of (a) its Redemption Date, (b) the Stated Maturity, (c) with respect to any Class of Rated Notes, the Distribution Date on which the principal of such Note is paid in full and (d) the last Liquidation Distribution Date. With respect to any Distribution Date, the "Determination Date" will be the seventh Business Day prior to such Distribution Date. Reinvestment Period The period from the Closing Date and ending on the earliest of (a) the Business Day immediately preceding the Determination Date relating to the Distribution Date in June 2014, (b) the date after the Non-Call Period specified by the Investment Manager in a notice to the Trustee that investments in additional Collateral Obligations within the foreseeable future would be either impractical or not beneficial, (c) the last day of the Due Period prior to any Rated Notes Redemption Date and (d) the date on which all unpaid amounts payable on the Notes in accordance with the Indenture are accelerated and become due and payable. Stated Maturity of the Notes June 22, 2021 (or, if such date is not a Business Day, the next Business Day). Any Preferred Shares Outstanding on the Stated Maturity will be redeemed. Priority of Payments On each Distribution Date, Interest Proceeds and Principal Proceeds will be payable as described under "Description of Certain Terms of the Securities -- Priority of Payments." Distributions of Interest On each Distribution Date, subject to the Priority of Post-Acceleration Payments, each holder of Rated Notes on the Record Date will be entitled to receive interest on the Aggregate Outstanding Amount in arrears at the rate per annum specified below, in each case in accordance with the Priority of Payments (each such interest rate, an "Interest Rate"): Class of Notes Class A-1 Notes Class A-2 Notes Class B Notes EFTA01422857 Class C Notes Class D Notes Interest Rate LIBOR plus 1.25% LIBOR plus 1.90% LIBOR plus 2.75% LIBOR plus 3.30% LIBOR plus 4.50% On each Distribution Date, the Subordinated Securities will be entitled to receive any Excess Interest in accordance with the Priority of 2 EFTA01422858 Payments. If on any Distribution Date funds are not available to pay interest on a Deferrable Class in accordance with the Priority of Payments, that interest will be deferred. Such a deferral will not constitute an Event of Default. Each of the Class B Notes, the Class C Notes and the Class D Notes will be a "Deferrable Class" until it becomes the Controlling Class. On each Distribution Date, Interest Proceeds will be diverted, in accordance with the Priority of Payments, to (a) purchase additional Collateral Obligations, during the Reinvestment Agency Confirmation; Period (i) if an (ii) if the Effective Date Ratings Confirmation Failure has occurred, to the extent necessary to obtain Rating Supplemental Diversion Test is not satisfied as of the related Determination Date, to the extent necessary to satisfy such test as of the Determination Date; and (iii) to the extent of Designated Proceeds and (b) pay principal on Rated Notes if (i) any Coverage Test is not satisfied on the related Determination Date, to the extent necessary to satisfy such test or (ii) a Continuing Effective Date Ratings Confirmation Failure has occurred and is continuing, to the extent necessary to obtain Rating Agency Confirmation. Payments of interest on each Class will be subordinated to certain payments on each Higher Ranking Class (including in the case of the Subordinated Securities, to certain payments on the Rated Notes) and to payment of certain fees and expenses. Distributions of Principal On the Stated Maturity, the Outstanding Rated Notes will mature at par (and the final payment of principal will be made on such date) and the Outstanding Subordinated Securities will be entitled to receive Principal Proceeds (if any) remaining after payment of principal of all of the Rated Notes and all fees and expenses. Principal payments will be made on Outstanding Rated Notes in accordance with the Priority of Payments on: • any Distribution Date in the event that a Continuing Effective Date Ratings Confirmation Failure has occurred and is continuing, to the extent required to obtain Rating Agency Confirmation; • any Distribution Date if any Coverage Test is not satisfied as of the related Determination Date, to the extent required to come into compliance with that test; • any Distribution Date after the Non-Call Period on which a Special Redemption occurs; • any Distribution Date after the Reinvestment Period, until the Rated Notes are retired; • any Redemption Date; and EFTA01422859 • the Stated Maturity. Distributions Post-Acceleration If any Event of Default has occurred and has not been cured or waived and acceleration occurs in accordance with the Indenture, payments on each Lower Ranking Class will be subordinated to payments on each Higher Ranking Class in accordance with the Priority of PostAcceleration Payments. 3 EFTA01422860 Legal Provisions Applicable to Payments on the Preferred Shares Any dividends paid by the Fiscal Agent to holders of the Preferred Shares will be payable in accordance with applicable law out of distributable profits of the Issuer and/or out of the Issuer's share premium account. No payments may be made to Shareholders (including redemption payments) if the Issuer (as determined by its board of directors) is not able to pay its debts as they fall due in the ordinary course of business immediately following such payment. Optional Redemption Subject to the satisfaction of conditions described herein, (i) on any Distribution Date after the end of the Non—Call Period or (ii) upon and during the continuance of a Tax Event on any Distribution Date, at the direction of the Required Redemption Percentage, the Issuer will cause (a) a redemption of each Class of Rated Notes, (b) a Refinancing of one or more Classes of Rated Notes, or (c) on any Distribution Date on or after the Rated Notes are redeemed or paid in full, the redemption of the Subordinated Securities. The "Non-Call Period" is the period from the Closing Date to, but excluding, the Determination Date relating to the Distribution Date in June 2013. Special Redemption If, at any time during the Reinvestment Period, the Investment Manager, at its discretion, notifies the Trustee that it has been unable using commercially reasonable efforts for a period of at least 30 consecutive days to invest in Collateral Obligations, on the next Distribution Date, the amount of Principal Proceeds designated by the Investment Manager (the "Special Redemption Amount") will be applied to pay principal of the Rated Notes in accordance with the Priority of Payments (each, a "Special Redemption"). Use of Proceeds The net proceeds on the Closing Date will be used by the Issuer to purchase a diversified portfolio of Collateral Obligations meeting the diversification, rating and other requirements described herein. On the Closing Date, the Investment Manager currently expects to use at least 37% of the net proceeds to purchase Collateral Obligations and redeem notes issued to the Pre-Closing Parties to finance the Issuer's preclosing acquisition of loans. By the Closing Date, the Issuer will have purchased or entered into agreements to purchase Collateral Obligations with an aggregate principal balance of approximately $260 million. The Investment Manager expects to purchase (and enter into agreements to purchase) additional Collateral Obligations by the Effective Date. On or before the first Determination Date, any remaining net proceeds from the Closing Date will be treated as Principal Proceeds or, in an amount not exceeding $3 million, as Interest Proceeds as directed by the Investment Manager. See "Security for the Notes — Collateral Obligations" and "Use of Proceeds." Security for the Notes The Collateral EFTA01422861 pledged by the Issuer to the Trustee under the Indenture for the benefit of the secured parties will consist of Collateral Obligations; Eligible Investments; any securities or assets issued in exchange for Collateral Obligations that do not themselves constitute Collateral Obligations; certain accounts of the Issuer; the rights of the Issuer under any Hedge Agreements, the Investment Management Agreement, the Administration Agreement, the Registered Office Agreement, the Fiscal Agency Agreement, the Collateral Administration Agreement and any Securities Lending Agreements; and the proceeds of 4 EFTA01422862 each of the foregoing. Holders of Preferred Shares will not be secured parties under the Indenture. The Collateral Obligations will consist primarily of senior secured floating rate leveraged loans made to corporate and other business entities ("Leveraged Loans") of below investment grade credit quality. See "Risk Factors." The Issuer may lend Collateral Obligations Ratings to Securities Lending Counterparties that satisfy the requirements described herein. See "Risk Factors" and "Security for the Notes — Securities Lending." It is a condition to the issuance of the Notes that the Class A-1 Notes be rated "Aaa(sf)" by Moody's and "AAA(sf)" by S&P, that the Class A-2 Notes be rated at least "AA(sf)" by S&P, that the Class B Notes be rated at least "A(sf)" by S&P, that the Class C Notes be rated at least "BBB(sf)" by S&P and that the Class D Notes be rated at least "BB(sf)" by S&P. The Subordinated Securities will not be rated. In connection with the Effective Date, the Investment Manager (on behalf of the Issuer) will request Rating Agency Confirmation from S&P and, unless the Effective Date Moody's Condition is satisfied, Moody's. Governing Law The Notes, the Fiscal Agency Agreement and the Indenture will be governed by, and construed in accordance with, the laws of the State of New York. The terms and conditions of the Preferred Shares will be governed by the laws of the Cayman Islands. Offer and Transfer Restrictions The Securities have not been and will not be registered under the Securities Act, and none of the Issuer, the Co-Issuer or the pool of Collateral is or will be registered under the Investment Company Act, in reliance on the exemption provided by Section 3(c)(7) thereof. Accordingly, such Securities may not be offered or sold within the United States to, or for the account or benefit of, "U.S. persons" (as such terms are defined in Regulation S) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the Investment Company Act. The Securities may only be offered or sold to (A) Qualified Institutional Buyers that are also Qualified Purchasers and, in the case of the Subordinated Securities, Accredited Investors that are also (i) Qualified Purchasers or (ii) in the case of Subordinated Securities, Knowledgeable Employees in reliance on an exemption under the Securities Act or (B) non-U.S. persons in accordance with the requirements of Regulation S and (C) in accordance with any other applicable law. Transfer of the Securities is subject to certain restrictions. Each purchaser (including transferees) will be required to make (or will be deemed to have made) certain representations and agreements. For a EFTA01422863 description of such representations and agreements and restrictions on resale or transfer of interests in the Securities, see "Transfer and Exchange" and "ERISA Considerations." Listing and Trading Application has been made to the Central Bank under the Prospectus Directive, for the Prospectus to be approved. Application has been made to the Irish Stock Exchange for the Notes to be admitted to the Official List and trading on its regulated market. The Indenture does 5 EFTA01422864 not require, and there can be no assurance that, such a listing will be obtained or that any such listing will be maintained. See "Listing and General Information." The Preferred Shares will not be listed. There is currently no secondary market for the Securities and none may develop. Tax Considerations See "Certain Income Tax Considerations." ERISA Considerations See "ERISA Considerations." For a discussion of certain factors that should be considered by prospective investors in connection with an investment in the Securities, see "Risk Factors." 6 EFTA01422865 RISK FACTORS An investment in the Securities involves certain risks. Prospective investors should carefully consider the following factors, in addition to the matters set forth elsewhere in this Offering Memorandum, prior to investing in the Securities. Risk Factors Relating to the Securities Investor Suitability. An investment in the Securities will not be appropriate for all investors. Structured investment products, like the Securities, are complex instruments, and typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. Any investor interested in purchasing Securities should conduct its own investigation and analysis of the product and consult its own professional advisers as to the risks involved in making such a purchase. Nature of the Obligations. The Issuer Only Notes will be limited recourse debt obligations of the Issuer, and the Senior Notes will be limited recourse debt obligations of the Co-Issuers, in each case, payable solely from the Collateral pursuant to the Indenture. The Preferred Shares are equity of the Issuer. The Securities do not represent interests in or obligations of, and are not guaranteed, insured or secured by any rating agency, any Transaction Party (other than the Issuer or, in the case of the Senior Notes, the Co-Issuers), any Affiliate, director, member or partner of the Co-Issuers, or any other Transaction Party, or any other person or entity (other than the Issuer, or in the case of the Senior Notes, the Co-Issuers). If distributions on the Collateral are insufficient to make payments on the Securities, no other assets will be available for payment of the deficiency and, following liquidation of the Collateral, the obligations of the Issuer, or in the case of the Senior Notes, the Co-Issuers, to pay any such deficiency will be extinguished. Liquidity Considerations. There is currently no secondary market for the Securities, and none may develop. The Securities are not expected to be readily marketable. In addition, the Securities are subject to certain transfer restrictions (including minimum denominations) that may further limit their liquidity. regulatory requirements may restrict a potential investor's ability to purchase Securities or make such an investment unattractive to them. See "— Tax Considerations" and "— Risk Factors Relating to Regulatory and other Legal Considerations — Recent Legal and Regulatory Developments." Furthermore, various The Securities are designed for long-term investors and should not be considered a vehicle for short-term trading purposes. As a result, investors must be EFTA01422866 prepared to bear the risk of holding the Securities until their Stated Maturity. To the extent that any secondary market exists for the Securities in the future, the price (if any) at which Securities may be sold could be at a discount, which in some cases may be substantial, from the principal amount of the Securities. To the extent any market exists for the Securities in the future, significant delays could occur in the actual sale of Securities. Subordination. Payments on the Securities are subordinated to payments on each Higher Ranking Class (including in the case of the Subordinated Securities, subordinated to any required payments on the Rated Notes) and certain fees and expenses. Payments on the Preferred Shares are also subordinated to any payments in respect of the claims of any other creditors of the Issuer, secured or unsecured. If any Coverage Test is not satisfied as of any Determination Date or if a Continuing Effective Date Ratings Confirmation Failure has occurred and is continuing, cash flows otherwise payable to Lower Ranking Classes of Securities will be diverted to the payment of principal on Higher Ranking Classes of Rated Notes as set forth in the Priority of Payments. Interest Proceeds will be diverted, in accordance with the Priority of Payments, to purchase additional Collateral Obligations, during the Reinvestment Period (a) if an Effective Date Ratings Confirmation Failure has occurred, to the extent necessary to obtain Rating Agency Confirmation; (b) if the Supplemental Diversion Test is not satisfied as of the related Determination Date, to the extent necessary to satisfy such test as of the Determination Date; and (c) to the extent of Designated Proceeds. If an Event of Default has occurred and has not been cured or waived and acceleration has occurred, Interest Proceeds and Principal Proceeds will be applied to pay both principal of and interest on each Higher Ranking Class until each such Class is paid in full before any further payment or distribution will be made on any Lower Ranking Class. See "The Indenture and the Fiscal Agency Agreement— Payments after an Acceleration of Maturity." As a result, Lower Ranking Classes will not receive interest payments until each Higher Ranking Class has been paid principal and interest, Lower Ranking Classes may not receive partial or full payment of principal and further distributions may not be made in respect of the Subordinated Securities. 7 EFTA01422867 None of the Transaction Parties (other than the Issuer or, in the case of the Senior Notes, the Co-Issuers) or any Affiliates of the Issuer or Co-Issuer or of any other Transaction Party or any other person or entity (other than the Issuer or, in the case of the Senior Notes, the Co-Issuers) will be obligated to make payments on the Securities. To the extent any losses are suffered by any holders of the Securities, such losses will be borne by the holders of the Securities, beginning with the Subordinated Securities as the most junior Classes. Equity Status of Preferred Shares. The Preferred Shares will be equity interests in the Issuer and are not secured by the Collateral. Accordingly, Shareholders will rank behind all creditors, whether secured or unsecured and known or unknown, of the Issuer, including, without limitation, the holders of the Notes and any Hedge Counterparties. Except with respect to the obligations of the Issuer to pay the amounts in accordance with the Priority of Payments, the Issuer does not expect to have any creditors. The Issuer is also subject to limitations with respect to the business that it may undertake. See "Issuer and Co-Issuer — General." Dividends on the Preferred Shares will be payable in accordance with applicable law out of distributable profits of the Issuer and/or out of the Issuer's share premium account. No payments (including redemption payments) may be paid to the Shareholders if the Issuer (as determined by its board of directors) is not able to pay its debts as they fall due in the ordinary course of business at the time of and immediately following such payment. Leveraged Credit Risk. The Issuer will utilize a high degree of investment leverage. The use of leverage is a speculative investment technique that increases the risk to holders of the Securities, particularly holders of the Subordinated Securities. In certain scenarios, the Rated Notes may not be paid in full and the Subordinated Securities may be subject to up to 100% loss of invested capital. The Subordinated Securities represent the most junior Classes in a highly leveraged capital structure. As a result, any deterioration in performance of the Collateral, including defaults and losses, a reduction of realized yield or other factors, will be borne first by holders of the Subordinated Securities. In addition, the use of leverage can magnify the effects on the Subordinated Securities of deterioration in the performance of the Collateral. The Collateral is expected to consist of below investment grade debt obligations. Such obligations have greater liquidity risk and credit risk than investment grade debt obligations. Failure of any Coverage Test or the existence of a Continuing Effective Date Ratings Confirmation Failure will result in cash flows (if any) otherwise available for interest payments EFTA01422868 being applied to make principal payments on Higher Ranking Classes of Rated Notes. Interest Proceeds will be diverted, in accordance with the Priority of Payments, to purchase additional Collateral Obligations, during the Reinvestment Period (a) if an Effective Date Ratings Confirmation Failure has occurred, to the extent necessary to obtain Rating Agency Confirmation; (b) if the Supplemental Diversion Test is not satisfied as of the related Determination Date, to the extent necessary to satisfy such test as of the Determination Date; or (c) to the extent of Designated Proceeds. In addition, if an Event of Default has occurred and has not been cured or waived and acceleration has occurred, Interest Proceeds and Principal Proceeds will be applied to pay both principal of and interest on each Higher Ranking Class until each such Class is paid in full before any further payment or distribution will be made on any Lower Ranking Class. This will likely reduce returns on the Subordinated Securities and cause a temporary or permanent suspension of payments on the Subordinated Securities. Furthermore, if additional securities are issued after the Closing Date, such securities may not be issued in the same proportion as existing Classes of Notes, which may reduce the Issuer's level of investment leverage. This would likely adversely affect returns on the Subordinated Securities. In addition, certain expenses (including the Investment Management Fees) are generally based on a percentage of the Portfolio Principal Balance, which includes the Collateral obtained through the use of leverage. Accordingly, expenses attributable to the Subordinated Securities will be higher because such expenses will be based on the Portfolio Principal Balance. A significant amount of the initial proceeds of the sale of the Securities will be applied to pay organizational and other expenses incurred by the Issuer in connection with the offering of the Securities rather than to make investments in Collateral Obligations. As a result, the aggregate principal balance of the Collateral Obligations will be less than the initial Aggregate Outstanding Amount of the Securities. In addition, during the lifetime of the transaction, except as described herein, Excess Interest will be paid to the holders of the Subordinated Securities, rather than being invested in additional Collateral Obligations. Therefore, it is highly likely that after payments of the Rated Notes and the other amounts payable prior to the Subordinated Securities under the Priority of Payments, Principal Proceeds will be insufficient to return the initial investment made in the Subordinated Securities. Therefore, over the passage of time, holders of Subordinated Securities will have to rely on Excess Interest for their EFTA01422869 ultimate return. 8 EFTA01422870 Impact of Uninvested Cash Balances; Unpaid Accrued Interest on Collateral. To the extent the Investment Manager (on behalf of the Issuer) maintains cash balances invested in short- term investments instead of higher yielding obligations, portfolio income will be reduced which will result in reduced amounts available for This will likely reduce the amount of Interest Proceeds that would distributions on the Securities, in particular the Subordinated Securities. On the Closing Date, the Issuer is expected to have significant uninvested proceeds. otherwise be available to distribute to the holders of the Subordinated Securities, particularly on the first Distribution Date If the Issuer issues additional securities after the Closing Date, the Issuer would likely have significant uninvested proceeds of the offering, pending investment in Collateral Obligations. The extent to which cash balances remain uninvested will be subject to a variety of factors, including future market conditions and is difficult to predict. In addition, there will be a mismatch between the payment dates of the Collateral Obligations and the Distribution Dates with respect to the Securities. Accordingly, interest that has accrued on Collateral Obligations during a Due Period may not be received by the Issuer during such Due Period, which may adversely affect the Issuer's ability to make payments and distributions on the Securities, particularly the Subordinated Securities, on any particular Distribution Date. Calculation of Overcollateralization Tests. If any Coverage Test is not satisfied as of any Determination Date, cash flows otherwise payable to Lower Ranking Classes of Securities will be diverted to the payment of principal of Higher Ranking Classes of Rated Notes as set forth in the Priority of Payments. Calculation of the Principal Balance of Collateral Obligations for purposes of the Overcollateralization Tests applies certain reductions to the par amount of Collateral Obligations as set forth in the definition of Principal Balance. For example, for purposes of this calculation, a Defaulted Obligation will have a Principal Balance that is the lesser of its Market Value or Recovery Rate and the excess of Collateral Obligations with an S&P Rating of "CCC+" or lower or a Moody's Obligation Rating of "Caal" or lower exceed certain levels will have a Principal Balance equal to their Market Value. See clause (d) of the definition of Principal Balance. Such reductions may increase the likelihood that one or more Overcollateralization Tests is not satisfied and cash flows otherwise payable to Lower Ranking Classes of Securities will be diverted to the payment of principal of Higher Ranking EFTA01422871 Classes of Rated Notes. Valuation Information; Limited Information. Neither the Issuer nor any other party will be required to provide periodic pricing or valuation information to investors. Investors will receive limited information with regard to the Collateral Obligations and none of the Co-Issuers, Trustee, or Investment Manager will be required to provide any information other than what is required in the Indenture. Furthermore, if any information is provided to the holders (including required reports under the Indenture), such information may not be audited. Finally, the Investment Manager may be in possession of material, non-public information with regard to the Collateral Obligations and will not be required to disclose such information to the holders. Control of Remedies. The Controlling Party will have the right to direct certain actions and control certain decisions, including if an Event of Default occurs and is continuing with respect to remedies and acceleration of maturity on the Notes, providing consent to certain amendments of the Indenture, and directing or consenting to certain actions under the Investment Management Agreement with respect to removal for cause of the Investment Manager and appointment of a successor manager. The remedies and other actions pursued by the Controlling Party could be adverse to the interests of holders of other Classes of Securities. For example, the Controlling Party could vote to direct the Trustee to liquidate the Collateral to facilitate payment of amounts due in respect of the Notes of the Controlling Class even if a delay in the exercise of such remedy might permit the value of the Collateral to increase to the benefit of the holders of other Classes of Notes. Amendments to the Indenture. The Indenture may be amended, and in many cases may be amended without the consent of holders of Notes. Such amendments could be adverse to certain owners of Notes. See "The Indenture and the Fiscal Agency Agreement—Amendments of the Indenture." Average Life and Prepayment Considerations. The average life of the Rated Notes is expected to be shorter than the number of years remaining to the Stated Maturity. The average life of the Rated Notes will be affected by a number of factors, including any Optional Redemption, any Special Redemption or acceleration described herein, the amount and frequency of principal payments as a result of the failure of Coverage Tests or a Continuing Effective Date Ratings Confirmation Failure, the financial condition of the obligors of the underlying Collateral Obligations and the characteristics of such obligations, including the stated maturity, existence and frequency of 9 EFTA01422872 exercise of any redemption rights (or tender offers or exchange offers for such obligations), the prevailing level of interest rates, the redemption price, the actual default rate and the actual level of recoveries on defaulted obligations, the level of reinvestment of certain types of proceeds after the Reinvestment Period, prepayments and the amount and frequency of any sales of Collateral Obligations by the Investment Manager and the ability of the Investment Manager to invest in additional Collateral Obligations. A shortening of the average life of the Rated Notes may adversely affect returns on the Subordinated Securities. The Collateral Obligations actually acquired by the Issuer may be different from those expected to be purchased by the Investment Manager, on behalf of the Issuer, due to market conditions, availability of such Collateral Obligations and other factors. The actual portfolio of Collateral Obligations owned by the Issuer will change from time to time as a result of sales and purchases of Collateral Obligations. The Issuer will cause the redemption (in whole but not in part) of all Classes of the Notes, as described under, and subject to the conditions described in, "Description of Certain Terms of the Securities — Optional Redemption." In addition, the Notes may be accelerated upon the occurrence of an Event of Default, as described under "The Indenture and the Fiscal Agency Agreement — Events of Default; Acceleration." There can be no assurance that, upon any Rated Notes Redemption, the proceeds realized would permit any payment on the Subordinated Securities after all required payments are made in accordance with the Priority of Payments, or upon an acceleration of the Notes, the proceeds realized would be sufficient to pay the Rated Notes in full and permit any payment on the Subordinated Securities. In particular, the market prices of the Collateral Obligations and any payment due to Hedge Counterparties will affect returns on the Subordinated Securities. In addition, a Rated Notes Redemption or acceleration of the Notes could require the Investment Manager to liquidate positions more rapidly than would otherwise be desirable, which could adversely affect the realized value of the obligations sold. Notes Surrendered by Holders Will be Cancelled. Notes may at any time be tendered by a holder for no payment to the Trustee for cancellation ("Surrendered Notes"). Surrendered Notes will be cancelled and no longer deemed Outstanding for certain purposes under the Indenture such as the exercise of voting rights. However, for purposes of the Overcollateralization Ratio and the Event of Default Par Ratio, any such Surrendered Notes will be deemed to (i) remain Outstanding and thus will not affect the calculation of the Overcollateralization Tests or the Event of Default Par Ratio, until all Notes of the applicable Class and each Higher Ranking EFTA01422873 Class have been retired or redeemed and (ii) have an Aggregate Outstanding Amount equal to the Aggregate Outstanding Amount as of the date of surrender, reduced proportionately with, and to the extent of, any payments of principal on Notes of the same Class thereafter. See "Description of Certain Terms of the Securities—Surrender of Notes." Tax Considerations. An investment in the Securities involves complex tax issues. See "Certain Income Tax Considerations," below, for a more detailed discussion of certain tax issues raised by an investment in the Securities. As discussed in more detail below, the Issuer expects to conduct its affairs so that it will not be treated as engaged in a trade or business within the United States (including as a result of lending activities). As a consequence, the Issuer expects that its net income will not become subject to U.S. federal income tax. There can be no assurance, however, that the Issuer's net income will not become subject to U.S. federal income tax as a result of unanticipated activities, changes in law, contrary conclusions by the U.S. Internal Revenue Service (the "IRS"), or other causes. If the Issuer were determined to be engaged in a trade or business within the United States, its income (computed possibly without any allowance for deductions) would be subject to U.S. federal income tax at the usual corporate rate, and possibly to a branch profits tax of 30% as well. The imposition of such taxes would materially affect the Issuer's financial ability to make payments on the Securities Although the Issuer does not intend to be subject to U.S. federal income tax with respect to its net income, income derived by the Issuer may be subject to withholding or gross income taxes imposed by the United States or other countries. In this regard and subject to certain exceptions, the Issuer may generally only acquire a particular Collateral Obligation if, at the time of commitment to purchase, either the interest payments thereon are not subject to withholding tax or the issuer of the Collateral Obligation is required to make "gross-up" payments. Similarly, the Issuer may generally only enter into a Securities Lending Agreement in respect of any Collateral Obligations if the substitute interest payments received thereunder are not subject to withholding tax or the counterparty is required to make "gross-up" payments. The Issuer may, however, be subject to withholding or gross income taxes in respect of commitment fees, letter of credit fees, securities lending fees, facility fees, and other similar fees, as well as with respect to substitute dividend payments, interest and disposition proceeds in respect of Collateral Obligations not 10 EFTA01422874 outstanding prior to March 19, 2012 (as discussed in more detail below, and such withholding or gross income taxes may not be grossed up) In addition, there can be no assurance that income derived by the Issuer will not become subject to withholding or gross income taxes as a result of changes in law, contrary conclusions by the IRS, or other causes. In that event, such withholding or gross income taxes could be applied retroactively to fees or other income previously received by the Issuer. To the extent that withholding or gross income taxes are imposed and not paid through withholding, the Issuer may be directly liable to the taxing authority to pay such taxes. If the Issuer owns a Pre-Funded Letter of Credit and withholding tax is not being withheld with respect to the Pre-Funded Letter of Credit fee, the amount required to cover the full amount of withholding tax that would have been withheld with respect to such fee if it had been determined that such fee were subject to withholding tax at the time of such payment (the "Pre-Funded Letter of Credit Reserve Amount") is required to be deposited into the Pre-Funded Letter of Credit Reserve Account. Such amounts will be unavailable for distribution as Interest Proceeds under the Priority of Payments until such time as no Notes rated by any Rating Agency remain Outstanding or the Issuer or the Investment Manager (on behalf of the Issuer) has received an opinion of nationally recognized tax counsel that such payments are not subject to withholding or a public pronouncement or ruling to that effect has been made by the relevant tax authority. A U.S. law enacted in 2010 imposes payments made to the Issuer after December 31, 2012, including potentially of sale of, U.S. Collateral Obligations not outstanding prior to March 19, 2012, complies with an agreement with the IRS to collect and provide to the U.S. tax authorities substantial information regarding direct and indirect holders of the Securities. In some cases, the ability to avoid such withholding tax will depend on factors outside of the Issuer's control In addition, the law may subject payments on a particular Security (including principal payments) to a withholding tax of 30% unless (i) each foreign financial intermediary through which such Security is held enters into such an information reporting agreement; and (ii) the direct and indirect holders thereof supply the Issuer and each foreign financial intermediary through which such Security is held, if any, with information necessary to comply with such information reporting agreements. The Issuer an appropriate information reporting a withholding tax of 30% on certain all interest paid on, and proceeds unless the Issuer enters into and intends to enter into EFTA01422875