Maverick Income Fund, L.D.C., a Cayman Islands Hmited duration company (the "Fund"), is an investment company organized to make aggressive investments in any type or quality of debt securities or other asacts that Maverick Capital, Ltd., the Investmen Mémagur, bulloves have the potential for substantially above average Încouze and/or growik. Pursuant to this Confidcntiaš Private Placement Memorandam (the "Memorandumn"), the Fund is soliciting subscriptions for additional Shares at in Offering Price based on the not nater value of the Shares from time to time.
Sam Wyly, the President of the Investment Manager, and his brother, Charles Wyly, the Chairman, have been engaged in managing substantial entrepreneurial investments and securities investuents for the Wyly family since 1963: The Fund is co-managed by Sam Wyly and Bran A. Wyly, who from 1992 to 1993, served as Vice President, Mergers and Investments of Mishaals Shores, Ind., managing en $80 million investment portfolio.
In addition to their investment managemmol activities, Sam Wyły and Charles Wyly have a long record of investing in and building companies in industries as diverse na computer software, telecommunications, silver and gold mining, oil refining, restaurant franchising, and arts and crafts superatores.
2. SUMMARY OF THE FUND AND THE OFFERING
The following is a summary only and is qualified in its entirety by reference to the Fund's Articica of Association, and other documents referred to herein, copies of which will be provided to each prospective investor upon request.
discretion, may accept azbscriptions for Shares as of the end of any calendar mouth.
The Investment Manager will receive a quarterly management fee payable in advance equal to .25% of thồ nét afects of the fund.
The Investruck Manager will also receive an aggregate annual performance fee equal to 20% of the Pand's net soonomde gain (including realized and unrealized gain and not investmoet income) for each year, payable at the close of esch year. Net economic losses in any year are carried forward for purposes of determining performance fese for subsequent years in which chers are economic gains. The Investment Manger le responsible for the costs of providing its services to the Fund, including overhead, and office expenses. The Fund boars all other costs of its investment program (including administration, brokerage and custody charges, intacest and taxes) as well as professional fees of its auditors and attorneys. Offering and organizational costs will be borne by the Pand.
Redemptions may be made as of the last business day of tack calendar mond with at least 30 days prior written notice (walvable in the sole discretion of the Pund), at the net asset value per Share as of the redemption data, loss any applicable radaroption charges and acorned management and performance feus, Sectionsents will normally take place within 60 days after the redemption.
The Fund may require a shareholder to surrender all or any portion of its Shares for redemption at any time and for any reason.
A redemption charge of up to 1% may be imposed, at the discretion of the Pund, to cover costs associated with redemptions of Shares within 12 months of the data of an inventorʼa initial purchase of Shares.
Shareholders will receive audited ausmal reports and ungodlied quarterly reports.
MesaPierson (Cayman) Limited, a Cayman Islands company in George Town, Cayman Islands (the "Administrator").
The Pand does not anticipate that any dividends or other distributions will be paid to shareholders out of the Fund's current sarnings and profita, but rather that such income will be reinvested.
The Fund should not be subject to any United States Indóstic taxes (other than U.S. withholding taxes on dividends and certain interest income derived from U.S. conronn which are not in ulthor caner expatsed to be insterial). Shareholders of the Fund who are not otherwise subject to Cayman Islands or United State taxation by mision of their residence, nationality or other particular circumstances should not becoms subject to any, manis taxation by season of the ownership or redemption of Shares, The Fund will not be subject to any Cayman Islands taxation on the basis of the current legislation of the Cayman Islanda.. The Pond has been incorporated as all empted compeRy, and ipas. applied for and expeces to obtain a tax undertaking certificate from the Caymap lelands governascut indicating that should the current legislation change, no will be imposed upon its profile for at losst a 20 year period.
The Fund reports is results and transacts contributions and distributions in U.S.. dollars
The investment objective of the Fund is to achieve high total retuchs through aggressive investuaens in any type of assite that the Investment Manager believes have the potential for significans yield, capital appreciation or both. Investments may be located in the United States or in other countries and may be denominated in U.S. Dollars or other currencies. The Fund may make any type or quality of debt or equity investment that the Investment hissager believen offers the potential for substantially above average insome and/or csptial growth, including investmetus ia which the Fund socks to exercise or lufraince control over the laruar. The functional currency of the Pond in U.S. Dollars, and the Pund may or may not hedge against currency risks.
The Fund has no fixed policy as to the allocation of its atouts berween dobt mand equity investments, or between investments la United States and other world mackats. The Fund may also invest in debt securities that ges mot paying duriant income or are involved in bankruptcy proceedings or voluntary recapitalizations. The Fund is not restricted to any particular mafarity.
Inoethe and equity securities in which the Fund may arrest may be subject to high risk. Income securities will not be required to meet a minimum reting standard and may not be rated by any internationally recognized credit rating organization. To the extent they are rated, the Fund's investments are expected to be rated is the lower rating categories. These types of securities generally involve a greater risk of defank and are generally more voladilo in price then securities in higher rating oatsgocios.
The Find also maintains a significant portion of its portfolio in investments in common equities of companies believed to have superior potential for saphal appreciation and growth in earnings and profitability zejative to the broad market averages. These investments may include investments in emerging markets outside the U.S. The Fund has the capability to sell short, allowing it to profit from overvalued or fundaisontally unsound securities and to reduce overall exposure to market £uotuations.
The Fund does not felt itself to a particular investment "style" and may engage in various combinations of "value" "growth", "tum-around" or "cyclical recovery Investments. The Fund may invest in securities of any type Issuer, inchiding investment companies, governments and governmental entities, as well as corporations and other busiques organizations. A portion of the Pond's portfolio may also consist of liquid investments, including defaulted bonds, loans or other direct debt interests acquired by the Fund from third parties, Interante in or related to companies in liquidation, and restricted securities of U.S. issers that cannot be publicly sold in the U.S. withou registration under the Securities Act of 1933. The Fund may shao wake investments for the purpose of obtaining or influencing control of the issuer.
The Fund's investment philosophy will he weighted toward the longer term, and while there may be periods of high portfolio turnover to seek to take advantage of short term trends, the Fund will seek primarily to obtain high retains from longer term investments.
The Fund is permitted 10 invest in any type or quality of securities issued in the United States or in other countries. As market conditions change, the types and mix of securities held in the Fund's portfolio may vary significantly hom those in which the Pond currently kivests. The lavtariner behunger way, in its sole discretion, modly primary investment emphasis of the Fund at any time if it determines that truck an approuch might berter achieve the investment objectives of the Pund.
The Fund in authorized to borrow in-order-to enhance in investment leverage. There are no restrictions on the Fund's ability to borrow other than those that may be imposed by leaders or any applicable credit regulations ifbeing lenders. Margin Jouns generally will be whtxined from brokers, although other fistizial indiālutions may also be used. To the extent that the Fund may engage in short sales, it may also borrow sockaitino damt k has sold short.
International Investinants
The investment Manager believes that opportunities for attractive returns may be found in securities issued by non- U.S. corporations and govecatomnts, particularly in the developing nations of the world that are generally regarded "Emerging Countries". These investments entail additional risks to investments in U.S. and other developed country mrkets, Sẽe "Risks and Coculicts of Interest-Riska-International Investments",
The Investment Manager may purchase securities that have not been registered under the United States Socorities Act of 1933 or the securidian lawy of diy U.S. Stäte or any foreign ogustry, or for which there is no active trading market. These securities may include closely-held debt securities, bank loans or participations, and venture capital investinguts in amali, unseasoned companias. As a result of the absence of a public trading market, those securities may be less liquid and more difficult to value than publicly traded securities.
Lose Participations and Assignments
The Fund may invest in losas ("Lower”), including restructured Loans, arranged through private negotiations between an issuer and one or more financial husthuxions. The Pand's investments in Loans are expected in most instances to be in the form of participations in Loens and aseigaments of portions of Loans from third parties. Participations typically will result in the Pund having a contractal relationship only with the leader and not with the borrower.
Recapitalizations and Liquidations
The Find may invest in securities (Including Loans) of companies or countries that are in default or financial distress and are in the process of recapitalizing their obligations through an exchange of securities. Company recapitalizations may be voluntary or through focal bankruptcy proceedings. Country recapitalizations may take the form of a Brady Plan exchange or socas other szokange of scouridos with no cellmoral or differers types of collateral.
The Fund may also invest in bunkruptcy or other liquidation proceedings, in which the assets of the compatty la liquidation are acquired at a specified pelos or the company is guarantood a specified amount of liquidation proceeds, and the sets are then sold through the services of a profissional liquidation flom. Any such investments by the Fund will generally take the form of a loan to, or participation inserest from, such a professional liquidation firm.
Under such circumstances as the Investment Manager deseur approptimus, the Fund Mily seek to exeroles control or influence control over the business or operations of any lasuse in which it Invests, and may make investments for the purpose of seeking smok control or influence. Such investments could subject the Fund so partain reporting MEGACIONET VELIENsoni ümber the United States Securities Exchange Act of 1934.
The Fund may from time to time sell securities short without limitation. A short sale is a transaction in which the Fund sells securities it does not own (but has borrowed) in azololuution of a decline in muskat palio-f 8 lo terange through a broker to borrow the securkien nod, in (
the Fund will become obligated to replace the securities borrowed at their market price at the time of replacement, whatever that price may be: The Pizil may have to pay a premium to borrow the securities and must pay my dividends or interest payable on the securities until they me instal.
Lending of Portfolio Securities
The Fund may, in sooking to increase its income, lend securities in its portfolio to meurities Arms and fluencial institutions deemed creditworthy by the Investment Manager. The loans will be terminable at any tims, and the Pund will receive any interest or dividends pald on the loaned securities.
The Fund may purchase and sell exchange listed and over-the-counter put and call options on securities, financial futures and fixed income indices-und other financial-instruments, water intey fleucial fondre "codimmota, saint' into interest rate transactions, and enter into currency transactions (collectively, Chase transactions are referred to in this Memorandura as "Strategic Transactions"). The Pand's interest rate trasections may take the focre of swaps, cups, flours and collars, and the Pund's cachagy transactions will take the form of currency forward contracts, currency fotures contracts, currency swaps and options on currency or currency fares. Strategic Transmoglega may be mood to attempt to protect against ponibile changië in the market value of securities held in the Fund's portfolio manising from securities markets or currency sachange rare fluctuations, to protect the Fund's unrealized gains in the valus of its portfolio securities, to facilitate the sale of those securities for investment purposes, to manage the effective maturity or duration of the Fund's portfolio, or to establish a position in the derivatives markets as a natoporary substitute for purchasing or selling particular securities.
The Fund will select brokers for its securities transactions based on a number of factors, including commitajon ratas, research services, margin facilities and other services. In addition, the Fund may utilize brokers who have referred investors to the Pand. Accordingly, the Fund may not necessarily obtain the lowest segotiated brokssage commlesions. The Fund may also utillas a broker affiliated with the investmann Manager, provided that any such transactions will be conducted in commission rates that do not exoted those charged to non-affiliuses in comparable transactions. In addition, the Fund may utilize brokers that farish services to the Fund Manager, such as research, telephone lines, news and quotazion equipment, offion equipment, account record keeping and clerical services, financial publications, economic consulting services or office facilities.
MANAGEMENT AND INVESTMENT STAFF OF MAVERICK CAPITAL, LTD.
Maverick Capital, Lid,, a Texas (UBA) limited parmership, serves in the Fund's investment manager and is registered as an investment Advisor under the United States Investment Advisers Ací of 1940 (ai kejeaded).. As of June 30, 1995, Maverick Capital, Lid, kad approximmały US $120 million in assets under its ranntgencies. Sam Wyly. General Partner and President. Mr. Wyły is an entrepreneur who founded University Computing Company (UGC), a computer software and wevious company, and harvest in my Presiden or Chairman fron 1963 unill 1979. UCC merged into Computer Associates in August 1987 for $750 million in stock. In 1968, Mr. Wyly co-founded Earth-Resources Company, an oil refining and silver and go38 ataing company, serving as its Essourive Committee Chairman from 1968 to 1980. Earth Resources merged into hlapco in November 1980 for $400 million. ta stock. From 1968 to 1989, Mr. Wyly nerved as Chairman of USACafes, a national swakhouse chain, during which time it grew from 20 restaurants to over 600. He is encreetly a control, stookkoldag and acıvama na Chaltas
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