Napier Park Distressed Debt

Opportunity Fund Ltd

Fund Investment Objectives

The Napier Park Distressed Debt Opportunity Fund (the "Fund") is an event-driven credit fund that seeks to acquire assets which in the Investment Manager's view are undervalued as a result of the financial distress of the issuer or holder, or because of a deterioration in the quality of assets. The Investment Manager seeks to recover a substantial portion of the value of these assets over time or through a restructuring of the issuer or the assets. The focus is on middle market companies ($500 million to $4 billion in debt outstanding) as the team believes they offer greater relative value than other segments. The Investment Manager will often play an active role in workouts on behalf of the Fund and may serve as a member of an ad hoc or formal creditors' committee. Market Exposure-The Fund invests in distressed securities at various levels within the capital structure. These securities may be bank loans, high yield bonds, and/or preferred and common equities. Portfolio Concentration-The Offering Memorandum limits investments with respect to securities of any single issuer to a dollar amount no greater than 20% of total assets. Geographical Market Focus-The Fund intends to focus on US-domiciled companies. Liquidity- The Fund invests in securities, loans, derivatives and other assets. The majority of assets are traded over the counter. Correlation- The Investment Manager believes that the risk for any portfolio is rarely a linear correlation to the risks of the underlying assets. The Investment Manager will try to measure portfolio-level risk by carefully considering the possible correlations across different investments and also considering the impact of poor liquidity on certain portions of the portfolio.