Is There Any Possible Way I Could Select The Option To Get 15% Of My Money Back? If Not I'll Take The 50 Year Lock-Up

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Satellite Asset Management halted withdrawls in November. Now that the firm's had some time to think, this is happening. Short version: keep your redemption request, and for every dollar you invested, get 30 or so cents back (by the end of the year, natch). Or, lock it all back up for 2, 3 or 5 years. Long version:

February 3, 2009
Dear Investor,
We thank you for your support and patience over these past several weeks while we
prepared our plans for going forward. Your feedback and input have been invaluable as
we worked through a myriad of complex issues. We are pleased to announce that the Board of Directors has approved our plan to offer all existing investors in Satellite Fund II, L.P., Satellite Overseas Fund, Ltd. and Satellite Credit Opportunities Fund, Ltd. (the "Satellite Funds") an opportunity to contribute certain of their holdings into a new master-feeder fund ("Satellite Strategic Credit Fund").
Satellite Strategic Credit Fund will be managed by Steve Shapiro and the existing credit
team and supported by Satellite's institutional infrastructure. Satellite Strategic Credit Fund will be formed to actively manage assets contributed from the Satellite Funds, as well as to make new investments in order to take advantage of what we believe to be historic opportunities in today's credit markets. Incorporating your recent feedback and expressed objectives, we have designed a management model that mitigates potential conflicts and provides for the full-time portfolio management of the Satellite Strategic Credit Fund, as well as the ongoing management and periodic distributions of cash from the Satellite Funds. As a result, the Satellite Funds will continue to retain the full-time investment management oversight of Lief Rosenblatt, Gabe Nechamkin and Mark Sonnino (the "Senior Principals"). The Senior Principals also will serve as advisory board members and investors in the Satellite Strategic Credit Fund.
You will receive a separate mailing shortly, detailing the various terms and conditions of the new Satellite Strategic Credit Fund offering. In the interim, some of the offering's key provisions are as follows:

Class Lock-up Management * Fees * Incentive Fees
Class A
•2 year hard lock with annual liquidity thereafter
• One time option to redeem up to 25% of the investment
after the first year
1.5%
2009: Waived
2010 and beyond: 10% until the high water
mark ("HWM") attributable to contributed
assets is reached;
once HWM is reached: 15%
Class B

3 year rolling

Annual Profit Redemption
Available
1%
2009: Waived
2010 and beyond: 9% until the high water
mark ("HWM") attributable to contributed
assets is reached;
once HWM is reached: 12.5%
Class C

5 year rolling

Annual Profit Redemption
Available
1%
2009: Waived
2010 and beyond: 7.5% until the high
water mark ("HWM") attributable to
contributed assets is reached;
once HWM is reached: 10%
2

Investors in all existing Satellite Fund share classes may elect to invest in any
available share class in the new fund (Class A of Satellite Strategic Credit Fund will
be limited to 25%).

Any additional subscriptions (beyond the "rolled" amount) made by current investors
in 2009 will have access to the terms above, up to the total amount of their capital balance in the existing Satellite Funds as of March 31, 2009. You and your advisors should carefully review the terms of the full offering documents of Satellite Strategic Credit Fund before making any investment decision, since there are numerous material terms and risk factors that this summary does not address and that differ from the Satellite Funds.
Investors who opt to "roll" their current Satellite Fund investment into Satellite Strategic
Credit Fund will receive two securities: (i) an interest in Satellite Strategic Credit Fund
corresponding to the more liquid portion, currently estimated to be at least 70% of such
investors' Satellite Fund investment and (ii) shares of a special purpose company (the
"SPC") which will hold the less liquid portion of such investors' Satellite Fund
investment. The SPC will liquidate its holdings pari passu with the Satellite Funds and
periodically will distribute realized cash to the investor.
Investors will have until March 15, 2009 to elect whether or not to "roll" their current
Satellite Fund investment into Satellite Strategic Credit Fund. We anticipate launching
the new fund by April 1, 2009. Investors not interested in "rolling" their investment need
not do anything and will remain invested in the Satellite Fund. The Satellite Funds will
proceed with periodic distributions of cash and will manage their assets with a view to
realizing all current investments in an orderly manner while maximizing the embedded
value in the portfolio.
Currently, we anticipate distributing, depending on market conditions, the cash value of at least 30% of assets in 2009, with at least 15% to be distributed by June 30, 2009.
Furthermore, we anticipate, depending on market conditions, that the majority of the
assets in the Satellite Funds will be liquidated within 18 months, although some material
portion of each portfolio could take significantly longer to realize. It is important to note
that, as the goal of the Satellite Funds will be to distribute cash, the Satellite Funds will
not pursue new investment opportunities but will continue to make hedging investments
and engage in other protective transactions, as deemed necessary. This means that some
investments that will continue to be held by Satellite Strategic Credit Fund and certain
other accounts managed by the investment manager may be sold by the Satellite Funds.
As always, we value the longstanding relationship we have developed with your
organization and look forward to continued discussions with you on the Satellite Strategic
Credit Fund.
We will contact you shortly, but in the interim, please reach out to your Client Management
representative directly if you have any questions or concerns.
Sincerely,
Satellite Asset Management, L.P.

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