KEY HEDGE FUND PLUS INC.

Addendum No. 2 to the Offering Memorandum dated 26 February 2004

26 March 2008

KEY HEDGE FUND PLUS INC.

(the “Company”)

Addendum No.2 to the Offering Memorandum dated 26 February 2004

This Addendum should be read in conjunction with, and forms part of, the Offering

Memorandum of the Company dated 26 February 2004 (the "Offering Memorandum) as amended

and supplemented by Addendum No. 1 to the Offering Memorandum. All capitalised terms

herein contained shall have the same meaning in as in the Offering Memorandum, unless

otherwise indicated.

Leverage

As of 1 October 2007 the Company redeemed its investment in the Option. Accordingly the

following changes are made to the Offering Memorandum:

On page 6 the definition of “Bear, Stearns” is deleted.

On page 9 in the fourth line of the first paragraph under “Investment Objective” the words “,

certificates or other derivatives” are added after “such as options”.

On page 9 the second paragraph under “Investment Objective” is deleted.

On page 10 in the fourth paragraph after “Fees and Expenses” the words “Bear, Stearns” are

deleted.

On page 14 in the fourth line under “Investment Objective of the Company” the words “,

certificates or other derivatives” are added after “such as options”.

On page 15 in the first line the words “, certificates or other derivatives” are added after “such as

options”.

On page 15 the paragraph headed “Bear, Stearns Option” is deleted.

On page 16 in the second paragraph after “Manager’s Fees” the words “the Option” are deleted

and replaced by “any option, certificate or other derivative”.

On page 17 the fourth paragraph, beginning “Bear, Stearns charge fees” is deleted and replaced

by the following:

“The provider or issuer of any options, certificates or other derivative transactions the Company

enters in to purchases will charge fees on a normal commercial basis. Such fees may be implicit

in the price of the instrument. Any such fees will always be negotiated on an arms length basis”.

On page 19 the second sentence of paragraph (c) is deleted.

On page 35 paragraph (c) is deleted.

On page 44 in the paragraph headed “Leverage, Interest Rate and Margin” the words “the

Option” are deleted and replaced by “options, certificates”.

Appointment of Director

David Watts was appointed as a director of the Company with effect from 12 November 2007.

Accordingly the following changes are made to the Offering Memorandum:

On page 5 following the fourth line under “Directors:” the words “David Watts, Cowfold Farm,

Mattingley, Hook, Hampshire, RG27 8JX, United Kingdom” are added.

On page 12 under “Directors” the following paragraph is added after the fourth paragraph titled

“Morten H. Kielland”:

“David W. Watts (British) has been a non-executive director of several companies including two

investment trusts since 1999. Mr. Watts worked at Gartmore Investment Limited from 1979 to

1999, where he held the positions of Chief Investment Officer and Joint Chief Executive.

Gartmore is a large independent fund manager providing asset management services from offices

in London, Tokyo, Boston, Madrid and Frankfurt. Prior to this, Mr. Watts was a Pension Fund

Manager at Phillips and Drew Stockbrokers from 1971 to 1979. Mr. Watts obtained an Honours

Degree in Engineering Science and Economics in 1971 from Brasenose College, Oxford.”

On page 36 the following paragraph is added after the fourth paragraph of section (c) under

“Directors, Promoters and Interests”:

“David Watts is also a director of KAM Group Limited and a number of other investment funds

managed by the Manager including Key Europe Inc., Key Global Inc., Key Asia Holdings Inc.,

Key Global Emerging Markets Inc., Key Recovery Fund Limited, Key Special Situations Fund

Inc., Key Multi-Strategy Fund Inc., Key Multi-Strategy Fund Plus Inc. and Key Hedge Fund Inc.”

26 March 2008