Private Equity Investment Memo

SUMMARY OF PRINCIPAL TERMS 10 The Partnership: 10 Investment Objective 10 Partnership Size 11 The General Partner 11 Limited Partners 12 Capital Commitment by General Partner 12 Minimum Commitment by Limited Partners 12 Series 12 Closing 14 Drawdowns 14 Limited Opt Out Right 16 Advisory Board 17 Alternative Investment Structures 19 Investment Restrictions 19 Distributions 20 Allocations of Profits and Losses 23 Early Termination of Investment Period 23 Management Fee 24 General Partner Giveback 25 Sub-Advisors 25 Organizational and Offering Expenses 25 Administrative Expenses 25 Valuation of Securities 26 Term of Partnership 27 Withdrawal and Termination 27 Transfer of Interests 27 Reports and Meetings 28 Parallel Investment Entities 28 Taxation 30 Exculpation and Indemnification 30 Limitation on Liability of Limited Partners 31 ERISA Investors 32 Unrelated Business Taxable Income 32 General Partner Parties and Defaulting Limited Partners Excluded 33 Legal Counsel 33 Independent Auditors 33 IV.. Investment Process Key elements of the General Partner s investment process include: (i) identification of distressed companies, utilizing both conventional and proprietary sources of deal flow and emphasizing specific screening criteria, with an appropriate spread between fundamental and perceived market value (ii) thorough analysis of the prospective investment, including a liquidation analysis to help quantify the investment downside (iii) accumulation of significant positions in the target securities through in-house trading expertise and relationships with key brokers acquiring control or blocking positions (typically more than one-third of an impaired class of security) where necessary, to ensure appropriate influence in those situations where active participation in the investment is anticipated and structuring investments with a view toward enabling the company to emerge from its financial difficulties and (iv) active monitoring of investments and managing of the ba