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					                                                                  Copy No.______________________

                                                          Name of Offeree_____________________




              CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
                                   OF
                       [THE NAME OF THE FUND] , L.P.

                                a California Limited Partnership

    An Investment in the Partnership Involves a Risk of Loss. Please Review „Risk Factors.‟

                The date of this Confidential Private Placement Memorandum is
                                   [INSERT DATE OF PPM]




             This Amended and Restated Confidential Private Placement Memorandum (the
“Memorandum”) constitutes an offer only to the offeree named in the space provided above.
Delivery of this Memorandum to anyone else is unauthorized and any total or partial
reproduction of this Memorandum or divulgence of its contents, without the prior written consent
of [NAME OF FUND], LP, is prohibited. By accepting delivery of this Memorandum, the offeree
named hereon agrees that if such offeree elects not to make a purchase offer or such offeree‟s
purchase offer is rejected, he or she will return this Memorandum and all documents delivered
herewith to [NAME OF FUND], L.P. and will thereafter maintain the confidentiality of all
information contained herein.




                         Private Placement Memorandum – [NAME OF YOUR FUND], LP
Notice To All Potential Investors
                 This Amended and Restated Confidential Private Placement Memorandum (this
“Memorandum” or this ˝Offering Memorandum” ) is provided to potential investors (“you”) solely for the
purpose of your evaluation of an investment in [NAME OF FUND], L.P. (the “Partnership”), a
California limited partnership. You may not reproduce or distribute this Memorandum to anyone else
(other than your professional advisors). By accepting this Memorandum, you agree to return it and all
related documents to [MANAGING ORGANIZATION OF FUND], LLC, the General Partner of the
Partnership (the “General Partner”) if you do not invest in the Partnership.

                The information in this Memorandum is given as of the date on the cover page, unless
another time is specified, and you should not infer from either the subsequent delivery of this
Memorandum or the acceptance of your investment that there have not been any changes in the facts
described since that date. You and your authorized representatives may ask questions of the General
Partner about the terms and conditions of this offering, and may obtain additional information to the extent
the General Partner possesses such additional information or can obtain it without unreasonable effort or
expense.

                No person has been authorized in connection with this offering to
                give any information or make any representations other than those
                contained in this Memorandum.

TAX ADVICE: As required by U.S. Treasury Regulations governing tax practice, you are hereby
advised that any written tax advice contained herein is not written nor intended to be used (and
cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under
the Internal Revenue Code of 1986, as amended.

All references to “$,” “dollar,” “U.S. dollar” and “U.S. $” are to the currency of the United States of
America, unless otherwise indicated. “Business day” as used in this Memorandum means any day that is
not a Saturday or Sunday and is not a legal holiday or a day on which banking institutions generally are
authorized or obligated by law or regulations to remain closed in New York.




                                                       i
                               Private Placement Memorandum – [THE FUND NAME], LP
                                    [NAME OF FUND], L.P.
                                   Limited Partnership Interests
                                  Minimum Investment: $250,000

         [NAME OF FUND], L.P. a California limited partnership, (the “Partnership”) is hereby
offering (the “Offering”) limited partnership interests (the "Interest" or “Interests”) totaling a
minimum of [$x](the “Minimum Offering”) and a maximum of [$x] (the “Maximum
Offering”). The minimum subscription is for interests totaling $x per accredited investor, subject
to the right of the Partnership to accept subscriptions for amounts less than $[x]. The Interests are
being privately offered on a best efforts basis pursuant to exemptions from registration under: (i)
the United States Securities Act of 1933, as amended (the “Securities Act”), as provided for in
Regulation D under the Securities Act (“Regulation D”) and (ii) Section 3(c)(7) of the
Investment Company Act of 1940 (the “Investment Company Act”).

        The Partnership generally does not intend to compensate third parties with respect to the
sale of Interests; however, the General Partner reserves the right to pay commissions or fees on
terms to be negotiated with any third-party selling agents. Investors acquiring Interests through
third parties may be charged an up-front selling commission based on a percentage of the
purchase price of the Interests at the time of sale unless waived in whole, or in part, by such third
party. Further, the General Partner may pay such selling agent on a monthly basis a percentage of
the fees it receives from the Partnership allocable to the outstanding Interests sold by such selling
agent. This Offering will terminate on the earlier of: (i) receipt and acceptance of subscriptions
for Interests totaling $[x], or (ii) [Month, Day, Year], unless extended by the Partnership to no
later than [Month, Day, Year], (hereinafter "Offering Period").

     THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE
PURCHASED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT. THESE SECURITIES ARE TO BE OFFERED AND SOLD ONLY TO
ACCREDITED INVESTORS.

     THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES LAWS OF ANY JURISDICTION, INCLUDING THE UNITED STATES
SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND WILL BE
OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF APPLICABLE UNITED STATES FEDERAL AND STATE
SECURITIES LAWS.

      THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR
DISAPPROVED BY ANY GOVERNMENTAL AUTHORITY, INCLUDING THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION, NOR HAS ANY SUCH
AUTHORITY, COMMISSION OR ANY STATE SECURITIES BUREAU, COMMISSION OR
OTHER REGULATORY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF
THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.



                                                     ii
                             Private Placement Memorandum – [THE FUND NAME], LP
FORWARD LOOKING STATEMENTS: THIS MEMORANDUM CONTAINS STATEMENTS
REGARDING MATTERS THAT ARE NOT HISTORICAL FACTS AND CONSTITUTE
FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF
THE SECURITIES ACT AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF
1934. THESE STATEMENTS OFTEN REFER TO THE PARTNERSHIP‟S FUTURE PLANS,
PROJECTIONS, OBJECTIVES, EXPECTATIONS AND INTENTIONS AND THE
ASSUMPTIONS UNDERLYING OR RELATING TO THESE STATEMENTS. THESE
STATEMENTS ARE GENERALLY IDENTIFIED BY REFERENCE TO SUCH WORDS AS
“EXPECTS,” “ANTICIPATES,” “HOPES,” “PLANS,” “INTENDS,” “BELIEVES”, "MAY",
"ATTEMPT", "WILL" AND SIMILAR EXPRESSIONS EVIDENCING FUTURE
INTENTIONS. BECAUSE THE OUTCOMES OF THE EVENTS DESCRIBED IN SUCH
FORWARD LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES
AND IN THE NATURE OF PROJECTIONS OR PREDICTIONS OF FUTURE EVENTS
WHICH MAY NOT OCCUR, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
THOSE EXPRESSED IN OR IMPLIED BY SUCH FORWARD LOOKING STATEMENTS.
ALTHOUGH THE PARTNERSHIP BELIEVES THAT THE EXPECTATIONS REFLECTED
IN SUCH FORWARD LOOKING STATEMENTS ARE BASED UPON REASONABLE
ASSUMPTIONS, IT CAN GIVE NO ASSURANCES THAT ITS EXPECTATIONS WILL BE
ACHIEVED. THE LEVEL OF FUTURE REVENUES OF THE PARTNERSHIP, AND ITS
PROFITABILITY, IF ANY, ARE IMPOSSIBLE TO ACCURATELY PREDICT DUE TO
UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, MARKET AND OTHER
CIRCUMSTANCES. SOME OF THE FACTORS THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER FROM THE PARTNERSHIP‟S EXPECTATIONS ARE SET FORTH IN RISK
FACTORS. PROSPECTIVE INVESTORS ARE URGED TO CONSULT WITH THEIR OWN
ADVISORS WITH RESPECT TO ANY REVENUE, FINANCIAL, BUSINESS AND OTHER
PROJECTIONS CONTAINED HEREIN.

     THE INFORMATION CONTAINED HEREIN IS PRESENTED AS OF THE DATE
HEREOF AND IS SUBJECT TO CHANGE, COMPLETION AND AMENDMENT WITHOUT
NOTICE. NEITHER THE DELIVERY OF THIS MEMORANDUM AT ANY TIME NOR OF
ANY INTERESTS ACQUIRED PURSUANT HERETO SHALL IMPLY THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE SET FORTH ON THE COVER HEREOF.

     IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR
OWN EXAMINATION OF THE PARTNERSHIP AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR
REGULATORY AUTHORITY, NOR HAS ANY SUCH AUTHORITY CONFIRMED THE
ACCURACY NOR DETERMINED THE ADEQUACY OF THIS OFFERING
MEMORANDUM     OR   ANY   INFORMATION     CONTAINED   HEREIN.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

     NO OFFERING LITERATURE OR ADVERTISING IN ANY FORM WILL BE OR
MAY BE EMPLOYED IN THE OFFERING OF THE SECURITIES, EXCEPT FOR THIS
MEMORANDUM (INCLUDING AMENDMENTS AND SUPPLEMENTS) AND
STATEMENTS CONTAINED OR DOCUMENTS SUMMARIZED HEREIN. NO DEALER,

                                            iii
                     Private Placement Memorandum – [THE FUND NAME], LP
SALESMAN OR OTHER PERSON IS AUTHORIZED BY THE PARTNERSHIP TO GIVE
ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN AS
CONTAINED IN THIS MEMORANDUM IN CONNECTION WITH THIS OFFERING.
THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER WITHIN ANY
JURISDICTION TO ANY PERSON TO WHOM SUCH OFFER WOULD BE UNLAWFUL.
THIS MEMORANDUM IS FOR THE EXCLUSIVE USE OF THE PERSON WHOSE NAME
APPEARS ON THE FACE OF THE COVER PAGE AND DOES NOT CONSTITUTE AN
OFFER TO SELL ANY SECURITIES TO ANY OTHER PERSON. THIS MEMORANDUM
AND THE INFORMATION CONTAINED HEREIN MAY NOT BE REPRODUCED OR
USED IN ANY OTHER MANNER WITHOUT THE EXPRESS WRITTEN CONSENT OF
THE PARTNERSHIP.

     THE PARTNERSHIP HAS AGREED TO GIVE EACH PROSPECTIVE INVESTOR
OR HIS OR HER REPRESENTATIVE(S), OR BOTH, AT A REASONABLE TIME PRIOR
TO HIS OR HER PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY, THE
OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE ANSWERS FROM, THE
GENERAL PARTNER OR PERSON(S) ACTING ON ITS BEHALF CONCERNING THE
TERMS AND CONDITIONS OF THIS OFFERING, AND TO OBTAIN ANY ADDITIONAL
INFORMATION WHICH THE GENERAL PARTNER POSSESSES OR CAN ACQUIRE
WITHOUT UNREASONABLE EFFORT OR EXPENSE THAT IS NECESSARY TO VERIFY
THE ACCURACY OF THE INFORMATION SET FORTH HEREIN.

     PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS
MEMORANDUM AS INVESTMENT, TAX OR LEGAL ADVICE. INVESTORS MUST
RELY ON THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE
SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND
RISKS INVOLVED, IN MAKING AN INVESTMENT DECISION. THIS MEMORANDUM
AND THE EXHIBITS HERETO, AS WELL AS THE NATURE OF THE INVESTMENT,
SHOULD BE REVIEWED BY EACH PROSPECTIVE INVESTOR‟S PROFESSIONAL
ADVISOR(S), IF ANY, HIS OR HER INVESTMENT, TAX OR OTHER ADVISORS,
AND/OR HIS OR HER ACCOUNTANTS AND/OR LEGAL COUNSEL. THIS
MEMORANDUM CONTAINS SUMMARIES, BELIEVED TO BE ACCURATE, OF
CERTAIN TERMS OF CERTAIN DOCUMENTS. THIS MEMORANDUM REFERS TO THE
ACTUAL DOCUMENTS WHICH MAY BE OBTAINED FROM THE PARTNERSHIP FOR
COMPLETE INFORMATION CONCERNING THE RIGHTS AND OBLIGATIONS OF THE
PARTIES THERETO. ALL SUCH SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY
BY THIS REFERENCE.

     THIS OFFER MAY BE WITHDRAWN AT ANY TIME AND IS SPECIFICALLY
MADE SUBJECT TO THE TERMS DESCRIBED IN THIS MEMORANDUM. THE
PARTNERSHIP RESERVES THE RIGHT TO REJECT ANY SUBSCRIPTION IN WHOLE
OR IN PART, OR TO ALLOW ANY PROSPECTIVE INVESTOR LESS THAN THE
NUMBER OF SECURITIES APPLIED FOR BY SUCH INVESTOR.

     THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE. AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE PARTNERSHIP AGREEMENT OF [NAME OF YOUR FUND],

                                          iv
                   Private Placement Memorandum – [THE FUND NAME], LP
L.P., THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

     IF ANY PERSON ELECTS NOT TO MAKE AN OFFER TO ACQUIRE INTERESTS
OR SUCH OFFER IS REJECTED BY THE PARTNERSHIP, SUCH PERSON, BY
ACCEPTING DELIVERY OF THIS MEMORANDUM, AGREES TO RETURN TO THE
PARTNERSHIP THIS MEMORANDUM AND ALL RELATED DOCUMENTS ENCLOSED
HEREWITH OR FURNISHED SUBSEQUENTLY.
                 ______________________________________

                                                    LEGENDS

        The legends set forth below are required by the respective state securities authorities for
the jurisdictions indicated. Offerees, subscribers and their representatives must refer to the
appropriate legend set forth in this Memorandum in order to ascertain the rules for their state of
residence. Furthermore, subscribers must recognize that the restrictions set forth hereinafter will
continue to apply to the ownership, assignment or sale of the Interests. Therefore you must retain
this Memorandum for future reference if you elect to purchase Interests. The restrictions
presented below are shown as of the date of this Memorandum. To the extent the applicable
regulations change in the future, these restrictions may also change. Prospective investors must
seek independent and current legal advice as to the status of regulatory restrictions and adverse
tax consequences if and when an assignment is contemplated. For additional information
regarding state securities laws, commonly known as "Blue Sky" laws, please refer to each state's
securities regulatory agency.1

NOTICE TO NON - U.S. RESIDENTS.

IT IS THE RESPONSIBILITY OF ALL PERSONS WISHING TO PURCHASE THE
INTERESTS TO SATISFY THEMSELVES AS TO FULL OBSERVANCE OF THE LAWS OF
ANY RELEVANT TERRITORY OUTSIDE THE U.S. IN CONNECTION WITH ANY SUCH
PURCHASE, INCLUDING OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER
CONSENTS OR OBSERVING ANY OTHER APPLICABLE FORMALITIES.

NASAA UNIFORM LEGEND

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE
TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE
INTERESTS HAVE NOT BEEN RECOMMENDED BY ANY UNITED STATES FEDERAL
OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE

1
 For Securities relating to California, please visit http://www.corp.ca.gov/. For Florida, please visit
http://www.flofr.com/. For Missouri, please visit http://www.sos.mo.gov/. For New York, please visit
http://www.oag.state.ny.us/. For Washington, please visit http://www.dfi.wa.gov/sd/.

                                                          v
                                  Private Placement Memorandum – [THE FUND NAME], LP
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE
INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
PARTNERSHIP AGREEMENT OF INNOVATEUR CAPITAL OPPORTUNITY FUND TWO,
L.P.. THE SECURITIES ACT, AND APPLICABLE SECURITIES LAWS OF ANY
APPLICABLE STATE OR OTHER JURISDICTION, AND PURSUANT TO REGISTRATION
OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.

CALIFORNIA RESIDENTS:

THESE SECURITIES MAY ONLY BE SOLD TO INVESTORS EACH OF WHOM CAN
REPRESENT THAT HE HAS A PRE-EXISTING PERSONAL OR BUSINESS
RELATIONSHIP WITH THE ISSUER OR ANY OF ITS OFFICERS, DIRECTORS OR
CONTROLLING PERSONS, OR HAS, THROUGH HIMSELF OR THROUGH HIS
UNAFFILIATED PROFESSIONAL ADVISOR, THE BUSINESS OR FINANCIAL
EXPERIENCE TO PROTECT HIS INTERESTS IN CONNECTION WITH HIS
SUBSCRIPTION TO THE INTERESTS. THE SALE OF THE SECURITIES WHICH ARE
THE SUBJECT OF THIS OFFERING HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF
THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL.
UNLESS THE SALE OF THE SECURITIES IS EXEMPT FROM THE QUALIFICATION BY
SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE THE
RIGHTS OF ALL PARTIES TO THIS OFFERING ARE EXPRESSLY CONDITIONED UPON
THE QUALIFICATION BEING OBTAINED.

FLORIDA RESIDENTS:

THE FLORIDA SECURITIES ACT PROVIDES, WHERE SALES ARE MADE TO FIVE OR
MORE PERSONS IN FLORIDA, THAT ANY SALE MADE PURSUANT TO SUBSECTION
517.061 (11) OF THE FLORIDA SECURITIES ACT SHALL BE VOIDABLE BY SUCH
FLORIDA PURCHASER EITHER WITHIN THREE DAYS AFTER THE FIRST TENDER OF
CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF
THE ISSUER, OR ANY ESCROW AGENT, OR WITHIN THREE DAYS AFTER THE
AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER,
WHICHEVER OCCURS LATER.

MISSOURI RESIDENTS

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE MISSOURI UNIFORM SECURITIES ACT, BY REASON OF
SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY
OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR
OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE

                                            vi
                     Private Placement Memorandum – [THE FUND NAME], LP
SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.

NEW YORK RESIDENTS:

THIS MEMORANDUM DOES NOT KNOWINGLY CONTAIN AN UNTRUE STATEMENT
OF A MATERIAL FACT NOR KNOWINGLY OMIT TO STATE A MATERIAL FACT
NECESSARY TO MAKE THE STATEMENTS MADE, IN THE LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING. IT
CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS OF DOCUMENTS
PURPORTED TO BE SUMMARIZED HEREIN. THIS MEMORANDUM HAS NOT BEEN
FILED WITH OR REVIEWED BY THE ATTORNEY GENERAL OF THE STATE OF NEW
YORK PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE
OF NEW YORK HAS NEITHER PASSED ON NOR ENDORSED THE MERITS OF THIS
OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. THIS
OFFERING OF THE INTERESTS HAS NOT BEEN REVIEWED BY THE ATTORNEY
GENERAL OF THE STATE OF NEW YORK BECAUSE OF THE OFFEROR‟S
REPRESENTATIONS THAT THIS IS INTENDED TO BE A NONPUBLIC OFFERING
PURSUANT TO REGULATION D, AND THAT IF ALL THE CONDITIONS AND
LIMITATIONS OF REGULATION D ARE NOT COMPLIED WITH, THE OFFERING WILL
BE RESUBMITTED TO THE ATTORNEY GENERAL FOR AMENDED EXEMPTION. ANY
OFFERING LITERATURE USED IN CONNECTION WITH THE OFFERING HAD NOT
BEEN PRE FILED WITH THE ATTORNEY GENERAL AND HAS NOT BEEN REVIEWED
BY THE ATTORNEY GENERAL. EACH NEW YORK INVESTOR WILL BE REQUIRED
TO AGREE THAT HE OR SHE WILL NOT SELL OR OTHERWISE TRANSFER THESE
INTERESTS, UNLESS THEY ARE REGISTERED UNDER THE SECURITIES ACT OR
UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. EACH NEW
YORK INVESTOR WILL BE REQUIRED TO REPRESENT THAT HE OR SHE HAS
ADEQUATE MEANS OF PROVIDING FOR HIS OR HER CURRENT NEEDS AND
POSSIBLE PERSONAL CONTINGENCIES AND THAT HE OR SHE HAS NO NEED FOR
LIQUIDITY OF THIS INVESTMENT. ALL DOCUMENTS, RECORDS AND BOOKS
PERTAINING TO THIS INVESTMENT WILL BE MADE AVAILABLE FOR INSPECTION
BY EACH NEW YORK INVESTOR AND HIS OR HER ATTORNEY OR HIS OR HER
ACCOUNTANT OR HIS OR HER PURCHASER REPRESENTATIVE, AND THE BOOKS
AND RECORDS OF THE ISSUER WILL BE AVAILABLE, UPON REASONABLE NOTICE,
FOR INSPECTION BY INVESTOR AT REASONABLE HOURS AT ITS PRINCIPAL PLACE
OF BUSINESS. ALL NEW YORK INVESTORS WILL BE REQUIRED TO REPRESENT
THAT THEY UNDERSTAND THAT THE OFFERING MAY BE MADE ONLY TO THOSE
NON ACCREDITED RESIDENTS OF NEW YORK WHO HAVE A NET WORTH (ALONE
OR JOINTLY WITH A SPOUSE, BUT EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES) OF FIVE TIMES THE AMOUNT OF THE INVESTMENT OR AN
ADJUSTED GROSS INCOME (ALONE OR JOINTLY WITH A SPOUSE) OF THREE TIMES
THE AMOUNT OF THE INVESTMENT.




                                             vii
                      Private Placement Memorandum – [THE FUND NAME], LP
WASHINGTON RESIDENTS ONLY

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND THE SECURITIES ACT OF WASHINGTON, CHAPTER 21.20 RCW, AND
CANNOT BE RESOLD WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF
1933 AND THE SECURITIES ACT OF WASHINGTON OR AN EXEMPTION
THEREFROM.

                 ______________________________________


     NEITHER THE INFORMATION CONTAINED HEREIN, NOR ANY PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT COMMUNICATION SHOULD BE
CONSTRUED BY THE PROSPECTIVE INVESTOR AS LEGAL OR TAX ADVICE. EACH
PROSPECTIVE INVESTOR SHOULD CONSULT HIS OWN LEGAL AND TAX ADVISORS
TO ASCERTAIN THE MERITS AND RISKS OF THE TRANSACTIONS DESCRIBED
HEREIN PRIOR TO SUBSCRIBING TO SECURITIES.




                                          viii
                    Private Placement Memorandum – [THE FUND NAME], LP
                                                Instructions

                STEP ONE:                 READ THIS ENTIRE MEMORANDUM
                                          BEFORE INVESTING

               A potential investor (“you”) should carefully read this entire Confidential Private
Placement Memorandum (this “Memorandum”), which contains a complete copy of the Limited
Partnership Agreement (the “Partnership Agreement”) of [The Name of The Fund], L.P. (the
“Partnership”), a California limited partnership, as Exhibit B attached hereto. However, the contents of
this Memorandum should not be considered to be legal, tax or investment advice, and you should consult
with your own counsel and advisors as to all matters concerning an investment in the Partnership.

                       An Investment in the Partnership Involves Substantial Risk of Loss

                       Please Review “Risk Factors” Carefully

                STEP TWO:                 COMPLETE THE INVESTOR QUESTIONNAIRE

                 The Confidential Investor Questionnaire (the “Questionnaire”) is attached hereto as
Exhibit D. Because the General Partner will rely on the information provided in the Questionnaire, it is
essential that you provide accurate, candid and complete information on the Questionnaire. The General
Partner assumes no obligation to independently verify any information provided in your Questionnaire.

                STEP THREE:               READ AND SIGN THE SUBSCRIPTION
                                          AGREEMENT AND RELATED DOCUMENTS

                  You will be required to make a number of important representations and warranties in the
Subscription Agreement attached hereto as Exhibit A and upon which the General Partner will rely. Sign
it only after reading it carefully.

                STEP FOUR:                RETURN THE SUBSCRIPTION AGREEMENT

                Once you have completed these instructions, return the entire Subscription Agreement
and any additional agreements and documents required by the General Partner. If you have any questions
regarding the completion of subscription documents, you should contact the Partnership by telephone at
+1.xxx.xxx.xxxx or via e-mail at [email address].


If you invest, please retain this Memorandum for your records. If you elect not to invest, please return
                    this Memorandum and all other materials to the General Partner.




                                                      ix
                               Private Placement Memorandum – [THE FUND NAME], LP
                                                 TABLE OF CONTENTS
Notice To All Potential Investors ...................................................................................................i

Instructions ....................................................................................................................................ix

SUMMARY OF THE OFFERING .................................................................................................. 1

THE PARTNERSHIP ...................................................................................................................... 8

NET ASSET VALUE ...................................................................................................................... 9

RISK FACTORS ............................................................................................................................ 10

MANAGEMENT OF THE PARTNERSHIP ................................................................................ 19

FIDUCIARY DUTIES OF THE GENERAL PARTNER ............................................................. 20

ADVISORY BOARD .................................................................................................................... 21

CONFLICTS OF INTEREST ........................................................................................................ 21

RESTRICTIONS ON TRANSFERABILITY ............................................................................... 22

SALE OF INTERESTS .................................................................................................................. 23

FEDERAL INCOME TAX CONSEQUENCES ........................................................................... 24

SUBSCRIPTION FOR INTERESTS............................................................................................. 33

ADDITIONAL INFORMATION .................................................................................................. 36




                                                                        1
                                          Private Placement Memorandum – [THE FUND NAME], LP
                      SUMMARY OF THE OFFERING
This summary is qualified in its entirety by the more detailed information contained
elsewhere in this Memorandum and the documents referred to herein.

The                 [NAME OF FUND], L.P. is a California limited partnership formed on
Partnership:        [Date you formed the fund], and, if not otherwise terminated under the
                    terms of the partnership agreement forming the Partnership (the
                    “Partnership Agreement”), will terminate on [Date of Fund Expiration],
                    unless the General Partner extends the life of the Partnership for no more
                    than five one-year terms. The Partnership is offering a minimum of [$x]
                    and a maximum of [$x] in Interests to persons who are Accredited
                    Investors as defined in Regulation D. In no event will the Partnership
                    admit more than 99 partners. Each individual investor must subscribe for
                    at least [$x] and each corporate investor must subscribe for at least [$x],
                    although the General Partner in its sole discretion may waive either
                    requirement.

Investment          The Partnership‟s investment objective is to achieve long-term capital
Objective and       appreciation through the identification of, and investment in, securities of
Strategy:           early stage companies (“Portfolio Company or Companies”), primarily
                    in [stage of company] companies with headquarters in the [Geographic
                    Region] Region which have a large market potential in North America in
                    the following sectors: [Choose Industries: Examples - Medical Devices or
                    Services, Media and Entertainment, Functional Food and Beverage
                    Technologies, Clean Technology & Green Technology and Mobility
                    Markets] (collectively, the “Designated Industries”), which the General
                    Partner believes have a unique product concept, an identifiable product
                    market and the potential for completing a public offering or merging with
                    an existing industry leader within three to five years after such
                    investment.

General             The general partner of the Partnership is [Managing Company], LLC, a
Partner:            California limited liability company (the “General Partner”) formed on
                    [Month, Day, Year of Formation], the members of which are [any
                    organizations that are members of the organization] ("Members"). The
                    General Partner will contribute an amount equal to half a percent of the
                    total capital of the Partnership although a portion of such contribution
                    may be in the form of a non-recourse promissory note.

Closing             The General Partner expects to hold the first closing of this Offering on
Schedule:           [Target Date of Close]. The General Partner, in its sole discretion, may
                    accept additional investors in subsequent closings, with a final closing to
                    occur not later than [The Deadline Date of Close].

Experience of       Although the General Partner is newly formed and has no operating
the General         history, the Members of the General Partner have collectively 40 years of


                                                   1
                             Private Placement Memorandum – [Fund Name], LP
Partner            successful experience in identifying and funding start-up ventures.

Compensation of    The General Partner will be compensated for its services in organizing
General            and running the General Partnership‟s business by receiving a percentage
Partner:           of the current value, measured quarterly, of the assets held by the
                   Partnership and all interest earnings from the Subscription Payments
                   earned after the Offering and while not invested in Portfolio Companies
                   (“Management Fee”). For the first year of the Partnership, the General
                   Partner will receive a fee equal to [x%] per annum of the total capital
                   subscribed for or committed for by the Limited Partners (“Asset Value”).
                   After the first year, this fee will be reduced by [x%] per year, but in no
                   event shall the Management Fee be less than [x%] of the Asset Value.

Use of             All proceeds from the sale of Interests, after deduction of expenses for
Proceeds:          this Offering and certain administrative and operating expenses, shall be
                   applied to the acquisition of securities of Portfolio Companies (“Portfolio
                   Securities”).

                  Until Minimum Offering is met, offering proceeds will be held in an
                  interest bearing special trust account by [Your escrow or law firm] LLP,
                  which acts as the Partnership's legal counsel and escrow agent. After the
                  Minimum Offering is reached, but before the expiration of the Minimum
                  Offering on [Target closing date], or any extension thereof, the Partnership
                  may, in its discretion, accept subscriptions and commence in using the
                  subscription proceeds for Partnership operations. If the minimum of [$x] is
                  not sold on or before [Target closing date], or any extension thereof, the
                  General Partner may acquire the remaining unsold Interests necessary to
                  complete the minimum Offering of $[x]. Thereafter, the General Partner
                  may sell the Interests it purchased to complete the Minimum Offering to
                  new investors for an amount equal to the amount the General Partner has
                  contributed to the Partnership in respect of such Interests. If the Partnership
                  has accepted subscriptions for the minimum of $[x] prior to [Target Close
                  Date], the Offering will remain open until the earlier of: (a) the date on
                  which the maximum number of Interests have been subscribed for and
                  accepted by the Partnership, or (b) or such later date up to and including
                  [Extended deadline for closing date], as the General Partner may determine
                  in its sole discretion.

                  Additional Capital
                  In the event that the Partnership for any reason requires additional capital,
                  investors shall have the option to contribute said additional capital.
                  However, in the event an Investor elects not to contribute his/her
                  percentage of any additional capital required, that Investor will receive a
                  dilution in his/her ownership percentage in the amount of the Investor‟s
                  additional capital amount divided by the total capital contributed by all
                  parties.


                                                  2
                            Private Placement Memorandum – [Fund Name], LP
Conflicts of       The General Partner, its Managers, Members or their affiliates may invest
Interest:          in or participate in the management of a Portfolio Company. Neither the
                   General Partner nor its affiliates are precluded from investing in or
                   operating as a manager or advisor for other similar Portfolio Companies
                   or investment companies. Accordingly, certain conflicts of interest may
                   arise in connection with the Partnership‟s investments. In addition, neither
                   the General Partner nor any of its affiliates is obligated under the
                   Partnership Agreement to present any opportunity to the Partnership and
                   may invest or otherwise participate in such opportunity without it
                   constituting a breach of fiduciary duty.

Limits on          Interests may not be transferred or sold without the express prior written
Transferability:   consent of the General Partner. In any event, any transfer which would
                   result in the Partnership exceeding 99 Partners is prohibited. Sale or
                   transfer or Interests are further subject to the limitations as set forth by the
                   Partnership Agreement and applicable federal and state securities laws.

Distributions to   The General Partner does not intend to distribute to the Limited Partners
Limited            any income from the Partnership, except in the event that it sells Portfolio
Partners:          Securities in connection with an initial public offering, sale or otherwise.
                   The General Partner intends to distribute to the Limited Partners and the
                   General Partners approximately 100% of all net proceeds from the sale of
                   Portfolio Securities within 30 days of receipt by the Partnership of such
                   proceeds.

Risk Factors:      An investment in the Partnership involves substantial risks, and each
                   prospective investor should carefully review this Memorandum and the
                   documents referred to herein before deciding whether to invest in the
                   Partnership. The Partnership is not registered as an investment company
                   under the Investment Company Act. The Offering will not be registered
                   under federal or state securities laws. Therefore, the protections provided
                   to investors by registration under such laws generally will not be available
                   to investors.

Organizational     The General Partner advanced the organizational and initial offering
Expenses,          expenses of the Partnership. The Partnership shall reimburse such
Offering           expenses to the General Partner, and amortize the organizational expenses
Costs, and         over the sixty (60) month following the reimbursement. The Partnership
Administrative     shall pay all of its ordinary administrative expenses and the expenses
Expenses:          incurred in connection with the Offering of the Interests and any
                   extraordinary expenses it incurs. The Partnership shall also reimburse the
                   General Partner monthly for administrative and other direct expenses
                   incurred on behalf of the Partnership.




                                                  3
                            Private Placement Memorandum – [Fund Name], LP
Suitability for   An investment in the Partnership is suitable only for investors who can
Investors:        bear the risks involved in the investment strategies described herein, who
                  are willing to accept limited liquidity of their investment, and who can
                  bear the potential risks of loss of their entire investment. Only those
                  persons who are Accredited Investors may purchase Interests.

Reports:          The Limited Partners will receive (i) an audited annual report, (ii)
                  unaudited semiannual financial statements with a summary update of
                  Portfolio Securities investments, including estimated valuations of such
                  investments, and (iii) annual tax information.

Subscriptions:    Subscribers must complete and return to the General Partner the
                  Subscription Agreement accompanying this Memorandum (a copy of
                  which is attached hereto as Exhibit A).

Offices:          The principal office of the Partnership and the General Partner: [Address
                  of General Partner]; telephone +[investor relations telephone number];
                  fax: +[investor relations fax number]; email: [investor relations email];
                  website: [website of partnership].




                                               4
                         Private Placement Memorandum – [Fund Name], LP
                          INVESTOR SUITABILITY STANDARDS

This is a private offering which is being made only by delivery of a copy of this Offering
Memorandum. Furthermore, the offering and sales of the Interests will be made only to persons
who meet or exceed certain suitability standards described below which have been adopted by the
Partnership for the purpose of determining who will be permitted to purchase the Interests.

An investment in the Interests may be considered to be speculative, involves certain risks (see
"Risk Factors"), and is suitable only for prospective purchasers who have sufficient financial
means to bear such risks, who have substantial other assets to provide for current needs and
future contingencies and therefore have no need for immediate liquidity with respect to this
investment, and who could withstand a possible total loss of this investment. Consequently, sales
of the Interests will be made only to "accredited investors" as that term is defined in Rule 501 of
Regulation D promulgated under the Securities Act ("Accredited Investors").

Each prospective investor must represent in writing that he or she is an Accredited Investor. A
prospective investor will be an accredited investor only if the investor meets one of the following
tests:

              (1)           The investor is a natural person who has a net worth or joint net worth
with the investor's spouse exceeding $1 million at the time of the investor's purchase.

              (2)          The investor is a natural person who had an individual income in
excess of $200,000 in each of the two most recent years and who reasonably expects an income
in excess of $200,000 in the current year, or who together with their spouse had joint income in
excess of $300,000 in each of the two most recent years and who reasonably expects a joint
income in excess of $300,000 in the current year.

             (3)           The investor is a (i) bank, savings and loan association or trust
company, (ii) a broker/dealer registered under the Securities Exchange Act of 1934, as amended
(the “34 Act”), (iii) an insurance company, (iv) an investment company registered under the
Investment Company Act of 1940, (v) a pension or profit sharing trust (other than a self-
employed individual retirement plan or individual retirement account), (vi) a governmental
agency, (vii) small business investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, (viii) a
business development company as defined in Section 2(a)(48) of the Investment Company Act of
1940 or (ix) a private business development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.

              (4)          The investor is an officer of the Partnership or occupies a position
with the Partnership substantially similar to those of an executive officer of a corporation.

              (5)          The investor is a relative, spouse or relative of a spouse of any other
purchaser who has the same principal residence as such other purchaser or any corporation, trust
or estate in which any purchaser owns more than 50% of the equity or beneficial interest.



                                                     5
                               Private Placement Memorandum – [Fund Name], LP
             (6)           The investor is a trust with total assets in excess of $5,000,000 not
formed for the specific purpose of acquiring the Interests.

              (7)           The investor is a tax-exempt organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), and has assets of not
less than $5,000,000 as of its most recent audited financial statements.

               (8)          The investor is a corporation, partnership, trust or other entity and
each and every equity owner of such entity certifies that the investor meets the qualifications set
forth in (1) through (7) above.

As used herein, the term "net worth" means the excess of total assets at fair market value,
including home and personal property, over total liabilities including mortgages and income taxes
on unrealized appreciation of assets. In determining income, "individual income" means adjusted
gross income as reported for federal income tax purposes, less any income attributable to a
spouse or to property owned by a spouse, increased by the following amounts (but not including
any amounts attributable to a spouse or to property owned by a spouse): (i) the amount of any
interest income received which is tax-exempt under Section 103 of the Code; (ii) the amount of
losses claimed as a limited partner in a limited partnership (as reported on Schedule E of Form
1040); (iii) any deduction claimed for depletion under section 611 et seq. of the Code; and (iv)
any amount by which income from long-term capital gains has been reduced in arriving at
adjusted gross income pursuant to the provisions of Section 1202 of the Code.

In addition to meeting these standards pertaining to the economic ability of the proposed investor
to undertake the risks inherent in the purchase of Interests, each prospective investor will also be
required to represent in writing, among other things, that such investor has either (i) a preexisting
business or personal relationship with the executive officers or directors of the Partnership, or (ii)
such knowledge and experience in financial and business matters that such investor is capable of
evaluating the merits and risks of an investment in the Interests and of making an informed
investment decision, or has retained an attorney, accountant, or other financial or business
advisor who is able, on behalf of the investor, to evaluate the merits and risks of such an
investment and to make an informed investment decision with respect thereto. Additionally, each
investor will also be required to represent that the Interests are being acquired for his or her own
account solely for investment and not for distribution.

EACH PROSPECTIVE INVESTOR SHOULD REALIZE THAT SATISFACTION OF THE
FOREGOING MINIMUM SUITABILITY STANDARDS DOES NOT NECESSARILY
DETERMINE THAT AN INVESTMENT IN THE INTERESTS IS APPROPRIATE FOR
SUCH PERSON.

All questions as to the validity, form, eligibility and acceptance of any Subscription Agreement
will be determined by the Partnership in its sole discretion, and all decisions of the Partnership's
discretion concerning such matters will be final and conclusive. The Partnership may, in its sole
discretion, elect to waive any defect or irregularity in any Subscription Agreement, or may permit
a defect or irregularity therein to be corrected within such time as it may determine, but shall be
under no obligation to grant such waivers or to permit such corrections. The Partnership reserves


                                                      6
                                Private Placement Memorandum – [Fund Name], LP
the absolute right to reject any subscription if such subscription is not in proper form or if the
acceptance thereof or the issuance of interests pursuant thereto could be deemed unlawful.

Tendered subscriptions will be irrevocable until accepted or rejected by the Partnership, but shall
be deemed accepted if not returned within thirty (30) days after receipt.

In the event that the Partnership rejects all or any portion of a requested subscription for any
reason, in its sole discretion, an appropriate refund, without deduction or interest, will be made by
the Partnership. After all refunds have been made, the Partnership, and its General Partner,
directors, officers and employees will have no further liability to any prospective subscriber with
respect to rejected or canceled subscriptions.

The Interests purchased by each subscriber will be issued and delivered by the Partnership as
soon as practicable after each closing of the sale of Interests.




                                                      7
                                Private Placement Memorandum – [Fund Name], LP
                                 THE PARTNERSHIP
Structure

[NAME OF FUND], L.P. is a California limited partnership formed on [Date of when the fund
formed] and, if not otherwise terminated under the terms of the partnership agreement forming
the Partnership (the “Partnership Agreement”), will terminate on [Date of when the fund life
will end], unless the General Partnership extends the life of the Partnership for no more than five
(5) additional one-year terms. Each investor will receive a copy of the Limited Partnership
Agreement with this Memorandum, a form of which is attached hereto as Exhibit B.

Investment Policies and Goals

        All of the proceeds of this Offering, net of expenses for the Offering, will be used by the
General Partner to carry out the Partnership‟s investment objectives. The Partnership‟s goal is to
achieve capital appreciation through the identification of and investment in Portfolio Securities of
[stage of companies you will invest in] companies in the Designated Industries which the General
Partner believes have unique product concepts, an identifiable product market, and the potential
for completing a public offering or merging with an existing industry leader within three to five
years after the Partnership‟s investment. The Partnership will pursue a mix of early stage
investments primarily focused in the [Geographic] Region and potentially some later stage
investments in California. The Partnership expects to make investments of $x to $x each,
including cash reserves for follow-up investments, in up to 20 companies. Ultimately, the
Partnership intends to liquidate its investments either from the eventual creation of a market by
such Portfolio Companies for their Securities or the outright sale or merger with larger
companies.

        The Partnership expects to focus on opportunities in which modest amounts of initial
capital, combined with vision and experience, can be used to develop substantial businesses. The
General Partner and the Advisory Board intend to identify emerging opportunities before
commercial value is apparent to the general business community. In certain highly attractive
early stage opportunities, the Partnership expects that it may invest before a management team or
even a final business plan is in place. For investments in established companies, the Partnership
expects to interact directly with experts to review data and select the most promising companies
and products.

       The Partnership expects that its participation in structuring and managing early-stage
investments will enable it to benefit from favorable investment terms and pricing. The General
Partner believes that the General Partner‟s contribution of human capital will provide the
Partnership with higher returns than passive equity investments alone would generate.

         There are no limitations on the size, operating history or dividend-paying record of the
Portfolio Companies in which the Partnership may invest. The principal criterion for investment
is that the Portfolio Securities meet the Partnership‟s investment objectives and investment
criteria. However, the Partnership expects to generally invest in preferred stock and other equity

                                                     8
                               Private Placement Memorandum – [Fund Name], LP
Securities. The Partnership may also invest in convertible securities, common stock, debt
securities, options or other types of securities. The Partnership will not invest more than 7% of
the total proceeds of this Offering in any one Portfolio Company.

             The projected investment and business plan is more fully described in the
prospectus/presentation attached as Exhibit C.

The Industry Opportunity

[Describe the invesment opportunity your fund seeks to target. Have about 3-5 paragraphs
outlining the investment opportunity; however, DO NOT indicate or promise any returns being
made. Do not view this as a „selling‟ paragraph. State facts and objectively explain why you will
be investing in the area. ]

Investment Criteria

        [Have a short 3 paragraph explaination on your investment criteria, how you will value
start-ups, and what you will look for in an investment]

The following are some of the key factors the Partnership intends to look for in new investments:

       • Strong and committed entrepreneurial management team or the ability to attract such a
         team;
       • Large underserved markets;
       • Proprietary, breakthrough technology capable of providing multiple products;
       • Differentiated businesses suited for public offering or acquisition;
       • Short development times following proof of concept (three to five years);
       • Modest capital requirements to reach value-generating milestones; and
       • Fields in which the Partnership can use its expertise to create high returns.


                                   NET ASSET VALUE
        The Net Asset Value of the Partnership will be equivalent to its assets less its liabilities as
of any date of determination, computed in accordance with generally accepted accounting
principles (“GAAP”) governing valuation of privately held businesses in the start-up or
development stage. Since computation of Net Asset Value will affect the amount of distributions
in kind, if any, to be made to the Limited Partners as well as the amount of compensation to be
paid to the General Partner during any quarter, the Partnership will cause its Tax Matters Partner
(as defined by the Internal Revenue Code of 1986 ("IRC"))to make such determinations in
accordance with GAAP.




                                                      9
                                Private Placement Memorandum – [Fund Name], LP
                                      RISK FACTORS
        An investment in the Partnership involves substantial risk and is highly speculative and,
therefore, should be undertaken only by Accredited Investors whose financial resources are
sufficient to enable them to assume these risks and who can afford to lose their entire investment.
The following risk factors (together with other factors set forth elsewhere in this Memorandum)
should be considered carefully, but are not meant to be an exhaustive listing of all potential risks
associated with an investment in the Partnership. Each prospective investor should carefully
consider the following risks, and should consult with his or her own legal, tax, and financial
advisors with respect thereto, before subscribing for Interests.

Risks Inherent in the Partnership’s Business

Overall Business Risks of the Partnership. The Partnership‟s investment strategy involves
making long term investments in start-up ventures in one or more Designated Industries. There
are significant risks on two levels: first, the Portfolio Companies, as start-up companies, are high-
risk investments; second, the Partnership must invest its cash which will be tied up for several
years before any possible success on its investment can be expected. Like most start-up and
development companies, no assurance can be given that such Portfolio Companies will develop
to the point of generating revenue, much less earning profits. Even if one or more such Portfolio
Companies should develop to the point of making profits, the Partnership would be able to
recoup its investment and make a profit only if the Portfolio Company‟s Securities become
tradable or if the Portfolio Company is acquired, at least in part, by a larger company, of which
no assurance can be given. Finally, even if a Portfolio Company were to develop, generate
revenue and cause its securities to become tradable on established markets, it is probable that this
would occur only after a period of several years, during which time, the Partnership‟s investment
would effectively be locked in.
        The Partnership may incur losses as a result of an inability to effectively evaluate or
mitigate the risks in Portfolio Companies. Portfolio Companies may expose the Partnership to
a wide and increasing number of risks, including market risk, credit risk, liquidity risk,
operational risk and litigation risk.

        The Partnership may not have control over an investment. In certain situations, the
Partnership may acquire only a minority interest in a Portfolio Company or other asset in which it
invests, or rely on independent third party management or strategic partners with respect to the
management of a Portfolio Company. The Partnership may also co-invest with third parties
through partnerships, joint ventures or other entities, thereby acquiring non-controlling interests
in certain investments. Therefore, the Partnership may not be able to exercise control over the
loan or investment. A third party partner or co-venturer may have financial difficulties resulting
in a negative impact on such asset, may have economic or business interests or goals which are
inconsistent with those of the Partnership, or may be in a position to take action contrary to the
Partnership‟s investment objectives.

        The Partnership may not achieve its targeted rate of return on its investments. The
Partnership expects to make investments based on its estimates or projections of overall rates of
return on such investments, which in turn are based upon, among other considerations,

                                                     10
                                Private Placement Memorandum – [Fund Name], LP
assumptions regarding the performance of Portfolio Companies, the amount and terms of
available financing, marketability and viability of and the manner and timing of dispositions, all
of which are subject to significant uncertainty. In addition, events or conditions that the
Partnership has not anticipated may occur and may have a significant effect on the actual rate of
return received on an investment.

       Lack of Liquidity and Need for Additional Capital. In some cases, Portfolio
Companies will become successful only if additional capital is raised, which may dilute the
holdings of previous investors. The inability of such Portfolio Companies to attract other capital
may have the effect of halting any real development of that Portfolio Company and cause the
Partnership to lose its investment therein. Also, if such Portfolio Company is ultimately
unsuccessful in going public and developing a public market or merging with or being acquired
by another company, then the Partnership‟s holdings of that company‟s securities may become
worthless.

        Limited Due Diligence. As a result of the limited investment in each Portfolio Company
and the early stage nature of the Portfolio Companies, the amount of information available to the
General Partner for due diligence will be significantly less than that of a more mature company.
The making of investment decisions on the basis of limited information could result in significant
losses suffered by the Partnership.

        Competition. The Partnership expects to encounter substantial competition in its efforts
to locate attractive opportunities, primarily from business development companies, venture
capital partnerships and corporations, venture capital affiliates of large industrial and financial
companies, small investment companies, and wealthy individuals. Many of these entities will
have significantly greater experience, resources and managerial capabilities than the Partnership
and will therefore be in a better position than the Partnership to obtain access to attractive
business opportunities. The Partnership also will possibly experience competition from other
public “blank check” or special purpose acquisition companies, some of which may have more
funds available than does the Partnership.

        Determination of Net Asset Value. Computation of the value of the Partnership‟s net
assets for any given fiscal quarter will be done in accordance with GAAP governing valuation of
privately held businesses in the start-up or development stage. This computation is the basis for
valuation of any distributions of Portfolio Securities to the Limited Partners and for the amount of
the quarterly fees payable to the General Partner. No assurance can be given that the General
Partner‟s computation will be reasonable in the eyes of the Limited Partners.

        Investments may be global, which exposes the Partnership to additional risks.
Investments outside the United States may be affected by changes in trade protection laws,
policies and measures, and other regulatory requirements affecting trade and investment; changes
in regulatory requirements for business, technology and capital markets; social, political, labor or
economic conditions in a specific country or region; and difficulties in staffing and managing
foreign operations. Such uncertainties may limit the Partnership's ability to successfully operate
its business.

Risks Relating to the Formation and Internal Operation of the Partnership

                                                     11
                                Private Placement Memorandum – [Fund Name], LP
         Dependence upon General Partner and Affiliates. Day-to-day decisions regarding the
administration of the Partnership‟s affairs will be made exclusively by the General Partner. The
success of the Partnership and its ability to realize profits will depend, in significant part, on the
abilities of the General Partner and its Managers. Only one of the Managers has significant
experience in managing venture capital businesses. If this one Manager for any reason ceases to
be a Manager, the business of the Partnership could be adversely affected.

         Conflicts of Interest. The Managers and other affiliates of the General Partner are not
directly accountable to the Partnership and may engage in other activities. The General Partner or
its Managers may have conflicts of interest in allocating management time, services and
functions between the Partnership and future enterprises that the General Partner may organize,
as well as other business ventures in which the General Partner or its Managers may be or
become involved. Neither the Managers of the General Partner nor the General Partner has the
obligation to present an investment opportunity to the Partnership and each may make
investments or participate in any manner with any other business or entity at any time without
first presenting such opportunity to the Partnership.

        Unspecified Investments and Securities. The General Partner has not conclusively
determined to invest in any specific Portfolio Company or other investments as of the date of this
memorandum. Investors must rely upon the ability of the General Partner to select prospective
Portfolio Companies that are consistent with the Partnership‟s investment objectives and
investment criteria. Limited Partners should not expect to have an opportunity to evaluate for
themselves the relevant economic, financial and other information regarding any Portfolio
Company or Securities before an investment is made. No assurance can be given that the
Partnership will be successful in investing in suitable Portfolio Companies or that, when the
investment is made, the investment objective of the Partnership will be achieved.

        Potential Adverse Effects of Delays in Investment. The General Partner intends to
identify and assist the Partnership in investing in several Portfolio Companies in a relatively short
period of time. If the General Partner is not able to identify such companies or complete their due
diligence in a timely manner or the Managers are slow or simply do not agree sufficiently in
making investment decisions, delays may take place in the selection of Portfolio Companies.
Such delays could adversely affect the return on investment to investors.

        Concentration of Investments. The Partnership is limited to 7% of the amount of the
Partnership‟s capital that it may commit to any one investment. Although it is anticipated that the
General Partner will follow an investment policy of diversifying the Partnership‟s capital among
more than three or four investments, the relatively small size of the Partnership will preclude
extensive diversification. Further, the number of Portfolio Companies from which the Partnership
will acquire Securities will be limited. It is also possible that the General Partner may depart from
such policy from time to time. A loss in any one investment could materially reduce the
Partnership‟s capital and performance. Moreover, the Partnership‟s search for investments will be
directed toward small and medium-sized enterprises which have a desire to merge as a result of
successful operation, or to become public corporations and which are able to satisfy, or anticipate
in the reasonably near future being able to satisfy, the minimum asset requirements in order to
qualify shares for trading on a stock exchange. The Partnership anticipates that the business

                                                     12
                                Private Placement Memorandum – [Fund Name], LP
opportunities presented to it may (i) have no operating history, or a history of losses attributable
to under-capitalization or other factors; (ii) experience financial or operating difficulties; (iii) be
in need of funds to develop a new product or service or to expand into a new market; (iv) rely
upon an untested product or marketing concept; or (v) have a combination of the characteristics
mentioned above. The Partnership intends to concentrate its acquisition efforts on properties or
businesses that it believes to be undervalued. Given the above factors, investors should expect
that any potential Portfolio Company may have a history of losses or low profitability.

        No Guaranteed Cash Distributions. There can be no assurance that cash distributions
will be made to the Limited Partners.

        Absence of Regulation. The Partnership is not registered under, and does not intend to
register under, (i) the Investment Company Act of 1940 in reliance on the exemption available
under Section 3(c)(7) thereof. As a result, the operation and conduct of the Partnership‟s affairs
are subject to less federal and state regulation and supervision than those of a registered
investment company.

       Termination of the Partnership. The General Partner has the right to terminate the
Partnership at any time, in its sole discretion, and distribute the assets of the Partnership to the
Limited Partners and General Partner in accordance with the Partnership Agreement.

       Limitation of Liability Indemnification of the General Partner. The General Partner
and its Managers, attorneys, agents and employees may not be liable to the Partnership or
Limited Partners for errors of judgment or other acts or omissions not constituting gross
negligence or intentional malfeasance as a result of certain indemnification provisions in the
Partnership Agreement. A successful claim for such indemnification would deplete the
Partnership‟s assets by the amount paid.

        Unfavorable results of future legal proceedings could materially adversely affect the
Partnership. The Partnership may be subject to various legal proceedings and claims that arise
out of the ordinary conduct of its business. Results of legal proceedings cannot be predicted with
certainty. Regardless of its merit, litigation may be both time-consuming and disruptive to the
Partnership‟s operations and cause significant expense and diversion of management attention. In
recognition of these considerations, the Partnership may enter into material settlements. Should
the Partnership fail to prevail in certain matters, or should several of these matters be resolved
against the Partnership in the same reporting period, the Partnership may be faced with
significant monetary damages or injunctive relief against it that would materially adversely affect
a portion of its business and might materially affect the Partnership‟s financial condition and
operating results.

       Unrelated Liabilities of the General Partner. The General Partner is not precluded from
being a General Partner in other companies. It is possible that liabilities from another company
could render the General Partner insolvent. If the General Partner is adjudicated bankrupt, a new
General Partner might be substituted or the Partnership might be dissolved.

        Minimum Size. The Partnership will continue operations during and following this
offering if the Partnership receives a minimum of $[x] in proceeds from the Offering. If sufficient

                                                     13
                                Private Placement Memorandum – [Fund Name], LP
funds are not raised, the diversification of the Partnership‟s portfolio will be further limited. Until
the Minimum Offering is met, offering proceeds will be held by [Escrow or law firm name that
you will use], LLP (“Escrow Agent”) in an interest bearing special trust account. Such amount
shall not be released until the Minimum Offering is reached. After the Minimum Offering is
reached but before the expiration of the Offering or any extension thereof, the Partnership may, in
its discretion, accept subscriptions and commence using the subscription proceeds for Company
operations. If the minimum of $[x] is not sold on or before [Month, day, year], or any extension
thereof, the General Partner may acquire the remaining unsold Interests necessary to complete the
Minimum Offering of $[minimum closing amount], or terminate the Offering and return investor
funds plus the pro-rata share of interest to the Investors after expenses are deducted. Thereafter,
the General Partner may sell the Interests it purchased to complete the minimum offering to new
investors for an amount equal to the amount the General Partner has contributed to the Company
in respect of such Interests. If the Partnership has accepted subscriptions for the Minimum
Offering prior to [Target date of close], the Offering will remain open until the earlier of: (a) the
date on which the maximum number of Interests have been subscribed for and accepted by the
General Partner, or (b) such later date up to and including [Extended date if you don‟t close
when anticipated], as the General Partner may determine in its sole discretion.

        Additional Capital. In the event that the Partnership, for any reason, requires additional
capital, investors shall have the option to contribute said additional capital. However, in the event
an Investor elects not to contribute his/her percentage of any additional capital required, that
Investor will receive a dilution in his/her ownership percentage in the amount of the Investor‟s
capital amount divided by the total capital contributed by all the Investors.

Risks Relating to Private Offering and Lack of Liquidity

        Illiquidity and Limited Transferability of Interests. Each Limited Partner, as a
subscriber of a Partnership's Interest will be required to represent that he or she is acquiring the
Interests for investment and not with a view to distribution or resale, that such subscriber
understands that the Interests are not freely transferable and, in any event, that such subscriber
must bear the economic risk of investment in the Interests for an indefinite period of time because
the Interests have not been registered under the Securities Act or certain applicable state “Blue
Sky”, or securities, laws, and that the Interests cannot be sold unless they are subsequently
registered or an exemption from such registration is available and unless such subscriber
complies with the other applicable provisions of the Partnership Agreement. There will be no
market for the Interests and subscriber cannot expect to be able to liquidate the subscriber‟s
investment under any circumstances. Further, the sale of the Interests may have adverse federal
income tax consequences on the subscriber. The transfer of the Interests also requires the prior
written consent of the General Partner. There are no specified circumstances relating to the
granting or withholding of the required prior written consent of the General Partner, although the
General Partner will observe the standards of a fiduciary to the Limited Partners as a group in
determining whether to grant or withhold its consent as to any particular request for a transfer.

        Speculative Investment. The Partnership‟s business objectives must be considered
highly speculative, and there is no assurance the Partnership will satisfy those objectives. No
assurance can be given that the investors will realize a substantial return on their purchase of the
Interests, if any, or that the investors will not lose their investment completely. For this reason,

                                                     14
                                Private Placement Memorandum – [Fund Name], LP
each prospective investor should read this Memorandum and all Exhibits to this Memorandum,
carefully, and should consult with his or her advisors. There is no assurance that the Partnership
will be profitable or that any distributions will be made to the Partners. Any return on investment
will depend upon the success of the operations of the Partnership and there is no assurance that
such operations will be successful.

        Determination of Price of Interests. The purchase price of the Interests bears no
relationship to any established criteria of value such as book value or earnings per Interest, or any
combination thereof. Further, the price of the Interests is not based on past earnings of the
Partnership, and the price of the Interests does not necessarily reflect current market value for the
assets proposed to be acquired by the Partnership. No formal valuation or appraisal of the
Partnership‟s business has been prepared.

       Offering Not Registered with Securities and Exchange Commission or State
Securities Authorities. The Offering of the Interests will not be registered with the Securities
and Exchange Commission under the Securities Act or the securities agency of any state, and are
being offered in reliance upon exemptions from the registration provisions of the Securities Act
and state securities laws applicable only to offers and sales to investors meeting the suitability
requirements set forth herein.

        Private Offering - Lack of Agency Review. Since this offering is a nonpublic offering
and, as such, is not registered under federal or state securities laws, prospective investors will not
have the benefit of review by the Securities and Exchange Commission or any state securities
commission.

        Private Offering Exemption - Compliance with Requirements. The Securities are
being offered to investors and will be sold to investors in reliance upon a private offering
exemption from registration provided in the Securities Act. If the Partnership should fail to
comply with the requirements of such exemption, the investors would have the right to rescind
their purchase of the Interests if they so desired. It is possible that one or more investors seeking
rescission would succeed. This might also occur under the applicable state securities or “Blue
Sky” laws and regulations in states where the Interests will be offered without registration or
qualification pursuant to a private offering or other exemption. If a number of Limited Partners
were successful in seeking rescission, the Partnership and the General Partner would face severe
financial demands that would adversely affect the Partnership as a whole and, thus, the
investment in the Interests by the remaining Limited Partners.

        Purchase of Securities by the Managers or Members of the General Partner. The
Managers or the Members of the General Partner and their respective affiliates may purchase
Interests. Upon any such acquisition of Interests, such persons will have the same rights as the
other Limited Partners, with respect to the Interests owned by them, including the right to vote on
all matters subject to the vote of the Limited Partners.

       No Representation of Limited Partners. Under the Limited Partnership Agreement,
each of the Limited Partners acknowledges and agrees that any counsel representing the
Partnership, the General Partner and their respective affiliates does not represent and shall not be


                                                     15
                                Private Placement Memorandum – [Fund Name], LP
deemed under the applicable codes of professional responsibility to have represented or to be
representing any or all of the Limited Partners in any respect.

        Special Risks in the Designated Industries. In addition to all of the risks inherent in any
start-up venture, the Portfolio Companies may operate in a regulatory system which involves
monitoring and approvals by governmental agencies. These additional processes may add
significant costs and time to the development process and make investments in companies in any
of the Designated Industries a greater financial risk than those in other types of industry. The
industry-specific risks are as follows:

       I. Medical Devices or Services:

               • Federal and State Regulatory Changes. Any change to regulatory or compliance
laws may change the feasibility of the product being sold or the service being provided, hence
affecting the profitability of operations. Such change may prohibit the sale of the product or
service of a Portfolio Company.

              • Unforeseen Technology Advancements. While a medical device product is
being developed and incubated, other more technologically advanced products may be developed,
which may cause the current product of a Portfolio Company to be seemed as old technology, by
way of being not as user friendly and not as efficient.

              • Competition from large medical device companies. Once product or service is
introduced, other large medical device companies may conduct their own research and
development. Because of expansive resources and fundings of these larger companies,
competition may arise very soon after any release of product or services.

               • Harmful effects not previously identified. Additional research or studies may be
published in the future with findings that have a negative impact on the product, and may cause
the product to be withdrawn from the market despite prior positive clinical studies or FDA
approval.

       II. Media and Entertainment

              • Technology Advancements. It is possible that prior to the product launch, a
competing and previously unknown competitor enters the market with a technologically superior
product thus causing the Portfolio Company's product to become obsolete and not able to be
marketed or sold.

             • Vendor Circumvention. If a dishonest vendor begins selling the Portfolio
Company's products directly without the knowledge of the Portfolio Company, the Portfolio
Company's sales may decline drastically and profit opportunities may suffer as a result.

               • Content providers and/or union strikes or lockouts. It is possible that unforeseen
labor disputes such as the last "Writers Strike" in the United States could occur, making it
impossible for the Portfolio Company's product to be marketed or sold.


                                                    16
                               Private Placement Memorandum – [Fund Name], LP
              • Unpredictable Market swings. It is possible that the trend in the entertainment
industry could shift rapidly, thereby causing the Portfolio Company's product to be rejected or
unappreciated by the market, thus causing potential harm to the Portfolio Company.

               • Long Term Product User Rejection. Even after the Portfolio Company's product
or service is successfully introduced in the market, audience or end-users may still reject such
product or services after initial acceptance, resulting in a complete loss in the Portfolio
Company's product or service development.

       III. Functional Food and Beverage Technologies:

              • Lack of Market Acceptance. The market or buyer of a product may, for an
unforeseen reason, not be attracted to the product being provided or the market acceptance could
be delayed such that the product is never accepted by the consumer.

               • Product Branding Delay. The time to brand a product could take longer than
anticipated, causing the product to never achieve brand status.

               • Lack of adequate distribution partners. It is possible that distributors who are
committed to distributing a product are more heavily incentivized to promote other products first,
causing the Portfolio Company's products to not sell as projected.

               • Abnormal Changes in Raw Materials. Unforeseen increases in the cost of
ingredients or other materials being used in the manufacture of a product may cause the
operations of the Portfolio Company's business to suffer and not be profitable.

               • Dietary Interest changes. New scientific research and findings by private
research or the US Food and Drug Administration in the future may cause a food or beverage to
be unpopular because of health reasons.

               • Unforeseen Competing Product Saturation. Due to the success of a product,
major industry leaders may develop competing or same/similar products and enter the markets,
thus causing harsh competition and arbitrage.

       IV. Clean Technology & Green Technology

               • Poor Market Acceptance. The product offering could be initially accepted, only
to be rejected as a long term product in the market thus causing the Portfolio Company to have
limited success or possible failure.

               • Federal and State Regulatory Changes. Changes to regulatory, compliance,
pricing and subsidize laws may change the feasibility of the product being sold or the service
being provided hence affecting the profitability of operations or, even worse, prohibiting the sale
of the product or service.




                                                    17
                               Private Placement Memorandum – [Fund Name], LP
               • Compatibility Issues. The product could, after initial acceptance by the market,
be unable to be compatible with unforeseen technology changes that would ultimately orphan the
product, causing severe negative impact to the Portfolio Company‟s growth.

               • Technology Advancement. It is possible that after development but prior to the
product launch, a new competitor enters the market with a technologically superior product
causing the Portfolio Company's product to become obsolete, unmarketable or unsaleable.

               • Arbitrage is set to the point of no profits. Due to the success of a product, major
industry leaders may develop competing or same/similar product and enter the market, hence
providing harsh competition and arbitrage

               • Abnormal economic changes which cause the product to not be profitable or
accepted. Unforeseeable economic changes, such as the decline in the value of the dollar or
overall US economy, may shift or eliminate the target market towards which the clean technology
service or product is directed.

       V. Technology and Mobility Markets

               • Poor Market Acceptance. The product offering could be initially accepted only
to be rejected as a long term product in the market thus causing the Portfolio Company limited
success or possible failure.

               • Compatibility Issues. The product could, after initial acceptance by the market,
be unable to be compatible with unforeseen technology changes that would ultimately orphan the
product causing severe impact to the Portfolio Company‟s growth.

             • Technology Advancement. It is possible that prior to the product launch, a new
competitor may enter the market with a technologically superior product thus causing the
Portfolio Company's product to become obsolete, unmarketable or saleable.

               • Arbitrage is set to the point of no profits. Due to success of product, major
industry leaders may develop competing or same product and enter the markets hence providing
harsh competition and arbitrage

Tax Risks

         There are federal income tax risks associated with an investment in the Partnership. In
addition to continuing Internal Revenue Service reexamination of the tax treatment of limited
liability companies, recent tax legislation has made substantial revisions to the Code.
Consequently, the income tax consequences of an investment in the Partnership are complex.
The following paragraphs summarize some of the tax risks to Limited Partners. A further
discussion of the tax aspects (including other tax risks) of the investment is set forth in “Federal
Income Tax Consequences.”




                                                    18
                               Private Placement Memorandum – [Fund Name], LP
        Risk of Audit. The Partnership‟s federal information returns may be audited by the
Internal Revenue Service. Such audit may result in the challenge and disallowance of some of the
deductions described in such returns.

       Portfolio Income. Losses from passive trade or business activities generally may not be
used to offset “portfolio income” (i.e., interest and dividends). The Partnership‟s income will be
considered portfolio income.

        Taxable Income in Excess of Cash Receipts. It is possible that a Limited Partner‟s
income resulting from his interest in the Partnership will exceed the cash distributions attributable
thereto. This may occur because funds received by the Partnership may be taxable income to the
Partnership while the Partnership may use such funds for nondeductible operating or capital
expenses of the Partnership. Thus, there may be years in which a Limited Partner‟s tax liability
exceeds his share of cash distributions from the Partnership.

        Changes in Federal Income Tax Law. The federal income tax law is constantly
changing, and frequently, Congress enacts major legislation that substantially affects the tax
treatment of partnerships but for which there is no significant body of administrative guidance
Thus, both the Partnership and the Limited Partners may not be in a position to adequately assess
the tax risks from particular transactions or business operations.


                  MANAGEMENT OF THE PARTNERSHIP
The General Partner

       The management of the Partnership will be vested exclusively in [Managing Company],
LLC (the “General Partner”). The General Partner has not previously managed any investment
fund. The General Partner is a California limited liability company which was formed on [Month,
Date and Year the managing company was formed]. Although the General Partner has not
previously managed an investment company, its Members have significant business and funding
experience.

        The General Partner‟s Managers, Members and the members of the Advisory Board have
successful track records in active venture investing. The team has expertise in deal selection,
technology assessment, syndicate management, recruitment and strategic development. This
expertise was acquired through experience in fund direction, company formation, board
participation and operations management. The Partnership team is based in [City and State where
the                         partnership                      is                        located].

General Partner's Managers

[THIS SECTION WILL CONTAIN THE NAME AND BIO‟s OF YOUR TEAM MEMBERS]

Compensation of the General Partner



                                                     19
                                Private Placement Memorandum – [Fund Name], LP
The General Partner will be compensated for its services in organizing and operating the
Partnership‟s business by receiving a percentage of the current value, measured quarterly, of the
assets held by the Partnership (“Management Fee”). For the first year of the Partnership, the
General Partner will receive a fee equal to x% per annum of the total capital subscribed for or
committed for by the Limited Partners (“Asset Value”). After the first year, this fee will be
reduced by x% per year, but in no event shall the Management Fee be less than x% of the Asset
Value.


         FIDUCIARY DUTIES OF THE GENERAL PARTNER
        The General Partner is responsible for the control and management of the administrative
functions of the Partnership. In handling Partnership matters, it must exercise good faith and
integrity. The General Partner has a fiduciary responsibility for the safekeeping and use of all
funds and assets of the Partnership, whether or not in its immediate possession and control, and
may not use or permit another to use such funds or assets in any manner except for the exclusive
benefit of the Partnership. The funds of the Partnership will not be commingled with the funds of
any other person or entity. The General Partner may employ persons or firms to carry out all or
any portion of the business of the Partnership and has the authority to employ attorneys,
accountants, appraisers or other persons or entities to assist them in the management and
operation of the administrative functions of the Partnership. Some or all of such persons or
entities employed may be Affiliates. NEITHER THE MANAGERS OF THE GENERAL
PARTNER NOR THE GENERAL PARTNER ITSELF SHALL BE OBLIGATED TO
PRESENT ANY INVESTMENT OPPORTUNITY TO THE PARTNERSHIP AND MAY
MAKE INVESTMENTS IN OR PARTICIPATE IN ANY WAY WITH AN ENTITY (EVEN IF
IT FITS THE INVESTMENT OBJECTIVES OR CRITERIA OF THE PARTNERSHIP)
WITHOUT FIRST PRESENTING IT TO THE PARTNERSHIP AND SUCH ACTION SHALL
NOT CONSTITUTE A BREACH OF FIDUCIARY RESPONSIBILITY BY THE GENERAL
PARTNER OR ITS MEMBERS.

        In addition to those duties and obligations placed upon the General Partner by the
Partnership Agreement, the General Partner is accountable to the Limited Partners, and is subject
to a fiduciary duty under applicable law and must exercise good faith and integrity in handling
the Partnership‟s business. This area of the law is rapidly developing, and investors who have
questions concerning the fiduciary duties of the General Partner should consult with their own
legal counsel.

        The Partnership Agreement generally provides that the General Partner will not be liable
to the Partnership and for indemnification of the General Partner (and its shareholders, affiliates,
officers, partners, directors, employees, agents and assigns) by the Partnership (to the extent of
Partnership‟s assets) for any claims, liabilities and other losses that it or they may suffer in
dealings with third parties on behalf of the Partnership not arising out of gross negligence or
intentional malfeasance by the General Partner. It is the opinion of the Securities and Exchange
Commission that indemnification for liabilities arising under the Securities Act of 1933 is
contrary to public policy and, therefore, unenforceable.



                                                    20
                               Private Placement Memorandum – [Fund Name], LP
                                   ADVISORY BOARD
        The Partnership has established an Advisory Board, which will be comprised of
distinguished business leaders and venture capitalists with experience and networks throughout
the [geographic region invested in]. The Partnership believes these leaders will be a source of
investment opportunities and will provide added depth and breadth to the Partnership‟s decision-
making process. Each member of the Advisory Board will have an active interest in the
establishment of entrepreneurial companies as a means of translating breakthrough research into
products and services to improve the quality of human life. Members of the Advisory Board, may
change from time to time depending on the needs, investments and interests of the Partnership,
and will be compensated out of the General Partner‟s carried interest in the Partnership.


                            CONFLICTS OF INTEREST
       It is anticipated that conflicts of interest between the Partnership, on the one hand, and the
General Partner and its Managers and Members, on the other hand, may occur from time to time.
The principal areas in which conflicts may be anticipated to occur are as follows:

Management of Portfolio Companies

        The General Partner, its Managers, Members and their respective Affiliates may make
individual investments in or act as consultants to or participate in the management of Portfolio
Companies and may serve on a Portfolio Company‟s Board of Directors. Consequently, the
General Partner, its Managers and their respective Affiliates may have conflicts of interest
between their interests as directors, owners or consultants of Portfolio Companies and their
interests in protecting the Partnership‟s ownership interest in such Portfolio Companies.

Investments by Affiliates of General Partner

        The Managers and Members of the General Partner and the General Partner itself need
not present opportunities to the Partnership prior to making investments in or otherwise taking
advantage of such opportunities. The General Partner intends to sponsor and manage additional
venture or investment funds which are likely, but not obligated, to invest in some of the same
companies as those in which the Partnership has invested or may invest. Such other venture or
investment funds may have different investment objectives than those of the Partnership such as
differing time horizons for disposal of securities in such companies. Consequently, the General
Partner, in managing other funds, may have conflicting interests in managing and making
decisions on behalf of the Partnership.

Interests in Other Activities

        The General Partner, its Managers, Members or any of their respective Affiliates may
engage for their own account, or for the account of others, in other business ventures, whether
related to the business of the Partnership, or otherwise, and neither the Partnership nor any
Manager of the General Partner shall be entitled to any interest therein solely by reason of any

                                                     21
                                Private Placement Memorandum – [Fund Name], LP
relationship with the General Partner, its Managers or their respective Affiliates or to each other
arising from their investment in the Partnership.

Obligations to Other Entities

        Conflicts of interest may occur with respect to the obligations of the General Partner, its
Managers, Members and their Affiliates to the Partnership and obligations to other entities. Other
investment opportunities in which the General Partner, its Managers, Members and their
Affiliates participate may compete with the Partnership for the time and resources of the General
Partner, its Members and their Affiliates. The General Partner, its Managers and Members will,
therefore, have conflicts of interest in allocating management time, services and functions among
the Partnership and other existing companies and businesses, as well as any companies or
business entities which may be organized in the future. Under the Limited Partnership
Agreement, the General Partner is obligated to devote as much time as it, in its sole discretion,
deems to be reasonably required for the proper management of the Partnership and its assets. The
General Partner believes that it has the capacity to discharge its responsibilities to the Partnership
notwithstanding participation in other investment programs.

Legal Representation

        Legal counsel to the Partnership and the General Partner in connection with the Offering
are the same, and it is anticipated that such dual representation will continue in the future. In
addition, such counsel may also represent one or more of the Portfolio Companies. As a result,
conflicts may arise in the future and if those conflicts cannot be resolved or the consent of the
respective parties obtained to the continuation of the multiple representations after full disclosure
of any such conflict, said counsel will withdraw from representing one or more of the conflicting
interests with respect to the specific matter involved. The General Partner has the power to grant
conflict waivers to legal counsel without the approval of the Limited Partners.

Resolution of Conflicts of Interest

        The General Partner is subject to a fiduciary duty as prescribed by the law and pursuant to
the Partnership Agreement. In handling the affairs of the Partnership, the General Partner will not
breach its fiduciary duties towards the Partnership. In the event of any conflict, the General
Partner will use its best efforts to mitigate such potential adversity and at all times abide by any
conflict resolution provisions stated in the Partnership Agreement.


                 RESTRICTIONS ON TRANSFERABILITY
        There are substantial restrictions on the transferability of the Interests in the Partnership
Agreement and imposed by applicable securities laws. Before selling or transferring an Interest, a
Limited Partner must obtain the written consent of the General Partner, and comply with the
provisions of Article 11 of the Partnership Agreement and applicable securities laws and
regulations, including the financial suitability requirements of such laws or regulations. It is



                                                     22
                                Private Placement Memorandum – [Fund Name], LP
highly unlikely that any market for Interests will develop and prospective investors should view
Interests solely as a long-term investment.

        In addition, the Partnership Agreement provides that an assignee of Interests may not
become a Substituted Limited Partner without meeting certain conditions and without consent to
such substitution by the General Partner, which consent the General Partner may withhold in its
sole and absolute discretion. If an Assignee is not admitted to the Partnership as a Substituted
Limited Partner, such Assignee will have no right to vote on Partnership matters, will have no
right to information relating to the Partnership‟s business, and will have only restricted access to
other rights enjoyed by the Limited Partners. The General Partner may require, as a condition to
any such disposition of Interests, that the Limited Partner furnish the Partnership with an opinion
of counsel reasonably satisfactory to the Partnership regarding the legality of the transfer. Any
transfer can only be made if such transfer complies with applicable securities laws.

        The Interests offered by this Memorandum have not been registered under the Securities
Act or by the securities regulatory authority of any state. The Interests may not be resold unless
they are qualified under applicable state securities laws or unless exemptions from such
qualification are available.

       The Partnership expects to invest nearly all of its assets in Portfolio Securities for which
no liquid trading market exists, provided such investments are consistent with the Partnership‟s
investment objective and investment criteria.

         When purchasing Securities that have not been registered under the Securities Act, and
that are not readily marketable, the Partnership will endeavor when possible to obtain the right to
have the Securities registered at the expense of the specific Portfolio Company. Registration is
only possible with public companies or with initial public offerings. However, even with public
companies, the Partnership may not be able to obtain such a registration right or, if such a
registration right is obtained, the Partnership may be subject to contractual lock-up agreements
which will require the underwriter of the registered offering or other persons to consent to the
sale of the Securities. Generally, there will be a lapse of time between the Partnership‟s decision
to sell any such Portfolio Security and the registration of the Portfolio Security permitting sale or
the consent to such sale. During any such period, the price of the Portfolio Securities will be
subject to price fluctuations.

        Securities acquired directly from the Issuer in a private transaction or securities owned by
certain “control persons” of the Issuer, can be sold only under the requirements of Rule 144 of
the Securities Act.


                                 SALE OF INTERESTS
Qualifications of Investors

The Interests may be purchased only by investors who are Accredited Investors as that term is
defined in Rule 501 of Regulation D.

                                                     23
                                Private Placement Memorandum – [Fund Name], LP
Purchase Price
       The Purchase Price for a membership Interest in the Partnership, each Interest of which
shall constitute 0.66 2/3 percent (0.66 2/3%) of the aggregate ownership Interests of the
Partnership, shall be $50,000,000.

Subscription Inquiries

       Inquiries regarding subscriptions should be directed to the Partnership at [Your corporate
address]. The telephone number of the Partnership is +[investor relations telephone], and the
email address is [your email]

Sales Materials

        Other than this Memorandum, the Exhibits attached hereto, and a summary of the
Offering prepared by the General Partner, no other literature will be employed in the Offering of
the Interests. Except as described herein, the Partnership has not authorized the use of other sales
materials in connection with the Offering. The information in such sales material does not purport
to be complete and should not be considered as a part of this Memorandum or as incorporated in
this Memorandum by reference or as forming the basis of the Offering.

       No dealer, salesman or other person has been authorized to give any information or to
make any representations other than those contained in this Memorandum or in any sales
brochure literature issued by the Partnership and referred to in this Memorandum and, if given or
made, such information or representations must not be relied upon.

     THE INTERESTS ARE BEING OFFERED ONLY TO PERSONS WHO ARE
ACCREDITED INVESTORS AND CAN REPRESENT THAT THEY MEET THE INVESTOR
SUITABILITY STANDARDS.


                FEDERAL INCOME TAX CONSEQUENCES
        The following is a summary of certain federal income tax consequences of an investment
in the Partnership which should be considered by a prospective investor. Prospective investors
should be aware that the following discussion necessarily condenses or eliminates many details
that might adversely affect some prospective investors significantly. The Partnership has not
sought a ruling from the Internal Revenue Service or any other Federal, state or local agency with
respect to any of the tax issues affecting the Partnership, nor has it obtained an opinion of counsel
with respect to any tax issues.

       This summary of certain aspects of the Federal income tax treatment of the Partnership is
based upon the Internal Revenue Code of 1986, as amended (the “Code”), judicial decisions,
Treasury Regulations and rulings in existence on the date hereof, all of which are subject to
change. There is uncertainty concerning some of the tax aspects discussed herein, and there can



                                                     24
                                Private Placement Memorandum – [Fund Name], LP
be no assurance that some of the deductions claimed or positions taken by the Partnership will
not be challenged by the Internal Revenue Service.

        In addition to the particular matters set forth in this section, investment managers of
employee benefit plans and other tax exempt organizations should review carefully the sections
of this Memorandum regarding liquidity and other financial matters to ascertain whether the
investment objectives of the Partnership are consistent with their respective organization‟s overall
investment plans. Each prospective investor is urged to consult his own counsel regarding the
acquisition of Interests.

Tax Consequences Regarding the Partnership

       Status as Partnership. The Partnership and the General Partner will not elect to have the
Partnership taxed as a corporation.

        As a partnership, the Partnership will not itself be subject to Federal income tax. The
Partnership will file an annual partnership information return with the Internal Revenue Service
which reports the results of operations using the accrual method of accounting. Each Member is
required to report his or her distributive share of the Partnership‟s net long-term capital gain or
loss, net short term capital gain or loss and all other items of ordinary income or loss separately
on his or her income tax return. Each Member is taxed on his or her distributive share of the
Partnership‟s taxable income and gain regardless of whether he or she has received or will
receive a distribution from the Partnership.

        Publicly Traded Partnership. Certain publicly traded partnerships are taxed as
corporations for Federal income tax purposes. Publicly traded partnerships are defined as
partnerships whose interests are (1) traded on an established securities market; or (2) readily
tradable on a secondary market or the substantial equivalent thereof. The Interests will not be
traded on an established securities market. Treasury Regulations Section 1.7704-1(h) provides
that a partnership will not be considered readily tradable on a secondary market or the substantial
equivalent thereof if (i) all interests in the partnership are issued in a transaction or transactions
that was not required to be registered under the Securities Act of 1933; and (ii) the partnership
does not have more than 100 Limited Partners at any time during the taxable term of the
partnership. The General Partner believes that the Partnership will meet these requirements
because this offering does not have to be registered under the Securities Act of 1933, and the
Partnership Agreement limits any transfer of Interests if such transfer results in the Partnership‟s
having more than 99 Limited Partners. In addition, the Limited Partnership Agreement provides
that any transfer of Interests will not be effective unless and until the General Partner determines
that such transfer will not cause the Partnership to be considered a publicly traded partnership
under the applicable Internal Revenue Service guidelines.

       Limitations on Losses and Credits. Income from the Partnership will constitute
“portfolio income,” i.e., interest, dividends and gain. As a result, income from the Partnership
may generally not be used to offset “passive losses.”




                                                     25
                                Private Placement Memorandum – [Fund Name], LP
       Allocation of Net Income and Net Loss. Under the Partnership Agreement, the
Partnership‟s Net Income and Net Loss for each fiscal year will be allocated among the Limited
Partners as follows:

       A. Allocation of Net Income. Net Income of the Partnership shall be allocated (i) 20% to
the General Partner and (ii) 80% among the Limited Partners in proportion to their Partnership
Percentages.

       B. Allocation of Net Loss. Net Loss of the Partnership shall be allocated among the
Partners in proportion to their Partnership Percentages.

        The Treasury Regulations regarding the allocation of items of partnership income, gain,
loss, deduction and credit under Section 704(b) of the Code are concerned with whether an
allocation of partnership tax items has “substantial economic effect.” Under the Treasury
Regulations, an allocation has economic effect only if, throughout the term of the Partnership, the
Limited Partners‟ capital accounts are maintained in accordance with the Treasury Regulations,
liquidation proceeds are to be distributed in accordance with the Limited Partners‟ capital account
balances, and any Limited Partner with a deficit capital account following the distribution of
liquidation proceeds is required to restore the amount of that deficit to the Partnership for
payment to creditors or distribution to Limited Partners in accordance with their positive capital
account balances. If the Limited Partners‟ obligations to restore deficit capital account balances is
limited, the Partnership Agreement must contain a “qualified income offset” provision, as
described in the Treasury Regulations.

        The Treasury Regulations also require that the economic effect of the allocation be
“substantial.” In general, the economic effect of an allocation is “substantial” if there is a
reasonable possibility that the allocation will affect substantially the dollar amounts to be
received by the Limited Partners from the Partnership, independent of tax consequences. The
economic effect of an allocation is not substantial, however, if, at the time the allocation becomes
part of the Partnership Agreement, (1) the after-tax economic consequences of at least one
Limited Partner may, in present value terms, be enhanced compared to such consequences if the
allocation were not contained in the Partnership Agreement, and (2) there is a strong likelihood
that the after-tax economic consequences of no Limited Partner will, in present value terms, be
substantially diminished compared to such consequences if the allocation were not contained in
the Partnership Agreement. In determining the after-tax economic benefit or detriment to a
Limited Partner, tax consequences that result from the interaction of the allocation of such
Limited Partner‟s tax attributes that are unrelated to the Partnership will be taken into account.

        The Partnership Agreement requires that the Limited Partners‟ Capital Account balances
be maintained in accordance with the Treasury Regulations, and liquidation proceeds are to be
distributed to the Limited Partners, in proportion to their positive Capital Account balances.
Limited Partners are not required to restore a deficit capital account balance. However, the
Partnership Agreement contains a “qualified income offset” provision.

       Transfers of Interests. For Federal income tax purposes, the Partnership may allocate
items of income, gain, loss or deduction to a Limited Partner only if they are received, paid or
incurred by the Partnership during that portion of the year in which the Limited Partner is treated

                                                     26
                                Private Placement Memorandum – [Fund Name], LP
as a Limited Partner of the Partnership for tax purposes. If any Limited Partner‟s Interest in the
Partnership changes at any time during the taxable year, each Limited Partner‟s share of each
item of Partnership income, gain, loss, deduction and credit is to be determined by using any
prescribed by Treasury Regulations that takes into account the varying interests of the Limited
Partners in the Partnership during the taxable year.

        The legislative history concerning this provision indicates that a monthly convention will
be provided for by regulation. Under this convention, Limited Partners entering on the sixteenth
day of the month or later will be treated as entering on the first day of the following month, and
Limited Partners entering during the first 15 days of the month will be treated as entering on the
first day of the month.

        The Net Income and Net Loss allocable to any Interests transferred during any year will
be allocated among the persons who were the holders thereof during such year in proportion to
the number of months that each such holder was recognized as the owner of such Interest during
the year. A Limited Partner who purchases an Interest during the first 15 days of a month will
receive allocations of Net Income and Net Loss relative to such month. A Limited Partner who
purchases an Interest on or after the sixteenth day of the month will be treated for income tax
allocation purposes as acquiring an Interest on the first day of the following month. A Limited
Partner will be required to report a share of the Partnership‟s Net Income or Net Loss during the
period of such Limited Partner‟s ownership on his or her personal income tax return even though
he or she receives no distributions with respect to such period of ownership and the amount
distributed to such Limited Partner has no relationship to the amount that he or she is required to
report.

        Calculation of Limited Partner’s Adjusted Basis. Each Limited Partner‟s adjusted basis
in his or her Interests will be equal to such Limited Partner‟s Capital Contributions increased by
the amount of such Limited Partner‟s share of taxable income of the Partnership. A Limited
Partner‟s basis in his or her Interests is reduced, but not below zero, by (i) the amount of the
Limited Partner‟s share of taxable net loss or deduction and expenditures which are neither
properly deductible nor properly chargeable to the Limited Partners‟ Capital Account and (ii) the
amount of cash distributions received by the Limited Partner from the Partnership.

        Treatment of Cash Distributions from the Partnership. The Partnership Agreement
provides for cash distributions resulting from operations of the Partnership. Cash distributions
made to a Limited Partner, other than those made in exchange for or in redemption of all or part
of his Interests, will generally not affect the calculation of a Limited Partner‟s distributive share
of Net Income or Net Loss from the Partnership. Such distributions are generally first applied
against and reduce the Limited Partner‟s adjusted basis in his Interests. To the extent that such
distributions are so applied against and reduce the adjusted basis of the Limited Partner‟s
Interests, they will not give rise to a realization of income, gain or loss by the Limited Partner.
Cash distributions in excess of a Limited Partner‟s adjusted basis in his Interests will result in the
recognition of gain to the extent of such excess. Ordinarily, any such recognized gain will be
treated as gain from the sale or exchange of an Interest.

       Net Income in Excess of Cash Distributions. It is possible that a Limited Partner‟s share
of the Partnership Net Income may exceed cash distributed to him with respect to his

                                                     27
                                Private Placement Memorandum – [Fund Name], LP
Interests and such Limited Partner‟s tax liability on that share may even exceed such
distributions.

        Treatment of Liquidating Distributions. Generally, upon liquidation or termination of
the Partnership, gain will be recognized by a Limited Partner only to the extent that cash, and in
certain circumstances marketable securities, is distributed in excess of such Limited Partner‟s
adjusted basis in his or her Interests at the time of distribution.

        Treatment of Gain or Loss on Disposition of Interests. It is not expected that any
public market will develop for the Interests. Furthermore, Limited Partners may not be able to
liquidate their Interests promptly at reasonable prices since any transferee of Interests will be
required to comply with the minimum purchase requirements and the investor suitability
standards imposed by the transferee‟s state of residence or by the Partnership and since all
assignees of Interests may be admitted as a Substituted Limited Partner only with the consent of
the General Partner and upon compliance with the provisions of Article 11 of the Partnership
Agreement.

        Any gain or loss realized by a Limited Partner upon the sale or exchange of his or her
Interests will generally be treated as capital gain or loss, provided that such Limited Partner is not
deemed to be a “dealer” in such Securities. If the Limited Partner‟s holding period for the
Interests sold or exchanged is more than one year, the portion of any gain realized that is capital
gain will be treated as long-term capital gain.

        Tax Elections; Returns; Tax Audits. The Code provides for operation adjustments to
the basis of partnership property upon distributions of partnership property to a Limited Partner
and transfers of partnership interest (including by reason of death) provided that a partnership
election has been made pursuant to Section 754 of the Code. Under the Partnership Agreement,
the General Partner, in its sole discretion, may cause the Partnership to make such an election.
Any such election, once made, cannot be revoked without the Internal Revenue Service‟s
consent.

        The General Partner decides how to report the Partnership items on the Partnership‟s tax
returns, and all Limited Partners are required under the Code to treat the items consistently on
their own returns, unless they file a statement with the Internal Revenue Service disclosing the
inconsistency. In the event the income tax returns of the Partnership are audited by the Internal
Revenue Service, the tax treatment of the Partnership income and deductions generally are
determined at the Partnership level in a single proceeding rather than by individual audits of the
Limited Partners. The General Partner, as the “Tax Matters Partner,” has considerable authority
to make decisions affecting the tax treatment and procedural rights of all Partners. In addition, the
Tax Matters Partner has the right on behalf of all Partners to extend the statute of limitations
relating to the Partners‟ tax liabilities with respect to Partnership items.

Tax Treatment of Partnership Investments

       The Partnership expects to act as an investor, and not as a dealer (as those terms are used
in Code Section 73 1(c)), with respect to its Securities transactions. A trader and an investor are
persons who buy and sell Securities for their own accounts. A dealer, on the other hand, is a

                                                     28
                                Private Placement Memorandum – [Fund Name], LP
person who purchases Securities for resale to customers rather than for investment or speculation.

        Generally, the gains and losses realized by a trader or investor on the sale of securities are
capital gains and losses. Thus, the Partnership expects that its gains and losses from its securities
transactions typically will be capital gains and capital losses. These capital gains and losses may
be long-term or short-term depending, in general, upon the length of time the Partnership
maintains a particular investment position and, in some cases, upon the nature of the transaction.
Property held for more than one year generally will be eligible for long-term capital gain or loss
treatment. The application of certain rules relating to short sales, “straddles,” “wash sales” and to
“Section 1256 contracts” may serve to alter the manner in which the Partnership‟s holding period
for a security is determined or may otherwise affect the characterization as long-term or short-
term, and also the timing of the realization, of certain gains or losses.

        The excess of capital losses over capital gains may be offset against the ordinary income
of a non-corporate taxpayer, subject to an annual deduction limitation of $3,000. For corporate
taxpayers, capital losses may be offset only against capital gains, but unused capital losses may
be carried back three years (subject to certain limitations), and carried forward five years.

        Limitation on Deductibility of Interest. For non-corporate taxpayers, Section 163(d) of
the Code only allows a deduction for “investment interest” to the extent of the taxpayer‟s net
investment income for the taxable year. Net investment income is defined as the excess of
investment income, excluding net capital gain (the excess of net long-term capital gain over net
short-term capital loss), over investment expenses.

        For purposes of this Code provision, certain of the Partnership‟s activities may be treated
as giving rise to investment income for a Limited Partner, and the investment interest limitation
would apply to a Limited Partner‟s share of the interest attributable to the Partnership‟s operation.
In such case, a Limited Partner would be denied a deduction for all or part of that portion of his
or her distributive share of the Partnership‟s ordinary losses attributable to interest unless he or
she had sufficient investment income from all sources including the Partnership. A Limited
Partner who could not deduct losses currently as a result of the application of Section 163(d)
would be entitled to carry forward such losses to future years, subject to the same limitation. The
investment interest limitation would also apply to interest paid by a Limited Partner on money
borrowed to finance his or her interest. Prospective investors are advised to consult with their
own tax advisers with respect to the application of the investment interest limitation in their
particular tax situations.

       Deductibility of Limited Partnership Investment Expenditures by Individual
Limited Partners. Investment expenses (e.g., investment advisory fees) of an individual are
deductible only to the extent they exceed 2% of the taxpayer‟s adjusted gross income. In addition,
for Limited Partners where adjusted gross income exceeds a specific amount of investment
expenses in excess of 2% of adjusted gross income may only be deducted to the extent such
excess expenses (when aggregated with certain other itemized deductions) exceed the lesser of (i)
3% of the excess of the individual‟s adjusted gross income over a specified amount or (ii) 80% of
the amount of certain itemized deductions otherwise allowable for the taxable year.



                                                     29
                                Private Placement Memorandum – [Fund Name], LP
         These limitations on deductibility should not apply, however, to an individual Limited
Partner‟s share of the investment expenses if the Partnership is considered to be engaged in a
trade or business within the meaning of the Code. However, the Code does not clearly define
“trade or business” in this context. Several courts which have examined this issue have held that a
“trader” is involved in a trade or business, while an “investor” is not. A “trader” is defined as a
person who makes frequent trades in an effort to catch the swings in the daily market movements.
Conversely, an “investor” purchases securities to be held for the long term (more than one year)
with a view to capital appreciation, without regard to short-term developments that would
influence the price of securities on a daily basis. In view of the Partnership‟s investment strategy,
it is likely that the Partnership will be treated as an “investor”. In such event, the Partnership will
not be deemed to be engaged in a trade or business, and it will not be able to deduct investment
expenses at the Partnership level. Instead, it will report to each Limited Partner its allocable
portion of such expenses. Each Limited Partner will then be responsible for computing whether
the deductible expenses exceed the two or three percent floor and will report them on his or her
personal tax returns.

       The consequences of this limitation will vary depending upon factual circumstances as
they unfold and the personal tax situation of each taxpayer. Accordingly, individual Limited
Partners should consult their tax advisers with respect to the application of the above limitations.

       Limited Partnership Organization and Syndication Fees. Expenses connected with the
syndication of Interests (for example, promotional expenses and printing costs) are not deductible
by the Partnership or the Limited Partners. Such costs may result in a reduction of any gain (or an
increase in any loss) realized by the Limited Partners for tax purposes upon the termination of the
Partnership.

        Any expenses paid by the Partnership which constitute organizational expenses will be
capitalized, but these fees may be amortized for tax purposes over a period of not less than 60
months beginning in the month the Partnership begins business. If the Partnership is liquidated
within the 60-month period, the Partnership should be able to deduct the balance of these
deferred expenses.

Partnership Distributions of Marketable Securities to Partners

        Code Section 731(c) generally treats marketable securities as money (in an amount equal
to their fair market value) for purposes of determining the amount of gain recognized on
distribution of the Securities from the Partnership. Accordingly, unless the distribution is one that
falls within one of the exceptions to the general rule, a Limited Partner will recognize gain to the
extent he receives marketable securities, the fair market value of which, together with the amount
of any money distributed, exceeds the basis of his partnership interest immediately before the
distribution.

        Tax Section 731(c) is inapplicable if (1) the distributed Security was not actively traded
on the date acquired by the partnership and the entity to which the security relates had no
outstanding actively traded securities on that date, (2) the Security was held by the Partnership
for at least six months before it became actively traded, and (3) the Security was distributed
within five years of the date upon which it became actively traded. In addition, Section 731(c)

                                                     30
                                Private Placement Memorandum – [Fund Name], LP
will be inapplicable to a distribution of marketable securities from an investment partnership to
an eligible partner. Section 731(c)(3)(A)(iii) defines an eligible partner as one who contributed
only investment assets to the partnership. An investment partnership is a partnership that has
never been engaged in a trade or business and substantially all of whose assets consists of
specified investment type assets.

Investment by Tax-Exempt Entities

      Before investing in the Partnership, a tax-exempt investor should consider the special
income tax rules applicable to it. The following discussion relates solely to federal income tax
consequences to a prospective investor that is tax-exempt and does not address state or local
income tax matters.

       Qualified plans and certain other tax-exempt entities (“Exempt Investors”) are subject to
federal income tax with respect to any “unrelated business taxable income” (“UBTI”) as
determined in accordance with the Sections 511-514 of the Code, and are required to file Federal
income tax returns if they have gross UBTI in excess of $1,000 whether or not tax is actually due.
UBTI includes income derived from a trade or business carried on by a tax-exempt entity or by a
partnership of which the entity is a member. Certain specified investment income (e.g., interest,
dividends, and gains on sale of assets held for investment) is generally not included in UBTI.
However, under the Code, any gain or income earned from “debt financed” property is treated as
income from an unrelated business, even if the income otherwise would have been excluded.

        The Partnership does not intend or expect to incur “acquisition indebtedness,” such as the
purchase of securities on margin. However, if an Exempt Investor incurs a debt to acquire its
Interests, income such Exempt Investor derives from the Partnership will be UBTI. Accordingly,
an investment in the Partnership may result in some UBTI for an Exempt Investor, depending on
the level of “acquisition indebtedness” during the year.

        The Partnership will be required to report to a Limited Partner which is an exempt
organization information as to the portion of its income and gains from the Partnership for each
year which will be treated as UBTI. The calculation of such amount with respect to transactions
entered into by the Partnership is highly complex, and there is no assurance that the Partnership‟s
calculation of UBTI will be accepted by the Internal Revenue Service.

        The possibility of realizing UBTI from its investment in the Partnership generally should
not affect the tax exempt status of such an Exempt Investor. However, a charitable remainder
trust will not be exempt from Federal income tax under Section 664(c) of the Code for any year
in which it has UBTI. Moreover, the charitable contribution deduction for a trust under Section
642(c) of the Code may be limited for any year in which the trust has UBTI. A prospective
investor should consult its tax advisor with respect to the tax consequences of receiving UBTI
from the Partnership.

Foreign Limited Partners

      A foreign person or entity considering acquiring Interest(s) should consult his, her or its
own tax advisors as to the federal, state and local tax consequences of an investment in the

                                                    31
                               Private Placement Memorandum – [Fund Name], LP
Partnership, as well as with respect to the treatment of income or gain received from the
Partnership under the laws of his, her or its country of citizenship, residence or incorporation.

        The Partnership does not intend to seek a ruling from the Internal Revenue Service as to
whether it is engaged in a Interested States trade or business nor will it receive an opinion of
counsel that the Partnership, and its foreign Limited Partners, may be deemed engaged in a
Interested States trade or business.

        If the Partnership is not engaged in a U.S. trade or business, a foreign Limited Partner not
otherwise engaged in a U.S. trade or business would be subject to a 30% (or lower treaty rate)
withholding tax with respect to his or her share of the Partnership‟s U.S. source interest,
dividends and most other passive income for such year, but be exempt from U.S. taxation on his
or her share of capital gains realized by the Partnership if the foreign Limited Partner is not
present in the U.S. for 183 days or more in the calendar year in which the Limited Partner‟s year
ends. No withholding is imposed on “portfolio interest” received by a foreign Limited Partner. A
foreign Limited Partner entitled to an exemption or reduced withholding under a tax treaty must
file a Form 1001, Ownership, Exemption or Reduced Rate Certificate with the Partnership and
file a tax return with the Internal Revenue Service. A foreign Limited Partner claiming an
exemption from withholding for income effectively connected with the conduct of a trade or
business in the U.S. must file a Form 4224 with the Partnership. However, a foreign Limited
Partner that files a Form 4224 is subject to the withholding tax on effectively connected income
discussed below. If the Partnership is not engaged in a U.S. trade or business, a foreign Limited
Partner‟s share of Partnership deductions or expenses would be subject to the 2% floor on
miscellaneous itemized deductions.

        If the Partnership is engaged in a U.S. trade or business, each foreign Limited Partner will
be deemed to be engaged in a U.S. trade or business and will have an obligation to file U.S. tax
returns. In addition, income effectively connected with the Partnership‟s U.S. trade or business
allocable to foreign Limited Partners will be subject to a withholding tax of 39.6% for individual
and other non-corporate foreign Limited Partners and 35% for corporate Limited Partners. The
withholding tax paid by the Partnership, which will be treated as a cash distribution to the foreign
Limited Partner, will be treated as a credit against the foreign Limited Partner‟s tax year in
which, or with which, the Partnership‟s tax year ends. Foreign corporate Limited Partners may be
subject to the branch profits tax on earnings of the Partnership which are not reinvested in the
Interested States. An individual's interest in the Partnership or its assets may be subject to U.S.
estate taxation unless provided otherwise by applicable treaty.

State and Local Taxes

       In addition to the federal income tax consequences described above, the Partnership and
the Limited Partners may be subject to various state and local taxes and should consult their own
tax advisors in this regard.

Summary

       The foregoing statements are not intended as a substitute for careful planning, particularly
since certain of the income tax consequences of an investment in the Partnership may not be the

                                                    32
                               Private Placement Memorandum – [Fund Name], LP
same for all taxpayers. In addition, the foregoing does not discuss state and local tax, estate tax,
gift tax or other estate planning aspects of the investment. There can be no assurance that the
Partnership‟s or the Limited Partner‟s tax returns will not be audited by the Internal Revenue
Service, or that no adjustments to the returns will be made as a result of such an audit.
Accordingly, prospective investors in the Partnership are urged to consult their tax advisors with
specific reference to their own tax situations under Federal law and the provisions of applicable
state laws before subscribing for Interests.


                       SUBSCRIPTION FOR INTERESTS
Offering

The Interests are being offered until the earlier of: (i) [$x] or (ii) [Month, Day, Year], unless
extended by the General Partners to [Month, day, year]. All payments received on account of
subscriptions for Interests (“Subscription Payments”) will be held by Escrow Agent in the
depository account at a bank of its choice (“Depository Account”), pending receipt and
acceptance by the General Partner of Subscription Payments for $[x] for Interests. The cash in the
Depository Account will be invested in an interest bearing account and held in trust until the
funds are released to the Partnership or the Offering is terminated. Any interest earned on such
cash in the Depository Account will be paid to the General Partner as management fee upon
termination of the Offering or upon release of the funds to the Partnership. If the minimum
offering of $[x] has not been subscribed to prior to [Month, Day, Year], which date may be
extended until [Month, Day, Year], in the sole and absolute discretion of the General Partner,
none of the Interests will be sold and all funds tendered for the purchase of Interests will be
refunded in full to each subscriber without offset.

Subscription Procedures

Persons desiring to subscribe for Interests may do so by completing and executing the
Subscription Agreement, a form of which is attached hereto as Exhibit A, as well as an Investor‟s
Questionnaire, a form of which is attached hereto as Exhibit D. All subscriptions are payable in
full at the time of subscription. All checks should be made payable to [Name of Fund] L.P. All
checks must be delivered with one fully executed and completed copy of the Subscription
Agreement and Investor‟s Questionnaire. During the escrow period, funds tendered pursuant to
the Subscription Agreement will be deposited by the Escrow Agent in the Depository Account by
the second business day following receipt by the Partnership, and will earn interest from the date
of their actual receipt.

Acceptance of Subscriptions

The General Partner has the right, to be exercised in its sole discretion, to accept or reject any
subscription in whole or in part for a period of 30 days after receipt of the subscription. Any
subscription not returned within 30 days of receipt shall be deemed accepted. In the case of a
rejection, all funds tendered for the purchase of Interests will be refunded to the prospective
subscriber without offset.

                                                    33
                               Private Placement Memorandum – [Fund Name], LP
Investor Suitability Requirements

        The offer and sale of the Interests are being made in reliance on exemptions from the
registration requirements of the US Securities Act and state securities laws. Accordingly, the
subscription of Interest hereunder pursuant to the Subscription Agreement has been strictly
limited to persons who meet the requirements of an Accredited Investor and those who make the
representations as follows:

        1. The investor understands and acknowledges that the Interests are being offered for sale
in a transaction not requiring registration under the Securities Act or any other securities laws,
that the Interests (the “Restricted Securities”) have not been registered under the Securities Act
or any other applicable securities laws and, unless so registered, may not be offered, sold or
otherwise transferred except in compliance with the registration requirements of the Securities
Act or any other applicable securities laws, pursuant to an exemption there from or in a
transaction not subject thereto and in each case in compliance with the conditions for transfer set
forth in paragraph (3) below.

        2. The investor is an “accredited investor” within the meaning of subparagraph (a) (1),
(2), (3) or (7) of Rule 501 of Regulation D promulgated under the Securities Act or, if the
Interests are to be purchased for one or more accounts (“Investor Accounts”) for which it is
acting as fiduciary or agent, each such account is an accredited investor on a like basis. In the
normal course of its business, it invests in or purchases securities similar to the Interests and it
has such knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of purchasing the Interests. It is aware that it (or any investor
account) may be required to bear the economic risk of an investment in the Interests for an
indefinite period of time and it (or such account) is able to bear such risk for an indefinite period.

        3. The investor acknowledges that neither the Partnership nor any person representing the
Partnership has made any representation to it with respect to the Partnership or the offering or
sale of any Interest, other than the information contained in this Memorandum, which has been
delivered to it and upon which it is relying in making its investment decision with respect to the
Interests. It has had access to such financial and other information concerning the Partnership and
the Interests, as it has deemed necessary in connection with its decision to purchase the Interests,
including an opportunity to ask questions of and request information from the Partnership.

        4. The investor is purchasing the Interests for its own account, or for one or more investor
accounts for which it is acting as a fiduciary or agent, in each case for investment, and not with a
view to, or for offer or sale in connection with, any distribution thereof in violation of the
Securities Act, subject to any requirement of law that the disposition of its property or the
property of such investor account or accounts be at all times within its or their control and subject
to its or their ability to resell the Restricted Securities pursuant to any exemption from
registration available under the Securities Act. It agrees on its own behalf and on behalf of any
investor account for which it is purchasing the Interests and each subsequent holder of the
Restricted Securities by its acceptance thereof will agree to offer, sell or otherwise transfer such
Restricted Securities only (a) to the Partnership, (b) pursuant to a registration statement which has
been declared effective under the Securities Act, (c) to an “accredited investor” within the

                                                     34
                                Private Placement Memorandum – [Fund Name], LP
meaning of subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act that is
purchasing for his own account or for the account of such an “accredited investor,” or (d)
pursuant to any other available exemption from the registration requirements of the Securities Act
subject in each of the foregoing cases to any requirement of law that the disposition of its
property or the property of such investor account or accounts be at all times within its or their
control. If any resale or other transfer of the Restricted Securities is proposed to be made pursuant
to clause (d) above, the transferor shall deliver a letter from the transferee to the Partnership,
which shall provide, among other things, that the transferee is an “accredited investor” within the
meaning of subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act and that it is
acquiring such Restricted Securities for investment purposes and not for distribution in violation
of the Securities Act. Each purchaser acknowledges that the Partnership reserves the right prior to
any offer, sale or other transfer prior to the Resale Restriction Termination Date of the Restricted
Securities pursuant to clauses (c) or, (d) above to require the delivery of an opinion of counsel,
certifications and other information satisfactory to the Partnership. Each purchaser acknowledges
that certificate representing the purchase of the Interests, if any, will contain a legend to
substantially the following effect:

     “THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF [NAME OF YOUR
FUND] LP (THE “PARTNERSHIP”) THAT THIS SECURITY MAY BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY (1) TO THE PARTNERSHIP (UPON
CONVERSION, EXCHANGE OR REDEMPTION THEREOF OR OTHERWISE), (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH
RULE 144 (IF AVAILABLE) UNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES.”

        5. The investor acknowledges that the Partnership and others will rely upon the truth and
accuracy of the foregoing acknowledgments, representations and agreements and agrees that, if
any of the acknowledgments, representations or warranties deemed to have been made by it by its
purchase of Interests is no longer accurate, it shall promptly notify the Partnership. If it is
acquiring any Interests as a fiduciary or agent for one or more investor accounts, it represents that
it has sole investment discretion with respect to each such account and that it has full power to
make the foregoing acknowledgments, representations and agreements on behalf of each such
account.

        6. The investor acknowledges that the investor must continue to bear the economic risk of
the investment in the Interests for an indefinite period and recognizes that the Interests are being
sold to the investor without registration under any state or federal law relating to the registration
of securities for sale. The investor also understands and acknowledges that the Partnership will
not be registered as an investment company under the Investment Company Act of 1940.

        7. The investor has consulted with professional advisors of its choice prior to purchasing
the Interests pursuant to this Offering Memorandum, or has had the opportunity to consult with
professional advisors of its choice prior to purchasing the Interests pursuant to this Confidential

                                                     35
                                Private Placement Memorandum – [Fund Name], LP
Offering Memorandum, to the extent desired by the investor. The investor acknowledges that
counsel to the Partnership has acted solely on behalf of the Partnership and has not acted as an
advisor or counselor to any investor. The investor acknowledges that investment in the Interests
involves certain risks, including without limitation the risk factors outlined in this Memorandum.

Discretion of the General Partner

        The investor suitability requirements stated above represent minimum suitability
requirements, as established by the General Partner. Accordingly, the satisfaction of applicable
state requirements by an investor will not necessarily mean that the Interests are a suitable
investment for such investor, or that the General Partner will accept the investor as a subscriber.
Furthermore, the General Partner may modify such requirements at their discretion, and any such
modification may raise the suitability requirements for investors.

        The written representations made by investors will be reviewed to determine the
suitability of each investor, and the General Partner will have the right to refuse a subscription for
Interests if, in its sole discretion, they believe that an investor does not meet the applicable
investor suitability requirements or the Interests otherwise constitute an unsuitable investment for
the investor.




                          ADDITIONAL INFORMATION
       The General Partner will answer inquiries from subscribers concerning the Partnership
and other matters relating to the offer and sale of the Interests, and the General Partner will afford
subscribers the opportunity to obtain any additional information to the extent that the General
Partner possesses such information or can acquire such information without unreasonable effort
or expense that is necessary to verify the information in this Memorandum.




                                                     36
                                Private Placement Memorandum – [Fund Name], LP
              EXHIBIT A

SUBSCRIPTION AGREEMENT




                     37
Private Placement Memorandum – [Fund Name], LP
                 EXHIBIT B

LIMITED PARTNERSHIP AGREEMENT




                       38
  Private Placement Memorandum – [Fund Name], LP
               EXHIBIT C

PROSPECTUS/PRESENTATION




                     39
Private Placement Memorandum – [Fund Name], LP
              EXHIBIT D

INVESTOR‟S QUESTIONNAIRE




                     40
Private Placement Memorandum – [Fund Name], LP

				
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